Financial

Real estate: the fine print of the Regional Contract

Published

13 years ago

May 26, 2011

Choosing a buyer’s agent isn’t just about finding someone who knows the neighborhood, can commit to the time necessary to helping you find your perfect place and can get you to settlement smoothly — it’s also about finding someone with the smarts and detail-oriented know how to help you navigate the plethora of legal forms that you’ll sign binding you to the house you’ll eventually buy.

Most agents are not lawyers, and therefore are not allowed to practice law. But since most buyers don’t meet a lawyer involved in their transaction until settlement, the agents are their primary guide to understanding the impact of what they sign.

For sellers, too, an agent must also be savvy with the ins and outs of the contracts. For buyers and sellers alike, having an intelligent agent who knows the fine print of the standard contracts can give them a huge advantage in the transaction. Most agents use the Regional Sales Contract in the D.C., Maryland and Virginia area around Washington, and there are a number of unexpected surprises contained in those forms, so as a buyer or seller, it helps if you know a few of them too:

1. The contingency expiration date that never comes

Buyers count on contingencies to protect them in the event they find something out during the process that changes their ability or desire to buy the property. Sellers count on those contingencies ending at some point so they can have confidence they’ll actually get to settlement.

Two big contingencies, the financing and the appraisal contingencies, have expiration dates that can come and go, but still remain in effect, even all the way until settlement. The financing contingency does not expire until the seller gives notice (an official signed document pertaining to the transaction) that the deadline has expired. But if the buyer doesn’t remove the contingency within three days of receiving this notice, the contract dies.

The language is worded thus to protect the buyer, obviously. Unfortunately, the effect this generally has is that sellers are so scared to deliver the notice (and therefore risk the contract dying) that they don’t do so, and then the contingency deadline loses all meaning since it goes on indefinitely. Often, sellers don’t even know they have to give notice, especially if they are working with an agent who may not know the contract so well, and think they can take the earnest money deposit (often tens of thousands of dollars) if the buyer doesn’t qualify for the loan after the expiration, only to find out they can take nothing.

Similarly, the appraisal contingency deadline can also come, go, and still remain in effect if the seller does not give notice of that deadline’s expiration. The difference is that if the buyer doesn’t respond in three days, that contingency expires, but the contract survives. Therefore, every good seller’s agent should deliver notice immediately upon expiration of that contingency to ensure the seller is duly protected. Most other contingencies in the standard Regional Sales Contract expire upon their expiration date.

2. The attachments that don’t convey

Most buyers and sellers who have some experience in the market know that attached fixtures (elements of the house or decor that are physically attached to the property in a relatively permanent way) convey, or come with, the property without express written agreement. So the sofa goes, the light fixtures stay; the lamps go but the mantelpiece stays — unless agreed to otherwise in writing.

What about blinds, curtain rods, built-in refrigerators, and, most importantly as of late, wall-mounted flat-screen televisions? Well, good agents know that to ensure there is no dispute down the road, any ambiguous items should be identified and agreed upon in writing. But good agents know that some of these items are already excluded by default in the regional sales contract. For example, mounted televisions and speakers that extend outside the wall or ceiling do not convey unless otherwise agreed upon. Since they are affixed to the wall, many buyers and their agents assume they count as fixtures and will convey automatically. The contract says otherwise, so beware!

3. When digital signatures don’t count

Digital signatures are being used more and more frequently these days, and it’s understandable. In our area, a normal contract usually is more than 25 pages long, and sometimes it’s more than 50! Printing and faxing or e-mailing these docs back and forth has become a huge burden, even as internet speeds improve, so being able to enter a password and click to place your signature in a document on your desktop saves a lot of time and toner.

However, many agents who use digital signatures don’t get a digital signatures authorization form signed from the beginning that allows for digital signatures to be interpreted as valid in a legal sense. Without that one form signed, by hand, the entire contract could be considered invalid. The day of settlement, the buyer could simply walk away. Similarly, a contract originally agreed to in writing but then signed in subsequent parts digitally could be considered valid only until the subsequent parts that weren’t signed by hand. In that sense, if a buyer makes certain demands under the home inspection contingency but submits notice with a digital signature without an agreement to sign in such a way, they have effectively not given notice by the deadline and may lose all the rights to make such demands once the deadline expires.

