You have found the home of your dreams and are prepared to make a purchase offer. Before you do, make sure you find out what stays with the house and what goes with the seller. Making the assumption that you get everything you see can result in unpleasant surprises and even heated disagreements. To avoid disappointment and disputes, know what property conveys with the sale and put that information in writing.

Generally speaking, real property conveys; personal property can be removed. Fixtures typically transfer to the buyer with the real property unless they have been excluded from the sale. What’s the difference? Real property refers to the land and anything that is permanently attached to it like the house, trees, other buildings, etcetera. Personal property, also called chattel, is movable. It includes items that are not intended to be permanently fixed like furniture, area rugs and potted plants. Fixtures are items that would otherwise be personal property that have been attached. Examples include light fixtures, landscaping, and wall-to-wall carpeting.

These definitions appear to be clear. However, disputes do arise between buyers and sellers when applying those definitions to some items. This is especially true for items that appear to be fixtures. The seller is thinking they are personal property and the buyer thinks they are part of the home and therefore real property. Items that appear to be permanently attached like decorative lighting, ceiling fans, window coverings, and some appliances can present problems. If a dispute does arise about what is real versus personal property, the law specifies criteria for determination. Basically it looks at a number of tests including, but not limited to, the following:

• Method of attachment – If an attached item can be removed without causing substantial damage to the property, it is generally considered to be personal property. On the contrary, if the item is nailed, cemented, bolted, or otherwise attached in such a manner that removal would be destructive to the property, it probably would be part of the real property.
• Adaptability of use – This deals with the nature of the property and whether or not it has been adapted for use in a home. If an item was specifically fitted or designed for a particular location in a home, the argument could be made that this is a permanent part of the property.
• Intent of the buyer and seller – A couple of considerations are typically made here. One is whether the average person would consider the item to be real or personal property. The other relates to what was advertised or presented for sale. For instance, a freestanding washer and dryer could be moved, and a buyer might reasonably expect that the seller would take them unless stated. If the seller, however, advertises the home with a description that says new washer and dryer, then this usually shows the seller’s intent to include them in the sale.

If you are a buyer, the best way to avoid disputes or confusion is to spell out everything to be included in the sale in your purchase contract. Itemize each personal property item that conveys based on your agreement with the seller. Also include a clause in your purchase contract that addresses fixtures so that you can avoid problems. Consider a thorough list of fixtures like lighting, plumbing, heating, built-in appliances, security systems, fireplace inserts, and the like.

The above tips apply whether you are buying an existing home or a new home. Because new homes are sometimes pre-sold before they are built, buyers make decisions based on what is included in the model home. The model often includes fixtures that are upgraded and available at an additional price. Be sure you understand exactly what you are getting with your purchase.

If you are a seller, you can help avoid misunderstandings and possible disputes by being very clear and specific, in writing, about what is included in the sale and what is not. When it comes to fixtures, if you do not want an item included in the sale, consider removing it before the first prospective buyer sees your home. For example, you can take down your treasured chandelier in your dining room or those ceiling fans that you just cannot bear to leave, and replace them with suitable items that will transfer to the buyer.

Whether you are a buyer or seller, be clear about what items stay with the property and what may be removed and put what is agreed to in writing. Then you are better positioned for a smoother transfer of ownership of the real property and all that goes with it.

Escrow comes into play whether you are buying or selling real estate. In fact it is among the important components of your transaction. It is also among the most confusing. Most people have little more than a vague impression of what escrow means, why it is important, and what role it plays in a real estate transaction. To help take some of the mystery out of escrow for you, here is a brief overview.

What is escrow and why is it important?
Very simply defined, escrow is a way to transfer money and/or property from one person to another through an independent third party. In this process, funds or documents are held “in trust” by that neutral party until needed to fulfill an obligation related to your transaction. This unbiased process is extremely important in real estate because your transaction takes time to complete and involves large sums of money and sensitive documents.

