YOUR HOME IS ON THE MARKET

Once your home is on the market and we are starting to get showings what’s next.

The Showing Process: The following is one method many listing agents use to have other agents show their listings. It provides the easiest way for agents to show your home and provides the highest number of showings. We place a Key safe on the front door of your home. It contains a key to your home. The MLS publishes your phone number for them to call for showings. Agents will call you to show it. They will indicate when they wish to show. If you are home, they will give you a time they will come. If you aren’t home, they will leave a message of the time they will arrive. Agents will use the Key safe to open the front door. When the agents open the Key safe, we will receive a text message from the key safe that they arrived. When they finish showing and return the key to the key safe the device will notify us that they have finished showing. We will automatically send an e-mail to the agent asking for their client’s comments of your home. We will bring this feedback to you.

However, for example when there is a pet in the house during the day there needs to be an alternate method of showing so that the pet doesn’t escape. We will discuss these alternative showing methods

OFFER: When an offer is made on your home the agent representing the buyer will contact us and provide us with the offer. We require any offers be accompanied by the buyer’s proof of funds, a pre-approval letter from a qualified lender showing that the buyer is approved for a loan to purchase your home. We will review the offer, to ensure that, we have received all the elements we need to help you make an informed decision. We will call the lender for any information we feel is lacking. We will than meet with you to go over the offer.

NEGOTIATIONS: We will likely write a counter offer to address any exclusions or insufficiencies in the offer. We will send the counter offer to the agent representing the buyer.

MEETING OF THE MINDS: Once we have reached an agreement, we will open escrow.

ESCROW: In the State of California the recognized third party to the process of buying and selling real estate is Escrow. This neutral third party works for both buyer and seller. The purchase contract becomes part of escrow instructions and the escrow company will create additional instructions for your signature. When escrow instructions are complete, we will review them with you. Escrow will work with the title company to provide a preliminary title report which will tell the buyer what leans, and easements are on the property. Escrow will also work with the buyer’s lender. The result of this process is for the buyer to receive the deed to the property and the seller to receive the net proceeds of the sale and to have all his home related loans and obligations paid off.

BUYERS LOAN PROCESS: The buyer has contacted the lender prior to the offer to determine the buyer’s ability to purchase. The buyer will then make a formal loan application with the lender. The lender will verify with the buyer’s bank that the funds are available for the down payment. The lender will contact the buyer’s employer to verify the employment and income.

APPRAISAL: The lender will hire an appraiser to appraise the property. In most cases the appraisal must come in at or higher than the sale price. We will meet the appraiser at your home and provide him with any documentation necessary as well as a floor plan of your home. A successful appraisal is a major milestone in the escrow process.

INSURANCE: The buyer is required to get insurance for the property. Many insurance companies will inspect the property before agreeing to insure it. We will meet the insurance agent at your home.

DISCLOSURES: The contract and California law require the seller to provide to the buyer disclosures regarding the known condition of the property. We will meet with you and go over these forms.

CONTACTING MOVERS: Now is the time to contact moving companies and get bids on the cost of moving. We don’t recommend signing a contract with the mover until the contingencies are removed. Most movers are flexible.

STATE LAW RETROFITS: The State of California requires that ever home sold in the state must have a carbon monoxide detector on each level of the home and that smoke detectors be installed on each level and in every bedroom. We will discuss this with you. State law also requires that the hot water heater be strapped and braced.

INSPECTIONS:
The purchase agreement allows the buyer a due diligence period to inspect your home for any defects. The default period in the purchase agreement is 17 days. Sometimes this time frame can be reduced or expanded by negotiations.

AS IS: We sometimes have sellers say I’m selling my house as is and will not make any repairs. Although this is possible it is almost never done except in distressed sales like foreclosures and short sales). Buyers want to know what they are getting, and the real estate contract is designed to provide the buyer with a lot of information to help them decide if this is the right home for them. Inspections and disclosures are the best way for buyers to feel comfortable about their purchase.

