Newsletters Finances

Did you get a net sheet?
New Law about Security Deposits
How is your credit?

DID YOU GET A NET SHEET?
I am continually amazed by the number of people I meet who sell or buy real estate without ever getting a written estimate of costs BEFORE signing the contract to either sell their property, or purchase one.

If you have been involved in a real estate transaction before, you probably were surprised by some of the charges. My goal today is to help you understand where the money goes.

If you are a seller, selling a property for $500,000, the following will be all or some of your closing costs (these can vary depending upon certain conditions):

Sales Price: $500,000
Title Insurance: $1800.00 Guarantees clear title for the new buyer.
Sub-Escrow: $125.00 Title company charge for in house paperwork.
Escrow Fee: $1200.00 Paid to 3rd party to hold all funds until title is transferred.
Demand Fee: $50 per loan Charged by mortgage holder to provide Payoff amount.
Reconveyance Fee: $50 per loan Charged by mortgage holder to provide Document stating mortgage is satisfied.
Termite Inspection: $65 Inspection for wood destroying pests-repairs will Cost additional.
Natural Hazards Disclosure: $75 Required disclosure by state-provided by 3rd party.
Home warranty: $300 1 yr warranty of basic items in home. Additional Coverage available for pool, spa, roof, etc.
Septic Certification: $450 (if you have one) Guarantee of function of septic system
Well Certification: $450 (if you have one) Guarantee of well production and water potability.
Roof Certification: $150+ (if necessary) Guarantees no roof leaks for one year.

Naturally, Real Estate Commissions and your mortgage payoff will also have to be deducted. When you want to get the highest net figure possible, you need a Broker who looks out for all of your money. Be sure to call me as soon as possible, so we can get you what you deserve.

NEW LAW ABOUT SECURITY DEPOSIT
Did your tenant just move out? As of January 1, 2004, there are new rules for landlords if you intend to collect damages from the tenant's security deposit. The landlord has 21 days after the tenant vacates to furnish the tenant an itemized statement indicating what the deposit was used for, if it was not returned. If the deductions exceed $125, the landlord must provide in writing how much time was spent and what was the reasonable hourly rate charged by the landlord. Additionally, if the landlord hired someone else to do the work, the landlord must provide a copy of the bill, including, the name, address, and phone of that person who did the work.

If the repair cannot be completed or the receipts for work completed are in the landlord's possession within 21 days, the landlord may still deduct the expenses as long as the landlord provides the necessary documentation within an additional 14 days.

With commercial property, landlords will now have 30 days to return the balance of a security deposit, instead of 14 days. However, if the security deposit is more than two months rent, the excess above two months rent must be returned within 14 days.

On a different tack, as of January 1, 2004, the law AB 1059 imposes a civil penalty of up to $2000 for each act of a landlord that is "made for the purpose of influencing a tenant to vacate a dwelling" by using force, threats, or menacing conduct that "would create an apprehension of harm in a reasonable person".

HOW IS YOUR CREDIT?
Are you getting ready to refinance your home, buy another home, or even buy a car? One thing everyone should do is check their credit, so that any discrepancies can be caught early and disputed. If you haven't seen your report before, they always make for interesting reading.

Usually, within the report, there are directions about how one can dispute any mistakes or errors on the reports. If you find negative issues on the report that are accurate, they can remain on the report for anywhere from seven to ten years.

Since each credit bureau maintains separate records, it is smart to obtain copies of all three reports. You will be surprised at the differences in accounts on each report. You should be entitled to a free copy in certain areas, or if you have been denied credit, employment, rental housing or insurance. Otherwise you may have to pay for the report. To obtain a copy, contact:

* Transunion: www.transunion.com; 800-888-4213

* Experian: www.experian.com; 888-397-3742

* Equifax: www.equifax.com; 800-685-1111

Pay attention to your bill paying habits. Keeping your credit rating good makes your life incredibly easier, particularly in today's markets. People who make loans give more weight to your recent payment history, so a clean record for two to three years, can make a big difference in the interest rate and terms that you pay.

When you need Mortgage services, contact our sister company 1st American Mortgage for any loan program that fits your needs. For any other real estate needs that you have, call me as soon as possible at 951-694-6767.

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