Tag Archives: selling

AFTER THE INSPECTION – WHAT NOW?

15 Thursday Dec 2011

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NOW that we are through the inspection period, what happens now?  Here’s what you need to do:

  • Keep in contact with your lender – make sure that they have ALL documents they need from you.  Remember that they may come BACK and ask for more, different documents, depending what the underwriting department asks for.  Don’t worry – that’s normal.  Just get them any documents they ask for as soon as you can.  Email the lender to tell them you are THROUGH the inspection period and want to make sure they have all the documents that they need.
  • Let your agent know what TIME of day you’d like to close so that they (I) can get you on the closing attorney’s calendar and make sure that the time is all right with the seller.
  • Your agent will get you UTILITY INFORMATION.  But it’s probably best to wait until the week before closing to make the calls and arrange the transfer.  Sometimes companies won’t take your call until AFTER the seller has called to have the utilities taken OUT of their name (in other words, the seller must first call to have electricity turned OFF as of the day of closing – then you call to have it turned ON.  In truth, the utility company never actually disconnects – they just change the name on the account.
  • WATER is a special deal.  The City will require a copy of the signed SETTLEMENT STATEMENT before they will switch water to your name.  Go ahead and print out the application from online, fill it out and bring it with you to closing.  The closing attorney will fax it along with the settlement statement to the water department FOR you from the closing table.
  • PACK if you haven’t already.  Arrange a moving company.  Your agent can get you names/numbers if you want/need them.
  • If the seller has agreed to make repairs as a result of your inspection, you will want to check to make sure those repairs are done.  Hopefully you have requested that the seller provide receipts for any and all repairs either at closing, or preferably prior to closing.  If they are major repairs and you feel more comfortable doing so, you can pay your inspector to come back and inspect the repairs.
  • FINAL WALKTHROUGH – you will want to do one last walkthrough prior to closing.  This can be done on your way to closing, or the day/evening before.  You will be checking to be sure there has been no damage to the property and that all is in order.  IF there is something amiss, the seller is given the opportunity to correct it.  Obviously, if you do not discover it until right before closing, there’s not time for that.  You can either delay closing or ask the seller to put some amount of money aside as surety until the problem is fixed.

CONGRATULATIONS ON YOUR NEW HOME!!!

MAKING THE OFFER

21 Monday Nov 2011

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Okay, so you’ve looked and looked – and you’ve found the place that you want to buy!  What happens next?  First, have your agents pull COMPS.  COMPS are comparable properties that have sold in the area recently that will help you determine the value of the home that you want to buy.  Typically we start with homes that have sold in the last three months that are within a half mile radius that are “comparable”.  If there aren’t at least three comparable properties within those parameters, we expand the search – going out to a mile and back six months…. And so on.  Your agent can be an invaluable help in determining a fair price for the home and what you should offer.

Once you’ve determined what you’d like to offer, it’s time to put TOGETHER the offer.  We do this by filling out the GAR (Georgia Association of Realtors) Form – there’s one for single family homes, and a different one for condos.  Here are the elements of the offer: 

  • Purchase price you’re offering;
  • Amount of earnest money you’re putting up – standard in Georgia is to put up at least one percent of the purchase price, so for a $500,000 property you’d put up $5,000 in earnest money);
  • Amount of closing costs you’re asking the seller to pay:
    • This must be a SPECIFIC amount.  You can’t just ask the seller to pay “all” closing costs, or 50% of closing costs – you have to ask for a specific amount
    • Make sure the amount you are asking the seller to pay is not MORE than your actual closing costs.  Your lender can help you determine this
  • What DATE you want to close.  Typically you’ll need at least three weeks from making the offer if you are getting a loan (not paying cash) for the lender to underwrite your loan;
  • Due diligence period – this should be seven to ten days, unless there is a good reason to ask for more (say there’s evidence of structural problems, that sort of thing).  During the due diligence period you can terminate for any reason or no reason at all, and still get your earnest money refunded;
  • The closing attorneys you’d like to use; your Realtor can make recommendations for this – it needs to be an attorney who regularly does closings and who in on your Lender’s approved list;

In the stipulations, here are some things (among many) you may ask for (BUT keep in mind, that you might not want to clutter up your offer with lots of ancillary requests, particularly if the offer is a lowball offer):

  • Seller to provide a one year termite bond for Buyer
  • Seller to provide a one year home warranty for Buyer
  • Seller to provide a survey of the property for Buyer
  • Seller to have the property professionally cleaned prior to closing
  • There may be certain items in the property that aren’t listed on the Seller’s Disclosure as staying with the property, but which you want to remain with the property, such as:
    • A porch swing
    • A gas grill
    • A piece of furniture that is custom fit to a certain spot
    • Chandeliers, if not already being left; etc. 