You want both to be handled with the utmost confidentiality and impartiality while your transaction is in progress. And, no matter which party you are in the transaction, you also want the assurance that neither funds, documents, nor property will change hands until all of the conditions mutually agreed to in the purchase contract are satisfied. Escrow offers that assurance.

When will you hear the term escrow?
The first mention of escrow is typically at the time the earnest money deposit is made. This deposit accompanies a buyer’s purchase offer and is intended to demonstrate serious intent to buy the property. Once the buyer and seller mutually agree to the terms and conditions of the purchase contract, the earnest money check is deposited into a trust or escrow account.

This account can be held by the seller’s real estate brokerage or by another independent party such as a real estate attorney, title insurance company or another closing agent. At closing, the deposit is credited to the buyer. If the deal falls through, the money is disbursed in accordance with the terms of the purchase contract. Either way, the earnest money remains “in escrow,” protected by a third party, until it is time for disbursement.

You will also hear escrow in conjunction with the third party handling the closing transaction. Called the escrow holder or escrow agent, this party essentially acts as a common depository where both buyers and sellers entrust funds and legal documents until it is time for disbursement or transfer. Entities providing escrow services include title companies, mortgage bankers, attorneys, real estate brokerages, independent escrow companies, and banks and savings and loan institutions.

The escrow holder receives written instructions from both the buyer and seller, and it is the escrow holder’s job to see that those instructions are carried out to the letter. All instructions, which are based on the terms of purchase contract and the lender requirements, must be met before the transaction is complete. Thus, the interests of both the buyer and seller are protected. In addition, the escrow holder discusses matters only with the parties directly involved in the transaction. This ensures confidentiality in addition to fairness.

How long does the escrow process last?
The length of escrow is determined by the terms of the purchase contract. It can range from a few days to several months, but typically is anywhere from 30-60 days. During the time that funds and documents are in escrow, activities required to successfully complete the transaction are being completed. For instance, the buyer secures financing to make the purchase, a title search is completed, a home inspection is conducted, as well as any other tasks that either the buyer or seller must complete before the transaction can progress.

When all the escrow instructions have been carried out, all contract terms and conditions met, and all funds collected, closing of the escrow can take place. The closing signifies the release of the home purchase funds to the seller and the legal transfer of the property title from seller to buyer. Documents such as the deed are recorded and any final documentation is forwarded to the appropriate parties. Escrow is successfully closed and your real estate deal is officially done.

In a sellers’ market — when the supply of homes for sale is low and buyers are plentiful — you could easily find yourself competing against other buyers for a home. What are some of the things you should consider before joining the bidding competition? And if you do jump into the fray, how can you improve your chances for success in purchasing the home of your dreams at a fair price? Here are a few pointers:

Before You Put Your Offer on the Table

Understand how multiple offers work. Basically, a multiple offer scenario means that the seller has his/her pick of two or more purchase offers. The seller can accept one of the offers, reject all of them, or begin the counteroffer process. A counteroffer does not stop the seller from entertaining other offers while waiting to hear from you. If a better offer comes along, the seller could rescind their counteroffer before you have a chance to respond. Sellers have no obligation to respond to offers in the order they are received. Nor do they have to reveal the status of other offers to competing buyers. And in negotiating, the seller has increased leverage and may use it to improve price or terms.

Decide if this is the absolute right home for you. Try not to let the competitive market conditions create a halo effect on the home. Sometimes we find things even more attractive when competing against others to obtain them. Make sure that this is the home you would buy regardless of the market conditions.

Know your limits. This includes how much you are willing and able to pay, as well as what you are willing to give up in terms and conditions. By getting a handle on your limits up front, you can better determine whether you should even make an offer. And if you do make an offer followed by negotiations, you will be less likely to let emotions of the moment unduly influence your actions.

Know that the highest bid isn’t always the one accepted. Price is not the only consideration for sellers. They are looking for the offer that best meets their combination of needs. They may need to close quickly due to a job transfer or a move to another home. Or they might need to stay in the home for a period of time following closing. In these instances, timing of closing and possession would be factors that weigh into their decision process in addition to price.

