Kamala's 1st Time Homebuyer Credit + My Strange Problem

Kamala's 1st Time Homebuyer Credit + My Strange Problem

Episode Transcript

Speaker 1 (00:00):
Hey, it's Michael Blaze. Welcome to Your Home three sixty,
the show where we talk about everything that has to
do with your home. I appreciate you listening today. On
today's show, I'll tell you about a problem it's been strange,
a problem I've been having with my house, and how
that even ties into having a home inspection when you
buy your home and your due diligence period and what

(00:23):
you're going to look for in all of that. So
we'll get to that in a little bit, but first,
let's check the latest real estate news. According to new
data from Zillo, a monthly mortgage payment is less expensive
than rent in twenty two of the nation's fifty largest
metro areas. The data determined that the typical rent payment
nationally is two thousand and sixty three dollars a month,

(00:46):
while the typical mortgage payment is one thousand, eight hundred
and twenty seven dollars. New Orleans, Chicago, and Pittsburgh offered
the greatest savings when comparing the cost of rent to
a mortgage payment. The data did not include tax is
an insurance. When comparing those payments. There was also the
assumption that the buyer can put twenty percent down. Zillow

(01:09):
Home Loan's senior economist said that this analysis shows that
a home ownership may be more within reach than most
renters think. He said, coming up with the down payment
is still a huge barrier, but for those who can
make it work, home ownership may come with lower monthly
costs and the ability to build long term wealth in

(01:30):
the form of home equity, something you lose out on
as a renter. That is absolutely true. When you're running
a property, you're just paying somebody else's mortgage for them.
And that rent that they listed as a typical rent
nationally at twenty sixty three a month, it seems kind
of cheap to me. I guess it depends what they're

(01:50):
referring to when they say a typical rent payment. Are
they talking about a three bed, two bath house. If
they are, then that is relatively cheap compared to around here.
If you're renting in your first time home buyer, maybe
you're looking at Kamala Harris's plan of giving first time
home buyers a twenty five thousand dollars tax credit, and
you're going, you know what, that could help me hold

(02:13):
on a minute. Presidential candidate Kamala Harris has proposed giving
first time home buyers twenty five thousand dollars in down
payment assistance. Of course, there's a catch, and the credit
does not apply to all first time home buyers. The
Vice President proposes giving twenty five thousand dollars in down
payment assistance to four hundred thousand first generation home buyers.

(02:37):
That means if your parents or grandparents were homeowners, then
you're not eligible for the money. Also, recipients of the
funds will need to have a history of paying rent
on time for at least two years, so if someone's
living at home with their parents to save money to
buy their own home, they're not eligible either. What she's
proposing requires the passage by Congress of the Down Payment

(03:01):
Toward Equity Act, sponsored in the House by Representative Maxine
Waters in California and in the Senate by Rafael Warnock
in Georgia, the bill provides twenty thousand dollars to first
generation home buyers with incomes below one hundred and twenty
percent of the mean income for their area. The help

(03:22):
increases to twenty five thousand dollars if the buyers from
a socially and economically disadvantaged group defined as being black, Hispanic,
Native American, or Asian American. When Senator Ron Wyden of
Oregon proposed an earlier version of the bill that would
help all low income first time home buyers, he got

(03:45):
pushback from racial justice and housing advocates, who complained the
change would make too many white Americans eligible. The devil's
in the details. So when you hear Kamala Harris say
that she's proposing a twenty five thousand dollars first time
home buyer tax credit, she doesn't mean for all first
time home buyers. Don't let this happen to you. The

(04:08):
owner of a mansion in Raleigh, North Carolina, has found
himself in hot water after a stranger stole the deed
to his residence. The New York Post reported that Dennis
Craig Adams, who owns an eighty three hundred square foot
home in a gated community, discovered that a person named
Don Magnum falsely filed a warranty deed on his property
and tried to put it up for sale at four

(04:29):
point twenty five million dollars. Adams was only made aware
of the deed theft when his homeowners' Association alerted him
that Magnum was seeking gate access to the community. Adams
then discovered the Wake County Register of Deeds approved paperwork
that transferred his property to the Dawn Magnum Trust without
seeking verification that the transfer was legitimate. Although Adams could

