CaryRealEstate.com » Selling

When Should a Home Seller Give Buyer the Keys?

davidadmin — Wed, 08 Dec 2010 21:36:17 +0000

When does a buyer get the keys / possession of a home from the seller?

I believe if you polled most home buyers and sellers in the Cary area they would tell you - “buyers get the keys at closing” – which according to the stand NC Offer to Purchase Contract is absolutely correct – possession transfers to the buyers at closing.

Here’s the problem – most people have an incomplete definition of how closing is defined according to the contract – most people think of sitting at the real estate attorney’s office signing all the documents as closing – in fact that’s only one of the steps - closing is defined as the date and time the new deed is recorded.

What does this mean? The owner/seller still owns the home up until the time the closing attorney files the new deed at the county courthouse. When sellers hand over keys & allow the buyers to take possession prior to the deed being recorded they are exposing themselves to potential risk - risk such as damage to the home, personal injuries occurring at the home, problems with buyers loan funding etc. Is it rare that a problem occurs, yes, but when a problem does occur it’s usually major. I always view my role in representing clients to keep them informed allowing them to make educated decisions.

All this being said I will tell you that often times a seller will hand over the keys to the buyers at the closing table without a second thought – maybe because they don’t realize the possible implications/haven’t been properly educated or they are willing to take the risk. I find it ironic that when a seller does hold the keys until the deed has been recorded the buyers/buyers agent will often become frustrated – when that’s what both parties agreed to in the contract – tells me the buyers were not properly informed.

Closing being incomplete and ownership not transferring until the attorney travels to the courthouse is a major reason why closing times should not be scheduled late in the day, especially on a Friday -w here it may take until Monday to record the new deed.

Bottom Line – according to the standard offer to purchase contract possession does not transfer to the buyers until the deed has been recorded at the courthouse – if the seller chooses to give the buyers possession before they certainly can but at their own risk. If a seller does choose to give the buyers keys/possession before the deed has been recorded I recommend using the ‘buyer possession before closing’ agreement – which addresses several of the risk factors and clarifies who is responsible for what during the interim period.

Question on Trulia about a Cary home’s value

davidadmin — Wed, 08 Dec 2010 04:11:29 +0000

Trulia has a question and answer section that i enjoy participating in – tonight i answered this question:

My aunts home was appraised at $130,000 in Cary, NC. Is $90,000 cash a decent offer? I say it is too low. My cousin disagrees.

Home is in need of updating but appraisal was $130,000. My cousin thinks an appraisal is based on what it “could be if improvements done” I say it is based on the condition as is. Comparisons were $150,000 in the neighborhood

Here is the answer I posted for Diane-

You’ve asked a great question that opens up many variables to discuss. I’ll try to bullet point the key points for you.

- remember an appraisal is only an opinion of value

- appraisals typically reflect the individuals appraisers opinion of value of the property in it’s current condition unless otherwise noted

- the local Cary real estate market is constantly changing – one variable is how long ago was the appraisal completed

- many will argue that true value of a home is what a seller is willing to accept / what a buyer is willing to pay fair ‘market value’

- i would be very careful with what ‘comparisons’ in the same neighborhood were at as their are many variables that need to be adjusted for – lot value/size – updating – extra features etc

- if i was meeting with a seller consulting them regarding market value i would review not only past comparable sales but current active competition and how many months of housing supply in that price range/area – and adjust between the condition of the homes that have sold / currently for sale compared to your aunts home

- a cash offer does not ‘net’ a seller any more money that a buyer paying the same price taking out a loan – it only eliminates the possibility of buyer not obtaining a loan

- just like a seller would want a letter from a lender regarding a buyers ability to obtain a loan any seller should ask for written verification of funds from the potential cash buyers bank before accepting the offer

- the final point is one of the most important ones – if a home needs updating a buyer will want a greater differential in the purchase price versus what it would be worth after updating – here’s what i mean – example house ‘a’ and ‘b’ are identical except house ‘b’ has recently had $20,000 in updates – house ‘a’ needs the same updates.

