Question #4:
What kinds of things can prevent a house from being purchased?

Answer #4:
In most sales contracts there are 2 contingencies that most commonly effect homes sales. Nearly all purchase contracts contain the following:

FOR THE BUYER
1.  a financial contingency based on the buyer's ability to obtain a loan commitment from a lender (qualify for a mortgage); and
2.  a home inspection contingency based on having a certified inspection on the property performed to the buyer's satisfaction.

It's the seller's job to ensure the house has clear title (ability to transfer property legally, in Texas known as a deed of trust); the property is to be maintained in its present condition awaiting closing; and the seller agrees to make any agreed upon repairs mentioned in the contact to the property (usually those cited in the inspection report). Generally, a buyer will purchase a home inspection to verify the home's structural & mechanical condition. But today even home sellers are having inspections done beforehand to determine if there are any problems that could prevent a sale.


Question #5:
Whose job is it to disclose pertinent information about the property for sale?

Answer #5:
Texas homeowners are required to complete a Seller's Disclosure Form to be submitted to realtors and their clients when showing an interest in viewing a property. By law the Texas Property Code requires residential sellers to disclose all facts affecting the value of the property which might include: homeowner's association dues; any work done on the house that meets local building codes and permit requirements, the presence of any neighborhood nuisances or noises which a buyer might not notice, such as a barking dog,  poor TV reception, flooding, major home repairs/additions, treatment for termites/pest control, foundation repairs, replaced equipment or appliances; any death on the property within the last 3 years; and restrictions on the use of the property (zoning and association rules). *If a potential buyer signs an earnest money contract prior to being allowed access to read the  "Seller's Disclosure Notice", the buyer has the right to cancel the contract for any reason within 7 days of the receipt of the "Notice," according to the Texas Property Code.

The Seller's Property Disclosure Form specifically covers:

• in the kitchen - a range, oven, microwave, dishwasher, garbage disposal, trash compactor;

• safety features such as burglar and fire alarms, smoke detectors/sprinklers, security gate, window screens and intercom;

• the presence of a TV antenna, satellite dish, carport or garage, garage door openers, rain gutters, sump pump

• amenities such as a pool/spa, patio or deck, built-in BBQ and fireplaces;

• types of heating, condition of electrical wiring, gas supply, solar panels and such;

• types of water heater, supply line, sewer or septic systems

• condition of walls, roof, insulation, windows, fences, sidewalks, driveways, foundation, electrical & plumbing systems;

• environmental hazards, shared walls/fences, encroachments/ easements, and any pending lawsuits against the current owners.

*It is also highly recommended that sellers disclose the last 12 months history of utilities for electric, water and gas on a form to be given to their realtor. This helps potential buyers estimate their energy costs in addition to their mortgage.

A home inspection (generally paid for by the buyer) will also disclose the condition's property. It's a good idea to spend $250-$400 for an inspector to ensure what your buying is in good mechanical shape and worthy of your investment. On a $100,000+ investment this is just a very wise effort on the part of the potential buyer. (Most people spend money on a mechanic checking out a car purchase. I would think a house purchase with substantially more money involved would also warrant a professional's opinion).

Home inspectors are required to be licensed in the state of Texas through the Texas Real Estate Commission. (See their website above for a copy of the home inspection standards & sample reports). For information on a list of area inspectors, contact the Houston Area Real Estate Inspectors, Inc. (HAREI) visit their website at http://www.harei.com
Texas Association of Real Estate Inspectors. Check Standards Here.  American Society of Home Inspectors, Sample of a Home Inspection Report, Pillar To Post Home Inspections,  http://www.USINSPECT.com.

If a home inspection turns up flaws, you generally have a few options:
1. ask the seller to pay for repairs out of pocket (and expect to renegotiate the home's sales price);
2. set aside money in an escrow account for the repairs to be done, after getting bids from local contractors (this depends on Texas law requirements by title companies if they are permitted to do so legally. A realtor or broker is not permitted to hold such funds by law);
3. simply agree to split the costs 50 / 50.
4. the buyer has the right to void the home sales contract agreement, if any major problems with the structure or systems of the house are uncovered during the home inspection process. (It is highly recommended that the buyer attend the home inspection, usually lasting between 2 - 2 1/2 hours. This will allow you to ask questions about repairs and maintenance of the home.) Within 48 hours usually, you will receive a written report with details on the home's condition and some inspectors offer suggested repairs / recommendations. The buyer is not obligated to share the report's findings with the homeowner, since he or she paid for the service. However, most potential buyers and their realtors share the information willingly. For this reason sometimes homeowners feel the need to hire their own inspector to pre-determine any potential problems that could prevent a sale. To find contacts for home repairs, visit http://www.texastoolbox.com.


