Good morning. This is Jeb Smith, Coldwell Banker Residential Brokerage here in Huntington Beach and I’m back with your June 2019 Real Estate Market Report for Orange County, more specifically Huntington Beach. We’re now in the middle of the summer, which is normally our summer selling season if you will and things are a little bit different from from years past in the sense that the market has started to taper, starting to slow down a little bit. Over the last couple of years, if we go back year over year, the market has, at this point we’ve had low inventory, pretty high buyer demand, so things have moved pretty quickly and values have continued to rise.

This year is a little bit different in the sense that we are still seeing property come to the market. The number of properties coming to the market isn’t an outlier. It’s not any more properties than normal or any less properties than normal over the last couple of years. The year over year is pretty much the same. But what we are seeing is that properties are starting to sit longer. Days on the market are adding up, which tells us a couple of things. There’s less buyer demand out there looking, so there’s less people actually looking for property, which is one of the reasons that property is sitting on the market. And another reason is that properties are overpriced. So a lot of people have listed properties over the last couple of months and they’ve listed them higher than the fair market value of the property. In some cases those properties sell. But in most cases they don’t, and they continue to sit on the market, which as those properties sit, more property comes to the market, the inventory continues to build, which is what we’ve seen.

As a seller, the number one thing you can do in this market is price your home correctly from the start. Look at comparable sales, look at properties like yours that have sold and price it like those properties. Don’t try to go above and beyond what those properties have sold for. Otherwise you’re going to be in a similar position as to what these people are experiencing. Now, with regards to buyer demand, demand has slowed down. Rates have actually gone down quite a bit from where they have been over the last couple of months. And with that we haven’t really seen a huge pickup in buyer demand, unless you’re still in the lower price points. The lower price points are still selling pretty quickly with multiple offers. When I say that, I’m saying like under 700,000, those properties seem to be moving pretty quickly when they’re priced right. And as you move up in price and into the luxury market, homes are tending to sit a little bit longer.

The market is definitely slowing down from where it’s been over the last couple of months. We are not in a big correction stage or a correction stage really at all with regards to pricing. So we’re not seeing any big reductions in price with regards to, if your neighbor’s house sold for say 800,000, we’re not 5% below that or anything crazy like that. Now, the next home would sell for basically 800,000 and what you hear from a lot of buyers is that they’re watching the news and seeing that homes are sitting longer on the market. So they think that there’s some value to be had in that and they can offer much less than than what the property is listed for and actually get a deal. That’s not what I’m experiencing. And I don’t think that’s a good approach.

I think the market is somewhat stabilized, which is needed. And with that, buyers, if they’re looking to purchase and need to come in and make an offer based on what other homes have sold for. You’re not going to get a deal in this market. This is not that kind of market. It is still more or less a seller’s market. It’s not a strong seller’s market, but it is a seller’s market if you’re looking at the the days on market. Now as we continue into summer, longer in the summer, things are going to sit longer. You’re going to have more properties on the market. It’s probably going to turn to an even market where buyers and sellers are equal. Neither party really has the favor in the market if you will, but it’s still not going to be a huge buyer’s market where you can make low, lowball offers on properties and get deals accepted.

So I hope that’s helpful. I know it’s much of the same month over month, but things are starting to change now. The trends starting to change a little bit. I do expect as we get into the end of summer, we’re going to have more properties on the market than we’ve seen at some time. And that’s going to, as we get into fall, the buyer demand is going to continue to subside and inventory is probably going to come off a little bit too as we move into that market, it’s going to slow down even further. But at this point, I don’t see any huge things happening in the market. The economy is still strong, if you’re looking at the numbers there. So where we are right now, the market is it still a good time to be a seller, if you’re reasonable on your price. It’s still a good time to be a buyer, if you’re looking to buy something to hold for say, five plus years.

But if you do have questions, would love the opportunity to help. You can reach out to me directly at (714) 376-2711. If you want more information about me, check out my website Jeb Smith dot net or my other videos here on YouTube. As always, I appreciate you taking the time to watch and we’ll talk again soon. Have a great day. Bye-bye.

