Monthly Archives: September 2014

Benefits of Living in a HOA Community

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Millions of homeowners now live in communities governed by homeowner associations or HOAs.  In fact, it is estimated that one in six Americans live in a HOA community.  That statistic is probably higher in Orange County as so many of our beautiful subdivisions are HOA communities.

Buyers are often wary of purchasing properties that require HOA fees.  Many view HOA fees as another expensive monthly cost and find HOA rules and regulations to be too restrictive.  But, there are many benefits of living in a well-governed HOA as the intent of HOAs is to protect the value of the homes in the area.  While every buyer should weigh the cost of the fees and determine what amenities and services are included, here are some common benefits to being in an HOA community.

Property Value Protection

A HOA provides greater certainty that the community will remain visually appealing over time, by imposing and enforcing rules on architecture, landscaping, fences, signs, parking, usage of public spaces, and more.  The rules are designed to create parameters for aesthetic uniformity so that no house is an eyesore to the neighborhood.  In addition, the HOA is responsible for the physical maintenance of common areas.  While residents often find HOA rules to architectural enhancements to be thorns in the remodeling or construction process, they are put into place to protect the collective interest of the residents.

Recreational Amenities

One of the most attractive benefits to HOA fees are the amenities provided.  Many communities in Orange County offer gated access and around-the-clock security presence to provide added safety for the residents.  Others offer pools, clubhouses for rent, parks, gyms, basketball courts, tennis courts, community events and even private beaches!  Obviously, the more amenities offered, the higher the fees may be.

Property Updates

The HOA sets aside a reserve account for future capital improvements or repairs from unexpected damages.  The reserve account provides assurance that the properties will remain in good shape and may save homeowners money in the long run.  Many people recognize the benefit of owning a home but being able to share in some of the management responsibilities

Community Environment

When a community has an HOA, the residents of that neighborhood have agreed to a set of “good neighbor” rules fostering a greater sense of community.  Many HOAs also provide community events and socials to increase community bonding and communication among the residents.  While this benefit is difficult to quantify, it is highly desired especially by young families, and that desirability can be a factor in property values.

As a prospective buyer looking for a property, decide early in the process if the HOA lifestyle is a fit for you.  If so, do some research and determine how much you are willing to pay per month on HOA fees.  Also, research what amenities are provided in each subdivision to help you narrow your property search.  A seasoned real estate agent knowledgeable in the areas of your interest should be able to provide you with the information you need at the onset of your home search.

How To Get Top Dollar For Your Home

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How does a seller get top dollar for their home? Every seller wants the assurance that his/her house will sell at the highest price possible. But, real estate, as with most industries, is a highly inexact science. There are many factors at play within rapidly changing market terrain. While there are no concise answers as to how one ensures a house sells for top dollar, there are some important considerations to deliberate as the seller that can help you maximize profits, maintain control and reduce the stress that comes with home-selling.

  • Know why you’re selling and keep it to yourself.

The reasons behind your decision to sell impact the process greatly. Do you already have another house in escrow? Do you need to sell quickly? Or is profit your highest priority? All of these questions will factor into your pricing strategy. However, do not reveal your motivation to anyone else other than your agent or they may use the information against you during negotiations.

  • Set your price appropriately.

Setting the right price is the single most important decision you will make when you decide to sell. Price too high and you will turn off potential buyers. Price too low and you may leave money on the table. Make sure you do your homework by looking at comparable sales in your neighborhood in the last 3-6 months. Visit all the competitive offerings and see how they’ve been priced relative to the condition of the home. It’s always good practice to know your competition. While pricing, stay as objective as possible, and really look at your house from a potential buyer’s perspective. Emotional attachment to the house tends to drive pricing higher than necessary.

  • Maximize your home’s sales potential.

You may not be able to change your home’s floor plan or location, but you can make cosmetic updates that will enhance buyer impression. Assess your home, again, through the eyes of perspective buyers, and determine what can use updating. Fresh carpeting and/or a paint job can transform a space dramatically. If possible, avoid showing the house empty. You want to help potential buyers envision the home as their own, so provide neutral staging or de-personalize your existing décor. Furthermore, make repairs to visible damage. And don’t ignore the exterior. Buyer impression starts upon arrival at the house, so make your home appealing from the curb.