Earnest $ Deposits, Home Inspections and Option Fees: The earnest money deposit is 'monetary consideration' given to the homeowner for having taken your offer over others of your serious 'intent' to purchase the property, and allowing contingencies in the contract offer to be fulfilled: such as a 10-day home inspection period. In effect, the homeowner is limiting the marketing efforts on his home, while you verify the home's condition with an inspection. Some sellers continue to take 'back-up contracts' during this period in case your sale does not materialize. Should a buyer not fulfill the terms of the contract (such as not being approved for financing, not have enough money for closing costs, cancelled employment offers for relocatees, a job layoff or illness in the family, etc.) the homeowner can keep the earnest money deposit for repayment of 'lost' time marketing the property for sale. It is wise to always include a 'contingency' in your contract for 'approved financing', and 'completion of a home inspection  to the buyer's satisfaction'. Otherwise, you as a buyer, can be stuck with an obligation to buy a house you can't get financing approval for or may feel the home's condition was not fully disclosed legally. In most cases...buyers, who back out of a home sale because of home inspection concerns, are asked to sign a release and their earnest money deposit is refunded from the title company. Returning the funds are contingent upon receiving the proper signed documentation from all parties concerned. The title company is required to hold all earnest money deposits for a minimum of 30 days (in case their is a claim dispute filed by the other party). This basically means you're out of luck submitting another sales contract offer on another home for at least 30 days, until you receive your money back from the title company. It is wise to only put down the minimum amount for this reason.

There is also something known as an 'option fee' that you pay the seller to allow you time to consider purchasing the property. Depending upon what is agreed upon by both parties, the money can be an outright consideration 'fee' or applied towards closing. Talk to your realtor for more details on how this works.

Question #6:
What are some tips on negotiating a contract to improve my chances of purchasing the home I want?

Answer #6:
1. Learn as much as you can about the seller. Is their a need to sell the property fast because of a job transfer, someone going through a divorce, or the sellers have purchased another home and want to move quickly? Knowing this information gives you bargaining power to negotiate the terms of the sale in your favor.
2. Do not reveal too much personal information to the other agent and/or sellers. Don't feel rushed into making a decision for fear of losing your 'dream house' to another buyer.
3. Use a professional realtor and/or lawyer to draw up the contract to avoid any legal disputes later.
4. Do not try to offer a 'low ball' offer to the seller. He and/or she will be offended and terminate the negotiations. (The asking price is generally around the same amount as the tax appraisal district's value of the property, since mortgage companies typically will not finance over that amount.)
5. Be flexible, sincere, and open to discussion to close the sale.

Question #7:
How do I prepare for closing at the title company?

Answer #7:
Start by contacting your realtor a few days prior to closing (between 1-3 days) for last minute concerns and to confirm appointment dates / times at the title company.

One to three days Before closing buyers will need to get closing funds finalized from a local bank in the area - by certified check, electronic fund transfer (EFT) or money order. EFTs may take a few days to electronically wire the money to the title company. Allow time for the fees to be deposited into the title company's bank account. Don't think you can assume the funds made it electronically overnight. Buyers should also gather all necessary paperwork to be taken to the appointment the following day.

What to expect: Most realtors do a walk thru inspection with their clients the day prior to / or morning of closing. I recommend one being done 3 days - 1 week before closing to allow for repairs to be done if needed. Buyers will sign an acceptance form stating that they are satisfied with the property's condition. The form should not be signed until everything meets the buyer's satisfaction.

*If the buyers have any concerns, all parties will take the necessary actions to rectify any problems at that time. Closing can be delayed in the event the property is not accepted.


