Archives for June 2014

How Much Money Will You Walk Away With From Your Home Sale?

As the seller of your home, you are bound to face a parade of taxes, commissions and other fees that could cost 4% to 7% of your sale price.home-seller-fees-300x195

So how will you know how much money you will walk away with? Your REALTOR® will give you a worksheet itemizing all of the charges you are responsible for. The amounts vary by state, but most sellers will see several, if not all, of these common fees:

Commissions

Real estate agents work on commission. When you sell your home you will pay a commission—typically 6%—to your agent’s brokerage and the buyer’s agent’s brokerage. The agents are then paid from their brokerages.

Managing Your Mortgage

If you have a mortgage when you sell your home, you will face a few charges such as:

  • Mortgage balance payoff: The cost of repaying your home loan, second mortgage and any home equity line of credit is deducted from the sale price of your home.
  • Loan payoff fee: Some lenders charge an administrative fee when you pay off your mortgage or home equity line of credit.
  • Prepayment penalty: If you have a prepayment penalty clause in your mortgage, you will have to pay a fee to pay off your loan when you sell your home.

Working With the Buyer

Depending on the real estate market in your area and your buyer, you may have to negotiate and cover certain costs for the buyer, such as:

  • Closing cost concession: After you and the buyer agree on the final sale price, it isn’t uncommon for the buyer to ask for a closing cost concession to cover their closing costs. This fee—typically 3%—is added to the price of the house and then returned to the buyer after closing.
  • Repairs: Depending on the condition of the house, the buyer or the lender may ask you to cover the cost of repairs before closing.
  • Home warranty: Sometimes a seller will agree to foot the bill for a home warranty that offers a protection plan for the buyer’s first year in the home.
  • Termite letter: A document stating your home is termite-free may be required in some areas.

Fees Paid at Closing

Once you have struck a deal with a buyer, you will have other fees to pay before you can finalize the sale. For example:

  • Lien release document: If you owed money to a contractor, for court judgments, or for property taxes, a lien may have been placed on your property and you must pay that money before the sale can close.
  • Recording fees: If you owe money on the property, you will need to pay this fee to show your debts have been fully paid.
  • Notary fees: A fee charged by a notary to verify your identity and to make sure the documents are executed properly.
  • Escrow fees: The escrow company acts as an intermediary between you and the buyer, ensuring the money is handled properly. Escrow agents receive money from the lender, pay off your mortgage and closing costs, collect deposits and give the proceeds to the lender. You may be able to split these costs with the buyer.
  • Title search fees: Title companies search public records and give you a title insurance commitment. This document proves you have a legal right to sell your home.
Share Button

How to Win the Bidding War on the Home You Want

If you are buying a home at the height of a citywide seller’s market or simply want a sought-after house in a neighborhood with limited turnover, you may find yourself in the midst of a real estate bidding war.

Competing against faceless prospective buyers may bring out the warrior in you, but before you decide to go all out in your battle, you need to step back and decide how much you really want that particular home.

Should You Compete in a Bidding War?

In the thick of competition you may forget your end goal is a home you love and can afford to own. If your offers have been turned down by several sellers because of competing buyers, then you may feel pushed to make an aggressive offer for the next home you like.

You should stop yourself from competing just because you think the time is right to become a homeowner or to move up into a new place. Instead, think about whether you really want the particular house enough to fight for it.

To guard against making an emotion-fueled offer for a house, take a hard look at your finances. While it may feel good at first to beat out other buyers and to purchase a property, it won’t feel so great in a year or two when you are struggling to make the payments on a house beyond your means. Know your limits before you begin to bid.

Prep for Battle

Your first step before entering a bidding war should be to consult with a lender to understand the maximum amount you can borrow, to evaluate how much cash you have to spend while keeping enough money in a reserve fund.

Next, make sure you hire an experienced REALTOR® who can share information about local market conditions and communicate with the seller’s agent. You should rely on your REALTOR® for advice about how to handle a bidding war, but be sure to do your own research: visit a lot of homes in the area where you want to buy so you understand the value of various properties before you make an offer.

Bidding War Strategies

Your REALTOR® should work with you to craft an attractive offer based on the list price for the home, a comparative market analysis of similar homes, and knowledge gained from the sellers’ agent about the sellers’ motivations and preferences.

In a bidding war, it’s important to work with a REALTOR® who will move quickly to present your offer and any counteroffer, one who is easy to communicate with during the transaction.

While you may assume money is the motivator that steers sellers to one buyer over another, there are other ways to make your offer attractive, such as these ideas:

  • Solid financing: You may be competing against cash buyers, so make sure your loan pre-approval is in place and you have completed all required documentation other than identifying a specific property.
  • Eliminate contingencies—carefully: If you own a home now, you may want to offer to buy another home without making your contract contingent on the sale of your current home. You take the risk of carrying two mortgages for a while, so make sure you can safely handle the payments. You can also decide to have an “information only” home inspection rather than making your offer contingent on the outcome of the inspection.
  • Make the settlement date convenient for the sellers: Rather than negotiating on a closing date convenient to all sides, you can tell the sellers you will work with their schedule or rent back the property to them after the closing.
  • Offer to pay all closing costs: You can reduce the sellers’ out-of-pocket expenses by offering to pay their share of the settlement fees, but before you do this get an accurate estimate of what those costs will be and make sure you have the funds available to pay them.
  • Personalize the transaction: Sometimes the tipping point for sellers who receive multiple offers is something emotional rather than financial. A personal letter describing your love of their home may tilt the scale in your favor.
  • Try an escalation clause: Money talks, too, so you can add an escalation clause to your offer that increases your bid by a certain amount above other offers. Just make sure you set a limit on how high your offer will go.
  • Control yourself: Remember that any offer is subject to an appraisal (unless you waive that contingency, but that’s not recommended unless you have plenty of cash), so be careful not to bid above the market value of any property.
Share Button