House A is listed for sale at $100,000 while house ‘b’ is listed at $120,000 – what would be the motivation of a buyer to purchase house ‘a’, then spend $20,000 of their own money that typically would not be in the loan only to end up with a home worth $120,000? – instead they would just purchase the home with the work already finished at $120,000 avoiding all the headache, time effort etc – the motivation for a buyer to purchase house ‘a’ would be if they could get it at say $80,000 – put $20,000 into it and have the benefit of their sweat equity – basically getting ‘paid’ for their time, effort and ability to update the home

- other variables would be why you are selling – what happens if you dont – how are you marketing the home – how long has it been on the market – etc

Hopefully this helps a little – I’m happy to schedule a no obligation seller obligation with you and your cousin if you desire (assuming you do not currently have representation)

Contract for Buying or Selling a Home in NC Undergoes MAJOR Changes

davidadmin — Thu, 04 Nov 2010 16:30:26 +0000

Buying and Selling a home in North Carolina is about to get a lot less confusing – well at least that’s the intent of the major revisions in the paperwork involved.

Starting Jan 1, 2011 The North Carolina Realtor Association offer to purchase and contract and related forms will have a new approach to the buying experience. The new and improved ‘easier’ form is only one more page than the current 8 page offer – yes that’s right – the new form is now a whopping 9 pages!

One of the biggest changes – Gone are the many dates in the current contract – ie the date in which the buyer has to have the home inspected and repair request submitted, the date the sellers have to respond to the request by, the date the buyers have to respond to the sellers response and on and on and on. Gone are the days of debating back and forth what is a ‘necessary repair’ etc – the buyer will have the option of asking for anything they want the seller to address without limits and contrastingly the seller will have the right to decline the buyers request.

So what’s the new contract look like date wise – just 3 dates – the date the offer becomes a contract – a due diligence date and a closing date.

The premise is the buyer will now submit not only an earnest money check but a due diligence fee as well – this due diligence fee will be paid directly to the seller and is buying a negotiated amount of time. During this due diligence time period the buyer can perform inspections, get surveys and appraisals done – anything and everything they need to do in order to decide whether or not to purchase the property – the buyer will be able to walk away from the contract prior to the end of the due diligence period and receive their earnest money refund but not the due diligence fee – they will have already received the value they paid for – time to investigate the home. If the buyer elects to stay in the deal beyond the due diligence date their due diligence fee will be credited to them at a successful closing, however if the buyer does not close on the home then in almost all situations the buyer will be forfeiting both their earnest money and the due diligence fee to the seller. How much will the due diligence fee be? How long will the period be? All great questions that I will address in later posts.

I’ve already attended multiple classes on the new forms and look forward to teaching this material to my fellow realtors next year – this is the kind of thing that excites me – with the construct of the new offer to purchase it will be more important than ever to partner with an experienced, learning based Realtor that understand the nuances of the form and how to structure an offer based on the many variables thereby providing excellent representation to the buyer and seller clients – sounds at lot like the group at CaryRealEstate.com

FHA Changes-Impact on Cary Homes For Sale

davidadmin — Tue, 26 Jan 2010 00:57:44 +0000

David Williams (L) w/ FHA Commissioner David Stevens

Back in December I blogged about possible upcoming changes to FHA loan requirements – well it’s arrived – The FHA recently announced major changes to their requirements for buyers/borrowers. These increased standards could reduce the number of buyers that qualify to purchase Cary Homes For Sale. The changes are aimed at shoring up the FHA’s long term stability – which I think is definitely positive in the big picture/long term - it’s the individual buyers and sellers on a local level, like right here in Cary that will see and feel the impact – anytime the requirements become stricter for securing home loans the available buyer pool is reduced. However one of the major contributors to the recent housing market downturn was buyers purchasing too early or too high. The current FHA commissioner David Stevens is from the real estate industry, having worked on both the mortgage side and brokerage side – I believe he brings a common sense mindset to the FHA restructure.

FHA’s Changes to Borrower Requirements

The upfront fee charged for the mortgage insurance premium (MIP) will be raised to 2.25%
The Seller contribution (closing costs etc) is reduced to 3% instead of previous 6%
To Qualify for a 3.5 % minimum down-payment requires credit score of 580 or higher
Less than 580 Credit Score will require 10% or more down payment
Several new lender requirements aimed at protecting the borrower

Like to read detailed FHA policy? FHA Commissioner David Stevens recently wrote an article covering the FHA changes.