PHYSICAL INSPECTION: In most real estate transactions the buyer hires a home inspector to inspect the property. We will meet the physical inspector at your property. These inspections will take about three hours. The inspector will look at the roof, heating, air conditioning, plumbing, sewer system, appliances, the structure, pool and pool equipment etc. They will turn on the heat and air and determine the temperature variance. They will run the dishwasher through a full cycle. They will check all the electrical plugs. Flush all the toilets, check the water pressure, check if items meet building code. They will go into the attic to look for any structural issues and leaks. If your home is on a raised foundation, they will go under the house to look for leaks or evidence of flooding. These inspectors do a good job of being able to tell a buyer what they a getting. Although the buyer can attend the inspection often, they will show up at the end of the inspection period and the inspector will go over the results of his inspection. If the buyer has issues of anything that isn’t what he expected the buyer may ask you to repair certain items. This is done on a form called Request for Repairs. It is possible that the home inspector may recommend that the buyer hire another contractor to inspect areas of the home which are outside the expertise of the home inspector. This may be for roofs, plumbing, sewer, pool, structural, fireplaces, soils or any other area. In some instances, scheduling the additional inspections may take longer than the time allotted in the physical inspection. The agent representing the buyer may ask for an extension of the inspection period. It is up to you whether you will agree to this extension.

TERMITE REPORT: A termite report is not required in most real estate transactions. However, if FHA or VA financing is used a clear termite report may be required. Regardless of financing most buyers will usually contact a Pest Control Company to inspect for active infestation. This report is done by a company which is licensed with the state pest control board. We will meet the termite inspector at your property. The inspector is looking for infestation. This could be termites, dry rot, fungus or mold. This infestation is considered active infestation or section one. The company will also call out conditions which could lead to infestation. These could be leaky plumbing etc. This is considered section 2 and is not the responsibility of the seller to address. However, you might find this item come up as part of a request for repairs from the physical inspection.

When the buyer receives the termite report they will discuss it with their real estate agent. The buyer may address this report in the request for repairs by either asking the seller pay to have the termite company complete the work prior to close of escrow or ask for a credit so that the buyer can have the work done themselves. Sometimes this is difficult as lenders have a limit on the amount of credit a seller can provide a buyer. The seller may refuse to do any termite work. The termite report may call for the home to be tented. In this event you will need to be out of the house for three days while the tent is on. Also, if you have a tile, slate or lightweight concrete roof the tiles may be damaged by the tent installers during this process. The tent installers do not pay for any damage to the roof. It is just a cost of having to tent your home. Therefore, after the tent is removed you will need to have a roofer replace any broken tiles. Composition roofs usually don't have a problem with this. Dry rot is the most common item in a termite report. Patio covers are the most common place that dry rot is found. We have seen thousands of dollars in patio cover repairs in the past. The main reason for this is that wood is expensive. It is advisable to have a termite report done when we first place the property on the market so that you can decide whether to keep the patio cover or to remove it. When the report is complete, we will receive a copy and we will go over the report with you. The termite company will give a bid to make repairs, tent etc. Repair work can be done by the homeowner of another contractor. If so, the termite company will need to re-inspect the property to make sure the work was done correctly. Like the Physical inspection any work needed to provide a clear termite report may be addressed in the request for repairs. Once work is done the termite company will provide a clear termite report showing that the home is free from active infestation.

Until about a year ago sellers were typically responsible to provide a termite report. In many instances the seller would do any work necessary to remove any active infestation. Because the most recent Real Estate Purchase Agreement changed this and shifting the investigation responsibility to the buyer, you may receive an offer asking you to provide a clear termite report. We will discuss this with you.

The reason this changed is because the seller was agreeing to an unknown amount of work. If there was a wood patio cover or deck that required thousands of dollars (a blank check) to repair, the seller was required to do the work to conform to the contract. In many instances it would be better to tear down the patio cover than to repair it. The new contract addresses this by putting the responsibility on the buyer to get a report and then address it in a request for repairs. This allows a degree of negotiating in order to resolve any issues. The termite company must provide to the buyer and lender certification that the property is free of all active infestation.