In addition, there are often EXHIBITS to the contract that are necessary: 

  • Financing contingency – if you are paying for the property with a LOAN, you want to be sure that you can obtain financing
  • Appraisal contingency – this assures that the property must appraise for the amount you are paying, or you are able to get out of the contract
  • Lead Based Paint exhibit – if the property was built prior to 1978, you need an exhibit explaining that there may be lead based paint in the property
  • Plumbing disclosure – in some counties, like Dekalb, the county requires that you have LOW FLOW fixtures in order to obtain water service.  In those counties, there should be a plumbing disclosure attached to the contract
  • Seller’s Property Disclosure – this is attached to and becomes a part of the contract
  • Condominium Disclosure Exhibit – sets forth the monthly fees for the condo, etc.

Your Realtor will need your signature on the offer and exhibits, will need the earnest money check IN HAND (the Broker will deposit the check when you’ve reached binding agreement – otherwise, it will be torn up or returned to you) and a prequalification from your lender.

Now, the game begins!  Unless you’ve made a very good offer, chances are that the Seller will counteroffer, and the counteroffers will go back and forth until the parties reach agreement.  At this point, it is INSPECTION TIME – the subject for another blog post in the near future!!!

CHEAPER TO BUY THAN RENT

26 Monday Sep 2011

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I just placed an offer for a client who told me that he’ll be SAVING $450 a month by purchasing the condo we found for him.  He is actually SAVING money by purchasing rather than renting.  Really?  I asked him.  Does your calculation INCLUDE the monthly HOA (homeowner’s association) dues on the condo?  He assured me that it did – and that yes, he’ll save $450 a month.  Not to mention the money he’ll save on his income taxes.  Interest he pays on his mortgage is TAX DEDUCTIBLE, and in the early years of a mortgage, much of what you pay is interest rather than principal.  So he’ll see more savings add up when he files his income taxes with the I.R.S.

It’s unbelievable, isn’t it?  Why are so many people still renting?  My client assures me he’s going to spread the word to his neighbors in the apartment complex, and I hope to see more clients from there!  But why aren’t more people automatically following his lead, with interest rates as low as they are, and home prices bottoming out?  As long as my client holds on to his condo for a few years, chances are he’s making a heck of an investment – and saving money in the interim to boot!

One reason more renters aren’t purchasing, of course, is that many of them have been foreclosed upon or have had to short sale their properties (a short sale is when the seller sells the home for less than is owed on it, and the mortgage holder agrees to accept a reduced payoff).  If you’ve been through a foreclosure or short sale, you won’t be able to purchase a new home for some period of time.  (Typically, lenders tell me, a foreclosure will prevent you from purchasing for seven years, and short sale for at least three years, although these time periods can vary).  Then there’s another group of potential buyers who have relocated toAtlanta, but who cannot afford to buy a new home until their home in the former state sells.  And of course, it’s much harder to sell a home these days – you’re competing with all the foreclosures and short sales.

But if you haven’t had a foreclosure, short sale or bankruptcy recently, if you have steady employment and enough money for a down payment, it seems crazy NOT to buy.  The client in this example is buying a one bedroom condo in a great part of Buckhead for less than $50,000.  Just two years ago the same condo was selling for double that.  I have other clients who are looking at homes $200,000 and below – and we are finding LOTS of homes in that price range that they like.  They are having difficulty deciding upon which they like best.  Home prices are just incredibly affordable right now.

If you are currently renting, you owe it to yourself to explore whether or not purchasing a home makes sense for you.  Interest rates are again at record lows and who knows HOW LONG these low home prices will last – so please, call or email me or your other favorite Realtor – we’d love to help!

A House Divided – Selling Your Home While Getting a Divorce

10 Wednesday Aug 2011

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It’s no secret that this real estate market is very difficult for sellers.   Home prices are lower than they’ve been since 1990, and prices are still falling.  Therefore, many homeowners are “holding on” – deciding not to sell in this strong buyer’s market.  Those who are selling generally fall into one of two categories: (1) those who have to sell (sellers who can no longer pay the mortgage or they are relocating a new city) or (2) those who want to move “up” and figure they’ll make up what they lose in selling their current home by getting a great deal on the move-up home.

