Skeletons in Your Closet

SkeletonsLet’s admit it. There are things in our past that we’re not too proud to have done…or not done.

There’s stuff better left unsaid and, maybe, forgotten. Put away. Deep in the closet where no one will find them and remind us.

For a lot of life, you may be able to to this. If you’re involved in a real estate transactions, you can bet the farm all the skeletons are coming out of the closet. It doesn’t matter if you’re a home buyer or home seller. If there is something in the past that you’d like to keep in the past…..fogedaboutit!

Home Buyer Skeletons

It never ceases to amaze me how people just happen to “forget” about their bad credit. This is the really big skeleton and the one that gets exposed to the light of day first. The second you say it’s OK for a mortgage guy to run your credit report because you’re going to need a mortgage, every late payment and ding on your credit is coming out.

Bankruptcy? Foreclosure? Late payments on credit cards or car payments? Late rent or mortgage payments? Back child support or alimony? Yeah. It’s all coming out.

That’s not all. Since mortgage companies require documentation about your tax filings, all that’s coming out, too. Late filing? No filing? A tax return that you give to the mortgage person that looks different from the one you sent (or didn’t send) to the IRS?  Yep. That’s coming out, too.

I’ve had buyer clients have to go back to their divorce from 20 years ago to prove to the mortgage underwriter there’s not an alimony requirement hanging out there somewhere.

Bottom line: if you’re going to need a mortgage, the skeletons in the closet are coming out to play.

Home Seller Skeletons

I usually sit down with a seller and go over what they might get as a sales price for their house and subtract out what they might have to pay. Things like the balance of their mortgage, taxes, title company fees, my fee.  At the end, I tell them what they might have left to put in their pocket.

Sounds pretty easy, huh?

It normally would be if the seller has enough equity and they tell me everything they owe.

I’ve had great, friendly clients “forget” to tell me about some back Home Owner Association dues. Of course, the Home Owners Association didn’t forget. They got a lawyer to slap a lien against the house which meant there were the back dues, the late fees and the attorney and lien release fees.

Ooops.

That throws my calculation way off.

I had another client “forget” to tell me there was a second owner on title. Gee. That was a real eye opener when the title company e-mailed me to let me know they needed the second owner’s signature on all the contract documents.

For home sellers, there is also the home inspection issues where all the nice DIY projects that they did to save money on electricians and plumbers and such will come home to bite them.

Yeah. You can bank on the fact that virtually everything you wish you could have forgotten about will be scrutinized and questioned.

In real estate, there are plenty of skeletons in the closet on both sides of the transaction. Be prepared to see them and to deal with them.

(note: this was first posted on my LinkedIn page. Please feel free to connect!)

About Ken Montville

Ken Montville is a Realtor® and Associate Broker with RE/MAX United Real Estate in the beautiful Maryland Suburbs of Washington, DC. He has been selling nice homes since 1999. Way back in the 20th Century.

When Ken Is not doing the real estate thing he can be found all over social media in places too numerous to mention and he listens to jazz, reads a little (mostly non-fiction), hangs out with the Rotary Club of College Park, MD and can be found blogging at MDSuburbanHomes.com