A real estate attorney discusses homebuying
Matthew W. Neuman, Esq., real estate attorney of Bedford-based Absolute Title, discusses crucial home buying steps, the impact of fluctuating interest rates and his innovative approach to the closing process.
What are the crucial steps a New Hampshire homebuyer should follow before diving into the market?
It’s vital any buyer thinking of … using mortgage financing first reach out to a mortgage lender to verify their mortgage eligibility. With rates higher than the historic lows from a couple of years ago, it’s vital they identify their budget and focus on a realistic purchase price point. … Once you establish that price, they need to seek out a Realtor who will help guide them to only properties in their price range.
How are fluctuating interest rates impacting the average New Hampshire homebuyer?
Interest rates have fluctuated from all-time lows a couple years ago to where they are currently, hovering around 8 percent. These current rates are being characterized as very high when in reality they’re almost exactly equal to the historic average rate since 1971 of 7.75 percent, but as rates increase the consumer’s buying power decreases and prices them out of houses they may have been able to afford two years ago. Unfortunately most consumers are holding onto the memory of the historic rates. … It will be another 12 to 24 months before we see much relief in the area of interest rates, so people need to reset their expectations.
What are some common corners buyers are cutting in the current market, and what potential pitfalls should they be wary of?
If a buyer waives their right to perform a home inspection prior to closing, they run the risk of missing significant structural and mechanical defects in the property that could be addressed and negotiated with the seller. Buying “as is” is just that, and any issues go right along with it and more than likely will have no recourse against the seller. Buyers who waive their rights of due diligence for easements, restriction, covenants, etc., will miss the opportunity to verify there are no restrictions on the property that could potentially impair their intended use of the property, such as ‘no livestock’ for people looking to have chickens.
You’ve been credited with creating proprietary software to aid in the closing process. Can you explain how this technology helps the average buyer?
Historically, buyers were limited to one of two ways to bring their funds to closing: either a wire transfer sent from their bank, or bringing a bank certified check to closing. Both of those options are inconvenient, often costly and highly susceptible to fraud. In 2018 we released AbsolutePay, our proprietary and patented payment platform that allows buyers, sellers, Realtors and lenders to transfer the funds required for a closing from their account to ours easily, safely, securely and for free. They can initiate it in a few minutes from their desktop, laptop, tablet or phone.
How does fraud intersect with real estate, and what are some simple steps buyers can take to protect themselves?
Fraud has become quite rampant in the real estate world. The reliance on email as the preferred form of communication has opened the door for fraudsters to interject themselves into a conversation between the parties of a transaction and then steer the parties to make a fatal mistake, such as providing fraudulent wire instructions, which can then result in the loss of these funds. Wire instructions should never be provided through ‘unsecure’ email and should always be verified over the phone. Picking up the phone and having conversations will help to minimize the risk of fraud. Another fraud situation that has recently grown in popularity is the sale of ‘vacant’ land by someone purporting to be the owner but in reality is a fraudster. They will reach out to a Realtor, usually through email, explaining they live out of state or are on vacation and would like to list their property for sale but they don’t want their neighbors to know they’re selling so they instruct the Realtor to not place a ‘for sale’ sign at the property. Once the property goes under agreement, all correspondence with the seller occurs through email, and if not caught in time, the transaction is completed, resulting in funds being wired to the fraudsters. These situations can be avoided by choosing to work with experienced Realtors and title professionals.
Featured photo: Matthew W. Neuman. Courtesy photo.
