Questions Buyers Should Find Answers To (Before Buying!)

Take this checklist along when you visit a home and talk to the listing agent. Make note of your own observations, watch for defects, and ask about anything you may not see on your own.

• What is the visible condition of the property? Poor exterior condition may spell problems inside.
• Does the house require major repairs or replacements? Major repairs, such as a new roof, can be costly. Consider these costs if you decide to make an offer.
• How old are the mechanical systems? Consider the cost of replacing older systems if you decide to make an offer.
• Has the house been well maintained? Ask if the sellers have kept any maintenance records.
• Where is the house located on the block? Corner lots can be spacious, but exposed to more traffic and noise. Interior lots can be quieter but too close to neighbors.
• How is the house sited on the lot? Be sure the area around the house is graded properly to provide good drainage.
• Are there noteworthy architectural features? Front porches, gables or other details add value to the property.
• Are there noteworthy landscaping features? Established trees, shrubbery and perennials add value to the property.
• What is the condition of the houses on either side and across the street? If neighboring properties are too run-down, they may affect your resale value.
• What is the surrounding neighborhood like? Look for evidence of a sense of identity, and pride of ownership in the other homes.
• How close is it to shopping and schools? Nearby services can also add value.
• Are there community amenities nearby? Parks or recreation centers can add value to the property.
• How long has the house been on the market? A long time on the market may indicate problems with the house or neighborhood that you need to know.
• Why does the seller want to sell? If there's a problem with the house or the neighborhood, assess the situation carefully.

Homeowner's Insurance Issues

Today, getting preapproved for a loan may not be enough to prepare you to be a bona fide buyer. You also need to know that you're insurable.

Years ago, lining up homeowner's insurance was one of the last things you did before closing a sale. Now, buyers are finding that it's wise to make it one of their first priorities.

Homeowner's insurance is required to close any home purchase where a new mortgage is involved. A mortgage lender won't give you a loan unless you have hazard insurance on the property with the lender named as an additionally insured. If you can't get insurance, you can't have the loan.

Very few purchase contracts presently include insurance contingencies that make the purchase contingent on the buyer's ability to obtain acceptable homeowner's insurance. But, that situation could change, given current conditions in the insurance industry.

Homeowner's insurance carriers have recently been hit with skyrocketing costs due to an increased number of mold and water-related damage claims. In an effort to control costs, carriers have become hyper-diligent about who they will insure, and what properties they will insure.

For years, insurers have scrutinized applicants to make sure they were a good financial risk-checking credit reports and scores. Now, they also look at your claims record to see if you're a good insurance risk.

HOUSE HUNTING TIP: Insurance carriers are also checking out the property to make sure its claim record is clean before they'll agree to write a policy. This means that you could have a squeaky-clean record, but you could be denied insurance if a claim or two has been filed on the property you're attempting to buy within the last 5 years.

Most insurers participate in a claims-sharing database, the Comprehensive Loss Underwriting Exchange (CLUE). CLUE reports detail every claim made on a property during the last 5 years. A homeowner can obtain a copy of the Clue report on his home online at www.choicetrust.com for less than $15. A buyer cannot directly access the Clue report on a property unless the seller provides a copy. However, an insurance agent who has access to Clue can, and will, check the claims record.

Insurers are also tightening up with already insured homeowners. Long-time insured customers may not be renewed if they have submitted a claim in the last year. To make matters worse, what you think is a casual inquiry, the insurer may interpret as a claim. A woman who had been with an insurer for over 10 years, called to ask if damage caused by a leaky roof would be covered by her policy. The insurer said that it would. The insured never made a formal claim. She replaced the roof and repaired the damage herself. The insurer dropped her at the next renewal date. Her benign inquiry qualified as an unpaid claim.

If you call your insurer for general information, be sure to begin the conversation by saying: "This is hypothetical."Before you go house hunting, talk to an insurance agent to see if you're insurable. First-time buyers should consider taking out a renter's insurance policy. Insurers will often write homeowner's insurance for their existing customers.

