The process of selling your home can be stressful and challenging. Educating yourself and working with a great agent are the best ways to ensure that your home selling process will be as smooth as possible.
Real Estate Agent
The often complex process required to sell your house can be confusing and exhausting. It helps to know you are not alone and that you have, at your disposal, your Agent’s professional expertise. I will help you to do the following:
- Educate you through the entire process
- Listen to your needs to understand your real estate objectives
- Help you understand all of the paperwork
- Handle any problems that arise during the transaction
- Properly prepare forms, contracts and disclosures, which are required by law, and make sure that they are legally correct
- Provide comparable sales data to assure that you are setting the proper price for your home
- Guide you regarding the repairs that should be made
- Show you homes in an effective and professional manner
- Guide you in your selection of escrow/closing and title people
- Oversee the closing process
- Help you spot buyers who are attempting to take advantage of you
- Help you understand the use and limitations of good faith deposits
- Advise you as to when you should seek the advice of an attorney
- Make sure the appraisal process is handled properly
- Help you to understand the complete escrow/closing and title process
- Advise you as to any inspections such as septic, well or soil, which might be applicable to your property
- Guide you as to how the escrow/closing instructions should be prepared
- Properly handle the walk-through process with you prior to the final closing
- See that any repairs or requirements are met prior to the closing
- Advise you as to what course of action should be taken if the buyer refuses to close the transaction
- Negotiate and deal effectively on your behalf with the buyers, other agents, escrow/closing, title people and attorneys
- See that each and every facet of the buying process is effectively and professionally handled in your best interest
When buying or selling a home, people often question the need for a Realtor® because they are tempted to avoid paying the commission. Keep in mind that if you take on the duties of buying or selling a home unassisted, you also assume many difficult responsibilities.
Without a Realtor®, SELLERS do all the work and take all the risks.
Time and expense
You pay for costly ads that may prove ineffective and you pay for legal fees. You must stay constantly at home “on duty” seven days a week, or miss possible contact with potential buyers.
Your “For Sale” sign and advertising may attract unqualified, curious people seeking entry into your home. Identifying a real prospect is often difficult. Without an agent, you could spend all your time with unqualified buyers. Furthermore, an agent will use their valuable contacts to find the right buyer.
For sellers without a Realtor®, negotiations lead to the most difficulties. A skillful third-party negotiator is usually necessary to secure a beneficial final agreement between the buyer and the seller and to provide a greater net return on your investment.
Realtors® can save you hours of research by sharing their knowledge about where money is available and who has the most competitive rates.
Is It Worth It?
The commission “saved” may prove inadequate to meet the total costs of your own time and marketing efforts. Who wins if you sell through a Realtor®..? You do!
Pricing Your Home
- Why is it that some homes sit on the market for a year while others sell like hot cakes? Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.
- If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.
- The secret is perfecting a technique that’s as American as apple pie: comparative shopping.
- Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.
- A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Market Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last six months. Typically, it is a realistic price range that will ensure you top dollar and a reasonably quick sale.
- However, factors such as the amount of time needed to sell your home can affect the agent’s price recommendation dramatically.
- I can determine the typical duration that listings are on the market and can explain that the marketing “norms” vary with prices and properties. Based on this criteria, we will be able to sell your house for a price that both you and the buyer will be happy with. However, if you’re under time constraints because of unexpected job changes or moving agreements you’ve made on another property, this will narrow your chances of selling the home for top dollar in the market.
- Assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.
The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer, and other factors, such as the economy, could cloud your view of how much your home is really worth.
- Another good benchmark is to review the selling prices of homes that have just been sold and are pending closes. Most MLS services provide information on deals pending that most real estate agents should be able to share with you.
- A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house. Once completed you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.
- Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help your agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer. If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale
How to price your home – one of the most important issues you will face. Pricing will determine, among other things:
- How quickly your home sells
- How attractive your home will be to buyers
- How you will reach your financial goals regarding the transactions
Unless there are extenuating circumstances, such as your property’s being located in a high-risk, undesirable or unusual area, the listing price of your home will set the tone for your entire transaction.
That’s why my expertise and knowledge of your local marketplace is so helpful. I will gather statistics that quantify the prices of comparable homes in your neighborhood:
- That have sold
- That have not sold
- That are pending
- That currently are on the market
I will compare aspects of those homes against the unique features of yours. I will also analyze market conditions, the availability of mortgage funds, neighborhood reputation and characteristics, among other considerations, to create a Comparative Market Analysis (CMA). The CMA provides objective information that will enable us to make an educated, informed pricing decision designed to yield a speedy sale for the most advantageous price possible.
