gonna make an offer... need help!

Discussion in 'Homesteading Questions' started by cc-rider, Jan 8, 2004.

  1. cc-rider

    cc-rider Baroness of TisaWee Farm Supporter

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    I'm going to make an offer to buy a house tonight. I've never done this on my own and I'm really nervous.

    Is there anything special I should watch for? For instance, I'm making it contingent on the inspection being OK. What about a survey? No one seems to know for sure where the property lines are. Can I make it contingent that the survey (which I assume I have to pay for) shows it to be at least in the ball park of where we THINK the lines are? Are having the water and septic inspected part of that contingency?

    There is a gasoline pump by the garage. You know, those tall, red, handpump (I think!) things, with an underground storage tank somewhere. I found the vent and fill pipes, so I think I know where it is. Is that dangerous? Can it be removed or filled in? Is it worth anything to anyone? (i.e., would someone remove it for me in exchange for it?) It looks in good shape.

    It also has a fuel oil furnace, pretty new-looking. I've never used fuel oil, but have had propane in the past. Is there anything special I need to do about that? I think I can have it filled by just calling someone.... I don't need a contract with them or anything. It is a HUGE tank....

    I'm just so nervous!!! I want this so much to work out right and have no one else to talk to! Thanks for listening --- as usual!

    Chris
    in cold NW Ohio
     
  2. Ken Scharabok

    Ken Scharabok In Remembrance

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    Is there anything special I should watch for? For instance, I'm making it contingent on the inspection being OK. What about a survey? No one seems to know for sure where the property lines are. Can I make it contingent that the survey (which I assume I have to pay for) shows it to be at least in the ball park of where we THINK the lines are? Are having the water and septic inspected part of that contingency?

    (Unless the property lines are obvious, I would recommend a new survey, subject to your approval. Also, be sure to get title insurance at closing. Well worth the extra money. By inspection, I hope you mean a whole-house inspection by an independent, third-party, rather than the one 'always' used by the realtors. Having the water tested and the septic system looked at are likely separate topics and should be done.)

    There is a gasoline pump by the garage. You know, those tall, red, handpump (I think!) things, with an underground storage tank somewhere. I found the vent and fill pipes, so I think I know where it is. Is that dangerous? Can it be removed or filled in? Is it worth anything to anyone? (i.e., would someone remove it for me in exchange for it?) It looks in good shape.

    (This is a B-I-G-G-I-E, which should greatly affect the sale. If the gasoline has leaked into the soil you are looking at a H-U-G-E clean-up bill. In fact, this would just about be a deal killer for me. If nothing else, you shoud require an environmental survey to check for ground contamination. Better yet, insist it be removed at the seller's expense prior to closing. My SWAG is you are looking at over $50K to have the tank removed.)

    It also has a fuel oil furnace, pretty new-looking. I've never used fuel oil, but have had propane in the past. Is there anything special I need to do about that? I think I can have it filled by just calling someone.... I don't need a contract with them or anything. It is a HUGE tank....

    (I actually like fuel oil heat, especially if combined with hot water radiant heat. Procedures will vary from area to area. Generally if you sign a long-term contact with a supplier you get a better price over a call-when-needed service. Probably they will top off the tank several times during winter.)

    (If you are ready to offer, I hope you have done your research on what an appropriate offer price would be. Research what other similar properties are going for in the area. Ask if they have received any prior offers. I would recommend offering, initially, no more than 95% of fair market value.)

    Ken S. in WC TN
     

  3. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Mornin cc,

    You want to be careful about the fuel tank. If it has been leaking you could have MAJOR issues. Filling it in won't do any good. I know that for gas stations with old style (single wall) tanks they have to remove and then fill in. That's why so many gas stations closed down...they couldn't afford to do the replacement. I don't know what to tell you other than to be careful on that.

    To find out about the last survey, go to the county building and ask at the auditor or map office. You could also look for survey pins on the property itself (if there are any).