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

CaryRealEstate.com Makes it Easy for Home Buyers & Sellers

davidadmin — Fri, 08 Jan 2010 04:18:43 +0000

At CaryRealEstate.com we’re always keeping our eye out on how to improve our level of service with home buyers and sellers. Most of us enjoy the latest gadget but rarely does something have as much positive impact as docusign. It’s a web based service that allows the creator of a document to send an electronic copy to a recipient and allow that recipient to sign, date, initial etc a document with a few easy mouse clicks. Yes there is a short process to accept/create your electronic signature but it’s super easy.

Worried about security? docusign has their act together – they’re even endorsed by the National Association of Realtors! The system provides multiple levels of security, along with tracking numbers, ip address etc. Yes, the state of North Carolina and the North Carolina Real Estate recognize this type of signature as valid.

Real Life Example of Cary Real Estate making life easier for their clients – last night we were able to send one email to our buyer clients vacationing at Disney – without leaving their hotel room the buyers were able to review 7 different documents (new construction purchase) they electronically initialed or signed every page in just a few minutes – upon completing their signatures the system immediately notified us and we had an executed set of documents, no hunting for the hotel desk clerk / worrying about the business center being closed etc.

We’re able to compose, deliver, receive signatures and file electronically without ever creating the first piece of paper! It’s perfect for offer to purchase sales contracts, buyer agent agreements, listing agent agreements etc!

End Result – it’s easier for our clients, better for the enviroment and allows us to operate more efficiently!

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

Home Seller's Ask, Does it Go or Does it Stay?

davidadmin — Thu, 07 Jan 2010 04:44:03 +0000

Home Sellers are often confused or at least curious what goes and what stays when it comes to selling their home. Here at CaryRealEstate.com we take the time to review with our home sellers exactly what to expect and be prepared for. The best answer to what goes and stays “whatever the sales agreement between buyer and seller stipulates”.

Great. Thanks David, that helped a lot.Could you elaborate?

A typical offer to purchase agreement states that personal property goes with the seller and fixtures stay with the home – so what is a fixture? something that was personal property but now by the manner in which it’s attachted to the home it becomes part of the home and real property – wow – that sounded like an attorney talking (which I am not)

Examples of Fixtures – items that would stay with the home:

- ceiling fan

- dishwasher

- window blinds

- bathroom mirror

Examples of Personal Property that goes with the Seller:

- Refrigerator (unless built-in ex. Sub-Zero)

- washer and dryer

- window treatments

Controversial Items – they may be attachted but do not belong to the seller (leased):

- Satellite Dish

- Security System

Bottom Line – As a home seller it’s important to know what is included by default with a purchase agreement. That’s why we take the time to review with our home sellers!

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

Coming Soon to a Yard Near You, Maybe Even Yours!

davidadmin — Tue, 29 Dec 2009 03:24:18 +0000

At Cary Real Estate we’re preparing for a busy 2010!

We placed an order for more yard signs today – yes we spent the extra money to have the reflective signs – we think it really makes a difference, especially during the winter months as it gets dark so early – the reflective signs really ‘pop’ with car headlights.

Fortunately the Town of Cary, known for strict sign ordinances, still allows a home seller to have a for sale yard sign – but you can’t get carried away! The town limits a home seller to one yard sign with certain size restrictions.

What about open houses? One of the keys to having a successful open house is to drive traffic to the home for sale by having lots of signs – the down side - open house signs start to multiply & not everyone is timely with removing the open house sign – the Town of Cary takes the aesthetic appearance seriously - they have multiple regulations in place regarding a home seller or real estate agent having and advertising open houses.

- limit on the number of open houses per year

- limit on the number of off premise signs directing to the open house

- specs on the size/color of the open house directional sign

- open house sign limited to the weekends

The net effect of the Towns regulations, few agents hold open houses and the Town is not cluttered with signs. Bottom line – There’s a lot more to successfully selling your home in Cary than just an open house!