REQUEST FOR REPAIRS: If in the Physical Inspection or Termite Inspection there are items that need repair, or the condition is worse than the buyer expected the buyer may ask the seller to make repairs. The request for repairs is a formal request to compensate the buyer for those discoveries which were unexpected from the inspection. They may ask for a credit for the repairs so they can hire their own contractor to rectify the item or ask you to hire a professional to make the repairs and provide them with receipts for the work done.
When we receive a copy of the physical inspection, termite report and request for repairs we will discuss them with you. You can agree to make the requested repairs, some of the repairs, none of the repairs or choose to credit the buyer with a cash amount so he can make his own repairs. This is a second negotiation period. Once buyer and seller come to a resolution, we have reached a mile stone in the escrow process. When a home falls out of escrow this is the point that it happens most.

PHYSICAL INSPECTION CONTINGENCY REMOVAL: The contract calls for the buyer to remove their physical contingency within 17 days (or other negotiated period) from the acceptance of the offer. We will request that the buyer provide this contingency removal as the time period for its completion arrives.

START PACKING: Although you should be packing at the beginning of the process once we have the physical inspection out of the way and we are confident that the loan process is proceeding properly its time to get packed up. Contacting your moving company and start setting specific moving dates.

LOAN APPROVAL: When the offer is made on your home, we have requested that the buyer provide us with a loan pre-approval. This is a preliminary investigation of the buyer by the lender checking his credit, income, debts and funds to purchase the home. During the loan process the lender will verify this information by checking employment, bank records, tax returns and receiving an appraisal on the property. Once the lender has completed their investigation, they will tell us that the buyer has formal loan approval. This means that the lender has agreed to provide the loan to the buyer. They will order loan documents and send them to escrow.

LOAN APPROVAL CONTINGENCY REMOVAL: The contract calls for the buyer to remove their loan contingency within 21 days of the acceptance of the offer. Although we will be following the progress of the buyer’s loan from the beginning of escrow, we will request that the buyer provide this contingency removal as the time period for its completion arrives.

VARIFYCATION OF CONDITION (Walk-Thru): The contract calls for the buyer to have a final walk-through of the home. This is often the only time in the escrow process that the buyer and seller may meet. The purpose is to verify that the property is in the same condition as it was when they first purchased it (such as landscaping has been cared for and the seller hasn’t removed the kitchen sink) and that the seller has completed any agreed to repairs. Although it’s not required in the contract. This is a great time for the seller to show the buyer how the sprinkler system, pool equipment and other things work.

When we have a definite close of escrow date you will want to contact your utility companies to cancel service. It is best that you put in a order to cancel service while the buyer puts in a request for service. This way most utility companies will not turn off the service only transfer it into the new buyer’s name.

CLOSE ESCROW: Escrow is closed when the title company records the buyers grant deed at the County recorder’s office. Once that is done the escrow company will settle the escrow file by paying off the seller’s mortgage loan and providing the proceeds to the seller. Proceeds can be made in a cashier’s check or by wire transferring the funds directly to the seller’s bank. Because of wire fraud it is extremely important for the seller to coordinate closely with the escrow company if funds are to be wired.
MOVING: The contract calls for the buyer to have possession of the property at close of escrow unless other arrangements are made. We will discuss all this with you.
OVERVIEW: This has been a very brief overview of a real estate transaction. Every transaction is unique with its complications and challenges. We will keep you informed every step of the process.
CONCLUSION: This again is Rich McMillen with the Rich & Jan McMillen Team at Aviara Real Estate in Westlake Village. We can be reached at 805-217-1960. Or e-mail address is
info@TOHomes.com. If you are considering buying or selling in The Conejo Valley, Moorpark or Simi Valley, please contact us. We will put our over 30 year’s experience to work for you.