Couple in bed with the covers pulled up their eyeballs because they are scared of their haunted house

Are You Buying A Haunted House? Know the frightening facts.

by Joshua Blumen on Tuesday, October 9th, 2018

Adjusting to a new home can be tough. Especially at night, when unfamiliar creaks and noises can rattle your nerves.

Is that someone walking on the roof under the full moon? What are those footsteps coming towards me in the middle of the night?

In my case, these late-night terrors turned out to be turkeys and a toddler.

But what if it were something else? What if you believe the cause of your uneasiness can’t be explained by old plumbing and drafty windows? And how does this concern affect your legal rights and responsibilities when buying or selling your home?

When it comes to ghosts, ghouls, and goblins — or other unsettling facts about a property — Massachusetts real estate law says it’s the buyer who should beware. According to Mass. General Laws, Chapter 93, Section 114:

“The fact or suspicion that real property may be or is psychologically impacted shall not be deemed to be a material fact required to be disclosed in a real estate transaction.”

The law defines psychologically impacted property as real property that was the site of a “…felony, suicide or homicide” or “an alleged parapsychological or supernatural phenomenon.”

In other words, the Seller – or their agent — does not have the duty to disclose if the furniture tends to rearrange itself or why the dog won’t go near the basement.

Important: Just because the Seller doesn’t have to volunteer that information does not mean you don’t have the right to ask. And if you do ask, they cannot lie to you or misrepresent the truth.

Thanks to movies like Poltergeist and the Amityville Horror, and reality shows about paranormal investigators, questions about a home’s spiritual health are more common than ever. Besides, this is New England, where homes can date back hundreds of years and Salem isn’t the only place haunted by history.

Assuming that “haunted” isn’t a must-have on your home search checklist, how can you protect yourself from unwanted surprises?

  • Research the property address online and in public records for any news.
  • Be sure to ask the Seller or their agent any questions whose answers are important to you.

What if you don’t find out your house is haunted until after you close and move in? One popular approach is to perform a spiritual housecleaning.

A quick online search will reveal more options than you expect — from traditional religious ceremonies and services from mediums and feng shui practitioners to do-it-yourself instructions for removing negative energy and vibrations.

If that doesn’t seem to work, let me suggest a more practical solution. Move! Quickly. Just don’t lie when your Buyers ask if your home is haunted.

One more thing…

After conducting extensive research on the subject, I can advise with reasonably certainty about the best way to ensure that buying a home this fall doesn’t keep you up all night: Halloween candy for your closing attorney. Especially chocolate. And marshmallowy stuff. (Just sayin’.)

man's head wearing a white blindfold

Should You Waive Your Home Inspection?

by Joshua Blumen on Monday, July 30th, 2018

Another popular strategy that can make your offer stand out in a competitive market is waiving your home inspection contingency.

What Does it Mean to Waive the Inspection Contingency?

The inspection contingency is a standard part of typical Offers to Purchase real estate in Massachusetts. If your home inspection turns up deal-killing problems, the inspection contingency gives you the right to back out and recover your offer deposit.

In other words, the inspection contingency gives you the time and opportunity to verify the condition of the house or condo before you sign a Purchase and Sales Agreement and are required to put substantial down payment money on the line.

When you waive the inspection contingency you are agreeing to accept the property in “as is” condition. You agree to own whatever problems come with the property.

What Are the Risks?

A licensed home inspector can assist you in identifying potential problems with your new home. For example, your inspector may uncover evidence of water damage or mold. A professional home inspection may be able to tell you that your new home will need a new roof in a few years. Or that your water heater or A/C needs to be replaced.

These findings are not uncommon. And if these problems — or worse — turn up on your home inspection report, the standard inspection contingency gives you an opportunity to negotiate with the Seller.

Typically, when both parties want to make a deal, these kind of issues are resolved with the Seller agreeing to make repairs or credit the Buyer with a reduction in price. And if you can’t come to an agreement, the inspection contingency allows you to walk away with your deposit.

When you waive your inspection contingency, you assume all financial risk for whatever condition the property is in — and whatever repairs are required. Sometimes the fix is relatively simple and inexpensive. But if your problems are serious, what you don’t know can add thousands, and in some case, tens of thousands to the true cost of buying that property.

I’ve seen it happen. Take, for example, the Buyer who discovered (as they were moving in) that not all the electrical outlets worked. They ended up paying for an electrician and building permits to rewire a good portion of the house. Or the couple who found a major structural crack in the foundation after the Sellers moved out.

Were these clients happy about having to deal with these problems? Of course not. But they were happy that waiving the inspection contingency helped them craft a winning offer. The additional cost of making repairs was a risk they understood and a price they were willing and able to pay.

How to Minimize Your Risk

Waiving the inspection contingency can be an effective offer strategy, if you know what you are doing. Here are some tips to help minimize your risk:

  • Make sure you have the financial means to play this game. In a competitive market, waiving the home inspection contingency makes sense if you are a well-funded buyer. If you aren’t, this isn’t a strategy. It’s gambling.
  • Pay for a professional home inspection before you sign the Purchase and Sales Agreement. Waiving the inspection contingency doesn’t prevent you from having a home inspection. It just means you won’t be able to use results from an inspection to negotiate remedies or price with the Seller.
  • If the inspection turns up something that makes you want to walk away, you still can. Yes, you’ll forfeit your offer deposit, but it’s a much smaller loss than forfeiting the down payment you’ll be required to make when you sign the P&S.

Buying a home in Massachusetts? Get the legal help you need. For more information, contact the Law Offices of Joshua Blumen, P.C. 781-784-2500.

Owner’s Title Insurance: What is it and why do you need it?

by Joshua Blumen on Wednesday, April 25th, 2018

You’re about to close on the sale of your home. The buyer has lined up financing. You’ve lined up the movers and the final walk-through. Everything is on track and on time.

Until you get a call from your attorney. There’s a problem with your title — and it’s complicated. The bottom line: You aren’t closing on time. In fact, until you solve your title problem, you aren’t closing, period.

Now what? Well, that depends. If you have an Owner’s title insurance policy, all the costs of fixing your title defect are covered.

If you don’t have Owners title insurance, you’re on the hook for all costs to get your title free and clear. That can easily add up to thousands in out-of-pocket legal fees — if you’re lucky. Complex cases can easily run to tens of thousands. And in extreme cases, you could lose your equity and your home.

What is Owner’s title insurance?

It’s an insurance policy that protects the integrity of your title, the legal document that says you are the rightful owner of your home.

When can you buy Owner’s title insurance?

The time to buy Owner’s title insurance is at the closing when you buy your home.

Why do you need Owner’s title insurance?

As part of the closing process, a title search is performed that goes back at least 50 years to verify that the title is “free and clear” from claims. But what if the title search misses something? Or one of the documents you relied on to establish clear title turns out to be a forgery? And what if — like most homeowners — you don’t discover this problem until you go to sell your home?

That’s the value of Owner’s title insurance: It protects you from things that may have happened before the property became yours. If there’s a claim against your rightful ownership, title insurance will protect and defend you – with letters and lawyers (and court, if necessary). Find out there’s a long-lost heir who says your house is his house? Covered. Forged signature from a prior owner’s deed? Covered. Old tax liens that should have been paid before closing? You’re covered.

Title problems don’t discriminate. They pop up in titles for single family homes, condos, and investment properties. I’ve found title problems in new construction. And I’ve discovered title problems in a property that was in a client’s family for as long as anyone could remember. Where there’s title, there is always the risk of unforeseen problems.

Aren’t I already paying for title insurance at closing?

If you are buying your home with a mortgage, the answer is yes. Your lender will require you to buy a Lender’s title insurance policy. But the Lender’s policy only protects the lender’s interest in your home — not yours. To protect your interest, you need an Owner’s title insurance policy.

Here’s the good news:

  • Unlike homeowner’s or auto insurance, which you pay each and every year, you only pay for Owner’s title insurance once.
  • The cost is paid at closing as an item on your settlement statement.
  • The one-time premium is based on the purchase price of your home.
  • Owner’s title insurance lasts as long as you own the property.

Your home is going to be one of your most expensive investments. Make sure you protect yourself with an Owner’s title insurance policy at closing. It’s an easy, one-time payment for long-term peace of mind.

Buying a home in Massachusetts? Get the legal help you need. For more information, contact the Law Offices of Joshua Blumen, P.C. 781-784-2500.