Ever wondered what constitutes a bedroom?  It is common for listing agents to list homes with number of “functional bedrooms” vs. legal bedrooms.  A functional bedroom is a room that, although not a legal bedroom, can be used as a bedroom by guests in a pinch. However, a home should not be listed with these rooms counted as bedrooms. Homes are assessed and appraised based on the number of legal bedrooms.

So what is a legal bedroom?

The biggest misconception is that in order to be a bedroom, it has to have a closet.  But this actually depends on if it’s common for the area. If the home is older, from a time before closets were common, then it is not required for a bedroom to have a closet. Pre-1930, it was more common for people to store their clothes in armoires and dressers.

According to ANSI (American National Standards Institute) a bedroom is any room that you can fit a conventional bed into.

More specifically, the legal requirement of a bedroom is controlled by state building codes.  Individual towns can also enforce more stringent requirements.

Most building codes have specific requirements for what constitutes a legal bedroom, below are the most common requirements:

1) Two means of egress: Bedrooms should have a window or door which provides an emergency exit.  A window that provides natural light and ventilation is also needed. A bedroom must have one other method of egress beyond the entrance point. A door to the exterior works as an exit point, and so does a window. According to the ANSI, a bedroom window must be no greater than 44 inches from the floor. It needs at least 5.7 square feet for the opening, and it must measure no less than 24 inches high and 20 inches wide.

3) A bedroom must be a minimum size of 70 square feet.

4) No horizontal dimension can be less than 7 feet.

5) Minimum ceiling height of 7 feet for at least half of the ceiling.

6) A bedroom must be able to be heated to at least 68° at all times from a permanent source of heat.

7) Two electrical outlets or an outlet and a light fixture.

8) Private access.  The room cannot be a throughway to another room.

Bedrooms can add $10,000-$50,000 in value to a home. So, whether you are buying or selling, understanding what is a legal bedroom versus what can be used as a bedroom functionally, is very important.  Additionally, if the home is on a private septic system, the system will determine the maximum number of bedrooms allowable by the Board of Health in the town that the house is in. If it is unclear how many bedrooms the septic system is designed for, a call to the local town Board of Health will answer this question. Every septic system is on file at the Town Hall, or City Hall, and each septic design is designated for a certain amount of bedrooms.

 

When you are preparing to close on a home, it can feel like you are near the end of the buying process. If you are well prepared, and you have a good attorney and buyer’s agent representing you, everything should go smoothly and the closing should be the end of the homebuying process, and the beginning of life in your new home.

Let’s look at the things you need to be ready for when you close on a house.

What is a Closing?

A real estate closing is when the property will become yours at last. On the day of closing, you will be scheduled to meet with your closing attorney (usually at his/her office) to sign many documents.  Most of the documents are required by lenders.  After all documents are signed, the attorney will submit required documentation to the registry of deeds of the county that your home resides in. Once the registry officially records your deed, with you as the new owner (this is referred to as “being on record”) ownership will legally switch to you. It will be the final step in taking ownership of the property.

The agreed-upon closing date should have considered the time needed for the lender, title company, and other professionals to do their work to make sure everything is correct and legal. This includes the title search checking the property title for any issues so title insurance can be issued. Having a clear title is a crucial aspect of any home purchase contract.

At the closing, the attorney will have the deposits you paid at the offer and P&S, then you will be instructed to bring the remaining portion of your down payment, if any. Your lender will have sent the mortgage money, and you will have to bring a check to cover the closing costs. Your attorney will contact you a few days prior to closing to instruct you exactly what you need to bring, and how much.

Days Prior to Closing

2-3 days Prior to closing, your attorney, or your lender will contact you to review all of the details of the closing. They will send you a closing disclosure statement that details all of the debits and credits that will be impacting you on closing day. They will also give you a dollar amount that you will be required to bring with you to reconcile the closing.  This dollar figure will represent whatever the remaining amount you owe on your down payment (your ultimate down payment amount less any deposits you’ve made), plus any closing costs that you will owe.

