Video is quickly becoming homebuyer’s favorite media for searching properties online. For large houses of 5,000 sqft plus- having a video gives a better sense of the relationship of space and how rooms function with one another. Video allows buyers to interact with a property in a way that is not possible with 2D still photography. They add motion, get buyers excited, and bring the property to life!
Making a quality video is quite the production. A video shoot may require a cinematographer, video editor, music composer, actors or models, cars, multiple days of shooting, and post-production graphics which makes videos a lot more expensive than photos. The average cost of Los Angeles Real Estate video production is somewhere between $4,000 – $8,000 for a 3 minutes to 5-minute video. This price tag makes video cost-prohibitive for listings under 2M. I have seen some value video companies starting to appear that can keep the budget manageable between $1,000 – $2,000 for less expensive properties.
The cost of the la real estate video can range widely. Some of the variables that determine the cost are- the size of the property, whether or not models are hired (Models day rate will be between $200-$500), luxury car rentals if needed, and if you want twilight video and drone video. The length of the video, voice-over actors, and having a custom soundtrack can also affect the price. I would not recommend the video to last longer than 5 minutes – for real estate, this is about as long as you can expect to hold people’s attention. This type of content is primarily for sharing on websites, and Social Media (Facebook, Youtube, Instagram) so viewers are looking for shorter length content.
Sky Photography literally invented the Real Estate Video tour. Was one of the first person doing drones and videos, he has had a huge influence on everyone else’s videos, the first person to use models, etc.
Floorplans are a great marketing tool, and not just for new construction buildings, they cost $250-$350 and can be in B&W or Color. I find in Los Angeles we get a lot of international buyers and buyers from out of state. Having floorplans to go along with listings marketing materials gives prospective buyers a chance to see the property in a way that is not possible with photos. Buyers can visualize a property’s space, room dimensions, and how rooms relate with one another. In this way, they can see if a property’s layout works for them before ever setting foot in the property. I can’t tell you how many times I have seen prospective buyers in escrow with their measuring tape trying to make their own floorplan from scratch to check if their furniture will fit. Why not do it for them? They like that.
For complex properties with nontraditional floorplans, like architectural properties, or hillside properties with three or more stories, sometimes floorplans can be confusing and are not much use. Keep in mind that floorplans are just estimates, so do not rely on them for determining square feet.
Floorplan drawings was founded by Anna Ellison in 2013. Anna is located in NELA but will travel pretty much anywhere in LA. She does beautiful full color floor plans, that include landscaping. She also does more traditional B&W. Costs $200
Floorplans cost starts at $130 for B&W, $160 for color, and $200 for 3D plans (pretty new feature). Rest is one of the most popular and original floorplan companies in Los Angeles. You will see their floorplans frequently in the MLS.
Ike is trained as an architect so his floorplan SQFT is very accurate. Ike lives in Los Feliz area and works a lot on the eastside for floorplans. He has recently started to experiment with color, which is $25 extra. Minimum cost is $150 for floorplan, he charges $60/1,000 sqft. Ike does about 15 floorplans a week so he is pretty booked up, you will be lucky if you can get him. I personally love his trees!
A Pocket Listings is a Real Estate Listing that is not listed for public sale on the open market. Pocket listings are not uploaded into the Multiple Listing Service (MLS).
Pocket listings can also be called: Private Sale, Off-Market listings, Quiet Listings, Hush Listings, Not in MLS, Sold Before Processing, or Whisper listings.
MLS is real estate industry lingo. The MLS is the public marketplace for real estate listings. It is controlled by a Local Board of Realtors and is an electronic database that member agents access to share listings.
Los Angeles County has several different “MLS-es” (made up that word). I am a member of the Combined Los Angeles Westside (CLAW) MLS. There is also the Southland Regional Association of Realtors (SRAR) for the Valley, and CRMLS for Orange County. It is common for surrounding regions to have reciprocity with one another- so if an agent in Los Angeles travels down to Orange County for business they can access Orange Counties MLS and vice versa.
From the MLS, listings are syndicated to the web. Those listings go to big consumer websites like Trulia, Zillow, Redfin, Movoto, Estately, realtor.com, and 1000’s of other sites- including local real estate agent’s own personal websites (like this one!).
The public has direct access to listings in the MLS, and can shop from home, whenever they want, without the help of an agent.
