Why the need for Earnest Money?

Today’s blog is short but sweet. But since I get asked this question a lot, I thought that I’d address it.

Perhaps it is best to first answer the question, what is earnest money (EMD for short)? Earnest money deposit comes up in Paragraph 3A in the offer. It’s the first item in financing the property, right after purchase price. EMD can be anywhere from 1 – 3% of the purchase price. planning for deposit

The standard in most areas is 3%. Why?

Take a look at Paragraph 21B. REMEDIES FOR BUYER’S BREACH OF CONTRACT: LIQUIDATED DAMAGES. Liquidated damages for breach of contract are set at 3%. By voluntarily putting 3% up for the earnest money deposit, the buyer is showing that they are serious about following through with the contract and will not back out at the least minute.

If you are a buyer, one thing to keep in mind is that the sellers are very often as nervous as you are. They want to sell their home and – presumably – if you’re in contract they want to sell their home to home. However, sellers are as concerned about you backing out as you are about finding something wrong with the property.

That’s why it’s really important to start planning. While there is some creative financing, in a competitive market like the one we are in now, seller’s are wary of buyers coming in with 0$ down and asking for a credit for closing costs. It does happen and offers like this can be successful; however, why not put yourself in the best possible position to have your offer accepted in this real estate game?

 

Make Moving with the Family Easier

image2

Today is the third component in our ongoing guest blogging. I’d like to welcome Alexis Hall. Alexis is a single mom to three kids. She created SingleParent.info to provide support and advice for the many families out there with only one parent in the household.

How to Make Moving With Children Easier and Happier for the Whole Family

Moving to a new home, and often, to a new city entirely, is simply a part of life. Making a move may feel simple when you’re single or a couple without kids, but it takes on a whole new meaning when you have children. If your family is planning a move, know that it can be an overall positive experience using these tips to help along the way.

Finding Your Family Home

As you start searching, you may come to realize that your ideal home is different from what you wanted before having kids. Before making any big decisions, spend a little time researching the best prices and neighborhoods in your region. The average sale price for homes in Fairfield, CA, is $475,000.

With this information in hand, start your home search with a few key points in mind:

Get to Know the Neighborhood: The neighborhood your family ends up in is just as important as the house itself. Think about your family’s lifestyle and what matters the most to you. Do you want a neighborhood that is within walking distance to schools or parks, or are you OK with being in a less walkable neighborhood if the streets are quiet and ideal for children? Besides your own unique needs, there are several ways you can tell if a neighborhood is thriving and an overall good place to be. Drive or walk around to see if people are out on the streets walking or biking, if houses tend to look like they have been improved, and if you see churches and signs of city services.

Put Practicality Over Emotions: Buyers often fall in love with a home that feels just right, but then they realize that it doesn’t actually meet their family’s needs. Families with children should look closely at a home’s floor plan and yard. Think about whether you want all the bedrooms on the same level if you have small children, or if you want a flat yard for outdoor play. It’s completely OK to have a “feeling” about a house, but don’t let a feeling cloud your judgment.

Managing the Move

Moving can be scary and highly emotional for children. The best approach is to communicate about it with kids as soon as you know you’ll be moving and to keep the conversation going. Kids need to process their feelings about the change. One idea from Scholastic is to encourage them to write in a journal or draw pictures about the move. Kids who are old enough can also get involved in packing. Give them some independence in making choices about how they pack.

Don’t forget that while you are doing plenty of research into your new home and neighborhood, your children may not know what to expect. Spend some time helping your kids get familiar with the new area. Talk about what your new neighborhood has that they will love, and start exploring the area together, if possible. For young children especially, talk about what won’t be changing too. Make sure they know you’re bringing all of their possessions to the new home.

Settling In

When you first move into the new house, unpack your children’s rooms first so they start to get a feel for their own space surrounded by things that are familiar. In the days and weeks to come, help kids adjust to the change by keeping your schedule as routine as possible. You can also do some special family activities in those early days to start creating positive memories in your new home and neighborhood. The Art of Happy Moving blog suggests going to your local library or setting up a lemonade stand to get to know the neighbors.

While moving with children isn’t always ideal, it doesn’t have to be traumatic. You know you’re making the right move, and it will be best for everyone in the long run. There will still be bumps in the road, but these tips will help your whole family bounce back and adjust with less stress.

Photo credit: Pexels

One Thing You HAVE to do After You Buy a Home

Recently, my family and I woke up at 2am to the kitchen CO detector screaming that there was a problem. I walked around the kitchen, opened the back door and kitchen window to let things air out and then back to bed. At 4am the alarm right outside all of the bedrooms went off. This time I was able to figure out that something didn’t smell right. I had a hunch that it was the heater because it was old and…well…I hadn’t cleaned it recently.Smoke Detector

Turns out that my hunch was right. It was the old 1957 wall heater that came with our home. I smelled gas and so I called PG&E to come to turn off the gas leading to it. It took me awhile but I finally found a company that services wall heaters. Rich Jeffries with Creative Comfort Systems (707.373.0134) out of Vallejo was our savior. According to Rich it was one of the 10 worst of his career…

Heaters (and AC’s) should be serviced once per year. PG&E will come out for free once per year to make sure that everything is ok with your heating unit. You can take the additional step of having someone like Rich come out (if you have a wall heater) or another HVAC company if you have central Heat or AC. These companies will clean the filters and make sure that the units are running efficiently.

