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Accepting an Offer
Your home has been listed and a buyer makes you an offer. When we present the offer to you, you’ll know if the price the buyer has offered is fair. It may be less than your listing price, but you don’t have to reply immediately if you’re not comfortable with the price and terms.
Consider the current real estate market: Are homes in your neighborhood selling quickly, slowly or not at all? Don’t assume that one offer will lead to others; the real estate market is unpredictable.
Negotiating an offer
If you and your potential buyer are far apart on price, you could offer a few concessions such as appliances, an entertainment system or make some improvements prior to closing.
Most buyers insist on including contingencies for cancellation without penalties to protect them if they’re unable to get a mortgage, or the home inspection uncovers major problems. They might also ask you to make your sale contingent on the sale of their current home. Delays happen frequently, so expect to do a little waiting before your agreement is finalized.
How Much Can I Afford?
Before you go out looking for a home, you can get an idea of what you can afford by using our mortgage calculator. This handy tool will help you estimate how much mortgage you can handle.
Another thing to consider is your down payment amount. Think you can’t buy a house without a 20% down payment? Thanks to more lenient government guidelines and new mortgage programs, many people can now get into a house for as little as 3.5% down-or less.
The Benefits of Equity
Equity is the difference between what your property is worth and what you still owe. For example, if your home is worth $500,000 and you owe $450,000 then you would have positive equity of $50,000. You can use a home equity loan to finance home improvements, a child’s college tuition, or a new car.
Real estate is also a great way to keep a hedge against inflation. While some homes do appreciate in value more quickly than others, real estate usually keeps pace with inflation. In fact, homes in general have been appreciating at a steady 3% a year. Ask us about the appreciation rates in your area of interest.
Want a Tax Break
As a homeowner, when filing your taxes you can deduct the interest and tax portion of your monthly payment- that can mean big savings.
Look at what your monthly mortgage payment will actually be, take your tax breaks into consideration and you may find it’s about the same as-or sometimes even less-than a rent payment!
For example: a $100,000 30-year mortgage loan at 5% interest requires a monthly principal and interest payment of $536.82. Of this $536.82, $416.67 is interest and is tax deductible along with the $105 monthly property tax. (This is only an example. Please consult with a tax advisor regarding your own tax situation and current tax laws.)
Pre-Qualification vs. Pre-Approval
Pre-qualification is just an estimate of how much you could afford. But with a pre-approval, it’s just that: getting your mortgage approved prior to going out and looking for a new home.
Your loan officer will show you which items you should bring to apply so neither of you will need to wait for various written income, asset and liability information. You could get a loan decision in just days. It’s best practice to get a pre-approval prior to searching for a home so you know what loan amount you’re approved for and what you can afford.
Making an Offer
This is typically a time of nervousness and anticipation. You’ve found the home you want and your ready to make an offer, but you want to be as calm and objective as possible. As experts, the advice we can give you at negotiating time is priceless.
Negotiating The Buy
Be prepared for counter offers which is normal during a transaction. Remain patient and let your agent act as your liaison with the seller or the seller’s agent. You may need to be flexible on price, closing date, appliances and repairs.
Earnest Money Deposit
Once your offer is accepted, be prepared to make it official with an earnest money deposit. Earnest money deposit is usually a percentage of the home’s purchase price that indicates you’re serious about the purchase and shows your good faith. It’s generally applied to the purchase price when you complete the purchase, but may be forfeited to the seller if you fail to complete the purchase. Contact your agent to determine the amount of earnest money you should be prepared to pay based on your target home price.
Many first-time buyers are taken by surprise when it comes to earnest money deposit, especially if they have to make a fast offer. Be sure to discuss with your Realtor the appropriate amount of earnest money you should be prepared to pay based on the price range of properties you’re looking at. You should have this amount available in your checking account so you can wire the earnest money once you sign your purchase agreement. The earnest money deposit must be delivered to escrow within 3 days.
Rent or Buy?
With every rent check you write, you’re helping to build equity in your landlord’s property. That money could be going toward building equity in a home of your own. Today’s rates are low enough that your house payment could be lower than your rent payment!
There are many advantages to owning a home, including:
A feeling of security that comes from owning a home and the knowledge that your home is a safeguard against inflation.