MLS Listings are worldwide. They reach anyone with an internet connection. According to Google, about 47% of the world uses the internet now. The ones that don’t have an internet connection, probably aren’t buying your property, unless they are on a meditation retreat in Tibet. People on the complete opposite side of the planet can see your listing once it’s in the MLS! I have received calls on my listings from all over the world- England, France, Dubai.
I’m a Seller- Do I have to list my property for sale in the MLS?
No- you do not have to list your property on the MLS. There is no law that requires a seller to sell their home publicly or even hire an agent.
The vast majority of homes are listed publicly, but for some owners, they prefer to pocket list. If you have a tenant with quite a bit of time on their lease left or a very expensive/unique property that only has a very small number of potential buyers, or you just don’t want that level of exposure from a public listing on your home you might want to consider pocket listing. Even if you add a “Do Not Disturb Occupant” rider to your For Sale Yard Sign, sure as day follows night, some nosy homebuyer will wander around your property or even knock on the door with no appointment!
How Common are Pocket Listings?
On Average, about 85% of the properties in Los Angeles sell on the open market, so the vast majority of home sales are public.
Most of the time, it is in the seller’s best interest to list their home on the open market, to get the most exposure, and the highest sales price, but there are exceptions.
Market conditions have the greatest impact on the number of pocket listing sales that occur each year. During Buyer Markets, where inventory is high and it is difficult to sell, the number of pocket listings decreases to 10% or less. During Seller’s Markets, where inventory is low and there is heavy competition among buyers, the number of pocket listings increases, as high as 30%.
I’m a Seller- Should I pocket list?
Privacy is the #1 advantage of Pocket Listing. If you don’t want your neighbors, family members, friends, tenants, boss, the media, or everyone else under the sun knowing your business and what you are up to then pocket listing might be right for you. If you are embarrassed about the condition of your home, or the situation that is causing you to sell, a pocket listing will help keep a lid on it. For celebrities, that live their lives in the limelight and headlines, sometimes pocket listing can help lower their profile.
Disadvantage- Less Exposure
Since you are exposing the listing to less potential buyers, this may translate into a lower sales price. It is difficult to get multiple offers with pocket listings which is one of the best ways to get prices over asking. On average, I find pocket listings sell for slightly less than listings in the MLS- about 5% less – sometimes as much as 10% less if rushed and in poor condition. But on the other hand, I have seen pocket listings sell for market or even more than market if the property was very desirable or unique. The fact is there is less exposure with a pocket listing- sometimes this affects the price and sometimes it doesn’t.
If you own some really expensive things, like a Rembrandt, Renoir, AND a Picasso painting, or have the hope diamond in your jewelry box- you might be nervous showing your home to John Q Public. Pocket Listings give you more control over who sees your house. You can choose to only show your home to prequalified buyers.
Not all buyers are equal. Sometimes you will encounter a highly motivated buyer that has no problem paying a big premium to get what they want. By limiting showings, you might miss this buyer. In addition, since it’s hard to get multiple offers, the sales price of pocket listings rarely goes above list.
When you pocket list, you might not get the best price from your buyer, or the highest price for your property. For properties that are unique and very hard to value- you might accidentally sell below the market value. This can happen in rapidly changing markets during the transition between down markets and real estate booms. A real estate friend of mine says, “you can never list a property too low”. I have found this to be true for public listings. Buyers will step in and bid below market listings up to the market value and beyond. But, you don’t have this same protection with a pocket listing. You as a seller must rely heavily on your real estate agent’s accurate assessment of the property’s true value.
Advantage – Less Preparation
If you want to sell your property quick, or don’t have the budget to prepare it for sale- pocket listing might be a good solution. Some sellers take months getting their home ready for sale- painting, staging, landscaping, decluttering and packing, making repairs. All of these things can add up to a large expense. If you can sell the property as it is, without having to do anything, you can save precious time and money. Pocket listings don’t have as a high of an expectation on appearances.
A lot of pocket listings are listed early before a seller is actually ready to sell. If the property sells quickly, like in a few days with a cash offer- the owner might not have a plan in place for where they are going to move next. Hopefully, you can get extra time with a leaseback if you need it. I have heard of pocket listing sellers having to rent a hotel because they sold so fast, which is a good problem to have I suppose but it can be stressful if you don’t know where to go.
