How long is Escrow?

First off, what is escrow?  The escrow company is the neutral third party in a Real Estate Purchase.  They hold money and executed documents in trust until they are ready to transfer or record.

In California the escrow process usually takes about 30 days.  I’ve seen some as quick as 10 days and right now I’m involved in a sale that is taking 60 days.  Typically the buyer asks for the time period in the Residential Purchase agreement (RPA) that the lender and buyer’s agent have advised that this transaction will take.  The seller can counter a different time period.  After any negotiation both parties agree on a time period and the clock starts ticking.

On day one the contract is agreed on and signed by all parties. The listing agent, usually, will contact the escrow company, receive a number and “open escrow.”  Once escrow is open the buyer has until the end of day three to get the deposit into escrow. Deposit amount is usually one to three percent of the purchase price. The most convenient way is to use a wire transfer from the buyer’s bank directly in the the escrow trust account.  The buyer will be provided with instruction on how to do this.  Or if preferred the buyer or agent may deliver a check to escrow.

Then the buyer begins inspections, appraisal and any other due diligence as well as making a formal loan application. At day 17 (or another mutually agreed on day) the buyer is expected to release all contingencies but the loan.  At day 21 (or another mutually agreed on day) the buyer releases the loan contingency.  This is the buyer’s commitment to go forward and complete the purchase.  If the buyer does not complete the purchase after giving up contingencies, there may be penalties including the forfeiture of the earnest money or deposit.

The lender will order loan documents to be delivered to escrow and make an appointment with the buyer to come in and sign with a notary present.  If necessary the buyer may sign with a mobile notary at home or their work location.  The seller will have already signed the Grant Deed over to the buyer sometime during the escrow period and escrow will deliver for recording at the appropriate time to record the new title in the buyer’s name.

The buyer is entitled to a final walkthrough a  few days before closing to see if the property is in substantially the same condition as originally and to inspect repairs, if any.

One to two business days after signing and the deposit of any additional funds (downpayment, closing costs) from the buyer the loan will fund and then in LA county the title is recorded the following day.  Other counties may have different timelines.  Recording is usually day 30 of escrow.

The date the buyer takes possession of their new home is negotiated in the RPA.  Generally it’s the end of the day on the day of recording, but depending on the needs of both parties it may be a few days after the recording.  Your realtor may use terms something like COE plus 3.  That means Close of Escrow plus an additional three days.

After recording the escrow officer will balance the file and deliver the proceeds to the seller.

Congratulations, you’ve just completed escrow.

 

For more info: http://www.dre.ca.gov/files/pdf/Escrow_Info_Consumers.pdf

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New Civic Center for Long Beach Will Start Construction Soon

 

We’re getting a new City Hall, Library, Park and much more!  The current city hall building that was built in 1972 CityHall-01005-002awas found unlikely to survive a major earthquake.
At the same time, the city’s Port of Long Beach enterprise, which had been leasing administrative space, wanted to find a permanent home.
The development of the new courthouse in also meant the city had the site of the old courthouse on which to build.
The state awarded the Long Beach courthouse project in 2010 to Long Beach Judicial Partners LLC, a consortium led by the French firm Meridiam Infrastructure.
The Governor George Deukmejian Courthouse opened slightly ahead of schedule in September 2013.
The city will began demolition of the old courthouse on March 1 and start construction on July 1.
Construction is expected to be completed in fall 2018 and occupancy is set for June 30, 2019.
The Lincoln Park project would be completed by November 2020.
Take a look at this video outlining the new project.

Gingerbread houses

Making Gingerbread houses is a bit of an obsession for me.  I see bridges and old buildings, or the house you’re buying, and think; “how can I make this out of gingerbread?”

In July is when I really begin to obsess.  This year I entered Gingerbread City, which benefits the National Epilepsy Foundation.  The theme this year is “Light.”  After discarding many sketches I settled on a beach house made mostly of glass, reflecting the sunset, named Even Song.

So how is a Gingerbread house made of glass?  Very carefully.  To make the glass, you must melt hard candies.  It was really hard to find hard candy this year.  I began shopping at Halloween and everything was sour and gummy, even at the discount stores.  Finally I settled on Jolly Rancher candies, but they had no yellow.  For yellow I used butterscotch.  The Jolly Ranchers were very slow to melt (in the microwave) and set up very quickly. But once they were in place they didn’t move or crack.  I wanted the colors to gradually change as the window went up, but they set up too quickly for that. Lemon drops turned dark when melting so they were out.  The butterscotch melted well and didn’t set up too quickly but the windows cracked while cooling.2015-12-01 11.18.3420151130_224542-1

There are sailboats and a small houseboat in the bay.  The sails are made of pastillage with pretzel masts. The water is royal icing with blue food coloring.  Just a few days before finishing I almost gave up when I dropped a large piece with several windows in it and it shattered.  But determination won out and I baked a new piece.