Philosophically speaking, put yourself in a potential buyer’s shoes when considering pricing. Buyers’ main considerations will be location, age of property, its condition and style and of course, price. Thinking objectively about these matters will help you and me determine a price based on fair market value — what your house is worth in the current market, not the amount you or your buyers would like it to be.
Other key aspects to consider include the following:
- How soon do I want to sell my property?
Statistics show the narrower the gap between the asking price and my estimate of value, the sooner an offer will come in.
- How does my home compare to others in the area?
As a real estate professional, I have access to details about current listed and sold properties through the Multiple Listing Service. You will be able to see how much competition there is and what effect market conditions have had in your area. You can then determine your price by analyzing homes comparable to yours in age, size, condition and location.
- What are buyers willing to offer?
Buyers are interested in your home’s comparable worth, not what you might need to get out of the property. The buyer’s perception of the value of your home will not be altered by the cost of your next home, your need to pay off an existing mortgage, or your hope for a dollar-for-dollar return on home improvements. Remember that sellers and Realtors© are not appraisers…buyers are. In the end, it is the buyer’s evaluation that matters. Buyers make their assessments by comparing your property with others that offer similar features and are in a similar condition to yours.
- Is there any harm in overpricing property, then dropping the price if it doesn’t sell?
Yes. To effectively price your home, you must establish a solid correlation between the asking price and the fair market value. A realistic asking price will result in a fast, lucrative sale. If your price is out of sync with the market, you’re likely to turn off a large group of potential buyers. Contrary to popular belief, a buyer usually makes an offer on a fairly priced property before making a lower offer on a listing that is seen as overpriced. Also, overpricing your home often helps sell your neighbor’s home faster than yours.
- But my house is worth so much more…
Emotion and pride should have no place in the pricing process. Sellers speak of value, amount invested and what they can afford “to take.” Buyers consider only price, condition and other properties offered.
- Should I leave room for negotiating?
Experience has shown that the closer your listing price is to the supporting comparable sales data, the greater your chances for a quick sale at or near your asking price. As a result, we recommend pricing as close to that figure as possible. If you list your home at an unreasonably high price and receive a full-priced offer, the price will be tested during the appraisal and lending process. As a result, it’s important to price your property at something statistics and the experience of the local brokers can justify. In fact, agents will miss showing your property to potentially qualified buyers simply because, at face value, your property is out of their clients’ price range.
Preparing To Sell Your Home
One of the great challenges to selling a home can be showing all of its space, decor and natural light potential. For example, every home has crowded closets and dead space. Sellers should be aware that areas such as these are easy to spruce-up with a little elbow grease and old-fashioned innovation.
Begin by evaluating your closet/storage space, determine which areas can cut-down in clutter. Go through old clothes, shoes, etc., and get rid of anything that will not be used and in turn create more space. Consider organizing shelves and other areas to make better use of your storage space, including your garage and basement. Also, try to throw out or give away any old furniture that is no longer of use. All of the discarded items can be given to Good Will, Salvation Army or even sold at a yard sale.
Although most sellers keep their homes clean and well-decorated, it can be difficult to convince a buyer of a home’s potential when clutter is noticeable. As an agent, it’s my responsibility to offer any tips that will expedite the sale and make the experience more enjoyable for the seller.
Once you’ve eliminated the unwanted items and furniture, begin the ‘renovation’ process. For non-storage spaces that could use a little more decor, consider adding a small bookshelf complemented with a cozy reading chair. Always be sure you’re filtering as much light into your property as possible. Open or replace curtains. For example, light from a window overlooking the backyard offers a room more color, a great view and the illusion of more space.
Always maximize the potential of existing decor; wash old curtains, re-stain old wood casings, anything that refreshes and emphasizes all the potential of the space and decor of the home.
Prospective buyers are often more drawn to homes with features that they don’t have, those with clutter-free closets, open sunny rooms, and cozy little corners. To ensure you’ve realized all of the above characteristics the last step should be to bring in a friend and observe their reaction. Make sure it’s an honest friend, who will offer suggestions as well as notice the improvements. Seeing your own home through someone else’s eyes is a great way to make a home optimally attractive and more sellable to prospective buyers.
