YOUR EXCLUSIVE GUIDE TO
BUYING A L U X U RY H O M E
LUCIO BERNAL CRS, CLHMS, CalBRE# 01236217
310.383.2466
Lucio.Bernal@camoves.com
JON M. SMITH CalBRE# 01959566
323.309.6416
Jon.Smith@camoves.com
M E E T BE RNAL □ SMIT H G ROUP As luxury experts in Palm Springs, the Bernal-Smith Group offers a wealth of knowledge and expertise that is unsurpassed; you can always trust their service and commitment to you. Lucio Bernal has served affluent clientele for over 20 years. He offers keen insight into executive and corporate relocation services, and understands and adapts to constant changes in the luxury market. His expertise is why his clients are excited to refer his services to their family, friends, and colleagues. He is a Broker Associate, Coldwell Banker Global Luxury Ambassador, a Luxury Property Specialist, an expert trainer with The Institute for Luxury Home Marketing, and served as President of the Palm Springs Regional Association of REALTORS® after having been named the association’s REALTOR® of the year in 2015. Jon M. Smith comes from a marketing background. His skills in organization and human relations is what strengthens the Bernal-Smith Group’s success. Jon understands and seeks optimal understanding in all of their client’s needs and expectations. Facilitating transactions and showing property is essential to successful completion of the Bernal-Smith Group's efforts in real estate. Lucio and Jon also hold great importance to servicing their clients that are in modest to more affordable homes and condos. They treat all of their clients with extreme care and attention. • • • • •
Coldwell Banker Global Luxury Property Specialist Coldwell Banker Global Luxury Ambassador Certified Luxury Home Marketing Specialist – Million Dollar Guild 2017 President of the Palm Springs Regional Association of REALTORS® Certified Residential Specialist, Pricing Strategy Advisor
C O N T E NT S Introduction
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Our Commitment to You
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Understanding Your Requirements
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Researching Your Options
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Custom Build or Buy?
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Get PreApproved
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Look For a Property
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The Evaluation Process
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Presenting Your Offer
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Remove Contingencies
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Prepare for Closing
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Move In
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Frequently Asked Questions
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A Home Buyer's Glossary
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Your Guide to Buying a Home in the Prestigious Market Purchasing a luxury home requires sophisticated representation, including but not limited to, experience, market knowledge, professionalism, dedicated service, and most importantly, the ability to discern and negotiate the right property on behalf of your client. Our exclusive guide is intended to provide a tangible resource in the process of buying a luxury home. Our guarantee is to commit to the utmost discretion and provide personal concierge services throughout the process of finding your new property.
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OU R C OMMITMEN T TO YOU It is important to work with a Realtor who is not only committed to working with you, but who is also dedicated to finding you the RIGHT home. Your Realtor should be someone you trust and who is protective of your interests. As your Realtors, this is our commitment to you:
CONCIERGE
VIEWING AND ASSESSING HOMES
To focus on your specific needs and take care of all the small details, so you don't have to.
To view homes with you, provide a comparative analysis, and work with experts who can provide an in-depth analysis and advice.
RESPONSIBILITIES To educate you about the professional responsibilities, including disclosure, loyalty, confidentiality, compliance, and accountability.
CONSULTATION AND NEGOTIATION To provide full service consultation, together with expert negotiation on pricing and terms, with management of all documentation.
UNDERSTANDING YOUR REQUIREMENTS To take the time to understand your requirements – location, property type, purpose, your must haves, local amenities – even if your goals change.
CLOSING
RESEARCHING THE MARKET
DISCRETION
To provide a sophisticated home search that will assist you with previewing homes and to keep you informed as new homes come on the market.
To always keep your interests and privacy secure, so you know that you are working with someone with the utmost discretion.
To keep you fully informed about all activities that lead to the transaction closing.
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U N D E R STANDING YO U R R EQUIREME NT S Establishing Your Preferences and Expectations Traditionally, people purchase a property as a main residence. Understanding that your reason for buying a home may be different, it is important that we know your exact goals, along with your preferences and expectations.
PURPOSE What will be the home's primary purpose? Vacation home, a home closer to work?
LOCATION Are you looking at a specific area? City, rural, gated community, convenient location, privacy?
TYPE Is there a specific type of home that you are looking for? House, condo, lots of land, no land?
LIFESTYLE What is the lifestyle you are looking to lead and how can we help you achieve it?
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R E S E A RC H ING YOUR OPTI ON S Market Value vs Market Price As your real estate consultants, we will make note of all of your considerations and desires and begin researching the market to find your perfect home. Regardless of your desired location, property type, or purpose, a critical part of a home search is to research the value of homes currently on the market. The current selling price of a home does not mean that a property is ‘worth’ that amount to you– market conditions and what a buyer is willing to pay for a property affect the true value of the home at any moment. When deciding the value of any property, the following criteria should be considered: xx Location of the property xx Condition of the property xx Buyer demand
xx Current prices of similar properties xx Recent sales of competitive properties xx Availability of financing and funds
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C U S T O M BUIL D O R BUY? Determine Your Best Option As a discerning buyer, it can often be difficult to find your exact requirements when searching the market. Another option that should be investigated is the option to build your custom home.
LOCATION If location is the most important priority in your search, but the ideal home is not available, our insider knowledge of the area will assist you in purchasing a tear-down or empty lot.
BUILDERS As part of our service, we offer local, accredited architects and builders - but our ultimate goal is to ensure that you have both confidence and trust in our recommendations.
IT'S ALL IN THE DETAILS Our service offers you all the right connections from interior designers to landscape architects, surveyors to appraisers, and mortgage advisors to international banking services. If you decide to renovate or build a new home, allow us to assist you.
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G E T PR E-A PPROVE D Financial Considerations Luxury home sellers are only looking for serious and qualified buyers - whether you require a mortgage or not, it is always recommended to have your financial pre-approval ready to present.
PRE-QUALIFY VS. PRE-APPROVAL A pre-qualification letter provides general information on your finances, whereas a pre-approval letter requires extensive documentation and verification of your finances. It will state the amount you are pre-approved for and includes much more rigorous financial information.
BE PREPARED We will provide you with a comprehensive list of the items that are required when you wish to submit an offer – rules, regulations, and requirements are varied.
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L O O K FOR A PRO PE RTY Time To Find Your Dream Home With your requirements in mind, allow us to search for your dream home. While the majority of home buyers start their search on the Internet, many high-end properties aren’t officially listed on the MLS or major search engines. As your consultants, we will: xx Tap into our network of recommended Realtors and Brokers, who specialize in the local, high-end market xx Research the local market so we can advise on schools, nuances to neighborhoods, as well as the property specifics xx Utilize technology that automatically sends home matches xx Access global networks to find properties not listed
PROPERTY VISITS Zero in on your top picks by seeing properties in person because many sellers, protective of their privacy, refrain from putting extensive photos of their homes on the Internet.
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T H E E VALUATION PROCES S Narrowing Down the Prospects Evaluating a luxury home is more complicated than a typical home; its unique features and aspects need to be thoroughly reviewed, as it is these very qualities that often make a home distinctively luxurious.
AS YOUR REAL ESTATE CONSULTANTS, WE WILL: xx Schedule very detailed property tours to ensure you are able to appreciate aspects such as construction methods. xx Each county has its requirements for seller's disclosures and we will ensure you have full knowledge and understanding, so you can make an informed decision. xx Examine comparable properties - despite luxury homes being unique, it is still important that we review homes of similar stature to ensure we have a good basis on which to negotiate.
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PR E S E N T ING YOUR OFFER Starting the Process As your consultants, it is our duty to provide you with the best information and advice so that you can make an informed decision. As your negotiators, we will utilize our experience and expertise to negotiate on your behalf. An offer can be drafted with or without conditions; an offer without conditions is known as a firm or subject-free offer, and one with conditions is known as a conditional offer, which protects one party with the placement of certain conditions on the purchase.
POINTS TO CONSIDER IN YOUR NEGOTIATIONS: xx The condition of the home xx Length of time it’s been on the market xx Buyer activity xx Location xx Urgency of the seller The seller may accept your initial offer, reject your offer, or present a counter offer. The counter offer may differ from your original offer in respect to price, conditions, the closing date, or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations all together.
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A Few Reminders... The complexity and scale of buying a luxury home raises the stakes. Experts such as tax and financial planners, bankers, and attorneys should be consulted up front and often will be directly involved in the transaction. xx Never skip the inspection process; you always want to know what you are buying. xx Make sure inspections and repairs are made in a timely manner. xx While not required in every state or buying circumstance, a good local real estate attorney can save you a lot of headaches. xx Be prepared for closing costs. As your real estate consultants, we will advise you on what is expected for you to pay for – expenses at closing like transfer tax, attorney’s fees, title insurance, etc.
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R E M OV E C ONTINGEN CI ES Managing the Details Once both parties accept the sales contract and its contingencies (that is, any conditions either party may be subject to) they will start to work towards removing these conditions. It is important to understand the options available to you should one of your conditions not be removable prior to the contract date. This does not automatically mean that the deal is dead; as your consultants, we will work with the seller’s agent to find a solution. Equally, conditions that the seller needs to address can also be provided with extensions – this is particularly important when a problem is found during the house inspection. As your consultants, we will advise you on the right course of action based on our knowledge and experience. Once you are satisfied and wish to commit to purchasing the home, a contingency removal document will be prepared for both parties to sign.
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PR E PA R E FOR C L OSIN G Finalizing the Details After all the contingencies have been removed, it becomes the responsibility of the legal and financial institutions to prepare all the necessary paperwork. Should there be any issues, we will contact you. Closing day marks the end of your home buying process. We will provide you with a comprehensive list of personal and financial requirements prior to this date. At closing, you or your legal representative will sign all your documentation. When closing is finished, we will give you the keys to the property and any documentation that relates to the property, including a statement of costs, a statement outlining your mortgage terms, your mortgage note, and a copy of your deed of trust. At the end of closing, the deed will be taken and recorded at the county clerk’s office. It will be sent to you after processing. We will also make arrangements to see the home the day before closing to ensure the home is in the condition per the contract agreement.
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M OV E I N The Moving Details Moving into your new home can be exciting time, but it can also be stressful. As your consultants, we will be there to help coordinate all the final moving details.
AS YOUR CONSULTANTS, WE WILL: xx Locate and oversee a moving company that will be responsible for moving your belongings. xx Order any moving supplies that are needed for the moving process. xx Prepare a detailed map and directions for your movers, including a cell phone number where we can be reached on moving day. xx Be present when the truck is being loaded and unloaded just in case your movers have questions. xx Arrange for cleaners for the new home and old home. Even if the previous owner hires a cleaner, that extra touch before you arrive makes your new home feel fresh and ready.
YOU WILL WANT TO: xx Clearly label each box on the outside, with a quick checklist of the items inside – this makes unpacking so much easier. xx Make a list of the items that need extra attention during moving. Label boxes as fragile, as needed. xx Change your address – post office, banks, cable, Internet and phone, insurance company, utility company, credit card company, doctor and dentists, and any subscriptions you may have. xx Pack a travel bag with the items your family may need on moving day such as toothbrushes, a change of clothing, medications, hair brushes, soap, toilet paper, etc.
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FR E QU ENTLY AS K E D QUE ST IO NS WHEN IS THE BEST TIME TO BUY? When you have found the right home. Don’t wait for perfect conditions to buy – they don’t exist.
HOW DO I CHOOSE A REALTOR? Ask if they know the local market, can they give you references, etc. Think of the process as equivalent to giving a job interview - do they know your local market, price points, and types of homes – ask for references!
HOW DO I FIND THE PERFECT HOME? Prioritizing and compromising are necessary elements to finding the right home. Compile a list of ‘must haves’ and then a list of ‘would likes’ – you will never find the right home otherwise.
HOW DO I KNOW WHEN IT’S RIGHT TO PRESENT AN OFFER? Don’t be afraid to write an offer - there is no commitment until you remove all the contingencies. However, don’t write an unrealistic offer. Offer instead what the property is worth to you, otherwise you may be helping someone else’s offer look good.
CAN I GET OUT OF A DEAL IF I DECIDE THE PROPERTY OR DEAL ISN’T RIGHT FOR ME? Don’t be afraid to back out of the deal; you have not gone too far until the subjects have been removed.
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A H O M E BUYE R’S GLOSS ARY When buying a home, it’s important to understand some of the key concepts and terms. Throughout the purchase process, we will be available to explain any unfamiliar terms you encounter. That said, here is a short list of terms you’ll want to know: Abstract Of Title – A complete historical summary of the public records relating to the legal ownership of a particular property from the time of the first transfer to the present. Adjustable Rate Mortgage (ARM) – Also known as a variable-rate loan, an ARM is one in which the interest rate changes over time. Agreement of Sale – Also known as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller and buyer agree to transact under certain terms spelled out in writing and signed by both parties. Amortization – The process of reducing the principal debt through a schedule of fixed payments at regular intervals of time, with an interest rate specified in a loan document. Appraisal – An appraiser’s estimate of the market value of a property, based on local market data and the recent sale prices of similar properties.
Counter Offer – An offer, made in response to a previous offer, that rejects all or part of it, while enabling negotiations to continue towards a mutually acceptable sales contract. Debt-to-Income Ratio – A ratio that measures total debt burden. It is calculated by dividing gross monthly debt repayments, including mortgages, by gross monthly income. Deposit – The amount of money provided from the buyer to the seller as a token of the buyer’s assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. Your agent can assist you in proposing an appropriate amount for the deposit.
Assessed Value – The value placed on a home by municipal assessors for the purposes of determining property taxes.
Disclosures – Disclosure statements, which can come in a variety of forms, are the buyer’s opportunity to learn as much as they can about the property. Seller disclosures include knowledge of issues with the home. They serve to inform buyers and they can protect the sellers from future legal action. It is the seller’s chance to lay out anything that can negatively affect the value, usefulness, or enjoyment of the property.
Closing – The final steps in the transfer of property ownership. On the Closing Date, as specified by the sales agreement, the buyer inspects and signs all the documents relating to the transaction and the final disbursements are paid. Also referred to as the Settlement.
Down Payment – The money paid by the buyer to the lender at the time of the closing. The amount is the difference between the sales price and the mortgage loan. Requirements vary by loan type. Down payments less than 20% usually require mortgage insurance.
Closing Costs – The costs to complete a real estate transaction, in addition to the price of the home and may include: points, taxes, title insurance, appraisal fees, and legal fees.
Earnest Money – A deposit given by the buyer to bind a purchase offer and which is held in escrow. If the property sale is closed, the deposit is applied to the purchase price. If the buyer does not fulfill all contract obligations, the deposit may be forfeited.
Closing Date – This is usually the date that the legal ownership of the property transfers from the seller to the buyer. Conditions or "Subjects" – Items that are usually put in place to protect a party’s interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes. Some of these conditions could be “subject to financing approval,” “subject to the strata council allowing pets,” “subject to the buyer’s house selling,” “subject to seller finding suitable housing,” etc. Contingency – A clause in the purchase contract that describes certain conditions that must be met and agreed upon by both buyer and seller before the contract is binding.
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Conventional Mortgage – One that is not insured or guaranteed by the federal government.
Easements – Legal right of access to use a property by individuals or groups for specific purposes. Easements may affect property values and are sometimes part of the deed. Equity – The value of the property, less the loan balance and any outstanding liens or other debts against the property. Escrow – Funds held by a neutral third party (the escrow agent) until conditions of a contract are met and the funds can be paid out. Escrow accounts are also used by loan services to pay property taxes and homeowners insurance.
Fixed-Rate Mortgage – A type of mortgage loan in which the interest rate does not change during the entire term of the loan. Home Inspection – Professional inspection of a home, paid for by the buyer, to evaluate the quality and safety of its plumbing, heating, wiring, appliances, roof, foundation, etc. Home Warranty - Service contract that covers the repair or replacement of home system components and appliances that break down. Homeowners Insurance – A policy that protects you and the lender from natural disasters and liabilities such as a visitor injury or damage to your personal property. Inclusions and Exclusions – Specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures, and decorative pieces. Lien – A claim or charge on property for payment of a debt. With a mortgage, the lender has the right to take the Title to your property if you don’t make the mortgage payments. Market Value – The amount a buyer would pay a seller for a home. An appraised value is an estimate of the current fair market value. Mortgage Insurance – Purchased by the buyer to protect the lender in the event of default (typically for loans with less than 20% down). Available through a government agency like the Federal Housing Administration (FHA) or through private mortgage insurers (PMI). Possession and Adjustment Dates – When the buyer takes possession as specified in contract of purchase sale and adjustments are made for prepaid taxes, maintenance fees, etc. They are usually the same date.
Purchase Contract – A detailed written document which makes an offer to purchase a property, and may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the Purchase Offer becomes a legally-binding sales agreement.* Purchase Price – The amount that the buyer is offering to pay for the property, usually dependent on market conditions and may differ from the seller’s current asking price. There is no “normal” amount or percentage that a price will differ from its asking price, as the final price will be determined by many factors, including the seller’s motivation and how close the asking price is to actual “market value”. Terms – An offer includes certain “terms”, which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker, or if you wish to take over the seller’s mortgage (assumability). Title – The right to, and the ownership of, property. A Title or Deed is sometimes used as proof of ownership of land. Clear title refers to a title that has no legal defects. Title Insurance – Insurance policy that guarantees the accuracy of the title search and protects lenders and homeowners against legal problems with the title. Title Search – A historical review of all legal documents relating to ownership of a property to determine if there have been any flaws in prior transfers of ownership or if there are any claims or encumbrances on the title to the property. Truth-In-Lending Act (TILA) – Federal law that requires disclosure of a Truth-In-Lending statement for consumer loans. The statement includes a summary of the total cost of credit. * The Purchase Offer and contract procedures vary by region.
Possession Date – The date, as specified by the sales agreement, that the buyer can move into the property. Generally, it occurs within a couple days of the Closing Date. Pre-Approval Letter – A letter from a mortgage lender indicating that a buyer qualifies for a mortgage of a specific amount. It also shows a home seller that you’re a serious buyer. Principal – The amount of money borrowed from a lender to buy a home, or the amount of the loan that has not yet been repaid. Does not include the interest paid to borrow.
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We would like to thank you for giving us the opportunity to present this preview of the marketing services we can offer you and your property. We'd be pleased to assist you with the sale of your present home and the purchase of your next home, and the next one, because we are not just providing a service, we are building relationships. Please let us know when we can be of service. Call us before you make any important real estate decisions, you’ll be glad you did.
BERNAL-SMITH GROUP
LUC IO BE R NA L | 310. 383. 2 4 66 | LUC IO. BE R NA L @ C A MOV E S .COM JON M . SM I T H | 32 3. 3 0 9. 6 416 | JON. SM I T H@ C A MOV E S .COM
Not intended as a solicitation if your property is already listed by another broker. E&OE. Published by REAL Marketing (REM) | www.REALMarketing4You.com | 858.847.8631 | Š2018