Why you should pay for a lot line survey.

What is a lot line survey? A lot line survey is a service that exactly measures the location of the lot-lines for a piece of land. The lot lines are the boundaries where you land ends and your neighbor’s begins. Knowing where your lot ends and theirs begins is just a part of being a good neighbor.

In the city or suburbs a surveyor can cost somewhere between $400 and $1,000; but like everything in life the cost is negotiable, so shop around. For that price they will stake out the lot lines and corners of your property with wood stakes and metal survey pins. Always ask for the surveyor to place the survey pins in each corner and then add cement around the top of each pin. You can buy the cement at any hardware store and mix it on a small piece of plywood.

You might wonder, why spend the money?

Because it can save you a lot of money knowing where your ownership begins and ends. 

What can possibly go wrong?

I will give you three examples of how not having a survey can get your embroiled with the legal system and lawyers. And remember where there are lawyers there are legal fees and an uncertain outcome. 

Example 1: I bought a cabin in Northern Minnesota. My neighbors and I all got along wonderfully. We fished and barbecued fish and steaks together. We still today have a great relationship, but when I went to sell my cabin the buyers conditioned the sale on a lot line survey. The survey showed my neighbor’s garage was over the lot line. The buyers wanted it removed and the neighbor balked, but I had another idea, which the offending neighbor wasn't too happy about, but accepted to avoid having to tear down a four stall garage and boat house. We moved the lot line at the shoreline by ten feet and then wiggled the lot line around his offending garage. That way my buyer got ten feet more of shoreline and the neighbor got to keep his garage. 

RESULT: The offending garage owner had to pay for the legal work to make it all legal and he had to give up some land.

Example 2: My home is in a nice neighborhood. My second wife wanted to build a swimming pool. I ordered a survey and discovered the neighbor to our south had his swimming pool fence, landscaping and drainage slurry over the lot line and into my yard. The litigation has been ongoing for over ten years. There is no end in sight. The offending owner sold his home to a new owner and they understand less than the previous owners did. 

RESULT: No resolution.

Example 3: This story is an example of even with a survey, mistakes can be made, but at least you have someone to sue when it does. My son who attends Creighton School of Law sent me this story out of Florida. These folks in Missouri wanted to build their dream home in Florida. They hired a builder who built the 5,300 square foot beach house, but on the wrong lot. Ouch! You surveyors best get out your checkbooks. 

RESULT: No resolution at the time the story was reported in 2014.

My advice before buying or building, get the survey and then read it.

Who is Steve Lombardi? Steve Lombardi is a lawyer and a real estate broker in Iowa. He represents a limited number of buyers for the sheer pleasure of helping people find just the right home for a good price. His business is not about quantity, but quality. His clients stay involved in the search using the Internet to scout out just the right home and at a fair price. He is a lawyer and a real estate broker and so you get the full package for half what it would otherwise cost you. If you would like his help in finding the right home and want to do some of your own research, then contact him. If he isn't helping someone already then you are in luck. 

I have spoken from time to time about the buyers' due diligence, but did you know the sellers should also engage in due diligence? Due diligence is a period of time where you have an obligation to act in some way. When due diligence is applied to residential real estate (a home) it means a period of time where either the buyers or the sellers should be doing something to making decisions about the property that will be for sale.

According to Investopedia "due diligence” is defined as follows:

1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale. 2. Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.

What should you, the sellers be doing during your due diligence time period? The good news for sellers is they control the time frame surrounding the sellers’ due diligence time period. Theoretically you can set the period whenever you wish, but from a practical standpoint the seasons set the parameters along with your level of desire to sell. As an example more listings take place in the spring than in the winter, but more contractors are probably looking for work in late fall to early winter than will be available in the spring. Of course replacing the front door in winter has its own hidden cost, a higher energy bill for one.

Think about the due diligence period as the time for you to act proactively in getting your home ready for staging and then for-sale.

How should you prepare for the sellers' due diligence? Well, for starters you need to decide when you would like to sell your home. Depending on how much work will be involved in getting the home ready to list you may need a month or as many as twelve months. It all depends on the extent of work you believe needs to be performed to get the house ship-shape.

1. Decide on the listing date.
2. Sit down and divide the house into sections. (Main area, upper level, lower level, exterior, garage, landscaping, swimming pool area, patios, decks, driveways, etc.)
3. Have each section of the home evaluated for major renovations. (Discuss what you can afford to do and what you can't afford to do. Discuss with a real estate agent those renovations that will add the most bang for the buck.)
4. Have each section of the home evaluated for minor renovations. (These are probably things you can do like painting, wiping down, staining, replacing electrical plates, etc.)
5. Have the home evaluated for staging. (Keep in mind just because you like it doesn't mean buyers will find it appealing.)
6. Create a list of all things in the home that you will not want to move to a new home, because you are going to sell these items.
7. Take photographs of the household possessions you will sell and locate user manuals and purchase receipts. (Place all paperwork inside a clear expandable or large Tupperware container. This way everyone knows where to find the right documents when a buyer shows up for a look-see.)
8. List these items on CraigsList and/or get ready for a weekend garage sale.
9. Whatever you don’t sell then either donate it or toss it out.
10. I have heard it said everyone has at least $2,000 of things they don't use stored in their garages, basements and attics.

