Home Ownership Tips: Trouble with Mold

Mold spores aren’t easy to detect. While some molds are visible and even odorous, mold can also grow between walls, under floors, in ceilings, in the basement and up in the attic. It flourishes in water-soaked materials (e.g., paneling, wallboard, carpet, paint, ceiling tiles), and will survive in most any damp location.

moldThere are countless disputes over mold between sellers and buyers. Both parties should protect themselves up-front. Put a specific mold disclaimer into the real estate sales contract and encourage in the sales contract that the buyer hire and rely upon the buyer’s own independent mold inspection and testing of the home by a certified mold inspector. Conversely, a buyer should ask the seller about mold and hire an inspector to seek it out.

While it’s not the inspector’s job to look for mold, most home inspectors will mention obvious signs of water damage and the possible presence of mold. Because the inspector will poke around in spaces you might not, he or she may see things you wouldn’t. Don’t be shy. Ask whether the inspector saw signs of mold or potential mold dangers.

In some states, real estate agents have a duty to disclose problems they know exist. Appraisers should also notify you of any obvious sign of a mold problem if the value of the property can be affected.

If your home or property has a water, mold, other environmental problem—or if there’s a reasonable suspicion of a problem—you should remedy the water problem, mold infestation or environmental threat prior to even offering the property for sale.

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Earnest Money Deposit

Buyers today understand they need a sizeable down payment and a strong credit score to secure a conforming home loan. They must hold liquid funds for another financial obligation—an earnest money deposit—to be paid when they make an offer on a home.homesmoney

Earnest money is handed over to the seller’s agent or the title company when a purchase contract is signed. This demonstrates that the buyer is serious about the transaction and is backing it up with cash.

Without this, buyers could simply make offers on many homes, essentially taking them off the market until they choose a favorite. Sellers rarely accept offers without it.

There is no set amount for an earnest money deposit, so it’s negotiable. If there are multiple bidders, the seller may ask for up to 3% of the asking price as earnest money. Assuming the transaction results in an accepted offer, earnest money goes toward the buyer’s down payment and closing costs. If the transaction falls through, the buyer may have to forfeit a nominal cancellation fee or more.

Be sure the purchase agreement outlines the refund process. Remember, a buyer can lose earnest money through default, which happens when he or she does not perform according to the terms stipulated in a purchase and sale agreement.

Work carefully with your agent to ensure a clear understanding of all terms and obligations.

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