(04:52):
show that he was still the property's owner, the Register's
office claimed that they could not void the fraudulent transfer.
They say, there's a absolutely nothing they can do to
reverse this, Adams said, once it's filed, their only solution
is that I have to go hire a private attorney,
and the first quote I got was about eight thousand
dollars to file a civil suits against this woman. When

(05:14):
contacted directly, Magnum said she thought the property was abandoned
and claimed she was willing to return the ownership to Adams,
but the Register's office insisted it could not reverse the
deed without a court order. And while the Register's office
has a free fraud alert system that notifies homeowners when
actions are recorded under their name, Adams was not contacted

(05:34):
because he was not named in the phony deed paperwork.
I think I'd be thinking about suing not only this
Magnum lady, but also the Register of deeds in that county.
I feel sorry for that guy. That's just ridiculous. And
speaking of ridiculous, I've been having a ridiculous problem around
my house. So this is strange, and you know, I

(05:58):
should have an electrician check this out. It would probably
be the smart thing to do, because I'm no electrician. Now,
I can, you know, find my way around wiring a
little bit. But I kind of ran into this ghost
or demon, if you will, with my house. My wife
kept complaining, She's like, my plug doesn't work in the bathroom.

(06:19):
You know, it's an older house, so it doesn't have
GFCI plugs in the bathroom. Now, a lot of times,
especially in today's new houses, you'll find the GFCIs right
in the breaker box, so they stopped putting them on
the individual plugs most of the time anyway, and that
circuit's just protected right in the breaker box with a GFCI.

(06:43):
My house does not have that because it's an older house.
And it was the damnedest thing. The plug kept going out,
And then I noticed our master bathroom off of our bedroom.
You call it an end suite now, I guess it's
politically incorrect to call it a master bedroom. I noticed
that the power outlet in there, the lights, the fans,

(07:05):
everything works fine, but the power outlets kept losing power,
and so our electric toothbrushes and you know, electric razors
and things like that would not work. And it was
baffling because I'm like, okay, well maybe the receptacle went bad.
I went and replaced the receptacles. I'm handy enough to

(07:27):
do that, and it seemed to work. And then all
of a sudden she comes to me and she's like,
it's not working again, and I'm like, what could this be?
And I, you know, in my head, I'm like, did
some rodent chew the wire out? Or is it shorting out?
Is this a dangerous thing? And it dawned on me

(07:48):
one day. We have these lights out in the backyard,
so we have some trees lit up in the spotlights,
and a water fountain back there, and I did put
a gf C outside there, and originally did not have one,
and just for safety purposes. And sometimes when it rains,
you know, there's so many things plugged in and there's

(08:10):
an extension chord and whatnot, it'll trip that GFCI. And
so I looked out the back window of the house
out the door wall, and I noticed the palm trees
weren't lit up and the yard lights were not on,
and I'm like, oh, well, it must have tripped again
after this heavy rainstorm that we just had. And I

(08:30):
went out and I reset it, and then I was like, hmm,
And so I went into the bathroom and I checked
the receptacle and yes, it worked, and it's worked ever since,
and that GFCI has not tripped ever since. So I'm like,
Wailah figured out the problem. Now here's the next problem

(08:53):
I have. I don't know why that circuit would be
wired through that GFCI, So they must have jumped it
from when they built the house from the outdoor receptacle
and then back to the bathrooms. And I don't know
if they did it on purpose that way or if
they were just taking shortcuts. I don't know if it's
safe or not. I mean, it's lasted for thirty years

(09:18):
that way now or longer, but I, you know, have
no idea if that's safe or not, or if it's
proper or not. So I need to get an electrician
out there to take a look at it. So I
just thought I would bring up that story in the
spirit of, you know, sharing these little things that happen

(09:38):
in these you know, aha moments that you have. You know,
something like this also might help you while you're trying
to troubleshoot some particular problem that you're having, because I
certainly never expected that the receptacles in the bathroom were
not working because the outside GFCI was tripped. So that