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Hey there, Jeb Smith again, Coldwell Banker Residential Brokerage in Huntington Beach. Today we’re going to talk about how long it takes to purchase a home. So often, again, working with buyers in the business and one of the questions that comes up is how long does it actually take to close on a home? How long does it take to buy a home? And that changes in every market. The easiest question is it takes 30 days, right? I mean, most escrows, once you get into escrow, I would say the average is around 30 days. But that number can change anywhere from 10 days up to 60, 90 days, depending on what you’re trying to accomplish within the process.

So once you get into escrow, I would say the average is about 30 days. It may take you six months to go through that process of finding the right house, but once you go into escrow, typically the answer is 30 days. Depending on if it’s a seller or a buyers market may dictate how long of an escrow that you actually ask for with regards to buying a house. In markets where buyers are in control or it’s an even market, I would say that it’s kind of on the buyers side to pick the escrow, so somewhere between a 30 and 45 days escrow is pretty normal.

If it’s a sellers market, depending on what the seller is trying to accomplish, sometimes they have a property, sometimes they are contingent on selling that property to buy something else or to find a replacement property, so those escrows can actually take a bit longer, depending on how far they are into the process of actually looking for their replacement home. So sometimes those can take 60, 90, 120 days depending on what is actually being done there.

So, you know, it’s not just a clear cut answer, but I would say most of the escrows I do are somewhere around 30-45 days with more leaning towards 30 days. So, in order to buy a house, once you find that property, put in your offer, you’re looking at somewhere around 30 days from the time that you go under contract to the time that you close on that property, so one month. But clearly, if you’re looking for a longer escrow or a shorter escrow, you could put that into the contract and have the other side respond accordingly.

So I hope that answers your question. But, if you have additional questions, feel free to reach out to me directly. Check out my other videos here on YouTube and always appreciate you taking the time to watch. Talk again soon, bye-bye.

In this video, I discuss the most common time frame with regards to purchasing a home? The answer can be different depending on what you mean by the question but in this video, I’m referring to the time it takes once you open escrow on the home.

Other videos you might find helpful:

May 2019 Orange County Real Estate Market Update: https://youtu.be/Za9sxP3jqjM

Appraisal vs. Home Inspection: https://youtu.be/cwjokWbr1Go

Connect with me:

B L O G ➳ www.jebsmith.net/blog
F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor
I N S T A G R A M ➳ https://www.instagram.com/jebsmith

If you would like more specific information about your home, please contact me directly at 714.376.2711 or jeb@jebsmith.net.

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Hey, good afternoon. This is Jeb Smith, Coldwell Banker Residential Brokerage here in Huntington Beach and today I want to talk about the first steps in the home buying process. So often when I’m sitting at open houses or talking to perspective buyers, one of the first questions that I often get asked is what are the first steps? What should I do if I’m looking to buy a house? What I tell everybody is the first thing you should do is talk to a mortgage professional. This is someone that are mortgage brokers out there, there are people that work at banks, what have you, you know there’s a lot of different directions to go with this but talk to someone that is a qualified professional in the mortgage business who can discuss that process with you rather.

What they’re going to want to see is they’re going to want to see income, they’re going to want to see your assets, they’re going to want to run your credit, and they’re going to have the conversation with you to find out what it is you’re trying to accomplish. I mean, is there a payment goal that you’re trying to stay under? Are you just trying to see how much you can … What’s the max you can qualify for? There’s a lot of different options with regards to the qualifying aspect but at the end of the day that mortgage professional can look at your documentation and then from there take that documentation and look at the guidelines, if you will, and say okay, this is your credit score, this is how much money you make, this is how much money you have to put down, so this is essentially how much you’re qualified to purchase.

With that, once you have that number and you’re comfortable with the monthly payment that’s associated with that, that’s when it’s a good time to bring a realtor into the equation because once a realtor knows the max that you can qualify for with regards to a purchase price, then that realtor can guide you towards properties that meet that criteria that you’re looking for in a home.

Often people will go out looking at property and don’t get pre-approved and it’s a backwards way to do it because you’re out there looking at property that you may not be able to afford and then your expectations change or you can be out there looking at property that you might be able to afford quite a bit more. It’s always good to get that done and that way if you’re interested in making an offer, you have that step of the process complete.

It also shows anybody that you’re working with that you’re a serious buyer, because if you’ve gone through the process of getting pre-qualified, then if I see that and I’m working with a buyer, then I know that buyer is serious and I can trust what is being said because if we’re out looking at property and they want to make an offer and we have a pre-approval letter, then we have the full package of things that we can submit.