    Make sure you are there when the inspector goes through (you should select the inspector!). Ask questions. A good inspector will give you advice on things that won't necessarily show up in the inspection report. Also, you will want a seperate inspection and contingincy for pests (this is a different inspection) such as termites, carpenter ants, etc.

    Good Luck

    Mike
     
  4. Runners

    Runners A real Quack!

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    The offer can contain ANYTHING you want. If you want them to pay for the home inspection, tank removal, property survey, title & lien search, tank, septic, well location costs, soil tests (for underground tanks!), well & septic certification - write that into the contract. Of course you want it contingent upon ALL that stuff - write that into the offer.

    When they say, "no way!" - ask for a counter offer, or make a counter offer - negotiate your way to an equitable deal. Verbal deals & promises are worthless, write it into the contract - have your list in hand before you walk in the door. The first offer is just a starting point, the earnest money says you're serious... if all the other stuff checks out.

    One mistake we made was neglecting, "This offer EXPIRES on 'date' at 'time of day'" - and the relator held us in limbo for 3 weeks... while he was lining up a better offer! Our offer was rejected the same day another was accepted!

    Get it all written into the offer to purchase - then negotiate.
     
  5. Ken Scharabok

    Ken Scharabok In Remembrance

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    Just a comment anything written into the offer expires at closing unless it is included as a separate 'personal services'-type contract. If any work is to be done after closing insist on this separate contract.

    Ken W. in WC TN
     
  6. deberosa

    deberosa SW Virginia Gourd Farmer!

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    Chris,

    First - you can make anything a contingency and feel free to do so. Insist on a survey and the corners of the property marked before any deal goes through. Call it a "satisfactory survey" in the contingencies because you don't want it if the lines are goofy. Talk to the neighbors and see what they are like as part of the inspection process. You can back out for any reason if you have an inspection clause. Check with the city or county on the buried tank - that could be an expensive problem and put that in as a contingency also - that the city/county OK's the buried tank. Put in that they pay for the pest inspection (get that for sure) well inspection (is it on a well?) and tank inspection. They should have to do that no matter who they sell it to. You will need to pay for the structural inspection but you want to pick a person you can trust for that. Also get a septic pump and inspection (if there is one) and they should pay for that. Sometimes I pay my own pest inspection.

    I don't pick things to death in an inspection, mainly I want to know what my to-do list is going to be when I move in - you can make a lower offer based on the results of the inspection also instead of having them fix stuff. If you have the seller fix stuff it will be done cheaply and shoddily and maybe not to your liking.s



    My parents have fuel oil, I don't know much about it but it works fine for them. Prices seem to vary quite a bit but that's the only thing I have heard them talk about.

    Have people been living in the place or is it vacant or a rental? I knew my place was solid because an elderly lady had owned it and lived here for years and I was right - it is nice and warm and dry this winter. Find out why they are leaving, that could tell you what is going on with the place.

    I imagine you are not in a tight market so don't have to worry about competitive bids and it doesn't sound like you are perfectly in love with the place. You can always make an offer and keep looking.

    It is a nervous time - I have bought and sold 5 homes before buying this place - three of them in the last 10 years and I still get nervous! You just never know what can go wrong - and sometimes it has - mostly on the selling side.

    When I am selling I have become picky about who I accept offers from because it takes my house off the market and I want to make sure it closes. I also don't want to deal with people who are picking everything apart - I want to SELL the house not rebuild it! So I accept offers from people who have the financing lined up and the realtor can give me some take on whether they are reliable. I have had buyers try to back out on closing day and it's not nice. I am telling yo u this so you understand what the seller is going through also. For me anyway the more the buyer works with me the more I am willing to concede to get the sale completed. It's a little less stressful for you because you don't sound like you need to sell your current home to make the deal work - in my case it was a chain reaction of closings that all had to happen at once so any wrench in the works really complicated things!