The last thing you should do is the most important. Ask your real estate agent for a copy of the sellers’ real estate disclosure statement. Read it and make sure your appliances and home systems work properly.

If done right selling a home takes work and some money. If sellers do not do their due diligence then buyers expect to pay less than top dollar. And so do your due diligence, ignoring it will not make it go away.

HOW TO CONTACT US

The Lombardi Law Firm

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Telephone: 515-222-1110

Fax: 515-222-0718

Write to Steve or Katrina

Email: sdlombardi@aol.com or katrina.schaefer8@gmail.com

What is due diligence and why is it important to the buyers?

French Fries get to do nothing, as buyers you don't.

Due diligence is an opportunity to act. Many buyers after their offer is accepted truly believe their job is done and now they have only to wait and move in. But that my friends could not be farther from the truth. Right after the offer is accepted your job as the buyers has just begun. And if your real estate agent isn’t pushing you to act, then you have made a huge mistake in who you selected as your agent. Remember an agent, like in baseball, is the professional who is supposed to represent your interests. With the privilege of representation comes a duty to ‘A-C-T’; meaning something besides waiting needs to happen.

I previously posted a blog about due diligence: Iowa Residential Real Estate: What is due diligence? So what should you be doing? Well, before we talk about what you should do, you need to understand why you even get a due diligence period.

As buyers you have probably been inside the house a total of maybe five times. During any one of those visits your ability to poke and prod has been extremely limited. Any inspection made was quite cursory, meaning you were only allowed to scratch the surface. This due diligence period is intended to allow you time and opportunity to hire professionals to make sure the building systems are working as you expect them to work. A good example is the furnace. If you are buying the home in June the furnace is not likely to be operating. If you buy in December it is doubtful the AC unit is running. So how would you know they work properly? Well, you hire an HVAC professional to do an inspection during the due diligence period.

I personally use a guy by the name of Dave Michael. Dave is a contractor we use to build out commercial space or when we buy a home he inspects the home systems to bring out attention to problems we might be unaware. Now granted these home inspections are not one hundred percent, meaning they will probably not uncover some problems, but whatever he finds is important to us as buyers.

Why should you carefully read the home inspector report?

What Dave’s report does is tell me if we need to act and how to act. The “Dave Report” can tell me if we need to get additional inspections, renegotiate the terms of the purchase agreement, require the sellers to make repairs, make further disclosures, change the price, hold money in escrow or terminate the purchase agreement. In other words this Dave Report can save me the headache of buying a lemon when I think I’m buying the Taj Mahal. Barbara and I do not hesitate to ask Dave questions about what is in his report. After all we paid for it.

The weeks following the acceptance of your offer to purchase, is not the time for the buyers to go to sleep. It is time to get busy evaluating what you may have just bought to see if it makes sense to move ahead to the close.  As potential buyers it is time to evaluate your assumptions about the property. Are they all accurate or were you as potential buyers mistaken about the property? Is this a good buy or is this a 'money pit'? Let's look at where to focus your attention.

I asked Dave Michael if he would give me permission to add his contact information along with why he believes a home inspection is worth the money. Here is what he said.

- Buying a home for most people is the most expensive investment they will ever make. While some people feel an inspection is another expensive check they have to write, I see it as an opportunity to have a professional find those things the seller might be hiding or don't know about in the first place. Everything a third party inspector can find, is one less thing that can cost a homeowner money or worse, them or their loved ones their life. Dave Michael, Michael Contracting Services, LLC

• Dave MichaelMichael Contracting Services, LLC.
• 5462 Pine Valley DrivePleasant Hill, Ia 50327
• 515-202-6520
• David@Michael-Contracting.com
• Michael-Contracting.com 

Here is how to think about the buyers' due diligence period:

• ·         To act
• ·         To investigate
• ·         To inspect
• ·         To ask questions
• ·         To read
• ·         To evaluate
• ·         To decide
• ·         To seek further disclosure from the sellers
• ·         To renegotiate the price and conditions
• ·         To buy more time to decide if this is the right deal for you
• ·         To reexamine your emotions and why you like this home
• ·         To repair
• ·         To rehabilitate
• ·         To reject
• ·         To walk away the “money pit”
• ·         To not make the biggest mistake of your lives
• ·         To reenter the market for a better home and at a better price

If you don’t understand why a due diligence period is important then you are probably not being properly represented. If your agent is pushing you to schedule inspections, then listen to what they are saying and why. After all they are your agent and before you possibly make the biggest mistake of your life, do all of the above. And in the end if you aren’t sure, terminate the purchase agreement and keep looking. After all, your objective should be to buy quality, not just any house quickly.

Who is Steve Lombardi? Steve Lombardi is a lawyer and a real estate broker in West Des Moines, Iowa. He represents a limited number of buyers for the pleasure of helping people find just the right home for a good price. His business is not about quantity, but quality. His clients stay involved in the search using the Internet to scout out just the right home and at a fair price. As a lawyer and a real estate broker and so you get the full package for half what it would otherwise cost you to hire two professionals with his expertise. If you would like his help in finding the right home and want to do some of your own research, then contact him. If he isn't helping someone already then you are in luck.