Before you step foot into the first home you look at, it’s a good idea to thoughtfully determine your wants and needs, and the difference between the two! By analyzing your needs you will be able to get a clear picture of exactly what you want your new home to look like and how it should function for you. Once you’re in the thick of viewing homes, it’s all too easy to fall in love with someone’s decorating or a home’s outstanding architecture – and to completely overlook that there aren’t enough bedrooms or bathrooms to fit your needs. First, you should write down why you’re looking for a home. For example, are you currently renting and would like to have a home where you can begin building equity? Maybe you have outgrown your existing home or changed jobs which required you to move to a new city. These factors will all have an impact on how you approach your home search.
It is important to identify what you envision your home to look like and what features it should have. Writing this down helps to avoid ambiguity later in the home search process. You should make at least two lists: one should describe everything you would ideally like and the other should list the features of the home that are an absolute must. It is most likely that you will blend the two lists into one as you progress through the homebuying process. This is a natural and evolutionary process that becomes clearer as you determine what you want and what is available.
What home improvements really pay off when the time comes to sell your house?
That’s an important question for any homeowner contemplating moving or remodeling. And the only possible answer is a somewhat complicated one.
That answer starts with the fact that really major improvements – room additions, total replacements of kitchens and baths, etc. – rarely pay off fully in the near term. It ends with the fact that small and relatively inexpensive changes can pay off in a big way in making your home attractive to buyers if your decision is to move now.
It’s often the case that the most appropriate major improvements are unlikely to return their full cost if a house is sold within two or three years.
Does that mean that major home improvements are always a bad idea? Absolutely not. It does mean, though, that if your present house falls seriously short of meeting your family’s needs you need to think twice – and think carefully – before deciding to undertake a major renovation. Viewed strictly in investment terms, major improvements rarely make as much sense as selling your present home and buying one that’s carefully selected to provide you with what you want.
Even if you have a special and strong attachment to the house you’re in and feel certain that you could be happy in it for a long time if only it had more bedrooms and baths, for example, there are a few basic rules that you ought to keep in mind.
Probably the most basic rule of all, in this regard, is the one that says you should never – unless you absolutely don’t care at all about eventual resale value – improve a house to the point where its desired sales price would be more than 20 percent higher than the most expensive of the other houses in the immediate neighborhood.
Try to raise the value of your house too high, that is, and surrounding properties will pull it down.
Here are some other rules worth remembering:
It is customary and prudent for a buyer and seller to have a third, disinterested party to assist them in carrying out the terms of their agreement. In California, this procedure is known as an escrow. When opening an escrow, the buyer and seller establish terms and conditions for the transfer of ownership of property. Your escrow is created shortly after you execute the contract to purchase your home. The escrow becomes the depository for all monies, instructions and documents. The Escrow Officer has the responsibility of seeing that all terms of the escrow are carried out.
NOTE: In some states, the process of completing the purchase of a home is known as the “Settlement” process. Often the seller and buyer will come together at the Settlement table where documents are signed and exchanged. There may be a settlement attorney who facilitates this process. In California, the term “Escrow” is used to describe the process of completing the sale of property.
The escrow holds all monies, instructions and documents for the purchase of your home, including your down payment funds and your lender’s funds and documents for the new loan. The escrow officer takes instructions based on the terms of your purchase agreement and your lender’s requirements. The escrow officer can hold inspection reports and bills for work performed as required by your purchase agreement. Other elements of the escrow include hazard insurance, title insurance and the grant deed from the seller to you. Escrow cannot be completed until the instructions (requirements) have been satisfied, and all parties have signed escrow documents.
Sellers of properties built prior to 1978 have the following obligations:
California law requires sellers to disclose, via a “Natural Hazard Disclosure Statement” or NHD, if properties are located in one of six predetermined “natural hazard” zones. (If the property is not within one of these zones, you, of course, have no such obligation.)
The six zones are:
If an NHD is delivered to the buyer after both parties have signed the Purchase Agreement, the buyer will have three days to rescind the agreement. However, if the buyer received the NHD before they signed the Purchase Agreement, then they cannot use the NHD to rescind.
Especially (but not exclusively) if you are selling a home in a newer area, you may be within a Mello-Roos tax district, and you must provide to the buyer a “Notice of Special Tax.” If this notice is delivered to the buyer in person, they have three days to rescind their offer. If it’s delivered via U.S. mail, they have five days to decide.
Basically, a “Mello-Roos Community Facilities District” is formed by a local government, district, or agency to finance public services and facilities including police and fire departments, ambulance and paramedic services, parks, schools, libraries, museums and cultural facilities.
If you’re selling a condominium, townhouse or other planned development (for purposes of this discussion, we will call them all “condominiums”), there are the buyer needs to know about common areas (such as greenbelts and recreational rooms) and the homeowner’s association.
The buyer will be required to make monthly payments, known as regular assessments, to maintain common areas, as well as special assessments to replace a roof or repair the plumbing, as determined by the homeowner’s association (HOA.)
Condominiums also may have regulations regarding architectural requirements, limitations on pets, and age restrictions (i.e., senior housing). These must be formally disclosed to the buyer during escrow. You may provide this information via the following documents, to the extent that they exist and are available:
Many smaller HOAs will not have all of these documents, but must provide what they do have.