Advantage- No Days on Market/ No Listing History
This is a big advantage of pocket listing. When you are listed publicly, the clock is your enemy, and it’s always ticking. Every day that goes by without an offer means you will probably sell for less money. Buyers get very suspicious of listings that have lingered on the market for several months. With a pocket listing, you don’t have to deal with questions like- have you gotten any offers yet? why hasn’t the property sold yet? Implying there is something wrong with your property. You are free to move at your own speed.
Disadvantage- Longer Sale Time
Fewer showings and less exposure, mean longer sale times. Although the number of days it takes you to sell won’t count against you, it will probably take longer. Want to jumpstart the sale process? Lower the price a little to spark some interest.
Everybody wants what they can’t have. It’s human nature. The clubby feeling surrounding pocket listings makes buyers drunk with power, and agents aren’t immune either. Who doesn’t love to feel smarter than the average bear? And why shouldn’t you? You know about a house for sale that other buyers don’t. Luxury brands have been using this tactic for years.
Disadvantage- Less Excitement if Later Listed
The top agents in the neighborhood will know about your pocket listing. When you do come on the market, there might be less of a pop- because many of the buyers in the market who are working with these agents were already exposed to your listing as a pocket.
Advantage- Lower Commission
Owners can save money on real estate commissions by pocket listing. If you list publicly, you usually have to pay 5% or 6% sales commission total. Half of that is a buyers agent commission of 2.5% or 3%. If the listing agent represents both buyer and seller, I know a lot of agents who are happy to give a commission discount- usually 4% but sometimes less. If the seller is a lawyer or part-time real estate agent or has an agent friend who will work for a minimal flat fee or drastically reduced commission- they can get away with offering a buyer’s agent a normal commission and save on the seller side fee. Any way you slice it, the seller usually saves 1% or 2% on commissions when pocket listing, which gets them a little money back that they might be giving up by not listing publicly.
Disadvantage- Dual Agency
The two most common causes for real estate lawsuits in California are disclosure and agency. If you are a dual agent, special care has to be taken that both sides are treated fairly. California allows Dual Agency, so it is legal. Real estate boards aren’t overly fond of pocket listings because they work against the spirit of cooperation that the MLS is based on. If there is a dispute later, the fact that the sale was a pocket listing may color an action in a pale light.
I’m an Agent- how do I market a pocket listing?
Pocket listings take away an agents #1 marketing tool- the MLS, so they require more work and are more difficult to sell than normal listings. What marketing you can do depends on what your seller wants and is OK with. Marketing a pocket listing is pretty similar to marketing a normal listing except no MLS more or less.
1- Ask the owner for permission to take pictures. Pictures will help you sell the thing! Consider getting a floorplan also.
2- Market the pocket listing to your Sphere of Influence. I always start by trying to sell my pocket listings to my existing clients first. Send out an email blast to your client database, and posting the pocket listing on your website/social media is where I’d start. If you write a monthly newsletter, you could also include it in there.
3- Didn’t sell it yet? Reach out to other brokers in your office, and in the community that you are friendly with. I would print out a flier of the pocket listing and stick it in every agent’s mailbox in my office. You could also go to a few other offices if your company has multiple locations. If your company has a weekly office meeting- pitch it there. If you have an email list of agents you are friendly with, email blast them. Or if you want to add the personal touch, pick up the phone and make a few phone calls.
4- There are places online you can post a listing that are not the MLS- if the seller allows you. Zillow.com is the first place I would put it online under coming soon– although you need to be a premier agent to unlock this function. Many Savvy buyers use Zillow to search for off-market coming soon listings, so you will get some internet exposure there. Craigslist is OK but has really dropped off in recent years. I have experimented with Forsalebyowner.com but found that the only people on there are hungry real estate agents looking for listings. I have posted several pockets on the site and never once got a buyer call, the only calls I received were from prospecting agents so I would avoid that one as a total waste of time.
5- Private listing groups. There are several different private listing groups for real estate agents to share pocket listings with one another. Top Agent Network (They charge a membership fee), The Pocket Listing Service, and this very popular local Pocket Listing Facebook Group, are a few examples.
6- If the seller gives you permission, install a yard sign.
7- If the seller gives you permission, hold a Pocket Listing Open House. Place your directional open house signs out on Sunday.
8- You can try to advertise the pocket listing with a print ad or Facebook ad to generate some traffic- or buy buyer leads Zillow, Trulia, Realtor.com, Yelp, or some other place.