I sold two homes last year where both of my clients told me horror stories about how filthy the filters were. I highly recommend having a company come in – prior to move in if at all possible – and service your HVAC system.

A Wrinkle in Time…

One of my all time favorite books. If you haven’t read it, make the time. It’s well worth it…but today’s blog isn’t about that. Today I want to talk about time wishing the offer process. There is often a lot of confusion surrounding what happens – in fact, I just went through a similar process where the time for the other party to respond expired…twice! There are a few key points to keep in mind. Some may sound rudimentary but you would be surprised at how the pressure of the situation can affect an individual’s sound judgment. But that’s what you have us there for, right?

  1. Just because you submitted an offer, doesn’t mean that it has been accepted: Simple, right? People generally only get confused about this part a little later into the counter offer process but I’ve seen it start at the very beginning. Buyer rights an offer and asks, “So what’s the next step? When and where do I give my deposit too?” Unfortunately, next step is to wait until we see what the seller says. Boiler plate language on the contract states that the seller has three days to respond.pexels-photo-280254.jpeg
  2. Three days starting…now? Yes, but this can get a little confusing…but it’s still better than it used to be. The day you submit an offer (or counter offer) is day zero. You then have three additional days to wait for a response. For example, if you submit an offer on Monday at 3:30pm, the seller has until Thursday at 5pm (close of business) to respond. Feels like four days, right? The waiting can be interminable. If your agent knows that offers are due on a certain day, you can always ask them to shorten the time frame to respond.
  3. What happens when time runs out? You’ve blown past day three and still haven’t received a response from the seller or buyer. Hopefully your agent is in contact with the other side so that you know what’s going on. But if they aren’t…what now? Officially your offer has expired. If the other side wants to accept it they can but you are no longer bound by it. You do have a couple of options. You have the right to leave your offer open and go into contract. You also have the right to walk away. Your offer has expired and it is no longer valid. Just because the other side wants it now doesn’t mean that you still do. Make sure, however, that your agent communicates to the other side your intention.

Real estate is not a zero sum game. It is meant to be a win-win situation for all parties involved. There are times when it is difficult to get all parties on the same page because of distance; some times parties aren’t as technologically savvy as others and so you still need a “wet” signature rather than a digital one. Just make sure that your agent is talking to the other side as well as you. Communication the most important assets in real estate.

I’ve Got a House Crush…

American Canyon edition!

I actually have a couple of homes that I’m eyeing for the right buyer. The first is 442 Lucina Drive in Napa Square. It’s rough…it’s really rough even at $469,000. The bedrooms are a little small but the living space has a ton of potential. There is a small family room with fireplace immediately off to your left as you walk through the door. This gives way to a formal dining room and wet bar. The kitchen is massive but has enough wasted space that it makes you want to channel your inner Chip & Joanna…take out a wall and add an island. Here’s a quick video of the living area. It’s listed by Debora Graftaas w/ Homes 4 All Realty, Inc. Contact me now to set up a showing.

Next up on my mini tour was 233 Newberry offered at $529,500 and exclusively listed by Verna Mustico with Mustico Realty in Vallejo.

I love this part of American Canyon, perhaps even more than Rancho Del Mar. It’s just a long half-block from Donaldson Way Elementary, the Rec Center and another short jaunt to the middle school. Standard 3 bed, 2 bath, 1600±sf home.

This slideshow requires JavaScript.

The carpet needs to be replaced and the kitchen could use some updating (I know…white tile counters should never have happened). Nevertheless, the layout of the home works well and there is a fantastic flow throughout the house. The bedrooms – including a well proportioned master suite – are nestled in the back of the home allowing for some privacy. The slider off of the master bedroom could be replaced by French Doors. The outside of the home is spectacular. It appears that there are several mature fruit trees and there is so much space…the tax record shows .18 acres but the lot feels larger.

I had some friends who lived on Crawford Way with a similar layout. They had their main family area in the living room to the left as you walked in with the TV and couches, etc. They turned the family room off the kitchen into more of a studio (he is an artist) but one could easily turn it into an office or small gathering area if so desired. The best part, though, was definitely the outside. They had enough room for two patio tables, a large grill and a dry bar. This back yard is easily the same size.

If you’re interested in seeing either of these two homes – or any home in American Canyon, Napa or Solano Counties – contact me today: 707.853.0797 | rich@napasolanohomesforsale.com

 

Lic# 01931815

When Things Fall Apart…

Casey Stengel once said, “There comes a time in every man’s life and I’ve had plenty of them.” That is certainly true for trying to get a transaction closed in real estate. There are any number of ways to delay closing. My first mentor (who also happens to be my mom…in fact I got into real estate helping her with marketing) told me that there is a point in every transaction where it looks like things are going to fall apart. This was sound advice. It is a rare transaction where things breeze through.

