Exterior and Curb Appeal

Experts say most buyers make their decision at first sight.

General Exterior

Prospective buyers will react well to signs that your home has been meticulously maintained.

·Manicure landscaping: mow, edge, & water lawn, trim hedges, weed, fertilize and add mulch to flowerbeds, and prune trees.

·Keep driveway clean and free of parked cars, and keep the garage door closed.

·Repair or replace loose or damaged roof shingles or tiles.

·Minimize cracks or crumbling on walkways, walls, or steps, and keep them clean and free of obstructions like toys.

·Items from RV's to trash cans left out, can contribute to a cluttered appearance. Make sure that from the street, your property appears neat.

·Inspect appearance of interior window coverings from the curb.

·Repair any peeling paint or loose caulking on windows or other areas.

·Take steps to eliminate insect or rodent pests.

·Pick up after your pets or neighborhood animals.

Doorway

While agents work the lockbox for a key, buyers have idle time to notice details.

·Apply a fresh coat of paint to the front door and frame.

·Consider adding pots of flowering plants in the entryway.

·Eliminate cobwebs and groom doorway area windows, porch light, or decorative glass.

Interior Appeal

Once inside, experts say most buyers are reaffirming their curbside decision.

Clean, Clear, Light and Bright

·Give every room in the house a thorough cleaning and remove all clutter. Hiring a cleaning service may pay for itself by adding to a buyer's perceived value of your home.

·For a sleeker, more spacious look, consider placing furniture from crowded rooms in storage.

·Clear kitchen counters of everything other than perhaps a few very pretty items. Ask yourself: In a model home, would a professional decorator put your choice of items out on the counter?

·Remember: closets will be opened! Keep closets, cupboards, and even your attic orderly and neat. Since you are anticipating a move anyway, consider holding a garage sale or boxing and storing unused belongings.

·If necessary, repaint or clean/replace dingy, soiled or strongly colored walls, and window and floor coverings with a light, neutral shade. Bright rooms look bigger, and neutral colors help buyers envision their own furnishings and décor.

·Repair dripping faucets, burned-out light bulbs, or cracked window panes.

·Repair cracks, holes, or damage to plaster, wallboard, wallpaper, and tiles.

Warm and Homey

·Subtle scents of potpourri in bedrooms or baths and fresh baked cookies or cinnamon in the kitchen can make your home more inviting.

·Keep an attractive set of towels in each bathroom to be brought out only for showings.

When an offer comes in, as the seller, you may wish to have the buyer's agent present the offer in person, or the offer can be faxed to us. Many years ago, most offers were presented in person by the selling agent. Today, most offers are faxed to the listing agent. The best agents will also prepare a buyer's profile letter and a lender pre-qualification that accompany the offer.

There is more to an offer than just price. Price is very important, but the terms and details of the offer are also very important. We will review all areas of the offer. You have the final say, but you hire me for my expertise, so I will comment on all areas of the offer.

After we have reviewed the offer, it is time to give potential buyers a written response. We have three options;

1. Accept the offer.If you accept the offer, escrow is opened.
2. Reject the offer.If you reject the offer, you are sending a message tothe buyer that we no longer wish to negotiate.
3. Counter the offer. If you counter the offer, the buyer has the same three options; to reject, to accept, or to counter your counter offer.

As you can see, an acceptance or rejection ends the process of negotiation, and a counter offer continues the process.

As late as 1980, the Offer to Purchase, now called the Residential Purchase Agreement, was one 8 ½" X 11" form with mostly blanks. Today's Residential Purchase Agreement with addendums is more than ten pages.

Whether the Residential Purchase Agreement is one page or ten pages, it has the same purpose; to detail the terms of the sale.

