When you make an offer, as a Fremont home buyer, you are promising to do things. The one most important things you, as a Fremont home buyer, need to do is to inspect the house and sign off your inspection and loan contingencies, (saying in writing that you are now going to buy the house for sure, no excuses). After all, you cannot leave the seller hanging and wondering the whole time. They have to make plans too.

Fremont home buyers do their inspections. What could go wrong? Lots. The courts are filled with well-meaning people just like them who thought buying a house would be okay. Here are at least 3 lessons of the real estate contract you need to know.

Problem 1. You wrote a real estate contract and the real estate contract got accepted. Now you need to inspect the house. The owner of the home has things stacked up in the garage because they plan to move. They carefully placed them on and against the workbench to make sure there was a path through the garage. The termite inspector inspects the house as far as they can but cannot move the wall of boxes in front of the workbench. It is not their job to move items. The report only makes a note about the covered wall but does discover a few rotted pieces at the bottom of a doorway. This unintentionally diverts everyone's attention and you get that repaired prior to moving in. All is well with the real estate contract.

You buy the house! After the first week, you as a new Fremont home buyer start placing boxes on the workbench too because it is now cleared off of the previous owner's things. You notice a little wiggle in the bench and decide to see if it can be tightened. It seems minor. One thing leads to another and you pull off the workbench from the wall and to your dismay, the wall is infested with termites. Did you inspect the house? Yes.

The deal is done. Is the seller off the hook? Yes, they are. You signed off the contingencies mentioned above after you did inspect the house, but did not put in safeguards to protect yourself. Here is what you could have done to ensure this doesn't happen to you in the real estate contract.

Answer: You need the right wording in the real estate contract that stipulates the seller shall provide complete access to all areas prior to inspections. Now the termite company can inspect the house, certify and and guarantee the property for one year. That's what you want.

Problem 2. The same thing happens as above, but this time it is not related to termites at all. Rather, it is something that the general house inspector missed. It happens. It was a crack in the galvanized piping under the house that now gave way just one week in to your new home ownership as a Fremont home buyer. The inspector can only apologize, but that will not stop the flood under your house. The previous owner is not required to upgrade to copper piping prior to the close of your escrow, and your home owner warranty will not cover a pre-existing condition, namely the old crack. What could you have done?

Answer: You should consider the use of a Maintenance Agreement in the real estate contract prior to your acceptance of the real estate contract. Do not wait to add it in later. Doing this at the start holds a reasonable amount of the seller proceeds in escrow and is already agreed to be used for unforeseen items after the close of your escrow within a reasonable amount of time. That will get the pipe fixed, even though you found out 5 days in to your new ownership. This technique is not to be confused with just holding monies in escrow. The agreement is well drawn up and uses wording that safeguards you in the real estate contract.

Problem 3. You made an offer on a house you just have to have. So, you wrote the offer with no loan contingency because you were told that you had no trouble getting the loan. The underwriter informed the loan officer that there is a debt to income problem and it got kicked back even though your loan officer said it was a sure thing. The officer and the underwriter used different formulas to arrive at your income. The seller is now asking to keep your deposit of $10,000 because you cannot get the loan.

Answer: Even though your loan officer said it was a done deal, you should keep the loan contingency in place for as long as you can. The real estate contract calls for active (written) removal of that contingency. So, unless the seller (real estate agent who represents the seller) delivers a 24 Hour Notice to Perform to your agent representing you, the buyer, you might as well sit tight until the underwriter signs off the loan and your loan docs are being drawn up.

Stressful situations aren't they? Rest assured our broker of record, Jeff Pereyda examines the real estate contract and terms of every transaction that goes through the doors here at TriCity Real Estate Brokers, Inc. BEFORE they get signed into real estate contract.

Do you want peace of mind? Get us to set up a meeting with our broker before you buy a home.

Call 866-967-9137 toll free. Or, by email. Contact us and get peace of mind.

go back to home page