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The Buyer's Responsibilities

by Samia S. Morgan
Your role during the escrow process should be an active one. Don’t wait for the seller to volunteer information – stay on top of it yourself and take reasonable care, along with me, your agent, to protect yourself.

For example, when you review the Transfer and Disclosure Statement, TDS, keep an eye out for questions answered "unknown" or left unanswered. Ask about them until you are satisfied with the answers.

Let's talk about your specific concerns or plans for the property. Concerned about the open parcel behind the house? Ask about it!

You may also wish to investigate the following non-physical conditions, including:

  • Governmental zoning, requirements and limitations
  • Governmental permits, inspections or certificates
  • Limitations, restrictions and requirements affecting use of the property
  • Rent and occupancy control
  • Schools
  • Proximity and adequacy of law enforcement, crime statistics, proximity of registered sex offenders (see section on Megan’s Law) and other criminals
  • Proximity to fire, police and other services
  • Proximity to commercial, industry or agricultural activities
  • Existing and proposed transportation, construction and development, which may affect noise, view or traffic, airport noise, or odor
  • Wild and domestic animals, other nuisances, hazards or circumstances
For Further Protection – Home Warranties: Home warranties have become a more popular option on homes for sale. For protection you may wish to have a home warranty that either you or the seller pays for. (It’s negotiable.) Warranties range in price from $300 - $600 and, for a fixed rate, generally cover limited aspects including plumbing, electrical, pest control and a host of other related areas. If you have a problem, generally you’ll pay $35-$50 to have a professional come out inspect and fix problems that are covered. Warranty agents typically are on hand 24 hours a day, 7 days a week to take your calls in emergencies.

The Challenges of Pricing Your Home

by Samia S. Morgan
Why is it that some homes sit on the market for a year while others sell like hot cakes?

Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is perfecting a technique that’s as American as apple pie: comparative shopping.
Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Market Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last six months. Typically, it is a realistic price range that will ensure you top dollar and a reasonably quick sale.

However, factors such as the amount of time needed to sell your home can affect the agent's price recommendation dramatically.

I can determine the typical duration that listings are on the market and can explain that the marketing “norms” vary with prices and properties. Based on this criteria, we will be able to sell your house for a price that both you and the buyer will be happy with. However, if you’re under time constraints because of unexpected job changes or moving agreements you’ve made on another property, this will narrow your chances of selling the home for top dollar in the market.
Assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer, and other factors, such as the economy, could cloud your view of how much your home is really worth.

Another good benchmark is to review the selling prices of homes that have just been sold and are pending closes. Most MLS services provide information on deals pending that most real estate agents should be able to share with you.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house. Once completed you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help your agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer. If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale.

The Pre-Approval Letter

by Samia S. Morgan
Though you may be willing to spend a certain amount, the real determination of how much house you can afford is driven by how much a lender calculates you can afford. So before you begin to search for the perfect house, it is very important to begin the home buying process by getting pre-approved. Getting pre-approved for a home mortgage loan will provide you with a preliminary statement on the size of loan for which you can qualify. Knowing this, you can then focus your home search.

In general, lenders allow your total monthly housing costs to go as high as but not more than 30 percent of your gross monthly income. The second requirement is that not more than 36 percent of your gross monthly income can be tied up in the total monthly house payment and payments on long-term debt.

Lenders use slightly different formulas for determining the "total monthly house payment.” These costs generally include the mortgage principal and interest payment, property taxes as a monthly sum, and hazard insurance as a monthly sum. These four items are referred to as PITI (principal, interest, taxes and insurance). Other costs may be included in this calculation if your down payment is less than 20 percent or if you are responsible for homeowner’s association dues. The calculations may vary from lender to lender, but will provide you with a gauge.
The Pre-approval Letter

Your friends and family may know you to be reliable, dependable and someone who pays bills on time, but all others in a real estate transaction will require you to prove it. That’s where preapproval comes in. A preapproval letter is more reliable than a pre-qualification letter. In the preapproval process, a lender will examine your finances and will make a preliminary statement on the size of the loan for which you’ll qualify.

Preapproval is an involved process. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This procedure will ultimately give you the exact loan amount that you will be eligible for (depending on what type of loan you decide to select.) Being preapproved lets the seller know that you have gone through an extensive financial evaluation and there should be no unexpected obstacles to buying the home. It makes your offer much more powerful.

Preapproval gives you a very good indication of:

  • How much down payment you’ll need
  • Your closing costs
  • Your monthly payment (including PITI: principal, interest, taxes and insurance)
  • The type of loan for which you qualify and which best suits your needs; and,
  • Special programs for which you may be qualified, including those for veterans, first-time buyers, teachers, etc.
  • To become pre-approved you will need to provide a lender with the following:
  • Your employment and income history (including recent pay stubs)
  • Your monthly debts
  • The amount and source of cash available for the down payment and closing costs
Pre-approval letters are not binding on the lender, they are subject to an appraisal of the home you want to purchase and are time sensitive. If your financial situation changes, interest rates rise or a pre-determined date passes, the lender will review your situation and recalculate your maximum mortgage amount accordingly. You can research lenders yourself and ask them to pre-approve you.

5 GREAT Relocating Tips

by Samia S. Morgan
Your boss has just given you the career opportunity of a lifetime, but the job is in another state.

Soon you discover that moving your family to another city may be one of life’s hardest tasks. The thought of leaving behind old friends and schools for a strange town can be frightening. The biggest challenge of all, however, it to preserve the equity in your housing investment so you will be able to purchase a similar home in the new location.

Not to worry. Even in these uncertain times homeowners can sell at very satisfactory prices in a reasonable period of time. The secret? Pay attention to details, utilize marketing savvy and price the home to sell quickly.

The following tips can help you get that “sold” sign up fast.

OFFER THE RIGHT PRICE. Start with a price that is reasonable for your neighborhood and the size of your home. Comparing the price of your home with similar nearby listings is an easy way to be sure you are offering the right price. Comparing the opinions of two independent appraisers will also help you avoid over-pricing.

PAY PART OF THE CLOSING COSTS…usually 3 to 5 percent of the loan amount. This will attract those first-time buyers who are short on cash for down-payment and closing costs. Offering to turn over personal property such as washing machines and dryers, refrigerators and flower boxes can also attract buyers looking for the best deal.

ACCEPT CONTINGENCY AGREEMENTS. Make your sale contingent upon the sale of the buyer’s home. This takes away buyers’ fears of juggling two properties and mortgages at the same time.

TAKE ADVANTAGE OF THE CORPORATE RELOCATION TRADE. Be sure that your broker is connected to a relocation network – one capable of bringing in buyers from distant places. And, of course, try to get your employer to provide you with relocation assistance, too.

MAKE YOUR HOME STAND OUT. Fresh paint and flowers can go a long way in impressing buyers. Tend to such details as moving the lawn, fixing stubborn doorknobs and sliding doors, and straightening up the basement. Remember, your home’s appearance on the day it’s shown can make or break a sale.

The bottom line is that sellers should take the time to make their home as attractive as possible. Compiling helpful tips for the buyer about school districts, utility bills and directions to the nearest shopping mall can go a long way in selling your house quickly.

With a little work and an active real estate agent, chances are good that your house will sell fast in today’s buyer’s market.

Displaying blog entries 1-4 of 4

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Photo of Samia S. Morgan, Inc. Real Estate
Samia S. Morgan, Inc.
dba Samia Realty Group
BRE# 00967165
San Mateo CA 94403
650-678-3633