Posts Tagged ‘selling a home’

Protect Yourself: What You May Not Know About Escrow Companies

Wednesday, November 15th, 2017

Most people know that escrow is the party that handles the money, paperwork and closing details of a transaction in California (and other states – the remaining states use attorneys for closings). But many do not know that escrow and escrow officers can fall under two regulatory categories, and that this could have an effect on their duty to remain a neutral party to both sides of a property sale.

2 Types of Escrow Companies in California

Independent or licensed escrow companies are independent companies that are licensed by the California Department of Business Oversight (DBO), which are governed by strict regulations designed to protect consumers.

Some of the requirements of independent escrow companies are that they are subject to management and bond requirements, are trust fund insured, are subject to annual financial and procedural audits and Department of Justice investigations of all employees, as well as escrow license requirements.

Controlled, or non-independent, escrow companies are nonlicensed businesses owned by third parties, such as real estate brokerages, attorneys, banks or title companies. These controlled companies are regulated by different licensing and regulatory authorities, which can vary amongst jurisdictions and are not governed as strictly as independent escrow companies.

Escrow officers have a difficult role in that they need to represent both parties in a property sale transaction while remaining neutral. An independent escrow company is the best choice, in my opinion, for real estate parties and clients, as there is more protection offered and there is not the threat of compromised neutrality.

 

 

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Home Sellers: You Get What You Pay For

Thursday, October 1st, 2015

Have you ever thought about your experience buying clothing, and compared shopping at say Nordstrom, to shopping at a discount clothing store? Did you notice the service difference – sure, the Nordstrom employee works on commission, but that is actually a benefit to you if you need help finding the right outfits. He or she will go out on a limb to pick the perfect shirt, slacks, tie or accessories to make you look your best. For sale

Selling a home is the same. I always tell potential sellers when I meet them to discuss listing their homes that ANYONE can list a home – it is not rocket science. The part time mom/real estate agent who only works weekends, the new “green” 18 year old agent with his first client, or the experienced agent – they all can do it. But you have to make sure to ask the right questions and get the right information to assure that you truly get the best representation.

You may have noticed agents in your area who might boast that they will list your home for less than the competition – some for say a 1% fee, and others for flat fees. While this may sound great to you as a seller, make sure you interview a seasoned listing agent and compare what you will get from each – you may be surprised.

Here are the things you need to ascertain as a potential seller to make sure that your home will be marketed properly and survive the escrow process in order to close:

1. Responsiveness – Many discount brokers will take your fee and put your home on the MLS, but that is where the buck stops. If you have questions or concerns you may find it hard to ever reach them, let alone have issues responded to. Even “big” agents who list many properties have this issue – there are several of them in my area and I have helped clients sell homes who had worked with them before and were unsatisfied with their lack of responsiveness. This is important to you as a seller, because you need an agent who is your partner and can communicate both effectively and continuously throughout the entire process from listing to closing.

RE_cancel2. Marketing – Does the agent’s marketing budget mirror the commission you are paying? In other words, if the agent is taking a lower fee, is this going to cause your marketing to be less than superb? I can tell you that I get a LOT of real estate information in my mailbox, and about 90% of it is junk – poor quality, bad images/non-professional photography, grammatically incorrect/spelling errors. The way your home looks to potential buyers is what will drive them to want to see it – it is a feeling and a lifestyle that you are selling, not just a house with walls.

3. Communication with other agents and parties: Your listing agent needs to be able to effectively communicate with other agents, loan officers, lenders, escrow and title representatives throughout the sales and escrow process. This includes following up with showings and alerting agents of potential buyers of any changes or new developments with the property. Problems always come up that need to be addressed in order to stick to the time frames identified in the contract – make sure your agent knows how to do so and is willing to stay in touch on a daily basis.

4. Negotiations – This is a big one. Your agent must be a strong negotiator. Unfortunately many real estate agents are not strong in this regard, and many contracts do not come to terms or fall apart after agreement. Negotiation skills are needed not just at the start when a contract is received, but throughout the entire escrow period. Getting an offer is just one part – keeping those buyers excited about their new home until closing is another issue.

5. Paperwork – if you work with a discount agent/brokerage, make sure that your agent explains how the paperwork will be handled. Real estate transactions contain a LOT of paperwork, and they are all LEGAL documents! There are many consequences to filling out paperwork incorrectly, including law suits years after your home sells. You need to make sure your agent knows how to properly handle the paperwork and how to coach you in filling it out correctly so as to avoid legal ramifications.

The bottom line is that you usually get what you pay for – like comparing Nordstrom quality and service vs. Walmart quality and lack of service. Unlike buying a shirt however, selling a home comes with many legalities. Make sure you are protected and find an agent that will work hard for you to keep you informed, compliant and safe.

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5 Ways to Best Sell a Tenant-Occupied Home

Friday, February 20th, 2015

Selling a home the right way can be tricky – you need to make sure the home is clean, clutter-free, shows well and is staged properly. You should  have beautiful professional photos and the home should be inviting and bright…a lot to contemplate when preparing for sale. If the home is occupied by tenants these tasks can be even more challenging. Here are 5 things you can do to make sure your home looks great with tenants living there. spring-cleaning

1.  Make assessments with the tenants. Before listing you should walk through the home with the tenants and your real estate agent. Make a list of things that need to be done in order to get great photos and optimal showing results – is there any clutter that needs to be removed? Does anything need to be remedied? Make a list for the tenant and then offer to help them out to get those items resolved.

2.  Include the tenants in the planning. Make sure you discuss with the tenants the ideal time(s) for showings – get them involved so that they do not feel their privacy is invaded. Find out if they would like to be notified by the agents themselves of potential showings, or if they prefer to have daily times where agents can just go and show (for example, if they will be at work). If there are any pets make sure to get instructions on what agents need to do to assure the pets are safe during showings. Consideration goes a long way and will make your tenant feel their needs are being addressed.

3.  Pay for a cleaning service. Tell your tenant that you will be paying for the home to be cleaned. If your tenants are messy you may need to have the cleaning service come every week or bi-weekly during the showing period. Most tenants will like this because they do not have to clean themselves. Make a deal with them that you will do this if they promise to make beds, put away clothing and food items, and keep everything clutter-free. If the home is carpeted you should also have the carpets cleaned, as well as the windows.

4.  Rent reduction. Many tenants have no desire to help you sell the property because it means they will need to move. In order to make sure they keep the house clean and show-ready you need to make it worth their while to do so. The best way to do this is to reduce their rent during the time the home is being marketed and shown. The tenant will agree to keep the home tidy and de-cluttered daily, in exchange for a reduced rent. This can be a win-win for everyone.

5.  Last resort: termination of tenancy. Some tenants just won’t cooperate no matter how much you do to help them. Rather than try to show the home in a poor state, if all else fails you will need to provide your tenants with written notice to terminate the lease (if it is possible to do so according to the terms of your lease). If the lease is still in effect and cannot be terminated it may be advantageous to offer the tenants a monetary sum to terminate the lease early. Make sure you speak with a real estate/tenant and landlord attorney in your area to understand the law and your rights as a landlord, as well as those of your tenants – you should do this before listing the home if you have a lease that is still in effect.

Over the years I have sold properties with tenants – from cooperative tenants to those who lived in filthy conditions and made nasty comments to potential buyers about the home (those tenants started out cooperative and said they were going to keep the place clean – they had to be evicted eventually). In general it is easier to sell properties without tenants, but if you have people who are willing to help out it can be done and it can be a positive situation for everyone if you take steps to be considerate and plan everything out.

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