Escrow From a California Homeowners Perspective
March 23, 2008
The Escrow Process
Both Buyer and Seller deserve the assurance that no funds or property will change hands until all of the instructions in the Purchase Contract have been satisfied. The Realtor submits Buyers and Sellers signed documents and Buyer’s deposit money to be held by an independent neutral third party (Escrow). After the conditions agreed upon by both Buyer and Seller (in the Purchase Contract) are satisfied, Escrow then distributes the documents and the funds.
The escrow holder is an independent neutral third party; works for both the Buyer and the Seller, and is authorized to follow the specific written instructions provided by both parties. Escrow functions:
Receives and deposits (into escrow’s account) Buyer’s initial deposit and prepares escrow package. Requests “demands” (pay-off statements) from existing lenders and/or lien holders. Obtains Seller’s notarized signature on grant deed. Safeguards grant deed until all terms and conditions are met and Buyer’s remaining certified funds are on deposit. Orders title search and receives and distributes preliminary title report. Calculates prorations pertaining to property taxes, rents, insurance, interest, and other expenses as required.
How to Show & Sell Your California Home
March 22, 2008
Seller’s Showing Instructions
1. When the agent arrives with the potential buyers, have the window coverings open to let in as much sunlight as possible. At nighttime, be sure that all of your outdoor lights are on, particularly any landscape or pool lights. Indoor lights ? all of them should be on day or night. I have never heard a buyer tell me ? "it is too bright".
2. Open doors between rooms to give an inviting and open feeling. Turn the television off. When necessary, have the thermostat set to a comfortable temperature. In winter, a fire in the fireplace is inviting - you want the buyers imagining themselves living in your home.
3. Pick up any newspapers, magazines and clutter that may be lying around. Your kitchen and bath counter tops should all ready have been cleared of all but the most basic necessities, make sure dirty dishes are not in sight.
4. If you have pets, take them for a walk. Many people are afraid of pets; others love them and will remember your pet more than your home.
5. The beds should be made and clothes picked up. Bathrooms should be clean and the toilet lids down.
Sell Your California Home For Top Dollar
March 21, 2008
HOW TO SELL YOUR HOME FOR TOP DOLLAR
1. Make your home look like a model ? even if it isn’t. Hire a Realtor that offers the services of a professional decorator who will assist you in preparing your home for sale ? using the existing items in your home.
2. Keep the thermostat set so that buyer’s are comfortable. Imagine buyer’s looking at several homes on a hot summer day, even if your home is perfect, when the buyer’s are uncomfortable when viewing your home, they will not like it.
3. Lots of light. When you know your home is being shown, turn every light on, even on a sunny day. Open curtains (unless the view is unpleasant). When leaving for work, at a minimum, leave on the lights in the entry and the first several rooms that a buyer will naturally be drawn too. Have your windows professionally cleaned.
4. Open houses. Talk to your agent about the frequency and advisability of having open houses to the public.
California Home Seller Disclosure Duties
March 20, 2008
Property Condition - Seller’s What to Expect During the Inspection Process The Transfer Disclosure Statement (T.D.S.) ? Perhaps the most important paper you will complete when selling your home
Most sellers (other than institutional type) are required by law to disclose facts and defects, which materially affect the value or desirability of their home. The Transfer Disclosure Statement (TDS) helps the seller meet this requirement by providing a standardized format for most basic information. If the seller does not fully disclose, the buyer will be able to cancel the escrow, or worse find out after escrow closes - Full disclosure can reduce or eliminate the possibility of later legal action.
Often, as part of "day to day" living in a home, certain items do not function properly, are overlooked and we just accept them. Some common problems: Does your doorbell work? Is the clock on the oven operating properly? Do all windows and doors open properly? Is there safety glass in shower & sliding glass doors? Are you aware of asbestos or lead based paint? How is your water pressure? Are any of your sprinklers broken? If you have a water softener is it owned or rented? Information about an alarm system should also be noted on the T.D.S. Legally, you must also disclose any homeowner’s insurance claims made in the last five years. When in doubt, disclose.
How to Make a Buyer Fall in Love with Your Home
March 20, 2008
If you are thinking of selling your home, there are a number of things you can do to improve the "showability" of your home. But first, let’s look at your home through the eyes of the buyer.
Inside:
1) Open the window coverings and let the sun shine in. Window coverings should be cleaned so that they are not dusty. Have your windows professionally cleaned ? you won’t believe the difference!
2) Turn on all lights - day or night. Clean all light bulbs, light fixtures and chandeliers. Wherever practical, install higher wattage light bulbs to further brighten your home.
3) Create the illusion of spaciousness, remove all clutter from each room to visually enlarge them (imagine a builder’s model home). Improve traffic flow and create a feeling of spaciousness by removing unnecessary furniture, knick-knacks, hobby items, children’s items, etc. Organize your closets and cabinets, remove unnecessary items and put them in storage. Rent a storage area if needed, or pack it in the garage. You’re going to move anyway — start now!
