Dear Michael: If you make an offer on a house and the seller comes back with a counter offer and you agree to it, can the seller still change his mind and sell to someone else?
Answer: A seller is free to withdraw the counteroffer any time prior to acceptance. The communication method for acceptance is described in the purchase contract. If your acceptance of the offer is communicated to the seller in the method described by the purchase agreement (prior to the seller withdrawing the offer), the seller should honor the contract with you and should not entertain any other offers.
But people don’t always do what they should. The problem then becomes whether you try to enforce your contract or not, which requires legal advice and expense. For that, you may want to consult an attorney. Although you could probably technically enforce the contract, you have to reach a decision on whether it makes sense to spend the time and money to do so. Or does it make more sense to realize the seller changed their mind and just move on to buy something different? I would choose the last method and save myself the headaches.
Dear Michael: I am closing escrow next week and the tenants are moving out on the day we close. I am worried that they may not move out. What would I do then?
Answer: Worst-case scenario, you would become a landlord for tenants that you would probably need to evict. Your best bet is to delay the close. Schedule your walk-through the day after the tenants move out; it’s the only way for you to be 100% sure that they have moved out and the property is not left in a state of disarray.
The purchase contract clearly states that tenants should be out of the property five days prior to the close. This is to ensure the buyer that the tenants are out and give the buyer enough time to work out any issues if the property should be damaged by the tenants.
Your seller is in breach of contract, but with tenants, it may be beyond your seller’s control. You should hold off depositing your down payment to escrow until you’re guaranteed that the tenants are out. Timing is of the essence: The cut off time to stop the transfer (closing) is at 4 p.m. the business day prior to the transfer.
Dear Michael: How come I’m paying more in property taxes than some of my neighbors who have similar houses?
Answer: Your taxes are not based on your neighbors’, but are based on the price you voluntarily agreed to pay for your home. Before Proposition 13, the average property tax rate in California was 3% of assessed value and there was no limit on annual increases. In those days, if a house on your block sold for much more than you paid for your house, you shuddered in fear when you received your next property tax bill.
Chances are your new taxes would be based on what your new neighbor was willing to pay for his home. Things were so bad in the late 1970s that people were actually losing their homes because of uncontrolled tax increases. The assessment rate is now only 1.25% for all California property and annual tax increases are limited to no more than 2%. When property is sold, it is then reassessed at market value, but the rate remains at 1.25% and the new owner is then protected by the 2% cap on annual increases.
Michael Kayem is a Realtor with Re/max/Execs, serving Culver City and the Westside since 2001. Contact him at (310) 390-3337 or homes@agentmichael.com.