With the complexity of today's Residential Purchase Agreement, most of the details are covered in the pre-printed matter. The following is a list of some basic issues covered in the Residential Purchase Agreement:

• Deposit amount
• Offering price
• Financing details
• The length of escrow
• An itemization of costs paid by seller
• An itemization of costs paid by buyer
• Time periods for all aspects of the transaction
• Defines fixtures and personal property
• Effective time period for the offer

Above are just a few of the areas covered in the Residential Purchase Agreement. After we receive an offer, we will detail all areas of the agreement.

Escrow is an impartial, unbiased third party, working for buyer and seller. Escrow holds funds and documents on behalf of the buyers and sellers and distributes them, according to buyer and seller instructions.

To start the process, the agent (usually the listing agent), delivers to the escrow officer such items as, but not limited to, buyer's deposit check, details contained in the Residential Purchase Agreement, buyer and seller addresses and phone numbers, and information regarding the buyer's lender.

The escrow officer then prepares escrow instructions to be signed by buyer and seller. Escrow instructions reiterate the Residential Purchase Agreement and also contain information pertaining to the escrow process. The escrow is formally opened when both buyer and seller return signed escrow instructions to the escrow officer.

During the escrow, everybody has a job to do. Below, each party's responsibilities are outlined.

Agent Responsibilities

·Assists his/her client in completing all of his/her responsibilities.

Seller

·Delivers grant deed to escrow.

·Delivers clear termite inspection to escrow.

·Delivers information on the current mortgage holder to escrow.

·Delivers information on home protection (if any).

·Delivers any bills to be paid out of escrow to escrow.

·Fulfills any other obligations required by the Residential Purchase Agreement.

Buyer

·Deposits earnest money, down payment, and money to cover closing costs to escrow.

·Approves any documents outlined in the Residential Purchase Agreement.

·Fulfills any other obligations required by the Residential Purchase Agreement.

Title Company

·Prepares preliminary title report.

·Arranges for and picks up loan funds.

·Delivers deeds to county recorders office

·Writes title policy.

·Confirms recording fees.

·Makes payoff to lender on seller's mortgage.

·Sends remaining proceeds to escrow (minus title fees).

·Sends title policy to insured.

The Lender

·Delivers loan documents to escrow for buyers to sign.

·Delivers funds for the buyer's loan to the title company.

Escrow Holder

·Opens the order for title insurance.

·Obtains approval from the buyer on the preliminary title report, termite inspection,and any other items required by the Residential Purchase Agreement.

·Has the buyer sign loan documents.

·Delivers loan documents to the lender.

·Receives funds from the buyer and lender.

·Pays buyer and seller bills, as outlined in the escrow instructions.

·Prorates taxes, association dues, rents, etc.

·Prepares a final statement (closing statement) for buyer and seller. This statement specifies amounts paid out of buyer and seller accounts.

·Records grant deed and trust deed and disburses funds.

·Delivers closing statements to the agents and/or buyers and sellers.

The escrow is closed after terms and conditions of the escrow instructions have been completed and deeds have been recorded.

During the escrow process, I will monitor all aspects of the transaction and consistently update you as it progresses. The next few pages will explain some of the items that transpire during the escrow process.

Title companies, unlike most insurance companies, operate under the theory of risk elimination. Most of the premium for title insurance is used to prevent problems, as opposed to most other insurance companies, which allocate most of their premiums to settle claims.

Title companies store and maintain records that affect title. This is done in the "Title Plant"; many title companies' records date back over 100 years. They determine what encumbrances are on your title. The title company works to clear encumbrances which buyers do not customarily assume before the close of escrow. The title company conducts a thorough search of public records to eliminate most of the risks against a future claim. When a claim is filed, the title company handles it according to the terms of the title insurance policy.

Title companies are required to file their rates with the California Department of Insurance. Rates and service vary from company to company. Buyer and Seller choose services; however, I will refer companies, if you wish. My referrals are based on price, service, strength of company, and past performance.

Most home purchases require a loan. Although the loan process may vary slightly from lender to lender, most of the process is very similar. The companies that purchase loans from lenders set standards under which most lenders underwrite loans. These standards act to regulate the industry.

