Real Estate Bits 'n Pieces

It’s all about enjoying your home, learning more about real estate and living the good life here in San Diego!

Feb. 7, 2017

Renters Beware!

Renters beware

If you are looking for a home to rent in San Diego County, good luck!  3 bedroom, 2 bath rental homes are in high demand and you can expect to pay $2500 - $2700 in a nicer neighborhood.  And many property management companies are looking for tenants with a minimum credit score of 650, which can be difficult for many folks.  With multiple applicants for each property and application fees of $30 - $40 per person, searching for a home can be a frustrating and expensive proposition.


So imagine the excitement when friends of mine who are searching for a rental home found what seemed to be the perfect home on Craigslist.  A lovely home in an older, but highly desirable area with a lap pool, 2800 sq ft, and a huge bonus room for entertaining.  The pictures looked fabulous and it was being offered for just $1700 a month!  They hurriedly replied to the ad and requested a time to view the home.


They received the following reply:


“The house is owned by me and my husband. We are a little selective in leasing out the House. Our priority is taking a responsible, careful, understanding and reasonable tenant that will take good care of the place. The above virtues are very important as we intend to leave you in full charge of the house while we are away. My husband and I just relocated to Africa recently due to business. We wanted to sell before since we will be away for a long time so we thought of renting it out since selling is taking longer than expected. So you can rent the place as long as it works with us. We intend renting from here as we would send the keys to you so you can take possession.12 month lease with full month's rent and a security deposit. Pets are considered w/additional deposit of $300. Note that only a serious and responsible applicant will be considered. It is therefore yours to prove to us that you are the perfect tenant for us. You can drive by the location and be rest assured before getting back to me as the house is absolutely clean. There's a $1000 security deposit plus a $1700 months rent due at signing of lease. Please get back to me so I can email you the rental application form and then we can proceed further. Please get back.”


The email response was signed by Eileen Simpson and included a Word Doc rental application as an attachment.  The application did not require a fee and there was no mention of a credit check…


Luckily, my friend called me as it all seemed just a bit off….and it is indeed!  I looked up the property on the MLS and it is a vacant active listing, with a list price of $749,000 - $799,000 – certainly not a home that would rent for $1700!   I then looked up on the tax records and the home is indeed owned by someone with the last name of Simpson.


I called the listing agent who immediately clarified that the owners had no intention of leasing the home and they certainly weren’t in Africa!  It was of course a total scam and I was the third person to call her with questions.  This has happened to her on several occasions over the past two years and she elaborated on how the scam works: Scammers identify a nice home that is vacant and for sale in a desirable area.  They download pictures and information from any real estate website and they might even check tax records to find out the name of the owner.  Next step is to put up an ad on Craigslist and advertise it for lease at a lower than market price in order to get a large number of people responding.  They of course can’t show the house because “the owners” are out of the country or state, but encourage people to drive by or look in the windows.  A bogus application is sent to everyone who responds and they are asked to submit the application along with the deposit and first month’s rent.  Upon receipt of the money, the “owners” will make arrangements to get the new tenants the keys. 


The scammers of course hope to get more than one applicant to fall for their ploy, but they move on quickly.  The ad is only posted for Craigslist for a short time to avoid arousing too much suspicion, and then it’s time to identify another home.  A variation on this scam that is even more convincing is when the scammer has access to the home, usually through a combo lock box, and can actually show the home acting as a property manager.


Renters beware!  A legitimate property manager or landlord will not expect you to pay money without seeing the property and they will charge an application fee and want to run your credit.  Another clue, as in this case, is the poorly written, contrived story.


So as my friend discovered, the old adage is correct:  If it sounds too good to be true, it probably is.


Posted in Real Estate
Feb. 3, 2017

Should You Remodel Before Listing Your Home?

Should you remodel before listing

A client recently asked me whether or not he should remodel the kitchen of his rental property before putting it on the market in order to maximize his return.  The 4 bedroom 2 bath home was built in 1965 and has not had any major renovations.  The roof was replaced about 2 years ago and the windows just last year, but the kitchen and bathrooms are original.


My response was an immediate “no”.  Contrary to what you might see on HGTV, it is unlikely that spending $80,000 on renovations will bump your sales price up by $100,000. According to the 2016 survey by Remodeling Magazine, a minor kitchen remodel costing $20,000 will return 83% of cost and a major remodel costing $60,000 will only return 65%. 