If you’re out there looking at property and you haven’t done the pre-approval process, you’re kind of behind the eight ball so to speak, and so it’s going to take longer to get that process moving forward if you haven’t done the pre-approval. Pre-approvals are free, they shouldn’t cost you anything to get out there and get one. If you need someone to speak to, let me know, I’m happy to refer you to someone locally. I mean, even if you’re nationwide, I can refer you to someone. I network with a lot of professionals across the country. I’m happy to put you in touch with somebody that can help you.

If you have additional questions about the pre-approval process, about the home buying process, feel free to reach out to me directly. Check out my other videos here on YouTube. As always, I appreciate you taking the time to watch and hope to hear or hope to see you again soon. Bye bye.

Other videos you might find helpful: Orange County Real Estate Market Update – https://youtu.be/Za9sxP3jqjM

How Much Deposit Do I Need To Buy a House? https://youtu.be/6OUqU919cpo

What does contingent mean in Real Estate?: https://youtu.be/_yq2tlynSzA

Connect with me:

B L O G ➳ http://www.jebsmith.net/blog

F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor

I N S T A G R A M ➳ https://www.instagram.com/jebsmith

If you would like more specific information about your home, please contact me directly at 714.376.2711 or jeb@jebsmith.net.

Hey, good afternoon. This is Jeb Smith, Coldwell Banker Residential brokerage back in Huntington Beach with your April/May monthly marketing update. It’s the end of April right now, beginning of May in a couple of days, and just want to update you on what’s happening in our local market.

As you know, I’m in Huntington Beach, but let’s talk about Orange County as a whole. This year our market started off a little slow, not a lot of inventory. Since then, we’ve seen inventory pick up. With that, we’ve also seen buyer demand pick up. Things are moving along fairly nicely.

In my market where I am, Huntington Beach, there’s only just over 200 active single family residences on the market that are detached, which is well below normal. Inventory hasn’t really picked up to the point where buyers have tons of options and homes are sitting. In fact, it’s exactly the opposite. If you’re under $900,000 in our market and you’re priced correctly, chances are your house is selling relatively quickly. The things that aren’t moving are the higher price points and things that are overpriced. When you see something sitting for a while, chances are either something’s wrong with it, or it’s overpriced. Keep that in mind when you’re out there looking.

Now is the time to sell your property. If you’re a seller looking to put your home on the market, right now is the best time. It has been for about two months. As we move into the summer months, things are going to slow down on the listing side just because you’re going to have less buyers out there looking at properties. It doesn’t mean your house isn’t going to sell, but right now would typically be the best time to take advantage of having tons of buyers and trying to put your property in the best position to sell for the most amount of money. Keep that in mind.

As a buyer, things are still moving fairly quickly in certain price points. When presenting an offer or making an offer, put your best foot forward. Make sure you’re discussing with your real estate professional or your real estate agent, comps, comparables, what the property’s worth. In doing that, keep in mind that home prices aren’t less now than they were a year ago. Home prices are at least where they were, if not a little bit higher than where they were last year. There’s a lot of people out there that think the market’s collapsed or that there’s some huge pullback in the market because the market slowed down. That’s not the case at all. Homes are still selling for fair market value, and fair market value is still pretty much where it was last year, if not a percent or two higher in certain markets.

As a buyer, I’ve been saying it for months, but when you find a good property that you like, put your best foot forward. You’re going to have to make an offer quickly because chances are it’s going to have multiple offers, and probably sell for pretty close to asking.

That’s pretty common throughout Orange County as a whole. Clearly there are markets where things are slower. The luxury price point, things aren’t selling as quickly. Homes are sitting on the market longer. Days on the market are longer. Those properties are seeing a lot of price reductions.

As Orange County as a whole, we’re seeing a huge amount of price reductions because there’s been so many people out there recently, over the last couple of months, thinking that they could just list their property for whatever and hope it would sell. Well, reality is kicking in. Those people are now reducing price because they’re not getting the activity that they initially intended. Things are coming back to a more normalized market.

I won’t drag this on, so if you are a buyer, seller, investor looking to purchase, you have questions, I would love the opportunity to help. Feel free to reach out, would love the opportunity to help guide you in the right direction.

