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Have a real estate question? E-mail it to me. I'll get back to you within 24 hrs. A Realtor® is licensed to offer advice on real estate matters. Consult an attorney for legal advice or a CPA for tax advice. Also, answers to questions below pertain to buying and selling within California. Answers may be different for some questions in other parts of the country.
Q: A: The answer continues to be the law of supply and demand. Our local area (central and south Contra Costa County) currently has a high demand for houses although conditions have changed in the past couple years. Inventory has increased in many areas. That has caused some prices to soften. However, many of the best properties continue to be in demand and average sales prices in a number of communities are increasing. (Check HERE for current market conditions.) Local communities have also become more and restrictive about allowing new construction and many local residents like it here enough that they don't have an interest in moving and that limits the supply.Selecting and Working with an Agent
Who Represents Me?
Buyers Mistakes to Avoid Selecting a Lender Looking at Houses
Making an Offer The Escrow Period Inspections
From my BUYER/SELLER COACH column in the Contra Costa Sun Newspaper By Judy Dickey The answers to these questions apply to real estate in the state of California. Laws concerning certain issues such as agency may be different in some other states.
Dear Judy: I'm ready to buy a home, how do I find a good real estate agent? L.L. Dear L.L. I would expect you are looking for an excellent local Realtor®, someone with lots of experience, excellent local market knowledge, and a professional with an excellent track record. I can help you find one of the very best agents in our area. I know the best agents here well. I'd be glad to share with you the names of the some of the most experienced, knowledgeable local buyer and seller agents, in my opinion, available in our area If you live out of my area, I can also refer you to a Certified Residential Specialist in your area who is very experienced and has a proven track record. I am a Certified Residential Specialist and I have a national directory of other experienced CRS agents throughout the country. Of course, you can also ask friends to recommend someone they've worked with, call an agent who is well-known in the area, call a local real estate office and ask for a recommendation from the manager, or visit open houses and talk with some agents. Another way is to check out agents on the Internet. However, be careful and actually interview an agent before you decide to work with them. You need to be sure that they know the area well where you want to live. Ask how many homes they sold last year. It's to your advantage to choose an agent who does a lot of business in the community where you want to live.
Dear Judy: I like to buy a new home but have not recently used a Realtor®. What do I need to know about the etiquette of working with an agent? B.V. Dear B.V.: Most real estate agents work on a commission basis so they do not get paid anything until you purchase a home and escrow closes. Therefore, time is very valuable to an agent. Good real estate agents try to not to waste a buyer's time and hope in return buyers will not intentionally misuse their time. Be honest with agents, tell them as much as you can about your housing requirements and your real motivation. They have your best interests at heart. Most agents work 6 to 7 days a week. Understand when they mention a day is their day off. Give them as much advance notice as you can when you want to see homes. They usually need time to preview and prepare for your visit. It is extremely important that if you set up an appointment with an agent, please be courteous enough to call and cancel your appointment, if you aren't able to make that meeting. That's only common courtesy.
Dear Judy: I'm moving to your area. There are so few houses available. Isn't it smart to work with several agents so I won't miss out on any new homes that come on? JJ Dear JJ: In the situation you are describing, one agent will eventually earn a commission when they close the sale of the home you buy. However, the other agent will find they will never get paid for the hours they actually spend with you and the additional hours they spent researching the market for you. Most agents will not work with buyers if they know those buyer are also working with another agent. You can see why. Choose one excellent, experienced agent to work for you. Be loyal to that agent and he/she will literally go to the ends of the earth to find you the home you a looking for and counsel you are all the aspects of the sale. Very few homes are selling before they go to the open market. Most sellers are being advised to take their properties to the market so they may eventually end up with multiple offers. Working with multiple agents will give you no advantage in our current market. It would only result in the agents having little loyalty to you because you seem disloyal to them.