This is not to say however, that having a brand new kitchen is not a selling point, and it is true that homes with new kitchens generally sell for more.  However, in looking at the comps, the homes with completely remodeled kitchens and bathrooms are selling for only $25,000 - $30,000 more than those that are older, but move-in ready.  Hardly worth the $50,000+ cost.


So when would remodeling have made sense for my client?  If he had remodeled 4 years ago it might have been a good idea.  In San Diego, a home with remodeled kitchen and bathrooms rents for more than a property that is outdated.   So let’s say he did a minor kitchen remodel by re-facing the existing cabinets and adding new counter tops, flooring and mid-range stainless appliances, spending $20K.  He potentially could have been charging $250 a month more.  Over 4 years that would have added up to approximately $12,000 and he would also now be in the position to expect a higher sales price. 


So remodeling right before selling?  Probably not a good idea unless you’re a contractor and can do all the work yourself.  The time remodeling really makes sense is when you’re going to live there and enjoy it!


Ready to find your San Diego home?  Give me a call or start your search here.

Posted in Home Improvement
Dec. 5, 2016

December Only Buyer Rebate Program!

For December only, receive a cash rebate after closing on a home where Steele Group Realty acts as your Realtor!  Simply get started with us this month and we’ll help you find the perfect San Diego County home and provide a $500 - $1000 rebate after closing any time in the next 3 months.  Simply start your search here, create a free account and we’ll be in touch with the details.  There is absolutely no cost to you, no strings, and no obligation.  Here’s to happy house hunting and a handsome rebate!  




Photo courtesy of

Posted in Real Estate
Oct. 21, 2016

Just Sign Here: Understanding Your Loan Documents


The time is finally here – you’re really buying a home and it’s time to sign the loan docs.  The notary opens a folder and you gasp as you see a pile of papers the size of a small phone book.  What the heck are you signing and how can you possibly read through all of these pages and feel confident that you’re not giving away your first-born child? 

The good news is that if you and your lender have both done their jobs, there will be no big surprises.  From the very beginning of the application process, your lender is required to deliver certain documents to you within 3 days of receiving your application – his job is to deliver the documents, your job is to read them carefully and ask questions.  The loan estimate you receive at that time shows your loan amount, interest rate, term, line-item fees, and the cash you need to close the transaction.  If you originally did a pre-approval before opening escrow, the estimate will be changed based on the final sales price and terms of the purchase. 

You will have another opportunity to review your loan 3 days prior to closing escrow when the lender is required to provide a Closing Disclosure (CD).  This disclosure is very similar to the loan estimate and will again show your loan amount, interest rate, term, line-item fees, and the cash you need to close the transaction.  The CD is delivered to you and signed just before loan docs are drawn by the lender and sent to escrow.  This provides you the borrower with one final opportunity to review the numbers before committing to the loan.  

So when you see that big stack of papers there should be no surprises.  Here are the main documents that you’ll be signing: 

  • The Note – The Promissory Note is your promise to repay the loan and the accrued interest.  It will show the loan amount, term, interest rate, due date, date of first payment, where to pay and penalties for late payment. 
  • Mortgage or Deed of Trust – Whether you sign a Mortgage or a Deed of Trust depends on where the property is located.  In California a Deed of Trust is most commonly used.  Both documents establish your home as collateral to protect the lender’s interests in case you stop making payments.  A mortgage is an agreement between the lender and the borrower.  A Deed of Trust also includes a third party trustee, often a title company, who acts as a representative of the lender in case of foreclosure.  Another difference between the two documents is that in case of foreclosure, the trustee can expedite the sale of the property whereas if there is a mortgage a judicial proceeding is usually required. 
  • The Deed – This document officially transfers ownership of the property from the seller to the buyer.   The Deed is recorded with the County Recorder’s Office providing public evidence of the sale and the transfer of ownership.
  • HUD-1 – This is a standard real estate settlement form that is used throughout the country.  It itemizes all the charges and credits associated with the transaction.  You will receive a HUD-1 3 days prior to closing and then a final certified copy after escrow closes.  The final HUD-1 is an important document to retain as there are certain closing costs that are tax deductible. 

Depending on the type of loan, you may also be signing an affidavit that you will be occupying the property.  This is likely if you have a VA or FHA loan.  If you have an adjustable rate loan, you will also sign an additional document outlining the adjustments and terms of the loan.  Another document is also signed if you are setting up an escrow account to pay your insurance and property taxes on a monthly basis along with your mortgage payment.  The most important thing to do when signing is to make certain that the loan amount, interest rate and all other terms are the same as what was previously disclosed. 

