Sunday, January 15, 2012

Pop quiz: Ten new questions for property buyers

  1. How much will I save if I deal directly with the listing agent?
  2. How much deposit do I have to put down to make an offer?
  3. How is an escrow deposit dispute settled and does it matter whose escrow account it's in?
  4. If I change my mind about a purchase 10 days after signing the contract can I get my deposit back?
  5. The inspection revealed that the AC doesn't work. The contract is "as-is". What are my options?
  6. Is $500 reasonable for closing costs for a cash buyer of a $400,000 property?
  7. The seller has offered to equally split the title insurance cost. Is that fair?
  8. Can I change the contract to my brother's name after it's executed?
  9. The seller countered my offer at a higher price but came back the next day and accepted my first offer. Do I have to accept it?
  10. How is a buyer's agent paid?
If you're unsure about any of the answers, you may want to pause your property search until you do know the answers. Not knowing or being wrong about any of them could be costly.

"Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous." ___Barry Ritholtz


  1. Okay I'll give this a shot:

    1. $0
    2. $0 - but it doesn't make your offer look very serious.
    3. Whoever breaches the contract forfeits their right to the deposit and no it doesn't matter who the escrow agent is.
    4. As long as your contract allows for a rescission in that time period.
    5. Unless there's a cancellation provision in the contract allowing rescission at that point (for any reason or for an inspection revealing repairs in excess of $x) otherwise your local HVAC dealer will have plenty of options for you to replace the a/c in your new place.
    6. Depends on where the property is located.
    7. Depends on local custom but typically its a sellers expense so splitting it would not be fair to the buyer.
    8. If the contract allows for assignment yes, otherwise it requires seller's consent.
    9. Why wouldn't you want to go ahead with the contract if the seller is accepting what you offered? As long as the acceptance is prior to the expiration of the offer, yes.
    10. Out of the listing agent's commission for a listed property or as agreed (usually by the buyer) for an unlisted property.

  2. All of Anonymous answers seem good to me but #9. I would think that once an offer is countered the old offer is not binding. I would also add to #3-4 that any good buyers agent would write an offer in a way that the buyer would have some ways to get out of it. On #1 I have heard stories of listing agents agreeing to reduce their commission in order for the seller to accept a lower price and net the same amount, but the buyer would have to ask for that in the offer I would think.