I was chatting with a friend the other day and we got talking about real estate “horror stories”. For each one that came up I offered my advice concerning how a prudent and well seasoned Realtor would have prevented each of the situations from happening.
My friend commented that I sounded just like Mike Holmes talking about the home renovation and inspection business and that I should start writing tips for consumers about how to avoid the many pitfalls that can occur when buying and selling real estate. She said that hopefully this would help consumers to fully appreciate the value of working with a highly experienced real estate professional.
The longer I thought about it the more I realized that she was right. Everything that John and I know when it comes to buying and selling real estate we did not learn at real estate school. Our knowledge is hard won and is the function of 22 years of experience and 1,000 plus transactions. Here is an example of our comments about one true story predicament that was recently mentioned to us:
Couple purchased a property for their daughter to live in while she is away at school. Unfortunately the daughter decided to drop out early and they needed to resell the property sooner than they had expected. Not only did they have to sell the property for less than they originally paid they were shocked to discover that they also had to pay a $5,900 discharge penalty to get out of their 5 year term mortgage.
1) Read, read, read your paperwork especially the discharge penalty section. Turns out this couple “assumed” that penalties are always 3 months of payments. In this case it was a 1% interest differential for the balance of the mortgage.
2) Why were they advised to take out a 5 year term mortgage in these circumstances?
3) Mortgage broker was recommended to them by their Realtor who was a relative. Lesson here for Realtors too – trust is a gift that extends to those that you recommend - make sure they are worthy.
Do you have a real estate question that you want to send our way? Contact us via info@NiagaraRealtySource.com and we would be pleased to share our comments here on our blog.
All the Best!
Cathy & John