The risk of loss clause

I ran into a Realtor who did not understand the “Risk of loss” clause in the standard purchase agreement. If the property is damaged after the final acceptance date on the contract but before the closing, the buyer has the option of canceling the contract.  The buyer must do so in writing and the buyer and seller must sign a cancellation and earnest monies are refunded to the buyer.

Damage can occur after a severe storm or maybe an accident. Some home repairs fail eventually, siding, roofs, furnaces, and water heaters wear out or malfunction.

There isn’t anything in the contract that would require the owner to make repairs either. Homebuyers should do a final walkthrough of the

fire fighters
firefighters

home before the closing. If something in the home has been damaged or is broken it should be addressed before closing.

Closing dates can be changed as needed with an agreement from both parties.

The risk of loss clause doesn’t specify the amount of damage that has to have happened to the property. If a home burns to the ground after an offer has been accepted but before the closing, the buyer does not have to proceed with the purchase.

If the roof develops a leak before the closing there are all kinds of remedies. One remedy is to put money in escrow for repairs. The seller can get a bid and have that amount of money withheld from the proceeds of the sale. The money can be held by the title company.

There is a myth out there that money held in escrow must be 1.5 times the amount needed to make the repairs. That is only true in some cases where the buyer’s lender asks that money be put in escrow to pay for repairs.

When choosing a real estate agent it is a good idea to find someone who has some experience. The unexpected can happen at any point in a real estate transaction. A good real estate agent can find solutions to any problem that arises. Having experience really helps. There are times though when the buyer or seller should consult an attorney.

Winter is the time to test for radon

January is national radon awareness month and the winter months are the perfect time to test for radon. You can do the test yourself, and right now radon test kits are discounted.

Homebuyers should always have a radon test as part of the home inspection.  It doesn’t matter if the next-door neighbors have tested and do not have radon or if no one knows of anyone in the neighborhood who has ever had a positive radon test.

When buying or selling a house the radon test should be conducted by a professional. 

Most homeowners have never tested for radon even though it is estimated that nearly half of all Minnesota an estimated 40% of homes have elevated levels of radon.

I’ll never forget the time the real estate agent told the buyers that she had never heard of radon in the neighborhood. It just doesn’t work that way.

Radon gas can be anywhere and everywhere. Radon is a colorless and odorless gas that comes from the soil. When inhaled these fine particles can damage the lungs. Exposure to radon over a long period of time can lead to lung cancer.

The average radon level in Minnesota is more than three times higher than the U.S. radon level. This is due to our geology and how our homes are operated. Minnesota homes are closed up or heated most of the year, which can result in higher levels of radon. In Minnesota, more than two in five homes have radon levels that pose a significant health risk.

Learn more from the Minnesota Department of Health

Info graphic national radon hotline 1-800-sos-radon

Getting organized

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January is the month for self-improvement and for getting organized.

Last January I  watched the Netflix series called “Tidying Up,” and learned all about tidying up and getting rid of items that don’t spark joy. The series was very popular last year and if you haven’t watched it you should.

On the show, Marie Kondo, who is also the author of “The Life-Changing Magic of Tidying Up“, teaches us how to use the “KonMari” method of folding clothes and organizing our homes.

She teaches people to touch their belongings and decide if they spark joy. If they don’t spark joy we are encouraged to thank the item and add it to the pile of the donate or discard pile.

After watching the show I reorganized my dresser and clothes closet. I have to say I was pleased with the results and it is so easy to maintain that it is still organized.

This fall I reorganized the bathroom closet and the junk under the bathroom sink. It looks amazing and was worth the effort.

Over the past five years or so I have gotten rid of a lot of stuff I was storing and because I have less stuff and I buy less stuff I know what I have more storage space.

For people who plan on moving or who want to downsize these cold winter months are the perfect time to get started. Choose a closet or a set of drawers. having less and having it organized makes moving much easier.

TNAS for the holidays

TNAS stands for “temporarily not available to show”. It is a status in the Realtor MLS system. If your home is on the

market during the holidays this is a great way to put it on hold. That means it is still for sale but no one will be able to make an appointment to see it.

The temporary part is kind of vague but it is a common practice to put listings on hold for a couple of weeks over the holidays.

If you want to sell your house but do not want it on the market during the holidays ask your Realtor about “temporarily not available to show”.

Please leave some lights on

House for sale

I went to show some clients a house at 6:30 one evening last week. There wasn’t a for sale sign on the property which isn’t terribly unusual. None of the street lights in the area were on if there were any.

The house was pitch black but I could kind of make out the shape of a house. I used my trusty flashlight to verify the address and waited for my clients.

When they came I used my flashlight to light the way to the door. One of my clients held the light while I worked the combination. As soon as I got into the house I started turning on lights. Some rooms did not have over headlights. I would have gone out to my car to get more flashlights but my clients didn’t seem to like the house at all.

After the showing, and while I was locking up the house one of my clients stepped into a hole in the front lawn and twisted an ankle. There is no sidewalk or walkway in front of the house.

With the short days, it is hard for people who have full-time jobs to look at homes for sale during daylight hours. It is a good idea to leave a light on if your home is for sale.

Homeowners can put light on timers. Go one step further and use a timer that can be controlled via wifi, turn it on before showings and off when they are over for the day.

The predictions for 2019 were wrong

Yesterday I went back and looked at some of the predictions for the housing market for 2019. Many of the articles I saw were written in December of

Maple leaf
Maple leaf

2019 and most of them were about the national housing market.

Several experts predicted that there wouldn’t be as many buyers and that the housing market would start to become more of a buyers market and that would the increase in prices.

Real estate really is local. We have not been seeing any kind of slow down in demand or housing. Buyers are still buying and prices are still rising. The one thing the predictions did get right is that the year will end with fewer home sales. it isn’t because no one is buying it is because fewer are selling.

I’ll go out on a limb and predict that home sales in 2020 will be down from 2o20 as compared with 2019 and that prices will rise. Interest rates will remain very low because well you know it is a presidential election year.

People used to live in the same house an average of 7 or 8 years. As of this year, that number has gone up to 13.3 years. People are moving less and spending more money on renovations. The trend seems to be local and national.

As for the housing market as long as the population continues to grow and as long as the current trend of not building affordable housing continues the seller’s market will remain strong. It is unlikely that baby boomers, especially those who are not wealthy will sell because there really isn’t anywhere for them to go. There isn’t enough affordable housing for seniors or for anyone else.

If you live in the Twin Cities metro area the local newspapers and blogs like mine are a better source of information than the coastal media.