Dear Judy: What mistakes should I avoid as a buyer? J.B. Dear J.B. Here are some mistakes to avoid: (1) choosing an inexperienced, unknowledgeable agent, (2) buying a home with a poor location, (3) buying a home with any major problems, (4) buying a home you can't really afford, (5) buying a home that will be hard to sell in the future because of its limited appeal (unless you plan to live there forever), (6) not having the house and lot inspected thoroughly by experts to determine if there are problems,(7) buying a home that you don't really like, and (8) working with an agent who is too busy to spend enough time with you.
Dear Judy: I'm ready to buy a home but I really don't know any local lenders. How do I find an honest, reputable lender? V.C. Dear V.C.: The real estate agent you choose to work with will be a good resource for you. That agent will have two or three loan agents that they will recommend based on that agent's experience with them. The lender will want to do an especially good job so that they will continue to get referrals from that agent. Your agent will refer you to a good lender only in order to assist you and in order to insure a smooth closing of the sale. Here are some local lenders I would recommend.
Dear Judy: I want to buy a home but my agent expects there to be multiple offers. What's the best thing to do in that instance. P.L. Dear P.L.: Ask your agent for advice on how to best approach the situation. In my opinion, don't even consider making an offer under asking price if there are multiple offers. Instead, be prepared to make the very best offer you can. Many buyers are hesitant to do so and often lose out on the first two or three offers they make. How much should you go over asking price? There's no exact percentage. Your agent can tell you what has been happening in the local market. Find out in advance what the seller wants as a close of escrow and other terms that are important. If you picked an excellent agent to work with, that agent should be able to give you more tips on writing and presenting an excellent, winning offer.
Dear Judy: A friend told me to have my agent pay some of my costs. Is that usual? B.V. Dear B.V.: Your friend is wrong. That is not usual. If an agent offers to do so, say thank-you very much. However, don't suggest that yourself or you may alienate the captain of your team, your agent, who is looking after your best interests.
Dear Judy: How many houses should I see before I decide to write an offer? W.R. Dear W.R.: It depends on you. Some buyers find the right home immediately. They know it meets most of their needs, they like it very much and they wisely make an offer immediately. Other buyers might see that same house, like it very much and then think they shouldn't buy it because they haven't seen enough homes. Someone else buys the house and they look at house after house for months hoping to find another one as nice as the first one they liked and let go. It's helpful to see 5-10 homes so you know what you might expect to find. However, it is not necessary to look endlessly. When you find something you really like, it's time to write that offer.
Dear Judy.: Will a low offer insult the seller? C.T. Dear C.T.: Most really low offers often do make even the best sellers unhappy. Selling a home is a very emotional experience and a low offer feels like a insult to many sellers. However, the seller's agent will usually recommend the sellers counter back at a reasonable price and see how the buyers respond. If you really want the house, I would not recommend a very low starting offer. Ask your agent for recent comparable sales and base your offer on market value not on a desire to try to steal the house. We are still seeing a very strong "sellers" market. They are very few "steals" that take place today.
Dear Judy: How long does it take to close an escow? E.L. Dear E.L.: Most escrows used to take from 45 to 60 days to close. However, in the past few years, most buyers seem to want to close in about 30 days. A few escrows close in 15-20 days but that is unusual. The closing date is negotiable and some sellers just can't get out in the shorter periods of time. Some sellers ask for a rent-back after close of escrow for one week or more.
Dear Judy: Do I have to be in town on the day of closing? J.J. Dear J.J.: This is one of those answers that varies on where you live. In California, there is no formal closing session as is done on the East Coast. Here the documents go to the county recorders office, the sale is recorded and the transaction is finished. The buyers meet at the title company a few days before closing to sign their loan documents and title papers in the presence of the escrow officer. The sellers meet at another time and sign their closing papers with the escrow officer. If either party will be out-of-town during the last week, those documents can be sent by some type of Express Mail to them for signatures, or they can use a power-of-attorney, if only one of the signers will not be there. The remaining party can usually sign then for the missing person. Check with your agent and title company for procedures used in your area.
