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Archive for Friday, September 25, 2009

Buyers, sellers should welcome home inspections

September 25, 2009

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Q: You always advise buyers to make their offers contingent upon receiving a satisfactory report from a professional home inspector, but are such inspections required by law? Also, if a seller receives an offer that includes such a contingency, does the seller have the right to demand that it be removed?

A: None of the 50 states requires that buyers make their offers contingent on a home inspection, nor does any state prohibit sellers from rejecting an offer that contains such a clause.

Nonetheless, it’s foolish for buyers to purchase a house without first obtaining an inspection and equally foolish for sellers to balk at a buyer’s request to have the property inspected.

If you were buying a car, you would never close the deal without having it examined by a mechanic or at least taking the car around the block. So, too, would it be unwise to spend hundreds or even thousands of times more for a house without ordering an inspection by a construction professional. The report would likely cost between $300 and $600, but it would be money well-spent if it helps you to avoid purchasing a real estate “clunker.”

Separately, while sellers always have the right to reject a buyer’s request for a report, doing so may make the buyer wary that the home is filled with costly hidden defects that the seller doesn’t want anyone to know about.

Q: Is it true that my favorite entertainer, Barbra Streisand, has a man-made pond in the back of the new mansion that she completed in Southern California?

A: Yes. The 67-year-old actress and singer’s latest home — the third she has built or bought as part of the compound she owns with husband and actor James Brolin in the seaside community of Malibu — has a relatively large man-made pond in the backyard. It’s stocked with only black-and-white fish, the diva says, to match the trim of her new property.

If I order a credit report on myself, will it affect my future credit score?

No. Inquiries for a loan or credit card will appear on your report and may impact your score. Though an inquiry initiated by yourself or your employer also will be noted on your record, it will not be reported to creditors with whom you might apply in the future and thus will not affect your credit rating.

Q: We offered to pay $225,000 for a very nice house that has several new appliances, including a fancy washer, dryer, refrigerator and stove. The seller accepted our offer and signed the contract, but crossed out and initialed the paragraph that stated that the appliances would be included. We would never have offered so much if those items would not be part of the transaction. Are we obligated to go through, or can we cancel the sale?

A: You have the right to cancel the deal and demand the return of your good-faith deposit. Perhaps the seller didn’t realize it, but he rejected your offer the moment that he crossed out the paragraph stating that the appliances were included as part of your offering price. The contract that he amended and signed is now considered a counteroffer, which you can accept or reject.

Q: We own a home, but also a small vacation cabin in another state. If we wanted to form the type of inexpensive trust you wrote about several weeks ago so our estate could avoid probate court after we die, could both properties be placed in the same trust, or would we have to establish separate ones for each home?

A: You would need to create only one trust, and then put title to the two properties into it.

Trusts are popular because they allow heirs to inherit real estate and personal possessions quickly, instead of suffering through the costly probate court process, which often takes a year or two to complete.

A trust can be particularly useful to you and others who own out-of-state property. That’s because if you died with only a simple will, your estate would likely have to go through separate probate proceedings — one for each state in which the properties are located. But with a trust, out-of-state property usually can be transferred to beneficiaries without the time and cost of multiple probate hearings.

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