When Making Your Offer

Open strong. In a hot sellers’ market, you may not get a chance to negotiate. So make the most competitive offer you can within your established limits. Keep the offer as clean as possible – uncluttered by lots of contingencies – but do not waive contingencies that are important and in your best interest. A contingency is a written provision that must be satisfied before the contract is binding. Contingencies can cover areas like home inspection, appraisal value, clear property title, or financing. If you have to sell a home first, you could include a “contingent upon the sale of your existing home” clause. In a sellers’ market, however, this can quickly kill an offer. Why should a seller wait for you to sell your home when buyers are lined up?

Be ready, willing, and able to close the deal. Act with a sense of urgency and show that you are serious. Getting pre-approved for a mortgage loan is very helpful in this regard. A pre-approval letter demonstrates that a lender has already considered your financial situation and is ready to proceed with your loan. You are essentially making an offer with the money to back it up.

Be flexible. If you do get to negotiate, do so with as much generosity as you can muster. Be reasonable and the chances are good that the seller will do the same. Don’t get into nickel-and-dime negotiating tactics. Instead, make a concerted effort to reach reasonable compromises that are win-wins for both of you.

Knowledge and preparedness are two of the keys to success in buying a home when bidding wars abound. Know what the market has to offer, determine the selling prices of comparable homes, find out as much as you can about the seller’s needs, and be ready and able to seize a good value.

Is a traditional single-family home out of your price range, too much upkeep, or just not your style? Then community living – condominium, townhouse, or cooperative – may be a practical solution for you. All three dwellings are forms of attached housing, a setting where you share common walls. These homes come with minimal maintenance responsibilities and are often affordable even in premium priced markets. Sound great? They certainly can be. But before you jump into the market for one of these homes, understand each one and use that knowledge to decide if this type of ownership is right for you.

To help you get started, here is a quick comparison:

Condominiums
Most condominiums, or condos, resemble apartments. These individual units are typically located in a complex of multi-unit buildings that can range anywhere from two stories to a towering high rise. Buy a condo and you own the interior space of your unit. You do not own the land beneath the building. You share common walls with neighbors who can be on one or both sides as well as above and below. You also share ownership and use of common areas and amenities. Examples of common areas are hallways and exterior walls. Amenities vary with the complex and can include swimming pools, clubhouses, and tennis courts.

As a condo owner, you are responsible for paying property taxes on your individual unit. You also become a member of the Homeowners’ Association (HOA), along with the other owners in your complex. Because the day-to-day operation of your HOA is a job in and of itself, a professional management company usually handles that work. This group is charged with maintenance and upkeep of the exterior buildings and grounds. To cover that cost, they charge all homeowners a monthly association fee. The amount you pay will vary depending on the amenities offered and that fee can sometimes be significant. What the fee covers also varies from complex to complex, so it is important that you have a clear idea of what it does and does not include. Your HOA also sets and enforces rules and restrictions to which all owners must adhere. The goal is to maintain a certain uniform look and feel throughout the complex. These rules can sometimes be quite restrictive and can govern anything from the color of window treatments to the number of parking spaces you have.

Townhouses
The architectural style of townhouses differs from condos which are stacked on top of each other. Townhouses are multi-story homes in rows. Units are connected to each other by shared vertical walls, and they may have attached garages or individual driveways as well as front and/or back lawns. If you buy what is called a fee simple townhome, you own your entire unit and the accompanying land. You also jointly own one or more common walls depending on the location of your unit within the row.

Just as you do for a condo, you also pay property taxes on your townhome. Other characteristics that townhomes can share with condominiums are common areas, homeowner associations, and maintenance fees. Typically in larger townhouse communities, you will have shared ownership in the common areas and any amenities. You may also be part of an HOA where there will most likely be maintenance fees associated with your ownership. Conditions and restrictions enforced by your HOA can also govern your duties and obligations as a townhome owner.