I’m a Buyer or Buyer’s Agent- how do I find pocket listings?
Finding pocket listings can be a little tough because you have to do a little digging to turn them up.
You might find the article I wrote “7 different types of pocket listings” helpful background information for understanding the various reasons sellers decide to pocket list.
1- Ask Local Real Estate Agents. Here is your new favorite question- “Do you have any pocket listings?”. Real estate agents are spending big money on their marketing, and have past client’s that they have relationships with, as well as potential sellers they are working on to list. By asking them if they have any pocket listings you will find out what they have in the cooker. It is not uncommon for a neighbor to keep close tabs over a nearby listing to see what it sells for, they usually hire the agent who was the most recent to sell a home nearby if they did a good job. I see agents get pockets in the same building for condos or on the same street for houses pretty frequently.
Keep in mind when you are committed to working with a buyer’s agent, that you can get yourself into an awkward situation by asking other agents for pocket listings because some agents will only show you their pocket if you agree to work with them.
2- Ask Brandon Miller. Brandon is one of the hardest working title officers in Los Angeles and he is always posting pockets on his facebook. Title officers are on the front lines of listings because they are usually one of the first people an agent calls when they have a new listing (also true with photographers, stagers, and transaction coordinators).
3- Drive around the neighborhood. Sometimes you can catch a listing being staged, a suspicious moving truck, or a seller fixing their place up to get ready to sell. If you are feeling bold, knock on the door or walk up to the seller and ask them if they are planning on selling. Keep an eye out for a fresh for sale yard sign.
4- If you can afford new construction- it’s no secret when a property is being built and is close to being finished. Poking around at the job site, you can usually get to the agent or owner after asking a few questions from the workers. You can also try to look up in the public records the agent that sold the property last because the builder is their client.
5- Check Real Estate agent’s personal websites for their pocket listings. Here are some links to agents/Agencies that keep their website updated with their pocket listings:
Rex Real Estate is a discount brokerage- they do not offer any commission to selling agents, so real estate agents usually don’t like showing their listings. They get a decent number of listings so this is an OK place to search and none of their listings are on the MLS.
6- Send out a Buyer Need Email Blast
7- Search on Zillow Coming Soon
If you have a pocket listing or if you are looking to find one, let’s chat!
Large staging companies stage 50 or more houses at any time and over 200 houses a year. They are more expensive than medium or smaller staging companies because they have higher overhead, but offer a wider selection of furnishings, shorter wait times, and have more manpower. They do not do partial or owner-occupied stagings and tend to not be cost effective for properties with property values under $1M. One big advantage of large staging companies is their capacity- they can stage homes quickly- sometimes in just a few days, whereas smaller companies might need two weeks or more if they are busy or need to wait for a destaging to get some of their furniture back.
Staging Minium? $6,000 Condo Staging? Yes Occupied Staging? No
Meridith Baer is the Largest Staging Company in US. They have about 150 homes staged at any given time, and stage over 800 homes a year. In more recent years MB has expanded to other big city markets, like San Francisco and New York, among others. Meridith Baer has a huge 200,000 sqft warehouse in South Gate – 4100 Ardmore Ave, that houses all of their furniture. The minimum staging cost is $6,000, and it can go up to $30,000 – $50,000+ for large estates. MB stays up to date with the latest design trends. No other staging company has a larger collection of furniture. They can do any style.
Staging Services: Condo Staging? Yes Occupied Staging? No Average Staging Price?
Jeff Marshall stages 100 properties at any given time – and roughly 400 homes a year. Marshall Design Group is the second largest staging company in Los Angeles. They service all of Southern California. They are known for a transitional style that is an updated traditional with modern touches, that appeals to high-end buyers- a conservative look that is light and clean. “with staging your trying to appeal to the broadest audience, you don’t know who the buyer is going to be, and you don’t want to turn anybody off with a bold decision” – Jeff Marshall. Marshall has been buying other staging companies the past few years, so they have other brands: MDG Estates www.mdgestates.com and High End Staging www.highendstaging.com.
Staging Services: Condo Staging? Yes Occupied Staging? No Average Staging Price?
Elite Home Staging is based in Canoga Park in the Valley. They stage about 100 homes each year and this year is their 11th year in business. Like other big staging companies, they have several designers. Their style is conservative updated traditional.
