Home Buying and Selling Tips
by Max Lent (Revised 3/06)
The following advice is anecdotal and based on my experience purchasing a
home.
Topics
How much is a home worth?
The seller's realtor will tell you how much the seller wants for the
property, but that may not be a reasonable asking price. To find out
the value of the house you are evaluating visit
Zillow.com. You will be asked
for the address of the house and it will return information on the last
selling price of the house and information on the selling prices of all of
the other homes on the same street. This information appears to be
based on the current assessed value. Although this data is not an
absolute indication of value, it does provide you with a baseline of
factual information. Use Zillow.com to look up the value of your
existing property as well. This is the kind of transparency that
only the Internet could provide.
Representation
If you are the home buyer, never allow a single realtor to represent
you and the seller in a deal. Realtors always represent the seller
unless they contract with you to be your paid representative.
Realtors have incentives for being the seller's and the buyer's agent
because they get money coming and going. However, the agent is
always working for the seller no matter what they may tell you.
The relationship between a home seller and a home buyer is
adversarial. The seller wants the highest possible selling price
with the fewest concessions possible. The buyer wants the lowest
possible price with as many concessions from the seller as possible.
The realtor is the representative of the seller and will attempt in the
best of deals to negotiate the best deal for the seller. The
higher the price of the house, the greater the percentage for the
realtor. Home buyers should invest in the services of a
representative to represent them. The fees should be more than
offset buy the representative obtaining a lower price and better
concessions.
Ask lots of questions.
When visiting a property, on which you are seriously considering
making an offer, write out a list of at least 50 questions to directly
ask the owner and the realtor. These questions should include:
- Does the roof leak?
- Has the basement ever flooded or had water on the floor?
- Has the house been broken into?
- Has the owner had to call the police regarding a neighbor or
neighbors?
- Are there barking dogs in the neighborhood?
- Are there any existing problems with the electrical system?
- Are there any existing problems with the plumbing?
- Has the house ever been treated for insect infestation?
- Has the house ever had a fire?
- Has the house ever experienced structural damage from a natural or
other disaster?
- Are there any structural flaws in the house?
- Have you asked the neighbors to temporarily hide barking dogs,
clean up their property, basketball hoops, or other undesirable
issues?
- Do visitors park outside and user their car horns instead of
using doorbells?
- Do the neighbors scream and yell at each other?
- and so on
My suggestion is to write out your list as a table and have the
seller initial a yes or no column and sign it. If the seller lies,
they can be held legally responsible.
For example, I made an offer on a home and had the home inspected by
an engineer. The realtor recommended the engineer--something that
I would never agree to again. The day the engineer performed the
inspection, the air temperature was too cold to test the air
conditioner. I didn't ask the realtor or the seller if the air
conditioner had any problems. I only asked if it worked and was to
find out that it did. Only after I moved in and had the air conditioner
serviced did I discover that the unit had a broken valve. The air
conditioner worked, but the broken valve will result in a quick demise
of the unit. Repair was out of the question because the company
that built the air conditioner had gone out of business years before my
purchase of the house. Repair of the valve, if parts were
available, would cost thousands. Replacing the air conditioner
will also require replacing the furnace which will cost more than
$5.000. The question that I should have asked the owner was, "Has
the air conditioner ever been diagnosed as having a problem?" If
it had, I would have negotiated for its replacement as part of the
purchase. Not asking the right question cost me $5,000.
Buyer beware!
Interest Rates
Shop around for interest rates. Do not automatically consider
using the realtor's broker. Realtors have an incentive to keep as
much of the transaction profits within their company as possible.
You may be able to obtain lower interest rates from local banks, credit
unions or other mortgage brokers. Check the newspaper Real Estate
section for mortgage rate listings. Compare those with what is
available on the Web. In my last home purchase I was able to
obtain great service and an excellent rate through my realtor's broker.
However, if I had made arrangements with another company I could have
saved more than $20K over the course of the loan. Another
possibility is that I could have lost the house if I had worked with a
Web-based company that took too long to respond.
