Ryan Blanco San Diego real estate agent

Home Sellers-How To Read A Buyer’s Offer

Yes! You’ve gotten an offer from someone who wants to buy your home. Now, how do you read and understand the fine print of all those pages??? I will help you read a buyer’s offer.

Just to clarify, the purchase offer generally consists of:

  • Residential Purchase Agreement (RPA) – 10 pages
  • Disclosure forms

The first two pages of the purchase agreement (RPA) is the most important and impacts you the most as a seller, so we will start with those:

Besides the all-important purchase price on page one, the escrow time-frame is in section 1D, and deposit amount in 3A are ones to note. Most home sellers want shorter escrow time periods since that is the quicker they get paid (although 30 days is the most common). When it comes to the deposit, more is better-since the potential buyer is showing they are willing to risk more money and are thus a serious contender.

On page 2, the division of costs in section 4 are very noteworthy as well. It is common for the seller to pay any transfer fees from the city and county, HOA report fees, a natural hazard report, home warranty plan, and termite inspection. Generally, the buyer and the seller share the escrow and title fees. The buyer generally pays for any other inspection costs such as their home inspection.

The other very important things to note on the RPA is the loan contingency (page 2, section 3H), and the inspection contingency (section 14). The inspection contingency says how many days the buyer has to inspect the property. These contingencies dictate how long the buyer has to back out of purchasing the property. Of course, the fewer the days the better, but 17 days is customary.

It’s common for the buyer to request that the seller pay for a termite inspection and Section 1 termite work (current infestation or damage). Section 2 is normally paid by the buyer (items that COULD LEAD to wood damage). Here in San Diego, it’s not unusual for some work to be needed on a home. It’s also common for a buyer to request the seller pay for a 1-year home warranty plan. This averages around $400, depending on the property.

If you have any questions, or want any clarification on anything involving the purchase offer, I am of course here to help. And congratulations – you are well on your way to selling your home!

Click on the graphics below to view the bigger full size versions of these Residential Purchase Agreement pages. This covers the first two, and most critical pages of a buyer’s offer.

How to Read a Real Estate Purchase Offer for California

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How to read a home purchase offer in California

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Price Per Square Foot-An Accurate Way To Value A Home?

A common way people like to compare the value of homes is by using the price per square foot metric. This is by taking data of sold properties, identifying the price per foot, and valuing another property based on that. The problem is that this only accurate if the houses are very similar. Of course, it cannot adjust for condition, lot quality/location, or neighborhood influences. Also, price per square foot tends to go down as house size gets bigger, so using it outside of a narrow range of sizes skews the data. In general, the lower price per square foot is correlated with higher square footage properties.

price per square foot of homeInstead, the recommend method is using the sales comparison approach – finding homes that are similar and making substitutions or corrections; for example, adding $15,000 for a nicely updated kitchen compared to a poor kitchen, or adjusting for small size and bedroom differences.

So, next time you’re analyzing a property for sale, consider minimizing the weight put on price per square foot, and instead look at the bigger picture.

 

Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

Should I Sell My Home Or Rent It Out?

should i rent out or sell my san diego propertyA recent study has concluded that nearly half of home buyers (when purchasing their next home) would prefer to rent out their last residence, rather than sell it. The main reason? They have locked in a low mortgage rate, meaning they are able to charge more rent than they pay in their monthly mortgage payment. Of course, a strong rental market just makes it even better. So, should you rent out your home?

This logic makes sense in some cases. Residential real estate is a great investment right now and can be great long-term as well. But if you have no desire to actually become a landlord, you may be headed for more headaches than you think. Are you ready to be a landlord?

Myths of owning rental property

Before renting your home, ask yourself the following questions to make sure this is the right course of action:

10 Questions to ask BEFORE renting your home

  1. How will you react to a tenant that tells you they are unable to pay the rent this month?
  2. There are times when many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?
  3. Do you know any experienced eviction attorneys in case a challenge does arise?
  4. Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
  5. Will you allow pets? Cats? Dogs? How big a dog?
  6. How will you actually collect the rent? By mail? In person?
  7. Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up? Will you hire a property management company?
  8. Do you have a list of craftspeople readily available to handle these repairs?
  9. How often will you do a physical inspection of the property?
  10. Will you alert your current neighbors that you are renting the house?