Question #8:
What should buyers look for when doing a walk-thru inspection at the new property?

Answer #8:
Buyers should be on the lookout for these items during their walk-thru inspection:

• look at the general appearance of the house noting any changes since you last viewed the property;

• in the bathrooms check the water pressure and clarity of the water by letting water run in the sink & tub (all at the same time). Also flush the toilet and notice if the water is slow to refill. (Their might be an obstruction in the pipes such as a kid's small toy. Don't laugh. I'm serious. I once had a plumber hand me an action figure out of the swirling waters, along with a plumbing bill!) Take off the lid & notice any water dripping from the tank's sides or corrosion, the ball not floating to the top/the chain sticking, or the toilet handle loose (if it's funky in there, consider a little bleach or drop-in deodorizer); Some people have low-water consumption toilets, which are not very popular with many homeowners. Besides being too narrow for nature to swish away massive amounts of poo, friends of mine complain that they tend to back up. A normal toilet uses 5 gallons of water per flush, a low-consumption toilet about 1-2 gallons. Almost all homes built in the last 5 years or so have low-water consumption toilets. It's becoming the standard to help conserve water resources.

• turn on the a/c & heat to see if it's functioning. Check the a/c unit outside for rust, weeds in the intake / fan area, the sound of the motor cycling on / off. It may be time to check the freon, at least seasonally. Inside the house put your hands near the ceiling vents to feel air flow. Open up the register grate to check the a/c filters (usually in the hallway or sometimes in the ceiling near a garage/utility room). Look for dark soot / dust inside ceiling or attic air vents for microscopic bacteria that could affect allergy sufferers, causing headaches, memory loss, and muscle weakness/fatigue. Do not overlook this, especially in older homes or newer homes weatherized to increase energy efficiency. This issue is quickly becoming a major health issue for renters and owners alike! If you think this might be a concern, consider having an environmental inspection done to test for mold, radon, asbestos, or lead paint in the home. Here in Texas, no home is immune from the possibility of potential air pollution or bacteria growth. Proper housekeeping such as regular cleaning, cross ventilation (not sealing the homes air flow completely), regular upkeep and maintenance practices, and common sense helps to minimize potential risks.

• look at each room of the house inspecting the carpet or tile for tears, stains, worn or unsafe areas. Carefully inspect walls and ceilings from which window treatments, wall pictures or any other attached furnishings have been removed. Check wallpapers, chair rails, etc. for damage, turn on/off lights, and test window locks--open/close a few. (Any moisture / mildew on windows, glass breakage or cracks, gaps in caulking?); Don't forget fireplaces, too. It's a good idea to have it professionally cleaned the first time or check a fireplace manufacturer's website for possible links to do-it-yourself instructions or vendors. The library may even help. You don't want to have an accumulation of soot cause a potential fire, so give it a thorough cleaning for safety's sake. Some fireplaces will have built-up deposits of minerals that can be a hazard.;

• in the kitchen check stove knobs, exhaust fan, refrigerator (if sold in the contract) and the oven. Turn on the dishwasher. You should hear a gurgling sound when water is filling or draining. This is normal; it's a protective air flow value to ensure your drain doesn't back up sewage into your dishwasher. If you are buying appliances, check them out thoroughly. Check the garbage disposal. Look for signs of grease near the stove / walls or painted over areas. Any signs of previous fire damage (chalk-like soot, stagnant smell, freshly painted cabinet interiors)? Open a few drawers and cabinets looking for traces of water stains, bug infestations, rotting or sagging wood. Notice the condition of the pipes under the sink cabinet and floorboard; An abused kitchen will have signs of severe warping, and white powder 'mineral' deposits on the interior cabinets (moisture problems/leaks), Are the counters chipped or scarred? Cabinets pretty banged up? Antiquated fixtures and storage areas (pantry, pots & pans storage)? The kitchen is the most likely area to have problem areas. It's often the most used room in the house; that's why renovating a kitchen, when a home is up for sale, is one of the first items redecorated;

• pull down the attic access stairs and take a look up there. Notice the a/c unit (look for overflowing water in the drip pan in the bottom of the unit that causes ceiling water stains). Any signs of rodents (gnawed beams, droppings, etc.)? How about the water heater - is it in the attic, laundry room or garage? ;

• check for trash debris on the property and in the garage.

