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BUYER ADVISORY
A resource for real estate consumers
Provided by
Lisa Bridges
A real estate agent is vital to the purchase of real property and can provide a variety of services in locating a property, negotiating the sale, and advising the buyer. A real estate agent is generally not qualified to discover defects or evaluate the physical condition of property; however, a real estate agent can assist a buyer in recommendations, and provide the buyer with documents and other resources containing vital information about a prospective property.
This advisory is designed to make the purchase of real property as smooth as possible. Some of the more common issues that a buyer may decide to investigate or verify concerning a property purchase are summarized in this Advisory. Included in this advisory are: (1) common documents a buyer should review; (2) physical conditions in the property the buyer should investigate; and (3) conditions affecting the surrounding area that the buyer should investigate. In addition, a buyer must communicate to the real estate agent in the transaction any special concerns the buyer may have about the property or surrounding area, whether or not those issues are addressed in this Advisory.
REMEMBER: This advisory is supplemental to obtaining professional property inspections. Professional property inspections are absolutely essential; there is no practical substitute for a professional inspection as a measure to discover and investigate defects or shortcomings in a property.
COMMON DOCUMENTS A BUYER SHOULD REVIEW
The documents listed below may not be relevant in every transaction, nor is the list exhaustive. Unless stated, the real estate agent has not independently verified the information contained in these documents.
Purchase Contract
Buyers should protect themselves by taking the time to read the real estate purchase contract and understand their rights and obligations before they submit an offer to buy a property.
MLS Printout
A listing is an agreement between the seller and the listing broker and may authorize the broker to submit information to the Multiple Listing Service. The MLS printout is similar to an advertisement. Neither the listing agent nor the printout is a part of the purchase contract between the buyer and seller. The information in the MLS printout was probably secured from the seller, the builder, or a governmental agency, and could be inaccurate, incomplete, or an approximation. Therefore, the buyer should verify any important information contained in the MLS.
Seller’s Property Disclosure Statement
Most sellers provide a SPDS. This document poses a variety of questions for the seller to answer about the property and its condition. The real estate broker is not responsible for verifying the accuracy of the items of the SPDS; therefore, a buyer should carefully review the SPDS and verify those statements of concern.
Home Warranty Policy
A home warranty may be part of the sale of the home. Buyers should read the home warranty document for coverage and limitation. Be aware that pre-existing property conditions are generally not covered under these policies.
Lead-Based Paint Disclosure Form
If the home was built prior to 1978, the seller must provide the buyer with a lead-based paint disclosure form.
County Assessors/Tax Records
The county assessor’s records contain a variety of valuable information, including the assessed value of the property for tax purposes and some of the physical aspects of the property, such as the reported square footage. The date built information in the assessor’s records can be either the actual or effective/weighted age if the residence has been remodeled. All information on the site should be verified for accuracy. Information is available on county websites.
Professional Inspection Report
The importance of having a property inspected by a professional inspector cannot be over-emphasized. An inspection is a visual physical examination, performed for a fee, designed to identify material defects in the property. The inspector will generally provide the buyer with a report detailing information about the property’s condition. The buyer should carefully review this report with the inspector about any item of concern. Pay attention to the scope of the inspection and any portions of the property excluded from the inspection.
Termites and Other Wood Destroying Inspects and Organisms
Termites are commonly found in the Central Florida area. The pest inspectors can provide the buyer with information regarding treatments on the property.
COMMON PHYSICAL CONDITIONS IN THE PROPERTY A BUYER SHOULD INVESTIGATE
Every buyer and every property is different, so the physical property conditions requiring investigation will vary.
Repairs and New Construction
The seller may have made repairs or added a room to the property. The buyer should feel comfortable that the work was properly done or have an expert evaluate the work. Request copies of permits, invoices, or other documentation regarding the work performed. For information regarding permits, contact the city or county building department.
Roof
If the roof is 10 years or older, a roof inspection by a licensed roofer is highly recommended.
Swimming Pools and Spas
If the property has a pool or a spa, the home inspector may exclude the pool or spa from the general inspection so an inspection by a pool or spa company may be necessary. Barriers: Further, there are pool barrier ordinances. Contact the proper entity for more information.