Although most buyers do not like the process which lenders put them through to obtain a loan, it is necessary to understand that, to some degree, interest rates are affected by keeping the default rate low. We pay more for products due to shoplifting, so when a business is able to cut down on shoplifting, the price of products is lower. The same holds true for the use of money. If lenders can keep the defaults on loans low, interest rates can be lowered. Therefore, a thorough loan process is in everyone's best interest. Consequently, the buyers will be asked to provide a considerable amount of information that is subject to verification.

Below is an outline of a typical loan process:

1. The loan application. The process begins when the buyers meet with the lender and complete a loan application. The application from is a standard form used by most institutional lenders. They will also be asked to sign release forms to allow the lender or broker to obtain verifying information.
2. Loan application reviewed. The lender or mortgage broker reviews the application to be sure that the buyer/borrower meets the qualification guidelines.
3. Assignment to a processor. The loan application is assigned to a processor. The processor will order or obtain such items as, but not limited to, the credit report/s, appraisal, employment verifications, down payment verifications, title information, association information, Residential Purchase Agreement, escrow instructions, and any amendments, tax returns, etc.
4. Loan packaged. After all the needed information is gathered by the processor, he/she will review the package to be sure it is complete and meets the lender's guidelines.
5. Underwriting. The loan package is sent to the lender's underwriter. The underwriter reviews the package in detail and will make one of four actions-- A) Approve the loan unconditionally; B) Approve the loan conditionally; C) Suspend the loan; D) Deny the loan.

Rarely is a loan approved unconditionally. More often, the loan is approved with conditions. This means that something considered minor is required to obtain an unconditional approval. If a loan is suspended, this means that the underwriter needs more information to make a final determination. The item/s is usually something more substantial than what is needed for a conditional approval. If a loan is denied, this usually indicates that the underwriter has determined that the loan package is complete, but does not meet the required guidelines and is, therefore, denied.

1. Order loan documents. After a final approval is obtained, the lender prepares the loan documents and sends them to the escrow company. The buyers will be notified by escrow to come in and sign the loan documents.
2. Funding the loan. After the loan documents have been signed, escrow will package them properly and return them to the lender. The lender will usually fund the loan within 48 hours of receiving the documents.
3. Recording the deed. This is when escrow closes. Tit is usually done the day after the funding of the loan occurs.

In most cases, the buyer will obtain a professional inspection of your home. Quite often, the buyers will accompany the inspector during the inspection. The inspector's job is to report, in detail, the condition of the property. An inspection will usually take between one and four hours to complete. Sometimes and inspector will suggest further inspections, tests, and/or investigations that the buyer should conduct. I recommend that you not be present during the property inspection so that the property can be inspected without distraction.

The law requires the sellers and brokers to disclose to a buyer all material facts known to them which will affect the value or desirability of the property. In most cases, brokers are required to make a visual inspection of the property and disclose anything that would affect value or desirability of the property. However, the inspection of the property does not alleviate the seller's responsibility to disclose material facts. It is best to consider everything to be a material fact, as it is much better to over-disclose than to under-disclose. The majority of lawsuits involving buyers and sellers of residential property involve lack of disclosure by a seller.

After the inspection/s is completed, the buyer's agent will submit a list of repair requests to me. We will then respond to it in writing within the prescribed time period. The Residential Purchase Agreement specifies the time periods for the inspections to be completed and responses to be made. It also specifies the seller's responsibilities with regard to repairs.

The termite inspection (or wood-destroying, pest and organism inspection report) is conducted to determine if there is any active infestation, dry rot, or fungus.In most cases, the seller pays for the inspection, selects the company, and pays for any required work as specified in the Residential Purchase Agreement.

The Pest Control Report separates any findings into two categories—either "section one" or "section two" findings. Section one findings include active infestation, dry rot, or fungus. Section two work is described as any condition which may, in the future, lead to active infestation, dry rot, or fungus.

In most transactions, the seller is responsible for section one repairs, and the buyer is responsible for accepting or correcting section two items.