If you’d like more information about me, check out my website, jebsmith.net, or my other videos here on You Tube.

As always, I appreciate you taking the time to watch, and we’ll talk again soon. Have a great day. Bye, bye.

What Does Contingent Mean In Real Estate?

Hey, good morning, Jeb Smith here Coldwell Banker Residential Brokerage in Huntington Beach. Today I want to talk about contingencies. What is a contingency? That’s something that I often get asked when working with buyers and sellers that don’t do a lot of real estate transactions if you will. And today I want to just kind of get into detail about it and help you understand it. So what is a contingency? A contingency is something that allows either the buyer or the seller to have an out on the real estate contract if you will. That’s the easiest way to explain it. And depending on how it’s done, gives the buyer and/or the seller the reason to back out of a contract.

But generally speaking, when you’re purchasing a property in the state of California, you have six contingencies when you’re purchasing a house. And those contingencies are financing, the appraisal, seller disclosures, a home inspection, title report. Essentially, those sorts of things. And what a contingency does is say, for example, your appraisal doesn’t come in at value. That gives you a reason to back out of the contract. Same thing with financing. If you can’t secure a loan, it gives you a reason to back out of the contract. That’s what contingencies do. They allow you to back out of the contract if you’re not able to satisfy that item if you will.

Now, with regards to seller disclosures, there’s nothing you’re satisfying, but you are reviewing the disclosures from the seller and one of those items is a document where sellers disclose things that they’re aware of about the property. So you might review that document as a buyer and find something on there that you’re not okay with. That gives you a reason to back out of the contract. So when you go into contract, generally speaking, you put earnest money, escrow deposit, down on the property. That money is normally a 100% refundable on the buyer-side until you release all of your contingencies.

And in the state of California, how the residential purchase agreements currently written is that you have 17 days to release all of your contingencies outside of the loan. So the loan is set at 21 days. All the other contingencies are set at 17 days. And so up to 17 days, you could back out of the contract for really no reason at all. And then after 17 days if you have released essentially all those contingencies, except for the loan, then more or less you have the loan that’s still out there, that if you’re not able to satisfy that and/or get the desired rate that you put on the purchase agreement when you initially wrote the contract, then you have that contingency to back out.

Now, before I get into to what happens, but there’re also seller contingencies. So a seller if they’re selling a property, they can put it contingent upon finding a suitable replacement property. So that means even if they go into contract with a buyer, that contingency allows the seller to back out of the contract if they’re not able to find a property to replace their current residents. You can also have it on the buyer’s side. So they put in an offer contingent upon selling their current property. So they have a house to sell, but they’re putting in an offer in on another property, and the house that they’re currently living in if that doesn’t close, they can use that as a reason to back out of the contract. That kind of is the most general way to explain them and give you some good examples.

Now, what happens after you release contingencies and you want to back out of the contract? That’s when you have problems. That’s when the escrow deposit becomes a potential issue with regards to your … You could lose the escrow deposit if the seller wants to take it after contingencies have been released. On the seller side, if you’re in a contract and you decide that you just don’t want to sell the property and you haven’t put up any contingencies and the buyer doesn’t want to let you out of the contract, they don’t have to. You can decide as a seller that you don’t want to move forward, but that’s where you have problems. Because the seller can pursue it, get an attorney and really force the issue and they can sue for damages. They could sue you to force you to sell your house. There’s a lot they could do and really make your life miserable if you’re a seller and you decide to back out for any of those reasons.

So depending on the circumstance, there’s a way to structure it so that you are protected. But just make sure that you’re covering those up front with your real estate professional when you’re listing your house or buying a house, just to make sure that if something does come up it gives you an out if you will. So anyhow, I appreciate you taking the time to watch. If you have another topic you want me to, to discuss, reach out to me. Send me an email, comment on my video. I’m happy to do it. And again, appreciate you taking the time to watch and we’ll see you again soon.

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Other videos you might find helpful:

Orange County Real Estate Market Update – https://youtu.be/iEE4BgSBZWA

How Much Deposit Do I Need To Buy a House? https://youtu.be/6OUqU919cpo

How much does it cost to sell a house?: https://youtu.be/v6PR1gIvIA8

Connect with me:

B L O G ➳ http://www.jebsmith.net/blog
F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor
I N S T A G R A M ➳ https://www.instagram.com/jebsmith

If you would like more specific information about your home, please contact me directly at 714.376.2711 or jeb@jebsmith.net.

