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NARI / Monarch Construction, Norristown, Penn.

Ask Our Broker

QandA WITH PETER G. MILLER

We’re Buying in Another

State. How Do We Make Sure
We Get a Square Deal?
Q: We’re Minnesotans looking to
buy a waterfront lot in southern
Missouri. This is a property for
sale by owner in a subdivision
where most lots are developed.
The seller is having a closing com-
pany write up a purchase agree-
ment. Who should we have review
the purchase agreement? Would it be a person in
Minnesota or Missouri? Does it matter? Is there
any standard language for protecting the buyer?
What is the best way to determine fair price for
the lot?

A: Just stop.The odds of disaster are overwhelming.

First, fair market value depends on local supply and
An award-winning basement makeover by Monarch Construction, Norristown, Penn., includes a home theatre and home entertainment center with a custom bar, demand.You need the assistance of a local real estate
pool table, recessed lighting and oversize sofas. Recessed lighting and a coffered ceiling helps create a light, airy feel. broker or appraiser to get a sense of pricing. Second,
there are contract forms that favor buyers and forms

Explore the Benefits of Basement, Attic that favor sellers.As a buyer you do not want to rely on
the seller to provide a form that may require thousands
of dollars in excess costs. For example, will you pay the
transfer taxes? Or will the seller? Or will the cost be
BY BARBARA BALLINGER in your house? Basements and attics are good plumbing, Grant advises. split 50/50? Who pays for a structural inspection? What
Content That Works places to stash holiday ornaments, family In the city of Chicago, a basement makes type of deed will you get?
mementoes and out-of-season clothing, so if sense because of the scarcity and high cost
You want professional help in the jurisdiction where

W
hen house hunting, it’s easy to be
attracted to a listing with a new
kitchen, large family room and gor-
geous deck versus one that lacks any or all of
those amenities.
But what about a house without a base-
ment or attic? Should the absence of either
feature be a deal breaker, particularly in cer-
tain areas of the country?
There’s no definitive “yes” or “no” answer,
say architects and real-estate experts inter-
viewed, but do consider the following fac-
tors:
Do you have adequate storage elsewhere
your planned purchase doesn’t have one be
sure the rest of the house offers options.
Three- and four-car garages can be a good
storage place, says Chicago architect John
Eifler.
Could you convert your basement or attic
into livable square footage? Remodeling
these areas can be more cost effective than
adding on an addition, says Chicago architect
Allan J. Grant.“If you dig down 3 1/2’ to 4’ for
crawl space in a new home, it’s not that
much more costly to dig deeper for a base-
ment, he says. If you initially can’t afford to
finish the basement, at least rough in the
of land and because many older city houses
were built with basements partly or fully the property is located.
above ground.These can become cheerful
living spaces, says saleswoman Jennifer D. Q: What does the number “4506” mean in con-
Ames of Coldwell Banker Residential nection with real estate and mortgage financing?
Brokerage.The lower levels of many older
Chicago suburban basements, however, were
built partly or totally below ground, so they
A: Most probably you’re thinking of IRS form 4506,
lack as much light unless remodeled,Ames “Request for Copy of Tax Return.”This form allows a
says. third party such as a lender to check past tax returns,
Attics in Chicago city homes usually don’t something that is appropriate when a loan application
offer the same potential living space that city is being considered.
Be aware that some lenders ask that you sign the
See BENEFITS, Page 2 form but not date it. Since the IRS will only fulfill 4506
requests within 60 days of the date signed by the tax-

Case Closed: Attorney Helps in Real Estate Deal
CHARLES SCUTT
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Imagine owning a large compa-
ny and trying to file the business
tax return yourself. Or taking
apart the engine in a foreign car
to diagnose a puzzling problem
all by your lonesome.That would
be similar to what it’s like to pur-
chase or sell a home without the
expertise of a real estate attor-
ney.
“Since buying or selling a home
is such a complex legal transac-
tion, it’s in your best interest to
have someone with knowledge
of the law working on your
behalf,” says Rita Polit, real estate
agent and consultant with The
Polit Group, part of Keller
Williams Partners Realty, Ft.
Lauderdale, Fla.“It’s not a good
idea to act as your own lawyer or
use the same lawyer as the other
person in the transaction.”
Consider that the lawyer you
hire “is independent and has no
motives other than your protec-
tion,” says Richard M. Zelman,
attorney and partner with the
firm of Sacher, Zelman, Miami,
Fla.“Other participants in the
payer, an unsigned form may be used at some distant –
and perhaps inappropriate – point in the future.Also,
be certain that lines 6 and 7 are completed; otherwise
process, whether real estate bro- any year or form can be requested.
kers, mortgage brokers, bankers
or otherwise, generally have per-
sonal benefit to encourage the Q: We have a back-up offer on a property. If a
completion of the transaction.” seller accepts an offer from another buyer when
does our back-up expire?
THE PROS OF A PROFESSIONAL
Hiring a real estate lawyer for A: There are a lot of possibilities here, so let’s look at
the sale or purchase of a home
See ATTORNEY, Page 2 See ASK OUR BROKER, Page 2

