Hidden Costs In Your Real Estate Transaction

Use this little check list to help you spot some of the most common places where your costs can go up dramatically.  Little extras that pile on and can really add up.

 

We all want to save money! Sure we do. We probably know where the best priced gas is in town and how to shop for a discount airfare when going to visit the family but Real Estate can be very confusing.

Mobile Notary Fees: Your closing officer will cheerfully tell you that they can send someone to you to sign and notarize documents. Great! But guess who pays for this service - you! Your schedule may make it worth it but if you can stop by the title or escrow office you can potentially save $100-$250 dollars. The reason for the broad range is because if you are getting a loan there are more documents to sign and the price goes up.

Termite Company Repairs: In many areas small repairs that are commonly called wood rot are bid by the termite company. Everyone is busy, everyone wants to close the sale so the seller typically signs this document and pays 3-5 times the amount it would cost to have a fascia board or a post on the patio replaced. Often a handyman is enough to do these jobs. Please note; I am not talking an actual termite problem here. That would have to be treated properly by the termite company.

Escrow Fees: These can vary wildly. I have seen differences of $450 for the same transaction. As Realtors we have trusted partners that we refer you to. However, over time we can lose sight of what the fees are. Ask your Realtor to get three quotes for escrow services. If they want to use their preferred escrow provider ask them to match the best price.

Title Fees: In many states these charges are set by the state insurance commissioner and do not really vary. However, it would not hurt to get a quote and also look carefully for any surplus charge beyond the actual title policy fee. Buyers, if you are getting a loan you will have to buy what is called a lenders title policy for your lender this is in addition to the title policy on the home which the seller typically pays for. Be sure you get quotes on that. One note here, any discounted extended to one party must also be equally extended to the other party.

Broker Fees: Buyers and sellers need to be aware of add on charges from the brokerages involved in the transaction. More and more often I am seeing some brokerages are adding a fee on top of any commission they are getting. Typically called a transaction fee or a admin fee these are pure junk and if you insist I am sure they will get removed. If not you will have to decide if that brokers services are worth that extra fee to you.

Home Inspections:  A good home inspector can save you a fortune! I would simply ask your RealtorRead Our article on how to ask the best questions in your home inspection.

if they have several they recommend or just one. Ask what sort of report you will get and what the general fees in the area are. Currently in my area inspection fees, for essentially the same inspection can vary by $125. Some inspectors provide very detailed reports with heavy emphasis on photos others just a general overview with few pictures. Be sure you get the report you need for the type of property you are buying.

State Requirements: Many states have specific forms or reports they require to be part of a real estate transaction. Here in California there is a pack of Hazard reports the seller must provide the buyer. There are multiple companies that sell these reports and prices differ by as much $35 for the exact same reports.

Your general rule of thumb is to ask questions. Anytime you as a buyer or seller are asked to pay for something be sure that you know what it is, are okay with it and know what options are out there for you. Don't let the hidden costs in your Real Estate transaction get out of control.

For more information on Real Estate in Southern California Please visit our website at www.PSagent.com or call us anytime at 760-408-5300.

What If You Have Deferred Maintenance But You Have To Sell Your Home?

If your home has serious deferred maintenance issues but you must sell you have a serious dilemma on your hands. Don’t kid yourself for a minute, the maintenance issues will cost you with buyers. Funds to create the changes needed might not be there or be hard to come by. This post will give you some ideas to help you get the most money for your home when you have to sell.

Common Maintenance issues:

Wood rot on eaves beams and decks - sand, stain or paint use wood repair filler if feasible.
Maintenance on the HVAC system – sometimes a good cleaning – filter change and service (usually under $100) will go a long way toward having the heat and cooling system pass inspection.
Water damaged cabinets (baths and kitchens) - replace floor of cabinets and/or re-stain or paint. This is not expensive and makes a very bad looking problem go away. Stains may be from household products and not water but replace them anyway. Water stains on front of cabinets from drips may possibly be polished away.
Remove items that cannot be repaired. Out of sight items cannot become an issue. If the pool heater is broken and you are not going to replace it, remove it. If the decorative fencing is rotten, get rid of it. Are most of your screens trashed? Get rid of all of them.

