The Importance of the Contract

We closed on our new home recently and when we went on the walk through, the seller had not completed the inspection repairs that they had agreed to do and didn’t seem to think was an issue.  Your thoughts?

I have noticed a trend lately away from respecting contracts.  I’m not sure if its because consumers don’t understand what they are signing, are too busy to keep everything straight or just don’t care.  Whatever the reason, the real estate contract and its addendums are what makes a real estate transaction work.  If you want to sell your home, you need some kind of document that binds the buyer to your home so that they don’t just walk away, leaving you holding a home you just moved out of and unable to close on your new home.  It is equally important to the buyer – they need a document by which a seller is actually bound to sell their home so that the buyer is also not sitting on the curb waiting to unload the moving van and unable to get the seller out (and yes, real estate is specific performance – if you sign a contract to sell, you must sell).

There are some basic principles to keep in mind that apply to all contracts. Sellers, if you include something on your disclosure, it is important that you actually leave it behind for the buyer.  The stove and dishwasher are obvious, but what about garage door openers?  When you are listing your home, take the time to be sure that you correctly list what is included – misplace a garage door opener and you are contractually required to buy a new one for the buyer.

If you agree to fix something during an inspection negotiation, then yes, you must actually get it fixed. Its not ok to have the buyer show up for the walk through and find out you haven’t taken care of the agreed upon repairs.  What you signed is legally binding – do what you said you will do or be prepared to give a hefty last minute credit to the buyer.  If you do get the items fixed, be sure to pay your bill before closing!  These repair bills are not the buyers’ responsibility and its also not ok to agree to make a repair and then stick the buyer with the bill.

And remember, the contract requires that your home be in the same condition it was in when the buyer made you the offer.  If you break something, you will need to fix it prior to closing.  At 13 pages, it is a lengthy document but it is important that you understand what you have agreed to do.  We can’t all be attorneys, so be sure to hire a realtor that you have confidence will thoroughly explain what you have signed and help you to be a good seller and honor all of its terms!

 

FEATURED HOMES

219 Orchard Lane

NEW LISTING – A spectacular Sewickley Village transformation!  Large two-story addition of 1000SF+ incorporates a new large family room, mudroom and luxurious master suite. This complete renovation included all new wiring, zoned central A/C added to the home, 2.5 new baths including a gorgeous master bath, addition of main level laundry and new kitchen featuring abundant white cabinetry topped with Quartz, stainless appliances, and large center island overlooking the large great room. New master suite includes vaulted ceiling, spacious walk-in closet with laundry chute, Fenced rear yard with patio.  $650,000   Read more

 

106 Beaver Road

Phenomenal Sewickley Village center hall colonial in Sewickley’s most sought after neighborhood checks all the boxes on your wish list! Incredible historic character is seamlessly blended with modern renovations in a timeless Sited on a 1.7 acre lot with lush mature landscaping and huge green lawns, this home is both incredibly private and in the middle of all the Village excitement! Amazing kitchen open to family room Convenient main level mudroom connects to attached two car garage. Sophisticated master suite with spa-style bath. Up t 5 additional bedrooms, 2.5 additional baths.  $1,350,000   Read more

 

 

 

 

I’m ready to answer any questions you have regarding your real estate needs.
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

Keeping Inspections in Perspective!

From what we hear, it seems buyers are very picky on home inspections these days.  What should a seller expect?

What a Seller needs to be prepared for on a home inspection needs to be evaluated in the context of the entire deal!  Both buyers and sellers need to keep things in perspective.  If a Buyer got a great deal on a home, then the inspection should be more about major things that the Buyer could never have known about.  If a Seller got top dollar for a home, the Seller should expect to be very generous on the inspection resolution with the buyers.  Sellers do need to expect that a buyer paying close to asking price will expect the inspection items to be addressed by the Seller unless the Seller had disclosed them on the Disclosure.

The Disclosure is a Seller’s friend.  What a Seller discloses is supposed to be outside the scope of inspection requests.  These are items that the Buyer should be taking into account when making their initial offer.  Therefore, when filling out the Disclosure, Sellers will want to review it carefully to be sure it is thorough.  Inspectors do not miss anything these days, so it will be far less of a financial blow to a seller if all possible issues are noted up front.