4. Never leave the blank blank

In the regional sales contract, there are hundreds of blank fields that agents fill in to get the deal done. Many of them simply don’t apply to the transaction; condo language doesn’t apply when you’re buying a single family home, and language that clarifies how a mortgage is to be assumed almost never pertains to transactions these days. But if a blank is left blank in an active and applicable section of the contract, rather than crossed through or filled in with “N/A,” it may eventually come back and bite you, whether you’re a buyer or a seller. For example, says Jason Sherman of Paragon Title Company, in a condominium transfer where there is no special assessment as of the contract date, but one comes up before settlement, there is no clear indication of who will pay it unless the agents fill in one of two options on the condominium addendum. When there’s no assessment it’s almost always left blank, but if an assessment comes in mid-stream there will be problems.

These are just a few of the more common errors I see practiced by inexperienced agents, or misunderstood by most buyers and sellers. But of course there are many more pitfalls that can sneak up on you. That’s why your choice in your Realtor shouldn’t just be based on whether he or she can make small talk at a cocktail party or has a nice advertisement. It should hinge on your confidence that they can handle the tricky — and often costly — intricacies of the legal documents you sign too.

David Bediz is a Realtor at Coldwell Banker Residential Brokerage and part of the Dwight and David Real Estate Group. He can be reached at 202 352 8456 or through www.DwightandDavid.com. He is not a lawyer and none of this article shall be construed as legal advice.

Real Estate

The rise of virtual home tours

Adapting to changing consumer preferences in spring real estate

Published

2 days ago

April 26, 2024

Jeff Hammerberg

Looking for a home? Virtual tours hold special benefits for queer buyers.

In today’s dynamic real estate market, the spring season brings not only blooming flowers but also a surge of activity as buyers and sellers alike prepare to make their moves. However, in recent years, there’s been a notable shift in how consumers prefer to explore potential homes: the rise of virtual tours.

For the LGBTQ community, these virtual experiences offer more than just convenience; they provide accessibility, safety, and inclusivity in the home buying process.

Gone are the days of spending weekends driving from one open house to another – unless that’s your thing of course, only to find that the property doesn’t quite match expectations. With virtual tours, you can explore every corner of a home from the comfort of your own space – find something interesting? Schedule a showing with any LGBTQ Realtor at GayRealEstate.com.

This is particularly significant for LGBTQ individuals, who may face unique challenges or concerns when attending in-person showings. Whether it’s the ability to discreetly view properties without fear of discrimination or the convenience of touring homes located in LGBTQ-friendly neighborhoods across the country, virtual tours offer a sense of empowerment and control in the home buying process.

Moreover, virtual tours cater to the diverse needs of the LGBTQ community. For couples or families with busy schedules or those living in different cities or states, these digital walkthroughs provide a convenient way to view properties together without the need for extensive travel. Additionally, for individuals who may be exploring their gender identity or transitioning, virtual tours offer a low-pressure environment to explore potential living spaces without the added stress of in-person interactions.

At GayRealEstate.com, we understand the importance of adapting to changing consumer preferences and leveraging technology to better serve our community. That’s why our agents offer an extensive selection of virtual tours for LGBTQ individuals and allies alike – visit our website, choose an agent and within minutes you’ll have access to the Multiple Listing Service (MLS) via their website.

From cozy condominiums in bustling urban centers to sprawling estates in picturesque suburbs, virtual tours showcase a wide range of properties tailored to diverse tastes and lifestyles.

In addition to virtual tours, GayRealEstate.com provides comprehensive resources and support to guide LGBTQ buyers and sellers through every step of the real estate journey. Our network of LGBTQ-friendly agents is committed to providing personalized service, advocacy, and representation to ensure that all individuals feel respected, valued, and empowered throughout the process. Plus, we are happy to provide a free relocation kit to any city in the USA or Canada if you are a home buyer.

As we embrace the spring season and all the opportunities it brings in the real estate market, let’s also celebrate the power of virtual tours to revolutionize the way we find and experience our future homes. Whether you’re searching for your first apartment, forever home, or investment property, GayRealEstate.com is here to help you navigate the exciting world of real estate with confidence, pride, and inclusivity.

Jeff Hammerberg is founding CEO of Hammerberg & Associates, Inc. Reach him at [email protected].

Real Estate

Boosting your rental property’s curb appeal

Affordable upgrades to attract and keep tenants happy

Published

2 weeks ago

April 13, 2024

Scott Bloom

Spruce up your curb appeal with new plants and trees.