Worse Case Scenarios:

Don’t cover up or attempt to hide anything. This could get you sued after the sale.
If you can’t fix something obtain bids so that the repair cost number can be real – buyers will have the tendency to over inflate repair estimates. Having bids keeps the conversation on a level playing field.
Insurance – this is not a first choice for anyone but if your house has serious damage check with your insurance carrier to see about placing a claim for repairs.

Free Resources:

>Check with local vocational schools or community jobs organizations that may donate or offer low cost labor. They may do the work for a lower cost or no cost if they can use the property as a teaching project.
>Check with the city or town you live in there may be small grants or programs to help you beautify your property – any discounted or free products or supplies will really help you keep costs in check.
>Look for neighborhood organizations, they may have a yard cleanup day or even neighbors willing to donate labor/talent on a once year one time basis. For example Spring Clean ups.
>Many cities have a bi yearly or quarterly program to pick up large items, extra yard waste electronic waste etc. Use these to clean your property out to the best of your ability. Just being clean and neat can help your home look better cared for.

Home Warranty plan for Sellers: Check with your listing agent. In some areas of the country home warranty products are common place and buyers expect to receive this coverage when they purchase the home. What you may not know is that the plans have seller coverage as well. Usually on a per-diem basis while your home is on the market and in escrow. The rates for these plans are typically very reasonable ($50 a month) and can cover unexpected systems failures and problems while the home is being sold. Best of all they typically are paid out of closing funds and do not require up-front payment.

Don't lose thousands to save a little effort and a few hundred dollars. There are ways you can make any property look better and stand out to prospective buyers.

How Much Home Can I Afford?

     Knowing how much home you can afford is more crucial than ever.  This handy calculator will help you get the whole picture.  As you enter your figures it will help you see the true cost of your loan. Keep in mind the percentage of your monthly expenses that will be devoted to your housing expense should probably not exceed 30% of your income.  Calculate my monthly Payment

If you need an Insurance Agent to give you a quote please just let me know and I would be happy to refer one.  Also, keep in mind that property taxes in the Palm Springs area average 1.15% of purchase price so we use 1.25% as a general guide.  Typically your property taxes will be lower than this.

Lastly, be sure you understand the closing costs. Closing costs are the cost of the financing.  While they are deductible, in  most cases on your taxes, they  can eat into the amount of money you have to put down.

Homeowners Insurance Buying Tips

Insurance has, like most industries, undergone big changes in the past decade.  At times it seems too confusing to keep up with.  Understanding your type of coverage is very important.

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It is always tempting to take the lowest price offered for something that appears to be the same. This could be a big mistake when it comes to your homeowners insurance.  Be sure you understand your coverage when shopping rates.

There are essentially three levels of coverage:

• Actual cash value - This value covers the house plus the value of your belongings after deducting depreciation (i.e., how much the items are currently worth, not how much you paid for them).


• Replacement cost - This is the actual cash value without the deduction for depreciation, so you would be able to repair or rebuild your home up to the original value.


• Guaranteed (or extended) replacement cost - The most comprehensive, this inflation-buffer pays for whatever it costs to repair or build your home - even if it's more than your policy limit! Certain insurers offer extended replacement, meaning it offers more coverage than you purchased, but there is a ceiling; typically, it is 20-25% higher than the limit.

Also don't forget that the value of the land is rarely included in insurance policies. You have to have special insurance if for some reason you think that you might sustain a loss to the actual land your property sits on. If this is a reality for you the insurance rates will probably be very high. One example is flood insurance which has increased quite a bit in the last ten years.

Be sure you are asking the right questions and comparing apples to apples when shopping for insurance rates. If you need a good agent in the Palm Springs Area please feel free to contact me