THE CLOSING: If your purchase contract doesn't include an insurance contingency, find out if the house is insurable at a price you can live with before you remove your inspection contingency. You can probably find insurance to cover a home with a bad CLUE report, but the cost may be prohibitive.

What’s In – What’s Out with Homebuyers in 2006

In Gilroy and the surrounding area, here’s a sampling of what we think are In, No Longer In and Almost Out:

What’s In

• Granite. Slab is the best, tile is seen as a downgrade, but better than ceramic tile.
• Marble floors. Entries, bathrooms, formal living rooms and dining rooms.
• Stainless steel. Appliances and sinks.
• Built-in refrigerators. Hot brands include Sub Zero and Viking. “Appliance Suites” are all the same brand of appliances in the kitchen, including refrigerator, range, dishwasher, compactor, microwave.
• White/very light carpet.
• Requiring shoes to be taken off at the front door. (It's in, but we - personally - hate this requirement!)
• Bamboo wood floors. It could overtake maple as the favorite light-colored wood flooring in 2006.
• "Wired" homes. DSL. wi-fi, surround sound in every room.
• Big, bedroom-size master bathrooms. Large tubs with jets, separate large shower.
• Big, bedroom-size walk-in closets, with closet furniture/organizers, sometimes with an island drawer cabinet.
• High Ceilings. Cathedral or 10- or 12-feet replaces 7- or 8-feet high in all rooms.
• Wine “features” including wine refrigerators with zoned cooling, wine rooms/cellars with sealed doors and temperature & humidity controls, wine racks.
• Negative space pools.
• Ranch or one-level homes. Baby-boomers are discovering their utility in droves.
• Carbon Monoxide detectors. Home inspectors red flag homes that have only smoke detectors. Inexpensive and lifesaving, install one on every floor of a home before opening to homebuyers.

What’s No Longer In

• The real estate bubble. It’s a correction with a slowing of movement, but very little decline in prices.
• Single-rod closets. Buyers want the most storage in the least amount of space. Organizers accomplish this.
• Ceramic tile, whether in the kitchen or bathroom.
• Wet bars.
• Dark rooms with small windows. Natural light can overrule a lot of other problems in a home.
• Wallpaper. Take it down (carefully) and paint.
• Narrow staircases.
• Mirrored backsplashes in kitchens and everywhere else
• Gas grills that need their own tank. Buyers prefer the gas piped from the house so they don’t have to replace tanks.
• Dropped ceilings. It might have updated a bungalow in the 1950s, but today buyers want as much vertical space as possible.
• Draperies.
• Flipping. Inventory of unsold homes is increasing, signaling weakening demand by all buyers. If you are holding properties to flip, prepare to hold onto them until inventory is reduced. Consider renting them out until market heats up.
• Smoking. Especially not inside the house.

What’s Almost Out

• Laminate flooring that looks like hardwood. Not only can buyers tell it’s not wood, the noise it makes is often the deal killer during property showings.
• Kidney-shaped pools.
• Huge lots. Vast expanses of manicured lawn.
• Low and average height ceilings.
• Mini blinds.

In the beginning...

The inagural posting is in progress. We are real estate agents in Gilroy, and we are interested in being able to pass on some information we have about real estate. Real Estate in Gilroy is ever-changing, just as it is all over the state and nation. We will use this site to convey information about the real estate market in Gilroy, as well as in general. Look over what we have to say, then post your comments. At the very least, let us know you visited!

We are Team Patereau, made up of Susan and Rick Patereau. We are real estate agents with Intero Real Estate, in Gilroy. You can visit our website to get our bios and other buyer/seller specific information. Here's the link: www.teampatereau.com.

W're working on postings that touch on the following topics:

• Appreciation of Real Estate - how relevant are the published figures to your property, and what should your expectation be when you are trying to use the information.
• The Valuation Formula - putting your numbers in a chart vs. having a professional from your area prepare a Comparative Market Analysis (CMA)
• Moving into a Buyer's Market, from a Seller's Market - what do Sellers have to do today to sell their property.

There are other topics to discuss. Let us know what you want. Post it here.