The Sound of a House Not Being Sold
Perhaps a new Real Estate cliché should replace the old one about what
makes a property valuable--"location, location, location." The new
one would read something like "what makes a property value drop quicker
than anything else--noise, noise, noise."
Swimming pools.
If on some summer weekday or winter day you visit a house with a
swimming nearby. Try to imagine pool parties going on all
weekend from morning to night during the summer. Parties equal
noise. The noise come from pool partiers having a good time at
your expense. There will be loud music, yelling, laughter, and
more possibly associated with pools. Remember that weekends are
the time of the week that you will be at home attempting to sleep in,
relax, or desire a little peace and quiet. While some Real
Estate descriptions may try to indicate that swimming pools are
indicative of a "family oriented neighborhood" they could be party
central during the summer.
Basketball hoops
If you are a sports fan and find the constant thumping sound of
basket balls on pavement, buy a house near a basketball hoop.
Otherwise, think twice. At one house I owned, the next door
basket ball hoop was a magnet for youths from blocks away. They
kept the balls in play from early in the morning until late at night.
Basketball hoops are another indicator of noise. Playing
basketball is a noisy fun game. Basketballs also go out of
bounds and possibly into your yard. Think about whether you want
unwelcome teens on your property, especially when you are not at home.
Watch out for neighborhoods where there are basketball hoops set into
the edge of the lawn near the street. The owners of these homes
will not likely take kindly to your moving in next door and them
telling them to move their basketball hoop.
Barking dogs
Some people, dog owners for example, seem to be able to filter out
the sound of barking dogs. Others like me, find the sound of
barking dogs unbearable. A great Real Estate agent for me would
be one who could tell me if a property I am about to evaluate has
barking dogs within a quarter mile. When I visit a property and
hear a neighbor's dog barking nearby, I move onto the next property
without seeing the interior.
Mechanical noise
Dirt bikes, hobby car repair garages, snowmobiles, and other
mechanical noise polluters. We visited a Real Estate listing
that was in a housing track on a cul-de-sac. As we
turned into the cul-de-sac we had to slow to a stop to avoid pre-teen
boys riding unlicensed dirt bikes in the street. Needless to
say, we turned around around at the first driveway and never returned.
I wonder how much those dirt bikers cost the seller? I wonder if
they ever figured out the cost of the noise or if the noise was why they
were selling?
Screaming Neighbors
One of the issues that drove me
out of the city was that my neighbors would much rather yell from house
to house than use a phone or walk. I thought that I would leave
that behind when I moved to the suburbs. Wrong. I have
neighbors now who, when they aren't using every imaginable motorized
yard tool available to humans, yell their conversations with each other.
They are probably nearly deaf from operating their noisy lawn tools, but
more likely, they come from a lower economic class where this is the
standard sound volume of communicating. One way to avoid this
situation is to walk the neighborhood rather than drive through it.
You can evaluate the neighborhood more carefully on foot. In my
case, the yelling neighbors moved in after I did. There's not much
you can do about that, but move frequently.
Maps
When we purchased our current house, we looked at more than 800 homes
using the online services. When we found a property that seemed
interesting or worth knowing about we used a online map program to get
an idea where the property was located. Mapping programs like
Microsoft's MSN Maps and Directions,
Google's map program,
Yahoo's map program, and
Mapquest. Any of these
services will enable you to zoom in and out to see if there is an
expressway or park nearby. Google's map program has a feature that
enables you examine properties even closer. It has satellite
photographs. Add the address of the property you are exploring to
the address box. When Google finds the address, use the satellite
image button to see what the property looks like from the air.
Look for nearby garbage dumps, power lines, freeways, and other
attributes that would eliminate a property. For example, if you
don't want a house next door to a swimming pool or a sports park, you
can eliminate those houses by using the satellite view. If you
want to take the satellite view to the next level of resolution,
experience Google Earth.
Google Earth requires that you install free software on your computer
and that your computer has a broadband Internet connection, but it is
worth the effort. Never before has a homebuyer had access to such
valuable visual information.