There are several choke points in a transaction (as illustrated in the CAR info graph below) but I’ve found that the hardest is the request for repairs. Lorna Hines says that the true power in any negotiation is being willing to walk away, but the art is in never having to do so. Buyers frequently want more than the seller is willing to give. Here is where an agent’s negotiating skills come into play. The beauty of real estate is that it is supposed to be a win-win situation. Both sellers and buyers should walk away happy. If that doesn’t happen, then one of the agents isn’t doing his/her job.

Closing-Chaos-hi-res

 

A meeting of minds…

In real estate when we speak of a meeting of the minds we are talking about the buyer and the seller coming together on price and terms. This may also include any needed repairs after inspections and prior to the physical inspection contingency removal. However, some times the meeting of minds has to be between multiple buyers. There are three primary components that need to be agreed upon to get to that meeting of the minds: price, location, and needs vs. wants.keys-in-door

There are two basic steps to price: the pre-approval process & deciding what is a comfortable monthly payment. The first step is relatively easy. You go to your preferred lender (if you don’t have one your agent will) and get pre-approved. However, just because you can get a $600,000 loan with $0 down does mean that you should. Walk through the monthly payments with your lender making sure that you are considering property taxes and any potential Mello Roos or HOA fees that are involved.

I will admit that – for the most part – I haven’t had buyers diverge on location too much. In a situation where both buyers have to commute, both sides are generally amenable to compromise and try to split the difference. Unless an investor, I’ve found that buyers are looking for a quieter spot in an area that feels right to them.poolside

The needs vs. wants, however, is where things can get tricky. It can be hard to distinguish between the two in the heat of the moment – especially in hot markets like American Canyon or Vallejo. Few buyers can get everything, but if their agent is willing to take the time to listen, most buyers can get more of what they want. My recommendation is to focus on the want at first; once a master list has been created it will be easier to cull the list into needs. Once you – as a buyer – have come to an understanding about each other’s needs it will become easier to focus on the wants.

One concept to keep in mind is compromise…sometimes this is with yourself. You might have to give up on a location to get more house; you might have to choose between turn-key and a home that needs a little bit of work; the community pool down the street might just have to be good enough instead of the infinity pool with a view overlooking the Carquinez Straits.

The most important thing throughout the process is to be honest with yourself. Too many home buyers are unhappy with their purchase and have buyer’s remorse. Don’t let this happen to you. Go for as much as you can and – unless there is a compelling reason to move faster – take your time. Yes, it sucks to pay someone else’s mortgage but why pay your own on a home you don’t even like? I can assure you that you will find the right home at the right price in the right location.

To find your next forever home, contact me today.

Let’s find you a home…pt. 3

So we covered knowing the inventory and asking questions. The last important competency that a buyer’s agent should bring to the table is negotiation skills.negotiating

There is no reason for you to leave money on the table. Everything in real estate is negotiable so you better make sure that your realtor® has some experience as a negotiator as well as some extra training. Negotiating is a learned skill so ask your realtor what courses s/he has taken to make him/her better.

My favorite real estate coach, Lorna Hines, teaches that the true power in any negotiations is the ability to walk away. This is true especially for a realtor®. If your agent can’t walk away from any deal that is bad for you because they want that commission…then you need to find a different realtor®. We owe a fiduciary responsibility to our clients; this means that we treat your money like it’s our money.

Our relationship with you is a sacred trust. No one, especially your realtor, should pressure you into doing something that you don’t want to do. If you’re feeling that pressure than it’s time to reassess that relationship.

 

 

Let’s find you a home, Pt. 2

In my last blog, I spoke about how there were three things that your professional realtor® should do for you to make sure that you get more of what you want: 1. Know the inventory; 2. Ask Questions; 3. Negotiate

Earlier this week I wrote about inventory knowledge. In case you missed it, it’s important. Today, I very briefly would like to focus on asking questions. As professional realtors®, we spend a lot of time talking. However, as any good therapist will tell you, half of helping people is asking the right questions and listening to the answers.

keys-in-door

That’s why it’s so important for you to go on the Grand Tour with your Realtor®. It’s the first opportunity for your agent to hear what you like and don’t like. You also shouldn’t be afraid to dream big. That’s one of the first thing that they teach you in coaching: tell me your biggest, baddest goals so that we can make them happen. You should be able to tell build your dream house and tell your agent. The more that you tell them what you want the more than your agent can find for you. No one should force you to do anything that you want to do so there’s no need to settle. The good, professional agents that I know work tirelessly to match the right home for the right buyer.

Tell us everything that you want in a home that you don’t have now. We know about homes that aren’t even on the market yet. So go ahead…build your dream house. We’ll help you find it.