What Buyers and Sellers Need to Know About Real Estate Contracts

Palm Springs Real Estate Podcast with Will Cook

Palm Springs Real Estate Podcast with Will Cook

1:42

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7 лет назад

MP4•Главная эпизода

Today we’re going to talk about what it takes to make a real estate contract legal and binding.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Today we’re going to talk about what it takes to make a real estate contract legal and binding.

All offers to purchase real estate should be in writing. An offer doesn’t have any teeth unless it’s in writing, and most sellers won’t respond to a verbal offer. The seller then has the opportunity to respond to the offer by either accepting it or countering it with terms and a price that are acceptable to him.

This process would continue with each counteroffer being signed by the presenting party until mutually acceptable terms and price are agreed upon. If there is no agreement, then the contract falls apart.

So in general, the offer becomes a contract on the date that both parties have signed. Once this happens, the contract is binding for both the buyer and the seller. The contract is one of the most important steps in the home buying process, as it clears the way for both parties to begin the transfer of property.

It means that the sellers can begin planning their move out and the buyers can work with their agent, lender, and escrow company to get their ducks in a row for closing. Of course, just how binding the contract is depends on the detail of the contract itself. Some contracts may have contingencies built in.

Typically, a buyer’s agent will try to build in as many contingencies as possible into the contract to keep the client from being tied down in case something unexpected comes up. A listing agent, on the other hand, will typically advocate for as few contingencies as possible and may even ask to tighten up some of the time frames of the contingencies because their client doesn’t want the buyer walking away from the deal.

Why may a buyer cancel a contract? One of the most common reasons that real estate deals fall through or fall apart is because of financing, or, specifically, a buyer’s inability to get financing from their lender. For example, an appraisal contingency protects the buyer and gives them the opportunity to walk away from the sale if the property does not appraise for the purchase price.

If the home fails to appraise or appraises lower than the purchase price, it usually means that the lender won’t be able to provide the buyers with as much financing as they need to actually close on the property.

The contract is one of the most important steps in the home buying process, as it clears the way for both parties to begin the transfer of property.

Other contingencies in the contracts include due diligence for a property passing a home inspection or a buyer’s property being sold before closing, or a title search that ensures the seller has the right to sell the property.

Sellers get some protection out of the contingency, like time limits for how long the buyer has to do their home inspections or to obtain their financing. But, most contingencies are written to protect the buyer and allow them an out if something goes wrong before closing. So, if contingencies aren’t met and the buyers walk away from the deal, they can typically get their funds that are held in escrow back, which could be like the earnest money deposit.

Should any of the contingencies not be met in a timely manner, the buyer should be able to dissolve the contract and walk away with no repercussions because that’s the point of the contingencies. Of course, if the contingencies were met and the buyer physically removes a contingency by signing a contingency removal document and then decides to cancel, then the buyer is obligated to perform in accordance with the original parameters of the contract.

That means potentially forgoing 3% for liquidated damages if that’s agreed upon in the contract. Or, they could be vulnerable to a lawsuit for specific performance demanding that the buyer close on the sale or provide funds equal to the purchase price to the seller.

Why a seller may cancel the contract: It’s more difficult for a seller to cancel the contract, but it’s not impossible. If the buyer’s contingency time period expires without an agreed-upon request for an extension for that time period for that contingency, then the seller can provide what we call a “notice to perform.” And the performance is to specifically remove that contingency within a certain number of days specified in the contract.

If the buyer does not remove the contingency, then the seller can unilaterally cancel the contract. Now, it is more typical for a buyer and a seller to work out an extension of time for that specific contingency to be removed, but let’s say that the seller has a higher backup offer and is looking for ways to get out of the contract with his initial buyer. This is why it’s always important for us to respect the agreed-upon time frames for contingencies in the contract, as time is of the essence and it should be respected by all parties and their representatives.

If you have any other real estate-related topics or questions that I can answer, please give me a call or send me an email. I’d be happy to make a video about it.

22 эпизодов

#Real #Estate #Agent #Top #Local #Find #Palm #Springs #Home #Selling #Tips #Process #Property #Search #Podcasting Education #Cooking #Video #Sales #House #Buy #Finders

What Buyers and Sellers Need to Know About Real Estate Contracts

published 7 лет назад

MP4•Главная эпизода

Today we’re going to talk about what it takes to make a real estate contract legal and binding.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Today we’re going to talk about what it takes to make a real estate contract legal and binding.