And then there are divorcing couples.  Multiply the stress of divorce with the current economy and tough house-selling environment, and it adds up to a very difficult time.  Sometimes divorcing couples fall into category (1) – but oftentimes they don’t have to sell, but they want to sell in order to move on with their lives.  The house is often one of the largest, if not the largest, marital asset.  If one party decides to buy the other out, the party who is being bought out is getting short shrift – the current appraised value is certain to be low compared to what the home was worth before the 2008 housing crash – and also low compared to what the home WILL be worth when the housing market recovers.

In a relocation situation, Realtors often recommend that a seller consider renting out the home in lieu of selling, at least until the market improves.  Divorcing couples generally do not wish to explore that option, and of course it is often not in the divorcing couples’ best interest for the parties to continue to have to deal with one another in finding a tenant, maintaining the home, etc.    The divorcing party’s desire usually is to make a clean break and start a new life.  So, for divorcing couples who decide that they must sell together in order to fairly divide the marital housing asset, here are some thoughts and guidelines to make the process easier:

IF POSSIBLE, BOTH PARTIES SHOULD VACATE THE HOUSE.  Key to selling a home is making it as accessible as possible for agents and their buyers.  If your home cannot be shown, it won’t be sold.  If one or both parties are living there, it’s more difficult to show and since the two divorcing parties are often not speaking with one another, it makes it even harder to arrange showings.  It only makes sense that it is not a good idea for both parties to live in the house while it is being marketed and sold.  There is already enough stress in the relationship.

BEWARE THE “DIVORCE HOUSE” LOOK.  If only one member of the couple is living in the house, the home tends to look barren and sad with half the furniture gone. Agents can tell when it’s a divorce house, and buyers can too.  Since purchasing a home is often an emotional decision, a half-empty house is a big turnoff, even though much of the prejudice may be subliminal.  Buyers may not know WHY, they only know that the house feels sad, and they won’t want to buy it.  You are much better off selling a vacant house (totally vacant, cleaned, fresh paint) or one that has been staged nicely with furniture.   Another problem with one party remaining in the home is that it often causes disagreement between the divorcing parties as to whether the seller remaining in the home is “thwarting” the sale in any way.

IF ONE PARTY MUST STAY IN THE HOUSE, stage it.  It does not have to be “full” but it should look as if there has been time and effort put into making the house presentable for buyers.  In other words, no folding chairs and bridge tables in the dining room, and no blow up mattress serving as the bed.

CHOOSE A REAL ESTATE AGENT TOGETHER.  Both parties must trust and feel comfortable with the agent who is chosen.   Neither party should feel that the agent favors one seller over the other, communicates better with one seller over the other, or is otherwise prejudiced against one of the parties.  That said, we often represent couples when an agent on our team has been friends with one or both of them and it seems to work out fine as long as there is good communication between all three – the two sellers and the agent.  It often helps to have an agent who knows the parties, is empathetic, and fully understands the situation.  If there is any conflict or uneasy feelings during the course of the representation, be sure the let the agent know your feelings about this and give them a chance to rectify or adjust. 

COME UP WITH A PLAN OF COMMUNICATION.  We will often find that divorcing couples are not communicating well with each other.  This is not surprising, of course.  In that instance, having a plan whereby the agent communicates with both parties at once through email is often the key.  Otherwise, the agent has to choose “who to call first” and that can cause problems, UNLESS both sellers agree that the agent’s primary contact is with one particular seller.  If email is to be the primary source of communication, be sure that both sellers have ready, easy access to email and check it regularly.  Remember that DELAY – in responding to a request for a showing, or to an offer – can be deadly to a sale.  Buyers will move on quickly in this era of many, many homes on the market.

PRICE RIGHT FROM THE BEGINNING.  Divorce always takes an emotional toll, regardless of the circumstance, so you want to limit the damage as much as possible.  Better to get the house sold that to have it sit on the market forever while the parties wait – and wait – and wait – to fully move on with their lives.  Time and time again we find that the longer a house stays on the market, the less the seller ultimately gets for it, so this would seem to be a no-brainer.  Price right from the beginning!  In this strong buyer’s market, that is likely to be less than you thought or hoped you would get for it, but mitigate the damage by pricing well from the start.  Believe me, ultimately it’s better – and more lucrative – that way for all parties.

Our team has helped many divorcing couples through the process of selling a home, and we’re happy to help you as well.  Please do not hesitate to contact us at mwalser@kw.com or 404-272-3527.