Many mortgage lenders wont finance vacant land
Q. Our bank doesn't want to give us a mortgage on a lot we want to buy. We're going to build a house there. What do you suggest?
A. Yes, banks are reluctant to lend for vacant land. And do-it-yourselfers, particularly those on a shoestring, can find it difficult to obtain financing. Lenders fear they'll end up with unfinished problem construction as security for their loan.
It's easiest if you are working with a large builder, who may finance the construction or help you arrange a building loan that later converts to a mortgage. Otherwise you'll have to buy with all cash or persuade the seller to hold a mortgage.
Building loans are most readily obtained after you have taken all the necessary steps to have your plans and lot approved by local authorities. And the good news is once the land is paid for, you could count it toward a down payment to qualify for a permanent loan.
Q. We are selling our home and moving out of town, and it looks like that will take place next week. I mentioned to our agent that an electrician is coming to remove the dining room chandelier, which we will be keeping for our new home. He said we don't have any right to do that. I've already bought a replacement that will be installed at the same time. Do you see any problem with that?
A. You have at least a potential problem. Prudent buyers will ask for a last-minute walk-through just before the closing. If they want that specific fixture, you may have some trouble. They offered to buy the real estate, which includes anything permanently attached to it, and you signed an acceptance. If you intended to take the chandelier, it would have been a good idea to say so in your listing contract. Even better, you could have removed it and installed a substitute before putting your home on the market. Buyers won't want what they can't see.
Lighting fixtures, fireplace equipment, drapes, wood stoves, swing sets, tool sheds - all of these gray-area items can cause problems. An item of personal property (which you have the right to take) legally becomes what is known as a fixture, part of the real estate, when it's permanently attached. There's quite a bit of room for argument with such items, though. It's best to head off trouble by specifying them in the sales contract.
Of course, your buyers may not care. Depending on how important this is to you, you may want to discuss it with your lawyer before doing anything.
Q. We have two houses to sell. Both are in highly desirable areas. Commissions in our area are 6 percent. The agent we are working with has told me she will do it for 2.5 percent on her side. Does that mean there will probably be a buyer's agent as well? Will we be paying a total of 5.5 percent? Should we ask for a bigger discount? She has been very helpful working with us on the remodel of one of the houses.
A. Your brokerage evidently offers to share the selling of your home with other firms. Yes, buyer brokers will probably be involved. There may be other offices that work on your listing as representatives of your listing agency and you, the seller.
There's no need to concern yourself with it - that's all to your benefit. The larger the pool of buyers who hear about your property, the more likely you are to receive top price.
Unless she operates alone, it's likely your agent has a managing broker who has authorized that discount on the firm's usual listing fee.
There's no harm in asking about discounts, but I doubt you'll negotiate anything lower. Anything less than the selling brokerage customary share - 3 percent - might discourage other agents from showing your place to potential buyers. And, yes, it does sound as if you'll end up paying 5.5 percent, whether your sale is made in-house or with a cooperating firm.
That 6 percent in your area is not set by law, by the way. Commissions are always established by agreement between agent and seller. While fees in any given location do tend to settle around the same figure, that's simply the operation of supply and demand in a free market. And as you've already seen, the rate is not set in stone.
• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.
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