    Also - don't hesitate to go back and look the place over again, even a few times. That's the realtor's job to take you there as needed and you will see different things, good and bad each time.

    As far as what to offer - look up the multiple list for your area on the internet - they are all there and look at the prices of places. Have the realtor tell you what other comparable places sell for. Most realtors will try to get top offers because of their commission so beware. Also understand your relationship with the realtor - is he your agent(looking out for your interest) or impartial or their agent(looking out for their interest) Rules about this vary from state to state. In Colorado I signed papers up front clarifying the realtor's role in the transaction, but that's not the case in Washington. If you are not in a tight market (other people want the same place) you can offer low and work your way up - they can always counter offer.

    Good luck! If you have questions e-mail me, I've been through this a lot both good and bad so might be able to help some. It was buying, fixing and sellling places that got me into the place I am today. Heck, I gave two houses away to ex-husbands and still am doing OK! :haha:

    Debbie



     
  7. cc-rider

    cc-rider Baroness of TisaWee Farm Supporter

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    Lots of good ideas. Eek.... hadn't realized the underground fuel tank was such a problem. I haven't seen the disclosure form yet, so don't know if they "mentioned" it.

    I look some friends with me last night to look at the house. I really trust their judgement.... they live around there, and have built their own homes, etc. They live on, I think, 10 acres of woods with a beautiful, huge, log cabin.

    They loved it. Thought it had a LOT of potential, although it is perfectly liveable now. The fuel oil furnace is about a year old, so I wouldn't bother changing it. Actually, fuel oil is cheaper now than propane, and more efficient gallon for gallon. The central air unit, water heater, etc., all looked new, too.

    The basement is very large and dry. Could carpet it if desired, but I wouldn't. The beams that support the floor are huge...some still have bark on them.

    The house was built around 1880. The floors are all hardwood, very narrow boards. My son, a construction worker, thought that they would squeak, but there isn't a squeaky or wobbly board in the house. The one downstairs bedroom has a corner that seems to dip, but it is solid underneath. I suppose the joist is dipped, too.

    There are four bedrooms, all with large, cedarlined closets. Only one bath, however, but very large.

    The yard is all chopped up. You can tell a little old lady lived there. Lots of trellis, flower spots, flagstone paths, patios, etc. all over the yard. No rhyme or reason. There is a formal rose garden with flagstone paths around it, and a little arching bridge going to another flagstone patio. I'd love to see it in the spring. There is a weeping kitty willow as the center of one of the gardens..... it is starting to bloom - that's how I knew what it was. I can also recognise an apple tree and a buckeye tree....but don't know what the myriad of others are. Oh..a grape arbor.... at least one. There is a "hover-round" chicken brooder in the attic of the garage, too.

    The house is empty now, in an estate, I'm guessing. The owner died recently and the daughter is trying to sell it. It has only been on the market for 4 days, but the listing agent said they had two offers on it already. I'm guessing that they lied about that.

    I have my own agent and I really trust him. They are asking $105K for it, and he said I shouldn't offer over $95K. I would have to sell my home, too, which makes it not as good an offer for the seller, so that's why I need to offer a tad bit more than someone who could just offer them cash. Or so my realtor says.

    Oh... I'd hire an independent inspector, too. Not the "real-estate-appointed" one.

    Anyway.... I'm excited about the possibility. And scared sh*tless. :)

    Thanks for listening to me ramble. And thanks for the pointers. I'm printing these all out and taking them with me.
     
  8. deberosa

    deberosa SW Virginia Gourd Farmer!

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    Sounds like a lovely place - the tank is a big issue though. When I cleared the blackberries at my new place there was metal legs sticking out of the ground. My heart stopped - thought it might be a fuel tank buried upside down! I dug around it and it turned out to be an overturned pig trough! whew!

    It was the same with my place - the lady could not live here anymore - this place was very loved as far as the yard (lots of yard art!) and lovely shrubs the and house went. She just had not stepped beyond the yard part of her place in years.

