L.A. real estate news and insights.
An impound account is an account maintained by the mortgage company to collect insurance and tax payments that are necessary for you to keep your home but are not technically part of the mortgage.
Some lenders require this, other lenders don't.
Check with the lender to see what their policies are before choosing to work with them.
If your initial offer gets rejected by the seller, don't be afraid to submit a new offer.
However, you have to improve either the terms of the deal or the price.
Find out what specifically the seller didn't like about your first offer and change that in your new offer.
For example, maybe the seller liked everything about your offer, but they hated that you wanted 17 days to inspect their home.
Bring that 17 days down to 10 days... maybe that one change will work for the seller and would open up the possibility of you getting an accepted offer.
Did you know that when you buy a home, you don't have to put the title of the property in your name?
If you have a living trust set up, you can buy the home under the name of the trust.
For example, if the name of your #trust is "Banana Family Trust", and you buy the home under your trust, the owner’s name on the title will appear as "Banana Family Trust" and not your legal name.
This also works if you buy the home under a #LLC.
Use this hack if you want to keep the purchase of your home a secret.
As soon as escrow opens up on a property, the buyer has to wire over their deposit money.
The deposit is typically 3% of the purchase price of the home.
This 3% is held by the escrow company.
They hold on to the money just in case the buyer breaches the contract and the buyer and seller go to an arbitrator to decide who the money should be awarded to.
If the buyer backs out of the deal because of one of their contingencies (inspection, appraisal, loan), and they are within their contingency period, then the buyer gets their deposit back without any problems.
But if the buyer backs out of the deal, and all the contingencies have already been removed, that's when the seller can come after the buyer's deposit for damages they incurred.
An arbitrator will hear both sides of the story and ultimately decide who gets to keep the deposit money.
When buying a home, your offer will have a few contingencies written in the purchase agreement.
Here is 1 example of a contingency:
The purchase of the home is contingent upon the home passing your inspections.
If the home doesn't pass your inspections within your inspection contingency period, you can back out of the deal and get your 3% deposit back.
However, once you have removed all of your contingencies, you can't back out of the deal just because you wake up one day and decide you no longer want to buy the home.
If you do that, the buyers could come after your 3% deposit as damages.
Always remember, changing your mind about the purchase of a property is not a contingency.
Get your calculators out!
Let’s say your home is 2,000 square feet and you want to sell it for $1,000,000.
To figure out your home’s price per square foot at that selling price is easy.
Plug into the calculator 1,000,000 (the asking price of the home) and divide it by 2,000 (the square footage of the home).
That equation equals 500 ($500 per square foot for the home).
Therefore, if your 2,000 square foot home sells at $1,000,000, the price per square foot for your home is $500.
If you live in a condo, take a look at the price per square foot other units in your building have recently sold for.
That is one way to figure out what your unit is currently worth.
It's not as easy with a single-family home.
Unlike a condo, with a single-family home, you have to take the lot size into consideration as well.
Check the first page of your listing agreement for the contract’s expiration date.
Once that date passes, the contract then becomes expired, your agent no longer works for you, and you are free to hire a new agent.
If you sell your home through a new agent before the listing agreement with your old agent expires, you will have to pay the new agent AND the old agent a full commission. ☹️
If you’re selling your home, and you sign a listing contract with a real estate agent, be aware of the contract’s expiration date.
Memorize that date!
If your agent is not doing a good job selling your home, once that date passes, you are free to hire a new agent.
You will no longer be obligated to pay the old agent a penny in commission.
Once you accept the buyers offer, you better prepare to actually sell your property.
Chances are the buyer will perform by removing all of their contingencies and you will have to abide by the contract by selling your property.
Accepting a purchase contract for your property is not a game or a joke... the consequences are very real.
As a home seller, your options are very limited to cancel escrow with the buyer of your home.
You can't just wake up one day during escrow and decide you no longer want to sell your property.
You signed a contract to sell your property to the buyer, and you have to abide by that contract.
Sellers are able to cancel escrow if the buyer doesn't perform.
For example, if the buyer inspection contingency is over and they still have not removed that contingency in writing, you can then send the buyer a notice to perform.
That means the buyer has 3 days to remove the contingency or back out of the deal.
If 3 days pass and they still don't remove the contingency, then you can send the buyer an escrow cancelation form.
You have to wait on the buyer to not perform to be able to cancel escrow, you can't cancel because you changed your mind about selling.
At tonight's New Year’s Eve party, while you are with your friends and family, I need you to do a little spying for me.
Someone at the party is going to bring up the topic of real estate.
They are going to say that they are thinking about selling their home in 2020.
I know you will be drinking a lot... but try to remember the person who said that.
Then, text me and say "Daniel, I have a friend looking to sell". I'll take it from there. 😉
My goal for 2020 is to help as many people as possible sell their property.
To do that, I really need your help investigating and letting me know which of your friends and family members are thinking about selling.
Thank you for all your help in 2019 and thank you in advance for all your upcoming help in the new year!
Happy New Year!!!
You want to keep your finances exactly how they are at the time your lender pre-approves you for a home loan.
Don't do anything financially out of the norm for you.
Don't buy a new car.
Don't go on any lavish trips.
Don't buy a #Rolex.
Keep paying your bills, keep making your car payments, keep buying food at the market.