What happens next will vary from state to state.  After signing in California, the notary will return all the paperwork to the escrow company.  Once the documents are inspected for accuracy and completeness they are returned to the lender who will also inspect the documents.  If anything is lacking or inaccurate in the lender’s loan package the underwriter may issue funding conditions that must be satisfied before they will fund the loan. 

Once all conditions are met and the lender is satisfied, the loan will be funded and the money is wired.  At this time, if you have not already done so, your down payment is also wired.  Upon receipt of all monies, escrow will arrange for the title insurance company to have the sale recorded.  Once you have confirmation of recording it’s time to break out the champagne.  Congratulations!  You just became a homeowner!



Sept. 14, 2016

About Real Estate Disclosures

One aspect of purchasing a home that is often a bit overwhelming to a first-time buyer is the amount of paperwork to be read and signed.  This includes a number of disclosures covering everything from earthquake zones and fire danger to mold under the kitchen sink and a problem with the neighbor’s dog.


Two Basic Categories of Real Estate Disclosures 

The number of disclosures now required by law has increased over time as a result of legal actions, often taken by buyers against sellers who failed to disclose pertinent information about the property, such as a roof leak or unstable soils.  A disclosure pertaining to a specific property prepared by the seller who has knowledge of the property is the first category of disclosures.  This would also include disclosures about whether there is an HOA, or any special fees associated with owning the property.  Although the laws vary, every state now requires that sellers provide some sort of disclosure about their knowledge of the property including any potential safety hazards or conditions that could increase the expense of ownership or reduce the value of the property.  

The second category of disclosures are those referencing existing conditions that may be inside or outside the home and unknown to the seller, such as the home  being in a flood zone or in close proximity to farm land.  Some of these disclosures are prepared by companies who analyze the location of a specific property in relation to hazards such as earthquake zones or airports.  This information is compiled into a Natural Hazard Zone Disclosure (NHD) Report which is typically ordered by the seller’s agent, paid for by the seller and delivered to the Buyer.  Along with the NHD, several other informational booklets may be delivered to the buyer covering topics such as earthquake safety, environmental hazards in the home and energy conservation.  These are typically issued by the state or local authorities as a means of educating homeowners about potential health and safety concerns.


California Real Estate Disclosures 

As noted above, it is the responsibility of the seller to pass along all pertinent information about a property to the buyer, including any reports or inspections.  Failure to disclose could result in fines or liability for the seller for any resulting damages.  In California there are many disclosures and some are specific to particular situations, such as a short sale or purchasing a foreclosure.  Here is a list and brief description of the most common disclosures required in the sale of a 1-4 unit residential property.  These disclosures are offered by the California Association of Realtors and made available to agents licensed in the state.  Other forms may be legally acceptable, but these are the forms most commonly used.  They are often referred to by their initials, which are also included below. 

Agency Disclosures (AD) – Clearly identifies the agents and brokers who are representing the buyer and the seller. 

Agent Visual Inspection Disclosure (AVID) – Agents visually inspect the property and make note of specific issues or attributes that are easily identified. 

Transfer Disclosure Statement (TDS) – A comprehensive statement regarding the condition of the property.  This is completed by the seller unless the seller has never lived in the property, in which case he is exempt from completing. 

Seller Property Questionnaire (SPQ) – Used in addition to the TDS or when a TDS is not required.  The SPQ provides the buyer additional information about known material facts. 

Statewide Buyer and Seller Advisory (SBSA) – A comprehensive list of all conditions that both buyers and sellers should consider investigating in the course of the transaction. 

Buyer’s Inspection Advisory (BIA) – A list of conditions the buyer is advised to investigate as part of his/her due diligence during the inspection period. 

Market Condition Advisory (MCA) – Advises both buyers and sellers that no guarantees are made regarding the future value of the property as real estate markets can change. 

Megan’s Law Database Disclosure (DBD) – Advises buyers and sellers that through a website maintained by the Department of Justice they may obtain information about the address or  residence community and zip code of registered sex offenders.


What to Look for in Reading Real Estate Disclosures 

Disclosures should always be read in their entirety.  These are legal documents and by signing you are stating that you have read and understand everything that is disclosed in a particular document.  If you don’t understand, or need clarification on a certain item, please discuss with your agent before signing. 