Of course, a pre-inspection may be a Seller’s best approach for a smooth transaction for all parties.  While a seller will spend approximately $400 up front, it gives you a chance to repair or disclose the issues before they possibly destroy a deal.  Remember, if buyers and sellers can’t come to a resolution about inspection concerns, the deal is terminated and both parties move on.  Sellers, you obviously want to sell or you wouldn’t be undergoing the joy of preparing your home for showings.  Keep the big picture in mind and understand that unless you are giving your home away, your buyer will expect you to fix what you didn’t disclose.  Don’t like the sound of that?  Pre-inspect so you know what you will have to address upfront.

FEATURED HOMES

316 Shields Lane

A rare opportunity on one of Sewickley’s most desirable streets. Private yet just blocks from all of Sewickley’s wonderful amenities. Be inspired by the possibilities offered by this all-brick Cape Cod – this property offers its new owners the opportunity to renovate to create their own dream home, or replace with a new home to their specifications.  .43 acre private, flat yard is your own oasis.  Home features hardwood floors throughout, attractive custom kitchen.  $495,000    Learn More

 

63 Thorn Street

Expertly remodeled, 63 Thorn paints a modern landscape on a charming traditional palate to create an exceptional home for the millennium home buyer.

Sited on a large lot with fully fenced back yard. The expertly designed and crafted kitchen (which is open to the family room) is flooded with light from an entire wall of windows that bring the private backyard into this warm and inviting space.  The dining room has also been opened to the back yard through an impressive wall of windows and doors, and spills effortless out onto the new back deck.  The second level is home to a new master suite with large closet and spa-like private bath.  Four additional bedrooms, two full baths and a convenient second floor laundry room complete the upper levels. $1,595,000    Learn More

 

 

I’m ready to answer any questions you have regarding your real estate needs.
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

Sound Advice for Sellers

Why have so many deals fallen apart this spring?  We watch the market and see homes that sell and then come back on the market – what is happening?

You have unknowingly picked up on one of the flaws in the Pennsylvania Standard Agreement for the Sale of Real Estate.  In the inspection contingency contained in this agreement, the buyer has the unilateral right to terminate the agreement of sale if they find any condition in a home inspection unsatisfactory to them.  It does not have to be a major defect as it did in prior years.  It does not have to be a safety related concern.  It does not have to rise to a particular threshold of cost to repair.  ANY condition whatsoever that they find unsatisfactory – a scratch on a floor, a dented garage door, a stain on a carpet  — and they can terminate. They do not need to give a seller an opportunity to repair the item – they can just say “sorry, we don’t want your house.” They get their hand money back and the home is back on the market.

Unfortunately, this year buyers have begun to abuse this right to terminate, treating it like an option to buy a home.  And when they do this, it stigmatizes the home for future buyers. I have seen deals terminated for items as simple as non-operational dimmer switches and puddles in the driveway, without giving the sellers the opportunity to repair.  In other words, these are not serious buyers, and something they liked more probably came on the market.  They terminate, wasting everyone’s time and energy.

This is a terrible trend, but sellers, you don’t need to sit back and let this happen.  When negotiating an offer on your home, you can negotiate any term, and you would be well advised to indicate that buyer’s right to terminate before even asking the seller to repair should be stricken from the agreement.  The buyer is still protected because they retain the right to terminate if the seller refuses to make the desired repairs, but this solution provides a more appropriate playing field for all parties.

FEATURED HOMES:

302 Beaver Street

302 Beaver Street

Located in the absolute heart of the Village, you can’t help but love the amazing transformation of this historic gem.  Stylish and trendy yet exuding incredible charm, with new kitchen, new baths, new & refinished floors, new HVAC and so much more. Large yard, garage, 4 bedrooms, three finished levels, Pottery Barn aesthetic throughout. Still potential for further expansion and value enhancement! $595,000.

