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Frequently Asked Questions
4 Categories of FAQ's:
1. Selling
2.
Buying and Inspections
3.
The Process of buying or selling, and what is Escrow?
4.
Maximizing your home investment
Specific Questions:
1. I want to sell. What
should I do?
2. How much is my property worth?
3. What does "AS-IS" mean?
4.
What kind of repairs are recommended and add value?
5. How does my property get shown?
6. What should I do while someone
is viewing my home?
7. Should I answer a buyer's direct
questions?
8. What do I need to disclose?
9. What's a home warranty
and should I provide one?
10. How do I see properties that
are For Sale?
11. What are the best and worst
ways to find homes?
12. What if they accept my offer
but there is something wrong with the property, is my deposit
money at risk?
13. Tell me about the inspection.
14. What kind of property should
I buy?
15. What is the process?
16. What is Equity? How does a refinance
work?
17. What is PMI (Private Mortgage
Insurance)?
18. I'm thinking about selling,
but definitely will in the next few years. What should I do
to prepare?
19. How can I improve my neighborhood?
20. What should I look for in a
Realtor?
Selling & Maximizing
Your Investment
1. I want to sell. What should I do?
First thing to do: Create the best curb appeal possible. You
want buyers to walk inside your home. A home buyer's first impression
is based upon their view of the house from their car. Take a
walk across the street and take a good look at your house. Look
at nearby houses, too, and see how yours compares.
The most cost effective methods are to clean up any unnecessary
clutter, plant colorful flowers, manicure the lawn and trees.
Get a new plush door mat, too. Painting will always bring more
buyers inside. Removing and replacing old or unkempt window
coverings will help. If you have an area for flowers, buy mature
colorful flowers and plant them.
On the inside try to remove clutter and keep pathways clear.
When people enter, keep windows open to let as much light in
as possible. Often people store extra things in the garage to
clear their home.
Remember, that many buyers have a difficult time imagining what
a house will look like after they've moved in. So the more desirable
look you provide, the better the offers. Also, keep your property
safe from obstacles and hazards (cords, holes, slippery surfaces,
etc.)
Prior to listing your property please gather and provide your
agent any and all paperwork pertaining to the home (construction
paperwork, permits, inspections, notices, etc.).
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2. How much is my property worth?
Your agent will provide you with recent sales and listings in
your area and will give you a price range of what your property
should sell for. By pricing your home too high you will discourage
buyers from even looking, and the property may not even come
to their attention. Believe it or not, overpriced properties
tend to take an unusually long time to sell, and they usually
end up being sold at a lower price. By pricing it too low you
will likely get many offers immediately and a few all-cash offers.
This can be corrected by waiting a week to counter or accept
and offer.
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3. What does "AS-IS" mean?
Most people do not understand what "AS-IS" means. Selling a
home "AS-IS" simply means that you will not make any improvements
or corrections, however you still MUST disclose everything you
know about the property. The buyer normally can still inspect
the property, but you are just telling them in advance that
the property is being sold just the way it is ("AS-IS") and
don't expect any repairs to be done. Banks and corporations
are legally allowed to sell "AS-IS" AND WITHOUT DISCLOSURE because
they are not human beings and because they didn't live in the
property. Contact Us for suggestions
on the most appropriate method of selling for you and the best
way to approach "as-is" properties.
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4. What kind of repairs are recommended
and add value?
Kitchens and bathrooms greatly help to sell a house because
they are the most expensive and most important rooms of a home
for the typical buyer. Any monies spent on these 2 items almost
always yield much more in increased value, more than any other
repair. Even minor upgrades will increase the value of your
home, as long as they are done professionally and in good taste.
All homes in Los Angeles County have termite issues. The buyer
of your home will likely have a lender that requires a termite
report and clearance. Termite clearance means the structure
is clear of infestations and usually is guaranteed for 1 year.
Before listing your home have it inspected and have all repairs
done. Having termite clearance will increase value and limit
the buyer's negotiating options. If you are in a city that requires
a City Inspection (Pasadena, San Marino, etc.) get it done now
and correct any violations. Again, if you have clearance you
will increase the value and limit the buyer's negotiating options.
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5. How does my property get shown?
There are different ways to have buyers view your home. Your
agent will coordinate appointments at times that are convenient
to you. The easier it is to show your home the more exposure
you will have and in turn the more offers you will have. Computer
coded lock boxes can be used for cooperating agents to access
your property without you needing to be present. This sophisticated
technology also keeps track of who enters the property with
an agent only access key. It
is vitally important
to have the property available, but at the same time we recognize
that you have your own schedule and privacy to work with.