In the District of Columbia, the rental market tends to open up significantly during the springtime for several reasons. First, spring brings about a sense of renewal and change, prompting many individuals and families to seek new living arrangements or embark on relocations. Additionally, the warmer weather and longer daylight hours make it more conducive for people to explore housing options, attend viewings, and make decisions about moving. Furthermore, spring often coincides with the end of academic terms, leading to an influx of students and young professionals entering the rental market.

Landlords and property managers also tend to schedule lease renewals or list new vacancies during this time, capitalizing on the increased demand and ensuring a steady turnover of tenants. In the competitive world of rental properties, attracting and retaining quality tenants can be challenging. However, with some strategic upgrades, property owners can significantly enhance their units’ appeal without breaking the bank. From enhancing curb appeal to interior upgrades, here are some practical and cost-effective ideas to make your rental property stand out in the market.

Curb appeal

First impressions matter, and curb appeal plays a crucial role in attracting potential tenants. Simple enhancements like freshening up the exterior paint, adding potted plants or flowers, and ensuring a well-maintained lawn can instantly elevate the property’s appearance. Installing outdoor lighting not only adds charm but also enhances safety and security.

Interior upgrades

Upgrade the kitchen and bathroom fixtures to modern, energy-efficient options. Consider replacing outdated appliances with newer models, which not only appeal to tenants but also contribute to energy savings. Fresh paint and updated flooring can transform the look of a space without a hefty investment. Additionally, replacing worn-out carpets with hardwood or laminate flooring can make the unit more attractive and easier to maintain.

Enhance storage

Maximize storage options by installing built-in shelves, cabinets, or closet organizers. Tenants appreciate ample storage space to keep their belongings organized, contributing to a clutter-free living environment.

Improve lighting

Brighten up the interiors by adding more lighting fixtures or replacing old bulbs with energy-efficient LED lights. Well-lit spaces appear more inviting and spacious, enhancing the overall ambiance of the rental unit.

Upgrade window treatments

Replace outdated curtains or blinds with modern window treatments that allow natural light to filter in while offering privacy. Opt for neutral colors and versatile styles that appeal to a wide range of tastes.

Focus on security

Invest in security features such as deadbolts, window locks, and a reliable alarm system to ensure the safety of your tenants. Feeling secure in their home is a top priority for renters, and these upgrades can provide meaningful, genuine peace of mind.

Enhance outdoor spaces

If your rental property includes outdoor areas like a patio or balcony, consider sprucing them up with comfortable seating, outdoor rugs, and potted plants. Creating inviting outdoor spaces expands the living area and adds value to the rental property.

As landlords, investing in the enhancement of your rental properties is not merely about improving aesthetics; it’s about investing in the satisfaction and well-being of your tenants, and ultimately, in the success of your investment. By implementing these practical and affordable upgrades, you’re not only increasing the desirability of your units but also demonstrating your commitment to providing a high-quality living experience.

These efforts translate into higher tenant retention rates, reduced vacancy periods, and ultimately, a healthier bottom line. Moreover, by prioritizing the comfort, safety, and happiness of your tenants, you’re fostering a sense of community and trust that can lead to long-term relationships and positive referrals. So, let’s embark on this journey of transformation together, turning rental properties into cherished homes and landlords into valued partners in creating exceptional living spaces.

Scott Bloom is owner and Senior Property Manager of Columbia Property Management. For more information and resources, visit ColumbiaPM.com.

Real Estate

Real estate agents work hard for that commission

Despite recent headlines, buyers and sellers benefit from our expertise

Published

3 weeks ago

April 6, 2024

Justin Noble

Realtors work hard for that rare six percent commission.

With there being a lot of noise in the media lately as I am sure you have read and heard headlines like “Gone are the days of the 6% commission” and “End of the good days of Realtors,” etc., I wanted to re-run a very short article of the long laundry list of things that well versed real estate agents bring to the table to earn that seldom 6% commission. It’s typically split in half and it has always been negotiable).

