Avoiding Pitfalls in a Real Estate Transaction of Buying a Home
Home buying involves a lot of due diligence. OREF forms lay out all the events and dates involved throughout the transaction and explain rights and responsibilities of each party involved in the transaction. There are lots of deadlines to review and inspect various elements of the property and real estate agents who have a working knowledge of how to best prepare each event for home buyers is critical. There will be lots of 3rd vendor involvement including inspectors, title / escrow company, mortgage lender/broker, appraiser, and the other realtor. Coordinating takes a lot of work and requires certain knowledge to best prepare for every event.
For example, urging the lender to order an appraisal as quickly as possible is very important. There is a huge demand for appraisers these days and it’s especially the case in Oregon. Even if you want to close in 5 weeks, getting an appraisal appointment is so backed up it will take 4-6 weeks. If you are getting a mortgage and you are not exempt from having to do an appraisal (e.g. cash deal/way under market value), you can safely assume that your closing will be at minimum six weeks from the acceptance date. So even if you put down 5 weeks until closing date, it’s not going to happen. Sellers should also know this and listing agents need to advise sellers of this possibly delay that is inherent due to the appraisal madness.
If the home sits in Northeast Portland, and has an unfinished basement, it is likely that there is a radon gas issue. Southeast Portland homes also have radon gas issues but NE Portland is where it’s the most concentrated. You must also know that EPA requires the radon reading device to be left in the house for 48 hours and if the level is above 4 pCi/l, mitigation is required. So it’s important to coordinate this within the allowed inspection negotiation deadline time frame.
Performing a sewer scope testing is always a good idea if the home is older than 50 years. Cast iron pipes can last for 100 years but often coupling joints can leak and require a correction. Sewer line repairs can be quite costly. It is normal that if your sewer scope report reveals problems, the seller orders a second opinion and even perform a hydro flush to correctly identify issues using a video after it’s cleaned.
Lending can have issues that will delay funding. Lots of big lenders have complicated underwriting guidelines that can slow the funding at the end. We now have required disclosure and mandatory waiting period. There are many other strict rules involved with lending. It is vital that your realtor explain to you what it means to be truly pre-approved rather than pre-qualified before jumping onto a deal. You will be submitting a long list of documents to your loan officer. You may think some are so tedious and ridiculous. However, it’s important that you comply with supply every detail and document if you don’t want the process to be delayed.
Do you still want to buy a home? The good news is that I deal with all this stuff and more when working as a real estate buyer’s agent. I just keep my buyers informed throughout every event and make sure that they maximize their interest throughout the transaction. The best part is that buyers don’t pay a dime to buyer’s agent. We get paid from the seller/listing agent.