  • Consider a pre-appraisal and a pre-inspection.

A pre-appraisal will provide you with an objective basis for pricing your home. Additionally, a pre-inspection can identify any issues with the house that you can address ahead of time rather than during escrow as re-negotiating during escrow can be more costly since you’ll have less leverage and the transaction can be at stake.

  • Know your buyer.

While you shouldn’t disclose much about your reasons for selling, you should try and find out who your buyers are. Why are they moving? Do they need to move quickly? Are they in good financial standing? Having some information on the buyer’s motivation and personal situation will give you the upper hand in the negotiations process.

  • Time your sale.

If possible, watch market conditions carefully and time your sale. Typically, spring and summer are good times to sell. But specific to your market, be mindful of supply and demand. Are there more buyers than sellers? Are interest rates reasonably low? When there are more buyers in the market, sellers can get better pricing and terms, especially if there are multiple parties interested in your property.

  • Hire the right listing agent to represent you.

Truthfully, nothing is more instrumental to your successful home sale than the right real estate agent for your needs. Not all listing agents are created equal. If you hire an experienced agent, they will perform all the research necessary to advise you on all the points listed above: pricing, home improvements, negotiations, timing of the sale, etc. Get a few quality referrals from friends and interview several agents. As part of the interview, make sure you understand how each agent’s marketing plan for your property differs.

To sell your home for top dollar requires proper positioning of your property to the maximum number of prospective buyers. Educating yourself on market conditions and having an experienced agent as your representation will increase the likelihood of a successful transaction for top dollar.

 

Things That Can Derail Escrow

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After all the trouble of putting a house on the market, showing the house to numerous buyers, and then going through several rounds of negotiations, a deal has been reached and the house is in escrow… what could go wrong?

The short answer is, plenty.  Escrow is a complicated process with many participants and equally numerous moving parts.  At the helm of it all should be the Realtors on the transaction guiding the deal to close for both the buyer and seller.  In my experience, the three biggest derailments of escrow are as follows:

1)   Financing & Appraisal

Next to having an experienced real estate agent, having a trusted and seasoned lender on the buyer’s side is vital to a smooth closing.  A lender should always advise buyers to withhold major purchases on credit during the home purchasing process.  Additionally, a diligent lender should proactively assist the buyer in fulfilling the underwriting conditions and have the buyer lock in a mortgage rate in a timely manner.  An essential piece of lending success is dependent on the appraisal coming in at the agreed upon price.  Should that not be the case and the property is under valued, then escrow is at serious risk unless the buyer and sellers can find a solution.

2)   Inspections

Nearly every real estate deal in current market conditions requires a physical inspection of the property.  When a buyer is handed an inspection report that itemizes things that are wrong with the house, from big items to little, it certainly can intimidate the buyer from proceeding.  A lengthy report from the buyer’s perspective is equivalent to excess expenditures and additional headaches for the buyer.  At this juncture, another round of negotiations could take place requesting the seller for repairs or adjustment to the price to cover for repairs.  If negotiations don’t result in a meeting of the minds, then escrow could be in jeopardy and the deal may fall apart.

3)   Disclosures

During the escrow process, the buyer is handed a list of disclosures.  While representing the seller, I tend to advise on disclosing more as opposed to less.  But it can be a little much for the buyers to digest depending on the severity of the disclosures.  The last thing anyone wants to happen is for the buyer to think that they were deceived and that the seller wasn’t forthcoming regarding the property.  Regardless, many deals have not come to fruition over items in the disclosure packet or that buyers discovered items that were not disclosed and therefore become suspicious about the property’s shortcomings.

Other issues that can derail closing include:

  • Termite inspection reveals serious infestation.
  • Title search reveals liens and clouds on title.
  • The house is uninsurable.
  • Closing is delayed due to errors, contingencies or missing documents.
  • Either the buyer or seller simply experiences a change of heart.

The good news once again is that if you have engaged an experienced Realtor to represent you, he/she will likely be have previously faced similar issues on another transaction and be able to help you navigate your way to a successful close regardless.   Whether it’s negotiating a request for repairs or connecting the buyer with a diligent lender, your real estate agent is your strongest ally towards a smooth close of escrow.