WHAT IS IT AND WHY IS IT IMPORTANT IN A REAL ESTATE SALE?
You have probably come across this message when looking at homes online:
"BUYER RESPONSIBLE FOR OBTAINING C/O AND FIRE CERTS"
If you haven't bought or sold a home recently, this might not make any sense to you. So I've put together responses to the most common questions about the C/O process to shed some light on the topic.
WHAT IS A "C/O"?
C/O stands for "Certificate of Occupancy". Municipalities decided that they needed a way to make sure that residential dwellings were being kept to minimum building code standards. In other words, they wanted a way to make sure that all residential property bought and sold was suitable for habitability. So they created the Certificate of Occupancy, or C/O for short.
HOW DOES IT WORK?
Every time a home is sold, a town inspector evaluates the property and determine if there are any health hazards or safety concerns. Any “violations” the inspector finds must be corrected before the home is re-occupied by the new owner.
WHO PAYS FOR IT?
It depends. In this market there are a lot of “as-is”, short sales, foreclosures, and properties that need repairs. Many of these properties require signifnact repairs in order to pass a c/o inspection. Depending on the list of violations, obtaining a c/o can become very costly. Therefore, who pays for it it becomes a point of contention during every real estate sale.
WHY IS IT THE BUYER'S RESPONSIBILITY?
Normally buyers are only responsible for obtaining the c/o when buying foreclosures and auction sales. But because we are in a seller’s market, many sellers today would rather put the responsibliy on the buyer, even in a traditional sale.
DO YOU ALWAYS HAVE TO GET THE C/O BEFORE CLOSING?
Not always. There’s something called a conditional, or temporary, C/O that allows the buyer to correct the violations after closing. In this case, the buyer agrees in writing (usually an affidavit) that he/she will not occupy the property until the town reinspects and issues the full C/O.
WHEN DOES THE SELLER GET THE C/O?
If the home is in good to great condition, then it makes sense for the seller to get the C/O. It shows the buyer that the home is safe and habitable and worth the price. Conversely, by telling the buyer that he/she must obtain the C/O, the seller is admitting that the home needs some repairs, and this usually effects the price a buyer is willing to pay.
TIP: The insepctor checks for open permits on a property before issuing a C/O, so make sure all permits are closed out beforehand!
WHAT ABOUT THE FIRE CERTIFICATE?
Depending on the town, the fire certificate can be a separate inspection or part of the C/O. Regardless of how its set up, the point of the fire inspection is make sure the home is fire code compliant. There is no “conditional” option for the fire cert, so it’s either pass or fail. This means that if the required smoke alarms, carbon monoxide detectors, and fire extinguishers are not properly installed in their correct locations, the property will fail and it will delay the sale. The town will usually have a diagram to follow for the correct placement of the aforementioned items on each floor of the home.
TIP: ALL SMOKE ALARMS MUST BE SEALED, 10 YEAR BATTERY SMOKE ALARMS. THIS IS NOW A STATE REQUIREMENT.
SO GETTING THE C/O IS A PAIN IN THE BUTT?
It can be, for sure. how difficult it is to obtain a C/O will depend a lot on the condition of the property and the willingness of the buyer and seller to cooperate. But most importantly, having someone with experience to handle the process can be a major help.
Whether it's my buyer or seller client, I always help with the C/O. I do things like fill out and submit the application, schedule the inspection, meet the inspector, discuss violations with clients, supervise the repairs, and so on.
For the fire certificate, I first walk through the property and install smoke detectors etc where needed. Then I bring a backup kit of materials to the inspection in case I missed anything.
So if you have a good experienced realtor that knows what the inspectors are looking for, passing the c/o inspection can be easy and inexpensive.
Questions? Text me: 973-506-9866
Till' Next Time!
-Silvio / Realty 33
2019 WINTER / SPRING REAL ESTATE MARKET REPORT
So 2019 is in full swing and we're coming up on that always anticipated Spring market. Let's recap how Union has done in the 1st quarter of 2019:
Total single family homes sold: 126
Avg list price: $334,683
Avg sales price: $329,305
Avg Days on Market: 51
# active listings: 160
Average sales price this March was up 12% over last year! For multi-family homes, the average sold price was $361,083. There are only 10 active multi-family listings right now. There is a serious lack of inventory!
Lowest single family sale: 268 Montclair Ave, SOLD $74,400
Highest single family sale: 380 Wayne Ter, SOLD $635,000
Lowest multi-family sale: 12 Roselyn Pl, SOLD $227,832
Highest multi-family sale: 349 Trotting Rd, SOLD $465,000
NJ Lecturers Gripe About Losing Offices, Then Lose Their Jobs
Landscaper Killed in Union Shopping Center
Who is Running in Union's Committee Primary in 2019?
This is just a market snapshot, I want you to be in the loop on what's happening in the area.
That's all for now!
Till' Next Time,
Silvio / Realty 33
534 MALCOLM RD, UNION NJ
ALERT ‼️ ALERT
This is an AWESOME deal in one of the best locations in Union, off Fairway Drive, right behind the Galloping Hill Golf Course.
This is the perfect home for an owner-occupant buyer, looking for a renovated forever home in a great neighborhood.
