Dear Michael: I have an appraiser coming over to appraise my home. My garage has been converted to a TV room without permits. Will this addition be factored into the appraised value?
Answer: No it will not. The appraised value is only measured for permitted space which includes: square footage and condition of home. I will even go as far to suggest that you refrain from showing the appraiser your converted garage. Some lending institutions may have a problem with a converted garage completed without permits. It is also a good idea to give the appraiser the most recent comparable sales in the area. Some appraisers are coming from an “out of area” location and may not be familiar with the comparables in your particular area. I and many Realtors have often seen appraisers come in at a lower value when in fact the value should have been an easy “slam dunk”.
Dear Michael: I have received my closing statement from escrow and notice there is a $200 charge for a payoff fee. What is a payoff fee?
Answer: Sub-escrow (loan payoff) is an extremely important service provided by title companies to facilitate the handling of money in the closing of a real estate transaction. The performance of the payoff function, exclusive of escrow services, is unique to Southern California. This is because the majority of title orders require payoff service.
A sub-escrow fee is a fee charged by the Title Company for the following services:
• Coordinating with the Escrow Company or lender for recording.
• Verifying and updating pay-off demand figures with the lender.
• Verifying payment of property taxes.
• Calculating the pay-offs on the day of closing.
• Disbursing all pay-offs and net proceeds per instructions.
• Upon confirmation of recording, notifying the escrow company.
• Process refunds.
Payoff – The receipt of funds from the buyer and the payment of the obligations of the seller in conjunction with a real estate transaction. The payoff function is performed by the title company.
Dear Michael: I recently purchased a home and signed a purchase sales agreement. I called the listing agent several times to place a “pending sale” or remove the “for sale” sign from the property. I was told that until we close escrow and money had been exchanged that the seller had the right to accept other buyer’s interest in the home. Is this ethical?
Answer: Those would-be buyers pose no threat to you if you already have an accepted binding contract. The seller has the right to continue showing the property. If someone else wants to buy the house, the seller could even accept a “back-up” contract from a buyer who’s ready to wait around in hopes that your purchase is cancelled. There’s always a chance that something might go wrong with your transaction. Perhaps you may not be able to get the required mortgage loan, or may not approve of the properties condition. Whatever the reason may be the seller should take all the necessary measures to protect themselves in case of cancellation. As for the “For Sale” sign and other lookers, don’t worry, they can’t hurt you as long as you do not cancel your purchase agreement. Keep in mind it is still the sellers’ house until you close escrow, they can do whatever they want to their front lawn.
Michael Kayem is a Realtor with Re/max Execs serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com