A Place In The Country
If the property you are considering purchasing is next to a forest or
field, know that the forest or field will sooner rather than later be
developed. What it is developed into will most likely be what you
are moving away from. Never trust what the owner or the Real
Estate agents say about about the adjoining property. They have an
incentive to play down or lie about what they know about possible
development of the adjoining property. Go to the city planning
department and look up who owns the adjoining land and what it is zoned
for. If the land you are considering is at the edge of a city,
know that the adjoining property can be re-zoned and sold in the blink
of an eye. The only way to protect your purchase of country
property is buy lots of land.
Use Google Maps and their
aerial photography option to view the land around the property that you
are considering. If there is a stub road, a road that points to a
forest or open space that just ends without a cul de sac, assume that
the stub road will soon be continued. A realtor told us that a
nearby stub road might remain a stub road for tens of years. They
were, at the very least, misinformed. Stub roads in places like
Webster and other eastern and southeastern towns and counties should
tell you one thing, development is coming.
If you currently live near a forest or open space, don't expect any
local or national wildlife, forest, nature or environment organization
to come to you aid in stopping the eventual development of your forest.
I know this from experience. Most of these kinds of non-profit
organizations seem to exist to solicit donations rather than saving
habitats. Developers, supported by politicians will almost always
win. You are better off investing your time in moving than
fighting. When you eventually lose your battle and see the forest
logged or the open space bulldozed for development, your heart will
break. It is not worth the pain.
My untried fantasy concerning the purchase of country land is to buy every acre I
could then donate all but the portion I want to live on
to a nature organization with an iron-clad agreement that they would
never sell or develop the land. Another fantasy would be to buy
lots of acreage and then use the land as some kind of tax advantage by
planting Christmas trees or creating a wet land area.
When we lived in the city, we griped about the crime and gun shots we
would hear from time to time. When we looked at property in the
country, we heard more gun shots than we did in the city. If you
are urban liberals, like us, you might not make many friends of your neighbors in the mostly right wing conservative rural
countryside.
Broadband Internet access becomes an issue as you look at houses in
the country. First, digital subscriber line, DSL access drops off
at the suburbs. Next, cable access drops off when you get to the
edges of the suburbs. Then you are left with dial-up or satellite
access. Perhaps the absence of broadband Internet access explains
rural conservatism. To get a feel for what it is like to go back
to dial-up access disconnect your computer from your broadband
connection and dial-up your internet service provider, ISP, using a
modem. It's intolerable. Satellite access sounds like a good
idea, but consider that you only get a download speed comparable to a
quarter of the speed you get from DSL or cable and uploads use the phone
line. Perhaps another cliche realtors could use in describing the
value of a property could be "broadband, broadband, broadband."
Local Government
Go to the local library in the area where you are considering
purchasing a home. Ask the reference librarian to provide you with
information on the town government. What you are looking for is
how the Town and its boards have voted on issues like green space,
regulating development, and other issues of concern to you. In my
case, I bought a house in a town where the planning board was chaired by
a developer. This is a like having the fox guard the hen house.
As a result the planning board has approved nearly every development
request for more than a dozen years. Ugly and poorly designed
shopping centers replaced woods. The commercial corridor became
over developed with redundant businesses that are sure to fail. If
I had done my homework, I would have found that my town government is
developer biased and that few voters in the town care one way or the
other.
You may have different needs and aesthetic requirements. For
example, if you want to live in a community where there is a drug store
on every corner and at least two Starbucks within three minutes drive
from your home, my town would be perfect for you. What is
important is that you do the research to find out if the town government
is one that you would support. Whatever you do, don't even think
about changing the government after you move into the town. You
will be in a minority and suffer a great deal of frustration.
An article titled "House for sale, neighbor as is" by Jim
Hawyer in the 9/22/07 Democrat and Chronicle
Newspaper's Real Estate & Rental section outlines some of the devious
practices used by realtors to sell homes to unwary buyers. Instead of
warning a buyer about a next door neighbor's barking dog, a realtor proudly
admits to urging the neighbor to keep their dog in during home
presentations. Another example described how a realtor and a seller
negotiated with a next door neighbor to keep their children's toys off their
lawn when a home was being shown to potential buyers. What this
clearly points out is that you, the buyer, must return to the neighborhood
repeatedly and unannounced to see the true state of the neighborhood.