4) Light your fireplace during the winter.
5) Keep your home dusted and vacuumed.
Investment Real Estate: An Inexpensive Way To Get Started
March 19, 2008
If you are considering getting involved in investment real estate, let me offer some of the amazing information available in my wealth-building system, Winning the Mortgage Game. In several parts of my system, I outline a strategy for getting started in investing in real estate, without being a landlord. Also, it can be done without a lot of money up front. The method I describe is purchasing mobile home notes.
A mobile home is a manufactured home, which has no land attached. It can be purchased and moved or purchased at a mobile home park. Now, you can actually purchase the mortgage from a private investor — meaning you will own the right to collect payments from someone who owns the mobile home. In other words, you will be the bank — the entity holding a note on a piece of property, collecting monthly payments.
You are not, however, a landlord. The people paying you actually own the property. They maintain it and fix any problems that arise. You, as the bank, have the right to foreclose, if they stop paying. But, if you’ve bought carefully, you will never have to worry about them not paying.
Top Tips for Buying and Selling a Home
March 18, 2008
Buyers
Looking for a home
-Use Internet for overview of properties, communities, and schools. -Visit potential neighborhoods at different times of day. -Research price trends in communities and neighborhoods. -Consider resale prospects on home before you purchase.
Get your new home inspected before you buy.
-Hire a home inspection professional who is certified or licensed. -Attend inspection, ask questions and take notes. -Use inspection tour to verify home fits your needs. -Submit inspection problems to seller for remedy.
Research home financing options before making a decision.
-Fixed rate. The interest rate you pay is fixed over the term of the loan. -Adjustable rate. Interest rate changes at end of adjustment period. -Seller financing. Mortgage contract between property seller and you. -Avoid paying Private Mortgage Insurance. An insurance fee charged monthly to higher-risk borrowers less than twenty percent down payment.
Retain a real estate attorney and buyers real estate agent. -An attorney should review contracts before you sign them. -Your attorney is your legal advocate from contract to closing/escrow. -Locate a real estate agent who has a fiduciary responsibility to you. -Fiduciary. Part of the common law of agency, indicates a relationship based on trust.
Dont Forget to Ask About Restrictive Covenants
March 17, 2008
Homebuyers, especially first-timers, may not think of asking about restrictive covenants. But these clauses dictate what can and cannot be done to or on a property. When buyers purchase property governed by restrictive covenants, they consent to conduct their lives in accordance with those provisions.
A restrictive covenant, which is a type of deed restriction, regulates a group of new and existing homes or building lots. Developers use them to preserve a development or subdivision as a model community and control its use and appearance. Buyers agree to the sometimes-rigid restrictions in order to maintain the aesthetic standard set by the developer and to safeguard the value of their homes.
Restrictive covenants should not be confused with local zoning and government regulations. Some covenants and zoning regulations overlap; for instance, either can limit the height of a building. But, restrictive covenants tend to exert greater control over a homeowner’s lifestyle. In addition to standard clauses, which may stipulate a home’s minimum size, height, architectural style, and color schemes, covenants often ban practices that could be regarded as aesthetically objectionable–such as parking RVs, boats and non-running vehicles on the property.
Preserve Equity, Build for the Future Using a 1031 Tax Exchange
March 16, 2008
Thinking of trading up on an investment resort property? If so, look into 1031 Tax Exchanges (based on IRS Code Section 1031), which allow taxpayers to defer taxes on capital gains resulting from the sale of investment real estate, often a sizable sum since combined Federal and State taxes can run as high as 38 percent.
With an exchange, owners are able to preserve equity, while still selling the property. The underlying concept is that an exchange of like-kind property for like-kind property does not generate funds, which can be taxed since the profits go directly into the new or replacement property. To accomplish this, sellers hire a Qualified 1031 Intermediary (QI) to document the sale as an exchange and to receive the funds from the sale. The QI then delivers the funds directly to the closing agent for the replacement property who deeds the property to the taxpayer.
The Listing Contract: Its All in the Details
March 15, 2008
Now that you’ve chosen a real estate professional to sell your home, you’ll need to work together to complete a listing agreement. This legally binding contract authorizes a broker and his or her real estate professionals to find a buyer for your home, according to the conditions specified in the contract. Depending on the type of listing agreement, you can expect to see most of these terms detailed in the document.
Terms of the Agreement The length of time the contract will be in effect typically runs anywhere from 30 to 90 days, depending on the local market. Since a contract can be extended before it expires, you may not want to lock yourself into an automatic extension.
Under Terms of the Agreement, you’ll also find the price of the home. You and your real estate professional should arrive at the home’s market value after considering the Comparative Market Analysis (prepared by your representative) and other factors.
