A few folks have asked me to explain what "effective date" of a contract is and when it actually begins. The most complete and clearcut answer is available from the Texas Association of REALTORS® and is as follows:
The final date of acceptance is the date on which the contract becomes binding between the parties. It is the date that both buyer and seller have agreed to all terms of the contract and have executed the contract. Four elements must be satisfied for final acceptance to take place:
The final contract must be in writing (typically satisfied when negotiations are made using promulgated forms).
The buyer and seller must sign the final contract, including the initialing of any handwritten changes to the initially drafted offer, if applicable.
Acceptance must be unequivocal.
The last party to accept must communicate acceptance back to the other party or the other party’s agent, if applicable.
The effective date is the date when the last element (communication back) is made after the other three elements are satisfied. One reason that communicating acceptance back to the other party is mandated is so that the other party will know when the contract performance requirements or periods for performance begin.
Wednesday, January 9, 2008
Monday, January 7, 2008
Real Estate Funnies
Every profession has humorous moments. Real Estate is no exception. While not all are cause for a belly laugh, all are at least good for a smile. Here are some examples.
A week aft er a for-sale sign went up in front of one house, another appeared two doors down. The neighbor in the middle said he was thinking of putting a sign up, too. It would read "Was it something we said?"
The guy who decided to sell his own house obviously wasn't a proofreader. Or maybe the sign he put up in his front yard wasn't a mistake after all. It read "for sale by ower."
Sign on REALTORS® marquee "We have LOTS to be thankful for."
Real estate agents have to be prepared for anything. Sometimes they fall victim to Mother Nature. Sometimes they are victims of their own oversights.
While showing a buyer a home, the real estate agent was certain of a sale. The buyer loved the house. When they went outside to look at the yard, howeverthe wind whipped the door shut, locking them out. The agetn's keys were inside, and it began to pour rain. The agent jiggled the doorknobs and checked for open windows.
Finally, they found an open window; the agent crawled in, and retrieved the keys. Driving back to the office, the agent asked how the prospect liked the house.
"I liked it but would never buy it," she said. "It's too easy to break into."
Then there was the new agent who was showing homes to the minister and his wife. After several hours, only two houses remained, and nothing had tickled the couple's fancy. The agent knocked on the door. No one answered. She used the lock-box key to enter the house.
Suddenly a young man came hurrying out of the bedroom, pulling up his pants. He asked why there were three strangers standing in his hallway. It seems he and his new bride had just returned from their honeymoon, and they knew nothing of the scheduled showing. The befuddled agent husteled the reverend and his wife back to the car.
That's when the agent realized she had listed both the newlywed's home and the home next door, the one they were supposed to visit. Both homes had identical for-sale signs. Luckily for the agent, the minister and his wife had a good sense of humor!
A week aft er a for-sale sign went up in front of one house, another appeared two doors down. The neighbor in the middle said he was thinking of putting a sign up, too. It would read "Was it something we said?"
The guy who decided to sell his own house obviously wasn't a proofreader. Or maybe the sign he put up in his front yard wasn't a mistake after all. It read "for sale by ower."
Sign on REALTORS® marquee "We have LOTS to be thankful for."
Real estate agents have to be prepared for anything. Sometimes they fall victim to Mother Nature. Sometimes they are victims of their own oversights.
While showing a buyer a home, the real estate agent was certain of a sale. The buyer loved the house. When they went outside to look at the yard, howeverthe wind whipped the door shut, locking them out. The agetn's keys were inside, and it began to pour rain. The agent jiggled the doorknobs and checked for open windows.
Finally, they found an open window; the agent crawled in, and retrieved the keys. Driving back to the office, the agent asked how the prospect liked the house.
"I liked it but would never buy it," she said. "It's too easy to break into."
Then there was the new agent who was showing homes to the minister and his wife. After several hours, only two houses remained, and nothing had tickled the couple's fancy. The agent knocked on the door. No one answered. She used the lock-box key to enter the house.
Suddenly a young man came hurrying out of the bedroom, pulling up his pants. He asked why there were three strangers standing in his hallway. It seems he and his new bride had just returned from their honeymoon, and they knew nothing of the scheduled showing. The befuddled agent husteled the reverend and his wife back to the car.
That's when the agent realized she had listed both the newlywed's home and the home next door, the one they were supposed to visit. Both homes had identical for-sale signs. Luckily for the agent, the minister and his wife had a good sense of humor!
Saturday, January 5, 2008
Selling it yourself? Think again!
For every homebuyer, there is a seller. And for every seller, there is someone who has, if even briefly, thought about selling his or her own real estate. In the real estate field, property listed by owners is referred to as a "Fizz-bo" the pronunciation of the acronym FSBO, standing for "for sale by owner." Clearly, owners can and do sell their own property. There are internet sites offering all kinds of tips and suggestions designed to help you sell your home. I even offer a free home sellers kit that contains items that can assist. But hints to sellers on how to spruce up a home to help it sell are usually good ideas for every seller - even those who elect to use a professional real estate agent. The fact that the do-it-yourself sites feel it necessary to have articles on contingencies, credit scoring, lock in in low interest rates, buy downs and home inspections speaks volumes about the need for a professional to handle your transaction. Sellers deny themselves the benefit of using a real estate professional because they want to "save" money. If selling it yourself is such a good idea, why are FSBO transactions only 16% of national home listings nationwide? The National Association of REALTORS® announced an advertising campaign recently in which they hope to persuade FSBOs to use a REALTOR®. You can see the video by clicking the link at the end of this article. The FSBO spot illustrates the convenience and expertise REALTORS® bring to complex real estate transactions. It makes side-by-side comparisons between selling a home with and without REALTOR® expertise and lets viewers draw their own conclusions about which method is preferable. Despite the sellers markets in many locales and predictions the internet would diminish the role of agents, a recent NAR study found only 16% of homes were sold directly by owners in 1999, even fewer than the 18% in 1997. Also, the survey revealed the median selling price of a home sold directly to an owner was $113,000 while the median sales price of a home sold using an agent was $129,000. Sure you say, but those homes that sold for $113,000 didn't have any commissions to pay. Well, even at a high commission, those homes sold for $120,000 vs. the 113,000. That's $7,000 in your pocket - or a super nice flat panel tv for your new home! Often times agents offer a move-up program that can save you even more. What's even more telling, however, is that of those homeowners who did successfully sell their home without a professionals help, 50% vowed they would never do it again. they cited these issues: -arranging for appraisals and inspections -understanding and filing paperwork -helping buyers obtain financing and -having time to do it all Again, it should be emphasized that it is possible to save commission costs by selling a home on your own or using discount firms. You must understand, however, the trade-offs involved. Namely, you deny yourself access to someone trained in real estate terminology and practices, which can be most advantageous. Experienced real estate agents are able to provide up-to-date reports on comparable sales in your neighborhood. Because they work in the local market daily, they have a much better understanding of what is happening there and what financing options are available. If the agent is a REALTOR®, they can provide more exposure, via the MLS, than most homeowners can obtain on their own. In most cases, it takes less time to use a licensed real estate professional to sell your home. If you do elect to use a licensed real estate agent, how do you know which one to pick? See my FAQ's for some questions to ask and things to consider. Any good real estate broker keeps their clients' interest in mind at all times, provides frequent status reports and has a clear understanding of the housing market as it is today. To maximize exposure and minimize problems, enlist the services of a broker. Your peace of mind and a great deal of money are at stake. With professional assistance, the home-selling process can be much easier! See the NAR video here: http://www.realtor.org/pac.nsf/video?OpenForm&Database=pacmediaV.nsf&FileName=XNWN-0604.asf
Friday, January 4, 2008
Most common inspection items
Lots of times clients ask me what things can come up on a home inspection. Buyers want to know what to be aware of and how it will impact the offer we write on a property. Sellers want to know what they need to do to maximize their profits on their most valuable asset. Buyers and sellers both want to know what I can do to help them be well positioned regardless of the results of the inspection.