The contract is one of the most important steps in the home buying process, as it clears the way for both parties to begin the transfer of property.

If you have any other real estate-related topics or questions that I can answer, please give me a call or send me an email. I’d be happy to make a video about it.

22 эпизодов

#Real #Estate #Agent #Top #Local #Find #Palm #Springs #Home #Selling #Tips #Process #Property #Search #Podcasting Education #Cooking #Video #Sales #House #Buy #Finders

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What Buyers and Sellers Need to Know About Real Estate Contracts

7 years назад

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Today we’re going to talk about what it takes to make a real estate contract legal and binding. Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation Today we’re going to talk about what it takes to make a real estate contract legal and binding. All offers to purchase real estate should be in writing. An offer doesn’t have any teeth unless it’s in writing, and most sellers won’t respond to a verbal offer. The seller then has the opportunity to respond to the offer by either accepting it or countering it with terms and a price that are acceptable to him. This process would continue with each counteroffer being signed by the presenting party until mutually acceptable terms and price are agreed upon. If there is no agreement, then the contract falls apart. So in general, the offer becomes a contract on the date that both parties have signed. Once this happens, the contract is binding for both the buyer and the seller. The contract is one of the most important steps in the home buying process, as it clears the way for both parties to begin the transfer of property. It means that the sellers can begin planning their move out and the buyers can work with their agent, lender, and escrow company to get their ducks in a row for closing. Of course, just how binding the contract is depends on the detail of the contract itself. Some contracts may have contingencies built in. Typically, a buyer’s agent will try to build in as many contingencies as possible into the contract to keep the client from being tied down in case something unexpected comes up. A listing agent, on the other hand, will typically advocate for as few contingencies as possible and may even ask to tighten up some of the time frames of the contingencies because their client doesn’t want the buyer walking away from the deal. Why may a buyer cancel a contract? One of the most common reasons that real estate deals fall through or fall apart is because of financing, or, specifically, a buyer’s inability to get financing from their lender. For example, an appraisal contingency protects the buyer and gives them the opportunity to walk away from the sale if the property does not appraise for the purchase price. If the home fails to appraise or appraises lower than the purchase price, it usually means that the lender won’t be able to provide the buyers with as much financing as they need to actually close on the property. The contract is one of the most important steps in the home buying process, as it clears the way for both parties to begin the transfer of property. Other contingencies in the contracts include due diligence for a property passing a home inspection or a buyer’s property being sold before closing, or a title search that ensures the seller has the right to sell the property. Sellers get some protection out of the contingency, like time limits for how long the buyer has to do their home inspections or to obtain their financing. But, most contingencies are written to protect the buyer and allow them an out if something goes wrong before closing. So, if contingencies aren’t met and the buyers walk away from the deal, they can typically get their funds that are held in escrow back, which could be like the earnest money deposit. Should any of the contingencies not be met in a timely manner, the buyer should be able to dissolve the contract and walk away with no repercussions because that’s the point of the contingencies. Of course, if the contingencies were met and the buyer physically removes a contingency by signing a contingency removal document and then decides to cancel, then the buyer is obligated to perform in accordance with the original parameters of the contract. That means potentially forgoing 3% for liquidated damages if that’s agreed upon in the contract. Or, they could be vulnerable to a lawsuit for specific performance demanding that the buyer close on the sale or provide funds equal to the purchase price to the seller. Why a seller may cancel the contract: It’s more difficult for a seller to cancel the contract, but it’s not impossible. If the buyer’s contingency time period expires without an agreed-upon request for an extension for that time period for that contingency, then the seller can provide what we call a “notice to perform.” And the performance is to specifically remove that contingency within a certain number of days specified in the contract. If the buyer does not remove the contingency, then the seller can unilaterally cancel the contract. Now, it is more typical for a buyer and a seller to work out an extension of time for that specific contingency to be removed, but let’s say that the seller has a higher backup offer and is looking for ways to get out of the contract with his initial buyer. This is why it’s always important for us to respect the agreed-upon time frames for contingencies in the contract , as time is of the essence and it should be respected by all parties and their representatives. If you have any other real estate-related topics or questions that I can answer, please give me a call or send me an email. I’d be happy to make a video about it.…

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7 years назад

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What Is Happening in Our Palm Springs Area Market?