534 Malcolm Rd, available for $381,000!!
- Split level style construction
- 3 bedrooms, 2 full baths
- Fully renovated w/ finished basement
- Fenced in yard with patio
- LOW ⬇ taxes only $8,728!!
- Top notch secluded location 🏡
Here is an opportunity to buy a renovated split level in Union for less than 400k!
Click HERE for some interior pics / Check out the listing on Zillow HERe:
**Interested in this property? Text 973.506.9866 for more info**
When it comes to technology, we live in a very exciting time. Our ability to capture our world and share it right from our cell phones has changed the way we interact with one another forever.
In real estate, advancements in tech have made for some exciting new ways of doing business. Here are just a couple of examples of how technology is shaping how we buy and sell homes.
1. Drones. Drone technology and real estate are a match made in heaven. The "Bird's eye" view is used to see an entire piece of property in one image. Inspectors use drones to analyze roofs, chimneys, and other hard to reach areas. They provide a smooth and stable image for promotional videos, and it's just fun and looks cool!
2. Mobile capture/edit/share. A few years ago, in order to create a good piece of content one would have to first record a video, then transfer it to a computer, edit the video, and then upload it to whatever the preferred platform was at the time. Now, a tech savvy realtor can create and edit an entire walkthrough, upload it online and share it before even leaving the home. My clients often use FaceTime to share walkthroughs of a property with family members who couldn't make it to see the home.
3. E-Signatures. My personal favorite new tech is the digital signature. I love it so much that I even bought stock in my preferred
e-sig service, Docusign. My clients love it, too. I just upload the contract to Docusign, indicate which areas to signed and by whom, and then send it via email to the appropriate parties. On the other end my clients open the email, create a digital signature, and when they click on the highlighted areas on the document, the signature drops right in! the best part is - it can all be done on mobile, which is perfect for my busy clients.
4. Digital Lockbox. The digital lockbox is a nifty little invention. It's placed somewhere on the outside of the property with the keys in it, and can only be opened using a fob or mobile app. Only licensed realtors are given the access codes required to use the app. This makes it safer than a standard lockbox, where anyone who happens upon the combination could gain access to the home. The other major advantage of the digital lockbox is that it keeps a record of everyone that opened it, with a date and time stamp. In certain situations, it may be crucial to know the identity of the last person who entered the house.
5. Facebook Ads. Before FB ads, only companies with huge marketing budgets could create ad campaigns to target millions of potential customers at the same time. But not anymore! With FB ads anyone can choose a target audience, create a compelling message, and have the ad shown to that audience for as little as $1 (or even less) per day. For example, I might create a video walkthrough for a new listing, upload the video to facebook, and use FB ad targeting to put it in front of every would-be buyer in the NY metro area, all for less than $50. Recently, FB ads have come under some serous scrutiny.
Those are just a few example of how modern technology is reshaping the real estate industry. Look out for plenty more breakthroughs if Amazon jumps in and buys Redfin.
Your "brother-in-law's cousin that's a realtor part-time and will list our house for 1% commission" might not use all this tech, but I promise you that I do, and it 100% makes a difference in my client's home buying/selling experience.
So I've been getting a lot of questions about "as-is" sales lately, so I want to clarify exactly what it means:
An "as-is" sale in real estate basically happens when the seller doesn’t want to make any repairs or give the buyer any credits or concessions.
It acts as a shield for sellers to protect them against giving up any money later on during the inspection period.
It also relieves them of the responsibility to make repairs, should something serious come up on the home inspection. Seems pretty straight forward right? But it’s actually much more difficult to put in practice.
5 TRUTHS ABOUT AS-IS SALES:
#1. Nobody Cares. "As-is" is usually meaningless to the buyer, because regardless if the property is "as-is" or not, the buyer can still cancel the contract if the condition of the home is not satisfactory. Plus, agents and attorneys know that once they get you deeper into the transaction, you’re more likely to give a concession for fear of losing the deal and having to start all over.
#2 It's Overused. Almost 50% of listings have some sort of “as-is” language. That’s because in a strong market, sellers will use any advantage they can to get the most favorable terms. The problem is with so many “as-is” properties on the market though, is that “as-is” winds up not meaning anything!
#3. Not Compatible with FHA. If the buyer is using a mortgage, the chances of an “as-is” transaction are slim. If it’s FHA, then it’s even more difficult. That’s because the buyer’s lender may also request repairs as a condition for the loan, and most buyers are advised against spending money on repairing a home prior to taking ownership of it.
#4. Lowers Market Value. When buyers or agents see “as-is” sale, they instantly think the home need repairs. This perception can effect the market value of the home. It will also increase the probability of getting low ball offers. You can’t sell “as-is” for top dollar, it just doesn’t work.
#5. Net More with Concessions. If your home is in good to great condition, and you list it at market value, then you will likely net more money in the sale if you make small concessions during the inspection period, rather than list “as-is” for a lower price.Yes, it can be annoying when the buyer asks for a $15,000 credit for chipped paint and a leaky faucet. But if the requests are reasonable then throwing the buyer a "bone” can get you to the closing table faster, which will also save you more money in the end.
There are many smart ways to maneuver through the inspection period, and I’ll share with you some of my favorite tricks in another article.
Till next time!
At Realty 33, We tap into 25+ years of experience and market know-how to help our clients make streetwise real estate decisions.