Brett Baer, the son of Meredith Baer wanted to open his own company, so in 2016 he opened up Vesta Home Staging. Brett knows the staging ropes from working with his mom for many years. Vesta has thier own style, that is ultra modern and is great for contemporary architecture or even traditional homes that would like a modern twist. Vesta is quickly becoming one of the top Staging Companies in the city.
Aggie Kiss is the owner of Modiano Design. Pricing starts at $4,000. Modiano travels anywhere in LA, they can go to Palm Springs and Orange County by special request. Aggie is known for color, but in the recent year, she has transitioned to a more neutral palette. Owner-occupied staging ok, although she needs $500 deposit. Stages about 6-10 homes a month.
Sarah Chavez and Marina Mizruh are interior designers. They also do some staging but it is not their main focus. Their staging is straight out of a magazine, and great for high end homes with a distinguished pedigree. Expect to pay for quality.
Michael McCraine has a quirky, creative style with pops of color. Definitely right at home with Markets like Venice and Silverlake. The might be a few $1,000 more expensive then other staging companies, but they have a lot of depth and are very handson. If you are looking for something a little different- fictional delivers.
AO Design is an interior design firm that also does some staging. They spend a lot of time searching all over the US for unique pieces, so they definitely have some cool antiques to mix in with more traditional fare.
Taylor Miller Home Staging www.taylormillerhsd.com Terence: 323-573-3335 email@example.com Larisa: 310-291-9856 firstname.lastname@example.org
The Eastside of Los Angeles has a very different vibe then other parts of LA. The buyers tend to be younger (30s-40s), first time home buyers that are attracted by affordable prices. Home Prices start at $600,000 and averaging around $900,000 on the Eastside, with the high end properties going for $1,500,000 to $2,000,000 (except for Pasadena). These younger buyers are more daring, so staging companies on the Eastside are pushing the envelope on design with colorful fabrics and objects and very busy patterns that sometimes clash, with a dash of vintage.
Kimberly Behling is the owner. Our warehouse is based in Glendale and we serve surrounding areas including Pasadena, La Cañada Flintridge, South Pasadena, Arcadia, Altadena, Glendale, La Crescenta, San Marino and the entire San Gabriel Valley region as well as Los Angeles and Beverly Hills.
Stages anywhere in LA. Prices range $2,500 $4,000 – Lauren Ashley charges based on the number of rooms- standard Living room + Dining room + Masterbedroom $1,250 for 2 months. You can additional spaces for $400 each. They do quite a bit of condos. Started in 2016. Averages about 10 stagings a month
Staging Your Move Keeley Andries 661-877-8331 email@example.com
Keeley lives in Santa Clarita and is a morning person, up and at em at 5 AM every morning. Keeley was a real estate agent for many years representing Builders in 200 home developments- she worked very closely with Staging companies to stage the model units. After many years in real estate she got tired of the corporate world and longed to do something creative, so she made the switch to staging. Keeley has very competitive prices and can do occupied Staging.
Sellers always want to know how much their closing costs are going to be so they can figure out their net proceeds from a potential sale. The average seller closing costs in Los Angeles range from 7%-8% of the sale price as a general rule of thumb.
Some of the big advantages of real estate are tax savings, the stability of prices, appreciation in value, and you can live in it. One of the disadvantages of real estate is that it is a rather illiquid asset (can take 3-4 months on average to sell) and has a high cost to sell. Since California is heavily regulated and taxed, it is a percentage point or two higher to sell properties here than in more affordable parts of the US like the midwest (but California real estate also appreciates better which offsets the higher cost and then some).
The #1 largest closing cost for sellers is the real estate commissions. Real Estate commissions range between 5%-6% of the sale price for full-service brokerages in Los Angeles. The commission is divided into two parts, half for the listing agent, and a half for the buyer’s agent. Sometimes sellers complain why they have to pay a double commission when they sell, but they forget that they did not pay a commission when they purchased. In Los Angeles commissions are back end loaded to make it easier for buyers to buy, if the buyer agent commission was moved to the buyer side, they wouldn’t be able to offer as much on the purchase price. I say it averages out to 1 commission per transaction.
A few other noteworthy expenses are Title Insurance, Escrow Fee, and the City Transfer Tax.
Your real estate agent or Escrow Company can prepare a seller ‘net sheet’ that will accurately estimate your seller side closing costs and tell you what your net proceeds are for the listing’s price.