Although as stated above, disclosures should be read in entirety, there are several key items to make sure you review thoroughly: 

  • In the NHD report make sure to note if you are in a special flood zone as this may mean that you will need flood insurance.  Likewise, if you are in a fire danger zone it might be more difficult or costly to obtain your homeowner’s insurance.  And if you are in an earthquake hazard zone, earthquake insurance may be something to consider.  It is also important to notice if you are in an airport flight path or an area with commercial/industrial zoning as these influences may cause noise or other disturbances. 
  • On the SPQ and TDS if any of the “yes” boxes are checked there needs to be an explanation written directly below that block of questions or noted on an attached sheet if necessary.  Depending on the situation, you may want to request receipts, inspection reports or invoices to see exactly how repairs, if applicable were made. 

While the seller is responsible for providing complete disclosure about all known facts about a property, the buyer bears the responsibility of making sure that he/she is satisfied with all explanations and thoroughly understands the implications of all items disclosed.  The best time to ask questions is before you close escrow on a potential problem.





Photo courtesy of

Posted in Real Estate
Sept. 8, 2016

Why Purchase Title Insurance?

According to Fidelity National Title Company, title problems are discovered in over one third of all residential real estate transactions.  Some common title problems, or “defects” as they are known, range from existing liens, judgments and unpaid mortgages to errors in recorded names, addresses and legal descriptions.  A title defect left unresolved can lead to legal battles down the road and even loss of property. 

Title insurance, unlike all other types of insurance, insures against what has happened prior to the policy being issued as opposed to after issuance.  This means that the owner and lender are insured that title to the property is free of defects and they are protected against future claims.  There are two separate policies issued, one for the new owner and if there is a new loan, one for the lender protecting the lender’s interest in the property.  Title insurance is a one-time purchase paid through escrow that remains in effect so long as you own the home, and in the case of the lender, so long as they hold a mortgage on the property. 

Over the course of time, there may be many entities that have some sort of rights in any given property; owners, heirs and even government agencies or utility companies.  In recent times in the U.S., changes to title have typically been recorded which helps maintain the “chain of title” and make clear the rights of all parties as they pertain to a particular property.  However, even when recorded there can be hidden risks such as forgery, incapacity of signers, impersonation and unknown errors.  Title insurance helps protect you against these unknown and often hidden issues.

The Title Insurance Process 

When your agent opens escrow, the escrow officer will open a title order with the selected title insurance company.  The title order is then passed to a department within the company that is responsible for research.  This is a complicated process as many records are not digitized and often require manual investigation.  In the course of the research, the chain of title will be examined, looking to make sure that each time title has passed from one person to another there are no gaps, errors or any questionable succession.  All deeds and records are collected, including a plat map showing the property in relationship to surrounding parcels.  A search is also done by a local tax service to verify the status of current property taxes and any liens that may have been filed against the property. 

Once all of this information is gathered, a Title Officer reviews the data and issues a Preliminary Title Report which is shared with buyers, sellers, escrow, agents and the new lender.  This report is issued prior to issuance of an actual title policy and will list any matters that may be exceptions to the coverage.  For instance, an existing Deed of Trust, recorded Covenants, Codes, and Restrictions (CC&Rs) or a judgment may be listed as exceptions.  Some exceptions such as an existing Deed of Trust or a judgment must be removed prior to title passing and issuance of a new title policy, while others such as utility easements or CC&Rs pass along with the property.  This is why it is important for all parties to carefully examine the Preliminary Report. 

The Title Officer will also examine the buyer’s and seller’s statement of information in order to verify the legitimacy of their identity.  Once the necessary exceptions have been removed, identities verified, and the purchase funds have been wired to escrow by the buyer and lender, the new title and if applicable, new deed of trust, will be recorded.  After recording, the Title Officer will write the policy and release it to the new owner and lender. 

Policy Types 

There are two basic types of policies issued in California:  CLTA and ALTA policies.  The CLTA policy is issued by the California Land Title Association.  This is considered a standard policy that protects against financial loss by fraud and forgery and recorded claims or unpaid taxes from a former owner.  The ALTA policy is issued by the American land Title Association and offers additional protections against unrecorded matters such as encroachments and boundary disputes, among other items.  Many title companies also offer an upgraded policy that goes beyond both the CLTA and ALTA policies in terms of expanded protection.  It is a good idea to review these policies to see which level of coverage you really need.



If you have further questions, or you’re ready to buy or sell your San Diego county home, please give me a call.  I’ll be happy to assist you with all of your real estate needs.

