Ask Me Anything: Get Answers To Your Real Estate Questions – Part One

I love answering real estate questions for homeowners, first-time home buyers, and anyone considering selling their home.

I love being able to help my clients and community, so I thought I’d round up a few of the most common real estate questions I get in hopes they can help you get the answers you’re looking for!

What does under contract and pending mean?

If you see a house listed as “under contract” or “pending”, it means that an offer has been made on the home and the seller has accepted. 

However, a lot of things can happen before the sale closes that could cause the house to go back on the market. Don’t completely lose hope if the house you want to buy has been marked as under contract!

Why should I get pre-approved?

Getting pre-approved for a mortgage before you start seriously house hunting is a great way to make sure you know exactly how much you’re comfortable spending.

You won’t waste time and be tempted to look at homes that you can’t actually afford.

What is the difference between pre-approved and pre-qualified?

Getting pre-qualified is usually faster and doesn’t include as much detail as getting a pre-approval.

Neither is a guarantee for a loan, but a pre-approval will show a seller that you have made a legitimate offer and you are serious about buying. A pre-qualification doesn’t fare as well against your competition.

Do I need an inspection if the lender is already getting inspections?

Most mortgage lenders don’t require a home inspection, they tend to be optional, which means the buyer needs to request one and pay for it. 

However, I always recommend a home inspection to my clients.

Inspections are designed to inform potential buyers about any potential problems with the property that might not be obvious or visible and what items may need immediate attention after closing.

Will I have to pay taxes on the sale of my home? 

If you’re concerned about paying taxes on your home sale, it’s always best to sit down with your real estate agent and your accountant or whoever files your annual tax returns. That way you can get all of your questions answered and put your mind at ease.

Simply put, if your home sale results in a short-term capital gain, it will be taxable as income in line with your marginal tax bracket.

If your home sale results in a long-term capital gain, it can be taxed anywhere between 0% – 20% depending on your taxable income.

Why do I have to pay next year’s property taxes when I sell my house?

Property taxes are paid in arrears in Indiana. You pay taxes next year for your use during the current year.  You will see terms like “2022 pay 2023” on contracts and paperwork.

Most sellers will see both the remaining balance of taxes this year and a proration of taxes owed next year on their closing statements. 

Even after 40 years of doing this it still is the hardest process to calculate and explain to my clients.

Are having restrictions the same as a Property Owners Association (POA)?

No, they are not. You can have restrictions without establishing a POA, or HOA. Restrictions outline the details of the property and building standards within the platted subdivision.  

If a POA is established, it is a governing body that includes Home Owners Associations (HOAs) or Condo Owners Associations (COAs). How POA membership fees are paid varies greatly. 

The restrictions and rules of your neighborhood are the guidelines your HOA, POA, or COA enforces.

Why doesn’t the home I’m interested in buying have a basement?

In the Kosciusko County area, there are a wide variety of home types, including historic homes.

Since we have a lot of lakes, creeks, and wetland areas, homes that are built closer to the water or near marshes and wetlands typically don’t have basements due to the increased risk of flooding. 

Really, it’s about the water table and whether a basement is a liability rather than an asset.

Mortgages on homes located in a floodplain also typically require owners to hold flood insurance to offset the losses if water damages the home.

Why did the building inspector pass this home?

It comes as a surprise to many that Kosciusko County and several adjoining counties do not have Building Inspectors.  

This is why you can’t rely solely on a building inspector (or assume there’s been an inspection) to catch any issues with the construction of your home (or potential home). To ensure you have a complete inspection process, I always recommend having an additional inspection completed as part of the due diligence process.

Have More Real Estate Questions?

Successful home buyers and sellers seek out an experienced real estate agent like myself.

I’ve been working with home buyers for 44 years in Kosciusko County and the surrounding areas. You won’t find a better agent to help you navigate the buying and selling process!