(09:59):
little story, right, there's a great segue into the question
that I received from a listener. I got it in
my real estate email, which I suppose they found on
my website, Michael Blaze realestate dot com. I have a website,
Michael blazerealestate dot com. But Matt wrote, Blaze, how do

(10:20):
I know that my home inspector will catch every hidden
problem with the house that I'm about to buy? Well, Matt,
you can't be sure that your home inspector is going
to catch every little problem. I think most home inspectors
would tell you that their generalists would a home inspector
catch that problem right there, And that's why I told

(10:42):
that story. Probably not, And you know why, because if
it was working at the time that they inspected the home,
there'd be no reason for them to investigate any further.
I mean, of course, they check your circuits. They put
the tester into the receptacles and make sure everything's working.
But if everything's working, end of a story for them, right.

(11:05):
And of course, because you know, they're not electricians either,
or electrical engineers or any of that, they're generalists. So
they see mostly what you know, the things that you
and I would see is wrong with the house. Now,
they're trained, you know, with more of an eye to detail.

(11:26):
But if that particular instance happened during a home inspection,
the only way that they would know there was a
problem is if they checked the receptacles in the bathroom
and saw that they weren't working. Since they're working now,
there'd be no reason to look any further into it.
So if you want a very robust and super detailed

(11:53):
inspection of your home, you know, then maybe you should
go beyond to home inspector, Matt and hire somebody that's
specialized in each system. Now that's going to be money expensive,
and that's why most people skip that step. They hire
a home inspector. The home inspector goes through the home.
But to answer your question, Matt, if you want a

(12:16):
real specialized inspection, it's going to cost you a lot
of money because you're going to want to go get
a plumber to inspect your plumbing system, an HVAC professional
to inspect your HVAC system. You're going to want to
hire an engineer to make sure that the house is
built correctly and that the foundation is okay, and you

(12:39):
might even want a foundation specialist in there too, and
the list goes on, so for every system in that house.
If you're willing to pay and you want to make
sure that there's no hidden problems, absolutely sure, then you're
going to want to hire each of those individuals, and
that's going to cost you a lot of money. As

(13:00):
I said, most people prefer not to spend that money.
They just rather have somebody that's trained in looking for
generalized problems, which would be a home inspector, and stick
with that. And of course you would hope that there
would be some kind of evidence that revealed itself during
the home inspection, so the home inspector can make note

(13:21):
of it, put it in their report, and then you
can go from there. If there are specific problems, and
say there's a fireplace issue, you know there's an extra
soot noticed on the ceiling or you know, up in
front of the fireplace, or whatever the case might be,
then you'd want to call in a fireplace or a

(13:41):
chimney specialist. You know, maybe there's a problem with the
HVAC where it's acting hinky and that was discovered on
the inspection report. So you can always still use those
specialist ala carte after you have the home inspection done
by a home but beware that the home inspector may

(14:03):
miss it, and that's not necessarily their fault. Like I said,
if the system appears to be operating properly, then why
would they look into it any further? And this brings
me to another point on home inspections. I was just
asked the other day about this specifically about the protocol
that you would follow when you're requesting a home inspection

(14:28):
while you're doing the initial contract. So our standardized contract
that we use, which is from the South Carolina Association
of Realtors, you used to have three choices when you
were submitting an offer to buy a house, and you
would either request a repair procedure, you would request due diligence,

(14:50):
or you would mark as is. We no longer do that.
It's no longer in the contract. That way, it's now
a due diligence contract only, so you are in due
diligence no matter what. And then you get to decide, well,
you get to negotiate with the seller. You know how

(15:14):
long of a period you're going to have for due diligence,
and not all the time. But sometimes it comes with
a price called a termination fee, so everything's negotiable. Some
people try to get away with putting zero for the
termination fee, and if you just have a you know,

(15:35):
a couple of days of due diligence, well then maybe
you can get away with zero. It's up to the
seller whether they want to accept that or not. But
the longer the inspection period, the longer the due diligence period,
the higher your termination fee should be, because under due
diligence you can terminate that contract for any reason at all.