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 BENEFITS
CONTINUED FROM PAGE 1
basements do unless they have
peaked roofs,Ames says.
Do you live in an area where a
basement or attic is a plus
because of weather conditions?
In states prone to tornadoes, a
basement can be a good place to
seek safety. In San Francisco,
those seeking shelter from an
earthquake are more likely to
run for protection under a door-
way than to a basement, says
David Hehman, president of
escapehomes.com, a resource for
second homes.
In cold-climate states, a base-
ment often is popular since foun-
dation footings need to be dug
below the frost line, so they
won’t heave and crack, Eifler
says.Again, as long as excavation
takes place, it’s not much more
costly to dig out a basement,
Grant says.
In warmer climates, home-
owners can make do with a slab
and no basement, says Michael
W. Litchfield, author of
Renovation (The Taunton Press,
2005). Houses in areas where the
water table is high, like New
Orleans, also weren’t built with
basements, says Fernando Pages
Ruiz, a Lincoln, Neb.-based archi-
tect and author.
Connecticut architect and
author Duo Dickinson cites a dif-
ferent basement benefit: extra
insulation. But he adds a caveat:
ATTORNEY
CONTINUED FROM PAGE 1
can provide several advantages,
according to William H. Brooks,
CEO of Hyatt Legal Plans,
Cleveland, Ohio.An attorney can
review the purchase agreement
to ensure that the terms and con-
tingencies are in your favor and
represent your best interests at
the closing in the event of any
last-minute disagreements.
Furthermore, a lawyer can see
that the deed is completed and
all documents are filed correctly
and in a timely manner.
Additionally, if you’re the
buyer, a real estate lawyer can
ensure the agreement lists all the
items you expect to be part of
the transactions (for example,
appliances and window treat-
ments).Your lawyer also can pro-
tect your rights as a buyer to
obtain a refund for the deposit in
the event the sale doesn’t take
place and review the title search
to uncover any deed restrictions,
easements and anything not cov-
ered in the title insurance.
If you’re the buyer,“on the day
your deal closes, your lawyer will
exchange documents with the
seller’s lawyer, who will hand
over the deed, a declaration of
possession and relevant affi-
davits,” says Polit.“If both lawyers
agree that all documents are in
order, your lawyer will give the
Bedrock in certain areas of his
state, and elsewhere, can be
expensive to excavate. Good
insulation can be accomplished
in less costly ways such as high-
performance, fiberglass or rigid
insulation in the floor cavity, or
for a greater price tag, high per-
formance injected foam prod-
ucts, says Dickinson.
Attic space can also offer the
benefit of insulation, especially
in warm climates where it
absorbs and vents the effects of
radiant heat, Dickinson says.You
can insulate and cool a house
without an attic by using similar
principles to insulating the floor
above a basement, he says.Also
provide maximum ventilation
underneath roof sheathing.
Do most homes in your area
have a basement or attic? Even if
you don’t want to copy neigh-
bors, consider what’s popular in
your area for when you sell.Turn-
of-the-century homes in
Vicksburg, Miss., were built with
basements, but newer homes,
especially spec houses, usually
are built on a slab, says Pam
Beard, with BrokerSouth GMAC
in Vicksburg.“It’s less expensive.
Even most custom homes aren’t
built with a basement but on a
conventional foundation and
maybe with crawl space,” she
says.Attics are more prevalent,
though not always full height,
she says.
If a basement or attic is
included in your potential pur-
chase, is it well constructed? A
seller’s lawyer a certified check
for the balance due on closing,
and he will receive the keys to
your property.Your lawyer will
then register the deed, and the
property is legally yours to take
possession.”
Real estate attorneys are espe-
cially important in situations
where the title may be in ques-
tion, says Brooks,“such as bank-
ruptcy, divorce or when the
property is part of an estate.An
attorney is essential to ensure
the property is clear of liens.And
in cases of new construction, an
attorney is necessary to review
the title, make sure all the work
is paid for and that all liens are
removed.”
While buyers and sellers are
not required by any state to have
legal representation,“some states
require attorneys during the clos-
ing process to file legal docu-
ments, handle funds or be the
escrow agents,” says Brooks.“In
such cases, the lender’s attorney
often handles these matters.
However, the lender’s attorney
represents the lender’s interests.
Therefore, consumers may
strongly want to consider having
their own attorney to represent
their interests.”
PAYING THE PIPER
Zelman says the only disadvan-
tages to using a real estate attor-
ney are the costs involved and
the possibility the lawyer may be
basement should be water-
proofed and possibly include a
sump pump, back-up battery
generator and interior and exteri-
or drain tiles, says Grant. Gutters
and a good roof are critical to
direct water off and away from
the house, Litchfield says. If
there’s no basement, Grant likes
the idea of a crawl space that
can prevent cold from transfer-
ring to the home’s floor.
Besides good insulation, a
well-constructed attic will
include a drain pan for heating
and air conditioning equipment,
