Sellers Concerns
Introduction
We have outlined the following concerns because this may be your largest purchase or sale of your most valuable asset, your home. This information simply reflects some of the major concerns we have experienced when working with Buyer and Seller over the years. All information should be confirmed for accuracy, as most codes and information are in a continuous state of change. Our intention is to help you purchase and sell your property in a knowledgeable manner with as few surprises as possible. The information that follows is in no way related to, or reflects the opinion of, Santa Fe Properties Inc.
1. Closing Cost, Documentation and Preparation
Title Insurance Cost, Title Exceptions and the cost to delete them
2. What Documents should you have to List your property?
3. The Disclosure Statement
4. If you want to sell your property, price it competitively or you will most certainly help sell some other property. This is a tough market.
5. If your property is rented, contact the "Landlord Tenant Hotline" for your and your tenant's rights in order to show and sell your property in a lawful manner. Phone # 505-983-8447.
6. Be Prepared
7. Do Not Move until you know your deal will close. Have your Broker secure enough non-refundable monies, (ideally in your pocket, not in Escrow), to allow you the comfort and assure you that your deal will close in a timely fashion. Another way is to lease your home back after closing for a period of time sufficient to move.
8. Bottom Feeders (The more your loose, the more they gain.)
9. Legal Advice
10. Taxes
11. State Required Septic Certification
Some things the Septic Inspector will look for:
In Conclusion:
These concerns will be clarified and revised as new issues evolve. This is not intended to address all matters of a transaction; just the major ones that come to mind now. Please feel free to email us with your comments, questions and inquiries. Phone numbers are most welcome and in our opinion enhance the communication process.
Helpful phone numbers:
We have outlined the following concerns because this may be your largest purchase or sale of your most valuable asset, your home. This information simply reflects some of the major concerns we have experienced when working with Buyer and Seller over the years. All information should be confirmed for accuracy, as most codes and information are in a continuous state of change. Our intention is to help you purchase and sell your property in a knowledgeable manner with as few surprises as possible. The information that follows is in no way related to, or reflects the opinion of, Santa Fe Properties Inc.
1. Closing Cost, Documentation and Preparation
- Cost to Close (Approximate):
- House - 7.5% of sale price (plus septic inspection and repairs, if applicable), and any legal fees.
- Land - 11 to 11-1/2% of sale price, plus any legal fees.
- It is customary for the seller to pay the following costs at closing:
- All Real Estate commission, plus any Gross Receipts Tax on the commission.
- Title Insurance: A copy of your most recent policy may get you a re-issue rate and save money. If a loan, the Lender's Policy is generally an expense to the Buyer.
- A preliminary Title search and binder.
- Deletions of exceptions; some of the standard exceptions are 1,2,3,4 and 5 e.g., Lien Exception, Survey Exception, etc. More info - sftitles.com
- 1/2 of the Title company closing fee.
- Sellers Recording fee
- Sellers Legal fees
- Survey and reflagging of property corners, possibly replacing any missing survey monuments.
Title Insurance Cost, Title Exceptions and the cost to delete them
2. What Documents should you have to List your property?
- A Copy of the deed and old Title Policy (Re-issue rate on new policy).
- A Copy of the Survey showing any improvements. (Have your property corners reflagged for clarity).
- If on septic system, a copy of the original permit, showing tank size, drainfield, location, Installer and date. (Also see number 11. State Required Septic Certification.)
- Receipts for any major repairs: e.g., hot water heater, roof.
- Any Warranty that may transfer.
- A Utility cost analysis for the last year.
3. The Disclosure Statement
- A Disclosure Statement is supposed to disclose everything you know about the house and property e.g., roof leaks, repairs, settling problems, mildew, helicopter noise, etc. Some Attorneys feel a standard disclosure statement is trouble because if asked questions, but possibly not all the right ones, or in the right context, you could be liable for an incomplete Disclosure. Regardless we would ask that at a minimum you make a list of the material facts you are aware of e.g., roof leaks and repairs, plumbing problems, drainage problems; supply receipts for repairs, and explain this is to the best of your knowledge and recollection. You are most likely not an expert and any interested buyer should have the property inspected by the professionals of their choosing.
4. If you want to sell your property, price it competitively or you will most certainly help sell some other property. This is a tough market.
5. If your property is rented, contact the "Landlord Tenant Hotline" for your and your tenant's rights in order to show and sell your property in a lawful manner. Phone # 505-983-8447.
