Category Archives: Buying Tips

Home Inspection & Seller’s Disclosure Important!!

Posted on by

The article below, published in the Buffalo News, offers valuable insights for everyone involved in a real estate transaction.

For Sellers

As highlighted in the article, it’s crucial to honestly disclose any defects in your home rather than attempting to conceal them. Transparency not only builds trust with potential buyers but also protects you from legal repercussions down the line.

For Buyers

While the home inspection may not have uncovered serious issues in this particular case, it remains essential to have one conducted. A thorough inspection can provide peace of mind and help identify potential problems that could affect your investment.

Understanding the importance of both seller disclosures and home inspections can lead to smoother transactions and more satisfied parties on both sides of the deal.

– Matt

Court awards $282,000 to purchasers of sinking home Jury finds sellers lied about condition

By Janice L. Habuda
NEWS STAFF REPORTER
Published: March 14, 2010, 12:30 am

A couple who bought a “sinking home” in Amherst has been awarded the purchase price by a State Supreme Court jury, which found the sellers lied about the home’s condition.

Karen and Anthony Regan sued the former owners of 107 Blue Heron Court, as well as the real estate firm that listed the property and the real estate agent who represented them. Claims against additional parties were dismissed by State Supreme Court Justice Patrick H. NeMoyer before trial.

The $282,000 award equals what the couple paid in 2007 for the house, which they also keep.

“This is the first case which has gone to trial in which a verdict has been rendered against both the seller and the real estate [agent],” said attorney James I. Myers, who represented the Regans.

“I think it sends a very strong warning and message to sellers. If they know of a material defect in their home, they have to disclose it,” Myers said. “It sends an equally strong message to real estate brokers and agents that they have a duty to disclose. They just can’t rely upon a buyer doing a home inspection.”

About a decade ago, hundreds of homeowners in parts of Amherst noticed foundation failures and sinking homes that later were attributed to soil problems.

Jurors found on March 5 that former owners Elaine and Robert Altman lied about the condition of the home, which is in an area of north Amherst where homes are sinking or cracking because of poor underground conditions. The Altmans were found 75 percent liable.

“We think the verdict is wrong,” said attorney Richard A. Clack, who represented the Altmans and said he is considering post-trial motions. “My clients certainly did not commit any knowing fraud against the buyers.

“We worked tirelessly throughout this case to try to come up with a solution for the new owners,” Clack said. “We went to trial on this unwillingly.”

John Fox, an agent for Hunt Real Estate whose actions were found to have violated Real Property Law, was found 20 percent liable.

Attorney Brian Sutter, who represented the agent and firm, said that an appeal is planned but declined to comment further.

Jurors found the Regans were 5 percent liable of negligence in their purchase. Their attorney said he doesn’t believe allocation of responsibility is appropriate in this case.

Another real estate agent, Scott Thomas, who originally worked on the Regans’ behalf as an agent for Keller Williams Realty, was found not liable.

Several years before putting the house up for sale, the Altmans noticed some settlement toward the back of the house and sought to remedy it, Clack said.

“They spent $28,000 in early 2002 to fix that,” Clack said. “They thought their house was in good condition when they put their house on the market.”

“They had given the Realtor the documentation of what had been done on the house,” Clack said.

Fox denied receiving or seeing some of the documentation in question, according to court papers.

The Regans looked at the home in spring of 2007 in the company of their real estate agent and the Altmans. In the basement, the walls were obscured but some cracks were visible in an uncarpeted area of the floor.

Anthony Regan claimed he asked about the cracks and was reassured by Robert Altman that there were no water problems. Regan testified that he then asked:

“This isn’t one of those sinking homes, is it?”

“[N]o, that’s in the Pines,” Altman reportedly replied.

“[Y]eah, they’ve had a lot of problems [or trouble] over there,” Thomas added.

After the Regans made an offer on the house, they received the “Property Condition Disclosure Statement,” in which the sellers stated there were no water infiltration issues with regard to the basement or structural defects.

Because of that statement and the existence of home warranty, the Regans decided not to have a home inspection.

After closing, the Regans heard from their new neighbors about sinking foundation problems in the neighborhood. They also learned of records on file with the Town of Amherst—including documents the Altmans had submitted with a request to have their assessment significantly reduced.

What about caveat emptor — let the buyer beware?

Myers, the Regan’s attorney, said that still applies, but sellers must prepare a disclosure statement and certify to its truthfulness.

“The courts have held that if they fill that out falsely, they can be held liable.”