Who pays for the inspection and who is responsible for sections one and two findings are specified in the Residential Purchase Agreement.

The buyer's lender will require an appraisal of your home before approving a loan for the buyer. The appraisal determines the maximum loan amount the lender will make on the property.

The appraiser will use the market comparison approach to establish an opinion of value. The market approach uses recent sales in the same neighborhood and compares location, condition, and amenities to establish approximate value.

The appraisal is usually a condition of the Residential Purchase Agreement, because lenders limit the amount they will loan based on the loan-to-value ratio. Loan-to-value ratio is defined as the relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value. For example; if a home is appraised at $300,000, and the lender will lend 80% loan-to-value (LTV), the loan amount cannot exceed $240,000.

When a home appraises for more than the purchase price, the lender will only make a loan based on the purchase price. When a home appraises for less than the purchase price, the lender will only make a loan based on the appraisal amount.

If the appraisal comes in below the purchase price, there are five possible solutions—

1)Increase the down payment. The down payment amount can be increased, thereby reducing the loan amount, to satisfy the lender's loan to value ratio.

2)Reduce the sales price. The sales price can be reduced to the appraised price.

3)A combination of 1 and 2. Increase the down payment and reduce the sales price.

4)Obtain another appraisal. The buyers can obtain another appraisal.

5)Obtain a loan with a higher LTV. If the buyers were not originally applying for a loan with the maximum loan-to-value, the LTV can be increased.

The walk-through inspection is usually done about five days before the close of escrow. We meet the buyers at the property and follow the following procedure:

Verify repairs. Most likely, there were repair requests that you agreed to repair or replace.

Demonstration of equipment. You will demonstrate how to operate equipment such as pool, spa, sprinklers, alarm system, appliances, or any other items buyers may have questions on concerning their operation.

Set up utilities. I will provide the buyers with a list of all the utility numbers and we will discuss, with you, the coordination of transfer of the various utility services to the buyer.

Coordinate possession. We will plan the transfer of keys and finalize the possession time and date.

Items to be left with the home. We will discuss where you will leave such items as garage door openers, extra keys, instruction books, alarm codes, safe combinations, etc.

Change of address. I will provide you with a change of address card to be filed with the post office.

Home protection plan. If a home protection plan was purchased, I will provide the buyers with the information pertaining to the policy, along with a service number to call, should they need service.

Review closing procedure. I will review with you the few days remaining until closing.

Regardless of how long it has been since you last moved, you will probably underestimate how big of a job it is. Below is a checklist that should help you prepare for moving day. Some of these apply to out of the area moves, but most apply to any move.

• Give change of address form to the post office.
• Change accounts and credit cards.
• Change of address with the DMV.
• Notify insurance companies.
• Call utility companies.
• Notify subscriptions of change of address.
• Notify friends and relatives.
• Get refunds on any deposits made.
• Return any library books or rented videos, etc.
• Plan a garage sale.
• Inventory your possessions.
• Get boxes to move.
• Set up movers and charity pickups.
• Try to use as much food in the refrigerator and freezer as possible.
• Set up house cleaning.
• Set up carpet cleaning (if necessary or required).
• Make arrangements for pets.
• Carry enough cash to make the move.
• Get any keys from neighbors.
• Leave keys, garage door openers, manuals, etc. for the new buyer.
• Make a list of service people, with phone numbers, for the buyer (spa, gardeners, etc.).
• Double check the house after everything is moved out.

It is also time to think about preparing the home for the buyer. Below is a list of what you should do to get the house ready for the new owner.

• Kitchen to be cleaned, including all appliances.
• Bathrooms to be cleaned.
• Cupboards to be wiped off.
• All floors to be vacuumed or mopped.
• All debris removed inside and outside of the property.
• Garage to be free of debris and swept.
• Landscape to be maintained. Cut the lawn within a few days of the buyer's possession.

Leave all manuals, garage door openers and keys, etc. for buyers