Costa Mesa Minute

Share Button

Orange County Solar-Panel Leases Turning Off Buyers

kurt real estateSolar-Panel Leases Turning Off Buyers

The leasing of solar panels for a home’s rooftop is growing in popularity because home owners can start saving on their utility bills without paying any upfront money for the system, which typically can cost thousands of dollars to install. But the fine print of these leasing contracts may deter some home buyers, who often have to assume the previous owner’s contract when the home is bought.

For example, home owner Dorian Bishopp tells Bloomberg that the solar panels he leased for his roof likely took 10 percent off the value of the Maricopa, Ariz., home that he sold in March. Bishopp says he leased the panels from SunPower Corp., which required the new owners of the home to assume a contract, which had nearly 19 years remaining on it.

But Solar is Soaring in Popularity

Bishopp had to “price the house lower than houses without solar to get people interested,” says Brian Neugebauer, the real estate agent at RE/MAX Excalibur who helped sell the property. Potential buyers were “scared of the solar lease.”

Home owners often don’t fully understand what they’re signing when they get into a solar lease agreement, Sandy Adomatis, a home appraiser in Punta Gorda, Fla., told Bloomberg. “You’ve got another layer to add on top of finding a buyer for the house. It’s not a plus.”

On the flip side, solar has been found to add value to a home, too. It adds about $25,000 to the home value for home owners who own rooftop power systems in California, according to a study by the Lawrence Berkeley National Laboratory. Leased systems, however, are considered personal property and not part of the house.

As such, a solar lease could be considered a liability rather than an asset that could drive away some potential buyers who are hesitant to assume the former home owner’s contract, says Adomatis.

Solar leases began growing in popularity in 2012, and they have helped solar panels become more affordable to home owners. Solar panel installations grew by 38 percent in the past year alone.

Buyers essentially are “moving into a home with a lower cost of ownership, a lower cost of energy,” so a solar lease shouldn’t make it more difficult to sell a house, says Jonathan Bass, a spokesman for SolarCity in San Mateo, Calif. “It becomes a selling point instead of a point of misunderstanding.”

Source: “Rooftop Solar Leases Scaring Buyers When Home Owners Sell,” Bloomberg (June 23, 2014)

Share Button

Vacancy, The Most over Looked and Most Expensive Aspect of Property Management

s-biz_money_housing_arrow
Costa Mesa, CA — (SBWIRE) — 06/11/2014 — 
The Kurt Real Estate Group is Property Management and Orange County Real Estate Experts. They have issued advice for people who are considering self-managing their rental properties and those who presently self-manage their residential real estate. Due to the uncertainty in the economy and property market many people who own and let out rental properties have begun to opt for self-management of their rental properties as a way to save money but the Orange County Real Estate Experts warn that this option might make sense in the short term yet in the long term this step may prove to be expensive. They point out that these unwanted long term expenses may occur due to the potential of overlooking important property management factors due to lack of training and inexperience. The Property market is on the rise in Orange County, therefor it is vital that property owners make the right and most sensible choice from the get go to avoid expensive mistakes in the future. For the ease of readers The Kurt Real Estate Group have outlined a few pitfalls of self-managed properties…

Common Pitfalls of the Self-Managed Property:
Not running their rental like a business
Not fully screening applicants.
Not reviewing State landlord/tenant laws.
Failing to have a proper written agreement.
Hiring the wrong contractors for repairs.
Not enforcing late rent policies.
Not inspecting your property on an annual basis.
Not using the advice of an eviction attorney when needed.
Entering a property without proper notice.
Not setting rents to market rate.
Poor record keeping.
Not maintaining the property.
Not properly handling deposit refunds
Failing to market properly to avoid extended VACANCIES.

About The Kurt Real Estate Group
Kurt Real Estate Group under the spearhead of Kurt Galitski have been servicing the Orange County Real Estate area for many years, their hard work and determination towards providing their clients the best real estate solution possible has earned them a coveted spot among the top 10% of the agents in Orange County. As an Orange County and Costa Mesa Realtor The Kurt Real Estate Group provide many services including representing Sellers, Buyers, Income Properties and Property Management, and also marketing a home to Hollywood’s film industry for film and commercial opportunities. Kurt and his group have received multiple 5 star ratings, check the Yelp reviews. Kurt and his team wish to convey to our readers:

“The bottom line is that we are in the business to create long lasting relationships. We want to attract and retain clients who, after experiencing The Kurt Real Estate Group Leasing way of doing business, will be excited to refer their friends and family. With The Kurt Real Estate Group Leasing, you will always be treated as a client and not a number. “

To learn more visit: kurtrealestate.com


The Kurt Real Estate Group

1503 South Coast Drive, Suite 130 Costa Mesa, CA 92626

(877) 957-6677

Share Button
%d bloggers like this: