David L. Montgomery, MSF

Review the Disclosures

Before you write an offer on a house be sure to obtain, read and understand the disclosures related to the property. In Michigan there are two primary disclosures you should obtain:

• Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards.
• Seller's Disclosure Statement.

Both forms are useful in providing information on the condition of and the likelihood of hazards in the property as disclosed by the seller(s). The purpose of the disclosures are:

Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards. Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning.

Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women.

The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase. (Source: US EPA)

In a nutshell the statement is saying, if the home you are thinking of buying was built before 1978 there might be lead paint in it. It discloses what exposure to the lead might do to you and yours. The seller(s) may or may not know if there is any lead present-- we'll tell you if we know. If you really want to know for sure; get it tested at your own expense. But, you can still buy the house if you want -- we just want you to know your options. The disclosure is not required for homes built after 1978.

Seller's Disclosure Statement. This statement is a disclosure of the condition of the property in compliance with the Seller Disclosure Act. This statement is a disclosure of the condition and information concerning the property, known by the Seller. Unless otherwise advised, the Seller does not possess any expertise in construction, architecture, engineering or any other specific area related to the construction or condition of the improvements on the property or the land.

Also,unless otherwise advised, the Seller has not conducted any inspection of generally inaccessible areas such as the foundation or roof. This statement is not a warranty of any kind by the Seller or by any Agent representing the Seller in this transaction, and is not a substitute for any inspections or warranties the Buyer may wish to obtain. (Source: Michigan Legislature)

In a nutshell the statement says here's all we know about the home you are buying. Remember now it is to the best of my recollection but I'm not a contractor either. I haven't lied about the condition of the house either physically or legally. This is a disclosure only and not a part of any contract. However, in Michigan if the buyer doesn't have the opportunity to review the disclosure the buyer can cancel the purchase contract.

Disclosures have a lot of information to help in your decision to buy a house. Get them, read them and understand what they mean.

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If you need help Selling your home or you are looking for a home to Buy, visit my website for information to assist you.

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Get a Home Inspection

You've gone through the house hunting process and narrowed it to "the one". It's just what you've been looking for, dreamed about, and it's priced just right -- at least until you prepare your offer. So what do you do now? There are a lot of items to consider when buying a home. It's condition is a major one. You may have questions about this. Do you have the expertise to determine the working condition of a home's furnace, electrical system, water delivery and waste water systems -- just name a few? No? Then get a home inspection. This is especially true when dealing with an older home or foreclosure.

Let me tell you what a home inspection isn't. It isn't going to let you know if you're getting a "deal". As HUD defines it in their disclosure, For Your Protection: Get a Home Inspection:

A home inspection gives the buyer more detailed information about the overall condition of the home prior to purchase. In a home inspection, a qualified inspector takes an in-depth, unbiased look at your potential new home to:

• Evaluate the physical condition: structure, construction, and mechanical systems;
• Identify items that need to be repaired or replaced; and
• Estimate the remaining useful life of the major systems, equipment, structure, and finishes.

It's the difference between kicking the tires on the used car you really have your eye on or taking it to your mechanic to have him tell you what you're really getting for your money.

For an average home the cost may only be a few hundred dollars and could vary by region, but the information it provides may save you thousands in a negotiation or help you decide to keep looking.

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If you need help Selling your home or you are looking for a home to Buy, visit my website for information to assist you.

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You Need to Have Insurance!

I've sold a little bit of real estate in these few years and one of the most consistent questions I've gotten is: "Do I need to get insurance?". The answer is Yes.

If you are financing your purchase with a mortgage, the bank or mortgage company will require it. But that's only part of the reason. Look at it this way; if you had to borrow money to buy your house, chances are you don't have thousands or hundreds of thousands of dollars lying around in the event the house is totally destroyed. You may not have a place to live but the debt will still be there. You can't pay; the insurance company will.

I have a friend whose home caught fire. The insurance company put his family up for six months while the burnt out home was being rebuilt. We all complain about paying premiums for "what may happen" but I know he was thankful that his coverage was in place.

As with all products and services on the market, you need to shop around to find the best match for price and coverage.

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If you need help in Selling your home or you are looking for a home to Buy, visit my website for information to assist you.

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Well,it's official, foreclosures depress nearby property values. I was browsing the Federal Reserve websites and came across this white paper at the New York branch. It is titled, Estimating the Effect of Mortgage Foreclosures on Nearby Property Values: A Critical Review of the Literature. You can read it if you like; it's only 14 pages with bibliography, by clicking on the title.

It is an analysis of various studies on the impact of a foreclosures in a given area. My state of Michigan was acknowledged as experiencing "long-term economic decline" (you too Ohio!). But I jest.

photo: feargal m

At the heart of the review is that if your home is between 50 to 1,500 feet from a foreclosed property, you might experience a drop in your property value! How much that drop may be "depends". Depends on where the property is and how many other properties are foreclosed in the neighborhood to name a couple.

What I found interesting was the statement and I quote: "Remarkably, prior to the foreclosure crisis, there had been little economic research connecting the incidence of foreclosure to nearby property values." So I interpreted that to mean it is widely believed that foreclosures have a negative effect on surrounding property values but, until the data "bites us (the Fed) on the butt" we haven't acknowledged it.

Hey Realtors it's kinda nice to be ahead of the curve!

The Washington Post has published in their online Breaking News an "Interactive Map of Unemployment by County".

The national unemployment rate for July, 2010 was 9.7%. For example, in Michigan one of the counties with the highest unemployment rate was Alcona County at 18.4%. The lowest in the state was Mackinaw County at 6.0%. My home county of Oakland was at 13.5%.

You get all this information by just hovering your mouse over the county you select. So look up yours and hopefully you won't feel like the lady on the left.

Go to: http://www.washingtonpost.com/wp-srv/special/nation/unemployment-by-county/

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