OCCOASTPROPERTIES, Steve Mino & Natalie Vizir report on:
"The 3 most likely "snags" you hit during a transaction, why they occur and how to avoid them"
Your purchase or sale is basically "layered" with expectations and requirements for both the buyers and the sellers (and yes, you agents will be depended on to carry the load of the transaction)
Where does the transaction begin for the buyer? Typically the buyers transaction begins at the introduction (updesk, open house, grocery store) or initial office meeting. So, what's one of the most important things to remember to get out of the way at this point? (pre-qualify your client) Prequalifying your client with a TRUSTED lender ensures that you will be showing your clients the types of homes they can actually buy! Natalie Vizir thinks, "Reality is huge! Don't show your clients homes out of their approval range, it will create false expectations which often stalls your ability to sell the homes they can actually buy while they are too busy thinking of the other homes they cannot". What else? (A good practice is to have them sign an Agency Agreement before you go out). This isn't always done, some find it difficult to ask someone to sign something for potentially nothing, but it's professional and it does create a commitment /agreement/bond between you and your clients.
Where does the transaction begin for the seller? (you've already signed the listing). (It starts at the receipt of an offer) The receipt of an offer starts the clock for a seller. What's the best way to make sure you have a solid buyer? (make sure your offer comes with a pre-APPROVAL letter and a reasonable copy of an Earnest Money Deposit check. While, the amount of the deposit typically depends on the size of the home, the higher the DEPOSIT usually indicates just how committed your buyer is. Steve Mino says "It's easier to walk away from $500 versus $5,000, right?" Make sure you communicate with your counterpart...ask them how long they have been searching, find out why they have chosen your home (area, schools, work, etc) READ the introduction letter that usually accompanies the offer and share it with your seller!
Once you have an agreement and you begin escrow, what's next for the buyer? (make sure you send a copy of the executed contract to your buyers lender, immediately) Why? (the lender will need to enter the loan, request appraisal and submit documents to the underwriter.....this process typically requires the lion's share of your typical 30-day escrow period...a good buyers' agent is usually waiting for the loan approval during the last two weeks of the transaction while collecting escrow documents, disclosures, inspections, company specific docs, etc) Schedule your 3rd party inspection ASAP! This is the FIRST area you are most likely to hit a "snag". Why? If you're going to find something wrong with the home, find it as soon as possible and be prepared to have your clients submit a REASONABLE Request for Repairs or RR-1 (CAR form) So, why does it get "sideways?"(Typically, it's because your buyer gets too aggressive with the request for credits or repairs OR you didn't openly communicate with the sellers agent or seller your intent to perform an inspection with the intention to request that all safety issues be resolved and broken or missing items replaced. Of course, short sales are almost 99% sold as-is and REO/bank owned properties are negotiable, but again....be reasonable)
Be on top of your paperwork and the transaction should go smoother....make sure the seller's agent or his or her designated Transaction Coordinator (TC) sends you your disclosures on time. It is also very important that the chosen Escrow company orders HOA docs ,for communities that have Associations, and ,if written into the contract, the responsible party (buyers agent or sellers agent) orders the termite report. The termite report takes atleast 3-5 days to schedule and get a report back and scheduling repairs could take a few weeks depending on the required work.
Okay, now...follow your buyers lender and the upcoming APPRAISAL, this is the 2nd most likely area where you will hit your potential "snag". Why? (Appraisals of properties are subjective to the appraisers methods and knowledge of the area. A good sellers agent will invite you to the appraisal, but more important he or she will come prepared with his own CMA or snapshot of the last 90 day and 120 day sales history for the area. They are knowledgeable of all the "sold", "active", "backup" and "pending" properties and mark them as - SHORT SALE, REO or STANDARD SALE. A good appraiser will give your STANDARD SALE a credit versus your comparable Short Sale or REO properties. The Selling agent should also have a complete list of improvements (with costs) and informs the appraiser about the "WHY" thier home is the best on the block - pool, location, view, upgrades...etc... NOW if your home doesn't appraise what are your options as a BUYER? (You can request a reduction of price based on the appraisal, very probable on bank owned or some short sales (they already use a BPO), not nearly as accept by most sellers, but you CAN negotiate a possible "split" if they won't drop to the appraisal price. OR, your buyer can pay the difference in escrow and the transaction moves forward. Best results are those made without extreme emotion either way! (at least while you are in company!)
The last area of your possible "snag" is usually found by the buyers lender or underwriter. Why? (Remember the pre-approval? Pre-approvals are fairly easy to come by and that's why the team of Steve Mino and Natalie Vizir advise you to communicate with your counterpart or use a trusted lender. The "WHY" they chose your home comes into play? Is it an investment? (investment property loans have strict requirements), Is this going to be the primary residence? Simple question, but it can make lending issues more difficult if it's not disclosed. Example, if the buyer has another LARGER property they are moving from, the lender should have prepared a statement for the underwriter to preempt any concerns as to the intentions of the buyer to occupy the smaller home. It is important that your buyer does not make any large purchases or make any large deposits to the accounts used for the upcoming deposit! Near the final days of escrow the underwriter will typically request the most recent bank statements and if they see unusually large withdraws or deposits they COULD eliminate the account from eligibility for your purchase! Without these funds being counted your buyer may now not qualify.
Again, these are just a few points of concern and small tidbits of advice that may or may not be helpful to you in your transactions. Remember that almost every transaction has a uniqueness of its own and don't get too caught up in the unnecessary distractions.
STAY FOCUSED, COMMUNICATE, STAY ON TASK, COMMUNICATE and remember the best possible result is when you end in a TIE!
Nobody knows more about Southern California Coastal real estate than the team of Steve Mino and Natalie Vizir.
Areas of coverage include:San Clemente, San Juan Capistrano, Capistrano Beach, Dana Point, Laguna Niguel, Laguna Hills, Ladera Ranch,Mission Viejo, Coto De Caza, Rancho Santa Margaita, Lake Forest, Foothill Ranch, Irvine, Laguna Beach, Newport Coast, Newport Beach, Corona Del Mar, Aliso Viejo and other Orange County and Riverside County cities.
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Steve Mino & Natalie Vizir
Century 21
OCCOASTPROPERTIES.COM
Steve: 949-300-7412
Natalie: 949-300-5074
Multi-Million Dollar Producers
Top Listing Agents
President's Club/Diamond club/Emerald Club
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