Square Footage
Square footage on the MLS printout or as listed by the county assessor’s records is often only an estimate and generally should not be relied upon for the exact square footage in a property. An appraiser or architect can measure the property’s size to verify the square footage. If the square footage is important, you should have it confirmed by one of these experts during the inspection period in a resale transaction and prior to executing a contract in a new home transaction.
Sewer
Even if the listing or SPDS indicated that the property is connected to the city sewer, a plumber, home inspector, or other professional should verify it. Some counties and cities can perform this test as well.
Septic and Other On-Site Wastewater Treatment Facilities
If the home is not connected to a public sewer, it is probably served by an on-site wastewater treatment facility (septic or alternative system). A qualified inspector must inspect any such facility within six months prior to transfer of ownership.
Water/Well Issues
You should investigate the availability and quality of the water to the property.
Soil Problems
The soil in most areas of Central Florida is sand which sometimes can create sinkholes. If the seller has disclosed sinkholes issues and/or the buyer has concerns, the buyer should secure an independent assessment of the property and it’s structural integrity by a professional.
Previous Fire/Flood
If it is disclosed there has been a fire or flood on the property, a qualified inspector should be hired to advise you regarding any possible future problems as a result of the fire or flood damage and/or any subsequent repairs. For example, if the property was not properly cleaned after a flood, mold issues may result. You insurance agent may be able to assist you in obtaining information regarding fire, flood, or other past damage to the property.
Pests
Cockroaches, snakes, fire ants, termites and other pests are common in parts of Florida. Fortunately, most pests can be controlled with pesticides.
Endangered and Threatened Species
Certain areas in the state may have issues related to federally listed endangered or threatened species that may affect land uses. Further information may be obtained by going to the US Fish and Wildlife website, or contact the appropriate planning/development service department.
Deaths and Felonies on the Property
A Florida law states that sellers and real estate licensees have no liability for failure to disclose to a buyer that the property was ever the site of a natural death, suicide, murder or felony. This information is often difficult to uncover, however, the local enforcement agency may be able to identify calls made to the property address.
Indoor Environmental Concerns
Mold: Mold has always been with us, and it is a rare property that does not have some mold. However, over the past few years a certain kind of mold has bee identified as a possible contributor to illnesses. Allergic individuals may experience symptoms related to mold. If you can see mold, or if there is an earthy or musty odor, you can assume you have a mold problem. Radon gas and carbon monoxide: Radon gas is a natural occurring gas in the environment and both are two of the more common and potentially serious indoor air quality concerns. Both of these concerns can be addressed by the home inspector usually for an additional fee.
Property Boundaries
If the property boundaries are of concern, a survey may be warranted. For example, a survey may be advisable if there is an obvious use of property by others (i.e., a well-worn path across a property and/or parked cars on the property) or fences or structures of adjacent property owners that appear to be built on the property.
Flood Plain Status
If the property is in a flood zone, an additional annual insurance premium of several hundred dollars may be required (check with your insurance agent about the cost and coverage). If the property is in an area deemed high risk, the buyer may be required by the lender to obtain flood hazard insurance.
Insurance
Many factors affect the availability and cost of homeowner’s insurance. Due to the recent hurricanes in Central Florida research the availability of insurance in your area.
Other Property Conditions
Plumbing: Check functionality.
Cooling/Heating: Make sure the cooling and heating systems are adequate.
Electrical systems: Check for function and safety.
CONDITIONS AFFECTING THE AREA SURROUNDING THE PROPERTY THE BUYER SHOULD INVESTIGATE
Every property is unique; therefore, important conditions vary.
Environmental Concerns
It is often very difficult to identify environmental hazards. Research information regarding the locations of open and closed landfills and wildfire information, as well as air quality and water quality information. Some areas of Florida are designated for conversation area. Research all properties surrounding the subject property to ensure the uses of the properties.
Electromagnetic Fields
Freeway Construction and Traffic Conditions
Although the existence of a freeway near the property may provide highly desirable access, sometimes it contributes to undesirable noise. Check maps to find the nearest future freeway routes and roads in the area slated for widening.
Crime Statistics
Sex Offenders
The Supreme Court has given states the green light to continue posting the names and pictures of convicted sex offenders on the Internet. This neighborhood search allows users to enter any address in Florida and search the Florida Sexual Offender/Predator Registry for any sexual offender or predator living within 1 to 5 mile radius of the address: http://familybeacon.com/gadgets/DadsGadgets/sexoffenderframe.asp?url=http://offender.fdle.state.fl.us/offender/Search.jsp. The presence of a sex offender in the vicinity of the property is not a fact that the seller or real estate agent is required to disclose.