 

 

 

 

608 Broad Street

608 Broad Street

The contractors have just left this newly remodeled gem.  Less than a block from the Sewickley business district and two blocks from the hospital — you can’t get any more convenient than this! 4 bedrooms and 2 full bathrooms, including a dedicated master bath.  New kitchen with stainless appliances.  $389,900

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.
Feel free to contact her at the office (412) 741-2200 x238,
or on her mobile phone (412) 779-6060.

Understanding Realtor-ese!

Why don’t realtors use plain language to advertise their listings?  How are we to be able to translate what they write so that we know what a home really has to offer?

The first step in selling a home is marketing that home, and sometimes the brutal truth is just not going to attract a buyer.  We figure that if we can at least get you to explore the possibilities, that there is a chance of a sale.  “Cozy” sounds much more appealing than “small”, “motivated seller” is less alarming than “the seller needs a sale now” and “awaits your vision” is far more intriguing than “this place needs a complete overhaul.”  I’ve included a translation guide to some of our more popular phrases to aid you in understanding “realtor-speak” as you peruse our listings!

  • Complete Renovation: the home has had a top to bottom overhaul and nearly everything is new within the past few years
  • Mature Landscaping: large trees, but it could border on overgrown
  • Secluded: there is no one anywhere to be found
  • Historic: old, with windows that don’t open, don’t stay open, don’t shut or don’t lock
  • Original: everything is at least 50 years old
  • Investment Opportunity: you’re going to need to gut this one to the studs
  • Needs TLC – another complete rehab needed
  • Custom Window Treatments: early 90s, expensive, teal or rose colored draperies
  • Must see Inside: zero curb appeal
  • Bonus Room – no one knows what to do with this space
  • One Car Garage – you might get your Suburban in, but forget about opening the doors once inside
  • Up & Coming Neighborhood – this home is next to the train tracks
  • Desirable Neighborhood – you’ll be paying more for this house because people love the neighborhood
  • As Is – inspect before making your offer – the seller won’t be fixing anything
  • Unique – you might have a hard time reselling this one
  • Close to the Village – a 10 minute drive by car
  • Walk to Village Shops – might be possible, but who has time?

FEATURED HOMES:

17 Linden Place

17 Linden Place

 

Central Sewickley Village neighborhood sited on a level lot with large fenced backyard and patio.  Hard-to-find four car garage with one bedroom apartment above is ideal for nanny, in-laws or rental income. Nicely remodeled interior with neutral décor, three finished levels of living space including large gameroom on lower level!  $750,000

 

 

 

7 Harvester Court

7 Harvester Court

 

Looking for a home delivered to you on a silver platter?  Your search is over!  This custom built all brick colonial was just renovated with 3 new luxury baths, newer kitchen, new roof, new HVAC, new deck, new paint in modern aesthetic and more. Totally turn-key for you and your family! 4 bedrooms, 3.5 baths, 3 car garage, finished walk-out lower level, nearly 2 acre lot. $775,000

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.
Feel free to contact her at the office (412) 741-2200 x238,
or on her mobile phone (412) 779-6060.

Selling with Old Mechanicals

Dear Kathe,

We have a very old (25 years) furnace.. It is still working well and we don’t have the cash to replace it. We are planning to sell our home next year. What advice do you have?

A 25 year old furnace is a very old furnace, well beyond the useful life expected of such equipment. If a buyer makes an offer on your home and then finds out how old your furnace is, there is a very high likelihood that they will be asking you to buy a new furnace as part of their inspection response. There are a few things you can do to set yourself up for a positive outcome.

First, when you complete your seller disclosure, be sure to write on the document that the furnace is past the end of its useful life and may need to be replaced soon. Price your home accordingly and be sure that your agent highlights to buyers agents that you have priced your home at a lower price point because of its older mechanicals. This will prevent the buyer from expecting you to buy them a new furnace – they should take the age of the furnace into account when making their offer.

Second, put a home warranty on your home when you list it. This will provide coverage to you should the furnace break while you own the home and will give the buyer 12 months of coverage should anything happen in their fist year of ownership (and it is renewable).