Posted in Real Estate
Sept. 5, 2016

All about Escrow and Why it’s Important

You and the seller have finally come to agreement on the terms under which you’ll purchase your dream home, but now what? How can both parties be sure that everything in the purchase contract actually happens?  Assuring that all terms of the written agreement are fulfilled is the job of a neutral third party referred to as the escrow holder.  In some states this job is handled by an attorney, but in California it is customary for the escrow to be handled by an escrow or title company. 


Companies providing escrow services are regulated by state law and are broken into two categories of regulation being either independent or non-independent.  Non-independent escrow providers include attorneys, savings and loan institutions, real estate brokers, and title companies all of which are governed by specific regulatory organizations.  Independent escrow companies have no other business interests other than supplying escrow services and they are licensed by the California Department of Business Oversight. 

Choosing an Escrow Holder

Deciding which escrow provider to use is part of the negotiation process.  In today’s competitive market the buyer will often include in the offer that selection of escrow and title services are “seller’s choice”, thus appearing to grant a concession to the seller right up front.  In reality, prices charged by the various companies for escrow services do not vary tremendously, and are negotiable to a certain extent, so selecting the escrow provider is usually more important to the agents than the buyers and sellers.  As it is against the law for a real estate agent to accept any type of gift or fee for referring an escrow company, or any other service provider for that matter, it really comes down to quality of service.  Most agents, when given the opportunity, will encourage their clients to use a particular company and escrow officer based on their positive experience in working with that company and officer. 

Understanding the Process

Escrow is generally opened by the listing agent who will email the selected escrow company officer a copy of the fully executed Residential Purchase Agreement and any other documents that are incorporated into the agreement such as counter offers and addendum.  The agent will also indicate which title insurance company is selected and provide the following information:

  • Postal and email addresses and phone numbers for both buyers and sellers
  • A copy of the pre-approval letter if the purchase is to be financed.  The letter will have contact information for the lender.
  • HOA information if applicable.
  • Commission information as stated in the listing agreement and MLS.
  • If the buyer has provided an earnest money deposit check payable to the listing broker, the listing broker will write a check from his/her trust account payable to the escrow company. 

The escrow period is stipulated in the Purchase Agreement and is generally 30 days for a transaction involving a new 1st mortgage;  longer in the case of a short sale or probate sale, and often much shorter in an all cash transaction.  In certain circumstances, with the agreement of both parties the escrow period can be extended beyond the agreed upon date. 

Generally, within the first 3 days the buyer will deposit their earnest money deposit by check or wire transfer.  During this time period the escrow officer will also send draft escrow instructions to both agents who will review the key terms of the transaction.  Upon approval from the agents, the escrow officer will send escrow instructions to both the buyers and sellers, including several forms that must be completed and returned. 

One of the most important forms is the Statement of Information or Statement of Identity.  This questionnaire asks for very complete personal information about marital, job and residence history, which may seem a bit intrusive.  However, it is very important to provide complete information to make certain that your identity is not confused with someone else that might have a similar name or lived at the same location, who has tax liens, bankruptcies, or other issues that could stall or totally derail the sale. 

The escrow officer will also review the Preliminary Title Report that is issued prior to the actual title insurance policy, making sure that there are no potential “red flags” such as tax or mechanics liens, encroachments, easements, local violations or judgments that have to be cleared or disclosed in order to transfer clear title to the buyers.  Owner’s title insurance will not be issued until title to the property can be transferred without defect. 

If there is a new mortgage on the property the escrow officer will also be responsible for coordinating with the lender to meet their closing instructions, including ordering pay-off demands for any existing loans and liens, and making sure that new hazard insurance and lender’s title insurance policy is in place prior to closing.  He or she will also coordinate with the buyers the signing of the new loan documents before a notary, the deposit of the balance of their down payment and the wire from the lender with the funds for the new loan. 

Calculating Pro-Rated items

One of the most important jobs of the escrow officer, and one of the most confusing to buyers and sellers, is balancing the money according to the day of closing.  For instance, if a seller has not paid the 1st installment of their property taxes (which become delinquent on December 10th), and the property is scheduled to close on December 8th, a buyer might worry about getting stuck with paying that whole first installment tax payment.  That is not the case however.  The escrow officer is responsible for pro-rating taxes, HOA fees and your home owner’s insurance premium to the day of closing.  Thus in the above example, the seller would be responsible for the property taxes from July 1 – December 8, and the buyer would be responsible for December 9-10, and the second installment which is due February 1 and delinquent April, 10th. 

