Archive for the 'Buying a Home' Category
Check That Vinyl Siding Before You Buy A Home
June 21st, 2008 Categories: Buying a Home, Home Inspections
I was at a home inspection with a buyer yesterday for a brand new home they purchased in North Raleigh. This particular home has vinyl siding and the inspector discovered that it was too tight.
Have you ever seen a home where the vinyl siding has buckled? Especially during the hot North Carolina summer days. If so, this was most likely because the siding was installed too tight. Our inspector told us that every piece should be able to move 1/4″ to 1/2″ when you grab the edge and give it a good pull.
We tugged on every single piece of siding we could reach, on all four sides of the home, and not a single piece moved. The inspector took us to a home under construction right next door and every piece we pulled on moved at least 1/4″ or so. This was a great object lesson and really illustrated the difference between a proper installation and an improper one.
Our home inspector speculated that the installer either nailed the nails too tight or failed to nail them in the centers of the slots. Or maybe he did both. Vinyl siding is designed to be installed in such a way that it can move slightly when it expands and contracts, or as the house settles over time. This eliminates the buckling effect. The photo at the right illustrates the correct way to nail the siding.
It left as is, the very least that would happen is that cosmetically the siding would be unattractive as it bowed out in various places in an attempt to relieve the pressure caused by the expansion. Worst case, several pieces could come loose allowing water to enter the walls. Don’t even want to think about the long term implications of that.
This one discovery paid for the cost of the home inspection… many times over. Now we have powerful evidence to present to the builder that will help us convince him that he needs to fix the siding. And the fix could very well be to pull it all off and reinstall it. But, whatever the fix, it’s the right thing to do for the buyer.
Owning a home will cost you far less over time if you can make sure it was built properly. And new homes aren’t perfect. Unfortunately, people build homes and sometimes they make mistakes, or unknowingly use defective materials. It pays to have an agent who can connect you with a good inspector. And it always pays to have a home inspection.
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What Happens If My New Home Is Delayed?
May 9th, 2008 Categories: Buying a Home, New Construction Homes
Builders contracts favor them and do very little to protect the buyer. That’s simply a fact. One often glossed over term in a builder’s contract is the amount of time allowed for delay of construction.
I sell a lot of new construction homes in the Raleigh area, and therefore, get the pleasure of reading sales contracts of all shapes and sizes. Please understand that most builders do not use the standard North Carolina Real Estate contract, which does not favor either buyers or sellers, but does a pretty good job of allowing the transaction to occur without either party harming the other. Most builder’s contracts are very different from our standard contract.
There are some fairly scary terms in these things, but none quite as frightening as the one that deals with what happens if either the buyer or the builder delays closing. Did you know that each of these causes for delay are handled quite differently?
What happens if the buyer delays closing?
This is very simple. According to the vast majority of builder’s contracts I have read, the buyer owes the builder money for each day closing is delayed. The amounts typically range from $50-100 per day. A 30 day delay, caused by the buyer, could cost you $3,000.
Hmmm… so that must mean that if the builder causes a delay in closing the buyer also gets monetary damages, right? Not exactly.
What happens if the builder delays closing?
This is simple too. The builder has two years to complete the home. How would you like to put a new home under contract, schedule it to close in August of 2008, and later discover that the home would not be ready until August 2010?
It’s interesting that whenever I challenge this term with a builder’s representative they usually respond that there’s nothing to worry about and that this has never happened to any of their deals. Well, if it never happens, let’s take it out of the contract.
Sometimes I can get this term excluded as part of the negotiations. It is a little easier to negotiate this now because sales are down and inventory is high. It is also easier to get the exclusion if the home is near completion.
Builder’s contracts are binding. If you sign one, you are bound by its terms and conditions. You either need to be a very good negotiator, or have someone representing you who is, if you plan on getting any modifications.
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New Home Search Tool Up And Running
April 25th, 2008 Categories: Buying a Home
I am so excited. I have installed a brand new home search tool on this blog that you’re just gonna love. Now I know what you’re thinking… this guy doesn’t have much to get excited about if he is all worked up over a new home search tool. Hey, keep reading, this thing is really cool and just might get you excited too!
It is a software service from Best Home Pro that features a map based search along with decision making tools that can help you sort and sift through the hundreds of homes that might typically show up in a search. When set up properly, this awesome tool can produce a pretty impresive top 10 list of homes that fit the exact criteria you specify.