At closing, Escrow is required by law to prepare a HUD-1 final closing statement. This document is an accounting of all the actual closing costs. I recommend to carefully to review the closing statement prior to closing to make sure there are no mistakes.
Here is a breakdown of the typical seller closing costs:
(Optional) Home Inspection ($400) – it is becoming an increasingly popular trend in Los Angeles to have a home inspection done prior to listing. That way you as a seller you are aware of any problems that a buyer might find and can either disclose them upfront for an as is sale or repair them before you go on the market.
HOA Documents – If you are selling a condo or property that is part of an association, the seller is responsible for paying the HOA Documents. HOA Docs typically cost between $300-$500 depending on the property management companies fees, they are the one that prepares them.
Retrofit– if you bought your property or it was built in the last 5-10 years it will probably already be retrofitted, if not this will be an expense. Typically ranges between $500-$2,000 depending on what is needed.
No matter where you live in the world there is some kind of natural hazard. For the people of Pompeii (pictured above), and Hawaii today, the natural hazard is Volcanoes. In Florida there are hurricanes. In Oklahoma there are tornadoes. In California our natural hazard is earthquakes.
California state law requires sellers to provide buyers with a Natural Hazard Disclosure (NHD) statement as part of the disclosures made by the seller during escrow. The NHD indicates whether or not the property is located in a ‘Hazard Area’.
There are several dams and reservoirs on the Westside: Encino Reservoir, Stone Canyon Reservoir, Franklin Canyon Reservoir, Mulholland Dam, and Silverlake Reservoir. In California history there has been two major dam breaks: St. Francis Dam (1928) and Baldwin Hills Dam (1963).
Baldwin Hills Dam
Baldwin Hills Dam Burst
Very High Fire Hazard Zone
Hillside areas in Malibu, the Santa Monica Mountains, Verdugo Mountains, and the Palos Verdes Hills are all Very High Fire Hazard Zones.
These hillside areas have a lot of trees and brush that can burn in wildfires, especially during a drought. Bel Air had a big fire in (1961) and more recently Malibu in (2007).
Homeowners insurance in Very High Fire Hazard areas is more expensive and harder to get.
The NHD goes on to include additional hazard information like proximity to Commercial or Industrial, airport, mining operation, hazardous waste, Mello Roos Tax, and future tax increases.
It is customary in Los Angeles for the seller to pay for the NHD report. The price of an NHD report is about $150.
Fixtures are items that are attached to the property. Their presence enhances the use and enjoyment of property and they transfer upon sale to the new owner. Fixtures are part of a broader category of property known in law as real property. Think of them as “belongs to the real estate”.
Some example of common fixtures are: Garage Doors, openers and remotes, Wine Coolers, Video Projectors + Screens, Dishwashers, built-in speakers and sound systems, Recessed Lighting, Baseboards and Molding, HVAC systems, Fireplace Screens and Fake Logs, Pool equipment, Chandeliers, Gates, Sheds and Fences, Security Systems and alarms, planted landscaping (but not potted plants), and Window Coverings such as blinds, Shutters and curtains (however be sure to specify curtains in writing!)
Fixtures are not personal property (which is not conveyed). Personal Property “belongs to the owner”. Personal property is anything that if you turned the house upside down and shook it would fall out. Some examples of personal property are Flat Screen TVs (what about the Flat screen TV wall mounts?), Safes, furniture, rugs, kitchen utensils, food, bicycles and cars, clothing, pictures and paintings etc.
As you can imagine, differentiating between fixtures and personal property can get confusing!
For agricultural properties like an orange grove- the Orange trees are considered fixtures, but the oranges are personal property.
A lamp is personal property, while a ceiling fan is a fixture.
Keep in mind that everything in real estate is negotiable. Personal Property, like furniture, or even a car, can be included in a sale, and fixtures can be excluded from a sale.
Sometimes sellers will want to exclude a fixture from the sale. I recommend to sellers who want to keep their curtains, or chandelier, or washer dryer, or whatever- to just removed them before they list if possible, and replace them with a comparable substitute. That way the buyer won’t see it and fall in love. So there is nothing to argue about. Communication is key. If you clearly communicate exclusions and inclusions that is the best way to avoid hurt feelings and disputes.