The article was meant to illustrate how useful realtors can be in dealing
with neighbor issues. Closer scrutiny shows that realtors will use any
method they can find within the law to deceive buyers. It seems to me
that if you were able to prove that a realtor asked a neighbor to hide
barking dogs when a house is being shown to you, that you should be able to
sue the realtor and the neighbor.
- If you are the seller and your agent negotiates with the buyer to also
represent them, know that the realtor will be working for the deal first,
you second, and the buyer third. Time equals money and if the
realtor controls both the seller and the buyer the incentive is for them
to close the deal quickly and move on. The sellers and the buyers
often feel as though they were taken advantage of in these kind of
relationships. Often they are.
- My experience with realtors is that on a low price house they want to
under price it to sell it quickly. The reasons for listing a low
priced house for less than market value are numerous.
- The realtor will not want to spend as much time on a deal where the
house costs $50K instead of $500K.
- Buyers of homes that sell for less than $50K will likely, based on
my one experience, will have trouble obtaining credit, the down payment,
and meeting deadlines.
- The realtor may not want to work with blue collar buyers.
- There are more problems with low priced home sales than with higher
priced homes.
- Find a realtor who has sold homes in your neighborhood. Never
hire a suburban realtor to sell an urban house. Chances are they
won't even like parking their car in front of your urban home out of fear
of car theft or break in. They may also lack respect for your
potential buyers.
Getting accurate estimates from movers is impossible. Monetary
incentives cloud reality. Every mover wants to have the best price,
so they estimate low. Sometimes they estimate very low. The
estimate means literally nothing. Whatever the mover decides to
charge you at the end of your move, you will have to pay. Horror
stories are numerous. The television program "60 Minutes" even ran
an expose' of movers many years ago. The con was to bid very low and
submit an outrageously high bill before unloading the truck at the
destination. If the customer couldn't come up with the money, the
movers would take away the customer's goods and hold them in storage until
payment was received. Laws protect the movers. Once you agree
to be moved by a company you are at the mercy of that company.
The Internet gives moving customers some leverage. For example, I
sent out an email to everyone I know in the Rochester, NY area and asked
them to share their moving recommendations and stories with me. The
responses were compiled into a Web page. The list of movers was
alphabetized and the customer comments were inserted below the mover's
names. The list was then published to my personal Web site. I
still share that list with friends who are looking for movers. The
mover that I used was Rochester Moving and Storage. They were
terrific. Dave Conkey runs his operation efficiently. He is
good natured, honest, and his estimate was reasonably close to reality.
His team is reliable, careful, and thoughtful. Some of his team
demonstrated incredible strength as they easily hefted oversized and too
heavy book boxes. Nothing was broken. Only a couple minor
scratches showed up on large appliances. I recommend Dave and his
team without reservation.
Wherever you live you can create a similar resource about realtors,
mortgage brokers, movers, or any other service to share with
friends, colleagues, or the public. You can start a free discussion
group on Yahoo http://groups.yahoo.com/
or MSN http://groups.msn.com/home
on any topic. You can make your discussion private or public.
You can easily accomplish the same result with even less effort by sending
out an email to your friends and colleagues as I did. Just don't
hoard the information. Once you have collected everyone's comments
collate them and send the entire collection back to everyone who
responded. I removed names to protect the anonymity of information
sharers.
Tips
- If you are moving locally, move all of your delicate and valuable
items yourself. Leave moving your large appliances, books, and
furniture to the movers.
- Request recent references.
- Visit the mover consumer group Web sites listed below in
Resources.
Books
Consumer groups
Movers
- Rochester Moving & Storage. 30 Harrison Terrace, Rochester, NY
14617. Phone: (585) 467-7610
Realtors
Was this information useful to you? Did I leave out anything?
Send me an email and let me know how useful or useless this information was
to your home buying or selling experience. Thank you
Max Lent.
|