Dear Judy: I'm confused about who actually represents me in a sales transaction. I've been told that real estate agents actually represent the seller and not me. Is that correct? PR Dear PR: Agency laws changed in California in the late 80's. Other parts of the country may have different agency laws. Now if you make an offer on a home in California and the house is listed by one company and your agent works at a different company, your agent usually represents only you. If, however, the house is listed by the company where your agent works, both your agent and the listing agent are called dual agents. They both usually represent both the buyers and the sellers. Your agent can further explain the particulars of agency. It used to be that all agents actually represented the seller. That is not so now in California. If you live in another state, the laws may be different. Q: Should we start looking for a house now, in January, or wait until March or April? A: The facts of life are that we usually see a bump up in prices in the early spring. I've noticed that this usually happens in February or early March. I've also noticed that we usually see an increase in interest rates as we enter "prime time" for buying. Therefore, if you are ready to buy now and find a home you like, then don't hesitate. If you wait until more buyers are out looking in March and the later spring months, you will have more competition, prices will likely be higher and interest rates may go higher also. Q: I need an agent to assist me as I buy. How can your service help me? A: I offer a free service providing recommending very experienced, knowledgeable local real estate agents for your situation. I'll do some research and give you the names of several agents to interview. They will know well the communities where you would like to live. Advantage to you: prescreening, saving time, knowing you have a really experienced agent. Q: My friend told me to never tell my agent how much I'm willing to pay. Is that true?A: I wouldn't agree necessarily agree with that advice. When looking for homes, you need to let your agent know how much you are willing to pay in order for that agent to show you the appropriate homes. When you are making an offer on a home, you can keep your final number private if you'd like. However, do be honest with your agent so he/she can do the best job of communicating with the seller and the seller's agent. Your agent should not share anything that is confidential.Q: Should I work with an agent whose office is out-of-the area where I want to buy? A: It depends completely on how well the agent knows the area in which you want to buy. Has the agent sold any homes in that area before? Does he/she regularly preview homes in that area? Does he/she know specifics about neighborhoods, values, schools, and other community aspects? Generally, your best bet is to work with a local agent who also lives and works in the general area and knows values and the community well.Q: My agent suggested we offer over asking price. Is that usual or is he just trying to make the sale? A: In the real estate market we have seen in this area (SF Bay Area) during the past several years, many homes have sold over asking price. See my Real Estate Statistics Page for more updated info on these stats. If your agent is suggesting such an offer, there is a reason. You probably won't get the house unless you do so. Rely on your agent's judgment. If you're working with an experienced, knowledgeable agent, they will know what might be necessary. Obviously the actual decision is up to you and your budget.
Q: I don't feel comfortable with the agent we're using. What do I do? A: Honesty is always the best policy. Discuss the problem as you see it with the agent and see if it can be remedied. If you are beyond that point and just don't want to continue, have the courtesy to thank them for their time and tell them you feel you need to find someone else. You might tell them you are just not a match and plan to move on to another agent.Q: My agent is the also the listing agent on the home we want to buy. Is that a problem? A: It depends on a number of factors. In this situation your agent (in California) would be representing both the seller and the buyer. The agent would work as a intermediary between both principals. Discuss with your agent as to how that would work and what he/she might see as the advantages and negatives. Then decide if you feel comfortable and would agree with that arrangement. The sellers also must feel comfortable and agree to the dual agency. In many instances, dual agency works quite well. It depends on the personalities of the buyers and sellers and their ability to all work together for the good of both sides (the ability to compromise) and be reasonable in their demands. If that doesn't look possible, then the agent should find another agent to represent one side.Q: Should I use an Internet Lender? A: From my experience, I feel that it is a major advantage to work with a local lender who regularly works in the area, knows local values, local appraisers, local title company routines and local real estate agents. That person will want to make sure