Meth Homes- Disclosure

In reading a story today from the New York daily news about the trouble buyers might encounter in the surprise of finding that their new home is a former meth lab (story available here: http://www.nydailynews.com/life-style/real-estate/shutdown-meth-labs-leave-dirty-secret-potential-homebuyers-article-1.1103805?localLinksEnabled=false. 

A number of thoughts crossed our minds.

At first, the story follows a family in Washington and another in Utah, where the families were surprised to learn and suffered many health problems from the fact that their home was a former meth lab and that this was not disclosed to them. This could be a problem financially in that once a home is labeled as having been a meth lab even in the past, the property value could decrease exponentially and the chemicals left behind from meth production can cause invariable illnesses and therefore money would be lost in treatment or removing said chemicals from the home to begin with. Make note that in Missouri disclosure is in fact required, and so therefore home-buyers in the state of Missouri are safer from these specific potential problems. 

That being said, to verify that the disclosure is correct, a new homeowner is advised to have a home inspection in all cases, but especially where questions might exist about drug production. Many home inspectors have services available for chemical testing either on surfaces or even into the drywall to see if those different and potentially harmful chemicals are still present. There are also testing kits available in some places to the public, so that people may test the area themselves for possible chemical issues, although it is still highly advised that a professional inspection take place. 

Without an inspection, identifying a home as a previous meth lab or other drug producing area can be difficult, while some texts indicate there are telltale signs of such things, these aren't always completely reliable or present. As always, when in doubt, inspect.

For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

Closing Funds

Today, let's talk about the that money you'll bring to closing whenever it occurs.


A couple of days before closing, your loan officer, your agent, or someone from the title company will call you and tell you the amount that you'll need to bring to closing. This amount may be for a down payment, your closing costs, or a combination of both. The money that you bring should be in certified funds, a check directly from the bank, whether it be a cashier's check, accounter's check, or anything else of the sort. 


The amount that you bring to closing should be fairly close to the amount that was given to you on a good-faith estimate from the lender at the time you applied for a loan, which shows the down payment and other amounts associated with the closing. If the seller is paying closing costs, deduct that amount, and the remainder should be close to the amount that you bring to closing. If this isn't correct or close to being so, call your agent and they can help you with the problem. 


Sometimes this amount be slightly more due to higher inspection charges or costs such as this, and sometimes the cost may be lower than the estimate due to tax prorations by the seller and other charges that the lender may have estimated but were not realized. 


For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

Closing Documents

A few people have asked us what exactly a person signs when they get to closing on their first house. There are generally three types of papers that a person will sign at closing time. 


The first part consists of a settlement statement, or HUD 1 statement,  that shows all the charges and credits to both of the parties, and the deed paperwork that goes with the actual property transfer. 


The second type of paperwork, usually signed by the buyer, are the documents needed for the loan. This can be a very large stack, depending on the type of loan the buyer has chosen to use. The documents will range anywhere from a new printed neat version of your original loan agreement, verification of name and address, and the note itself that says that you will pay the bank back. 


Finally, there are a number of documents that may or may not be needed as last minute items on the sales contract itself are needed by the agents on either side of the transaction.  We'll go more into detail on each of the types of documentation in future posts. 


For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

The Final Countdown

From time to time we like discuss certain terms that are used in the real estate business as if everybody knows what they mean, when in reality, not everyone does. So, in this entry we'll discuss the walk-through. 


There are a few good reasons to do a walk-through, but first let's talk about this really means. Walk-through is usually covered by something in a real estate contract, usually under the heading of something like "Verification of Condition". It's basically one last view of the property by the buyer prior to closing to make sure of three things.


First and foremost, the buyer wants to make sure that the property is in substantially the same shape that it was in when the buyer first put the property under contract or made an offer on it. Therefore, the buyer is going to make sure on the walk-through that there has been no damage done to the property by the seller, especially damage from moving out by the sellers if they were living there when the buyer made the offer. Sometimes when sofas or other furniture is moved, damage may be done to walls or doors in the moving out process. In other cases, rugs or other pieces of furniture had been covering stains or damaged flooring when the house was shown, and the buyers were unaware of this previously. Basically, the buyer is just trying to makes sure that the house is in the same condition as when they decided to make a purchase. Contrary to what some buyers believe, the walk-through is not a time to find new defects or do a new inspection of the home. 