7 years назад

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Right now, we’re definitely still seeing a seller’s market. But what changes have taken place since last year, and where is our market headed? Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation With a 3.9-month absorption rate, our market is continuing its trend of favoring sellers. As time passes, the seller’s market we’ve been seeing becomes even stronger. This is the first time we’ve seen inventory dip below a four-month absorption rate since 2013. However, certain other statistics have remained steady. For example, our average days on market has stayed consistent at 73 days for seven months now. By looking at the months of sales by price range we can see that inventory has gone down since last year across every price point, with all homes priced below $300,000 having the lowest absorption rate. Homes at this price point have just 2.5 months of inventory. Our Valley inventory continued to decline through the month of August, but this was expected because of seasonal trends. However, this decline occurred at an above-average rate. Inventory as of September 1st, 2017 is at 3,182 units. This is the lowest number we’ve seen since 2014 , but we can expect inventory to rise in the coming fall and winter months. However, the number is not expected to rise past 4,500 as we move into the 2018 selling season. The seller’s market is only getting stronger. The year-over-year change in the median price of detached homes across nine major cities shows that only one, Rancho Mirage, is lower. La Quinta had the largest year-over-year gain, at 13.9%. Followed by Cathedral City, which had a year-over-year change of 9.1% and Palm Springs with 7.9%. The median detached home price in Palm Springs is only 1.3% away from its all-time high made in 2006. The year-over-year change in the median price of attached homes shows five cities with higher prices and three with lower. Also , with interest rates rising combined with the current appreciation of home pricing makes now a great time to consider selling your Palm Springs area home. While there is more competition among buyers. As long as interest rates remain low, buyers still have a great opportunity to get into this market. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.…

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6 Types of Disclosures in California

7 years назад

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What exactly should you disclose to potential buyers when selling your home? These are disclosures required by state and federal law. Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation If you’re selling your home in California, there are certain disclosures that you are required to complete before your sale is final. The purpose of these disclosures is to alert the buyer to any potential issues in the home and generally give them a better picture of how the home has been taken care of. Here are six different disclosures that you may have to complete if you’re thinking of selling your home: 1. Water damage or mold issues. If you’re aware of a leaky roof or dampness in your house, or any evidence of water intrusion, you’ll need to disclose that to the buyer. 2. Lead paint. The federal government requires anyone who has a home built before 1978 to disclose their knowledge of any lead-based paint in the home. 3. Natural hazards. California state law requires sellers to alert buyers of any natural hazard risks in the area such as wildfires, earthquakes, and floods. This is typically done during escrow via a third-party who creates a natural hazard disclosure report. 4. Termite damage. If you’ve had your home treated for termite damage, that needs to be disclosed. During negotiations, a buyer may ask you to provide them with a pest inspection report or wood-destroying organism report. The report identifies active infestations as well as past evidence of an infestation. 5. Repairs and insurance claims. If you have knowledge of any previous repairs or insurance claims from yourself or the previous owners of the home, that needs to be disclosed. I’d disclose these when you list the home. 6. Death. In California, it’s required for you to disclose if you have knowledge of anybody dying in the home within the past three years. When in doubt, disclose. We have a saying in real estate: “When in doubt, disclose.” In other words, it’s better to be thorough and alert the buyer to any and all potential issues upfront. Keeping a binder of receipts and documents that show the different upgrades and improvements you’ve made to the home is smart. If you have any questions for me or you’re interested in buying or selling a home in the Palm Springs Area, don’t hesitate to give me a call or send me an email. I would love to hear from you.…

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What Do Buyers Look for in a Home?