Military and Public Airports
The legislature has mandated the identification of areas in the immediate vicinity of military and public airports that are susceptible to a certain level of noise from aircraft. The boundaries of these areas have been plotted on maps that are useful in determining if a property falls within one of these areas. The maps are intended to show the areas subject to the preponderance of airport-related noise from a given airport. Periodic over-flights that may contribute to noise cannot usually be determined from these maps.
Forested Areas
Life in a forested area has unique benefits and concerns. For more information on protecting your property from wildfire or wildlife contact county/city fire authority and other similar agencies.
Zoning/Planning/Neighborhood Services
Contact the planning and zoning agencies for concerns with growth and other neighborhood services.
Schools
Although there is no substitute for an on-site visit to the school to talk with principals and teachers, there is a significant amount of information about Florida’s schools on the Internet. Visit http://www.greatschools.net/for more information on local schools.
City Profile Report
Information on demographics, finances and other factors drawn from an array of sources, such as US Census Bureau, Bureau of Labor, Internal Revenue Service, Federal Bureau of Investigation, and the National Oceanic and Atmospheric Administration. www.homefair.com/find_a_place/cityprofile/
OTHER METHODS TO OBTAIN INFORMATION ABOUT A PROPERTY
Talk to the Neighbors
Neighbors can provide a wealth of information. Buyers should always talk to the surrounding residents about the neighborhood and the history of the property the buyer is considering for purchase.
Drive around the Neighborhood
Buyers should always drive around the neighborhood, preferably on different days at several different times of the day and evening, to investigate the surrounding area.
FOR INFORMATION ABOUT FAIR HOUSING AND DISABILITY LAWS
The Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwelling based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability. Visit HUD’s Fair Housing/Equal Opportunity website at www.hud.gov/groups/fairhousing.cfm. For information on the Americans with Disabilities Act, visit www.usdoj.gov/crt/ada/adahome1.htm.
MARKET CONDITIONS ADVISORY
The real estate market is cyclical and real estate values go up and down. The financial market also changes, affecting the terms on which a lender will agree to loan money on real property. It is impossible to accurately predict what the real estate or financial market conditions will be at any given time.
The ultimate decision on the price a Buyer is willing to pay and the price a Seller is willing to accept for a specific property rests solely with the individual Buyer or Seller. The parties to a real estate transaction must decide on what price and terms they are willing to buy or sell in light of market conditions, their own financial resources and their own unique circumstances.
The parties must, upon careful deliberation, decide how much risk they are willing to assume in the transaction. Any waiver of contingencies, rights or warranties in the Contract may have adverse consequences. Buyer and Seller acknowledge that they understand these risks.
Buyer and Seller assume all responsibility should the return on investment, tax consequences, credit effects, or financing terms not meet their expectations. The parties understand and agree that the Broker(s) do not provide advice on property as an investment. Broker(s) are not qualified to provide financial, legal, or tax advice regarding a real estate transaction. Therefore, Broker(s) make no representation regarding the above items. Buyer and Seller are advised to obtain professional tax and legal advice regarding the advisability of entering into this transaction.
FOR ADDITIONAL INFORMATION
National Association of Realtors: www.realtor.com
NAR’s Ten Steps to Homeownership
http://www.move.com/home-finance/buyers-basics/home-buyers-basics.aspx?lnksrc=FINHPGDS002&tran=vud
Home Closing 101: http://www.homeclosing101.org/
BUYER ADVISORY
A resource for real estate consumers
Provided by
Lisa Bridges
BUYER ACKNOWLEDGMENT
Buyer acknowledges receipt of the Buyer Advisory. Buyer further acknowledges that there may be other disclosure issues of concern not listed in the Advisory. Buyer is responsible for making all necessary inquiries and consulting the appropriate persons or entities prior to the purchase of any property.
The information in this Advisory is provided with the understanding that it is not intended as legal or other professional services or advice. These materials have been prepared for general informational purposes only. The information and links contained herein may not be updated or revised for accuracy. If you have any additional questions or need advice, please contact your own attorney or other professional representative.
Buyer Signature ____________________________________
Print Name:________________________________________
Date:_____________________________________________
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