How Much Deposit Do I Need To Buy a House?

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Hey, good afternoon, this is Jeb Smith, Coldwell Banker Residential Brokerage here in Huntington Beach, California, and today we’re gonna do another topic video. The topic today is gonna be, how much escrow money do you need to put down in order to buy a house?

So, often when working with buyers, first-time home buyers, one of the questions that they have is, how much money do they actually need to put into escrow once a contract is agreed upon in order to open escrow? Honestly, the answer is, there’s not a set amount. There’s no predetermined amount that says that you have to put X into escrow. When you do your purchase contract with your agent when you’re buying the house, that is something that you’re gonna discuss, is how much money you wanna put down once escrow is open in order to open escrow.

So let’s start for a minute and actually talk about what an escrow deposit is or an earnest money deposit. An earnest money deposit or an escrow deposit is like a good faith deposit. So it’s money that you’re putting into an escrow account, which is a third party that’s gonna hold the money during the transaction until contingencies are released or that goes towards the closing of the property.

That money, when I say good faith, just means that you’re showing the seller, “Hey, look, I’m serious about buying your house, and with that being said, I’m willing to put, say $10,000 into an escrow account to open escrow.” That money generally is 100% refundable until you release the contingencies, your contingencies when you purchase the property.

So generally, there’s six contingencies when purchasing a property in the state of California, and until you’ve release all of those contingencies, that money that you’ve put into escrow, that earnest money deposit, is 100% refundable to you unless some of that money has been used to purchase something. So it’s not money that you should be worried about losing unless you’ve released contingencies. Now once you have released the contingencies on the property, then that money is at risk of going to the seller if you decide to back out or change your mind or what have you.

So back to the question at hand is, how much is required? Well, like I mentioned, there’s not a set amount, but as a realtor, what I generally like to recommend to a client buying a house is somewhere between two to three percent, one to three percent, somewhere in there. So if you’re buying a $500,000 house, ideally you could put somewhere between, say five and $15 grand towards an escrow deposit, an earnest money deposit.

Now in states where purchase prices are less than California, say $100,000 purchase price, you might be able to get away with $500 bucks, $1000 bucks. So it’s all gonna depend on the property price, how much you’re offering on that particular property. So on luxury listings when you have $5 million listing, the earnest money deposit’s gonna be a lot higher on something like that than say a $200,000 property.

So I hope that answers your question, but if you have additional questions, wanna know what the contingencies are, any of that stuff, I’m gonna do another video. But please reach out to me, would love the opportunity to help. Have a great day. Bye-bye.

Other videos you might find helpful:

Predictions for the 2019 Real Estate Market: https://youtu.be/jAj_aRMOFSE

How much does it cost to sell a house?: https://youtu.be/v6PR1gIvIA8

Connect with me:

B L O G ➳ www.jebsmith.net/blog
F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor
I N S T A G R A M ➳ https://www.instagram.com/jebsmith

What is the difference in Fee Simple vs Land Lease?

Hey, good afternoon. This is Jeb Smith, Coldwell Banker Residential Brokerage. Today, I’m going to do a topic video, and we’re going to discuss the difference between fee simple and land lease.

So let’s start with fee simple. A lot of people buying a house see the word “fee simple” and automatically assume that there’s a fee associated with the land type, if you will, because there’s two different types of land. There’s fee simple and there’s land lease. Fee simple actually means that you own the land underneath the property, so when you’re buying the property the land comes with the property. There’s no fee associated with that. Once you buy the property, the land goes with it, and you’re just paying property taxes based on the land and the home that’s on the land.

The land lease is a little bit different. Land lease means that you don’t own the land underneath the property. So, whatever you’re buying, say it’s a condo or a house or what have you, you’re buying the house, but you don’t own the land. That means that you’re likely paying a lease amount on that land every month. This can come up in manufactured housing, mobile home parks. There are condos that are built on land leases. So what happens is a lot of times somebody owns the land. They sublease that land to say a developer. A developer builds a complex and then the builder sells off that complex, and then if there’s an association or what have you, the association is different from the land lease.

