Below are the last steps(4 and 5) on how to purchase a home in Orange County.
Negotiate the Offer
Buyers sometimes make the mistake of comparing the sales price of a home to other homes they have seen. It’s a mistake to compare sales prices among homes for sale. That’s because sellers can ask any price they want. It doesn’t mean the home will sell at that price.
- An agent can provide comparable sales and examine the pending sales. Comparable sales are similar type homes in the same condition and location that have sold within the past 3 months
- Pending sales will become the comparable sales by the time your home closes.
You may need to pay over list price in a seller’s market(Orange County is experiencing a very aggressive Sellers’ market) , many buyer are bidding on the same property. This will bring bidding wars and bring in offers above asking and even above market prices.
- Your agent can give you a reasonable price range and help to manage your expectations.
- A good buyer’s agent knows there is always more to an offer than its price, but price is paramount.
Do a Home Inspection
In CA a home inspection is a contract contingency.
- A contract contingency means a buyer has the right to cancel the contract.
- You might not want to be locked in to buying a home that has a faulty foundation, for example
- This can be waived but is unadvisable. REOs and Short Sales are sold “AS IS” meaning you can still perform an inspection and back out of the contract, but the Bank will not do the repairs
- Contingencies will be released once both parties have been satisfied with the offer(for the seller) and the home condition(for the buyer)
- When contengencies are released you have a mutually and fiscal measures can be taken
Sellers are generally not required to make repairs if problems are discovered during a home inspection. A home inspection is for the buyer’s edification. However, sometimes when a buyer gives a Request for Repair to the seller, rather than blow the deal, the seller will often agree to make a repair.
In Orange County the sellers are refusing almost all request because they know the can most likely get a even higher price if the buyer backs out. The reason for this is Orange County has seen a 30% year over year appreciation in homes since June of 2012. That is an average of nearly 3% a month and possibly more in the most recent months. The largest wave of appreciation has happened since the beginning of the year.
This is just the simplified version of purchasing a home and I hope that this can give you potential future holders of the American Dream a plan of action. I am always available so fell free to call or email me.
How to Sell a House in Orange County
Selling a house is a complicated process, no matter how good the real estate market is. Whether you’re a first-time home seller or not, you’ll probably have a bunch of questions. Do I need a real estate agent? What’s “closing”? How much paperwork am I going to have to fill out? How can I get the best price for my house? How can I sell my house and buy a new one at the same time?
There are two main ways to sell your home — with an agent or without one. Before we discuss and weigh each option, let’s go over some general tips that all sellers should know.
Though the Internet has made it easier to sell your home without an agent, about 93 percent of home sales are still done with some type of real estate agent. An agent can work independently or for a company that acts as the broker. The broker signs the agreement with the seller. Top agents receive 100 percent of the commission and pay a fee to the broker while less experienced agents get 30 percent to 40 percent of the commission. The Orange County market has shown to be consistently one of the most competitive markets in the Nation with prices averaging in the top 1% of the United States. For this reason many Realtors have started to work as a team creating a business structure that brings unsurpassed value to the home owner and each team member.
There are many reasons why hiring an agent can be helpful:
- Education and experience – A good realtor understands the complex procedure and paperwork involved in selling a home.
- Saves time and energy – You won’t have to spend time scheduling and conducting tours of your home, which cut into your work and weekends.
- Gauging offers – An agent can help discern serious buyers from those who are simply looking
- The market – A good realtor knows the market and understands trends, which can help your bottom line. The Orange County market is experiencing low inventory levels and buyers are extremely motivated right now. A good Realtor will help you take advantage of this and utilize the current market to get you a price you probably did not think you could.
- Negotiation – An agent has the negotiating skills to help you get a good price.
- Professional contacts – Your agent’s contacts with other realtors and with contractors, inspectors, landscapers and the like can help you find a solution for any problem you may encounter.
- Sale price – A good realtor will get you top dollar and the end figure after the commission will more times than not exceed the figure that you could have gotten on your own. In some cases, buyers will offer less money to someone who’s not using an agent, believing the seller is trying to save money by not paying commission.
A key tool for real estate agents is the Multiple Listing Service (MLS), a massive online database, which 900,000 agents subscribe to, that contains listings of 90 percent of properties for sale across the United States. Buyers can access the service for free at realtor.com however the information is not updated and can be inaccurate and misleading.
With all of the benefits that come with using an agent, there are some drawbacks.
- Most importantly, it’s very expensive. Commissions can run up to 6 percent of the house’s sale price, though many agents are willing to negotiate commission, especially in a good housing market
- Working with an agent also requires a certain degree of trust, a willingness to place your most valuable possession in a stranger’s
- That, along with letting go of any sentimental attachments you may have to your house, is part of a home sale
processSilverman, Jacob. “How Selling a House Works” 06 December 2006. HowStuffWorks.com. <http://home.howstuffworks.com/real-estate/house-selling.htm> 28 March 2013.