Finally, consider buying a new furnace. Many contractors are willing to accept payment at closing if you make arrangements for this upfront. With a new furnace you can ask more for your home and are more likely to draw more enthusiasm form the buyers who do see your home.

A Pre-inspection is Your Best Offense!

Dear Kathe,

Friends of mine just had the sale of their home fall through because of a home inspection. How can that be prevented?

 Yes – sellers should have their home pre-inspected before listing to prevent these kinds of issues! Finding a buyer and agreeing on a purchase price is only one small component of a real estate transaction and yet it is often all that sellers focus on.  What happens between then and closing, however, is often the more difficult part of the process.  Issues with a home uncovered on an inspection often cost a seller thousands in unexpected repairs and when sometimes even result in a terminated transaction.  Inspectors are incredibly thorough (sometimes even finding problems that aren’t problems) and so every home seller should anticipate that the home inspector will find deficiencies and that the buyer will expect correction.

All home sellers should seriously consider having their homes pre-inspected.  For as little as $250 – $500 for a basic pre-inspection you will quickly have an insiders view of how a buyer’s inspector will assess your home.  Use the inspection as a maintenance check list – find a handyman to come in and fix all of the little things so that they don’t come up again on a buyer’s inspection.  If there are larger items that you do not have the ability to repair, such as a roof nearing the end of its useful life, get an estimate or two for the repair or replacement.  Note the issue on your disclosure and include a copy of the estimate.  This should prevent you from having to credit the buyer for the repair later – buyers are supposed to review the disclosure and take any disclosed items into account in making their offer to you.

Of course, if your inspection is good or just has a lot of little items that a handyman can fix, attach the handyman’s receipt showing the repair provide a copy of the inspection in the house for buyers to see with a note indicating that the home has been pre-inspected and repaired and that they buyer can buy with confidence knowing that they are buying a house in great shape!  In a town full of older and aging homes, this will really help your marketing!

So before you list your home – consider a pre-inspection.  It will give buyers the confidence they need to move ahead with a purchase, may combat concerns that there are likely problems that would lower their initial offer to you, and will hopefully result in a smooth transaction once you do have your home under agreement.

 

Avoid an Inspection Fall-Through

Dear Kathe,

I’ve heard that agreements on many homes have fallen through lately from home inspections – why is that?

Our market has traditionally been one where buyers know they are buying old homes and allow the seller some leeway in not presenting a “perfect” home from an inspection standpoint. However, in many parts of the country, this is not the case. Sellers are expected to remedy all issues noted by home inspectors prior to closing. As more and more people migrate here from other parts of the country, our prices are going up, but so are the buyers’ expectations as to a seller’s responsibility for concerns discovered on a home inspection. At the same time, inspectors are getting significantly more particular. And so yes, it is absolutely possible to have purchased a home only two years ago and have new concerns arise that clearly existed and were overlooked when you bought your home. And yes, it is equally possible that you will be expected to fix them and if you refuse, your sale might fall through.

This can often leave a seller feeling like they are the unlucky one who got stuck holding the “hot potato.” As the years pass, the list of “hot button” issues mounts and if you are the owner when the issue is discovered, you will be the one paying the bill even though the home was bought and sold many times in advance of your ownership. These hot button issues include items such as radon, mold, damp basements, lead water lines, asbestos (fireplace inserts, duct tape, pipe wrap or flooring) knob and tube wiring and pushmatic electric panels. If your home has any of these issues, you should figure you will be the one footing the bill and address them before they become an issue on a home inspection.

The best way to prevent an inspection fall through or an unexpected bill for defects is to have your home inspected before you put it on the market. A pre-inspection will allow you the opportunity to fix those items that can be fixed and disclose the rest to save yourself from a laundry list of requests. Be sure not to ignore the small stuff that comes up or that you know is wrong. For example, when I list a home, I specifically ask sellers if all of their windows open, stay open, shut and lock, and if any are cracked or have broken seals. Sellers more often than not disclose no issues with their windows and yet it is one of the most frequent inspection deficiencies. Take the time to do your homework – get your home inspected – repair or disclose any possible concerns – and save yourself from a long last-minute repair list and potentially even from losing your sale.

