Dear Michael: We are selling our home and would like to know if we have to consider contingencies?
Answer: If you are a seller in a seller’s market, in which there is more demand than supply, you probably won’t have to entertain too many contingencies. But if you are selling in a buyer’s market (as we are in now), when buyers are few, prepare to be open to contingencies.
Most experts would agree that granting contingencies also depends on your motivation to sell, what kind of price you want to get and the condition of your property. Contingencies are written into the contract and are valid during the contingency period only (which can also be extended). Once an offer has been accepted, the only way to make changes to the contract is to have both buyer and seller agree to any changes.
Dear Michael: I am selling my own home and have no experience in negotiating. Is there a tip you can give me about negotiating?
Answer: There are several cardinal rules to negotiating effectively. One is to do your homework and learn as much about the buyer as you can. Another way is to play your cards close to your vest and not reveal too much information to the other party or his/her agent. Don’t let yourself get rushed into any decision, no matter how tempting it may be. Finally, if you have doubts about your negotiating skill, ask a relative or a friend to help, or better yet, hire a real estate agent.
Dear Michael: Our agent told us to remove any fixtures we want to keep and replace them. I am confused as to what stays or goes once our home is sold?
Answer: Fixtures stay. This means that any kind of personal property permanently attached to a house, such as drapery rods, built-in bookcases, tacked-down carpeting, dishwasher, oven or furnace, automatically stays with the house unless specified otherwise in the sales contract. Anything that is not nailed down is considered personal property and is negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator), although some sellers may be interested in negotiating for other items, such as a piano or furniture.
If you are a buyer and have decided to buy personal property from the seller, make sure you have written up an addendum outlining all items you have purchased with the price you are paying. This way, there will be no surprises if the seller reconsiders.
Dear Michael: I am buying my first home and want to know how I can save on closing costs. What do you suggest?
Answer: Closing costs can average 1-2% of a total home purchase price and are often more costly than many buyers expect. There are some ways to save:
* Get a no-point loan. The trade-off is a higher interest rate on the loan, but buyers who are short on cash and qualify for a higher interest rate may find a no-point loan will significantly cut closing costs.
* Get a no-fee loan. Usually, these fees are wrapped into a higher interest rate though it will save you on the amount of cash you need upfront.
* Shop around for the best loan deal. Every direct lender and mortgage brokerage has its own fee structure. Call around before submitting your final loan application.
* Ask your escrow and title company for a discount. Negotiating means asking. Closing costs are part of the transaction and you will need to pay them. But, who knows, you may save a few dollars.
Michael Kayem is a Realtor with Re/max/Execs, serving Culver City and the Westside since 2001. Contact Michael at (310) 390-3337 or homes@agentmichael.com.
