Dear Michael: I am selling my home without an agent and would like to know what are some of the things I should be sure to write in the contract?
Answer: The seller could be entitled to damages (earnest deposit) if the buyer does not fulfill his/her end of the contract. The amount can vary from as low as 1% to as much as 10% of the sale price, but generally it is 3%. You’ll want to also make sure that all facts you make about the property are accurate. Make sure that any of the buyer’s contingencies – like inspections, appraisal or financing – are completed within a reasonable amount of time. The date of closing, and possession should be clearly stated in the purchase contract. Also who will pay for closing costs such as: escrow, title, retrofitting and transfer taxes just to name a few. These should all be clearly spelled out. Please hire a Realtor and rid yourself of any possible lawsuits.
Dear Michael: After looking for months, we finally found a home we could afford. Unfortunately, the home inspection revealed a number of defects that weren’t apparent at the time we agreed to buy the property. While we have the right to walk away without penalty, we prefer to work out a solution. What are some of are options?
Answer: Though sellers must disclose all known material defects to buyers, there are some circumstances where the seller did not know of the defect or the defect wasn’t visible. Your first step is to review your home inspection report, prioritizing the major repairs. Second step is to complete several bids from contractors on the cost of the repairs. Third step is to re-negotiate with the seller a credit or require the seller to make the necessary repairs. As with the initial purchase negotiations, you may receive counter proposals from the buyer. Whether the seller will agree to pay for the items may depend on the terms of the contract and the current market and price of the property. If you cannot come to an agreement with the seller, you may consider moving on to another home.
Dear Michael: I am purchasing my first income property. Is it a good idea to close escrow while there is a tenant in the property that is currently being evicted for not paying rent?
Answer: Depending on how badly you want the property the answer is yes and no. An eviction can cost you around $800 plus court fees in addition to each month the tenant has not paid rent from the time you close escrow until the time they leave. It can take up to 2-3 months to evict a tenant. I suggest you add 3 months of rent with the $800 eviction service and ask the seller to credit you back this amount before the close of escrow. Or just don’t close escrow until the tenant is evicted and out. You may also want to do some homework when you become a landlord and screen each individual new tenant’s. Also, consider requesting the seller to have all tenant sign “estoppels certificate” confirming the status of security deposit amount and the personal items which are included in the sale such as appliances. Finally, ask the seller to “indemnity” you against any costs and damages claimed by the tenant in the course of the eviction process.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com