If you register your email address, the system can send you an update whenever a new home is listed that makes it into your top 10 list, or when a home sells and allows another home to move up to the list. It does this using a direct link to the Triangle MLS that is updated daily so that you are seeing very fresh information on homes listed for sale.
I’ll be writing more about Best Home Pro in the coming weeks. If you want to get started right away, click the link below, or the Search For Homes button over on the right. Enjoy!
Search ALL Triangle Homes For Sale
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If The Radon Levels In Your Home Are High Don’t Inhale
April 10th, 2008 Categories: Buying a Home, Real Estate Tips
Several months ago, I sold a new construction home and as usual, I insisted that some language be added to the builder’s contract giving my buyers the right to test for high radon levels, and the right to demand that any high levels that were discovered be remediated. My buyers ended up being very glad this language was added for their protection.
As it turned out, this home tested positive for high radon levels. Real high. The EPA says that radon levels over 4.0 pico curies (there’s my fancy word for the day) can cause long term health problems and death. That’s right, death. It’s not much fun to talk about, but 20,000 people die each year from lung cancer linked to exposure to high levels of radon gas. The average level in this home was 20 pico curies. This is serious stuff.
The radon issue in the home I sold was taken care of with a relatively simple foundation fan system that was installed at the builder’s expense. The radon levels in this home retested at far below the EPA threshold. My buyers can now breath easy. They shouldn’t ever have to worry about radon again.
Had my clients not had an agent who was willing to negotiate the additional terms regarding radon testing and responsibility for remediation into the contract, they could have ended up paying for the solution themselves. Or, worse. They might have never known what they were breathing.
I remember the first time I heard about the dangers of radon gas back in real estate school. It sounded pretty scary to me. I figured that with the seriousness of the issue, all buyers must surely have access to information on the dangers as well as the right to test and either have the seller fix any problems, or terminate their contract. When I began my real estate business back in 2002 I found the reality to be quite different.
The good news is that the standard North Carolina real estate contract used for resale homes includes really good terms that protect the buyer with regards to radon. The bad news is that when I explain that part of the contract to my buyers, they typically have never heard of radon gas before.
Most of the homes I list for sale have never been tested. I always ask at the listing appointment. Can you imagine selling your home and discovering from the buyer’s radon test that you have been inhaling high levels for years? Now you are struck with fear of the unknown effects on your health and you must install a system that could have protected you. The time to test for radon is when you buy a home.
Sometimes it feels pretty lonely counseling home buyers on the merits of having a $140 test done that could save their life. I’ve had listing agents tell me there is nothing to worry about because they don’t know of any radon issues in the area. I’ve had builders and their agents tell me the same thing. And their contracts usually just ignore the issue altogether.
I’m sure my buyer clients wonder why I’m sometimes the first person they have ever heard talk about the health risks of radon in such a passionate way. And their doubts may be strengthened when, as it turns out most of the time, they pay for the test and the radon levels in their new home are normal. Is it worth $140 to know if you are at risk of developing lung cancer from a gas you cannot smell, see, or taste? I think so.
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Homestead Exemption in North Carolina
March 21st, 2008 Categories: Buying a Home
I just got another unique question from a past client. This person, to whom I sold a home over in North Durham, wanted to know how to apply for a Homestead Exemption in North Carolina. I’m glad she asked in an email because my first thought was what the heck is a Homestead Exemption?
Okay, I understand that I’m supposed to know all about home buying and selling issues, especially as related to the local Raleigh market area. But in all my years of experience I’ve never had anyone ask about this. So, I got busy calling and searching on the web, and here is what I found.
This is a blurb from the NC Department of Health and Human Services website.
North Carolina Homestead Exemption
North Carolina G. S. 105-277.1 provides financial assistance to low-income elderly and disabled homeowners by exempting part of the value of their home from the property tax levied by North Carolina counties and municipalities. This assistance is called the Homestead Property Tax Exemption. Under current law, an elderly or disabled homeowner is eligible for the exemption ($20,000 or 50% of the appraised value of property, which ever is greater, used as his or her permanent residence) if he or she is a North Carolina resident and his or her income from the preceding calendar year was $19,700 or less. Effective July 1, 2003, the income eligibility limit will be adjusted annually to the nearest $100 based on the cost-of-living adjustment used in calculating Social Security and Supplemental Security Income benefits. To apply for this exemption, contact your county tax office.
Source: http://www.ncdhhs.gov/aging
So now we know all about how Homestead Exemptions work in NC. When I emailed the info to my client and called her to follow up, she told me that this was very different from how it worked in Georgia. If you are using Homestead Exemption in your state, and planning on moving to North Carolina, be aware that there may be significant differences in its application here.