There are some very talented artists who enter this competition and I did not place.  There was a very imaginative Whoville, two different nativity scenes and a Hogwarts that was amazing.  Last year in this same competition with a partner I entered a “Norsk Pole” santa’s village.

For several pPresidents-Choice-150x225revious years I entered the Discovery Science Center Science of Gingerbread competition and won best of show in 2013.

And of course, there has to be a way to use this in my business right? 😉

DreamHouse

How to Set a List Price for Your Home

Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR® will help you set your list price based on:

  • pricing considerations
  • comparable sales
  • market conditions
  • offering incentives
  • estimated net proceeds

Pricing Considerations – Find a Balance Between Too High and Too Low

When setting a list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors:

If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR® to “Bring me any offer. Frankly, I’d take less.” But compared to other houses for sale, your home simply looks too expensive to be considered.

If you price too low, you’ll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

TIP: Never say “asking” price, which implies you don’t expect to get it.

Price Against Comparable Sales in Your Neighborhood

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market.

Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your REALTOR® can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to ask, though, is always yours.

Competitive Market Analysis (CMA): The list of comparable sales a REALTOR® brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a “Comparative Market Analysis” (CMA). To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.

A CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. Also, an appraisal is done for a fee while the CMA is provided by your REALTOR® and may include properties currently listed for sale and those currently pending sale. For the average home sale, a CMA probably gives enough information to help you set a proper price.

Formal Written Appraisal: A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn’t been much activity in your area recently, if co-owners disagree about price or if there is any other circumstance that makes it difficult to put a value on your home.

TIP: If you do order a market value appraisal, make it clear you don’t need an elaborate, or full narrative report, i.e., the kind that’s complete with photos of the house and neighborhood. Floor plans and a site map is sufficient in most cases.

Market Conditions – Is it a Buyer’s Market or a Seller’s Market?

A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.

Your REALTOR® can tell you whether your area is currently in a buyer’s market or a seller’s market. In a seller’s market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer’s market, if you really need to sell promptly, offer an attractive bargain price.

If You Price High, Set a Schedule for Lowering the Price

Some sellers list at the rock-bottom price they’d really take, because they hate bargaining. Others add on thousands to the estimated market value “just to see what happens.” If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with your REALTOR® and work out an advance schedule for lowering the price if need be.

If there haven’t been many prospects viewing your home after three weeks, you may need to lower your list price. If that doesn’t bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you’re tempted to dig your heels in.

Offering Incentives to Hasten a Sale

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be “cash poor.” You may offer to pay some or all of a buyer’s closing costs and discount points required by the buyer’s lending institution.

If you haven’t had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be “to the broker who brings a successful offer before Christmas.”

Estimating Net Proceeds

Once you’ve been given an estimate of market value by your REALTOR®, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful when you start looking for another home to buy.

To estimate your net proceeds, from the estimated sales amount, subtract the applicable costs in the three sections outlined below: seller’s costs, buyer’s/seller’s costs and closing costs.

Seller’s Costs: Subtract the following costs as applicable.

  • payoff figure on your present loan(s)
  • broker’s commission
  • prepayment penalty on your mortgage
  • attorney’s fees
  • unpaid property taxes

Buyer’s/Seller’s Costs: Additionally, your REALTOR® can tell you whether local customs or rules dictate whether the buyer or seller pays for the items listed below. Subtract the following costs, as applicable.

  • title insurance premium
  • transfer taxes
  • survey fees
  • inspections and repairs for termites, etc.
  • recording fees
  • Homeowner Association transfer fees and document preparation
  • home protection plan
  • natural hazard disclosure report

Closing Costs: As far as closing costs are concerned, you and your eventual buyer may agree on any arrangement that suits you, no matter what local practice dictates. Your REALTOR® will assist you in estimating what your final closing costs will be.

Should I buy now or should I wait?

I wish I had a crystal ball.  Almost everyday someone asks me if I think prices are going to go down or up … or if interest rates are going to go down or up?

Prices have been rising steadily for over a year.  Will that continue?  Good question.  Real Estate price go up and down seasonally and through regular business cycles.  They tend to go up over the long term.  There are sometimes huge drops as we saw just a few years ago.

Interest rates have been held to very low rates for the last few years in an attempt to boost the economy.  They are almost sure to go up as the economy improves.

What effect does this have on your home purchase you ask?

If prices go up and rates go up your monthly payment goes up — duh.

Surprisingly, if prices go down and rates go up, your payment still goes up

Is it a better choice to wait to see if prices go down before you buy — probably not.

Check out this website to see real world examples. https://edge.mortgagecoach.com/report/edgereport.html#677346-0-0-629850