Caution: Taking action on a whim, and not thinking to ask your agent, may be hazardous to your real estate transaction and, thus, your pocketbook. All questions, no matter how difficult to ask, or how small they may seem, you should ask your agent.
Let’s take a look at three common scenarios and show you why you need ask your agent.
“We found a brand new house from XYZ Home Builders!”
“We don’t mean to hurt your feelings, but that nice real estate agent we met at the sales office seems very helpful – Shouldn’t we just use her?”
Sure, it seems convenient – the agent is right there in the new-home community, so you can just pop in whenever you like, right?
Consider this: that agent represents the builder/developer. How will she do her ethical duties to the builder and also to you? Would you hire your soon-to-be-ex-spouse’s attorney to handle your divorce? If not, why would you hire the builder’s agent to represent you in your home purchase? Ask your agent this, would he or she be comfortable negotiating for you AND for the other side of the transaction? It’s tough to do and borderline unethical.
As a buyer, you pay nothing for the services of me as your real estate agent. You probably do not conduct real estate transactions on a daily basis year over year, but I do! Be selfish and ask your agent (me) to represent you. I will have your best interests in mind and you can be sure there is someone in your corner throughout the process. If you don’t ask your agent to represent you, it could cost you time and money. Besides, I have represented home builders for many years and I understand that process well. Here is a blog I wrote about the new home process.
Here’s my seller’s disclosure statement. I was so busy I just checked “no” on all the boxes. That’s ok, right?
Sure, if you like litigation.
The typical seller’s disclosure statement asks: “Are you (seller) aware of any significant defects/malfunctions in any of the following regarding your home?”
You checked “no” on all the boxes, which means that you aren’t aware that the roof leaks every time we have a heavy downpour, despite you making that very clear to me or even your neighbor.
The buyer who suffered the loss of all his furnishings, will need to prove to a judge that you were aware of and actually concealed the problem. But, since you shared your travails with your buddy across the street, the buyer won’t have to do much digging. Neighbors are frequently deposed in these cases.
If you’re found guilty of concealing material facts about the home, you could be held liable for the buyer’s monetary losses (compensatory damages), be forced to pay punitive damages on top of that and in rare cases, the buyer is allowed to cancel the purchase and give you back the house.
If the concealed defect results in substantial harm or death to the buyer, you could end up in prison, like the homeowner in Vermont who deliberately failed to disclose a faulty driveway heater to the family of four who purchased the home. All but one member of that family (an infant) died of carbon monoxide poisoning, the former owner was convicted of involuntary manslaughter and was sentenced to four years in prison.
We understand how hard it is to expose even the home’s tiniest flaws to the prospective buyer, but to not do so may turn out to be exorbitantly expensive. Take your time with the seller’s disclosure statement and answer each question honestly. Ask your agent if you have any questions about the disclosure statement. Besides, the home inspection is going to reveal a whole slew of defects. Just remember that honesty is always the best policy.
I can’t believe we’re closing in just two weeks! Did I tell you we’re shopping for furniture and appliances this weekend? We got an awesome financing program for them!
This one is so common, and so sad. In the excitement in the run-up to closing, many buyers begin to imagine furnishing the new home. Many others actually take steps toward buying the furnishings. It’s a huge mistake. If you are unsure if it is a good time to shop for furniture or appliances, ask your agent.
Shortly before closing your lender will most likely pull your credit reports AGAIN, a process known as a “soft pull,” because it doesn’t affect your credit score. This is the lender’s final assurance that you truly can afford the monthly payment and that you will actually make that payment.
Applying for credit for those new appliances or furniture will show up on the soft pull and will catch the underwriter’s attention. The new credit changes your risk profile and the new monthly payment for the items you purchase with that credit may change your debt ratios so much, that you will no longer qualify for the loan.
It does happen and it’s heartbreaking. Until you close on the house, don’t apply for new credit, don’t switch jobs or move money around to different accounts. Keep your financial situation exactly as it was when you applied for the mortgage.
Ask your agent even if you think what you are about to do is innocent or non-threatening to the process, is the wisest move you can make during the real estate transaction. You never know just how huge it may turn out to be.