Trying To Buy A “Diamond In The Rough” Part 3

January 12, 2007

In Part 1 & 2 we talked about various TLC (Tender Loving Care) situations, home inspections including the structural as well as the mechanics and the roof.  If a seller were to credit a buyer - how to do it properly.  This, again, is where a good real estate agent comes in to play.  Many people think that once a person gets a real estate license that they know everything about real estate.  It takes years to learn the laws, which continually change and to be able to negotiate and what to negotiate best for their clients.  There are many critical areas that will be addressed in a real estate transaction and knowing the proper time to handle these critical areas is of upmost importance - otherwise, it will be too late to bring the items and concerns and negotiations into the transaction.

All too often at this stage a "seller concession" is made, but made incorrectly.  Using the example found in Part 2, instead of installing new carpet the seller agrees to a $5,000.00 carpeting allowance to be settled at Closing.  No new carpet, just $5,000.00 to the buyer to go and uy new carpet from the seller’s funds.  Makes sense, right?  Wrong.  A lender won’t permit the seller to pay the buyers $5,000.00 at closing.  Pating $5,000.00 in buyer closing costs will usually be fine.  But not by handing-over cash to the buyer.  Installing $5,000.00 worth of new carpet before closing, fine.  But not hand over cash.  Even though the buyer and seller have agreed in writing and in the sales contract it states to give $5,000.00 cash at cloing for a carpet allowance - the lender won’t allow the seller to hand over cash at closing.  Cash allowances in the contract can’t happen and you should be aware of this before you get deeper in the buying process.  Again, it comes back to having a knowledgeable real estate agent who is knowledgeable about these procedures.  Many buyers and sellers don’t find out these things until it’s too late, they are already involved in their transaction.  A good real estate agent will help guide you in the right direction and help construct a sales contract that will please both the buyer and the seller.  But, expecting to come home with a $5,000.00 check in your hand won’t happen - no matter how rough the diamond is.

To help find your "Diamond In The Rough" - contact me!

Posted in All Things San Diego, Helpful Hints, Lending, Real Estate, Things of Interest