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Kim N. Bregman's Blog

By Kim N. Bregman | Broker in Boca Raton, FL
  • New Home Construction Needs to be Inspected Too!

    Posted Under: Home Buying in Boca Raton, Agent2Agent in Boca Raton, Property Q&A in Boca Raton  |  February 7, 2012 3:50 AM  |  759 views  |  4 comments

    Every home-whether it’s a resale or new-has some kind of an issue, and the reality is that there is no “perfect” house. Many homebuyers embark on their search for a home with the belief that new homes should be flawless, when this is never actually the case.

    Problems are found in all homes, but the issues with new homes are totally different than the defects found in resale homes. When evaluating a resale home, most problems are often related to older systems that are near the end of their service life. On the other hand, problems in new homes typically involve incomplete work, damaged systems, missing pieces of key materials and imperfect workmanship.

    Unfortunately, many people who purchase new construction homes put a lot of trust in their builder and opt not to perform a home inspection. Hiring a home inspection company prior to the closing of a new home can help save homebuyers money and prevent headaches due to unexpected home repairs down the road.

    New home construction problems primarily fall into four categories:

    1. Incomplete work: Many new home construction projects aren’t completed properly. The incomplete work may be as simple as a layer of paint on a wall that was accidentally skipped, or a room that has no air ducting. In many cases, the unfinished or imperfect work isn’t detected until the homebuyer moves in. A home inspection company will uncover these issues prior to the move-in date.

    2. Damaged systems and finishes: Homes often incur damage during construction as a result of rain, snow, impact damage and stacking and storage damage. An example of this is ducting that gets compacted under attic insulation.

    3. Missing elements: Oversights during construction due to human error are more common than many REALTORS® and homebuyers think. For example, the construction team may have forgotten to install insulation in the attic. Taking a proactive approach to identify issues before moving in can prevent costly problems that could arise in the future.

    4. Imperfect or sloppy workmanship: While perfect workmanship is ideal, it’s nearly impossible. In reality, any number of things can go wrong on the construction site of a new home. A contractor could get delayed by work on another site and has to hurry to finish the current home he’s working on; rain and other elements can damage a home before it’s closed in; tradesmen could be diverted to another site, etc.

    Other common problems with new homes include interior and exterior finish issues, tile and floor damage, water damage, buckled siding, roofing issues and structural problems. All new homes should be inspected to uncover possible defects. Knowing upfront what issues might arise in the future can save homebuyers thousands of dollars in the long term. The most reliable way to uncover problems is by hiring an unbiased third-party home inspector.

  • Major Changes to North Carolina Real Estate Contract

    Posted Under: Agent2Agent in Asheville  |  February 1, 2011 4:16 PM  |  1,102 views  |  No comments


    The NC real estate contract has changed dramatically for 2011.  The new North Carolina real estate contract, called the Offer To Purchase And Contract, will require a totally different approach to the home buying process.  Let’s take a look at the major changes to the NC real estate contract.

    Due Diligence Period: The biggest change to the NC real estate contract is the addition of a due diligence period.  This is a mutually agreed upon period of time that the buyer will have to fully investigate the property and decide whether to proceed.  The length of time and the fee for the due diligence period are negotiable between the buyer and seller.  The buyer purchases this period to fully contemplate the purchase of the property and may terminate the contract for any reason or no reason, and at their sole discretion, prior to the expiration of the period.

    Due Diligence Fee: A negotiated fee will be paid to the seller by the buyer for the right to conduct due diligence.  It would stand to reason that the longer period of time required by the buyer, the more the cost of the fee.  The fee becomes the property of the seller and is a credit to the buyer upon closing.  It is important to note that this does not replace the earnest money deposit.

    Due Diligence Process: During this period the buyer must complete any of the following items that are important to them and critical to completing the purchase.

    â– have all inspections performed
    â– secure final approval for any financing
    â– review all relevant property documents
    â– investigate insurance availability and affordability
    â– have the property appraised
    â– have the property surveyed
    â– investigate zoning, schools, proposed roads, etc
    â– investigate potential flood hazards and and flood insurance requirements
    â– any other investigation the buyer wishes to perform

    Gone is the process of inspecting the property and then debating what is a “necessary repair.”  The buyer is free to request that the seller make any repairs and improvements they wish without regard to whether the request is for an item on the previously used necessary repair list.  Likewise, the seller is free to refuse to make any repairs or improvements.  The buyer can accept the property in its as-is condition, negotiate a written agreement as to what will be repaired, or terminate the contract prior to the expiration of the due diligence period.

    Note: There is no longer a finance or appraisal contingency. These matters must be resolved prior to the expiration of the due diligence period.

    Simplified Dates: Eight dates have been reduced to only three.  The new NC real estate contract contains 1) effective date 2)  due diligence date 3)  settlement date.

    Seller Breach Provision: In the event that a seller breaches the contract, or materially fails to comply with their obligations to deliver the property at settlement, both the due diligence fee and the earnest money deposit are returned to the buyer.  The seller is also now obligated to reimburse the buyer for reasonable costs actually incurred during the due diligence period.

    There are other changes as well, however, this pretty much covers the major differences between the previous contract and the new one. 

 
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