Navigating Real Estate: From Research to Closing

1. Radon How It Really Fits in a Real Estate Transaction

2. Home Buying Process Step 1: Start Your Research Early Step 2: Determine How Much House You Can Afford Step 3: Get Prequalified and Preapproved for credit for Your Mortgage Step 4: Find the Right Real Estate Agent Step 5: Shop for Your Home and Make an Offer Step 6: Get a Home Inspection Step 7: Work with a Mortgage Banker to Select Your Loan Step 8: Have the Home Appraised Step 9: Coordinate the Paperwork Step 10: Close the Sale

3. Research Buyers Should Consider Initially • What do you want and need in a home? • What Area / Neighborhoods do you want to search? • What are taxes in your chosen areas • What are schools in you chosen neighborhoods? • What is transportation in your chosen neighborhoods? • How much remodeling are you willing to do? • What’s your personal budget? • What are natural conditions in your chosen neighborhoods? Radon???

5. Traditionally, all agents involved in a real estate transaction legally represent the Seller (both the "Listing Agent" and the "Selling Agent.") When a Buyer's Agent is involved, the person buying the property is represented by the "Buyer's Agent."

6. Realtors actually work very hard. They show clients house after house on Weeknights and Weekends to no avail until Finally!!! It’s the Perfect Home !!!!

7. BUYER’S MARKET A buyer's market is what you get when there's more supply than demand. There are more people looking to sell houses than there are people looking to buy houses. In a buyer's market, sellers may have to accept a lower price than they want to sell their home and may have to resort to staging and incentives. SELLER’S MARKET A seller's market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a great price on their homes.

8. Bidding below listing price • Bidding for a property below its asking price is very common during a buyer’s market. (A buyer’s market occurs when there’s a surplus of homes on the market relative to demand from sellers.)

9. Realtors often advise against bidding more than 10 percent below the asking price. However, you can sweeten a relatively low offer price by guaranteeing the seller a quick closing and a large earnest money deposit. Or, if you accept the present state of the home without demanding free upgrades and repairs, you could sway the owner in your favor over other bidders.

10. The House goes into Escrow Mutual Acceptance An offer is mutually accepted on the property. Both buyer and seller agree to all terms and conditions of the contract, such as the price, closing date, escrow company, items included in the sale and any other buyer-seller arrangements. The fully signed offer is submitted to the designated escrow company so that an escrow agent can begin working on the closing process. Escrow Instructions An escrow agent will prepare the escrow instructions based on the details of the accepted offer. These instructions aim to ensure that all items and conditions of the contract are fulfilled prior to closing on the home. Elements such as lien payoff amounts, title insurance commitments, prorated tax and insurance payments, or home warranty coverage may be items that the escrow agent handles depending on what the contract consists of.

11. Purchase offers are typically contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Real estate agents frequently arrange to have this inspection conducted within a few days of the offer being accepted by the seller. This contingency provides a chance to renegotiate an offer or withdraw it without penalty if the inspection reveals significant material damage.

12. Purchase Agreements typically state that if the Buyer reasonably believes that the inspection report reveals a defect with the property and the Seller is unable or unwilling to remedy the defect to the Buyer’s reasonable satisfaction before closing, then the Buyer may terminate the agreement. Refer to the Purchase Contract/Agreement for more information regarding your rights to unilaterally cancel while in contingency periods

13. RADON TESTING IN HOME INSPECTION Make Sure The Home Inspection Includes a Radon TEST !!!!

15. Home Inspectors will usually encourage Buyers to do a Radon Test. Because: It’s significant to the Buyer Family’s Health and the Radon Test is usually an extra $100 - $200 dollars for the Home Inspector

16. BUYER’S MARKET A buyer's market is what you get when there's more supply than demand. There are more people looking to sell houses than there are people looking to buy houses. In a buyer's market, sellers may have to accept a lower price than they want to sell their home and may have to resort to staging and incentives. SELLER’S MARKET A seller's market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a great price on their homes.

17. How Do These Markets Affect Radon Testing BUYER’S MARKET A buyer's market is what you get when there's more supply than demand. There are more people looking to sell houses than there are people looking to buy houses. In a buyer's market, sellers may have to accept a lower price than they want to sell their home and may have to resort to staging and incentives. SELLER’S MARKET A seller's market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a great price on their homes. In a Buyers’ market, Home Inspections and Radon Testing are common since and Buyers tend to get their requests to fix Home Inspection findings. Sellers don’t want the Buyer to go elsewhere. In a Sellers’ market, the Buyers are typically paying higher prices so they want a Home Inspection and Radon Testing to be aware of any problems the property might have and ensuing costs. In our area Buyers have the right to test for Radon and if found over 3.9 pCi/l ask that it be fixed. The Seller may refuse. If the Seller does refuse the Buyer may walk with no financial penalty. The Seller must then disclose the elevated Radon readings to all successive potential buyers.