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Why You Need a Survey When You Buy a Home - Reason Number 43
March 20th, 2008 Categories: Buying a Home
I recently had a past client contact me and ask if he needed a permit to expand the deck on his home in North Raleigh. I get lots of calls from past clients regarding just about any subject related to the homes I sell them. And I gladly serve as an expert resource at no charge to all my clients for any needs or questions like this that they might have. But I honestly didn’t know the answer to this one.
So, I set out on a little research project and discovered some interesting bits of information regarding adding on to your home. Here’s what I found out.
A permit is required for anything that increases the area that a structure covers
The folks at the Raleigh Inspections Department let me know that a permit is required for deck additions, as well as any other kind of addition to a home in the City of Raleigh. It seems one of their main concerns is possible violations of building setbacks. Basically, you can only place a permanent structure within a certain distance of the property line.
The permit application process consists of sketching out your addition on a copy of a survey and submitting it, along with $70, for approval. The process can be done in person at the Raleigh Inspections Department and if everything is in order, you will walk away with your permit in 30-60 minutes.
Uh Oh, I don’t have a survey
Surveys are optional when you buy a home. I always recommend that my buyers obtain one. Every once in a while someone will just refuse to pay for a survey, and choose not to get one. In addition to protecting you from purchasing a property with a title defect related to matters that would be discovered with a survey, it is extremely handy if you ever want to put up a fence, build a storage building, or in this case, expand or build a deck.
You guessed it. My client just didn’t see the need to pay for a survey at closing several years ago. Now he is now faced with either having to order and pay for one before doing the deck project, or risk an alternative method that could possible lead to inadvertently violating a setback rule, or some other building code.
The risk of the alternative method
The alternative method to consider when you don’t have a survey and want to add on to your home is a little tricky. The first thing you have to do is search the public records and locate a plat map. That’s a map that shows your street and your lot as well as adjacent lots in your subdivision.
Once you have the plat map in hand, you have to find some point of reference and try to estimate where on the plat map your house is located. The risk is that you could easily be off by a foot or two on where you think the house is on the map. Then as you go out towards the setback lines (which usually aren’t shown on the plat map either) you could accidentally violate a setback rule.
So what happens if I violate a silly setback rule?
One possibility is that nothing happens as long as no one ever finds out. But what if you want to sell your home later on? Do you think the buyer will order a survey? Smart buyers will. And when they do, the violation will be clearly seen and noted by the surveyor.
Now rather that a relative smooth closing, you will have to move the building, or deck, that is in violation. Oh, and what if one of the main reasons the buyer wanted your home was because of the awesome party deck? If you must substantially change the look or function of the deck, the buyer may want out of the contract all together. Whatever happens, I can promise you will be wondering why you didn’t just get a survey in the first place.
When buying a home, make sure you have a real estate agent who will look out for your best interests and give you the maximum possible legal and financial protection. It’s our fiduciary duty and it’s what you deserve.
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FHA Loan Limits Increase For The Triangle Home Buyers
March 17th, 2008 Categories: Buying a Home, Mortgage and Finance
Great news for home buyers in the greater Raleigh area… FHA loan limits have been increased significantly!
Here are the new FHA loan limits by county:
- Wake and Johnston $295,000
- Durham and Chatham $331,250
This is a significant increase and long overdue. The old limit for Wake County was $224,200. Kind of low considering the average home price was $261,000 for the period since Jan 1, 2008.
I do have to say that the amounts seem without much rhyme or reason. The average home price in Durham County is $196,000, while Chatham County is $317,000. Why are these two grouped together at $331,250 by FHA?
Consistency and logic notwithstanding, the increases in FHA loan limits for the Triangle area is a very good thing. Here are just a few of the benefits of an FHA loan.
- Low down payment
- Down payment can be a gift
- Non-occupant co-borrowers are allowed
- No price adjustment for credit score
If you need the name of a good lender who can provide FHA financing, call me. I know some of the best in the business.
Search for Triangle area homes for sale
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Homes For Sale in Wake Forest | Update on Northampton
February 19th, 2008 Categories: Buying a Home, Wake Forest
St Lawrence Homes is at it again! The Wake Forest community of Northampton has just announced a brand new phase.
Big lots and cul-de-sacs
This new phase features a total of 3 cul-de-sacs and some larger than usual lots that back up to trees and open space. How many times have I heard a client ask for this? 