A Day or two prior to closing (sometimes the actual morning of the closing) you will do a “final walk-through” of the house. This is usually a 30 minute walk-through designed to ensure that whatever is supposed to be removed from the house, has been removed. Whatever is supposed to remain with the house, is still there. And to ensure that there has been no damage to the house since the time that you made the offer.

In the event that there is an issue, this will usually be resolved at the closing.  For example, let’s pretend that at the final walk-through you notice that the sellers decided to take the washer and dryer which were agreed to be included in the sale and documented in the purchase and sale. This will not prevent the house from closing, however, your attorney will negotiate with the sellers attorney a fair amount that the sellers will agree to give you to cover the cost of a new washer and dryer.

 Closing Costs

The common question is how much are closing costs, and what do they include? Closing costs vary significantly from transaction to transaction.

Typical items that the buyer will have to pay for a closing include:

1. a) Lender fees such as mortgage origination fee, points, appraisal fee, credit report fee
2. b) Title company & attorney fees, including: closing fee, title search, and title insurance
3. c) Seller refunds – it is typical that when the seller has paid a full quarter’s real estate taxes, the buyer will need to refund the seller for any portion of those taxes that they will assume once they purchase the house. For example, if taxes for the first quarter are $1,500 and the closing on the house happens at the end of the first month of that quarter, then the buyer will need to reimburse the seller for the remaining two months, or $1000 in this example. Also, if the seller has paid fuel costs in advance, for example if they filled the oil tank, or the propane tank, the buyer needs to reimburse the seller for any unused portion of fuel they will benefit from
4. d) Recording & Administrative fees – there are usually fees associated with recording the deed, occasionally there are fees associated with having to send documents overnight. Any of these expenses that benefit the buyer will be part of the buyers closing costs.
5. e) Insurance – if the lender requires that the buyer purchase homeowner’s insurance, that often is paid for in advance at the closing.

Those are the typical closing costs that buyers incur in a normal transaction. Although there is no single standard amount, typically closing cost will be 1.5% to 2.5% of the purchase price.

The Closing Meeting

Your real estate team (agent, lender, title company, attorney) has been working behind the scenes for many weeks to prepare for the closing.  A closing typically takes around 2 hours.

We will review each document with you, you will have the opportunity to ask questions. Typical items that you will be required to bring to a closing include: two forms of ID for each person who will be on the deed, bank checks to cover the remainder of your down payment and your closing costs, and a blank personal check to cover any small miscellaneous expenses that may need to be reconciled in order to close (typically this would be less than $100). Again, your attorney will call you in advance of the closing to review these figures with you.

Once the closing is done, it usually takes 3-4 hours before you are officially “on record “. Once you are “on record” Your agent, or your attorney, will give you the keys to the house – and then it is yours!

 

Are you going to be getting a home inspection? Home inspections are a vital part of the real estate transaction process, so it makes sense to learn as much as you can about them.

In this competitive market, it is common for buyers to waive home inspections in order to have their offers appeal more to the seller.   In order to make this decision, it is important for buyers to understand exactly what a home inspection is, and what is not.

A good home inspector will look for every possible flaw in a home. A typical home inspection will have 20 to 50 items needing attention. That sounds like a lot!  However, some of those items are small maintenance items that have little or no material impact on the safety, functionality, or value of a home. Examples of the small items could be loose railings, shrubs or bushes that are too close to house, squeaky floorboards, etc.

The more you know about what inspections entail, and more importantly, how they affect you as a buyer or seller, the more confident you will be moving forward with your transaction.

A very common misconception by buyers is that whatever the inspector points out needs to be repaired or negotiated with the seller.  Buyers need to understand that sellers have been living with these issues, perhaps not even knowing that they existed, for many years. So, most sellers are not going to be willing to compensate you, and certainly not be willing to repair those issues, just to appease a nervous buyer. It really comes down to how much you want to buy that house, and how much the seller wants to sell it to you. Everything is negotiable, but nothing is guaranteed.