18. How Do These Markets Affect Radon Mitigation BUYER’S MARKET A buyer's market is what you get when there's more supply than demand. There are more people looking to sell houses than there are people looking to buy houses. In a buyer's market, sellers may have to accept a lower price than they want to sell their home and may have to resort to staging and incentives. SELLER’S MARKET A seller's market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a great price on their homes. In a buyers’ market, Home Inspection findings including Radon will be corrected because the Seller does not want the Buyer to go elsewhere. A Sellers’ market typically occurs when the home sales market is really active and the overall volume of home sales is high. The percentage of Sellers that refuse to address Home inspection items including Radon Mitigation may increase somewhat but the extra volume means the demand is still high. Overall in our area Sellers are less inclined to bargain on Radon Mitigation than other items because they do not want an unsafe condition for the new owners. However, if Sellers refuse to fix a Radon problem the Buyers have a knowledge of a high reading and will call for Mitigation themselves.

19. Credit Equity Income and Assets.

20. FICO is an abbreviation for the Fair Isaac Corporation, the first company to offer a credit-risk model with a score.

21. 850 FICO score is a perfect score Credit scores higher than a 660 should qualify Buyers for a Mortgage assuming the Buyers are buying a house they can afford and applying for a mortgage that makes sense. Credit scores below 660 to 600 could qualify Buyers for a Mortgage but Lenders would rely on other criteria such as reliable source of income and solid assets to supersede the low credit score. The lowest credit score to buy a house, would likely be somewhere around a 500 FICO score.It is very rare for borrowers with that kind of credit history to receive mortgages.

22. A disclosure is something given to the Buyer by the Seller documenting their knowledge of the property. It is not the same thing as an inspection; because there are things the seller may not be aware of that an inspection brings to light.

23. So what kind of real estate disclosures do you need to make to a buyer when trying to sell some real estate? In general, you have an obligation to disclose potential problems to a prospective buyer that could affect the value of the property you're trying to sell. In addition, it is considered illegal in most states to deliberately conceal major defects on your property. Several states have begun requiring property owners to put their real estate disclosures in writing.

24. If a Seller Refuses to address a Radon Problem and the Buyer walks away from the house; the Previous Tests may be required to be disclosed to the next Buyer.

25. Radon in Real Estate Disclosure Laws Over 30 States have Laws / Regulations requiring Radon Disclosure

26. Three Salespeople Liable in Radon Disclosure Case October 1996 PITTSBURGH--Three realty salespeople have been ordered to pay $30,000 in damages for allegedly failing to disclose information about high radon levels in a listed house. The trial, in the Court of Common Pleas of Allegheny County, was one of the first in the nation dealing with nondisclosure of high levels of radon, according to attorneys involved in the case. Radon is a gas that leaks naturally from the ground in some areas. It's considered a health hazard when found in high concentrations in a house. Two of the salespeople, from Prudential Preferred Realty, shared the listing on the Pittsburgh house. The third sales associate, from Howard Hanna Real Estate Co., acted as a subagent and worked with the buyers.

27. The lawsuit filed by Pete and Sue Ann Radakovich of Pennsylvania was against three Real Estate Agents for failure to disclose dangerous levels of Radon gas in the home the agents sold to the couple. Claims of fraud, negligent misrepresentation and violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law against the three Realtors.

28. The house was tested for radon before its purchase in 1992, and the test indicated a negligible radon level. After the buyers moved into the $172,000 house, they discovered from a contractor that a test done two years earlier had shown very high radon levels, according to attorneys. The buyers sued the sellers and all three salespeople, charging misrepresentation and fraud in connection with the failure to disclose the prior test results. The two listing salespeople said they had disclosed the test results to the subagent. The subagent denied being told. ''What this came down to was one salesperson's word against another's,'' says attorney David Kuhn, who represented the listing sales associates. The jury found the sellers not liable, apparently believing the sellers' claim that they had disclosed everything they knew to the listing salespeople. The jury found all three salespeople liable under the state's Unfair Trade Practices and Consumer Protection Law.

29. . Sometimes sellers hire a home inspector before going on the market. It seems backwards, but this is the sellers’ opportunity to hire an independent party to inspect the property, in case they missed or were not aware of something

30. This makes sense as in the case of radon; In completed price negotiations: The Sellers are trying to get their asking price but typically have a lower price in mind that is the absolute lowest they would be willing to accept. the Buyers are trying to get the property for as low a price as possible and within their ability to pay. So Buyers and Sellers will make offers until they have a price they will both be satisfied with. Then Comes the home inspection and the buyer now must settle for less than their negotiated price. If a pre inspection is done no surprises are in store and the Sellers lowest price will include assumed repair requests

31. Sometimes the Seller will have a pre-listing home inspection and then just hire and pay Contractors to address any problems that were discovered. The subsequent Buyer can hire another home inspector prior to buying and may even find additional problems but these would be expected to be minor.