Cooperatives
Also known as co-ops, cooperatives are not as common as condos or townhomes. A cooperative is a housing arrangement in which a corporation owns single residential units, which may have been rental apartments at one time. A board of directors governs the corporation and each resident has one vote. As a resident, you are a shareholder in the corporation. You don’t own any real property. What you have is a proprietary lease to live in your unit. Your lease runs for the life of the corporation.

Since the property is owned by a corporation, it is treated as a single piece of property for tax purposes. The corporation pays those taxes. It also handles maintenance and upkeep, and sometimes utilities. These costs are shared by co-op residents and are usually assessed on a monthly or quarterly basis. The board of directors of the corporation also exercises a fair amount of control with respect to rules and restrictions. Examples of restrictions that may come with your lease include a maximum number of residents per unit, rules prohibiting pets in the building, and no subleasing of units allowed.

No matter which of these homeownership options you are considering, take time to check out the complex or building and even meet some of the neighbors to get a sense of what they are like. Also get an idea of how governing groups are organized and how financially stable they are. And remember to review all governing documents so that you make sure you understand and can live with all the rules.

You have many important decisions to make when buying a home. One of the most crucial relates to location. Choosing the right location matters because it has implications for two significant areas: quality of life and resale value of your home. So, what kinds of things do you look for when trying to find the location that positively impacts living quality and value? Here are some elements to consider as you begin your search:

Amenities that meet your needs. It is important that you have a list in terms of needs, interests, and preferences. Include factors that are important to you such as commute mode and time; recreational, cultural, health care, and shopping facilities; and types and quality of schools. Rank these priorities in terms of importance. That way you will have a clearer idea of whether a location meets all or most of your needs.

Quality of the neighborhood. An obvious point of interest is safety of the area. Check out crime statistics and drive through the neighborhood to see if any areas look unsafe. Observe whether the area is neat and clean or littered with debris. Pay attention to whether the homes are well maintained or beginning to get a run-down look. Get a good overall picture in your mind about the street, the neighborhood and the surrounding community. This includes gauging traffic patterns and volume at different times of the day, as well as checking noise levels from sources such as railroad tracks, airports, or major highways.

Personality of the neighborhood. Yes, neighborhoods have personalities too. And you need to find out what it is and how it fits with yours. How do you determine neighborhood personality? Meet some of the people who live there. Find out what age ranges the neighbors are and what they do for a living. Ask about active neighborhood associations and activities, if any. Walk around, get a feel for the neighborhood, and see if you feel comfortable and welcomed. In other words, if you feel “right at home.”

Demand and property values. Consider how popular the area is. Would it be considered to be up and coming, a situation where you might anticipate value to appreciate at a rapid pace? Or is it on the edge of what is becoming a popular place to live? Sometimes that popularity can spread outward and engulf surrounding neighborhoods with an effect of rising prices and thus property value appreciation. Of course on the other side, areas of low demand, areas where homes are already at a premium price, or areas where prices are stagnant may result in slow or no appreciation in value in the future.

Current and future development. Make a note of any development that is happening at the current time. Is it adding to the value of the area or possibly decreasing value? Also be aware of any future plans for development that could impact your property value and/or your quality of life. This includes finding out if there are any planned changes for roadways or business or commercial development in addition to residential development.

Economic vitality. This applies to the broader community. Get a sense of whether the economy is growing, stable, or stagnant. Look for a healthy mix of commercial and business districts. This provides employment and attracts residents as well as adds to the tax base that can be used for community improvements.

As you conduct your home search, keep in mind that there is no such thing as an absolutely perfect place to live. You will find positive and negative aspects about homes, neighborhoods, and communities. Have your checklist of what is most important to you – what you must have, what would be nice, and what you definitely cannot live without. Use that list to decide your compromises and trade-offs. That way you get as close as possible to your ideal place to live while maximizing your potential future gain in home value.