The Real Dangers
Contrary to popular belief, people problems, not title problems, will be your main concern. You will be able to eliminate title problems by requiring that the seller furnish a warranty deed, marketable title, title insurance and a survey. However, none of those will protect you from your own ignorance or weakness as a negotiator, or someone else's dishonesty or greed.
posted by MadBrook, Inc. at 5:53 AM
1 Comments:
Human beings we are, and it’s “people” problems at the heart of it all. Humans make mistakes; some steal, and most are poor communicators. An owner title insurance policy will protect the homebuyer from many of the risks, but not all.
A smart homebuyer should buy a current up to date survey, making sure the surveyor actually does field work and research. The drawing should accurately show the location of easements, rights of way, and improvements/structures. It’s not safe to rely on the seller’s knowledge or lack thereof. They may be mistaken. Owner title insurance typically does not cover the location of structures or lot lines. So if you close without a survey and find out later that the garage is actually on your neighbor’s property or that lovely area for a garden is not yours, you’re on your own. You’ll either go to court or take your lumps.
Also, owner title insurance does not cover the condition of the structure. A
smart homebuyer should take the time to hire professional inspectors and
look at their reports before the closing. Keep in mind the age of the
house and be realistic about your expectations. Every good home
inspector will point out all the flaws they find. You, the homebuyer,
will need to decide which ones are really important and then negotiate
with the seller for repair.
I am often amazed when a transaction falls apart because the buyer
insisted that the seller make the house perfect. Unless you are buying
a brand new home, try to keep your expectations realistic. It may have
taken a long time to find the right house in the right neighborhood at
the right price. A willing buyer negotiating with a willing seller
will usually find the right balance and resolve their concerns.
Here's some language we use at closing to make sure both buyer and
seller have reached an understanding:
"The undersigned buyer(s) and seller(s) agree that all terms and
conditions of the sales agreement have been satisfied or waived.
The undersigned buyer(s) confirms that they have had an opportunity to
inspect the premises to their satisfaction and that they have
personally reviewed and accepted any inspection reports issued by
contractors performing tests on their behalf including but not limited
to septic dye test, termite/pest inspection, home inspection, etc.
For purposes of holding the real estate agents, real estate companies,
Lender, its successors and assigns, and The Closing Specialists®
harmless, buyer(s) agrees to accept property in "as is" condition.
Representations and warranties from the seller are still being relied
upon by the buyer(s) and are not hereby waived.
Buyer(s) and seller(s) further agree to hold harmless all/any real
estate agents, real estate companies, Lender, its successors and/or
assigns, and The Closing Specialists® from further liabilities and/or
remedies related to the physical condition of the premises."
Signing this document at closing is a sort of "speak now or forever
hold your peace" moment. We really do not want you to close until you
are satisfied. Do your homework before you go to the closing table.
Order your inspections as soon as the agreement is accepted. Review
any concerns directly with the inspector. Negotiate repairs, if
necessary. Do a final walk thru right before closing to make sure the
condition of the house is broom clean and as agreed.
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