The biggest issue I see with fixtures is when buyers expect a fixture is included in the sale, to discover at their final walk through that the fixture has been removed without their approval. This can really sour a deal. Remember in Real Estate, disclose, disclose, disclose. If you are unclear about what is staying or going put it in writing.
Paragraph 8 of The Residential purchase contract specifies inclusions and exclusions. There are special boxes given for the big appliances since they are expensive, and movable, so it is good to indicate if the Fridge, Stove, and Washing Machines are part of the sale.
Not sure if something is a fixture?
M-A-R-I-A is an acronym for the legal test the State of California uses to determine whether an item is considered a fixture or personal property.
Method of attachment. Is the item permanently affixed to the wall, ceiling or flooring by using nails, glue, cement, pipes, or screws? Would removing the item damage the property? Even if the item is easy to remove, it may still be a fixture.
Adaptability. If the item becomes an integral part of the home, it cannot be removed. For example, a security system. One could argue that custom designed appliances such as a Miele wine refrigerator can be considered a fixture, although it can be unplugged, because it fits inside a specified space.
Relationship of the parties. Buyer to Seller, Landlord to Tenant.
Intention of party when the item was attached. When the installation took place, if the intent was to make the item a permanent attachment, for example, a built-in bookcase, the item is a fixture.
Agreement between the parties. Whatever is written in the Contract rules. If there is nothing in writing, it is not possible to prove the intention of the parties.
Special Notes for Tenants and Buyers- I never recommend to improve a property you do not own. Sometimes buyers will get excited in escrow and start ordering custom drapes, or hire a contractor to do some work. Tenants sometimes will work out “deals” with their landlord to reduce the rent in return for them to upgrade an appliance, or remodel. If the buyer doesn’t close, you are out of pocket for the money spent. For tenants, if they pay to install a fixture in a landlord’s property and get nothing in writing, they will probably have to leave it when they move. Be extra careful when purchasing tenant occupied property to ask the tenant what is their property and what is the owners. Finding out who owns what can save yourself a lot of headaches later on.
Receiving any offer, especially your first offer, is exciting news! Call your seller and let them know right away. Depending on if your seller has recently done a transaction, they may want to meet in person to go over the offer and for you to present it. Print out a complete copy and have a meeting.
First thing to look for is if the offer is complete. Does it have proof of funds, if financed, a preapproval letter, and if a lease the credit report. It is a good idea to call the lender who preapproved the buyer to ask them some qualifying questions. Is the bank one that you recognize? Have these buyers written any other offers- were they accepted? If so did they cancel? These are great questions to ask the buyers agent. You are entitled to ask them to tell you about their buyers.
When reviewing the purchase agreement, the first page has all the important information. The Purchase Price, Financing terms, close of escrow. Make sure that there are no hidden terms that will affect the net of the seller, such as excessive home warranty plans, buyer request for seller to pay closing costs, strange contigencies such as contigent on sale of other property (this can be doable if the property is already in escrow). If the offer is solid, then it is a good grounding point to start from there. If the offer is strong the seller may accepted it. Or they may decide to write a counter offer. A counter offer voids the first offer so be careful- if you sign you have acceptance, if you counter the buyer then must sign to have acceptance.
double check the expiration date to make sure that it is the standard 3 days.
A leaseback is when the seller of the property needs to rent back from the new owner. This can be because they haven’t found a new place to live, or sold more quickly than they anticipated. For a buyer it is rarely to your benefit to do a leaseback. The amount of rent you collect on the small number of days isn’t worth the hassel and unless you don’t plan on moving quickly, it will be an inconvenience to you. It is done to be nice usually.
Leaseback rarely occurs in deals because it can be quite sticky. You don’t collect any security deposit from the seller (they just sold you their house !) so if they damage the place while they are there (could be just on accident) you don’t have any coverage for that. If you are paying to live somewhere else, each day that you can’t move in will be costing you your daily living expense. Usually the seller leasing back will say they will pay your PITI- mortgage payment + taxes + insurance. This doesn’t factor in your living cost per day.
If the seller decides to stick around a little longer, you may end up with an eviction process, which seems quite ridiculous.
The good news is the leaseback amount is withheld from the seller proceeds in escrow, so that you don’t have to collect a rent check from the seller.
In all tenancy situations, I recommend a move in and move out inspection. Before the sellers leave go through the property with them if you spot a problem you can resolve it.