8 years назад

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You have more control in pleasing buyers than you may think. Before putting your home on the market, make sure to remember the three things buyers most often look for. Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation Today, I’d like to discuss three major items homebuyers are looking for during their search. If you are a seller, you have a lot more control pleasing buyers than you may think—so go into the process with an understanding of what buyers tend to look for. This knowledge will help you find success in today’s market. Currently, there are three main things buyers tend to look for: curb appeal, space, and updates. There are three main things buyers tend to look for: curb appeal, space, and updates. First, let’s talk about curb appeal. A first impression can only be made once, and the same goes about making a good one. Buyers should be excited about your home at first sight. Start by making sure your driveway and sidewalks are swept. Additionally, consider power washing the front of your home for an extra touch. Clean windows and tidy landscaping are also a must. You will also want to replace any outdated porch lights or front door hardware that could date your home’s appearance. The appeal of your front door is critical. Consider painting it a fresh, modern color to give your home an updated look. The second big item buyers look for is space. In fact, space is a key factor in why many people move in the first place. Before showing buyers the interior of your home, be sure to declutter. Rent out a storage space for anything taking up extra space. A buyer should be able to imagine themselves living in your home. Even in cases where people are downsizing, a clear, open space will be more attractive. Finally, don’t forget to update things around the house. Cabinet pulls, fixtures, appliances, and certain finishes should be replaced. Giving the rooms in your home a fresh coat of paint will also make a big difference. Neutral, yet modern colors will be your best choice. Buyers may not be expecting a mansion, but they are expecting you to have pride in your property. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.…

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Understanding Property Taxes and Assessments

8 years назад

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Property taxes are a significant expense for homeowners. Not to mention Mello-Roos and special assessment taxes. Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation In addition to your monthly mortgage payment, you also need to consider some other taxes and assessments to get a true picture of what homeownership will look like for you. Each of these components will empower you to accurately predict and control your monthly expenses. There are three components to these taxes: property taxes, direct assessments, and special assessments or Mello-Roos assessments. Every year, the city, county, and state all charge taxes on every parcel of real estate located within their borders. For many homeowners, these property taxes are the 2nd-largest home owning expense after mortgage interest. In most areas, property taxes are governed by state law. In most areas, property taxes are governed by state law, but assessed and collected by the county on an ad valorem basis. Ad valorem is latin for “according to value.” These taxes are calculated annually. In addition to these direct assessments, you may also be located in a special assessment district or a Mello-Roos district. In recent times, many cities have required developers to build and ensure long-term funding for parks, schools, and emergency services to directly benefit the subdivision. To prevent the influx of new homes from causing a drain on existing municipal services, special assessments are collected. A Mello-Roos district is an areas where a special tax is imposed on those property owners within a community facilities district. It is an area that has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services. Mello-Roos taxes are in turn used to make payments on principal interest on the bonds and is collected with the general property tax bill. It’s also subject to the same penalties that apply to regular property taxes. This stays in effect until the bonds and the costs incurred are paid off, but it won’t exceed 40 years. Both special assessment districts and Mello-Roos districts allow raw land to be used as collateral for bonds that are sold to investors. Those proceeds are then used to pay for public facilities. If you have any additional questions about anything I discussed in this post, give me a call or send me an email. I would love to hear from you.…

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Why Should You Consider Real Estate Investing?

8 years назад

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Real estate investing is an often overlooked, but potentially very attractive, means of diversifying and smoothing out a portfolio. Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation Adding real estate to your investment portfolio is a great idea. Because it offers diversification, real estate makes a good addition to traditional stock and bond style portfolios. This is especially true because real estate is it’s own asset class, can offer generous yields during periods of depressed economic activity, and can appreciate when the economy is strong. Real estate also combines aspects of stocks and bonds that tend to work in opposite directions in most economic conditions. For this reason and others, financial advisors tend to consider real estate as an alternative investment on the level of commodities. Real estate investing can not only help diversify a portfolio but can also smooth out its rough patches. The reason real estate investing is often overlooked, however, is that most people already have great exposure to the asset class by way of their own homes. Since a home is most people’s largest asset, finding exposure to real estate isn’t typically a priority. As long as household formation continues, real estate will continue to be a viable asset class. Since the real estate bubble and the subsequent technology bubble, real estate investing has recently been considered a less attractive option by some. Despite this, people should look at it in a long-term sense. As long as household formation continues, real estate will continue to be a viable asset class. What’s more is that some stock portfolios have allocation to mortgage insurers or real estate investment trusts which tend to pay healthy dividends. Because both of these sectors are tied to real estate, they thrive when prices are rising. In a long-term sense, the health of the real estate market is determined by demographic and economic trends. These trends remain favorable and make real estate an attractive option for investors seeking non-correlated returns. If you have any other questions or would like more information feel free to give me a call or send me an email. I look forward to hearing from you soon.…

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What Are the Advantages of Putting Your Home in a Trust?

8 years назад