Most problems can be described in two words, "deferred maintenance." Other problems may have existed since the original construction. Whatever the origin, they all can be fixed - for a price.
The most common problems are....
Foundation
The clay subsoil of Texas expands and contracts according to the amount of water in the soil surrounding the clay. Excess water causes the clay to expand and lift watever is sitting on it.
If your inspection report indicates foundation problems or you see signs that indicate a problem, it is wise to have the foundation evaluated. Remember our Strategic Alliance partners are always ready to provide world-class service.
Drainage
Settling of soil next to the house, poor initial landscaping and poor rainwater run off management are the leading causes of this type of problem.
Poor drainage allows water to stand next to the slab, and that water enters the soil surrounding the clay subsoil. That can lead to the foundation problems noted above.
Fixes for these problems include downspouts and splash blocks, gutters and regrading areas adjacent to the house. French drains and, in some cases, cutting roots that form dams to natural drainage are other options. The most important thing to do is direct rainwater away from the house.
Roofing
If a roof leaks, the most common places for them to begin are at the chimney flashing, structural flashing and roof penetrations.
Roof penetrations are where anything goes through the roof itself, such as plumbing or water heater vents or the chimney. Missing or damaged shingles or a roof that has reached the end of its life expectancy are potential sources of leaks.
Heating, ventilation and air conditioning
Air conditioners Texas work long and hard before they suddenly stop working. Most of the time the problem is as simple as a freon charge or replacing an electrical contact. Other repairs, such as condenser replacement, are more costly.
Older electric furnaces sometimes need to have elements rewired. Heat exchangers on gas furnaces can rust and become dangerous. When this happens it may be more economical to replace the entire furnace.
Electrical
Ground fault circuit interrupters (GFCI's) are probably the most common item we see on the list of recommended repairs. GFCI's are required on electrical outlets within six feet of the water supply in kitchens and bathrooms, on exterior locations, in garages and around whirlpools, spas or swimming pools.
Using circuit breakers that are the wrong size for the wire attached to them is another common problem. Sometimes we also see "stunt wiring," a homeowner's do-it-yourself project that is a fire waiting to happen.
Plumbing
Fixing a leaky faucet or drain can take hours, even if you know what you're doing. Other common problems include leaking commodes or ones that are not mounted securely to the floor and leaking pipes in the attic or under pier and beam foundations.
Trim and siding
You may have noticed that it can rain a lot in a short period of time here in our great state. Houses need to be caulked and painted regularly or moisture will begin to rot exterior (and sometimes interior) wood. Fascia, soffits, siding and window and door trim are all candidates for this type of deterioration.
Doors and windows
Whether inside or outside, doors can stick, get damaged or become delaminated (when the thin covering of wood veneer starts to come off). And some houses have just suffered from serious neglect.
Other common problems include broken windows and missing screens. Windows may not lock securely, and exterior doors may not have a lock that can only be operated from the inside.
Water heater
Water heaters in the garage or in a room that opens directly into the garage must be elevated 19 inches above the finished floor. That's so the burner or igniter in the water heater will not ignite gasoline or other volatile vapors and cause a fire or explosion.
Water standing beneath the water heater, rust on the tank or single walled exhaust vent pipes are also potential problem areas.
Miscellaneous
This category catches everything missed in the other nine. It could be anything from a cook top that doesn't work to rotten fencing. It includes damaged decking, holes in the yard and nonfunctioning door bells.
Remember not all items noted on an inspection report require repair or replacement. Many houses were built before current codes were written, and just because an item does not meet todays code does not mean there is an imminent danger.
Sellers are not required to bring a home up to todays code. Most of the time a seller will correct safety issues. Ideally, a seller will provide a price reduction equal to the value of these repairs, and the new buyer can have these items completed by the contractor of their choice (remember our Strategic Alliance partners!).