The second potential reason for the buyer to do a final walk-through of the property is to make sure that the seller's responsibilities under the terms of the contract have been completed. For example, when a buyer goes through the property, they find an old car in the backyard. The buyer, when writing the contract, may dictate that the seller must remove the old car from the yard. The walk-through is the time to make sure that the obligation of removing the car has been filled by the seller. There may also be repairs needed to be made after the inspection has taken place, and if these haven't been made, the buyer may choose to terminate the contract. 


Most buyers who have been through a walk-through before know that it is a major part of the process, but as a first-time buyer, you may not have realized that a final look around is in fact necessary and proper. If something isn't the way it should be, don't close until it is. If your agent doesn't call you to schedule a walk-through, take it upon yourself to call them and schedule. The final walk-through is an important process, and is the only way to make sure that everything agreed upon in the contract is in fact the way it should be. 


For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

What Questions are the Right Questions?

When you’re looking to buy a home, there appropriate questions and answers- and there are inappropriate questions and answers. It benefits both you and your agent if you stay on the appropriate side of the line. For instance, a good agent (we do this) will ask you to list all of your needs and wants in the aspect of looking for that next great home. So, for example, you might want a fireplace. But given that the home has central heating, you don’t really need a fireplace- so that would be considered a want.


The next step of that process (we do this, too) is to prioritize those needs and wants, so you know the top three or four things you are really looking for in a home. It is very appropriate for an agent to ask these questions of you, and it is very appropriate for you to ask those questions amongst yourselves if there’s more than one buyer. The next area of appropriate questions is questions about the area or the kind of area that you’re looking for, such as the proximity to shopping locations and restaurants or parks, or even the feel of the neighborhood you’d like to have- more centrally located, out in the suburbs, or even in an area less crowded out in the country.


Where many people make a mistake and cross over into the inappropriate side of asking questions is when they choose to inquire about racial, ethnic, or age breakdown in an area. These questions are not in any way relevant to real estate, and with fair housing laws in place, agents are never allowed to discuss information about neighbors or previous owners of the house you are looking at. While you may wonder about these aspects of a neighborhood, it is not appropriate to ask an agent these questions, and don’t be surprised when an agent doesn’t answer.


A good real estate agent is here to answer appropriate questions, educate you about the process, and ask you questions to help you find what you’re looking for. It benefits you and the agent and the whole real estate process to stay in the appropriate question and answer areas.


For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

A Rising Market is a Smooth Market

We've talked before about how the buyers’ market that we’ve encountered in the last two or three years may be coming to an end, and if this month’s market data is any indication, it may have already ended.

Several areas within the Springfield Marketplace, whether searched by zone or by school district, show that inventories of homes currently on the market have reached a three (or in some cases a four) year low (and by that we mean the number of months it would take to sell all of the houses currently for sale on the market).

In addition to that, the last three months have shown a robust increase in the median home sales price in Springfield. In May, median sales price of residential property went up to $116,500- the highest that it’s been since July of 2009. In January, we started the year off with a median sales price of $101,900, so this month’s $116,500 represents a 14.3% increase in the median sales price just this year.

For both sellers and the market, this is great news in that this greater median sales price may allow other sellers with good quality homes to place them on the market, in effect keeping the market going smoothly. However, it may indicate to buyers that it is a good idea to buy now, before the prices go up even further.

If you’re ready to buy a home, all of those reasons that you may have had to delay might  now have evaporated, and it may be just the right time to find a new home for you.

For more information, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222. 

Everybody Needs Closure

One thing that all buyers have to consider, particularly first time buyers, is when closing will be. This seems like a simple issue in a contract, especially since buyers and sellers typically agree on the closing date. But there are still three things of importance to consider as a buyer.