32. Here in California the Real Estate Transfer Disclosure Statement requires sellers to inform buyers of any environmental hazards, including radon gas, of which they are aware. Unfortunately there is a lack of Real Estate Radon Testing in much of the State.

33. A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home's market value and ensure that the amount of money requested by the borrower is appropriate.

34. Appraisal A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home's market value and ensure that the amount of money requested by the borrower is appropriate. What are they? A home appraisal is a very educated guess as to how much your property is worth. Many times the inspection is done first because of the Inspection period set forth in the contract, which is tied to the "effective date" of the contract. In other words, the buyer cannot wait on doing the inspection. Although, there have been cases where an appraisal is warranted prior to the inspection because there is concern that the property may not appraise at the offered price. This prevents the buyer from spending "inspection" dollars unnecessarily. Why are home appraisals important? No credible financial institution will lend you money for a house without an appraisal.

35. "The appraisal lets a bank or lender know what the loan collateral will sell for in a worst-case scenario," says Bart Jackson, an appraiser in Charleston, South Carolina, who is also a real estate agent with Charleston Preferred Properties, a residential real estate brokerage firm. • In other words, to go with an extreme example, the bank doesn't want to be stuck with a home they lent the borrower a million dollars for but can only sell for $100,000 because that's all it is worth. The homebuyer shouldn't want that either, of course. • Who pays for the home appraisal? Usually, it's the seller who pays for it at closing, which can be as high as several hundred dollars. The national average cost for a property appraiser is $309, according to data compiled by HomeAdvisor.com. • do home appraisals differ from home inspections? The two often get confused, but they aren't the same thing. Both an appraiser and inspector will walk around the house and take a good look at it (usually, the inspector comes first), but they're each at the house for different reasons. The appraiser is looking at the value of the home; the inspector is looking for any defects with the home that may cause you financial grief later • What factors go into deciding the worth of a house? Plenty. "The appraiser is looking at the key characteristics of the property including square footage, number of bedrooms and bathrooms, condition of the home, current recently sold comparables that are close in proximity and health and safety issues," Titsworth says.

36. RADON TESTING & MITIGATION IS DRIVEN ALMOST TOTALLY BY REAL ESTATE SALES Five ASHI Inspector Friends gave me the total number of radon tests they did last year and the number that were non Real Estate

37. Total Tests Non Real Estate

38. The Closing: Be prepared to sign a lot of papers in a very brief time. Typically many are not read just explained by the closing Agents

39. Closing • When all conditions of the contract are fulfilled, the escrow officer will prepare the closing documents, such as the loan paperwork and transfer of deed forms. Additionally, both the buyer and seller are contacted and advised on how much money to bring in to closing, or how much is due. When all the necessary paperwork is signed and the loan is funded, the escrow officer will notify the county recorders office so that the transfer of ownership can be official.

40. Required Radon Notification Acts are a step in the right direction. The Buyers must sign a paper that encourages testing and explains Radon but radon testing is still voluntary. If signed at closing the notice gets lost in the pile of papers required to be signed.

41. Real Estate Professionals do not lead the charge for Radon Testing and Mitigation as a matter of fact they will often drag their feet. But once it is adopted as Standard Policy, they get on board and assure it’s done and done right.

42. Home Sales is now the driving force in Radon Testing and Mitigation . It’s not a priority once the Buyers move in. It is easy to overlook because it is not visible and it may not immediately harm you plus it is easy to forget. So for better or worse Home Sales is the time when Radon becomes an issue.

43. The Following all recommend all homes be tested for Radon • The U.S. Surgeon General • Dept. of Health and Human Services • The American Medical Association • Conference of Radiation Control Program Directors • The American Cancer Society • The American Lung Association • The American Public Health Association • The National Academy of Science • The Health Physics Society • Council on Radiation Protection • Centers for Disease Control • The Environmental Protection Agency • Housing and Urban Development • US Department of Energy • US Green Building Council • National Association of Counties • to name a few………..

44. The Environmental Protection Agency recommends all homeowners test their home’s radon level Not just Homebuyers

45. “The lung cancer five-year survival rate (17.8 percent) is lower than many other leading cancer sites, such as the colon (65.4 percent), breast (90.5 percent) and prostate (99.6 percent). • f being diagnosed.” The five-year survival rate for lung cancer is 54 percent for cases detected when the disease is still localized (within the lungs). However, only 15 percent of lung cancer cases are diagnosed at an early stage. For distant tumors (spread to other organs) the five-year survival rate is only 4 percent. • More than half of people with lung cancer die within one year o

46. You are all very knowledgeable and conversant in the importance of radon testing but the 2 takeaways here are: Most Radon Testing in the Country is motivated by Real Estate Sales. (we’ve discuss how & why) We need to expand our efforts to better promote testing in Homes not being sold.