Be diligent in your efforts and be sure the renovations improve the aesthetic appeal of the home. All the hard work will be worth the reward of a successful sale.
Styles of houses vary across the country. From the New England Cape Cod to the Victorians of San Francisco, the choices are almost endless.
Following is a quick guide to help you recognize and use the professional terms for many of the most prevalent house styles:
• Cape Cod: This compact story-and-a-half house is small and symmetrical with a central entrance and a steep, gable roof. Brick, wood or aluminum siding are the materials most commonly seen.
• Dutch Colonial: The Dutch Colonial has two or two-and-one-half stories covered by a gambrel roof (having two slopes on each side, with the lower slope steeper than the upper, flatter slope) and eaves that flare outward. This style is traditionally made of brick or shingles.
• Georgian: Popular in New England, the Georgian has a very formal appearance with two or three stories and classic lines. Usually built of red brick, the rectangular house has thin columns alongside the entry, and multi-paned windows above the door and throughout the house. Two large chimneys rise high above the roof at each end.
• New England Colonial: This two-and-one-half story early American style is box-like with a gable roof. The traditional material is narrow clapboard siding with a shingle roof. The small-pane, double-hung windows usually have working wood shutters.
• Pueblo / Santa Fe Style: Popular in the Southwest, these homes are either frame or adobe brick with a stucco exterior. The flat roof has protruding, rounded beams called vigas. One or two story, the homes feature covered/enclosed patios and an abundance of tile.
• Queen Anne / Victorian: Developed from styles originated in Great Britain, these homes are usually two-story frame with large rooms, high ceilings and porches along the front and sometimes sides of the house. Peaked roofs and ornamental wood trim, many times referred to as “gingerbread,” decorate these elaborate homes.
• Ranch: These long, low houses rank among the most popular types in the country. The ranch, which developed from early homes in the West and Southwest, is one-story with a low-pitched roof. The raised ranch, which is also common is the U.S., has two levels, each accessible from the home’s entry foyer, which features staircases to both upper and lower levels.
• Southern Colonial: This large, two-to-three-story frame house is world famous for its large front columns and wide porches.
• Split-levels: Split-level houses have one living level about half a floor above the other living level. When this type of home is built on three different levels, it is called a tri-level.
• Tudor: Modeled after the English country cottage, Tudor styling features trademark dark-wood timbering set against light-colored stucco that highlights the top half of the house and frames the numerous windows. The bottom half of the house is often made of brick.
These are just a few of the many styles of homes available across the country – some are more prominent in different areas than others.
What home improvements really pay off when the time comes to sell your house?
That’s an important question for any homeowner contemplating moving or remodeling. And the only possible answer is a somewhat complicated one.
That answer starts with the fact that really major improvements – room additions, total replacements of kitchens and baths, etc. – rarely pay off fully in the near term. It ends with the fact that small and relatively inexpensive changes can pay off in a big way in making your home attractive to buyers if your decision is to move now.
It’s often the case that the most appropriate major improvements are unlikely to return their full cost if a house is sold within two or three years. Does that mean that major home improvements are always a bad idea? Absolutely not. It does mean, though, that if your present house falls seriously short of meeting your family’s needs you need to think twice – and think carefully – before deciding to undertake a major renovation. Viewed strictly in investment terms, major improvements rarely make as much sense as selling your present home and buying one that’s carefully selected to provide you with what you want.
Even if you have a special and strong attachment to the house you’re in and feel certain that you could be happy in it for a long time if only it had more bedrooms and baths, for example, there are a few basic rules that you ought to keep in mind.
Probably the most basic rule of all, in this regard, is the one that says you should never – unless you absolutely don’t care at all about eventual resale value – improve a house to the point where its desired sales price would be more than 20 percent higher than the most expensive of the other houses in the immediate neighborhood.
Try to raise the value of your house too high, that is, and the surrounding properties will pull it down.
- Never rearrange the interior of your house in a way that reduces the total number of bedrooms to less than three.
- Never add a third bathroom to a two-bath house unless you don’t care about ever recouping your investment.
- Swimming pools rarely return what you spend to install them. Ditto for sunrooms – and finished basements.
- If you decide to do what’s usually the smart thing and move rather than improve, it’s often the smaller, relatively inexpensive improvements that turn out to be most worth doing.