In fact, where there’s a condo complex … In Huntington Beach we have these. They’re not prevalent, but there’s couple of communities in the city that have them, and what happens is there’s a condo complex sitting on lease land. When you buy the condo, you’re buying the condo itself and then you’re paying an HOA fee every month. In addition to that HOA fee, you’re paying a land lease payment. Depending on where it’s located, how long that lease is, can determine the amount on the lease, but it’s in addition to those other things.
With that said, each land lease is a little bit different. A lot of these land leases are big documents, so you almost need an attorney to review them just to make sure you’re not getting into something if the lease expires or something happens to the lease that you’re completely out. But some of them are written where at the end of the lease, you walk away with nothing and that can reflect in the value of the property. Others, there may be a buyout clause or something in the contract at the end.

They’re all a little bit different, but you just need to make sure that whatever you’re getting into you fully understand it and understand the pros and cons of what you’re doing because a lot of land leases, the property, the purchase prices are less than something that would be similar that’s not on lease land. So you might be getting it for less money, but you have to understand that there’s a reason for that and what happens at the end of the lease. And then, in addition to that, sometimes you pay property taxes in addition to the HOA and the mortgage or whatever you have on it even though you’re leasing the land. It’s all depends on how it’s written within that lease agreement.

So each one’s a little bit different, but if you have specific questions about something in Orange County, California, let me know. Would love the opportunity to help, but again, just make sure that you fully understand if you’re buying something that’s on lease land, what that means so that you can make an informed decision, if you will. Anyhow, appreciate you taking the time to watch. Hope that was helpful and look forward to seeing you again soon. Bye-bye.

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Other videos you might find helpful:

Predictions for the 2019 Real Estate Market: https://youtu.be/jAj_aRMOFSE

How much does it cost to sell a house?: https://youtu.be/v6PR1gIvIA8

Connect with me:

B L O G ➳ www.jebsmith.net/blog
F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor
I N S T A G R A M ➳ https://www.instagram.com/jebsmith

If you would like more specific information about your home, please contact me directly at 714.376.2711 or jeb@jebsmith.net.

What is happening in our local Real Estate Market Update? Check out my March 2019 Orange County Real Estate Market Update

As a Real Estate Professional I often get asked about what it cost to sell a house so in this video I discuss the fees that most sellers are going to be required to pay when selling a home.

New videos every week – Subscribe here: https://goo.gl/NZB1S6

Other videos you might find helpful:

Predictions for the 2019 Real Estate Market: https://youtu.be/jAj_aRMOFSE
Planning to Sell? Think Like a Buyer: https://youtu.be/mWq3fbINJcU

Connect with me:

B L O G ➳ www.jebsmith.net/blog
F A C E B O O K ➳ https://www.facebook.com/cbhbrealtor
I N S T A G R A M ➳ https://www.instagram.com/jebsmith

If you would like more specific information about your home, please contact me directly at 714.376.2711 or jeb@jebsmith.net.

This is Jeb Smith, Coldwell Banker Residential Brokerage in Huntington Beach, and today I’m going to do more of a topic discussion, and the topic today is going to be seller closing costs. How much does it cost to sell a house? Every home sale is different but these are the typical things a seller pays for when selling a house.

So often when I meet with sellers, new sellers, people that haven’t sold a house in a very long time, one of the first questions they ask is, “What are the costs associated with selling a house?” and this is honestly something that doesn’t really get discussed very often, and the reason I want to bring it to you today. So, you know, normally the first thing that … the first item rather that a seller pays as part of selling a house is commission, right? A seller is going to pay a commission fee. There’s no set commission fee within our industry, but typically there’s a commission fee paid both to the listing agent and to the buyer’s agent on a transaction when selling a home, so the seller actually pays their listing agent and they also pay the buyer’s side of the commission to bring the buyer to the table, so the commission fee is probably or definitely the largest chunk of what the seller’s going to pay when selling a house.

Some of the other fees that are associated with selling a house, are you’re going to have title fees, so a seller’s going to pay a seller’s policy when selling the house. Every seller is going to pay this, and the reason they’re paying a title fee is so that they can provide a clear title to the buyer on the property. There’s an owner’s policy that’s associated with that, there’s endorsements and some other minor fees that also go along with title that you’re going to pay, so a title fee is a large … one of the other fees that comes up.