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6. What should I do while someone is viewing
my home while I am home?
Buyers don't want to feel pressured. Kindly step outside with
any pets and turn off all radios and TV's. Keep the kitchen
and baths clean and turn on most of the lights to show a bright
and welcoming home. Take care of all valuables and breakables
and insist that the buyer is accompanied by their real estate
agent. Make sure you get the real estate agent's business card.
Limit talking about your properties shortcomings; you don't
want the buyer to think they can negotiate you down on price.
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7. Should I answer a buyer's direct questions?
You are paying your real estate agent to negotiate, market and
communicate for you. Limit your direct conversations with agents
and their buyers and ask them to ask your agent the questions.
You are under no obligation to talk to anyone if you choose
not to. Most buyers and their agents understand that it is usually
inappropriate to talk to the seller directly.
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8. What do I need to disclose?
California Civil Code requires that anything that can materially
affect the desirability of a home must be disclosed. Please
discuss this at length with your agent. The number one problem
in transactions is intentional and unintentional non-disclosure
of important items. Think about problems your home has (foundation,
electrical, leaks, plumbing, noise, non-permitted work, soil
and drainage problems, deed restrictions, etc.). Contact
Us for help with this.
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9. What is a home warranty and should I
provide one?
Home warranties are more and more popular, even with homes in
excellent condition. The typical warranty is about $300-$450
and covers most plumbing, electric, garbage disposal, vent fans,
water heater, etc. When a problem arises, the buyer contacts
the warranty company and they send a licensed contractor to
remedy the problem (as long as it is covered). It is an excellent
selling feature; it shows good faith and helps to cover the
seller from liability.
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Buying
and Inspections
10. How do I see properties that are For
Sale?
First, you need to be pre-approved with a reputable
lender before searching for property. This will help you understand
how much you can afford. When you submit an offer, the seller
will require that your offer be accompanied by a pre-approval
letter. There is a big difference between being pre-approved
and pre-qualified. You can get pre-qualified over the phone
with no verification at all. Whereas, being pre-approved requires
a completed loan application, credit report, and income verification
be analyzed. Most lenders can provide you with a pre-approval
within a few hours. The next step is to decide what type of
property and amenities you need. We will provide you with current
listings for you to drive by with or without our accompaniment.
When you find a property that intersts you, contact us immediately
and we will arrange an appointment to view it. You can also
search all of Pasadena, surrounding areas, and Los Angeles County
through this web site.
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11. What are the best and worst ways to
find homes?
The best way is to hire a reputable Realtor® who uses the
local Multiple Listing Service (MLS). Have your Realtor search
the MLS daily, network with their fellow agents in the area,
set you up on instant email listings, scan all listings, and
attend weekly caravan meetings (where new listings are showcased).
Using services like Realtor.com and other web-based services
are good, but their information is not always up to date. Some
agents are guilty of advertising desirable properties which
have already been sold because they want you to call them. Unfortunatly,
most ads in the local papers are 5-14 days old and often properties
are sold within that time.
We check listings daily and will make sure that you recieve
current listings and information to act quickly on the properties
which are best suited for you needs.
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12. What if they accept my offer but there
is something wrong with the property. Is my deposit money at
risk?
Initially no, but eventually yes. The standard real estate purchase
agreement is written with basic contingencies and time constrants
which allows for renegotiation or cancelation, allowing you
to keep your earnest money deposit. The standard contract requires
the seller to leave the property in the same condition as when
the buyer initially viewed the property which includes landscape
mantainance.
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13. The inspection process.
The contract will almost always allow you to perform inspections
of the property (electrical, plumbing, roof, foundation, etc.)
as well as all pertaining documents, all within specific time
periods. Many people hire a professional inspector or a general
contractor. Some just ask a friend in construction or do the
inspection themselves. Your agent will not perform the inspection
for you. Regardless of what you do, you must understand that
it is your choice. Inspections have time limits and specific
ways of being handled. Be sure to discuss this with us.
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14. What kind of property should I buy?
Your property choice depends on your goals. If you intend to
live in your home for over 10 years, then buy what you want
and need. Your first concern is your home, but always understand
that it's also an investment, much like an annuity. However,
if you are looking to buy something as a starter, an investment
or a rental, think about what adds to the resale value and what
detracts. Investment properties need to be looked upon as true
investments. A 2 car garage and a 3rd bedroom or den increase
resale. Updated electrical and plumbing or even minor improvements
can increase the value of your investment. Swimming pools can
be both a positive or a negative depending on the buyer. Always
remember the 3 most important aspects of real estate: location,
location, location.