(15:59):
The due diligence period is not just for inspections per se.
You might want to review the HOA documents. You may
want to pursue a zoning variance. You may want to
get estimates on adding an addition to the home, or
adding a swimming pool, or everything under the sun that

(16:23):
you might want to do. You know, you can conduct
during your due diligence period, and then if it doesn't work,
or even if you just change your mind, you can
exercise your right to terminate under due diligence as long
as you do it within the due diligence period. And
for that very reason, there's a termination fee tied to

(16:46):
your due diligence period. Again, it's negotiable. But if you're
going to for all intents and purposes, have the property
off the market, I mean it's it's still usually it
goes active contingent and it's still marketed as such, but
you know people are going to not be so interested
when they already know that there's a contract on that property.

(17:09):
And so therefore, you know you're for all intents and
purposes kind of taking it off the market. Right, You're
showing everybody, I have a contract on this property, and
most of them, if not all of them, are just
going to move along and ignore that property. So the
longer that period of time that it stays active contingent

(17:32):
and under contract, and then you have the potential to
back out for any reason you would like, the seller
wants to be compensated for that period of time, so
it makes sense and it's all negotiable. So while we're
on the subject, let's talk about how you should handle
your due diligence period. A lot of people forget, and

(17:56):
I have even real estate agents say all the time,
why is the due diligence period so long? Not in
every case, but in several of them. I've been asked
that question, and it's because to me, it's kind of
a flaw in the way that the contract works, because

(18:18):
you have to you only have until time is of
the essence. That's one of your main things to remember
in real estate. If you have a time and a date,
whatever you agreed to do by that time and date
better be done by that time and date, including due diligence.
So once your due diligence period is over, it's over,

(18:38):
and that includes any kind of negotiation with the seller.
As soon as it is due diligence terminates your negotiations done.
So if you anticipate that you're going to have to
negotiate something, or if you just want to even if
you don't anticipate it, there's going to be a problem.

(19:01):
But you want to make sure that you leave enough
room that if there is a problem, you can properly
handle it. You're going to need some time to send
a counteroffer to the seller. You might ask for repairs,
you might ask for money in lieu of repairs. However
you choose to handle it. If you counter offer the seller,

(19:24):
and especially if you're asking for repairs, or maybe even
if you're asking for money in lieu of repairs, the
seller is going to want to get estimates right, because
the seller is not going to say, okay, I agree
to fix this plumbing issue or this HVAC issue without
knowing how that affects their bottom line, how much it's
going to cost them. And remember, your negotiation has to

(19:47):
be done by the time that due diligence expires. If
it's not, then essentially you're greined to buy the house.
So you have to leave an enough time for the seller,
to give yourself enough time to present the counter offer
to the seller, and then give the seller enough time

(20:09):
to figure out what the hell is going on here,
how much is this going to cost me, and to
get those estimates and then negotiate it in all within
that due diligence period. So you want to put some
extra time on the end. Usually I do to make
sure that you have enough time to do everything that
you need to do and to protect yourself during that

(20:30):
due diligence period. And a lot of people don't understand that.
Like I said, I even have realtors real estate agents
say well, why is the due diligence period so long?
And I'm like, well, I don't anticipate taking that long,
and certainly, if there's nothing wrong, we can wrap this
up and we can do an addendum to the contract

(20:50):
stating that you know, the due diligence period is removed.
But I want to give myself enough time for us
to negotiate and for you or client to be able
to explore what their options are and how much it's
going to cost them and make up their mind. So
just be aware of those dates. A lot of people
just kind of put arbitrary dates. I mean, you really

(21:12):
have to think it out and say, all right, it's
probably going to take me. I'm not going to be
able to book an inspector for that's going to take
a few days, and then the inspector is going to
take another day or two to get the report back
to me, and then I may have to go get
some estimates and then I'm going to have to counteroffer
to the seller. The seller may have to go get estimates,

(21:33):
and all of that has to happen within that due
diligence period. So just make sure that you plan accordingly.
And I should explain you heard me say at the
beginning of that that I thought that this process that
there was a flaw, And by that I mean because
you want to give yourself that long of a period
and you're getting pushedback from the seller, especially the seller's agent.