Payments on your mortgage loan mean you are acquiring a major possession; instead of rent, you own more and more. The garden you plant, the improvements you make – all enhance your way of living as well as the value of your home. Many individuals build their wealth by investing in Real Estate.
Your real estate taxes and the interest on your mortgage are deductible from your income tax.
Most people begin the road to financial independence through home ownership. Your principal and interest payments remain the same for the full term of your mortgage while your rent usually goes up as the cost of living increases.
Better than a savings account, your home can appreciate to keep pace with inflation.
Home ownership offers special advantages that make life more enjoyable – backyard entertaining, family gatherings during holidays, a home workshop and a chance to enjoy friends and family in the privacy of your own home.
How much can you afford?
Our handy calculators can offer you valuable assistance in determining how much home you can afford and how much you can borrow.
Curb Appeal Is Crucial
A mowed, trimmed lawn and well-kept garden create a good first impression. Inspect the exterior of your property, as first impressions to most buyers are key. If your home lacks curb appeal, buyers tend to continue driving and not walk through your front door, which is a lost opportunity.
Clean each room thoroughly. Give special attention to the entryway, kitchen and bathrooms. Shampoo the carpet if necessary and if your carpet is worn or old, consider replacing it. Don’t forget to clean the corners and ceilings of each room!
Buyers will open closets and cupboards, so make sure they’re as tidy as possible. Get rid of items you don’t use. Remove unnecessary furniture to help make each room appear more spacious. We advise our clients that have cluttered homes to get a storage unit and de-clutter their home for better staging.
Easily fixable items such as loose doorknobs, a broken dishwasher, a dripping faucet, and squeaky doors all detract from your property’s perceived value. Spending an afternoon making needed repairs now can eliminate a buyer’s objections later.
Small Changes Can Make A Big Impression
New towels can freshen a tired kitchen or bath. Fresh flowers add warmth to any room and even a fresh coat of paint doesn’t cost much.
Keep it Fresh
Make sure your home passes the scent test. Right before an open house, open windows, bake some cookies or light a few scented candles. Strong odors could send potential lookers running out the front door.
Understanding a Short Sale
The short sale option provides a way for the financially distressed seller to prevent foreclosure.
A short sale is an agreement in which the mortgage lenders or other lien holders agree to accept a payoff on the loan for less than the current balance. Many lenders agree to a short sale because they receive more of the loan balance in comparison to the amount from selling the home under foreclosure. The short sale process also aids in maintaining homes values in the community and helps the seller maintain better credit compared to foreclosure. In most instances, homeowners considering a short sale must meet specific criteria to qualify.
San Diego Real Estate Services
We are partnered with multiple lenders that can provide a vast menu of mortgage loans at competitive rates.
Our relocation team is confident that you and your employee will be pleased with all the aspects of our service. Our relocation specialists take special care to match an appropriate Realtor to your employee after determining the area of interest and specific needs.
As you may know, homeowners insurance must be in place by closing. MySanDiegoRealty has partnered with leading insurance firms who can provide you with the insurance you need at some of the most competitive rates available.
An escrow is an arrangement on which a neutral third party, called an escrow holder, holds legal documentation and funds on behalf of a buyer and seller. MySanDiegoRealty has partnered with two of the most distinguished full-service escrow companies to ensure you have a smooth and successful escrow.
The purchase of a home is probably the single largest investment you’ll make in your lifetime. It’s wise that you safeguard your rights and investment. MySanDiegoRealty has partnered with California Title Company who works to eliminate risk and prevent loss caused by defects in the title before a sale closes.
Covering major home systems and appliances, a home protection plan from First American Home Buyers Protection Corporation can help make buying or selling a home a more rewarding experience.
Home Financing to Fit Your Needs
Our mortgage-lending partners provide a variety of home financing programs and the convenience of a one-stop source for fast, efficient service. They are knowledgeable in purchase and refinance programs, investment properties and many other loan types.
Visit their website here
Mortgage Consultant – Find a local mortgage consultant
Mortgage Calculators – Estimate your monthly payment
Mortgage Dictionary – Common terms used during the mortgage process
MySanDiegoRealty does not endorse any of the products or vendors referenced on this material. Any mention of vendors, products, or services is for informational purposes only.