What is a Home Inspection?

A professional home inspection is complete review every aspect of the home that may affect the safety, security, functionality, and livability of a home.  A good home inspector will make a very long detailed list, with pictures, of anything that is not perfect with the house.

Every home Inspection will result in many items on this list. In the past, we’ve had clients inspect brand new homes, and even those inspections resulted in 10 to 15 items needing some attention.

A Home Inspection Contingency

In order for a buyer to have the legal right to request an inspection prior to the purchase of the home, it will need to be included in the offer as an inspection contingency.  The offer will give buyers a specified period of time to conduct the inspections (usually 5-9 days from acceptance of the offer). This is referred to as the due diligence period.

Choosing a Home Inspector

Home inspectors play an integral role in the vast majority of real estate transactions. It is easy to see why picking the right home inspector is vital.

Here are a few pointers to consider in your search for a home inspector:

1. Get a reference from your real estate agent.  If you’ve worked with your real estate agent for a while and you have learned to trust their judgment, this will probably be a good source. Good agents keep a list of inspectors that they think will do a good job, represent the property fairly, and be reasonably priced. Only your buyer’s agents though can legally recommend one.
2. You must choose a home inspector licensed in the state that your home is located in.
3. Find out what the inspection includes and how long it takes. A typical inspection well last between 1 1/2 hours and 3 hours, depending on the size and age of the home.
4. Additional items that you might ask for include: radon tests, radon in water tests, well tests, mold tests, lead paint tests, and pest inspections.  Some inspectors do not do these services, while others will provide these services for an additional cost.
5. Ask your inspector to confirm that both you and your agent can accompany the inspector throughout the inspection.
6. Request a sample inspection report. It’s important to familiarize yourself with what an inspection report looks like prior to your own inspection

What Home Inspectors Can & Cannot Do

A misconception is that home inspectors can provide you estimates of what certain things will cost to repair. In fact, home inspectors are not legally allowed to provide quotes or estimates. All they can do is tell you if something appears to be near the end of its life, or if it is not functioning properly.

Also, inspectors cannot inspect something that they do not have access to. For example, if you’re buying a house with a finished basement, they cannot look behind the sheetrock to determine the condition of the foundation.  All an inspector can do is look for clues that might indicate a problem.

Most inspectors cannot tell you if there is mold in the house. That is a different type of inspection which requires a licensed mold inspector. But a good home inspector can tell you that there appears to be evidence of mold, and you should have it inspected by a professional mold inspection company.

Also, depending on time of year, the inspector may not be able to test the functionality of the air conditioning system. Inspectors are not allowed to test the air conditioning systems unless the weather has been a certain temperature for a few consecutive days.

Inspectors cannot test septic systems, nor can they test private water wells. They can test for water pressure, and they can test for water quality.

So what does the inspector look at?  Pretty much everything else: the roof, the electrical system, the plumbing system, the appliances, functionality of doors and windows, the chimney, signs of pests, signs of water damage, the attic condition, the foundation of the home (based on what they can see), the heating system and the air conditioning system, and the age and condition of the furnace as well as the hot water heater.

Buyers Options after a Home Inspection

Once the inspection is complete, and the report is reviewed, the buyer typically has three options:

1) Proceed with the purchase as outlined in the offer.

2) Attempt to re-negotiate with the seller to either reduce the purchase price, provide a credit at closing to repair or replace items identified in the report, or ask the seller to repair the items prior to closing.

3) Cancel the transaction. If the buyer has a home inspection contingency, they can choose to walk away and get their offer deposit back.

What Are Reasonable Home Inspection Repair Requests – and What Are Not

Some inspection repair requests are entirely legitimate—and probably expected. Of course, there are plenty of home inspection requests that will be seen as unreasonable. You want to make requests that are likely to be granted, not demands that will frustrate the seller and maybe cancel the transaction. Your agent will be able to help you navigate through this process based on their experience.