An escrow fee, so an escrow fee is a fee that’s paid to a third party company that more or less is an intermediary in between the seller and the buyer, so they’re there to facilitate the transaction, bring all the pieces together, and make sure that essentially everything goes according to schedule and closes on time. And so you’re going to pay an escrow fee, and so there are some additional fees that are associated with escrow fees as well: messenger fees, sometimes there are some notary fees, transfer fees, that sort of thing. So there are some small fees that are associated with the escrow.

So right now we have commission, we have title, we have escrow. If your property taxes aren’t current on your house, so say you paid the first installment. The second installment’s due, but you haven’t paid it yet. Property taxes are going to be something that you pay through the closing of your house. That’s going to be one of the fees associated with it. And if you have paid your property taxes already, then you’ll actually get a refund through the close of escrow back to you for whatever the pro-rated portion of that is.

So you’ve got commission, title and escrow: those are the major fees associated with selling a house. And then if you’re in a condo, you’re going to have HOA docs normally that the seller pays, so you’re going to provide documents to the buyer to verify the CCNRs, the financials, the rules and regulations of the community … normally that’s a fee that’s associated with the seller. And also depending on how the deal is structured, you might have fees like a home warranty that you’re paying for for the buyer when you’re buying a house. Normally a buyer, when they purchase a home, asks for a home warranty, and that covers the main systems of the home for the first year. Normally that’s a fee paid by the seller.

And then also termite. So if you’re in a condo, normally, or a town home normally, there’s not a lot of termite work needed as part of that, ’cause it’s normally covered by the association. But if you’re in a single family residence, the termite fees can be a larger number, because if it requires tenting or any woodwork needed … Those are things that are associated with the selling of a home too.

Those are the main things that are involved with selling a home. Obviously there may be some other fees that come up, but that’s the majority of them. And so normally what I tell the seller, the first thing that we do, is we find out how much you owe on your house. So if you’re thinking of selling your house, and want to see what the actual breakdown is, call me. Reach out. All I need to know is what you currently owe on your property, and then obviously commission is one of those negotiable fees, and we don’t know exactly what your house would sell for, so there are some things in there that we have to estimate, like the selling price of your property. But from there we can say, “Hey, this is how much your house is going to sell for. This is how much you owe. These are the fees associated with selling your house, so at the end of the day you’re going to have a pretty good idea of what you’re going to walk away with net-wise, in order … if your property sells for, say, “X”.

But anyhow, I hope that’s helpful. I’m going to keep doing videos like this, so if you have a topic that you would like discussed, please reach out to me. Check out my other videos on  YouTube, or if you want more information about me, go to my website, jebsmith.net. Or just reach out to me directly: 714-376-2711. I appreciate you taking the time to watch, and we’ll see you soon. Have a great day. Bye bye.

Hey there this is Jeb Smith, Coldwell Banker Residential Brokerage in Huntington Beach. And today I’m back talking about discount brokerages. More specifically today talking about Opendoor. Opendoor is a company, let me back up for a second. Discount brokerages are companies that will come in and list your house, sell your house for a reduced commission. Typically in the real estate world commissions have been somewhere between five and six percent. There’s no set amount but generally over the years commissions range somewhere between five and six percent total and that total is divided between the listing agent and the buyers agent. So a discount brokerage is someone that is willing to come in and list your house for a reduced fee.

The buyers commission is something you’re still going to pay. So even when they say hey we’ll list your house for say 1%, there’s still a buyers agent commission on the other side of usually 2.5%, 3%. So that 1% then becomes either 3.5% or 4%. So when you hear the 1%, it’s enticing because it sounds like you’re getting a huge discount when in fact you’re not really getting that big of a discount at all. Because a lot of times you’re giving up something in order to use one of these smaller brokerages or these discount brokers if you will. So just because they’re doing it from 1%, don’t think you’re getting a deal and saving 1.5%, 2.5% on the transaction. In fact you’re probably losing money because these companies aren’t coming in, doing the marketing, the advertising, the exposure necessary in order to help you get top dollar for your home to begin with.

