Today I showed a newer home in San Jose’s Cambrian Park area to some great first time home buyer clients of mine.  The house has a nice location and fine floor plan.  Some elements of the home were really appealing. But unfortunately, the sellers hadn’t made their home “show ready“.  They cut corners.

As we walked through the property, my clients and I noted places where there was neglect.  The items were generally not big, but unfortunately there were many of them.  Had the owners brought in a painter to do minor cosmetic changes (patch and paint), the home could have looked “like new”.  Instead, it was as if the home were full of red flags. Talk about making a bad impression!

My buyers asked me what I thought, if what we saw would scare me off.  No, I told them, they all seemed relatively minor to me,  but I did understand their concern.  One of them explained that “if we see things like this, we believe that the sellers have not taken good care of their home; what else is wrong that we cannot yet see?”

Confident buyers write offers and tend to write good offers.  Nervous buyers who are concerned that there are hidden defects (and therefore hidden costs) either don’t write contracts at all or they write lower offers.
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There are a number of things which are related to the purchase and sale of real estate which require the professional guidance of those other than your Realtor, namely a legal or tax professional.  This sometimes surprises consumers.  Once I was discussing one of these areas with a prospective client and she felt quite frustrated and exclaimed, “you know the answer, you just won’t tell me!”  That was many years ago, but I’ve never forgotten it.  Many Silicon Valley home buyers and home sellers assume that they’ll never need to talk to a tax or legal professional, and if advised to do so, may balk.

So let’s talk about it.

In other states, such as New York, attorneys are very involved in real estate transactions. Here in California, though, that’s not the case most of the time.  We call on CPAs and lawyers when there’s a problem or a question which is beyond the real estate licensee’s scope.  I’ll provide a few examples.

Holding Title: Probably the most frequent question I get that I’m not allowed (or qualified) to answer is about how people should hold title when buying a home.  The purchase agreements we use (both CAR and PRDS) lay it out best and puts it in bold so that consumers don’t miss it:

“THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL.” (newest revision of the CAR contract, April 2010)

Most title companies have a nifty little chart that summarizes the pros and cons of the various ways in which people can hold title.  But neither the escrow officer nor the real estate agent can tell you what’s best for you.  We know what’s most common, but that doesn’t mean it is best for you and your particular set of circumstances.  So talk to a CPA or talk to a lawyer (or both) if you do your research and are at all unsure of what to choose! (Old Republic Title has a summary of the most common ways to hold title in a downloadable pdf file, which you can access via this link.)
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