The cost of replacing a discolored toilet bowl, making sure all the windows work or getting rid of dead trees and shrubs is trivial compared with adding a bathroom, but such things can have a big and very positive impact on prospective buyers. A good broker can help you decide which expenditures make sense and which don’t, and can save you a lot of money in the process.
In many parts of the country, selling a home during the winter months can be a challenge. Dreary, cold weather and the end-of-the-year holidays can keep buyers away and heighten fears of your home staying on the market longer than expected.
However, there are a few things you can do to enhance “curb appeal.” And when that happens, buyers will take notice. For example, if your home has been on the market for several months, it’s probably time to change our sales approach. There are several factors that we can review to determine improvements that can be made. We may need to make a reassessment of the sales price, as it may be too high for the current market or, instead, we may opt to create a new or updated marketing plan for your home. Marketing your home goes beyond a few ads in the newspaper and a listing on the Multiple Listing Service (MLS). Ask me about all the ways in which I will market your home.
When setting the asking price through a comparative marketing analysis, compare similar homes sold in the winter months. Many owners set their asking price too high because of comparisons with sales prices during peak seasons. Always try to compare like properties sold at the same time of year.
Once you’ve settled on an asking price, it’s time to spruce up the interior and exterior of your home. I recommend opening as many curtains as possible to add light and color to rooms. Also, your might try keeping spring and summer pictures of your home out on tables and in clear view. Photos of your front yard flowers or the backyard shade tree in full summer bloom can help swing many buyers in favor of a purchase.
Staying on top of winter maintenance and chores is another sure-fire way of adding value to your home. A neatly shoveled driveway and cleared walkway can add a nice touch. Make sure the furnace is in good working condition and that the room temperature is kept at a comfortable level. Also, check to see that the basement (if there is a basement) is dry and sealed from any drafts.
Take yourself on a tour of your home. Start on one end and work your way through the house. More than likely you’ll see many previously undiscovered cluttered spaces and needed repairs that might turn off potential buyers.
Don’t overload your home with holiday decorations, either. The buyer should have a chance to see you home in its everyday condition.
The classic way for homeowners to increase the value of their house is by remodeling existing rooms or adding on to its current plan. Some choose to build recreation rooms and studies while others add new appliances, fixtures and cabinets to enliven rooms and make their home more attractive to future buyers.
But, when should you decide to stop sinking money into a home and buy a bigger place? And how much rehab is too much when it comes time to recovering remodeling costs through a home sale?
For instance, if you’ve just spent $1,000 remodeling your living room and didn’t expand your small bathroom, the chances of increasing the number of interested buyers are slim.
With these concerns in mind, I can offer a few tips for those struggling to add value to their home. First, always protect the character of your home. Nothing sticks out more than a new addition that is in a completely different architectural style. Be consistent. Recognize your home’s character and stay within its framework.
The most financially rewarding areas to remodel are usually the kitchen and bath. Newly re-done cooking spaces and cabinets can attract more buyers and may command a slightly higher price for the home than a comparable one on the market. Simple repairs that are made to last will bring you the biggest returns upon sale.
Enlarged bathrooms are the most popular attraction for new homebuyers, according to the National Kitchen and Bath Association. Today, the most popular additions for younger buyers are sunken whirlpool baths and showers. But be sure to install modest, solid amenities. It’s easy to quickly over-spend on bathroom fixtures.
Buyers are, by convention, more interested in aboveground living space – not basements, yards and walkways. Swimming pools can be a poor investment if installed for the sole purpose of increasing a home’s value; it’s rare that a pool’s cost will be recovered in a home sale. It can also be a negative feature for potential buyers with very young children.
Replacing worn carpeting, tiles and wood floors can give your home an immediate advantage over similar properties in the area. Updating paint colors in all areas of your home can also prove beneficial.
However, it’s recommended that you use neutral colors, such as gray, beige and off-white when adding new floor and wall coverings. Fewer buyers will then turn away because of differing tastes.
Stay simple with your remodeling and look at your home as though you were the buyer. Chances are that if you find the upstairs bedroom could be brightened by a larger window, potential buyers will probably feel the same.
Don’t go overboard. Concentrate on improving two or three deficiencies in your home. More than likely, the time and money you spend adding quality to your home will be rewarded with greater profit at selling time.
Fully preparing your home for sale can make considerable difference in the time it takes to sell it. You can help eliminate buyer objections before they arise by making necessary repairs and improvements, some of which are suggested below.
