The Seller's Dillemna: Start Packing?

A common question I receive from home sellers is “When should I start boxing up?”  The hidden subtext behind the question is: Will the buyer perform, and will we close on time?

No one wants to start packing years of accumulated possessions and making arrangements with moving companies unless they know that the sale will close so their efforts–and patience for living out of boxes–will not be made in vain.  A smooth transition requires good communication between the agents and buyers & sellers.  Hopefully these communications where well thought out PRIOR TO accepting an offer, so everyone’s needs were addressed IN THE CONTRACT.

Here are the steps to follow and questions to ask:

Refer to the contract. Think about it.  If you bought a car, would you want to know when you could get the keys and drive it off the lot?  Same goes for a home.  So, the details should all be in the contract if your agents did their job.

Check Possession. The term possession means when the seller must turn the home over to the buyer.  For the buyer to take possession, the home should be free of all personal property of the seller, vacant, and broom cleaned.  The date of possession might be a fixed day, upon close of escrow (COE) or it can be any number of days after COE.  If the seller retains possession after COE, the terms are usually spelled out in a Purchase Agreement Addendum (PAA), or a Residential Lease Back After Sale (RLAS) form if more than 30 days.

Check contingency removals. If the buyer has removed ALL contingencies, then you as a seller have reasonable assurances that they will close escrow (meaning, the buyer risks losing some or all of their deposit money if they do not close escrow).  However, this does not eliminate the possibility of delays for reasons including lender, wire transfer, title, or buyer timing delays/problems, among others.

Communicate with the lender. Your agent and the buyer’s agent should be in clear communication with any involved lender.  Said lender should be aware of the closing date.  Warning:  If the lender keeps asking for additional conditions to be satisfied, and if he/she regularly pushes back “…going to docs” (drawing loan documents for signatures), you can expect a delay in closing.  In rare cases, the buyers can sign loan documents the day before a planned closing and you can “record special” the next day with title.  Otherwise, I prefer to have loan docs signed SEVERAL days in advance of the closing date.  If you plan to close on a Monday, try to get docs signed Thursday or earlier.

Communicate with your buyer. Keep lines of communication open and clear with buyers and buyer’s agent.  If the agents are working together, they will do a good job of keeping clients sensitive to the needs of the other parties.  A buyer working in good faith may have legitimate reasons for needing more time.  Sellers, similarly, may need assurances of a buyer’s commitment if they are set to incur moving expenses, be inconvenienced by repairs or termite work, or need to sign a lease or remove contingencies on their own purchase.  It takes a team effort.  Don’t create a problem if a little flexibility on all sides will keep the deal together.

Ask escrow. While escrow does not represent the buyer or seller, they do owe you honest answers to matters that affect your escrow.  It is perfectly OK to ask them if there are any other items on their checklist that need completion prior to being able to close escrow.  They should be able to tell you if the buyer needs to sign escrow instructions or amendments, and if the lender has told them when they should expect loan documents.  If they have everything they need, they can sometimes tell you down to a couple of hours when they’ll hear confirmation of recording from title.  If they call you and say “It’s recorded,” congratulations.  The sale has closed.  When you hear those words you’re either already out or the wheels are in motion.

Still worried? Talk to your agent, be flexible, and just do it.  PACK.  There is always an element of risk and faith.  So long as all parties are proceeding with goodwill, it will all work out.  Now, breathe.

Daily Pilot Reports on Bixby Residential Media Scholarship at NHHS

There is no such thing as a FREE lunch, but how about a $1,000 homework assignment?

The Daily Pilot reported today on the Bixby Residential Media Scholarship at Newport Harbor High School.  Seniors are abuzz about the opportunity to earn three separate $1,000 prizes for print journalism, still photography, and/or short film.  With the scholarship competition officially open from now until May 1st, seniors are able to turn class assignments into an opportunity to earn money for school or fun.

Having been a freelance writer in the late ’90’s and early 2000’s prior to entering real estate full-time, I thought about how my business efforts might also benefit local students with an interest in the media.  With the help of Journalism professor Matt Johnson and Guidance Counselor Grace Nguyen, we’ll be judging entries for creativity, originality, composition, and execution, among other criteria.  I’m hopeful that with enough interest and entries, this scholarship can be offered annually.

If you’re a parent, friend, or sibling of an NHHS senior, encourage him or her to submit in one or more catagories.  Multiple entries are welcome, which increases participants chance of success.  The prize money goes directly to the student with no strings attached.  Scholarships will be given out at the year-end NHHS awards assembly.

Click here for the full article.

Bicycle Trails Good for Real Estate Values

Castaways blufftop path in Newport Beach

*NOTE:  This post is an excerpt from the League of American Cyclists Report titled The Economic Benefits of Bicycle Infrastructure Investments, as compiled by Darren Flusche, Policy Analyst, June 2009.

Many communities have recognized the broad appeal of bicycle facilities and the impact they can have on real estate values. Arlington County, Va., a silver-rated Bicycle Friendly Community, has set the goal of ensuring that all residents live within a quarter-mile of a bike facility and has currently achieved 90 percent coverage.

Bob McNamara, a Senior Policy Representative for the National Association of Realtors (NAR), a 1.2 million member professional organization, emphasized the importance of transportation choice at the 2009 National Bike Summit. He argued that Realtors sell not just houses, but communities, and that increasing transportation choice increases livability.  In 2008, NAR revised its policy statement on transportation to call for the consideration of all transportation types, including bicycling, in every transportation project.

By mapping real estate transactions, researchers have been able to show that bike facilities can have positive, statistically significant impacts on home values. The design identifies the value placed on home proximity to urban bicycle greenways with a statistical formula that controls for other housing features. A study of home values near the Monon Trail in Indianapolis, Ind. measured the impact of the trail on property values. Given two identical houses, with the same number of square feet, bathrooms, bedrooms, and comparable garages and porches – one within a half mile of the Monon Trail and another further away – the home closer to the Monon Trail would sell for an average of 11 percent more.  More studies on the impacts of trails and paths can be found at the National Trail Training Partnership and the Rails to Trails Conservancy.

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My two wheeled cents:  As a Realtor I am constantly trumpeting the value of walking and biking trails as a major quality of life amenity.  In fact, a friend and client recently told me that the main reason he chose to live in Castaways—what put him over the top—was the access to the bluff trails and the “…breath of fresh air” you get when you feel that open space just around the corner.  Newport Beach’s Back Bay loop, the peninsula boardwalk, the Port Streets bike paths, Crystal Cove State Park, and the broad sidewalks of Newport Coast are all examples of good planning that positively affects real estate values.  We all should lobby for more bicycle infrastructure planning for our health & safety, quality of life, and least of all, pocketbooks.

If you’d like to see the full League of American Cyclists report, just complete the contact form on this page and mention it in your comments, or give me a call.  To speak out for Newport Beach bicycle infrastructure planning, click here.