If the about seems like too much work, there is another option: let a property management company do all the heavy lifting. For around 8-10% of your total monthly rental income, they will ensure the property is occupied by the best tenants possible. This includes pre-screening tenants, showing the property, doing cleaning, repairs, & maintenance, and collecting rents. Most property management companies will charge an extra fee for finding new tenants, but that is worth it to some owners.

Bottom Line

Historically, renting out residential real estate. However, it is not without its many challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

 

Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

The Home Selling Process – Step By Step

organized home getting ready to sell Selling your home is a big task and your house is likely your biggest asset. In order to succeed you’ll want to be engaged at every step, from preparing it for sale, to pricing it properly, to negotiating, and closing. A great real estate agent will guide you every step of the way. Here is a quick summary of what you can expect in California during the home selling process.

1) Choose an Awesome Listing Agent

  • A listing agent will represent you and have a fiduciary responsible for looking out for your best interests.
  • Interview agents and meet at least 3. Get a feel for how they operate. Check out any of their current/past listings.
  • Negotiate your listing agreement, including the commission rate and length of time the home will be listed (5% for 6 months is the most common).

2) Find Out How Much Your Home Is Worth

  • A seller’s biggest mistake is to overprice a home. Many get emotionally involved and mistakenly think their home is worth much more than anything in their neighborhood.
  • Price your home in line with sold homes identified in a comparative market analysis report.
  • Consider the current state of the market (buyer’s market, seller’s market, or neutral) and price according to the market temperature.
  • What’s my home worth?

3) Get Home Ready for Sale

  • Prepare your home for sale by cleaning, decluttering and improving curb appeal.
  • Consider hiring a professional stage your home, or ask your real estate agent for help with staging.
  • Make repairs before listing it for sale. A general rule is to repair anything that is broken or a safety issue.
  • If you’re selling a home where pets live, make alternate plans for them.
 4) Market Your Home
  • You and your agent should identify the home’s best selling points and choose advertising words to sell.
  • Audit your agent’s online marketing campaign and tweak it as necessary to increase traffic and showings.
  • See how your listing is posted online (just Google your address!).
  • Your agent should saturate the Internet with photographs and descriptions of your home.

5) Show Your Home

  • If you’re wondering about lockbox vs. appointments, you’ll always get more showings if you let agents use a lockbox. Make it as easy as possible for them to show it to potential buyers.
  • Try to allow for agent open houses.
  • Ask your agent for buyer & agent feedback. You may need to adjust your price or condition accordingly. 
  • Selling during the holidays will likely result in a slightly lower sales price.

6) Receive Purchase Offers and Negotiate

  • Even if you receive a low-ball offer, negotiate by issuing a counter offer. Don’t ignore offers.  
  • If your home is priced right, prepare yourself for multiple offers.
  • Buying another home? Consider making a counter offer contingent it, if market conditions warrant.
  • Don’t be afraid to make a full-price counter offer, if you are priced competitively.
  • Remember, a counter offer isn’t just about price, but terms of the sale as well.

7) Obtain Seller-Required Inspections and Disclosures

  • You will likely need to pay for a termite inspection.
  • Your agent will help with various disclosures, such as lead-based paint, carbon monoxide, Megan’s Law, wire fraud advisory, etc.
  • If you are aware of material facts, disclose them. This will decrease your liability and help avoid future legal issues. 
  • Your title company should provide CC&Rs, but if you belong to a homeowner association, additional documentation will be required.

8) Escrow and TItle

  • Upon accepting an offer, your agent or transaction coordinator will open escrow and order a title report.
  • Escrow and title companies are neutral 3rd parties in a transaction.
  • Escrow and title costs are normally split between buyers and sellers.
  • Ask for a receipt for the buyer’s earnest money deposit.

9) Allow for the Appraiser Appointment

  • Clean the house the day before the appraiser arrives. You want the highest price possible.
  • If you receive a low appraisal, ask your agent about alternatives.
  • You are not guaranteed a copy of the appraisal because you did not pay for it, the buyer did.