Lots are currently available for pre-sale and a $100 deposit holds the lot of your choice while you choose options for your new home.
Ready to go now
In addition to the nice lots that were just released for sale, there are two very nice homes in inventory. Here’s the details.
Georgetown III - $344,900
3952 square feet, 5 bedrooms, 3.5 baths
Unfinished walk-up attic with over 500 square feet of unfinished space
Avery II - $399,900
3825 square feet, 5 bedrooms, 5 baths
Finished walk-up attic with huge bonus room and full bath
There are several resales for sale in Northampton as well. The link below will take you to a page with the most current inventory.
Search for homes for sale in Northampton
What’s the Realtor’s opinion?
I’ve sold in this neighborhood and showed homes here many times. My clients could not have been happier with their choice. The construction quality is very good and the floor plans feature all the things so many buyers are looking for these days, such as open living area, large master suites, and large gourmet kitchens. As previously mentioned, the lots tend to run on the large side with quite a few trees all around.
Wake Forest is a growing community with lots of amenities such as restaurants, shopping, parks, theaters, and more! Give me a call, or email me, if you would like any additional information on this great neighborhood.
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Real Estate Expenses Are Profitable Tax Deductions
February 12th, 2008 Categories: Buying a Home, Real Estate Tips
Most people want to keep as much of the money they earn as possible. Tax deductions are one way to accomplish this. Do you know which real estate expenses are eligible tax deductions?
First, let me warn you that I am not a tax accountant, nor do I play one on TV. By the way, my Broker-in-Charge just stuck his head in the door and said I have to tell you to check with a tax professional to make sure any of this stuff applies to your particular situation.
That being said, I can certainly let you know about some of the common real estate related tax deductions that you should be asking about if you have recently purchased a home, or if you own a home.
Mortgage Interest
This is the big one. You should be able to deduct the amount you pay in interest from your earned income. That means you don’t have to pay tax on that amount of money. If you just got a 30 year loan, this is a big number.
You should also be able to deduct any interim interest you payed at closing if you purchased your home last year. If you are one of my clients, you will be receiving a copy of your closing statement in the mail in the next few days. Be sure to have your tax preparer consider this as a deduction for you.
Real Estate Taxes
Hey, my accountant tells me that I can deduct the amount I paid in real estate taxes from my income taxes. Hmmm. Deducting your taxes from your taxes. Sounds like fun, doesn’t it? Maybe I should have been a tax accountant if I think this stuff is fun. Sorry, I digress. be sure to ask your tax preparer about deducting real estate taxes you paid from your earned income.
Discount Points
This one doesn’t come up too often because not many people use discount points to buy down their loan rate. With the historically low rates we continue to see, this option just doesn’t get used very much. But, just in case you closed on a home last year, and paid discount points, be sure to ask your tax person if you can use this as a deduction.
Other Stuff Like Origination fees
This is a little more tricky. Definitely get professional advice on origination fees, etc. Although usually these items are not deductible, there are certain instances where they might be.
Need a good tax accountant? I’m really happy with the person who keeps me straight. Just email me and I’ll be glad to pass his contact info along.
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2007 Wake County Real Estate Sales Results
February 11th, 2008 Categories: Buying a Home, Real Estate Market Trends, Selling a Home
I thought some of you might be interested to know how 2007 turned out for homes sales in Wake County. Here are the numbers straight out of the Triangle MLS.
2006 WAKE COUNTY HOME SALES
20,736 Homes Sold
$249,248 Average Sell Price
2007 WAKE COUNTY HOME SALES
19,314 Homes Sold
$262,786 Average Sell Price
The main thing I get from these numbers is that, on average, it cost $13,538 more to buy a home in 2007 that it did in 2006. That’s a 5.4% increase. All indications are that 2008 homes sales should follow the same pattern.
2007 sales were down 6.8% overall. If I look at Q406 versus Q407, I see that unit sales were 16% lower, so it is probably very safe to say that the downward trend accelerated late in the year.
Q407 also showed a 2% increase in average price over Q406. Interesting that no matter how we look at this, unit sales were down while the average price increased, isn’t it?
Taken as a whole, it looks like sellers are having to wait longer to sell their homes, but that is not motivating them to lower prices. Condition, presentation and marketing is the competitive difference for sellers right now.
I still attribute the slowdown in unit sales to the relocation market. People continue struggling to sell in other markets so that they can move here. Once that recovers, the Raleigh real estate market should be well positioned for a sharp increase in buyer activity. If supply drops, at that point we could see even stronger upward pressure on price.
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