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

How to Avoid a Huge Home Pricing Mistake, Home Seller Tips from Cary Real Estate

David Williams — Mon, 09 Nov 2009 06:47:34 +0000

There are many factors that go into properly pricing a home, this is a simple yet powerful tip! We all know the age old marketing ploy, price something at $9.99 instead of $10, it just sounds better right? No doubt this approach works it’s magic on our minds when we stroll the aisle of Target but don’t make the mistake of using this strategy with your home.

It can be a HUGE MISTAKE to price your home at $299,999 instead of $300,000!!

Curious Why? I hope so. It’s one of those simple things that’s so easy to miss.

Where do buyers start their home search? Online.

How do the online search parameters work? By Price.

Figured it out yet? Online home searches have you select your price range in even increments.

By pricing your home just above or just below a major price point you unknowingly eliminate tons of potential buyers!

If you price your home at $299,000 you have just eliminated the buyers that are looking in the $300,000 – $350,000 range.

If you price your home at $303,000 you have just eliminated the buyers looking in the $250,000 – $300,000 range.

If you have a home that is close to a $25,000 price point consider pricing it exactly at that price point.

What Every Cary Home Buyer & Seller Needs to Know BEFORE Talking to a Realtor

David Williams — Wed, 26 Aug 2009 04:55:19 +0000

All licensed real estate agents in North Carolina represent either the buyer party, the seller party or sometimes both parties (called Dual agency). It’s IMPORTANT for you to understand upfront who the agent you are talking with represents – the answer may surprise you.

Unless you have an agreement with the agent for representation then assume they are representing the other party, which means don’t disclose any personal information to that agent that you would not want the other party in the transaction to know. The state of North Carolina take this issue of representation very seriously – they have created a brochure called “Working with Real Estate Agents”. You should expect any real estate agent that you come into contact with to present you with this information before having a serious conversation or showing you a home. the brochure has a place for you to sign – this is not hiring the agent – it’s only acknowledging the agent gave you the brochure and reviewed the information.

Here is the Actual Brochure Text:

Working with Real Estate Agents

When buying or selling real estate, you may find it helpful to have a real estate agent assist you. Real estate agents can provide many useful services and work with you in different ways. In some real estate transactions, the agents work for the seller. In others, the seller and buyer may each have agents. And sometimes the same agents work for both the buyer and the seller. It is important for you to know whether an agent is working for you as your agent or simply working with you while acting as an agent of the other party. This article addresses the various types of working relationships that may be available to you. It should help you decide which relationship you want to have with a real estate agent. It will also give you useful information about the various services real estate agents can provide buyers and sellers, and it will help explain how real estate agents are paid.

SELLERS

Seller’s Agent If you are selling real estate, you may want to “list” your property for sale with a real estate firm. If so, you will sign a “listing agreement” authorizing the firm and its agents to represent you in your dealings with buyers as your seller’s agent. You may also be asked to allow agents from other firms to help find a buyer for your property. Be sure to read and understand the listing agreement before you sign it. Duties to Seller: The listing firm and its agents must

promote your best interests
be loyal to you
follow your lawful instructions
provide you with all material facts that could influence your decisions
use reasonable skill, care and diligence, and
account for all monies they handle for you.

Once you have signed the listing agreement, the firm and its agents may not give any confidential information about you to prospective buyers or their agents without your permission so long as they represent you. But until you sign the listing agreement, you should avoid telling the listing agent anything you would not want a buyer to know. Services and Compensation: To help you sell your property, the listing firm and its agents will offer to perform a number of services for you. These may include

helping you price your property
advertising and marketing your property
giving you all required property disclosure forms for you to complete
negotiating for you the best possible price and terms
reviewing all written offers with you and
otherwise promoting your interests.

For representing you and helping you sell your property, you will pay the listing firm a sales commission or fee. The listing agreement must state the amount or method for determining the commission or fee and whether you will allow the firm to share its commission with agents representing the buyer. Dual Agent You may even permit the listing firm and its agents to represent you and a buyer at the same time. This “dual agency relationship” is most likely to happen if an agent with your listing firm is working as a buyer’s agent with someone who wants to purchase your property. If this occurs and you have not already agreed to a dual agency relationship in your listing agreement, your listing agent will ask you to sign a separate agreement or document permitting the agent to act as agent for both you and the buyer. It may be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Some firms also offer a form of dual agency called “designated agency” where one agent in the firm represents the seller and another agent represents the buyer. This option (when available) may allow each “designated agent” to more fully represent each party. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between parties with competing interests, it is especially important that you have a clear understanding of

what your relationship is with the dual agent and
what the agent will be doing for you in the transaction.