Do You Need to Disclose the Ghost in Your Attic?

We live in an old town, with homes dating back to the early 1800s.  With old homes comes a lot of history, and sometimes a ghost story or two.  If your home has a history of paranormal activity (real or imagined), or someone has died in the home, do you have a duty to disclose that to potential buyers?  While approximately half of our states do require disclosure of paranormal activity, as of yet, Pennsylvania is not one of those states.  However, a case in Delaware County where the seller failed to disclose a murder/suicide that happened in the home may change that in PA.

Many other states have adopted far more comprehensive disclosure laws.  In our neighboring New York, paranormal activity must be disclosed.  In California, any death in a home in the preceding three years must be disclosed.  And in Massachusetts, the law is even more comprehensive, requiring disclosure of paranormal activity, as well as whether the home was ever the site of a felony, suicide or homicide or whether someone with HIV ever lived in the home.

Our disclosure simply asks whether there are any material defects, which is defined as anything that could significantly impact value. Material defects would clearly include any major problems with the physical structure, as well as pending tax assessments and disputes over property boundaries with adjoining landowners.  But what about those ghostly apparitions or eerie cries in the night?  According to a well-known California appraiser who specializes in diminution of value, a well-publicized murder can reduce value by 15% – 35%.  Does a ghost reduce a home’s value and need to be disclosed?  Right now, the answer in no in Pennsylvania, although sellers wishing to avoid lawsuits would be well advised to disclose anything that could be seen as stigmatizing a property, including paranormal activity and deaths in the home.  For some buyers, value actually increases with the prospect of living among ghosts.  But before disclosing the ghost in your attic, be sure there isn’t a rational explanation for what you are experiencing.

Buyers, if you don’t want to move into a haunted home, what can you do to protect yourself in the absence of required disclosure?  You can start with the internet – do a thorough search of the property address and sellers’ names.  That will likely turn up information on any more recent concerns with the property.  Some recommend burning sage to rid the home of spirits, and if all else fails, you can always call Ghostbusters!

The Disclosure — Your Best Insurance Policy

If you have bought or sold a home in the past 15 years then you have come across our (now very lengthy 6 page) Seller Disclosure.  The Disclosure is the document where, as required by law, the seller discloses what they know about the property that they are selling.  Sellers – the Disclosure is your friend – it is your best insurance policy against future problems in the deal or lawsuits after the fact – take the time to fill it out completely.

Right now, if you are like most home owners, you are probably thinking “I maintain my home – its in great shape.”  Or maybe “its an old home – old homes have problems – that’s what you get when you own an old home.”  You might be surprised to learn that what you know and fail to disclose could present future liability to you.

What might you not be thinking of?  The list is endless – some quick examples  follow.  Ever have water leak into the basement that you thought you fixed?  The disclosure asks if you have ever had water enter the basement.  Even if it seems fixed, you must still disclose that it happened – failure to do so could result in a lawsuit if the problem recurs when the buyer moves in.  How about windows that are painted shut, don’t stay open or have broken seals?  Failure to disclose these sorts of issues can cost you thousands when the home inspector inevitably finds them – if you disclose them upfront, the buyer cannot object to their presence later.  How about bathrooms that do not have exhaust fans to the exterior?  Bathrooms, kitchens or garages without GFCI plugs?  Staircases without handrails? Cracked pavement in sidewalks or driveways?  Non-fire rated doors leading into attached garages?  All of these things seem like non-issues when you live in a home but if not disclosed, can cost you thousands in inspection repairs.

And don’t forget disputes (or what could become a dispute).  Is your fence just a little bit over the property line?  Disclose, or you could find yourself having to pay to move the fence prior to closing.  Do you have liens against your home, such as tax or contractor liens?  Failure to disclose could cost you thousands in compensatory damages to your buyer if the closing is held up as the closing company tries to address the liens and your buyers find themselves having to store their belongings and live in a hotel.

If you are selling your home, it’s a good idea to sit down with your experienced real estate agent and make sure you have thought through all of the possible items that need to be disclosed.  If  you take the time to be thorough, it is your best insurance policy against future problems.