Inspections for houses should not be seen as an opportunity to create a punch list to make the property “perfect”.  You have to keep in mind that there will be other buyers who may be comfortable with the inspection report as is and purchase the house without any requests. So, it does really come down to how badly you want the house, what is the cost of repairing items that are critical, and whether or not the seller wants to put the house back on the market or negotiate with you.  It also depends on how much you ended up offering for the house. If you paid well above asking price, you typically can I ask for more of a refund as a result of the inspection. But if you got the house at a bargain, below asking price, sellers will often be very reluctant to give you any more than they already have.

What are some reasonable things that you may request a credit for, or a price reduction for?

* An aging roof. If the listing did not disclose that the roof was at the end of its life, it is reasonable for the buyer to request approximately 50% of the cost of a new roof. It is not reasonable to expect that the seller will pay for an entirely new roof that the buyer will benefit from for the next 30 years.

* A non-functional furnace or air conditioning unit. If the heat does not work properly, or the air conditioning is well beyond its expected life, again it is reasonable to request that the seller pay for a portion of the cost to replace these units.

* If it is determined that there is mold in the house, it is very reasonable to request that that mold be professionally remediated and the cost be paid in full by the seller.

What are some items that buyers should not ask for?

* Small cosmetic issues, or items that will cost you less than $200 to repair

* A window with a failed seal (these would have been visible at the time you made the offer)

* Renovations you are planning.  You cannot inspect the seller to pay for a new bathroom renovation because he did not like avocado green fixtures!

* Minor repairs for things like loose fixtures, railings, one or two outlets that do not work, etc.

Note:  It is our opinion and recommendation that buyers do not request sellers to repair items. It is much better to get a credit at closing and use that money to hire your own contractors to make the repairs. Why? Because sellers are going to generally find the fastest cheapest way to repair something, and it may not be to your standards, but that is subjective and you will not have any recourse if that happens, as long as the repair fixes whatever the issue is.

Summary

In summary, if you are not buying a new house, you cannot expect the house to be perfect. It is assumed that they will be flaws, items that are aging, needing repair, and some items needing replacement.  When you buy a home you should expect to have to make repairs and replace items on an annual basis. That is the cost of owning your own home.  The purpose of a home inspection is to make sure that there are no major surprises that will result in you incurring a serious expense within the first few years of owning the home. The most costly items are typically roofs, electrical systems, plumbing systems, heating systems, and air-conditioning systems.  And for the most part, those are things that are not quite as easy to spot when you are looking at the home and considering making an offer. Those are the items that the home inspector should focus on. Everything else is simply a list for you to work on repairing and replacing while you are living in the home.

 

 

Keeping your new home looking fresh means more than maintaining the interior and grounds. The driveway also requires ongoing care.

Driveways typically get built from concrete or asphalt. A well-cared-for concrete driveway can last up to 30 years, and an asphalt drive won’t need a replacement for 12-20 years. But in order to enjoy a pristine drive for as long as possible, you’ll need to perform regular maintenance.

Caring for a concrete drive

The secret to a good looking concrete drive is regular cleaning and sealing. For ordinary cleaning jobs, you can rent a pressure washer and buy a bottle of biodegradable detergent. Read More …

 

As an attorney, I frequently get asked how one should take title to their new property. There are a lot of options and there is no right answer. If you are buying the property alone, you would have three main options: 1) hold title in your own name, 2) hold title in a trust, or 3) hold title in a business entity. If you are buying the property with another person, you have even more options: 1) hold it as tenants in common, 2) hold it as tenants by the entirety, 3) hold it as joint tenants, 4) hold it in a trust, or 5) hold it in an entity.

Holding title in your own name: holding title in your own name is in some ways the simplest. No other documents need to be drafted, no entities or trusts need to be created, and lenders will usually prefer this method. However, that does not make it the best option. The draw backs would be

Read More …