Pricing & Closing Costs
CLOSING COSTS: WHO PAYS WHAT?
THE BUYER CUSTOMARILY PAYS
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Title insurance premiums 1/2 of the Escrow fee Document preparation, if applicable Notary fees Recording charges for all documents in buyers’ names Tax proration (from date of acquisition) All new loan charges (except those required by lender for- seller to pay) Appraisal fee Interest on new loan from date of funding to 30 days prior to first payment Assumption/change of record fees Beneficiary statement fee Pro-rated HOA dues, if applicable Inspection fees (roof, pool, property inspection, pest, geological, etc.) Home warranty (according to contract) City transfer tax (according to contact) Fire insurance premium for first year
THE SELLER CUSTOMARILY PAYS
Closing costs are the various fees charged by the lender, title company, real estate agents, and other service providers in order to complete a real estate transaction and are paid through escrow. Which party pays for specific closing costs can be negotiated between the buyer and seller.
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Real estate commission 1/2 of the Escrow fee Document preparation for deed Documentary transfer tax Payoff of all loans against property Interest accrued on loans being paid off, reconveyance fees & penalties Horne warranty (if specified in contract) Any judgment or tax liens against seller Property tax proration Prorated HOA dues, if applicable HOA fee for providing all updated homeowner’s documents, if applicable Bonds or assessments Delinquent taxes Notary and recording fees Third party Natural Hazard Disclosure Statement & California Tax Termite report and repairs Negotiated credits to buyer, if any Negotiated repairs, if any
PRICING YOUR HOME
IT IS IMPORTANT THAT WE PRICE YOUR HOME PROPERLY FROM THE START, WHILE BUYER INTEREST IS AT ITS HIGHEST. Pricing your home is a complex task that requires the expertise of an experienced real estate professional. Consider the following: • If the listing price is set outside of the proper parameters, potential buyers may be deterred from considering your home • Arriving at the optimal price requires evaluation and understanding of current marketing conditions, the marketable features of your home, and recent trends in the real estate market • The closer your home is priced to fair market value when it first comes on the market, the more likely it will sell quickly at the highest price • The higher your home is priced above market value, the fewer number of available buyers We will advise you of the following factors when assisting you to determine a listing price for your home • What have buyers recently paid for similar properties? • Will this price attract enough attention from buyers to generate showings and acceptable offers? • Which properties are competing for the attention of your buyers right now? • Which properties have not sold, indicating what prices buyers are unwilling to pay under current market conditions?
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“You never get a second chance to make a first impression. It’s extremely important not to miss the mark from the get-go. Once the gates open, all systems and marketing should be accurate and ready to go.” - Julie Del Santo, Broker/Owner Overpricing your home will attract fewer potential buyers and may cause it to sit on the market for longer than desired. To the buyer, too much time on the market indicates an overpriced property and often is perceived as an opportunity to negotiate a lower price than the market might typically bear. Pricing your home competitively at the start will create more activity among brokers and buyers, decrease the time it takes to sell, and ultimately yield the highest possible price.
MARKET VALUE STRATEGIES STATISTICS HAVE SHOWN Pricing is extremely important in the real estate market. The diagram below illustrates the importance of placing your property on the market at a competitive price from the very beginning. • • • •
95% of buyers will want to see your home if priced at fair market value 50% of buyers will try to view your home if priced at 5% over market value 30% of buyers will make an effort to see your home if priced only 10% over market value 20% of buyers will be interested in your home if priced at 15% over market value
Highest Potential
Lost Potential Multiple Offers
Dangerous Risk Gamble
Activity (Amount of Interest)
PRICE MATTERS You want to price your home to allow for the most exposure possible, in order to get the most buyers in the door, and get your property the highest possible price.
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Time on Market (Weeks) Your Asking Price
A property attracts the most excitement and interest from the real estate community and potential buyers when it is first listed; therefore it has the highest chance of selling for the highest possible price when it is new to the market. w w w. S e a r c h . h o m e s a t b e r m a n e s t a t e s . c o m w w w. b e r m a n e s t a t e s . c o m