As a real estate professional you will go on listing appointments and buyer meetings to not only attempt to gain business but in doing so you also educate the general public on what it is that we as real estate professionals do. I know what you’re thinking – and if you’ve seen my photo before you wouldn’t be wrong to assume that I am cast in “Selling DC” as the lead villain. I am just waiting for that phone call! But in all seriousness, when I sit down to come up with a list of things to prove to prospective clients the value in working with me as their real estate professional, I am pretty blown away at the items and qualities that a trusted professional representing you in a real estate transaction is responsible for managing a myriad of tasks, including but not limiting to the following:

• Have a pulse on the marketplace to truly understand exactly what is happening from a buying and selling standpoint while also understanding the economic side of things – not just looking at interest rates. Why are rates where they are? What employers are laying off and could cause an influx of inventory? What are the trends for individuals moving IN or OUT of an area looking like? Forecasting the marketplace of all things that truly affect real estate is vital.

• Soft Skills – these are the skills often considered as customer service skills. The ability to be approachable by all types of people and ensure that you are open to receive information. Also – when telling you bad news – it’s important to ensure that it is done in a manner in which you, the receiver, will be pleasantly receptive.

• Pre-market vendors – not only are real estate professionals expected to market your home for sale or locate a home for you to purchase, we are also expected to have a list of pre-market vendors to which you can use for your lending needs, home inspection, title work, any fluffing and buffing needed pre market for the sale of your home such as a contractor, painter, landscaper etc. We have a book of extremely well vetted vendors that either I personally have used or past clients have used that can assist with your needs. This beats Googling for hours and accidentally choosing the wrong contractor. Section A of the pre-market vendor list includes those in which we real estate professionals use for marketing materials for your property – we will use the best photographers, have floor plans drawn for your property, video, staging, catering for brokers opens and the list goes on. Again – this is a well vetted list that we have worked on for years and done all of the heavy lifting and had those uncomfortable conversations when things are not properly executed – so you don’t have to.

• On Market Tasks – these are the tasks that most clients are unaware that we do. Oftentimes when a listing is on market – folks think that I am just cruising around in my convertible buying nice things. However I am in fact going around checking each listing on market to ensure that they are clean, the booties are replaced, marketing materials are stocked, light bulbs are all working, staging looks crisp and the list truly goes on. That of course, doesn’t include the tasks we do to properly market the property such as weekly email blasts, reaching out several times to follow up with showing agents to get their feedback, check the market to see what our competition looks like, what’s under contract and why, and again…..I could go on. Needless to say the most important and time consuming tasks are those that are done when the property is on market.

• “Contract to close” management – the term contract to close is pretty much what it sounds like – it’s what happens from the time we go under contract until we reach the closing finish line and you have those keys. Once a trusted real estate professional has fiercely negotiated on your behalf as a buyer, the fun starts. Again pops up this vendor list – helping guide you though selection of a home inspector, termite inspector, etc. for the inspections. A title attorney is needed (depending on your jurisdiction) and any other vendors for quotes like renovations, etc., that you might want done to the property. Once the inspection is completed and we go through possible re-negotiations then we must ensure that the lender has the documents needed from you completed in order to have the appraisal done to prove the value of the home you are under contract for. Now we are getting into the weeds – but once we are on the other side of things and the appraisal comes back at value and the loan is clear to close then we are at the finish line to your new home.

A similar story can be told if you are selling your home. The appraisal is a very important part of the checklist as that is the value in which your home is worth. The appraiser is a third party that neither the buyer, seller, lender or myself have any allegiance to. I do, however, have the duty to educate said appraiser on why I chose the listing price and how I came up with that value.

• Post-market vendors. As mentioned before, a real estate professional should have a book of well vetted vendors from which to choose. Looking at the list of vendors now that we are on the other side of the table – I can provide a cleaning person, HVAC contractor, someone to repair the sprinkler system, a dog walker, the best caterers and bakery in town. Further down the road I am able to provide a wonderful wealth manager who can tell you what to do with that piece of real estate you purchased some time ago and we could go on for days.

While you are fully entitled to not use a real estate agent during your real estate transaction, I do believe that it is well within the realm of possibilities to say that without one there would be loose ends not completely tied up, things mismanaged and possible delays that could cost real cash. All of that aside, it is also such a truly wonderful experience to work alongside a trusted professional that at the end of the transaction becomes a new friend and family member. Real estate professionals love what they do, they love real estate and people and sheepherding you through the home buying or selling process is what it’s all about to us.

Justin Noble is a Realtor with Sotheby’s international Realty licensed in D.C., Maryland, and Delaware for your DMV and Delaware Beach needs. Specializing in first-time homebuyers, development and new construction as well as estate sales, Justin is a well-versed agent, highly regarded, and provides white glove service at every price point. Reach him at 202-503-4243, [email protected] or BurnsandNoble.com.