Dear Michael: We are in escrow on our first home. My brother has given us the funds for the down payment. The lender is giving us a hard time wanting a notarized document from my brother stating that he will not hold us responsible for a debt to him. We are thinking of switching lenders. Is this common practice from a lender?
Answer: In 2004 your lender would not have cared where your money came from, actually most lenders did not even care if you had money! Today is another story. Your lender is researching all aspects of your financials in order to be completely satisfied and that you will pose no risk at re-paying your loan. Your brother has given you a substantial sum of money for your down payment. This practice is common, as many buyers need some kind of financial assistance in order to buy their first home. The banks just wants to make sure that you will not owe any more money and that you can meet your monthly mortgage. I suggest you take the steps your lender has requested and get the documents notarized. The last thing you want to do is start the loan process all over again. Who knows, the next lender may ask for the same notarized document and maybe more?
Dear Michael: We are closing escrow on our first house next week. The house is vacant so we’ve asked the seller if they would let us do some repairs before the close of escrow, and they said no! Can you please let us know why they refused? We are disappointed since this was such a pleasant transaction with them.
Answer: Pleasant or not…this is a question of liability. If you where to start working in the property before the close of escrow and someone was injured because of matters you considered could have been prevented by the seller’s neglect, then it could make things very complicated and ugly. Another legitimate reason is that you may unintentionally damage the property and could result in turmoil between you and the seller as to who is to blame. There is also a possibility of hidden defects that the seller was unaware of, that you may uncover during your remodel or repairs. What if you have a traumatic experience and decide not to buy the house and leave unfinished repairs? And there is always the question of the loan, what if it is denied before the close. There are too many legitimate reasons as to why a seller will not to accept your request to start repairs before the close of escrow. Don’t take it personally. If the roles were reversed, I would advise the same.
Dear Michael: My neighbor saved a lot of money by selling her home herself. She mentioned that it took some time, but she thinks it was worth saving the commission. Can you advise me as to why I should hire an agent?
Answer: Good for your neighbor! But let’s take a closer look at the process of selling before making any decisions. Most sellers are unaware of the advertising, marketing, leg-work, negotiating and strategy and expenses that go along with selling a home in today’s market. In this fickle market, pricing your home is crucial. The longer the home sits, the less likely it will sell for what it’s worth. Agents are experienced in getting that fair price and in negotiating on your behalf, so that you’re not tied in by contractual language or feel nobody is representing you. And don’t forget attorney fees, which can total in the thousands if something should go wrong, a step every fiscally responsible seller or buyer should try to avoid. And by the way, your neighbor may have saved on the commission but ultimately got less for her home than she would have gotten if she had used a real estate agent. Hiring a real estate agent this day-in-age is a win-win for all.
Michael Kayem is a Realtor with Re/max /Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com