10) Cooperate with Home Inspection

  • Get ready for the home inspector. This is a time when the inspector, the buyers, and their agent need to be in the house alone.home inspection getting home ready for sale
  • Ask your agent to provide you with a home inspection checklist so you will know which items an inspector will want to see.
  • A home inspector’s job is to be very detailed. Don’t be insulted by them nitpicking the small things. Reasonable buyer’s won’t sweat it.

11) Negotiate Request for Repair

  • You are not required to accept a buyer’s request for repair; however, buyers can also cancel the contract. Compromise is key.
  • You are entitled to a copy of the home inspection report, if the buyers request repairs.
  • If you do not choose to make repairs, a buyer might instead accept a closing cost credit.

12) Ask Buyer to Release Contingencies

  • California purchase contracts default to 17 days for a buyer’s inspection contingency. After that period, the buyer should release contingencies.
  • Releasing contingencies puts a buyer’s earnest money deposit on the line-should they later cancel the contract.
  • If buyers do not provide a release of their contingencies, sellers have the right to cancel the contract.

13) Buyer Loan Documents

  • After a buyer’s loan is fully approved by the lender, loan documents will be issued for their signature.
  • After signing the loan documents, the loan normally funds 1-2 days later.sold home san diego

14) Close Escrow

  • The buyers and their agent will perform a final walk-through inspection, which takes place within 5 days of closing.
  • Your property deed, re-conveyance, and deed of trust will record in the public records.
  • The title company will notify your agent when it records.
  • Depending on buyer’s possession rights specified in the contract, buyers normally take possession the day the deed records.

 

 

Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

San Diego Housing Market Update-April 2017 Sales

San Diego Housing market update for home salesBelow is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

The employment landscape and wages have both improved over the last few years, allowing for more people to participate in the home-buying process. When the economy is in good working order, as it is now, it creates opportunities in residential real estate, and right now is a potentially lucrative time to sell a home. Houses that show well and are priced correctly have been selling quickly, often at higher prices than asking.

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One-year change in homes for sale

-13.2%

+6.4%

-28.0%

Closed Sales decreased 13.4 percent for Detached homes and 13.0 percent for Attached homes. Pending Sales decreased 1.7 percent for Detached homes but increased 1.4 percent for Attached homes. Inventory decreased 26.0 percent for Detached homes and 33.1 percent for Attached homes.

The Median Sales Price was up 7.0 percent to $599,350 for Detached homes and 6.9 percent to $385,000 for Attached homes. Days on Market decreased 9.4 percent for Detached homes and 11.5 percent for Attached homes. Supply decreased 26.9 percent for Detached homes and 36.8 percent for Attached homes.

Although there is a mounting amount of buyer competition during the annual spring market cycle, buyer demand has not abated, nor is it expected to in the immediate future unless something unpredictable occurs. While strong demand is generally considered a good problem to have, it creates an affordability issue for some buyers, especially first-time buyers. And yet, prices will continue to rise amidst strong demand.

According to Bankrate.com, interest rates have continued to stay near the 4% level, despite the Federal Reserve Bank finally raising the fed funds rate to .75%. They are currently at 4.09% for a 30-year fixed loan (they were at 3.98% at this time last month). This is well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

The San Diego Association of Realtors analyzes housing market data for San Diego county every month. Below is their monthly report for home prices. The figures represents ALL property types.

San Diego Housing Market Update for April 2017 Sales

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Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

8 Reasons Why You Should Work With a REALTOR®

Not all real estate agents are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® (NAR) and subscribes to its strict Code of Ethics. Here are reasons why you should work with a REALTOR®.

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, loan documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable professional will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and much more. They will also be able to provide objective information about a property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value down the road when I am ready to sell?

3. Help finding the best property out there. Sometimes the property you are seeking is available but not advertised well in the market, and it will take some investigation by your REALTOR® to find all available properties.

Search San Diego Properties for Sale

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, appliances, or equipment. In addition, the purchase agreement will provide a specific period of time for you to complete appropriate inspections and investigations of the property, before you are bound to complete the purchase. Your agent can guide you as to which investigations and inspections are recommended or required.

5.  Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a why work with a san diego realtorpractitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally pre-screen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate lingo.

7. Experience. Most people buy and sell only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you have done it before, laws and regulations are always changing. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an knowledgeable expert on your side is critical.

8. Objective voice. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional task. And for most people, a home is the largest purchase they’ll every make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues in your best interests.

 

Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

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