6. Be Prepared
- Get your property ready to sell. Have the obvious problems professionally repaired prior to the listing, e.g., roof, parapets, cracks. Get windows, doors and locks working properly; possibly re-paint. We can make suggestions. Save your receipts, disclose your repairs.
7. Do Not Move until you know your deal will close. Have your Broker secure enough non-refundable monies, (ideally in your pocket, not in Escrow), to allow you the comfort and assure you that your deal will close in a timely fashion. Another way is to lease your home back after closing for a period of time sufficient to move.
8. Bottom Feeders (The more your loose, the more they gain.)
- In today's market (a Buyer's market), make sure your Realtor tries to filter out the real buyer from the buyers that just tie up property, then continually try to "work" the seller down in price through Title and Inspection Investigation. Today, everyone is looking for a deal, as you will be when you buy your next property, but some speculators are tying up well priced property and wasting the seller's money and time in a continuous effort to get the price lower and lower. This is just one of the ways we earn our money; we can help defend against this. Ask us; we will be glad to share our thoughts with you.
9. Legal Advice
- I personally always use my attorney when I purchase or sell property for myself. Find a Real Estate Attorney you are comfortable with. Limit his or her input to what you need help with. Try and them to give you an estimate of their cost. Ideally have the purchase agreement reviewed after you and the seller have negotiated the major terms and conditions of the contract. Have an Attorney "review period" after agreement by the parties. As my attorney says, it's much less expensive to have it done properly the first time. For free legal advice use a Title company, that has a full time Attorney on staff, in the office, a Title Company you intend closing with. Most Title companies don't have an "in house" Attorney. Don't accept one that doesn't. The Title Company and their Attorneys have to be neutral facilitators of the transaction. They cannot take side of the buyer or the seller, but in most cases they can clarify your questions concerning title and title exceptions.
10. Taxes
- Avoiding unnecessary taxes on any gain (use a professional).
- 10-31 Exchange can shelter most Real Property i.e., Real Estate (not your primary residence).
- Even or up (spend as much or more).
- Like for Like, Real Property, House for Land is OK
- You must have your 1031 intentions in the purchase agreement and use a professional exchanger (a neutral facilitator).
- For a primary residence you can shelter a gain of up to $250,000 for an individual or $500,000 for a married couple if you have occupied the property two out of the last five years.
- (Please confirm the above information with your Tax professional.)
11. State Required Septic Certification
- All septic tanks must be pumped and inspected by a licensed Inspector, and certified by the state prior to closing. This should only be done in advance of a good binding contract, otherwise, if you lose the deal, you may have to have the tank pumped and maybe recertified for the next deal.
Some things the Septic Inspector will look for:
- 1,000 gallon minimum tank size for 3 Bedroom house.
- 1,200 gallon minimum tank size for a 4 Bedroom house.
- Tank access cover is secure and accessible.
- Tank condition after pumping.
- Drain field is clear of weeds, of adequate size, and no surface seepage or smell.
- Septic system is at least 100 ft. from your well, if on a community well much further.
- Cost of Septic Inspection with a copy of the permit is approximately $550; without a copy of the permit, it can cost $1,200 or more.
- If your Septic tank and drain field is not in compliance, you must pay for the required repairs, (in rare cases, a completely new system), prior to Closing. This is a State Law through Environmental Health. Septic tanks must be brought into compliance because of our sensitive ground water (drinking water) which is being threatened by septic contamination. Areas with very shallow water tables and relatively small lots, with septic tanks, are vulnerable to contaminating our ground water. For more information call: AAA Septic (Ralph 505-982-2242)
These concerns will be clarified and revised as new issues evolve. This is not intended to address all matters of a transaction; just the major ones that come to mind now. Please feel free to email us with your comments, questions and inquiries. Phone numbers are most welcome and in our opinion enhance the communication process.
Helpful phone numbers:
- PNM Electric, 1-888-342-5766
- NM Gas Co,. 1-888-664- 2726
- City of Santa Fe Water Dept., 505-955-4333
- Eldorado Water Dept., 505-466-1085
- Santa Fe County Land Use, 505-986-6225
- City of Santa Fe Land Use, 505-955-6585
- City of Santa Fe Police, 505-428-3710
- Santa Fe County Sheriff's Dept., 505-986-2455
- Your Realtors:
- John DeVito, 505-690-1998
- Don DeVito, 505-690-1866
- Santa Fe Properties Inc. 505-982-4466, fax 505-984-1003