__ Spruce up gardens and lawn; trim shrubbery and replace dead plants.
__ Yard and patio should be neat; outdoor furniture should be clean and in good shape.
__ Clean or paint your front door – remember first impressions last longest!
__ Manicure your front yard, driveway and entry – you can’t sell what you can’t see.
__ Check that door numbers, mailbox, and exterior lighting are all in good repair.
__ Touch up with fresh paint as needed.
__ Inspect chimney for cracks or earthquake damage.
__ Repair loose trim, drainpipes and fencing.
__ Clean stains; clean window screens.
__ Remove clutter; tidy up shelves.
__ Wash floor so it looks clean and spacious.
__ Apply fresh paint as needed…brighten your interiors with neutral-toned paint.
__ Clean draperies and carpets.
__ Replace burned out light bulbs.
__ Clean fireplace, remove smoke stains from wall and mantle.
__ Sinks, appliances and counter tops should sparkle without any clutter.
__ Wax the floor.
__ Clean oven, range and other appliances.
__ Clean tile and grout; replace if necessary.
__ Clean mirrors, glass, chrome and porcelain surfaces.
__ Replace shower curtain if necessary.
__ Fix any faucet drips or leaks.
__ Clean tile, grout and caulking; replace if necessary.
__ Doors and drawers should open and close easily.
__ Remove clutter; tidy up shelves and racks.
__ Shoes and clothes should be neatly arranged.
__ Check the basics around the house. It takes just a minute to check all doors, windows and cabinets to make sure they don’t stick, squeak or are too loose.
__ Clean your furnace & water heater, so buyers know they are looking at a house that has been well maintained.
- Your boss has just given you the career opportunity of a lifetime, but the job is in another state.
- Soon you discover that moving your family to another city may be one of life’s hardest tasks. The thought of leaving behind old friends and schools for a strange town can be frightening. The biggest challenge of all, however, is to preserve the equity in your housing investment so you will be able to purchase a similar home in the new location.
- Not to worry. Even in these uncertain times homeowners can sell at very satisfactory prices in a reasonable period of time. The secret? Pay attention to details, utilize marketing savvy and price the home to sell quickly.
- The following tips can help you get that “sold” sign up fast.
- OFFER THE RIGHT PRICE. Start with a price that is reasonable for your neighborhood and the size of your home. Comparing the price of your home with similar nearby listings is an easy way to be sure you are offering the right price. Comparing the opinions of two independent appraisers will also help you avoid over-pricing.
- PAY PART OF THE CLOSING COSTS…usually 3 to 5 percent of the loan amount. This will attract those first-time buyers who are short on cash for down-payment and closing costs. Offering to turn over personal property such as washing machines and dryers, refrigerators and flower boxes can also attract buyers looking for the best deal.
- ACCEPT CONTINGENCY AGREEMENTS. Make your sale contingent upon the sale of the buyer’s home. This takes away buyers’ fears of juggling two properties and mortgages at the same time.
- TAKE ADVANTAGE OF THE CORPORATE RELOCATION TRADE. Be sure that your broker is connected to a relocation network – one capable of bringing in buyers from distant places. And, of course, try to get your employer to provide you with relocation assistance, too.
- MAKE YOUR HOME STAND OUT. Fresh paint and flowers can go a long way in impressing buyers. Tend to such details as moving the lawn, fixing stubborn doorknobs and sliding doors, and straightening up the basement. Remember, your home’s appearance on the day it’s shown can make or break a sale.
- The bottom line is that sellers should take the time to make their home as attractive as possible. Compiling helpful tips for the buyer about school districts, utility bills and directions to the nearest shopping mall can go a long way in selling your house quickly.
- With a little work and an active real estate agent, chances are good that your house will sell fast in today’s buyer’s market.
Listing Your Property
If you list your home with me, be assured that keeping you informed of all client interest and market activity is a high priority of mine. Whether by phone, by e-mail, or by written notification, I will report regularly to you and keep you apprised of all relevant information including:
- Broker feedback from broker tours and open houses
- Client feedback from showing appointments including broker feedback
- Advertising notifications
- Any new market data or trends affecting the sale of your home
- Review of your home’s marketing activities
- Suggested adjustments to your marketing plan or pricing strategy
If you are interested in selling your property but have not listed yet, it would be my pleasure to show you all the ways in which I can effectively market your property through a Listing Presentation.