Mortgage interest is also pro-rated which again can be confusing. Unlike rent that is paid in advance of each month, mortgage interest is paid in arrears.  Thus when you pay your mortgage on the 1st of the month, you are actually paying for the use of that money (the interest) during the previous month.  At closing you will pre-pay interest from the date of closing to the 1st of the next month.  So if you close escrow on December 8th you will pre-pay interest from the 8th until December 31st, but you won’t have a mortgage payment due until February 1st, at which time you’ll be paying interest for January. 

Not to be Confused

There is another use for the term “escrow account” that often confuses first time buyers.  When financing a home purchase, or when re-financing, a lender will sometimes set up an “escrow” or “impound” account for the borrower.  Every month when the borrower pays his/her mortgage the lender is also collecting a percentage of the annual hazard insurance premium and property taxes.  These funds are deposited into the borrower’s escrow or impound account held by the lender.  When property taxes and the insurance premium are due, those bills are paid by the lender directly, not the borrower.  The advantage to this is that the borrower doesn’t need to worry about saving money for those bills.   But on the flip side, the borrower is not able to put that money to work in any way while it is sitting in the lender’s account.  An escrow or impound account is recommended for first-time buyers. 

Escrow Closing

So when does escrow close?  Real estate closings in California rarely involve everyone sitting at a table and signing papers then handing over keys.  Typically, once the lender has funded the loan, or in the case of an all cash transaction, all buyer funds are deposited, the title company will record the Deed of Trust at the County Recorder’s Office and provide confirmation of recording to the escrow officer who will notify both buyers and sellers.    Recording confirms that title has successfully passed to the buyers and arrangements are made to deliver the keys.  This signals that escrow has officially closed. The final job of the escrow officer at this point is to perform a closing audit on the escrow account and disburse proceeds to sellers, pay any demands or invoices such as termite work or inspections, pay commissions to brokers and mail a check to the buyers if there was an overage in the estimated amount of their costs.  He or she than issues a certified closing statement or HUD1 as the form is called, showing the final accounting of all funds. 

If all of this still sounds a bit overwhelming, rest assured that you can, and should ask questions about any aspect of the escrow process that seems confusing.  Escrow is the most important part of the sales process and your agent and your escrow officer are there to make sure you are comfortable every step of the way.


 Click here to learn more about who pays for what when buying a home



Photo courtesy of bluewater escrow

Posted in Real Estate
Aug. 23, 2016

Negotiation: How to Turn an Offer into a Deal

You’ve done your homework and written an offer that you hope will be well-received.  Your agent has submitted your offer and confirmed receipt, and now you wait for a response according to the time frame specified in your offer. 

A million questions swarm through your head:  Did I offer too little to be competitive?  Did I offer too much?  How many other offers has the seller received?  Should I have waived certain contingencies?  Do I really need a termite clearance? 

Whoa!  Settle down.  The game is just beginning.  The whole idea is to get your foot in the door with an initial offer that is attractive enough to get you to the next round.  I should add that occasionally there is a situation where an offer is so stellar that the seller accepts it without countering others.  But generally, whether or not there is more than one offer, a seller will counter to see how he can negotiate his best deal.


Receiving the Counter Offer 

If you’ve received a counter offer, congratulations!  You’re in the game.  The first thing you need to realize is that most everything in a real estate transaction is negotiable and the key to success is twofold: 

1)      Be prepared!  Learn as much as you can about the seller’s motivation and situation.  This is your agent’s job.  The more you know about what the seller is looking for, the better you can respond to his/her counter offer.


2)      Recognize your own parameters and stick to them.  This is key.  You must know when you need to sweeten your offer, hold, or just walk away.


Just what is Negotiable? 

As noted above, almost everything is negotiable, so don’t get fixated on the price…for many sellers, price is just a part of the equation.  Ask yourself, “What can I offer that will be attractive to the seller while still allowing me to get the best deal?”  Most negotiations involve a certain amount of compromise and concession on both sides.  The goal is for the seller to sell and the buyer to buy, each feeling like the transaction was fair to both parties. 

