Lisa and Jim's Northern Nevada Real Estate Blog: October 2008

One man's fortune is another man's loss.  That describes today's real estate market.  Unfortunately, we've noticed that many people are getting locked up and not taking action.  This is most interesting since the market has swung dramatically and there are opportunities for Buyers that were non-existent just a few months ago.  They will not be beneficial to Buyers, however, if Buyers don't buy.  It's just like Sellers that didn't sell at the height of the market ... they bemoan their "losses", but they never had the gain because they didn't sell when the market was high.  Buyers that don't buy now may bemoan their lost opportunities. 

Here's a classic example of shopping this market and finding the golden opportunity.  We were working with a young family, first time buyers.  Their price point directed us to certain types of homes.  When we met to look at the first home the homeowner's daughter met us with, "my daddy is shampooing the carpet where the dog threw up."  It went downhill from there including the third bedroom being an extra large laundry room with a bed in it.  They were discouraged and stopped looking, but they continued to follow the market. 

Roll it forward a couple of months.  With the information about the USDA Rural Development 100% loans that we shared with you some time back, they were able to raise their price point just a bit, about $30,000 to the mid-$170's.  At the same time, the prices dropped to the point where the homes we were looking at were newer and bigger.  We made a few offers to no avail.  We kept pursuing the market and ‘lo and behold, we were able to achieve unthinkable.  Large home, vaulted ceilings,      newer, great condition, corner lot, across from school, great views, many, many outstanding amenities ... a lifestyle they earlier could only have hoped to upgrade to in five, or more, years. 

Compared to the initial rundown, dirty, discouraging offerings, the home they are going to raise their family in is a jewel that will serve them wonderfully for many years.  Their payment is unchanged, but their lifestyle is dramatically changed.  That opportunity is available in every market segment right now for those that are in a position, financially and mentally, to move forward with their life and live their life as they choose. 

Our advice: Sellers are very realistic today.  If one isn't realistic, the next one will be...or the next one...or the next.  Work closely with your agent.  Define what you want to achieve, what is truly important to you.  Be patient, be active, and then be proactive in your approach to achieving your dreams.  There are diamonds out there, and they aren't all laying on the ground.  You might have to do a little mining to find your precious jewel, but be assured that the Northern Nevada real estate gem field is a mother lode ripe for the picking.  In the spirit of Nevada mining, be aware of the Tommyknockers.  Are you listening to the good, or the bad Tommyknocker?  Don't let ‘em getcha and cause you to miss out! 

Opportunity abounds in every market and this one is no exception!  Be bold and you will enjoy the fruits of your action.  Don't watch and wonder what happened.  Experience is Priceless!  Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, carsonvalleyland@hotmail.com, www.carsonvalleyland.com

It depends on your Sale Agreement, the nature of the items you are being asked to repair, and your motivation to close your escrow.  Here's what we mean.  Your contract likely has several paragraphs that address inspections, repairs and the condition of the property.  When the inspections are completed the Buyers, together with their agent, will prepare a list of items that they want the Seller to repair. 

It is important as a Seller that you, together with your agent, study the list to determine the validity of the Buyer's requests.  The list may innocently include items that are not the Seller's responsibility to repair.  For example, a physical inspector will often note when things don't comply with current code, i.e.- deck baluster spacing, missing GFI breakers, etc..  If it was not required by code when the home was constructed, the Seller is usually not required to bring an item up to current code.  Buyers often read an inspector's report and request that code-deficient items be included on their repair list.  Code requirements are often life-safety issues, and should be respected when the inspector notes them, but Sellers aren't automatically obligated to mitigate them.  

Some repair items may be required in order to get a new loan, and other items might need to be addressed depending on your intended use of the property, i.e.- insufficient exit windows in a basement that will be used for a bedroom.  The fact that the Buyer needs those repairs does not obligate the Seller to do them.  Understand, too, that cosmetic items that are deficiencies noted while viewing the property, i.e.- bad paint, holes in the doors, unless called out for in the Sales Agreement, are not necessarily required to be repaired.  

Our advice: Repairs can become very costly very quickly if they are unchecked.  Be very clear about the repair aspects of your contract - there are things that must be done, things that don't have to be done, and things that you might want done.  Some Seller repairs can be mandatory and yet not a part of the contractual repair limits depending on the specific contract language, i.e.- broken window seals.  Repairs that exceed the contract limits may be necessary to save the transaction.  We've seen two such instances recently, one involving a French Drain, and the other a credit for re-plumbing an entire house.  Though costly, they were in the Sellers' best interest and the Sellers' acquiescence to make the major repair gave the Buyers the comfort and confidence they needed to stay with the purchase.  If an unknown major problem is revealed during the course of escrow it is important that a Seller realize that it will likely need to be remedied for a subsequent Buyer.  With that realization it is usually in the Seller's best interest to make the necessary repair ... but not always.  Each such situation is unique and must be thoroughly evaluated with a broad perspective before an action plan is agreed to. 

Beware the Buyers that want a "gotcha" item or two ... a repair that they don't deserve. Such a Buyer is effectively continuing the sale negotiation after the fact.  Repairs can certainly be the valid subject of negotiation during the course of an escrow.  Buyers and Sellers often find that it can be in their best financial and emotional interest to make a concession and proceed with closing rather than to hold tight to the terms of the contract.  Which side should concede and to what extent is transaction specific.  Don't get hung up on principle.  Your agents will guide you through this process so you not only get what you bargained for, you'll get what you want.  Don't gamble with your most important investment. 

Experience is Priceless!  Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, carsonvalleyland@hotmail.com, www.carsonvalleyland.com