Q: What is an offer?
A: An offer is usually made in the form of a written contract prepared by a sales associate representing a buyer. All offers for your property will generally first be presented to me, and I will then present them to you.
Q: How quickly must I act?
A: Usually time is of the essence in negotiating an offer. There are often strict deadlines, which must be met. I will stay in constant communication with you during the entire transaction process.
Q: Who knows about the terms of an offer for my property?
A: No one, except you, and myself, will know about the terms of an offer prior to your acceptance. You will be kept informed of any other buyer’s interest in your property; and if more than one offer is submitted to me, all will be presented to you for your consideration.
When you receive an offer for your property, there are many decisions to make and details to consider. We will help you evaluate the quality of the offer, negotiate the terms and ensure a smooth transaction. Here are just a few of the many ways we will assist you through this important process:
- Be at your side when the offer is presented.
- Request information about the buyer’s background, intentions and qualifications.
- Ensure that the buyer is knowledgeable about available financing alternatives.
- Thoroughly review the contract and ensure that you understand all the details.
- Guide you through key stages of the process – contingencies, inspections, disclosures, escrow, buyer financing, and any unusual terms and costs.
- Negotiate the sales price and terms that are most advantageous to you.
- Provide you with information about recent market activity.
- Provide you with specific information about local, state and federal requirements that affect the sale of property. These requirements may include state codes such as: Transfer Disclosure Statement, Smoke Detectors Compliance, Environmental Hazards Disclosure; and Federal requirements such as: The
- Foreign Investment in Real Property Tax Act (FIRPTA) and Lead Paint Hazard Reduction Act.
You may also wish to consult your attorney or tax adviser during the sales process. We will always present you with all the facts at our disposal and offer our educated personal opinion, but the final decision to accept, reject or counter an offer is yours.
Closing The Deal
Escrow is the process that buyers and sellers of homes use to complete the monetary and legal details of a sale. A neutral third party manages the escrow, called an “Escrow Officer,” who generally works for a title company. “Title” is the proof of ownership of a property. The title company ensures that all terms of the contract are adhered to before the sale is complete and money changes hands.
In order to successfully bring an escrow to close, the title company will:
- Obtain a title report to ensure that the seller has the right to transfer ownership (title) to the buyer
- Ensure that any previous loans on the property have been paid off
- Acquire necessary loan and insurance documents
- Confirm that necessary inspection reports are on file
- Arrange for the buyer to sign all necessary paperwork to complete the close of escrow
When these details are complete, the Escrow Officer requests the funds to be released and instructs the title department to record the transaction at the County Recorder’s Office, thereby closing escrow.
Once you have negotiated a contract and agreed on a sales price, the next phase of our job begins. Below is a list of some of the details I will be managing through this process.
- I will constantly check with the title company to assess when they need additional information and whether there will be any problems that could affect obtaining title.
- I ensure that both you and your Buyer receive copies of all documents pertaining to the transaction. I will have the Buyer sign to acknowledge that he/she has received his/her copies.
- I will make sure that the Buyer meets and removes all contingencies within the time limit provided or get an extension, if needed, signed by both you and the Buyer.
- I will keep you abreast of the Buyer’s application for a loan and the progress of the appraisal on your home.
- I will work with the appraiser to arrange for entry to the property and to answer any questions he/she may have about the home or neighborhood. I will also provide the appraiser with the most recent comparable sales in the area.
- I will make sure that the Buyer increases their deposit in a timely manner.
- I will coordinate and attend as many inspections as possible and keep you informed of all findings.
- Once the inspections are complete, I will negotiate for you if any problems arise.
- I will cooperate with the Buyer and others involved ensuring that corrective work is completed according to the terms of the contract.
- I will ensure that all documents are ordered and drawn, including your loan pay-off and insurance for the Buyer.
- I will do my best to have your closing papers drawn one week before Close of Escrow (COE) so that if any problems arise, I can solve them while remaining within the time frame you expect.
- If you prefer, I will deliver your escrow check to you personally. I am also happy to coordinate move-in dates.