Here are a few negotiable items, other than price, to consider:


  • Seller concessions.  If a seller is considering 2 offers, and one requests $5K contribution to buyer closing costs and the other does not, it is pretty clear which has an advantage.
  • Earnest money deposit.  A larger or increased deposit generally demonstrates that you are a serious buyer.
  • Escrow time frame.  Would the seller favor a longer or shorter escrow?  If going for less than 30 days and you are financing the purchase, make sure that is a realistic expectation for your lender.
  • Service providers.  Often times a seller will have a specific escrow or title company that they prefer to work with.
  • Seller rent back.  Perhaps the seller needs to rent back for a month while closing escrow on his/her next home.
  • Seller financing.  Often sellers like the idea of carrying back a small 2nd mortgage. Or conversely, he or she may want all of their money out of the deal.
  • Contingencies.  Be careful about removing contingencies for inspection of the property.  Buyer beware!  You need adequate time to satisfy yourself about the condition of the property, but shortening the inspection period might be seen as favorable by the seller.
  • Fees.  There are many fees involved in a real estate transaction including transfer tax, escrow, title insurance and HOA transfer fees and docs.  Offering to pay a fee that might traditionally be paid by the seller may put your offer in a stronger position.
  • Personal property.  This can work both ways.  In one transaction it might be better not to ask for the new appliances as part of the deal, while in another allowing the sellers to leave an old refrigerator or piano might be doing them a favor.
  • Repairs.  Depending on the condition of the property, who pays for repairs can be a good item to negotiate.  However, be realistic about costs, time and your skill set.  As the saying goes, “Don’t bite off more than you can chew.”  Also, be aware of any lender required repairs and who is allowed to pay for what, particularly with VA or FHA loans.
  • Home warranty.    While purchasing a home warranty is advisable, it doesn’t necessarily mean that the seller should pay for it.  Perhaps the buyer, their agent, or for first time buyers, maybe their parents would like to buy it? 


What to do when it comes down to price 

Often a negotiation will go back and forth with counter offers, arriving at agreement on all terms except the price.  This usually occurs for one of two reasons:  

1) The seller has unrealistic expectations about the value of his/her home, or

2) Inventory is low and the market is so competitive they are hoping to drive up the price through a bidding war. 

The most important piece of information you’ll need at this point is a clear picture of the property’s actual market value.  Prior to writing your offer your agent should have provided you with comparable active and sold listings.  Before increasing your offer, it is a good idea to have your agent again check the comps to see if there are any new listings or closings that will affect market value one way or the other.  

If after reviewing the comps you and your agent determine that the seller’s price is still above market value you have several choices:  

1) You can hold at your price and hope that no one else will bid higher. If the market is not competitive, this might mean waiting a couple of weeks for the seller to agree.

2)  You can just pay the extra money out of pocket and consider it a premium you paid to get the house you really want.

3) Depending on the dollar amount of the gap between your offer and the seller’s price, you can increase your offer by slightly more than 50%, which might be enough to let the seller feel like he won. 

4)  You can agree to the higher price, but with the condition that you will not pay more than the actual appraised value.


With all of the possible ways in which the terms of an offer can be turned into a deal, negotiating the purchase or sale of your home is a job for a professional full-time agent.  Please give us a call and we’ll be happy to provide a no-obligation evaluation of your home’s value and discuss the outstanding services we provide to both sellers and buyers.




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Posted in Real Estate
Aug. 16, 2016 to Recognize Marti Kilby at Upcoming Results Summit

Marti Kilby, broker/owner of Steele Group Realty will be recognized for the innovative approach she used for a recent listing presentation. is composing a list of the top listing presentation strategies and has selected Kilby’s to be among those shared at the conference. 

Kilby revealed her strategy in a recent member’s-only blog post that was featured on Active Rain and reviewed by  Her strategy involved taking drone video footage of a home before she earned the listing and showing it to the prospective sellers on her iPad as part of her listing presentation.  The sellers had indicated in a phone conversation that the home’s location at the end of a cul-de-sac was a key selling feature.  With that in mind, Kilby decided that the best way to highlight that important attribute would be from an aerial perspective.  With the owner’s permission to tour the yard of the vacant home, Marti arranged for the drone photography and then included the short clip in her presentation. 

The sellers were very impressed as they had never seen their home from an aerial vantage point.  They watched the short video 4 times, even noting a loose tile on the roof that needed to be repaired before listing!  Kilby explained to the sellers that drone footage would be included as part of the video tour of the property that she would use to help market the home.  Kilby earned the listing and sold the property shortly thereafter. 

The Results Summit will bring together leaders in real estate and technology to share their best practices with agents from across the country.  The conference will be held September 19 – 20 in Las Vegas at the Encore at Wynn Resort.  Kilby’s drone strategy will be presented on stage alongside her name and photo.