Relocation Services Overview
Our team of relocation specialists is confident that you and your employee will be pleased with all the aspects of our service. Our team takes special care to match an appropriate Realtor to your employee after determining the area of interest and specific needs. The agent will maintain contact throughout the entire moving process to assure service excellence and a smooth transition.
As you may know, homeowners insurance must be in place by closing. Our affiliate insurance providers can provide you with the competitively priced insurance you need to protect your home and possessions.
Contact one of our affiliates and they will provide a no-obligation quote. Coverage can then be arranged immediately to be in place in time for your closing. It’s simple and convenient with no extra forms to complete.
What is an Escrow?
An escrow is an arrangement on which a neutral third party, called an escrow holder, holds legal documentation and funds on behalf of a buyer and seller. The escrow agent works closely with you, your realtor and lender to assure that the sale conditions are complied within the time period called for in the Residential Purchase Agreement and Joint Escrow Instructions.
After all parties have executed these documents, escrow prepares an Addendum to the Residential Purchase Agreement and Joint Escrow Instructions. Escrow then distributes them according to the buyers and sellers instructions. Both the buyer and the seller rely on the escrow holder to carry out faithfully their mutually consistent instructions relating to the transaction.
Escrow holder is bound by law to notify both parties if the instructions given are not mutually consistent or cannot be carried out. These instructions are drawn by the Escrow Officer, and signed by the buyer and seller. Since the escrow instructions are not as detailed as the Purchase Contract, the information contained in the instructions is intended to direct the Escrow Officer in the specific steps that are to be completed through the escrow instruction.
The purchase of a home is probably the single largest investment you’ll make in your lifetime. It’s wise that you want to safeguard your rights and investment. Title insurance assures that your rights and interests to the property are as expected, that the transfer of ownership is smoothly completed and that you receive protection from future claims against the property. It is the most effective, most accepted and least expensive way to protect your ownership rights.
Because land endures over generations, many people may develop rights and claims to a particular property. The current owner’s rights – which often involve family and heirs – may be obscure. There may be other parties (such as government agencies, public utilities, lenders or private contractors) who also have ‘rights’ to the property. These interests limit the ‘title’ of any buyer.
Before your real estate transaction closes, the title company performs an extensive search of all recorded documents related to the property. These records are then examined by experienced title officers to determine their effect on the current status of ownership and a report is issued to you or your agents for review. This exhaustive examination generally allows any pending title problems to be identified and cleared prior to your purchase of the property.
If title insurance companies work to eliminate risks and prevent losses caused by defects in the title before the closings, why do you need a title insurance policy? Even after the most careful research, some title flaws may go undetected. Among the more common flaws to title which are not of record are forgery, invalid court proceedings, mistaken legal interpretations, defective deeds, confusion due to similarity of names, previously unrecognized rights of spouses and undisclosed heirs. These problems may surface at any time in the future.
Protection against these flaws and other claims is provided by the title insurance policy which is issued after your transaction is complete. Two types of policies are routinely issued at this time: an ‘owners policy’ which covers you, the homebuyer for the full amount you paid for the property; and a lender’s policy which covers the lending institution over the life of the loan. Unlike other forms of insurance, your title insurance policy requires only one moderate premium for a policy to protect you and your heirs for as long as you own the property. There are no renewal premiums or expiration date.
Each policy is a contract of ‘indemnity’. It agrees to assume the responsibility for legal defense of your title for any defect covered under the policy’s terms and to reimburse you for actual financial losses up to the policy limits.
A First American home warranty is a residential service contract that provides repair and replacement coverage for many of the home’s most essential systems and appliances. With a home warranty, sellers, buyers and agents can all be protected against costly breakdowns before, during, and after the sale of the home.
Buying a home? You can move in with confidence knowing that your budget and new home is protected against unexpected mechanical failures. This includes major appliances such as; air condition units, refrigerators, washers/dryers and even your pool equipment. First American has many independent prescreened contractors and qualified technicians available to you 24 hours a day, 365 days a year.
Selling a home? People selling a home can also sell with confidence. Having a First American home warranty as a special feature on the home will give it a competitive edge over other homes on the market.