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Process
of Buying or Selling, and what is Escrow?
15. What is the process?
There are 3 main parties in a real estate transaction: the buyer,
the seller, and the escrow company. Escrow
is a neutral party used to ensure that the transaction is completed
in a legal and complete fashion. When
an offer is accepted with a deposit and pre-approval, the next
step is to give the transaction to an escrow company. The buyer
then completes all inspections; at which time the appraisal
should be ordered. Thridly have the lender "draw documents",
and then close with a final walk-through inspection.
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16. What is Equity? How does a refinance
work?
Equity is what we call the value of an asset above any loans
(encumbrances). For example, if you have a home worth $400,000
with a loan of $300,000, your equity is $100,000. Sometimes
you can have negative equity where there is no equity and you
owe more than the asset is worth. Some call this "being upside-down".
An example of this is if you have a home worth $400,000 with
a loan of $450,000. Even in good real estate markets people
can find themselves upside- down. A few factors could be zoning
changes, newer environmental problems or even faulty appraisals.
Negative equity was very common in the mid 1990's, but these
days it is far less common.
A refinance works by having a lender pay off or satisfy existing
loans by origionating a new loan with new terms. There are many
types of refinances. "Cash-out" refinances are one of the
most popular refinances. Here's an example of how this works:
5 years ago you bought a home for $300,000 with a 10% down payment.
So now your loan is $270,000 and your 30 year fixed mortgage
is at 8% making your payments $1981/mo. Today the home is valued
at $400,000 and your balance on the loan is $254,000. If you
wanted to take advantage of the current lower interest rates
and have extra money to pay off student loans or remodel the
home, you would get a new loan - a "cash out" refinance. The
new loan, might be at 6.75% on 80% of the value of the home.
80% of $400,000 is $320,000. The lender would give you a new
loan of $320,000, pay off the $254,000 (original loan), and
you could pocket the $66,000. Your new payment would be $2075/mo.
There are minor fees, tax implications, and other risks that
your lender can explain in detail.
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17. What is PMI (Private Mortgage Insurance)?
Private mortgage insurance is insurance that the lender usually
requires when a loan balance exceeds 80% of the value of a property.
The insurance premium is paid by the property owner monthly
and is typically not tax deductible. The insurance typically
covers about 17% loan losses for the lender with the understanding
that in a worst-case- scenario (they need to foreclose because
of non-payment) the property would be sold and losses probably
wouldn't exceed 17%. If you are paying PMI then the easiest
way to take it off is to refinance (hoping that the value of
the property has increased). Attempts to ask the lender to drop
PMI are difficult and typically require very good credit, a
re-appraisal, and application.
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Maximizing
Your Home Investment
18. I'm thinking about selling in the
next few years. What should I do to prepare?
A common blunder many people make is they fix up their home
for the new owner. Why not fix it for yourself and enjoy it?
Take good care of the improvements and benefit from the increased
value you'll likely get. Who knows what the future will bring,
so enjoy your home as much as you can.
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19. How can I improve my neighborhood?
There are direct and indirect approaches. The direct approaches,
other than fixing your own home, is to help other neighbors
clean their properties, form neighborhood watch groups, quarterly
homeowner meetings, and just getting to know your neighbors.
Often times when a neighbor starts improving their property
it motivates those around them. Most cities have programs for
the elderly, handicapped, or unemployed, which provide free
property remodeling and maintenance.
Indirect approaches are numerous and include free services in
almost all cities that will provide quick graffiti removal and
shopping cart removal. Some people will call their city or county's
code compliance department and report zoning, code or health
violations. You can call anonymously. In a worst-case-scenario,
you can call your local police station, ask for dispatch, and
anonymously report something. You can always contact
us for many helpful numbers.
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20. What should I look for in a Realtor®?
Buying or selling a property is your single largest financial
decision. Who do you want to advise and assist you in this?
A successful and good Realtor® will come referred, have
extensive experience in the market, have sharp negotiating skills,
a proven track record, and understand the contract. Do not be
afraid to ask for references. A good Realtor® is busy and
has lots of business. You aren't their only transaction; therefore
they aren't pressured to make all their money from you. The
Realtor® business is a relationship business. It's important
to have a good relationship, even a friendship, with your Realtor®.
Your Realtor® should never push you to buy or sell. A Realtor®
has a fiduciary duty of utmost care, trust and integrity, which
is the same duty doctors and attorneys are also required to
give their clients. The process of buying and selling can be
difficult, confusing, and stressful. A great Realtor® will
minimize this and constantly steer you towards your eventual
goal of a sound investment, home ownership, and no headaches.
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