Darlene Torbenson has been a spokeswoman for owners of sinking homes. “Hopefully, a ruling like this would make [real estate agents] a little bit more cautious about the homes they’re selling,” she said.

jhabuda@buffnews.com

Buyers… 8 Steps to Getting Your Finances in Order

Posted on by
  1. Develop a family budget.
    Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.
  2. Reduce your debt.
    Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.
  3. Get a handle on expenses.
    You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.
  4. Increase your income.
    It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.
  5. Save for a down payment.
    Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent down payment.
  6. Create a house fund.
    Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.
  7. Keep your job.
    While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.
  8. Establish a good credit history.
    Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®Copyright. All rights reserved. www.REALTOR.org/realtormag

Steps to Buying a Home

Posted on by

Buying a home can be an exciting journey. Here are the typical steps to guide you through the process of buying a home in Western New York:

1. Get Pre-Approved for a Mortgage

Begin by obtaining a mortgage pre-approval. This helps you understand your price range and estimated monthly payments.

2. Search for a Home

Start looking for your ideal home. Consider factors like location, size, and amenities that fit your needs.

3. Submit a Purchase Offer

Once you find a home you love, submit a purchase offer. A deposit is typically required at this stage to show your commitment.

4. Seller Accepts the Contract

If the seller accepts your offer, you’ll move forward with the contract.

5. Remove Contingencies

After the home inspection and any other contingencies have been addressed, you can proceed.

6. Apply for a Mortgage

You’ll typically apply for a mortgage within 7 days of accepting the contract.

7. Mortgage Processing

While your application is processed, your credit will be checked, and the property will undergo an appraisal.

8. Receive Mortgage Commitment

You should receive your mortgage commitment within about 30 days from your application.

9. Update Abstract

Ensure that the property’s abstract is updated.

10. Property Survey

A survey of the property will be conducted to confirm boundaries.

11. Water/Septic Tests

If required, water and septic tests will be performed.

12. Send Package to Lender’s Attorney

A package will be sent to the lender’s attorney 4 to 7 days before closing for review.

13. Attorney Review

The lender’s attorney will review the package to ensure everything is in order.

14. Purchase Homeowners Insurance

Typically 5 days before closing, you’ll need to purchase homeowners insurance, including a hazard insurance policy.

15. Final Inspection

A final inspection is done 1 day before closing to confirm the property’s condition.

16. Closing

Finally, the closing occurs, typically 60 days from your mortgage application.

Let this guide you through each step, ensuring a smoother home-buying experience!

5 Common First-Time Homebuyer Mistakes

Posted on by

1. Not Asking Enough Questions

First-time buyers often fail to ask their lender critical questions, which can lead to missing out on the best mortgage deals available. It’s essential to thoroughly understand your financing options.

2. Delaying Decisions

The housing market can move quickly. Hesitating to make a decision may result in losing out on a desired property to another buyer. Acting swiftly is key!

3. Choosing the Wrong Real Estate Professional

Finding the right real estate agent is crucial. A good agent will guide you through the home buying process and advocate for your interests.

4. Failing to Strengthen Your Offer

In a competitive market, it’s vital to make your offer as attractive as possible to sellers. This may involve being flexible on terms or including a personal touch in your offer.

5. Ignoring Resale Potential

Many first-time buyers don’t consider the resale value of a home before purchasing. Remember that the average first-time buyer typically stays in a home for only about four years, so think about future marketability.

Reprinted with permission from Real Estate Checklists and Systems at www.realestatechecklists.com and from REALTOR® Magazine Online by permission of the National Association of REALTORS® © Copyright. All rights reserved.

How Much Can You Afford?

Posted on by

Before deciding on the type of home that suits your needs, it’s crucial to determine what you can afford.

Assessing Your Financial Situation

At this early stage, review all aspects of your financial health, including your income, savings, monthly expenses, and existing debt.

Getting Pre-Qualified

Getting pre-qualified for a mortgage loan is a quick way to gauge how much you can afford. However, keep in mind that you will typically need to get pre-approved before purchasing a home. I will elaborate on the difference between pre-qualified and pre-approved in another article.

Importance of Pre-Approval

I recommend getting pre-approved as soon as possible. Being pre-approved allows you to shop with confidence. If you find a home you like, you can quickly make an offer, which also reassures the seller of your financial capability.

Factors That Determine Affordability

Your ability to pay for a home will be influenced by several factors:

  • Gross Income: Your total income before taxes and deductions.
  • Available Funds: Money set aside for the down payment, closing costs, and other miscellaneous expenses.
  • Debt Burden: The total amount of your existing debt.
  • Type of Mortgage: Different mortgages come with varying terms and conditions.
  • Interest Rates: Current rates can significantly impact your monthly payments.
  • Credit History: A strong credit history can improve your borrowing options.

Housing Expense-to-Income Ratio

Lenders often evaluate your affordability using a housing expense-to-income ratio, which assesses your estimated monthly housing expenses—commonly referred to as PITI (Principal, Interest, Taxes, and Insurance).

Every buyer’s situation is unique, and a mortgage professional can help you determine what you can afford. Your income and debts are typically the most significant factors in establishing your price range.

– Matt