First, remember when writing your contract that when you’re a first time buyer you’re probably renting right now, so you’ll want to schedule closing coinciding with the end of your lease or at least when you and your landlord have agreed to terminated. This can be sticky sometimes because if a closing date is delayed, at the end of a transaction you don’t want to become homeless. You definitely want to check on this issue before you even write the contract, at least to make sure that you aren’t paying a rent while moving into a new home, or so that you don’t end up homeless for a week or two before you get to move into your home.

Secondly, closing dates can often impact the amount of closing costs you have. Since closing costs include prepaid interests, that is, interest remaining of the month between closing and the last day of the month, and most people try to close at the end of the month to avoid those high closing costs. While this may not be possible for all people or some may not want this, keep in mind that it will have an impact on the settlement payment.

Thirdly, there’s simply the logistics of moving. Everybody wants to move at the end of the month, and that means that everyone’s going to want a moving truck or moving services during this time. This means that either price is going to be higher, or services might not be available for that time. There are also needs to be some flexibility in closing dates. If a loan gets delayed or a seller wants possession after closing, this will all have an impact on moving.

So, this seemingly simple part of the contract, the date on which you close, can have a real and very large impact on the purchase. Just like all other parts of the contract, pay very close attention and stay consciously thinking about the impact that this will have on you.

For more information about this topic and all other aspects of buying your first home, visit us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.872.9222.

The Challenge of Purchasing a HUD-Owned Home

 We recently assisted some buyers in the purchase of a HUD owned home. HUD (United States Department of Housing and Urban Development) acquires properties usually due to the foreclosure of the previous owners. They then put the property on the market for sale by new buyers. 

One of the most compelling issues of buying a HUD owned property is the property inspection. We talk about property inspections a lot on here, but they’re very unique when relating to HUD owned properties, and both the time limits and the procedures are different. 

First, rather than the ten day inspection period usually allotted in a Springfield-based contract, HUD allows the buyer up to fifteen days after receipt of the accepted contract to inspect the property. When the buyer does the inspection, they then either accept the property in it’s as-is condition, or they may choose to void the contract. HUD, in almost all cases, will do no repairs to a property, regardless of the outcome of the inspection. 

The next difference is the procedure by which the buyer goes about setting up the inspections. Many HUD properties don’t have utilities turned on, and many of them have been winterized (that is, water is completely shut off and drained from the system). So, a buyer must arrange for utilities to be turned back on in order for the inspection to take place. If the buyer is going to have the electric and/or gas set up for the inspections, the buyer must usually ask to do this at their own expense and through their own time and trouble. 

Finally, there is an even more cumbersome procedure if a property is on a well, septic, or propane gas for heating. If the buyer is going to inspect the gas services, and it has propane, the tank will usually not be on the property, so the buyer must arrange for the tank to be brought back to the property for their inspections (with permission from the property management company), and then have the propane tank picked up afterwards- they cant leave it on the property for an extended period of time or through closing. 

All of these things present different and more challenging obstacles when performing inspections on a HUD owned home, and a buyer must be prepared to go through these different procedures when considering the purchase of a HUD owned home.

For more information about this topic and the purchase of your first home, contact us on the web at springfieldfirsthome.com, or simply call or text us at 417.872.9222.

Good Common Sense

We were reminded today of the two most important things necessary for a successful real estate transaction: good buyers and good sellers.

Real estate transactions are full of negotiations over price, items included in the sale, closing date, terms of financing, and other obligations for the parties included in the transaction. Then, when inspections are done, there may be even more negotiations. Buyers may want certain things done by the seller-things to be repaired or remediated- and the seller may only want to agree to do or not to do certain things.

But in all of these negotiations, the most important aspect is that both they buyers and the sellers approach things with the golden rule and shared expectations in mind. Common sense possessed by both parties, and conducting negotiations in a logical way, will take a transaction a long way towards closing in and of itself.

That’s not to say that buyers shouldn’t negotiate vigorously for their interest, and sellers should do the same thing by the same token; making requests or responses to the myriad of issues commonly represented and found in real estate transactions. When common sense is applied, negotiations can happen in a non-antagonistic and mutually beneficial way.

For more information, contact us on the web at www.springfieldfirsthome.com, or simply call or text us at 417.72.9222.