you are very satisfied or it may cost them local business. The unknown Internet Lender who makes promises and then doesn't perform on time, doesn't have as much to lose and therefore may not be as motivated to perform on time and as originally specified. Obviously there are exceptions but I would be very cautious about working with anyone other than a local, well-known lender. Working with an unknown lender could prove to be very frustrating and costly.Q: I've found the lowest rate in the Bay Area. Why shouldn't I use that lender and save the money?A: I can appreciate your desire to find the very lowest rate. However, what if that lender gets swamped with a huge demand and can't fund your loan on time? Can you handle the closing being delayed for days or weeks? I've seen that happen before. I still say, working with a local lender will insure the greatest likelihood that your loan will be funded on time and you will close escrow as scheduled. Q: How much of a deposit is usual in this area? A: In our local area (Lamorinda, Walnut Creek, etc.), the minimum initial deposit is usually about 1% of the purchase price. However, then it is often requested that the buyers increase their deposit more up to at 3% of the purchase price at the removal of their loan contingency or inspection contingency. Each situation is a little different and I'm sure other areas may have a different policy. Ask your agent what is usual in your area. Q: How is an offer presented to the sellers?A: The seller and seller's agent will determine how offers will be presented. Usually the procedure in our local area is that the Buyer's Agent will meet with the Seller's Agent and the Seller to present the offer. The Buyer's agent then leaves and the Seller and the Seller's Agent discuss the offer and determine whether to accept it or reject it and send a counter offer to the Buyer.If there are multiple offers, then usually the Seller's Agent will set up appointments for each offer to be presented individually to the Seller's Agent or the Seller's Agent and the Seller. The Seller and the Agent will then discuss the offers and decide which one to accept or which one (s) to counter (there can be multiple counter offers that may go out that would not be considered accepted until the seller signs them when they return with the buyer's signature). Q: Our offer was just accepted. What happens next? A: Usually your agent will contact the title/escrow company and open the escrow (give them all pertinent information and a copy of the contract). Your deposit will be sent to the escrow company also. Then your agent will discuss with you desired inspections and set up those appointments. You will meet with your lender, if you haven't already done so, to get the loan process started. Q: What is escrow? A: Escrow is an intermediary company (third party) who holds the deposit and processes the required escrow, title and loan documents in the sales transaction until all terms of the escrow have been met. Tasks include obtaining title insurance, securing payoff demands, prorating taxes, interest, rents, etc. and distributing the funds held in escrow.Q: Who pays for the inspections needed on a house? A: Usually the buyer pays for all inspections except the Structural Pest Inspection, however, other inspections can be negotiable depending on the circumstances.Q: How do you find a good house inspector? A: I would suggest asking your agent for several recommendations based on her/his experience. There is a national organization called ASHI (American Society of Home Inspectors). (www.ashi.com) I usually looked for inspectors who were certified by this association. ASHI inspectors offer these qualifications:
As with any other professional, get an inspector who is well-trained, very experienced, and knowledgeable of conditions in your local area. Q: If we find problems with the house during the inspection, who pays for fixing them? A: As with most issues in purchasing a home, fixes on any problems are negotiable between the buyers and sellers. It used to be the the seller had an obligation to fix any section 1 pest items, but that has now been changed to it becoming a negotiable item in the most recent CAR contract forms.Q: The house we are buying looks to have been beautifully maintained. Is is okay to skip the inspections and save that money? A: I would recommend that you ALWAYS have a home you are buying THOROUGHLY inspected. It might look great on the surface but who knows what might be going on in unseen areas (plumbing, electrical, drainage, soils, etc.). I would even have a brand new home (new construction) inspected to find out if the builder has made any mistakes, such as leaving a heating duct disconnected, if there are potential drainage problems evident, or lots of wood scraps left under the house that will one day be sighted on a Pest Report as cellulose debris.
Or, call me at 925-376-9458.
The answers to these questions apply to real estate in
the state of California. Laws concerning certain issues such as agency
may be different in some other states. Realtors® are licensed to advise
on real estate related topics only. If you |
Do you have a real estate question?