During the escrow process, you must inform the buyer of specialized conditions that affect your home. These may include the following conditions:
- Lead Paint
Sellers of properties built prior to 1978 have the following obligations:
Provide buyers with a HUD pamphlet entitled “Protect Your Family From Lead in Your Home”
Disclose all known lead-based paint and related hazards and provide any available reports
Include a standardized warning as an attachment to the contract
Complete and sign statements verifying that requirements have been met
Retain the signed acknowledgement for 3 years
In addition, you must provide the buyers with a 10-day opportunity to test for lead
- Natural Hazards
California law requires sellers to disclose, via a “Natural Hazard Disclosure Statement” or NHD, if properties are located in one of six predetermined “natural hazard” zones. (If the property is not within one of these zones, you, of course, have no such obligation.)
The six zones are:
- A flood hazard zone as designated by the Federal Emergency Management Agency (FEMA)
- An area of potential flooding after a dam failure (also known as an inundation area)
- A very high fire hazard zone
- A wildland fire area, also known as a state fire responsibility area
- An earthquake fault zone
- A seismic hazard zone
If an NHD is delivered to the buyer after both parties have signed the Purchase Agreement, the buyer will have three days to rescind the agreement. However, if the buyer received the NHD before they signed the Purchase Agreement, then they cannot use the NHD to rescind.
- Mello-Roos Districts
Especially (but not exclusively) if you are selling a home in a newer area, you may be within a Mello-Roos tax district, and you must provide to the buyer a “Notice of Special Tax.” If this notice is delivered to the buyer in person, they have three days to rescind their offer. If it’s delivered via U.S. mail, they have five days to decide.Basically, a “Mello-Roos Community Facilities District” is formed by a local government, district, or agency to finance public services and facilities including police and fire departments, ambulance and paramedic services, parks, schools, libraries, museums and cultural facilities.
- Condominiums etc.
If you’re selling a condominium, townhouse or other planned development (for purposes of this discussion, we will call them all “condominiums”), there are the buyer needs to know about common areas (such as greenbelts and recreational rooms) and the homeowner’s association.The buyer will be required to make monthly payments, known as regular assessments, to maintain common areas, as well as special assessments to replace a roof or repair the plumbing, as determined by the homeowner’s association (HOA.)Condominiums also may have regulations regarding architectural requirements, limitations on pets, and age restrictions (i.e., senior housing). These must be formally disclosed to the buyer during escrow. You may provide this information via the following documents, to the extent that they exist and are available:Declaration of Restrictions: Commonly known as “CC&Rs”, or Conditions, Covenants and Restrictions
- Articles of Incorporation or Articles of Association Bylaws
- All current financial information and related statements, including operating budget, estimated revenue and expenses, HOA reserves, estimated remaining life of major components (including roofs, plumbing etc.), and regular and special assessments
- A statement describing the HOA’s policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments
- A summary of the HOA’s property, general liability, and earthquake and flood insurance policies
- On existing HOA’s, a statement describing any restrictions on the basis of age, such as authorized senior citizen housing
- Many smaller HOAs will not have all of these documents, but must provide what they do have.
A major question in every escrow is: “Who pays for what?” The answers vary by county ordinances and standard practices. What is listed below are “customary” practices. All fees charged are governed by terms of the sales contract and other written escrow instructions. Note: on some FHA, VA or other government-backed loans, the buyer will pay some fees that governmental regulations will not allow you to pay.
Seller’s Generally Pay:
- Real estate commission
- Document transfer tax ($1.10 per $1,000 of sales price)
- Notary fees
- Property tax proration (to date of acquisition)
- Special delivery/courier fees, if required
- Document preparation fees
- Document recording charges
- Homeowner’s association statement fee and prorata dues
- Home warranty (according to contract)
- Work/repairs required (according to contract)
- Matters of record against the property or seller (loans, tax liens, judgments, etc.) and fees required to clear them (statement fees, reconveyance/trustee fees and prepayment penalties)
- Bonds and assessments (according to contract)
Buyer’s Generally Pay:
- Title insurance policy premiums (lender’s and buyer’s)
- Escrow fees
- Notary fees
- Property tax proration (from acquisition date)
- Special delivery/courier fees, if required
- Document preparation fees
- Document recording charges
- Homeowner’s association transfer fee and prorata dues
- City costs
- Home warranty (according to contract)
- Inspection fees (according to contract)
- Matters of record against the buyer including tax liens, judgments and fees required to clear them
- Fire insurance premium for the first year
- Assumption/change of records fees if the buyer is taking over an existing loan
- Lender’s new loan charges
- Interest on new loan from date of funding to 30 days prior to the first payment
- Other prorations (rents, insurance etc.) if applicable