Does this information bring other questions to mind? Remember I'm just a phone call or email away!
Most problems can be described in two words, "deferred maintenance." Other problems may have existed since the original construction. Whatever the origin, they all can be fixed - for a price.
The most common problems are....
Foundation
The clay subsoil of Texas expands and contracts according to the amount of water in the soil surrounding the clay. Excess water causes the clay to expand and lift watever is sitting on it.
If your inspection report indicates foundation problems or you see signs that indicate a problem, it is wise to have the foundation evaluated. Remember our Strategic Alliance partners are always ready to provide world-class service.
Drainage
Settling of soil next to the house, poor initial landscaping and poor rainwater run off management are the leading causes of this type of problem.
Poor drainage allows water to stand next to the slab, and that water enters the soil surrounding the clay subsoil. That can lead to the foundation problems noted above.
Fixes for these problems include downspouts and splash blocks, gutters and regrading areas adjacent to the house. French drains and, in some cases, cutting roots that form dams to natural drainage are other options. The most important thing to do is direct rainwater away from the house.
Roofing
If a roof leaks, the most common places for them to begin are at the chimney flashing, structural flashing and roof penetrations.
Roof penetrations are where anything goes through the roof itself, such as plumbing or water heater vents or the chimney. Missing or damaged shingles or a roof that has reached the end of its life expectancy are potential sources of leaks.
Heating, ventilation and air conditioning
Air conditioners Texas work long and hard before they suddenly stop working. Most of the time the problem is as simple as a freon charge or replacing an electrical contact. Other repairs, such as condenser replacement, are more costly.
Older electric furnaces sometimes need to have elements rewired. Heat exchangers on gas furnaces can rust and become dangerous. When this happens it may be more economical to replace the entire furnace.
Electrical
Ground fault circuit interrupters (GFCI's) are probably the most common item we see on the list of recommended repairs. GFCI's are required on electrical outlets within six feet of the water supply in kitchens and bathrooms, on exterior locations, in garages and around whirlpools, spas or swimming pools.
Using circuit breakers that are the wrong size for the wire attached to them is another common problem. Sometimes we also see "stunt wiring," a homeowner's do-it-yourself project that is a fire waiting to happen.
Plumbing
Fixing a leaky faucet or drain can take hours, even if you know what you're doing. Other common problems include leaking commodes or ones that are not mounted securely to the floor and leaking pipes in the attic or under pier and beam foundations.
Trim and siding
You may have noticed that it can rain a lot in a short period of time here in our great state. Houses need to be caulked and painted regularly or moisture will begin to rot exterior (and sometimes interior) wood. Fascia, soffits, siding and window and door trim are all candidates for this type of deterioration.
Doors and windows
Whether inside or outside, doors can stick, get damaged or become delaminated (when the thin covering of wood veneer starts to come off). And some houses have just suffered from serious neglect.
Other common problems include broken windows and missing screens. Windows may not lock securely, and exterior doors may not have a lock that can only be operated from the inside.
Water heater
Water heaters in the garage or in a room that opens directly into the garage must be elevated 19 inches above the finished floor. That's so the burner or igniter in the water heater will not ignite gasoline or other volatile vapors and cause a fire or explosion.
Water standing beneath the water heater, rust on the tank or single walled exhaust vent pipes are also potential problem areas.
Miscellaneous
This category catches everything missed in the other nine. It could be anything from a cook top that doesn't work to rotten fencing. It includes damaged decking, holes in the yard and nonfunctioning door bells.
Remember not all items noted on an inspection report require repair or replacement. Many houses were built before current codes were written, and just because an item does not meet todays code does not mean there is an imminent danger.
Sellers are not required to bring a home up to todays code. Most of the time a seller will correct safety issues. Ideally, a seller will provide a price reduction equal to the value of these repairs, and the new buyer can have these items completed by the contractor of their choice (remember our Strategic Alliance partners!).
Does this information bring other questions to mind? Remember I'm just a phone call or email away!
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