Technology TransactionsAsk Realty Times
Question: My friend works for a top financial firm, and the analyst are saying that the real-estate market is going to fall hard. They are foreseeing in the next 1 to 3 years that the cost of today"s $300,000 house will be worth half that. They say not to buy any real estate, cause you will be stuck with a $300,000 dollar mortgage, and a house only worth $150,000. Do you see any truth to this?
Answer: No one knows where prices will be in the future. For example, how many analysts for top financial firms advised selling stocks when the NASDAQ was over 5,000?
Real estate is a localized commodity. What happens across the country in terms of average sale prices and such may not reflect trends in your community.
As with all economic questions, you need to use your judgment. What is the economic situation in your community? In your neighborhood? Are you buying a new home or a property you can fix up with your own labor? How will property values be impacted by interest rate changes? Is the local population growing? Falling? Etc.
Question: I"ve contracted to buy a home. Mold has been found. Can I cancel the contract?
Answer: There is no doubt that mold was found. As the EPA explains: "it is impossible to get rid of all mold and mold spores indoors; some mold spores will be found floating through the air and in house dust."
Before going further, ask some questions:
Is there leakage or undue moisture in the home which causes excess mold? If yes, can the leaks and such be repaired?
Do you have, or have you had, health-related mold concerns?
What kind of mold was found?
For perspective, is it possible that this property has less mold than your current residence?
Please speak with your buyer broker, attorney and allergist for information specific to your transaction. For general background, see the EPA"s brochure, A Brief Guide to Mold, Moisture, and Your Home.
Question: Does the seller need to give a copy of the termite inspection to the buyer?
Answer: In a typical real estate transaction there is a mortgage. As a condition of obtaining a loan, the lender will require evidence that the property is free and clear of wood-boring insects and thus require an inspection by a qualified pest controller. The cost of this inspection should be seen as negotiable matter between the buyer and seller, but both parties should receive a copy as it contains material information regarding the home"s condition. If there are no problems, great. If there are problems, the loan will not go through without appropriate treatment and/or repairs. In either case, both buyer and seller should know the score.
Question: A property was offered for $360,000. The price is far higher than relevant sales made in the past 90-120 days.
We offered $305,000. This offer was rejected outright and not countered. The next day, the price dropped to $349,900.
So my question is, was our offer just ridiculously offensive?
Answer: Sellers have a right to test the market. That homes have not sold for a given price previously does not mean the owner or the owner"s broker were somehow wrong. Prices rise in many communities, which means someone must be the first to breach a given price level.
The marketplace will ultimately decide the value of the property. That said, buyers have a right to bid for properties according to the value they see. You, as a purchaser, may have felt that the property was worth less based on past sales, available properties, condition, location, siting, design, etc.
How do you know what the seller will accept unless you make a written offer? A real estate transaction is a business deal -- you made an offer, it was rejected and both parties can decide what they wish to do next, if anything.
Have a real estate question? Send your inquiry to Ask Realty Times. Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style.
This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.