FAQ
Questions That Sellers Frequently Ask
Q. Why shouldn't I price my house a little high, since I can always drop the price later?
A. That is a strategy that sounds good - but, in fact, is more likely to result in a lower price. Here's why. The first few weeks a house is on the market is when it will have the most activity. If a house is overpriced, it has to compete with houses at that higher price level, which are almost certainly larger or have newer/more luxurious features. So the overpriced home is unlikely to attract an offer. Worse yet, those first weeks are when real estate agents preview the house. If it's overpriced, they may not even bother to show it to their buyers. Eventually, the seller will have to drop the price - and may end up with an even lower price because buyers will wonder why the house has been on the market so long and may factor that into their offer.
Q. What is meant by the term "contingency" in a sales contract?
A. Sales contracts typically contain several "contingency" clauses, or stipulations that the sale is subject to. For example, with a mortgage contingency, if the buyer is unable to obtain financing within the specified timeframe, neither the buyer nor the seller is required to complete the purchase. Among other common provisions in the "subject to" section are property, termite or radon inspections and/or the purchaser's need to sell a current home first.
Q. As a seller, what certifications am I responible for?
A. Your municipality may require you to provide a Use and Occupancy Certificate to the buyer at settlement. Typically, the municipality will check your home for safety issues such as working smoke detectors, GFCI outlets at appropriate locations, loose handrails, trip hazards and proper permits for any improvements made to the home. Ask me and I will tell you if your municipality has this requirement and I will provide a list of the things required to obtain it. You will also be required to provide a tax certification that your taxes are paid up to date as well as a water and/or sewer certification. These are obtained by my conveyancer on your behalf for your convenience.
Q. What happens if the home inspection reveals a serious problem?
A. Generally, if the home inspections reveal a serious problem, the buyer who has a properly drafted contract can get out of the contract. What usually happens, however, is that the the repair or cost of remedying the problem becomes an issue of negotiation. That is where my skills as a negotiator is critical in resolving the issue and keeping the home sale moving.
Q. What is radon and what is the purpose of radon testing?
A. Radon is a radioactive gas produced by the natural decay of other radioactive substances. If radon dissipates into the atmosphere, it is not likely to cause harm. However, when radon enters buildings and is trapped in high concentrations (usually in basements in inadequate ventilation), it can cause health problems. The general rule is that remediation is indicated if radon levels measure 4 picocuries per liter (PiC/L) or more. Radon levels vary, depending on the amount of fresh air that circulates through a house, the weather conditions, and the time of year. It is relatively easy to reduce the levels of radon by installing ventilation systems or exhaust fans.
Questions that Buyers Frequently Ask
Q. How many homes should I plan to view and how should I make the final decision?
A. While exploring your needs and wants fully is a good idea for focusing your search and saving time, viewing a number of homes will help you become familiar with what you can expect to get for your money. When you find a home you really like, it's a good idea to go back and look at it at a different time of day. This will give you greater insight into what it will be like living in the home full time.
Q. How can I check my credit rating before I apply for a mortgage?
A. Your credit rating is based on a combined score generated from three credit bureaus who look at your credit history, amount of credit available, and recent inquiries to determine what's called your FICO score. For a small fee, you can get your score or review your credit report by going online to www.myfico.com or contacting the credit bureaus directly at:
- Equifax: (800) 685-1111
- Experian: (888) 397-3742
- TransUnion: (800) 916-8800
Q. Why should I consider paying points?
A. Buyers often choose to pay a one-time charge called mortgage "points" in exchange for a lower interest rate. Usually paid at closing, each "point" costs 1% of the mortgage amount, or $2,000 on a $200,000 loan. The lower rate reduces the monthly mortgage payment, and points paid in conjunction with the purchase of a home are generally tax-deductible in the year they're paid (see tax advisor). Monthly savings will often exceed what was paid in points in just a few years' time.
Q. What is title insurance and why do I need it?
A. Basically, title insurance assures that you have clear title to the home you're purchasing. A title search is the primary component of "due diligence," a process that will be started either by your attorney, if you are using one, or by the title company you choose. The title search determines whether the seller actually owns the property and if there are any claims against it.
Q. What happens if the house I want to purchase does not appraise at the amount expected?
A. . If the house doesn't appraise at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be willing to put more money down, the seller may adjust the price or offer other concessions, or the two sides may negotiate to split the difference between them.