• the property should be conveyed in 'working order' (as it was presented during 'showings' with functioning electrical, plumbing, mechanical, etc.)

• carpets should have been vacuumed or at least clean in appearance, floors swept;

• all window shades, curtains, blinds, etc. should be closed;

• ceiling fans/ lights should be turned off, and all doors to each room closed;

• appliances should have been thoroughly cleaned, and food removed from cabinets and the refrigerator;

• look for dishes left in the dishwasher, and items under the kitchen & bathroom sinks (check drawers, too!);

• don't forget to check for items left in the attic or any other hiding spaces in the house; the previous owners may have forgotten about them.

Just a reminder: removal of property such as light bulbs,
a/c filters, light switch plates or electrical outlets, water filters, door hardware / locks, fireplace screens, curtain rods, or replacing light fixtures not stipulated in the sales contract is illegal and constitutes fraud. (Why? The law says that if it is attached to or is needed in the performance of certain functions, it is considered a fixed asset and stays with the property);

• also remember to connect utilities in your name to establish new service;

• there should be no left over paints, chemicals, batteries, & spare tires in the garage. If found, you can check about disposal options at a local recycling center.

• residual building materials (bricks, wood, garage items, etc.) should have been removed as well. If not, consider donating these items to a local church group or charity for community projects;

• owner's manuals or garage door openers should be found in a kitchen drawer;

• spare keys should be brought to closing and personally handed to the new owners for security reasons;

• the property should be secured (including retrieving spare keys from neighbors, storing recycling or trash bins, closing fence gates/windows/doors, checking garden faucets, and take a utility meter reading for your records).

• if  a dog house, children's swing set / fort, storage shed, or other outdoor item is left behind, you'll should have discussed it's sale or removal when the contract was presented.
  
  *If anything has changed from the time the house was shown to the buyer before closing (such as a broken water pipe), the sellers are responsible for repairs. If it's a major expense, the seller's homeowner policy should cover it.
  
  *If you have signed the acceptance form during a walk-thru inspection, you have agreed to the condition of the property as being acceptable. Acts due to natural occurrences (hurricanes, floods, fires, theft, vandalism) would be covered under your new homeowner's policy for payment / reimbursement (minus your deductible).
  
  *If you find anything out of order or items left behind, please contact me and I will notify the other agent to rectify the situation;
  
  As a realtor, I can only suggest the above-mentioned provisions be completed to ensure a smooth transfer of property. Unless written into the sales contract, they are unenforceable by law and are merely suggestions.
  I do everything humanly possible to ensure your moving experience is as stress free as possible. In the end it just comes down to common sense and treating others as you would like to be treated. Read this article for what to look for when inspecting new construction homes.
  

Question #9:
What can I do to make moving day easier for me & my family?

Answer #9:
Be smart - allow for possible delays during a move. Plan a back-up strategy in case of some unforeseen event. I've personally known sellers whom took longer than expected to move out and delayed buyers moving in. I recommend a one-day delay between officially closing and having the buyer's movers come. I know it's an added expense, but it sure beats having to look for a storage unit for all your belongings at the last minute! Eliminate the stress. Plan ahead. Delays in getting a U-haul, a reservation glitch, or even bad weather can ruin your moving plans. The best way to reduce stress -- prevent it! Most of the time moves go pretty smooth, but on occasion tempers can flare! Trying to do too much in one 24-hour period is insane. Slow down, plan your day, and pace yourself.

*If you're really savvy, negotiate in your sales contract that the seller will pay for any delays in moving, due to not vacating the property by a certain day / time limit.

There's a big struggle to get families moved in and out of their homes. The truth is everyone seems to want to move on the last day of the month (to alleviate paying extra interest on their mortgage or rent). I would either have a back-up moving date established or roll over your moving date into the beginning of the next month. Yes, it complicates computing your closing costs/mortgage, but it's worth preventing the stress that's associated with relocating. Moving is one of life's 5 stressors - marrying/divorcing, having a baby, changing jobs, moving,  or having health problems. My job is to ensure your house purchase meets your needs and your move goes smoothly.