Real Estate FAQ's
by Lee Ann Brady
Q. Why should I have a home inspection, and is it important? Lee Ann Brady is the Broker at Paradise Mountain Real Estate. If you have a question about real estate, contact her at: (530) 872-6900. ...or email us.
A. If you are buying a new home or an old one, it's important to have an extensive home inspection. They are designed to disclose defects in the home that could affect its safety, livability and resale value. If you are planning to sell, it is advisable to have an inspection before you list your home. This not only increases your chances of selling, but avoids problems that might pop up in the middle of an escrow.
Inspections will include foundation, grade, insulation, heating & air, plumbing, electrical, structure, leaks, cracks, poor water pressure and other possible defective areas. Inspections range between $125 and $300. Your Realtor will be able to give you a list of inspectors in your area that have a good reputation.
Remember, once you enter into a contract, there is a time limit for the inspections and response to it. Even if you are buying "AS IS," it is essential to have a professional home inspection — DO IT!
Q. I am thinking about buying a fixer-upper. What are the things to consider?
A. So you are thinking of a fixer upper. Well, at least you get to choose the colors. Either you are doing this to get into a house you couldn't normally afford or as an investment.
Things you should look for are location, floor plan and a basically well built home. Remember the old saying: "Buy the worst house in the best neighborhood." All the cosmetic things such as paint, carpets, junk littering the place, can all be corrected at a fairly low cost. Even if a new roof is needed, it may still be a wise buy. The price you pay and the cost of repairs should never exceed the price you would pay if it was in perfect condition. Don't let your emotions run away from you when buying.
When you make your offer, make it contingent upon examination by professional inspectors. There are a lot of good bargains out there! Find yourself a Realtor you feel comfortable with. Let them know what you are looking for and let them guide you. That's what their job is all about.
Q. Can you tell me how they decide how much property tax I should pay and who assesses these taxes?
A. The amount of tax is determined by the County Tax Assessor and collected by the County Tax Collector. It is normally based on a little over 1% of the purchase price and then it will be raised between 2 & 3% per year. However, it may be re-valued if you have remodeled or built a new addition. There are various formulas tax assessors use to calculate your property tax. If the homeowner is living on the property, there is a $7,000 homeowners tax exemption.
Q. Why don't we have more open houses in the area?
A. The odds that a buyer will be found from an open house are very slim. The people who attend open houses are usually buyers who have been directed there by signs or curious future sellers. Since they don't have any prior information on the house, it's probably not the size of house or the price range of the house they are seeking.
Serious buyers are usually working closely with an agent and have already been told about your house. The biggest benefit of an open house is to the agent having the open house, for they will be meeting possible buyers or sellers that can be a source of future clients.
Q. Is now a good time to buy a home or should I wait until the interest rates go down and the prices to go up?
A. Sometimes people sit on the fence waiting for interest rates to go down before buying a home. And sometimes homeowners who would like to sell and move up to something better keep waiting until they can get a higher price for their house.
Sounds reasonable. Interest rates do fluctuate a little and obviously if you get more money for your present house you can afford to buy a bigger move-up house. But sometimes obvious things are wrong. In fact, the old real estate adage, "The best time to buy or sell a home is always now," is usually right.
That's because there is a self-leveling factor in most real estate transactions. The weeks and months spent waiting for a lower interest rate, even if it comes, can be canceled out by a home's higher price.
People sometimes wait for prices to go up before selling their homes. But if prices do rise, the extra $2,000 they may gain on the sale of a $100,000 home translates to an extra $4,000 on the cost of a new $200,000 home.
Q. We have just signed the documents to purchase a home,but are not sure we have picked the right one or that we can make the mortgage payments. Any suggestions?
A. Well, take two M & M’s and call your agent in the morning. What you have is "buyers remorse." This often strikes buyers after making the offer and before closing the escrow. It causes you to act a little crazy and go into panic. But hang in there, it will be all right. If your lender tells you that you can qualify for the mortgage and you have all your inspections, everything should be all right. Years from now, you will look back and laugh at yourself.
Q. Can you explain the Multiple Listing Service to us?
A. The MLS is a database of real estate property listings used to maintain and disseminate listed properties. This is where real estate agents exchange information about the availability of a property for sale. Details include address, how to set up showings, square feet, number of bedrooms and baths, room sizes, garage, acreage and price. The MLS is for MLS members, and to be an MLS member, you must be a licensed real estate agent.
Q. What is a CMA?
A. A Comparative Market Analysis is the way to determine the value of your property and is done by an Agent, using the MLS database. It will show what properties that have SOLD within a recent time frame. CMA’s will list properties with similar location and features. This is usually done free by the Agent, in hopes of securing your listing when you are ready to sell.
Q. We looked at a house last weekend that was being sold "as is." Does that mean you just buy it and worry what is wrong later?
A. When a property is sold "as is," that means the seller is not going to do any repairs and does not warrant the property. The buyer will accept the property in its present condition, and after escrow is closed it is the buyer's responsibility to make any repairs they wish to do. But the seller has a duty to disclose any known defects and condition of the property. This disclosure is usually done on a Transfer Disclosure Statement. Whether you buy a property "as is" or not, it is very important to have the property fully inspected so you know what problems exist. There may be problems there that even the seller did not know about and could not disclose to you.
Q. What is your recommendation on how we should prepare to buy a home?
A. Buying a home can be one of the most exciting things or one of the most upsetting things to ever happen to you. Here is a 9-Step Program than can help:
