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Escrow: The Nuts and Bolts

To some home buyers and sellers, and perhaps to some less experienced real estate agents, the escrow process is something of a mysterious experience where a lot of money and documents change hands until a property is magically turned over to the new owner during a projected ‘close of escrow.’



In fact, at its essence, escrow is a clearing house – a neutral third party whose job it is to carry out all the written instructions agreed upon by buyer, seller, and lender, and hold in trust the buyer’s earnest money and other applicable funds and documents until conditions are met and the transaction can be completed.

But the escrow process has many moving parts, and having a reputable, approachable escrow officer can help demystify the experience and keep things moving toward a timely closing.

Here is what you and your clients can expect from your escrow officer

  • We receive and hold the buyer’s funds in a non-interest trust account
  • We review and comply with all agreements of the sale as detailed in the purchase contract and joint escrow instructions
  • We manage preparation of the grant deed (for seller’s signature) and the estimated closing statement and any other documents needed to clear title
  • We receive loan documents from the buyer’s lender and prepare estimated closing statements 
  • We order evidence of insurance from the buyer’s insurance agent and send the signed loan documents and all lender-required items to the new lender for funding
  • We submit original documents required to clear title to the title company for recording at the close of escrow
  • We ensure that escrow is in receipt of all funds necessary to pay the seller their proceeds and that the seller has sufficient equity in the property to cover all agreed upon costs, lien payoffs, and/or invoices
  • We make sure all required paperwork is in escrow to provide the buyer with clear title to the property
  • We ensure that all conditions agreed upon by the buyer and seller, and in writing through escrow, have been satisfied

When all escrow instructions have been carried out, the closing can take place. At this time, all outstanding funds and fees are collected and paid, including title insurance premiums, real estate commissions and termite inspections. Title to the property is then transferred to the new owner, title insurance is issued, and it’s time to turn over the keys.

Should You Sell Your Home and Downsize When Your Kids Are in College?

If all of your kids have gone to college or moved out, you may be looking at their empty bedrooms and thinking about downsizing. There are some distinct advantages to doing that, as well as downsides to consider.



Downsizing Can Save You Money
There may be no need to have a large house if your kids are rarely there and one or more bedrooms just sit empty the majority of the time. A large house can mean high bills for utilities, maintenance, property taxes and insurance, not to mention a steep monthly mortgage payment. 

Downsizing to a smaller home may allow you to significantly reduce your living expenses and give you more money to save for retirement or to use for traveling and other priorities. It can also give you an opportunity to enjoy a simpler and less stressful lifestyle. You’ll be able to spend less time on cleaning and maintenance, and have more free time to devote to hobbies. 

You Can Still Have a Place for Your Kids to Stay
Moving to a smaller house doesn’t mean that your kids will have to stay at a hotel if they want to visit. You can buy a home with a guest bedroom, or you can set up a family room, home office or hobby room with a sofa bed or space for an air mattress for times when your children come home during breaks.

Moving to a Smaller House Isn’t the Only Way to Save Money
If you’re looking to cut your living expenses, downsizing isn’t your only option. Room rentals are in high demand. You may be able to rent out one or more unoccupied bedrooms on a monthly basis. Or, if you live in an area that sees a lot of tourist traffic, you may earn more money by renting out rooms for shorter periods of time.

If You Move, You’ll Need to Let Some Things Go
If you decide to downsize, that will mean that you’ll need to get rid of some of your possessions. It may be a good idea to have your kids go through the house and make a list of things that they would like to have. Then you can figure out what to do with the rest. You may decide to have a yard sale, donate some items to charity and discard others. 

Don’t try to cram everything into a smaller house, and don’t rent a storage unit so you can avoid getting rid of things. If your goal is to save money, a monthly storage unit rental fee will reduce your overall savings.

Think About Your Goals and Dreams
While your kids were growing up, you likely focused on their needs and put your own long-term aspirations on the back burner. Now that they’ve moved out, you have an opportunity to figure out what you want your future to look like and to make your dreams a reality.

What to Look Out for When Buying an Old House

Are you planning to purchase an old home? This could be a very smart real estate move, as old houses tend to cost less than modern builds. Additionally, if you’re the type of person who appreciates the nostalgic appeal and charm of an older home, then this will be a gratifying choice for you.


 Although older houses bring undeniable historical character and uniqueness, there are a few things you need to be aware of before buying one. Here is a list of important things to look for when buying an old house to avoid running into trouble:
 
Harmful Building Materials
The very first thing you should check before buying or moving into an old house is the presence of harmful building materials. Generally, houses built before 1978 are known to contain lead-based paints and asbestos. These chemicals pose a danger to both children and adults. Therefore, if you find the house to have these chemicals, you need to hire a professional to remove them before you settle in.
 
Foundation Issues
The foundation of a home plays an important role in its overall stability—it’s what the entire structure sits upon. Many old houses tend to have foundation issues due to tear and wear, seismic waves, wet soil or tree root activity. In order to make the house livable, you need to hire a structural engineer to inspect and repair any damages or cracks. Experts can assess the situation and ensure the foundation is properly restored.
 
Roof Issues
The roof is another common problem among old houses. If a house is very old, the roof shingles likely have depreciated and become less effective. Depending on the roof type the house has, its quality and efficacy can deteriorate based on weather, maintenance and quality of installation. Consider reaching out to professionals in your area to get an estimate on repair or replacement.
 
Electrical Connectivity
Unlike modern homes, older ones usually have old electrical connectivity, which cannot withstand modern usage and appliances such as HVAC systems, computers and televisions, to name a few. Therefore, you need to ensure that the connection is updated before you finally move in. Among the areas to pay attention to are knob and tube wiring. These kinds of wiring were common in the early 1900s and are likely to be no longer effective.
 
Moving into an old house can be a great decision. It brings a piece of history, uniqueness and classic proposition to your life. If you’re determined to own an older home, though, you need to take your time and check on the things mentioned above. Doing this will help you get a house worth your money and ultimately protect your investment!

Tips for a Better Work-at-Home Experience

More people are working from home these days than ever before, and many will have the option to continue to do so even when the pandemic is over. There are perks, for sure, including no long commutes, spending less on gas and work clothes, and lunches out.



But working from home comes with challenges, chiefly from changes in routine, the absence of socialization and/or household noise and distractions. Psychologists suggest five ways to make the most of your transition and set boundaries between your work and home life,

  • Have a Designated Space to Work – The kitchen table is not ideal and your bed should never be your desk. Whether it’s a whole room or a corner in your living room, a designated workspace can help get your head in gear before you even get seated.
  • Monitor Your Screen Time – Zoom fatigue is real, optometrists say, and too much screen time strains your eyes. In addition, the blue light emanating from digital screens can wreak havoc on your eyes and skin. Dermatologists advise putting on sunscreen before you start your day at the computer. 
  • Plan Your Workday – While the average workday runs from 8-10 hours, studies show that most people are at their most productive for 5-6 hours a day. To stay at your most productive, organize your day by taking occasional breaks from the computer to do tasks that require less brain power, such as making phone calls, organizing paperwork or just relaxing with a snack.
  • Change Up Your Routine – Following the same routine every day becomes boring and dulls your energy. Rearrange the office furniture to change the view from your workspace. Fix yourself a hearty breakfast now and then instead of rolling out of bed and going straight to work. Make that trip to the coffee shop and bring back your favorite cup of joe. Take a longer afternoon break and read or listen to music. 
  • Separate Work and Home Life – Maintaining a healthy work-life balance is important. Clock out on time and start enjoying your after-hours time with family or friends. Resist the temptation to check your work email at night or finish that report. Tomorrow will be here soon enough.

How to Select the Best New Homes for the Best Price

Buying a home is all about getting the best deal. However, while you can negotiate prices on a home that’s already built, if you’re buying new, you’re at the builder’s mercy. Or are you? It’s a common misconception that, if you’re buying a new build, the prices are set in stone. The reality is there’s quite a bit of wiggle room—if you know where and how to find it.


 
Walk the Lots
Builders know that some lots are preferred over others. A cul-de-sac, for example, is quieter and less busy than a corner lot. And those two lots are priced accordingly, with the cul-de-sac lot selling at a premium. Of course, your builder will probably show you the more expensive lot. However, if you don’t particularly care about having a premium lot, or you’d be just as happy on a corner lot if it saved you a few thousand dollars, take the time to walk the different lots and choose one that better fits your budget.
 
Look at Comparable Sales
Just because it’s a new build doesn’t mean the home doesn’t have comparable sales in the area. By looking at the prices of comparable homes in the area, you’ll get a better idea of how much your new build is truly worth. You’ll still pay a bit more for the privilege of being the home’s first owner, but you’ll be able to negotiate a better price based on similar home sales. Ask your builder to pull comps for you or access the public county records yourself. This is also a good way to ensure you don’t overpay based on the current selling climate.
 
Price Check Upgrades
One of the big draws for people looking at new homes for sale are the upgrades. Higher end floors and finishes, and being able to choose exactly what you want, allows you to make your new house a home that’s all yours—but it comes at a price. That price doesn’t have to be outrageous though. You can check with other contractors to see what they would charge to install the same upgrades your builder offers and then either use that to negotiate a better price with your builder or have the less expensive contractor install the upgrades. You can also look for a builder that includes upgrades as a standard option that doesn’t cost more.
 
Ask About Incentives
To attract buyers, builders will often offer incentives. You might get a credit for closing in a certain month or a discount for using the builder’s preferred lender. Ask your builder about any incentives they offer to see how much you might be able to save. One incentive that you may want to ask about is purchasing a model home. These homes are built on premium lots and have all the available upgrades to persuade homebuyers to buy. But because they’ve been used as a model, they’re no longer considered new or custom, so you can get them for much less.
 
Buying a new home is a big dream. To be the first owner, put your own touches on it and know that it’s all yours is a very satisfying feeling; but it’s a satisfying feeling that comes at a cost. You can keep that cost down by knowing where expenses can be cut without sacrificing quality or luxury. With the right information and some easy negotiations, you can have the home you’re dreaming of within the budget you can afford!

How Planting Trees Can Lower Your Energy Bills

Many homeowners have high utility bills in the summer and winter. Adding more insulation to your house can lower your energy costs, but there are other steps that can help. Planting trees can reduce your utility bills, provided you choose the right types of trees and plant them in the right locations.



Use Trees to Save Money in the Summer
Trees can provide shade that can block the sun and help keep the interior of your house cool. In addition, trees lose water vapor and cool the environment around them through the process of transpiration. The combination of those two effects can result in substantial savings on your energy bills.

Plant deciduous trees that will have leaves in the warmer months and will lose them in the fall. Deciduous trees will provide shade when you need it in the summer. In the winter, after they’ve lost their leaves, those trees will allow sunlight to naturally warm your house.

Trees should be planted on the sides of the house that get the most direct sunlight. Planting different species that will grow to a variety of heights can provide shade when the sun is at different angles in the sky. 

If you have an outdoor air conditioning unit, planting trees where they can offer shade will help the AC operate more efficiently. Plant trees so that branches will hang over the AC unit and provide shade, but they won’t hang down and possibly damage the unit or keep it from functioning properly.

Plant Trees to Reduce Your Winter Energy Usage
Winter wind that enters your house through gaps and cracks can make it cold inside and force your furnace to work harder. Trees can serve as a windbreak and help your house stay warm in the winter. 

Plant evergreen trees on the sides of your house that tend to get the most wind and group them together so they can form a windbreak. Plant them perpendicular to the direction of prevailing winds. 

Position the trees at a distance from the house that is 2-5 times the height they will be when mature. That distance will enable the trees to effectively reduce wind speed and keep your house warmer. 

Don’t plant evergreen trees on the sides of your house that get the most sunlight. If you do, they will block the sun. That means you won’t get to enjoy the benefits of natural heating and the associated energy savings during the winter. 

Protect Other Structures in Your Yard
When you plant trees, it’s important to think about how big they will be when they’re fully mature, in terms of both their height and the length of their roots. You don’t want to have tree branches scraping the house or interfering with utility lines or have roots that grow underneath your deck, driveway or walkway, and cause damage. Consult a local landscaper for help choosing the right species and locations.

How to Find a Home in a Seller’s Market

In a seller’s market, there are more buyers looking for a home than there are houses available. That means sellers may have an advantage, since multiple buyers may be interested in purchasing their home. If you’re looking to buy a house in a seller’s market, it’s important to know what to expect and to be prepared so you can avoid common pitfalls.



Get Pre-Approved 
Before you start shopping for a house, you should get pre-approved for a mortgage. That means you will submit your financial information and supporting documents to a lender, and it will review them to decide how much you can afford to pay for a house. Being pre-approved will demonstrate to a seller that you are in a good financial position, can afford a house and will be able to move forward quickly.

The amount a lender pre-approves you for is not necessarily the amount you should spend. The lender may not consider all your monthly expenses, such as childcare, or other costs of homeownership, such as property taxes, private mortgage insurance, homeowners insurance, maintenance and repairs. Assess your overall financial circumstances to figure out how much you can comfortably afford to spend for monthly mortgage payments.

Make a Competitive and Realistic Offer
You want to get a home at a good price, but in a seller’s market, you may be competing with one or more other buyers who are interested in the same house. To have a better chance at becoming the new owner, you need to present a competitive offer right off the bat. If you try to start negotiations by submitting a low bid, you may not get a chance to negotiate at all because the seller may simply choose a buyer who made a higher offer. 

Don’t make an initial offer for the maximum amount you can afford. In a seller’s market, bidding wars are common. You may find that because competition is fierce, the only way to win a bidding war is to offer more than the list price. That doesn’t mean you should go over your budget—it means you should focus on homes with asking prices below the amount you can afford so you will have room to negotiate. If another buyer submits a bid that is higher than what you can afford, be prepared to walk away and look for another house that’s a better fit for your budget. 

Get Help From a Knowledgeable Real Estate Agent 
An experienced real estate agent who is familiar with the local market can guide you through the process of looking for a new home. An agent can help you decide how much to offer so you can hopefully get the house you want at a competitive price without being outbid by another buyer. If you can’t find a home with the features you want in your price range, your agent may recommend that you consider another neighborhood or city with lower home prices.

Is a Booming Market a Good Time to Sell Your Home?

Many real estate markets throughout the country are enjoying an unprecedented boom. This is undeniably a good thing if you were already planning to sell your home in one of these locations. Some sellers, however, are simply looking to take advantage of the moment. While this can be a savvy move, it’s important to carefully think it through before deciding to list your home. Here are a few considerations to take into account before selling your home in today’s hot market.



Where Will You Move?
This is the first question to ask yourself and the answer might not be so simple. After all, in order to truly take advantage of selling your home in a booming market, you’ll need to purchase your next house elsewhere. If you already have a second home that you plan to move to full-time or have your eye on a different area seeing less demand, that can help you avoid having to buy back into a seller’s market. 

Focus on Long-Term Goals
Take the time to consider how this will align with both your lifestyle and financial goals. It’s important to keep an eye on the big picture because selling right now might make it difficult to re-enter this competitive market in the future.

No Harm Testing the Market
Many sellers who are looking to take advantage of the current demand are simply testing the waters by listing their home above market price. If you’re still on the fence but are interested in selling your home for the right price, there’s no harm in feeling out the market to see what sort of offers you receive.

Don’t Be Impulsive
It can be exciting to see what other homes in your neighborhood are currently selling for, but you shouldn’t let this cloud your judgment. Weigh all of the pros and cons, and discuss your options with your family, to ensure that listing your home now is a sound decision for all of the right reasons. 

These Outdoor Features Will Help You Sell Fast

The interior of homes is often in the limelight when it comes to considering what adds value to a property. However, you shouldn’t discount the exterior of a home. Outdoor features can prove just as valuable, giving you a boost in price when it comes time to sell.




Having a backyard filled with amenities, from a well-thought out irrigation system to a fully equipped kitchen right outside, has quickly become a necessity for sellers to feature.

Smart Irrigation System 
Not only is this a great selling feature, but it is also environmentally friendly. With many of today’s buyers coming from the millennial generation, highlighting something that is tech-friendly and sustainable is important. There are many options to choose from, such as a system that can be controlled via bluetooth, as well as some that are solar powered. Highlight this feature in your listing, including the environmental and financial benefits that come along with it.

Pet- and Kid-Friendly Spaces 
Another great selling feature when it comes to your outdoor space is having one or more areas dedicated to pets and children. If you have a dog, for example, and have built a dog house in your yard, consider leaving it on the property and adding it to your listing. The same goes for swing sets, playhouses and treehouses. If a buyer has young children, these can be attractive features that can help your listing and your home to stand out from the competition. 

Outdoor Kitchen 
Of course, not every backyard features a fully equipped kitchen, but if you have one, be sure to highlight it. More people are spending time at home and crave an outdoor living space that checks all of their boxes. Rather than a grill and a simple patio set, today’s buyers are looking for outdoor features for entertainment and relaxation. And what is more relaxing than having everything you need right at your fingertips? Consider adding a small fridge, counter and storage space, a bar cart and even a pizza oven! 

Privacy
For many buyers, privacy is a top priority. Whether you have large hedges or a tall fence around your property, be sure to point this out in your listing. For homes in a neighborhood where neighbors are close in proximity, this is especially important. If you do not have a fence or another form of privacy around your property, serious buyers may request this as part of their negotiation, so consider adding this feature before you list your home to avoid major costs later on. 

Before putting your home up for sale, consider adding a few of these outdoor features that today’s buyers crave. If you already have one or all of these features, be sure to highlight them in not only your listing images, but the description as well. Talk to your real estate agent about how to best showcase these outdoor add-ons to ensure that your home sells fast!

4 Tips for Buyers to Overcome Low Inventory

A booming real estate market can present plenty of challenges to homebuyers, one of which is low inventory. When you find yourself in a highly competitive market that faces a shortage of listings, it’s important to work with an agent who has an in-depth understanding of how to navigate the situation. Following are several tips to help ensure you can achieve your goals, even when facing low inventory.



Ask About Pocket Listings
In the luxury sector, in particular, it’s quite common for sellers to quietly list their property rather than blasting it all over the internet. A savvy real estate agent who’s plugged into the local market can help get you access to these pocket listings that are discreetly marketed by word-of-mouth. Furthermore, your agent should also be able to keep aware of any pre-market listings that are ready to be listed but not yet marketed online, to help you get a jump start ahead of the pack.

Get Ready to Act Fast
In a hyper-competitive market, speed can make all the difference. That’s why it’s always a good idea to get pre-approved for a mortgage even before you find the ideal home so that you know exactly how much you can offer and are positioned to act quickly when the time comes. The last thing you want is to miss out on an opportunity while waiting to get approved.

Make a Strong Offer
When sellers receive multiple offers, it’s not always the highest one that’s the most appealing. In fact, there are other ways to set your offer apart, such as making a cash offer or waiving contingencies. In the event that another buyer offers the same amount, this can give you a competitive advantage. 

Be Prepared for a Bidding War
No buyer wants to find themselves in a bidding war for a property, but it’s all too common in a market with low inventory. If this happens, it’s important to know your limit beforehand and take the time to consider what the home is worth to you versus its current market value. After all, it can be difficult to put a price on the perfect home, especially once you’ve started getting attached to the idea of it.