But that’s another story. But I want to talk about Opendoor for a minute. So Opendoor is a company that is willing to come in and make you an offer on your house. It’s a cash offer. And what they’re willing to do is come in and instead of you having to list your house on the open market if you will, on the MLS, have open houses, buyers walk through, et cetera, they’re just willing to give you a cash offer for your house and I think you’re able to pick the closing date. Somewhere between I think their website says somewhere between ten and 60 days or something. I don’t know the exact number. But something along those lines. And their whole premise is that you avoid having to deal with open houses like it’s a huge stressor and this big to do to have an open house.

In my experience, open houses, a lot of times help sell a house. A lot of times it’s to benefit the agent themselves, but in a lot of cases I’ve sold houses off an open house. People have driven by, they weren’t even looking. Online happen to see the house, made an offer, and they ended up buying a house. So open houses do work. But let’s say we’re going the strategy of Opendoor where they’re just making you an offer on your house. It sounds like a great idea because you avoid the headaches or what have you of having to list your house, get it ready, what have you. But keep in mind the things that they’re factoring in to their offer. So they’re factoring in things that need to be done to your property. They’re taking that into account when offering you a price.

So you’re not getting market value for your home. You’re getting market value minus whatever their cost is or their time is to resell it. Because they’re factoring in putting your house on the market and reselling it. So the time it takes them, that they think it’s going to take them to sell your house, they’re factoring that into the price that they’re going to pay you. They’re also charging you somewhere between their website says somewhere between six to seven percent, up to 13% for a listing fee if you will. A commission. They’re not calling it a commission, but it’s a commission. It’s somewhere between six to seven percent, up to 13% to sell your house. That is way more than an agent like myself is going to charge you to sell your house. I mean my commissions are typically somewhere between five and six percent.

So they’re giving you a reduced amount to buy your house, they’re charging you at least what I’m charging you if not more to sell your house, and then they’re also one of their pros if you will on their side of the plus or minus chart if you will is that you’re not paying any concessions when selling a house. A concession is something that you’re giving back to the buyer in order to help them with the transaction. Sometimes you’re doing repairs on the property. That’s a concession. Sometimes you’re paying for home warranty. Sometimes the buyer asks for closing costs. And that’s a concession. In my entire career I’ve never given up anything close to the amounts that they’re talking without building it into the price. So they’re factoring that you selling your house is going to concession somewhere they said two to three percent. So on a $600000 house they’re saying you’re going to pay somewhere between $12000 and $18000 in concessions.

Not true. Never had that in my entire career where I’ve had to pay, where sellers had to pay a buyer that much in concessions without factoring it into the price of the home or the price that we put out there initially. So what sounds like a good deal with them coming in and offering you an amount on your house, the end of the day you’re getting less money for your house. You’re not getting market value. You’re paying more money in commission. And you’re losing money. You’re losing money by not putting it on the open market and getting that emotion involved when buying a house.

Selling a house is an emotional process. People buy emotionally. They justify logically. So as an agent, my job is to do the marketing, the exposure necessary to get eyes on your property, to get people in your property and if we priced it right at fair market value you’re going to get people in there that have seen the marketing that we’ve done online that have some emotion tied to the property. Those are the people that we’re targeting. Those are the people that are going to make offers on your house and those are the people that hopefully bid your property up. If we’ve listed your house correctly you’re going to get market value for your house with the marketing and exposure that we’ve done in order to get you there.

So by going with a discount brokerage, they’re not doing that. Opendoor is a completely different deal because they’re just paying you a cash offer up front. And selling your house and then they’re reselling it on the back end. Other companies like Purple Bricks, Rex, these guys all they’re doing is charging you basically less of a commission and not doing anything to help you sell your house. So it’s more or less a for sale by owner. But they’re just putting it out there on the MLS for other people to see it. Let’s be honest, you’ve got to do more than just putting it on the MLS in order to sell your house. So you know that’s where marketing and advertising comes into play. Getting your property in print, getting it on social media, getting it on TV, doing all of those things are what’s going to help you sell your property for the most amount of money and the quickest amount of time.

So you know, if you have additional questions about discount brokers, selling your house, buying a house, would love the opportunity to help. Please reach out to me directly. Again, Jeb Smith, Coldwell Banker Residential Broker Chair in Huntington Beach. 714-376-2711. Also if you want more information about me check out my other videos on YouTube and visit my website. Jebsmith.net. I appreciate you taking the time to watch. Look forward to seeing you again next month. Make it a great day. Bye.