(21:57):
Why is this due diligence period so long? And in
a competitive market you have other people that are putting
these offers in. The shorter the due diligence period, the
more attractive the offer. And that goes for any kind
of contingency in the contract. The less contingencies the shorter

(22:20):
periods of time, the more appealing the contract is. So
if you do what I just said and think it
all out and protect yourself properly, and if you think
about it, you're also protecting the seller, whether they realize
that or not, it could put you at a disadvantage
in a competitive market because just as an example, say

(22:43):
everything else is the same, but your due diligence period
is twice as long as another competing offer. Well, they
may choose to go with that other competing offer because
they've requested a shorter due diligence period, even though it
may benefit fit them when they really think about it,

(23:03):
to have a longer one that you proposed. They may
be well more well protected with that longer period than
with the shorter one. But a lot of people don't
realize that. So call it what you will. That's what
I mean by you know, it's kind of flawed, but
nothing's perfect in this world. And that's the way that
the procedure currently works with inspections and due diligence. So

(23:26):
just make sure you leave yourself enough time in that
due diligence period and to get everything done that you want. Now,
I should add a way, and I already mentioned this earlier,
to overcome a seller's hesitance in accepting that longer due
diligence period. That's where your termination fee comes in. Make

(23:47):
sure your termination fee if you have a long due
diligence period is chunky so they can say, well, you
know what, it wasn't a waste of time. Because even
if they change their mind and walk after a month,
I get to pocket five grand, ten grand, whatever it
might be, whatever you decide, you know, would be a

(24:08):
good incentive for them to accept that period and your contract.
I've done contracts where we proposed the sixty thousand dollars
termination fee because we needed a long due diligence period
to make sure that the buyer could do everything that
they wanted to do with the property, and we wanted

(24:30):
to make sure that the offer was very attractive, and
we did not want that long due diligence period to
put the contract at a disadvantage, so we offered a
huge termination fee under due diligence. Now, I'm not telling
you to do that. I mean, you have to consider
each case individually, but I'm just telling you some ways

(24:50):
to make it work in your favor and to get
around you know, what I just said was kind of
a flaw to overcome this hesitance, and don't get freaked out.
I mean, you know, sixty thousand dollars is a lot
of money, and I would say that is not typical
in the sales of residential real estate where you're going

(25:13):
to have a sixty thousand dollars termination fee. But it
may be or you may be requesting a very short
due diligence period, so you may try to get away
with offering zero for termination fee. Or you could have
an expensive home that has a lot of contingencies in
the contract and an extra long due diligence period, and
then you might want to offer sixty thousand dollars or

(25:35):
whatever the number is for due diligence termination. Like I said,
each case it's a case by case basis, so you
have to look at how long of a period you want,
what other kind of contingencies are in the contract. It's
a nuanced thing, so you have to think the whole
thing through and hopefully have somebody that's good at negotiation

(25:56):
on your side and good at thinking all of these
things through in order for you to have the best
shot at your goal, which is to have the seller
accept your contract. Now, I could go on forever, as
you can tell talking about this because there's a lot
of things to consider, But in conclusion and in consideration

(26:18):
of what I just said, you know, the main goal
is to get your seller to accept the contract. So
if you are in a competitive situation when you're placing
your offer, you may want to forego due diligence altogether. Now,
the contract doesn't give you a way to do that.
It just simply says what is your due diligence period.

(26:40):
So the way around that would be to do a
very very very short due diligence period. So in other words,
I've done them more by the time we've even ratified
the contract. Essentially time was up on the due diligence period,
so there's no time for anybody to act under dodue diligence.

(27:01):
So say it expires five minutes after it's ratified, you know,
you just pick the next day or even later that
day if you think they're going to ratify it right away.
So in effect, you're going to your due diligence period
is going to expire by the time you can even
have the chance to act on it. So that's how
you would forego your due diligence. But remember you only

(27:23):
want to do that in a very competitive situation where
that's the only way you're going to be able to
get the deal done. Well, I'm just about out of time.
I'm Michael Blaze. Thanks for listening to your Home three
sixty the show where we talk about everything that has
to do with your home. You can catch the podcast
on your iHeartRadio app, or go to ninety four to
three WSC dot com and look under podcasts for your home.

(27:44):
Three sixty Be safe and enjoy the rest of your weekend.