Beyond commission to the broker, Sellers have to pay various city and state taxes and transfer fees when selling real estate. These fees include escrow and title fees. If you don’t have an escrow or title company you prefer to work with, make sure your agent works with reputable companies and pay attention to those fees as well – they vary from company to company and some of those fees are also negotiable. The escrow or title company that the brokerage is affiliated with may not always be your best choice. We usually negotiate escrow fees around $1.50 or less per thousand plus a $250 base for the Seller’s fees with no additional garbage fees (many escrow companies will charge $2 to $2.50 per thousand). The Sellers and Buyers customarily each pay their own escrow fees and the title insurance policy is customarily paid for by the Seller. The escrow company can prepare an estimated closing statement which will give you an idea of what your net proceeds will be after you pay off any outstanding loans, commissions, taxes etc. As a Seller, it’s better that your agent have control over what escrow company and title company you work with and uses someone they know is on top of it. The competency of an escrow officer can come in handy when last minute issues arise and they often do.
Retrofitting is another expense that is typically paid for by the Seller. Retrofitting refers to those State and/or City mandated ordinances that require such things as low flow toilets, automatic gas shut-off-valves, smoke and carbon monoxide detectors, and water heater strapping to be in place prior to the close of escrow. There are several companies who specialize in this work – Examples are LA Lowflush Retrofitters, LGS Retrofitters and Solutions for Property. They will inspect the property and can usually complete any work right on the spot. Once everything is in place they provide a certificate of compliance – all of this can be paid through escrow. It’s smart to work with companies that specialize in this type of work because they understand the requirements and know to pull the necessary permits etc. I’ve seen cases where a seller used their own plumber to install a gas shut off valve who didn’t know what they were doing and it had to be redone. Legally, you can not elect to do the work after closing. The requirements vary by city. Because Ladera Heights is in the County of Los Angeles but not techincally in the city we have less requirements for retrofitting. Requirements in Ladera Heights include properly strapping the water heater and installing smoke and carbon monoxide detectors.
Termite treatment is no longer be incorporated into the purchase agreement and it is not required when selling your home. The Buyer can elect to have the inspection done along with their other inspections. If termite treatment will be performed and who will pay for it is negotiable between the Buyer and Seller.
Sellers typically pay for the cost of the Natural Hazard Disclosure Report – these reports tell Buyers about earthquake, fire and flood potential in the area along with other disclosures – this report is prepared by an outside company such as Property I.D. and usually runs about $125 and is billed directly through escrow. There is a supplemental report called the C.L.U.E. report which will tell the buyer if there have been insurance claims – many buyers don’t ask for that report.
Buyers typically request in the purchase contract that the Seller pay for a 1 year home warranty plan. Typically a basic plan will run $400 or more depending on the coverage desired and the size of the property etc. This is also a negotiable item.
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