    A warning about making a contingency offer because this got me - as soon as you make a low offer contingent on the sale of your home, the price on the multiple list changes to that lower price. It draws out tons of other offers and you have to answer each one as they come up and if you can't buy the house at that point you lose it. I made a contingent (on the sale of my house) offer for 20K under the asking price on my new place. (The realtor took and hour talking me into offering less than asking by the way). The price went down on the multi list and offers started pouring in. I wanted this place really bad so I pushed the realtor to sell my place FAST! I made up my own fliers and got them out and pushed the realtor hard (he still teases me about that). That's because I removed the contingency on the sale of my house and let the financing dictate the closing date(they take forever to do appraisals and whatnot anyhow if you don't prod them every day and would not give me a loan if I had not sold my house so the financing contingency would get me out of the deal). It didn't give me much time but I had no choice. It was summer and I had a nice place - it sold in 10 days but for about 15 K under value. It was worth it to me just to get the place I wanted, but you have to be prepared for this problem. I could have offered the 20K more for the new place or take less on the old place to sell fast - it all works out the same really, just a little more stressful the way I did it.

    It's good to have a realtor you can trust. Mine was very good (except I had to prod him into action a bit!). He remains a good friend with contacts throughout this community, even had him over for coffee last week to see what I have done with this place and get more ideas.

    Just some food for thought - good luck!!!

     
  9. deberosa

    deberosa SW Virginia Gourd Farmer!

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    Don't trust the disclosure forms! They have "to my best knowledge" written all over them. Great if they admit something but just because they say things are OK it is no guarantee.

     
  10. cc-rider

    cc-rider Baroness of TisaWee Farm Supporter

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    Oh! I didn't know that! They actually change the MLS? I thought that they didn't even bother showing it anymore once they had an accepted offer. I'll have to talk with the realtor about that....

    Let me make sure I have this right. Make it contingent on securing financing, NOT on selling my house (which is really the same thing, if you think about it). If I don't sell my house, I can't get financing. AHA. Good idea. :) Makes it look better to the seller, but is the same thing for me.

    I'm going to take a beating on selling my house if I sell it now, but I really want this other one. Mine goes up in value daily because it is becoming a 'commercial area' and people are buying up the houses and building businesses. I own the two corner lots of the next area to be developed. The guy in front of me wants mine since that will give him the whole block. But he doesn't have the money right now because of other investments he's made. I can sell it as residential, but will lose maybe 1/4 - 1/2 of the value I could have gotten as commercial. In either case, I can still sell it for more than what this other house will cost me.

    I could even afford to make two mortgage payments, but the bank doesn't see it that way. They require a certain debt-to-income ratio. It doesn't matter that I don't spend the national average on food, clothes, entertainment, etc. and could use that money for the mortgage. Oh well.... I'm glad they are protecting us from our evil money-hungry ways. :no: (sarcastic.... I hope you noticed!)
     
  11. deberosa

    deberosa SW Virginia Gourd Farmer!

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    My realtor did not know that would happen and I believe him because he didn't want to deal with how mad I got. :haha:

    This only happens when you make it contingent on selling your house - the rules are different - even different forms now. Otherwise it just goes off the market for inspection. You get "first right of refusal" meaning that as people make offers you have a certain number of days to make good on your offer (remove the contingency) or lose the house (you keep your earnest money of course). You don't have to match their offer, just make good on the offer you made, but if you lose negotiating power because the seller can just say no deal and go with the other people at any point you make a demand.

    It was a very rude shock. And on the internet now the updates to the multiple list are almost instantaneous.

    The house I got had been on the market for a year almost and all of a sudden everyone wanted to buy it because they had been waiting for the price to go down!
     
  12. mary,tx

    mary,tx Well-Known Member Supporter

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    I didn't see this mentioned, but we also always make the price contigent upon the property appraising for that amoung.
    This time, we also had a 10 day no-questions walk period.