Common Q&A about Buying a Home

How do I get the real scoop on homes I am looking at?
Home inspections, seller disclosure requirements and the agent's experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to complete a real estate transfer disclosure statement.  Here is a summary of the things you could expect to see in a disclosure form:

  • In the kitchen -- a range, oven, microwave, dishwasher, garbage disposal, trash compactor.
  • Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom.
  • The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump.
  • Amenities such as a pool or spa, patio or deck, built-in barbeque and fireplaces.
  • Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels.
  • The type of water heater, water supply, sewer system or septic tank also should be disclosed.

Sellers also are required to indicate any significant defects or malfunctions existing in the home's major systems.  A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.  The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property.
Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.
People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions.  It's important to note that the simple idea of disclosing defects has broadened significantly in recent years.  Many jurisdictions have their own mandated disclosure forms as do many brokers and agents.

What do all of those real estate acronyms in the ads mean?
If you find yourself stumbling over weird acronyms in a real estate listing, don't be alarmed.  There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges).  Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section:

  • assum. fin. -- assumable financing
  • dk -- deck
  • gar -- garage (garden is usually abbreviated "gard")
  • expansion pot'l -- may be extra space on the lot, or possibly vertical potential for a top floor or room addition.  Verify actual potential by checking local zoning restrictions prior to purchase.
  • fab pentrm -- fabulous pentroom, a room on top, underneath the roof, that sometimes has views
  • FDR -- formal dining room (not the former president)
  • frplc, fplc, FP -- fireplace
  • grmet kit -- gourmet kitchen
  • HDW, HWF, Hdwd -- hardwood floors
  • hi ceils -- high ceilings
  • In-law potential -- potential for a separate apartment.  Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first.
  • large E-2 plan -- this is one of several floor plans available in a specific building
  • lsd pkg. -- leased parking area, may come with an additional cost
  • lo dues -- find out just how low these homeowner's dues are, and in comparison to what?
  • nr bst schls -- near the best schools
  • pvt -- private
  • pwdr rm -- powder room, or half-bath
  • upr- upper floor
  • vw, vu, vws, vus -- view(s)
  • Wow! -- better check this one out

How long do bankruptcies and foreclosures stay on a credit report?
Bankruptcies and foreclosures can remain on a credit report for seven to 10 years. Some lenders will consider an borrower earlier if they have reestablished good credit.  The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.

What are some tips on negotiation?
The more you know about a seller's motivation, the stronger a negotiating position you are in. For example, seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called "motivated sellers" include people going through a divorce or who have already purchased another home.   Remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller's asking price stacks up.
Some experts discourage making deliberate low-ball offers. While such an offer can be presented, it can also sour the sale and discourage the seller from negotiating at all.

Do sellers have to disclose the terms of other offers?
Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.