Grant says.Ventilation also is key.
“Attics that lack adequate ventila-
tion are excessively hot in the
summer,” Litchfield explains.“In
winter in cold climates, unventi-
lated attics allow rising water
vapor from the living area to col-
lect as frost on the underside of
roof sheathing.The frost eventu-
ally melts.” It’s desirable for attics
to be accessible via a stair, Grant
says.
What do your nose and skin
suggest? If things don’t smell
right in a basement, there may
be too much moisture and not
enough ventilation, Dickinson
says. If it’s exceptionally hot on
an average winter day in an attic
or as cold as the outside air,
there’s probably not enough
insulation, he says. If it’s more
than 15 degrees hotter in an attic
on a hot day, there’s also inade-
quate ventilation.
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too conservative and not willing
to advise you to take what you
may believe is an appropriate
and acceptable risk, such as stip-
ulating or agreeing to a reason-
able contingency.
A real estate attorney’s fees
may vary depending on your
location and the value of the
property.Your attorney may
charge a flat fee or an hourly rate
for real estate closings.Typically,
you can expect to pay between
$500 and $2,000, says Brooks.
Buyers should anticipate paying
between one half to one percent
of the purchase price, Zelman
says.
“Many home buyers find the
cost of a lawyer to be prohibitive
when they are husbanding their
cash for the downpayment, clos-
ing costs and new furnishing,”
says Zelman.“However, for a
buyer to spend hundreds of thou-
sands of dollars without an inde-
pendent, unbiased, sophisticated
advisor is extremely risky and fre-
quently the source of regret after
the closing,” he says.
FINDING THE RIGHT EXPERT
When shopping for a real
estate lawyer,“look for an experi-
enced attorney with a license to
practice law in the state where
the transaction is taking place.
Experience depends not only on
the number of years in practice,
but also the extent of the firm’s
real estate practice,” Brooks says.
Ask Our Broker
CONTINUED FROM PAGE 1
just a few. In general, a back-up offer is written when a
seller has already accepted a purchase offer.The idea is
that if the first purchase offer falls through then the
buyer will consider the back-up offer.
However, you have to see exactly what the back-up
agreement says. For example, is the seller required to
accept your back-up offer or can someone with a high-
er bid get in front of you? Does the seller have to
accept your back-up offer at all?
Many back-up offers contain a “kick-out” clause. In
this situation a buyer with a back-up contract can say
to a seller at any point, if we cannot close our offer
within 48 hours (or whatever amount of time is appro-
priate) then this offer is withdrawn and you must
return our deposit.
For specifics regarding your back-up offer, be sure to
have it read by a local real estate attorney.
Q: What is the difference between a town-
house, condominium and patio home? Which is
the best buy?
A: A townhouse is one unit within a row of homes.A
patio home is a single-story home, often with a base-
ment that can be finished to provide additional space.A
condominium is not a type of home; rather it is a type
of ownership.With a condominium you own your unit,
finance it as you prefer, have an ownership interest in
common areas and a vote in the affairs of the condo
association.A condo can be an apartment-style flat, a
townhouse, a detached home or other type of property
with both individual units and common areas.
As to which is the best buy, there is no universal
answer. Different types of property are more or less
popular in different communities. No less important,
the fact that one form of property may be fashionable
does not mean that all units are equally in demand.
By its nature, all real estate is unique. Even properties
that seem the same, such as a row of townhouses, are
actually different in terms of finish, décor, financing,
view, drainage, construction and other factors. In fact, if
you look at similar units for sale in a townhouse com-
munity or a condo you will instantly see that even
properties with the same floor plan are not equally
attractive.This is why prices differ and some homes sell
more quickly than others.
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Do you have a question or a quandary about buying, sell-
ing or renting? Peter G. Miller, author of The Common-Sense
Mortgage, specializes in providing real solutions to real estate
dilemmas. E-mail your questions to
peter@contentthatworks.com.
Zelman recommends attor-
neys with at least five years expe-
rience dealing with real estate
transactions.Your attorney also
should be familiar with mortgage
loan documents and title insur-
ance.
A qualified real estate attorney
can be found by calling your
state bar association for a referral
or via word of mouth from trust-
ed friends, relatives or co-work-
ers.
Once you’ve narrowed down
your search, contact the office,
explain your situation and ask if
the attorney you’re interested in
charges for an initial consulta-
tion,” says Brooks.“Use the initial
consultation as an opportunity to
get to know the attorney and
decide if he or she has adequate
experience with your type of sit-
uation,” he says.
Before any work is begun, ask
the lawyer about his or her fees
and request a signed, written fee
agreement.
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