Pulitzer Prize winning financial writer & real estate expert offers advice on home ownership dilemmas. Weekly.
For some of the best survival tips in today’s market, turn to one of the nation’s most honored real estate reporters, David W. Myers.
David W. Myers
In the changing world of real estate, it is natural to wonder if now is the time to buy or sell a home, or whom to ask about mortgages. Each week, celebrated real estate expert David W. Myers answers such questions in his column, About Real Estate, which is distributed nationwide by King Features Syndicate.
The column provides readers with the tips that can help them make the best deals in the complex world of real estate. With an easygoing, reader-friendly style, Myers covers the real estate market, explaining not only the essentials of buying and selling, but legal issues, property taxes, home improvement, insurance and much, much more.
Myers, a 20-year veteran of the newspaper and magazine business, is one of the nation’s most honored real estate and personal finance reporters. In 1994, he left his post as chief banking and real estate writer for the Los Angeles Times to write “About Real Estate.”
He was a member of the Times team that won a Pulitzer Prize for its coverage of the 1992 Los Angeles riots and another Pulitzer for its reportage of the 1994 Northridge earthquake.
Before joining the Times in 1986, Myers was the real estate editor at Investor’s Business Daily and a staff reporter at The Wall Street Journal.
He has won an unprecedented 13 awards from the National Association of Real Estate Editors, including the coveted title of Best Consumer Writer five times, and Best Investigative Reporter twice. He also has won the National Association of Realtors/University of Maryland real estate writing competition three times.
He graduated cum laude with a bachelor’s degree in journalism from California State University at Northridge, where he minored in speech communication and psychology. He is currently working on a master’s degree in mass communication.
Myers lives in California.
Smart buyers always make their purchase offers contingent on obtaining a satisfactory report from a professional home inspector, but it doesn’t force a seller to pay for unexpected repairs.
DEAR MR. MYERS: I have signed a purchase contract for a home, and I made my offer contingent on getting a satisfactory report from a home inspector. The inspection report states that the home has major plumbing problems, which will cost about $6,400 to repair. Is the seller required to pay for the work because my offer was contingent on an inspection?
ANSWER: No, the seller isn’t obligated to make the repairs in order to close the sale.
You were wise to make the purchase of the home contingent on first obtaining a satisfactory report from a professional inspector. A typical inspection contingency allows buyers to cancel a sale and get their deposit back if the report uncovers previously undetected problems, such as a badly leaking roof or a plumbing system that needs a complete overhaul.
An inspection contingency does not, however, require a seller to fix any problems that the inspector might find. When problems are discovered, buyers have four basic options: Renegotiate with the seller to have the needed repairs made before the sale closes; ask for a lower sales price so the buyer will have the money to make the repairs after moving in; purchase the property “as is”; or cancel the sale and have their deposit returned.
A bad plumbing system can cost thousands of dollars to fix, and thousands more to totally replace. If you still want the house, contact two or three professional plumbing companies and ask for written estimates for the cost of the work that needs to be done. You can then show these bids to the seller in an effort to make him pay for some or all of the work, or at least to lower the sales price so you can afford to take care of the problem after you move in.
If the seller won’t renegotiate, you’ll have to decide whether to accept the house in its current condition and pay for the repairs yourself, or to instead exercise your contingency to cancel the sale and demand that your deposit be returned.
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DEAR MR. MYERS: I don’t have a lengthy credit history because I pay for most things with cash. However, I have several large bank certificates of deposit, as well as a stock-market portfolio worth more than $200,000 and about $150,000 in equity in my home. How can I get this information listed on my credit record to raise my overall credit score and qualify for the lowest rate possible when I go to refinance my mortgage?
ANSWER: For better or worse, financial assets are almost never listed on a credit report. The primary purpose of a report is to show how much you currently owe to creditors (not how much you have saved), and how well you have handled your debt obligations in the past.
Though you can’t make your assets part of your permanent report, you’ll nonetheless get “credit” for them when you apply for a mortgage. That’s because loan applications always ask for information about the prospective borrower’s earnings, savings, brokerage accounts and other assets. Your chance of getting a loan at the best possible rate should improve dramatically after you show the lender proof of your rather sizable savings.
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DEAR MR. MYERS: My wife and I are thinking about creating the type of inexpensive living trust you have discussed so the estate we leave to our kids won’t be subject to long and expensive probate proceedings. But what would happen if I die before my wife does, or she dies before I do? Would the heirs immediately be entitled to our house and everything else that’s in the trust, even though one of us would still be alive?
ANSWER: No. The surviving spouse would continue owning the home and control all of the trust’s other assets, provided that both of you named each other as “co-trustees” when the trust was formed.
Married or not, everyone who creates a trust must name a trustee – usually the person or financial institution that you want to manage and control the trust’s property while you are alive. Assuming that you and your spouse want to live in your home and manage the trust as long as either of you are breathing and mentally capable, the two of you could simply name yourselves as co-trustees and thus help to ensure that the surviving spouse will retain power over the house and other assets until he or she dies too.
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Our booklet, “Straight Talk about Living Trusts,” explains how even low- and middle-income homeowners can now reap the same benefits that creating an inexpensive trust once provided only to the wealthiest families. For a copy, send $4 and a self-addressed, stamped envelope to D. Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405. Net proceeds will be sent to the American Red Cross.
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