Real Estate Reel
It's all about Real Estate…Keepin it RealArchive for July, 2009
Challenges of Selling Tenant Occupied Property
My very first experience of being involved in a sale where a tenant occupied the property was amusing. It worked out, but the potential to kill the sale was real. The tenant did not want to move. She made herself a very nice place to live, planted flowers and kept her home tidy.
She was cooperative at first, working with the listing agent to allow the property to be shown and allowed inspections. Then, came the crushing event.
The tenant informed the listing agent that because of a depression in the lawn area on the side of the house, she was convinced there was a “tank” buried there. Well, tanks in real estate sales are not to be taken lightly. Especially when you are selling Vintage property. Homes were often heated with fuel oil stored in tanks, often buried.
Now that the listing agent became aware of her “concern”, the duty to disclose was now in force. It was disclosed, and now the Buyer had the opportunity to make sense of it and further inspect if they chose to, which allowed for an extension of the inspection contingency.
And so began the search for the buried tank. No tank was found. Sale went through. All turned out well.
Properties that are tenant occupied can present challenges in the sale process. Tenants have rights. Tenant/Landlord Law is very clear and explicit.
Basically, when a property is tenant occupied, and an owner wants to sell, understanding a tenant’s rights is fundamental. Depending on whether the tenancy is on a month to month basis or in a fixed lease term, will govern what notice requirements are required.
This will lead to the next question. Whether you will sell the home tenant occupied, subject to tenants rights, or to be delivered vacant upon close of escrow. The Buyer will often answer the question in their offer.
If a property is sold tenant occupied, the Buyer inherits the tenancy. This is the way investment property is usually sold. Not so in the case of residential, unless held for investment, in which case the Buyer makes an informed choice to continue with the terms of the tenancy when they close escrow. Most residential sales where the Buyer intends to occupy the home as a principal place of residence will only accept that the home be vacant upon close of escrow.
Understanding tenants rights in relationship to terminating a tenancy to deliver property vacant is imperative to successful close of escrow. Time lines in the contract for proper notice need to be accounted for. Uncooperative tenants can also impact contractual obligations between a Buyer and Seller. A Buyer and Seller who are attempting to make good on their promises in contract, but are restrained because of an uncooperative tenant, can find the sale process disrupted.
I have to say, my experience of working with tenants and landlords in the sale process has been rewarding and successful. It starts with communication with all parties. Being considerate, working together. Discussing expectations with both landlords and their tenants of what a sale process involves. Often times, a Realtor can be instrumental in helping relocate a tenant to another home.
Realtors are conduits of good relations between buyers, sellers(landlords) and their tenants to assist with a smooth and successful transition for all.
What the Heck is Dbert?
Catchy name but what’s up?
It stands for Dillon Beach Emergency Response Team. In cooperation with the Marin County Fire Department in Tomales, a group of neighbors who attended CERT Training(Community Emergency Response Team) at the local firehouse, have self-organized to be better prepared for a community emergency.
Most communities around Dillon Beach have completed their disaster planning, and now Dillon Beach is on board. Communities who have not organized are encouraged to get involved, and Dbert can help by example.
We have all felt the inconvenience of loss of power living in remote parts of the county during storms, but we don’t think too much about it. Many have generators to weather the storm, some prefer to wait it out with candles.
A major earthquake is inevitable, living in close proximity to the San Andreas Fault down Tomales Bay. Quoting from The Earthquake Preparedness Handbook prepared by the Muir Woods Park Community Association…
IF you think that after a quake your home will be intact, and have running water, electricity and phone service restored quickly. And that you will drive easily over roads undamaged & unblocked by landslides, downed trees or power lines, or panicked drivers to buy food at undamaged, well stocked stores. Time’s up! Time to wake up!
Let’s not forget the medical side of this which you can only imagine if you project the impact of falling structures, trees, and power lines.
Who will be there until help can arrive? Your neighbors. Working together, coordinated.
Get involved and prepared for yourself and community. Visit www.getreadydb.com.
Health Is Returning To The Marketplace
We all can appreciate our personal sense of signals whether it be in our personal life or the economy that point to progress, improvement and things looking positive.
Maybe you have been thinking I need to get more excersie. So, today, you wake up and put your athletic shoes on and out the door you go. You’ve thought enough about it, but, today you put the thought in action. This is improvement, progress towards better living. Your outlook changes for the positive.
We have all felt the weight of the tumbling economy, and the day to day coping with this weight on our shoulders…more than many can bear.
However, there are signals in each individual that form a compass of direction. Confidence.
My title to this post is Health is Returning To The Marketplace. What I mean as it relates to real estate translates into confidence. Just this week in my own community in West Marin, Camp Tomales, which is a most interesting property went into escrow after receiving four competing multiple offers. Two offers have been received on a couple lots in Tomales. News that the only bank owned home in Dillon Beach sold at auction. Press Democrat news published today by Michael Coit “The sales surge was fueled by improvements in the availability of large mortgages and a growing sense among potential buyers that prices have bottomed out, MDA DataQuick reported.” Confidence is returning to the marketplace.
I went to a California Association of Realtors Legislative Day recently, and both economic forcasts that I heard described the economic recovery in terms of a U shape. No V shape in this cycle. But, based on the signals I am sensing, if indeed we are at the bottom of the U, the only way out is UP. Think positive!
Thank goodness for HERA effective July 30, 2009
The new Housing and Economic Recovery Act (HERA) laws go into effect on July 30, 2009. The good news is that they require all mortgage lenders and mortgage brokers to help prevent deceptive lending practices. Helping customers become informed is the first line of defense.
HERA amends the Truth in Lending Act. Amongst the provisions is the Mortgage Disclosure Improvement Act. This act changes the Truth in Lending Act requirements concerning early and final disclosures to home buyers. It also deals with the timing of when fees can be charged.
As a result, close of escrow on your transaction can be impacted. For example even though a Buyer and Seller can contract a specific closing date, the earliest any home purchase transaction can close is 7 business days after the home buyer is issued initial mortgage disclosures from the lender. Note business days not calendar days.
Other provisions include when upfront fees can and cannot be collected by the lender, when the home buyer must be provided a copy of their appraisal, and when a revised and reissued Truth in Lending Disclosure needs to be received by the home buyer before closing.
It is your Realtor’s job to set realistic expectations upfront, so your escrow will close smoothly and successfully without unnecessary delays.
As a home buyer, remember, one of the best ways to expedite your close of escrow is to lock in rate and fees ASAP so as not to trigger disclosure requirement rules late in the escrow time line.
It took an Act of Congress to clean up deceptive lending practices. If you do experience a delay in your close of escrow, just remember it is all for the better. Selling home ownership is great when it is right for the home buyer who is informed.
ValueMap Link Added for You
With the 4th of July almost here, I wanted to add a great link to this Blog. It is called ValueMap. From time to time you may want to check in on what your home is worth. Up until now, public sites for estimating value don’t give the big picture because they lacked MLS data, providing tax data as the only basis. Now you have access to a site that integrates both tax and MLS data into valuation.
Not only that, check out the aerial view when locating an address anywhere in the United States.
Have a great 4th of July!