BUYERS

When buying real estate, you may have several choices as to how you want a real estate firm and its agents to work with you. For example, you may want them to represent only you (as a buyer’s agent). You may be willing for them to represent both you and the seller at the same time (as a dual agent). Or you may agree to let them represent only the seller (seller’s agent or subagent). Some agents will offer you a choice of these services. Others may not. Buyer’s Agent Duties to Buyer: If the real estate firm and its agents represent you, they must

promote your best interests
be loyal to you
follow your lawful instructions
provide you with all material facts that could influence your decisions
use reasonable skill, care and diligence, and
account for all monies they handle for you.

Once you have agreed (either orally or in writing) for the firm and its agents to be your buyer’s agent, they may not give any confidential information about you to sellers or their agents without your permission so long as they represent you. But until you make this agreement with your buyer’s agent, you should avoid telling the agent anything you would not want a seller to know. Unwritten Agreements: To make sure that you and the real estate firm have a clear understanding of what your relationship will be and what the firm will do for you, you may want to have a written agreement. However, some firms may be willing to represent and assist you for a time as a buyer’s agent without a written agreement. But if you decide to make an offer to purchase a particular property, the agent must obtain a written agency agreement. If you do not sign it, the agent can no longer represent and assist you and is no longer required to keep information about you confidential. Furthermore, if you later purchase the property through an agent with another firm, the agent who first showed you the property may seek compensation from the other firm. Be sure to read and understand any agency agreement before you sign it. Services and Compensation: Whether you have a written or unwritten agreement, a buyer’s agent will perform a number of services for you. These may include helping you

find a suitable property
arrange financing
learn more about the property and
other-wise promote your best interests.

If you have a written agency agreement, the agent can also help you prepare and submit a written offer to the seller. A buyer’s agent can be compensated in different ways. For example, you can pay the agent out of your own pocket. Or the agent may seek compensation from the seller or listing agent first, but require you to pay if the listing agent refuses. Whatever the case, be sure your compensation arrangement with your buyer’s agent is spelled out in a buyer agency agreement before you make an offer to purchase property and that you carefully read and understand the compensation provision. Dual Agent You may permit an agent or firm to represent you and the seller at the same time. This “dual agency relationship” is most likely to happen if you become interested in a property listed with your buyer’s agent or the agent’s firm. If this occurs and you have not already agreed to a dual agency relationship in your (written or oral) buyer agency agreement, your buyer’s agent will ask you to sign a separate agreement or document permitting him or her to act as agent for both you and the seller. It may be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information about them to the other party. Some firms also offer a form of dual agency called “designated agency” where one agent in the firm represents the seller and another agent represents the buyer. This option (when available) may allow each “designated agent” to more fully represent each party. If you choose the “dual agency” option, remember that since a dual agent’s loyalty is divided between parties with competing interests, it is especially important that you have a clear understanding of

what your relationship is with the dual agent and
what the agent will be doing for you in the transaction.

This can best be accomplished by putting the agreement in writing at the earliest possible time. Seller’s Agent Working With a Buyer If the real estate agent or firm that you contact does not offer buyer agency or you do not want them to act as your buyer agent, you can still work with the firm and its agents. However, they will be acting as the seller’s agent (or “subagent”). The agent can still help you find and purchase property and provide many of the same services as a buyer’s agent. The agent must be fair with you and provide you with any “material facts” (such as a leaky roof) about properties. But remember, the agent represents the seller—not you— and therefore must try to obtain for the seller the best possible price and terms for the seller’s property. Furthermore, a seller’s agent is required to give the seller any information about you (even personal, financial or confidential information) that would help the seller in the sale of his or her property. Agents must tell you in writing if they are sellers’ agents before you say anything that can help the seller. But until you are sure that an agent is not a seller’s agent, you should avoid saying anything you do not want a seller to know. Sellers’ agents are compensated by the sellers.

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com