If you are considering the sale of your home, please call and learn how Steele Group Realty can take the marketing of your home to the next level.

To learn how you can include drone footage in your next presentation visit Ronn Kilby Creative.

Posted in Real Estate
July 26, 2016

Who Pays for What When Buying a Home?

Buying a piece of property is not a simple transaction, and buyers are often surprised by the number of parties involved, who of course, all need to be paid.  But how is it determined who pays for what?  What is a seller expense and what is paid by the buyer? 

Interestingly, who pays for which line item is often based on regional or state customs.  Steele Group Realty is based in San Diego County, so we’ll examine expenses for a Southern California purchase transaction using the Residential Purchase Agreement developed by the California Association of Realtors and an ALTA Final Settlement statement as a guide.


Inspections and Reports

Typically the seller pays for a natural hazard zone disclosure report which often includes a separate C.L.U.E (Comprehensive Loss Underwriting Exchange) report that reveals past insurance claims on the property.  The seller may also pay for a termite and wood destroying pest inspection and report. It is generally up to the buyer to pay for a general home inspection and any other more specialized inspections such a roof, plumbing, or electrical inspection.   If there is a well or septic system on the property it is generally up to the seller to have those systems inspected and certified.  On a large property the buyer may also want a survey that marks the corners of the lot.  This may or may not be paid by the seller.  The allocation of costs for inspections and reports does not determine who will pay for any repairs that might be necessary as a result of those inspections.  That is negotiated between buyer and seller.


Government Requirements 

There are certain minimum state and local safety requirements that must be met prior to close of escrow, unless the seller is exempt.  Generally, the seller is required to pay for the installation of smoke and carbon monoxide detectors as required by California law.  The seller is also responsible for the correct water heater bracing to protect against tipping in an earthquake.  If there are other minimum safety standards that must be met, the seller is generally responsible for those expenses.


Escrow and Title Insurance 

In California most real estate transactions are managed by escrow companies, not lawyers as they are in many parts of the country.  Escrow companies are neutral 3rd parties, licensed to manage the accounting and accurate distribution of the funds of both the buyer and seller.  As such, both sides of the transaction are charged for the services of the escrow company.  It is customary for buyers and sellers to each pay their own escrow fees or to split the total fee 50/50. 

Title insurance is designed to protect both the owner and lender from financial loss due to title defects, liens, or other title related issues. The seller generally pays for the owner’s title policy, and the buyer pays for a title insurance policy to protect the lender.


Transfer Taxes and Fees 

In California there is a transfer tax paid to the city and county when real estate title is transferred.  Throughout most of the state that tax is $1.10 per $1000 of the purchase price.  This is generally paid by the seller. 

If the property has an HOA (Homeowner’s Association), the association generally charges a transfer fee as well as a fee for providing all of the HOA documents to the buyer.  The preparation of certain HOA documents are required by law to be paid by the seller and in most cases the seller pays for all fees associated with the HOA transfer.


Home Warranties

A home warranty protects the buyer against certain defects or failures in the home’s systems for 12 – 13 months after close of escrow.  The policies vary considerably as far as what is covered and the cost of a service call.  Home warranties are not a part of every transaction and who pays for a home warranty is definitely negotiable.



Commissions paid to real estate brokers are generally paid by the seller.  Commissions in California are negotiable, but generally range from 5.00% – 6.00%, split equally between the listing broker and the selling (buyer’s) broker.  The brokers then pay the agents a percentage of the commission based on their contractual agreement.


Other Buyer Expenses 

There are other expenses incurred by the buyer that are associated with his new loan including an appraisal fee, notary fee, recording charges, underwriting and loan processing fee, and a credit report fee.  The buyer will also pay for hazard insurance and pro-rated property taxes.


Seller Concessions 

Despite what is usual and customary regarding allocation of costs, it is not unusual for the seller to pay some of the buyer’s closing costs.  This is especially true if the buyer is using a VA loan where he or she may not be allowed to pay for certain items.  The seller may also provide a closing cost concession if the buyer agrees to pay a slightly higher price.  This is advantageous to the buyer who is short on immediate funds but well qualified for a higher loan amount…he is basically financing some of his closing costs.


The bottom line:  Who pays for what is largely negotiable.  Just make sure that a discussion regarding allocation of costs is part of your offer writing process with your agent


Are you ready to find your San Diego dream home?  Just give me a call or start your search here.




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Posted in Real Estate