Selling Your Home?
Thinking about selling your home? Would you like to find out how much it's worth and how much it could sell for in today's market? Please provide some basic information about your home for a FREE Home Market Evaluation.
Seller Transaction Costs – What To Expect
While some of the items below are negotiable and/or may not apply to every seller, typically, sellers can expect to pay for the following:
- Real estate agent/broker commissions
- Owners policy of title insurance Title Insurance is usually obtained when real property is purchased. The policy of title insurance insures the owner and/or the lender of ownership of the property.
- One half of the sub-escrow fee charged by the title company for handling payoff funds
- One half of the base escrow fee, in addition to fees for handling payoffs, paying California Withholding tax, and document preparation.
- Documentary transfer tax for the County of Los Angeles – $1.10 per thousand based on the sales price
- City transfer tax based on the sales price:
- Los Angeles: $4.50 per thousand
- Santa Monica: $3.00 per thousand
- Malibu, Beverly Hills: -0-
- City report fees: Los Angeles $70.20, Santa Monica $234.46
- Retrofitting, carbon monoxide & smoke detectors, gas shut off valve and water heater strapping:
- Certificate of Compliance: Los Angeles – $15, Santa Monica – $50
- Natural Hazard Disclosure Report
- Termite inspection and Section 1 corrective work
- Payoffs of loans against the property (principal, accrued interest, statement fee, reconveyance fee)
- Judgements and/or liens against the seller
- Taxes and homeowners association dues (prorated and paid current)
- Homeowners association charges for documents and transfer fees
- Recording fees for grant deed, reconveyance, releases
- Notary fees
- Messenger fees
- California Withholding/Franchise Tax Board taxes (if you are not exempt)
- IRS Withholding (if you are a foreign person and are not exempt)
- The seller may agree to purchase a one-year home protection plan for the buyer
- Costs for repairs that buyer and seller agree on
Ways To Make Your Home Sell For More
In a market where buyers have many homes to choose from, sellers need to make their home more inviting and saleable as possible. Staging, for example, is wonderful way to help showcase your home and present it in the best possible fashioned.
- It is important to make your rooms look light and bright. Take advantage by painting and decorating rooms with light, neutral colors thereby making your home appeal to buyers with a different lifestyle than you may have.
- Kitchen counters and tables should be free of clutter; take advantage of the opportunity to show off the amount of counter space.
- Closets should also be neat and as uncluttered as possible to show there is plenty of room for buyers who are concerned about storage space.
- Make patios and balconies look inviting. Replace old, unattractive patio furniture with new and don’t forget to add bright cushions. Plants also make patios and balconies look fresh and inviting. If the plants look like they are suffering from a lack of light you should replace them with beautiful, green, and flowering plants.
- Upgrading or remodeling the kitchen and bathrooms will also go a long way to increase value and make your home more saleable. Look at some of the remodeling magazines to get ideas on how to make kitchens and bathroom look more attractive to today’s buyers.
- Remove old, heavy, dark draperies. Most buyers prefer blinds or shutters, and in some cases, no window coverings at all. Wash the windows and take advantage of the best views your home has to offer.
- Remove “cottage cheese” (asbestos) ceilings and redo with smooth plaster. Cottage cheese ceilings were a “1960’s” thing making homes look dated and buyers really don’t want them these days. (Should consult with professional companies who do this).
- Eliminate cooking and pet odors, and shampoo dirty carpets.
- Remove clutter from all areas as much as possible, including countertops, bathroom tub and shower areas, closets, and coffee tables. Remember, “Less is more.”
- Remove massive pieces of furniture or scale down the amount of pieces to make your rooms look larger.
- You will spend a bit more by changing your counter tops to granite, but your return on investment may be well worth it.
- Repair or replace old kitchen appliances, light fixtures, and cabinet hardware.
- Replace switch plates, trash receptacle covers, if necessary.
- Remove unnecessary cords, wires, and cables.
- Caulk and grout as needed in bathrooms and kitchens.
- Make your bedroom “sexy,” with an attractive bedspread, pillow shams, and accessory pillows.
- And, finally, depersonalize your home from old, faded family photos, and recipes and other clutter posted on the refrigerator.
In conclusion, a home that is bright and uncluttered will attract more prospective buyers. A visually attractive home that smells fresh and is clean will be very inviting. For open houses, some sellers even bake cookies for the agents and their buyers because of the wonderful aroma that spreads through the house, or spray vanilla in the rooms so the house smells wonderful. If you would like further information on how to make your home more attractive to buyers, feel free to contact me anytime. I offer a complimentary walk through and analysis of what you can do to improve your home, how to stay within your budget, and the possible return on investment you might receive by making the upgrades.
What is a Short Sale?
A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for. Short sales are a way for homeowners to avoid foreclosure on their homes and still be able to pay off their loan by settling with lender.
7 steps to doing a short sale
Things You’ll Need: Financial Calculator Real Estate Brokers
- Verify the value of your property. If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.
- Add up all the costs of selling the property. If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.
- Determine the amount owed against the property. This will be the total of all loans against the property
- Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.
- Contact the lender or lenders. Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.
- Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone else who’s making money off the transaction to see if they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.
- Sell the property.
Tips & Warnings
Closing costs will include title and escrow fees (if the seller is responsible for any portion of them, which will depend on your county), attorney fees, a portion of unpaid property taxes, re-conveyance fees, notary fees, delivery fees, documentary fees and/or transfer fees.
Remember that the amount on your monthly loan statement does not include interest. Interest is accrued until the date a loan is paid off, so you may have as much as 30 days of interest on top of the balance owing, and you’ll need to include this interest in the total payoff amount.
If a property is sold under a short sale, the lender may require the buyer to make up the difference, either through a personal obligation or a collection.
The IRS often gets involved with short sales, because they are seen as a relief of debt and may be treated as income. Check with your accountant.