Real Estate: Buyer - Seller Guidelines for Pre Sale Home Cost

Stuff to Know and Get Prepared for in Those Pesky Real Estate Transactions

A. - Seller’s Guidelines for Their Potential
Pre-sale Cost:
(1) It is reasonable to expect the Buyer may want the appliances. Normal washer and dryer, and refrigerator ranging 3 to 7 years old will sell as a package from about $750 to $1,000. I have seen an appliance package as low as $350. Everything is negotiable. This depends on condition, brand, type, etc.

(2) Getting paint done.
Interior painting, nothing fancy or elaborate, you buy the paint from Home Depot, will average with a Handyman from $1.00 to $2.00 per square foot (minimum 500 SF).
Colors – stick with neutral colors, off white is always good. If you want to color coordinate, visit a few NEW home models by builders. The colors used are generally the current trends.
Note: If the square footage warrants it will be cheaper to buy the paint in a 5-gallon bucket.

(3) A CLUE Report is about $20.00.
You can obtain a CLUE Report from the following website:
http://www.choicetrust.com/

(4) Professional Window / Mirror Cleaning (inside and out) single story is about $125.00

(5) Landscaping ¼ acre or less – No tree trimming. Standard trimming only, Raking, Blowing, and Clean up should range from $80 to $100.

(6) Landscaper – Planting shrubs and bushes, with you buying the plants, should range from $15 to $20 each for planting only. I recommend Home Depot if you are buying 5 plants or less. Home Depot generally gives a one year warranty on all plants, shrubs, and tress - you must keep the receipt and return the dead plant for a replacement. Larger quantities you may want to consider buying from a nursery, they may deliver and plant free.

(7) Typical Seller Cost for Real Estate Fees in the Phoenix Metropolitan Valley:
    Average Listing Agent 1% to 3%
    Average Buyer Agent 3%
    Total = 4% to 6%
        SAVE Thousands of Dollars, sell it yourself !!


B. - Buyer’s Guidelines for Their Potential Pre-ownership Cost:
(1) Termite Inspection is about $35.00 in Phoenix Valley / Maricopa County (Arizona).

(2) Home Inspection Service (averages about $300, but can be as low as $175 and as high as $375). Note: Use only a licensed home inspector. Your Realtor should be able to recommend a company.

(3) Security Inspection $150 (recommended if security is a concern to you). Your Realtor should be able to recommend a company. Try this website at:
www.security1inspections.com

(4) Separate Roof Inspection $150 to $175 (I personally recommend one of these for shingle or built up type roof systems). The most common roof system here in the Phoenix Valley of the Sun is roof tiles. A home inspector should be adequate for this type of roof system. Your Realtor should be able to recommend a company.

(5) One Year Home Warranty Contract ranges around $350 to $400. This is highly recommended if you buy a home older than 3-years. Your Realtor should be able to recommend a company.

(6) One Year Termite Warranty is about $175 to $200. This will probably be more expensive if termites were found. Your Realtor should be able to recommend a company. It’s highly recommended that you get a termite warranty contract in Arizona.
Note: If the home is less than 5-years-old it should have a current existing Termite Warranty Service Contract.

(7) Appraisal. The cost averages about $350. Your mortgage lender will determine whom they use. If you are paying cash, I would recommend getting one any way. Your Realtor should be able to recommend a company.

(8) A Fissure Report – Around $300. This report tells you if your home site is on or near a current fault line where fissures occur. Your Realtor should be able to recommend a company.

(9) If the home has an in ground pool, you may want to ask for a separate Pool Inspection by a licensed Pool Installer (contractor). This cost is around $100. Your Realtor should be able to recommend a company.

(10) At one time Evaporator Coolers were popular on homes here in the Valley of the Sun. If you are buying an older home and it has anything mechanical out of the ordinary you may want to have a separate HVAC inspection. The cost is around $100. Your Realtor should be able to recommend a company.

(11) Title Company. Selected by the BUYER (unless it’s a new home, then the builder uses their own). Your Realtor should be able to recommend a title company.

(12) Important: Some things in a home are leased. Make sure what is permanent and what isn't. Examples of things leased by home owners: A security system; A water softener system; A drinking water system (not part of the permanent household plumbing).


C. - Other BUYER Information:
(1) A CLUE Report is important. If the previous homeowner has had a homeowner’s insurance claim, your homeowner’s insurance rates are based on the dwelling not the occupant. In other words you are punished (Rate / Cost Wise) for the previous owner’s claims, even it wasn’t their fault.

(2) Finding A Lender – There is no real need to use a Mortgage Broker if …
    a) You are putting down 20% or more.
    b) Have a Credit Score of over 720.
    c) If you meet both of the above criteria try major Lenders such as Washington Mutual and Wells Fargo Bank (These are not recommendations just a place to start looking).

(3) PMI – It is not necessary or required if you put down 20% or more. If a lender still wants to charge you this, get a new lender.

(4) Fees – Again if you are putting down 20% or more, major lenders will allow you to pay your own Property Taxes, HOA Fees, and Home Owners Insurance directly. You will just have to send them proof it is paid. The downside is you have to remember to do it.

(5) Flood Insurance – Even if you do not live in a flood district (zone) you may want to purchase this. Recent crazy weather patterns throughout the country have made us all a little paranoid. Homeowner’s insurance policies rarely cover major flood damage. Check with your insurance agent and make him show you where it’s covered. You may ask him if his company provides a rider for that coverage. More than likely the Federal Home Insurance is cheaper. Your title company representative can help you with this.

(6) HUD 1 Report – You should get two of these, a preliminary copy sometime after final contract signing and before Close of Escrow (COE). A second HUD 1 (with the final numbers) will be at closing. Make sure every line item cost is clearly spelled out and identified. If you are unsure ask, you are entitled to a full explanation of all cost and paperwork you are signing. Do NOT accept statements like:
    a) Everyone does it
    b) It’s a typical cost
    c) Don’t worry about that

(7) The seller or their agent should have the Property 4-Sale Sign down and removed the same day of closing. Make sure your real estate agent gets it done for you. You do not have to accept statements like it will be removed in a few days or so. Some REALTORS like to keep the sign up, its free advertisement for them. Also make sure they remove any other ads like flyers, etc.  Some subdivisions have flyer boxes out front, especially gated or guarded communities that allow potential buyers to get a flyer without entering community. The HOA will want these removed.

(8) PREVIEW the HOME before Closing. This is very important. All buyers should look at the home just before closing to make sure the seller has removed everything, left no junk or debris behind, is totally moved out, and has NOT removed any item(s) that were supposed to be included in the purchase / sales contract. If there is a problem post pone the closing (COE) until all issues have been resolved. Remember in Arizona when you close and the deed is recorded you own it, any problems after that must be settled through legal means.

(9) If the home is fairly new, less than 5-years-old, ask the Seller if they have the original documents and manuals provided by the builder.

(10) READ EVERYTHING BEFORE SIGNING IT !!!!!
Do not be rushed into anything or intimidated into signing something.
Consult a Real Estate Attorney if you have any questions or issues before signing any documents or paperwork.
According to several National Consumer Groups the average Civil Action (lawsuit) takes about two years and cost somewhere around $30,000. It is better to slow down and be confident about what you are getting into than sign and end up suing later on. Besides lawsuits being costly and time consuming they are very stressful.

A wise man once said, “When it comes to money you have no friends.”

About the Author:
I am a former licensed REALTOR in Arizona.

Disclaimer: This is a Guide Only for The Phoenix Valley Metropolitan Area of Arizona.  Any 'Prices' are subject to
change without notice and are market driven. This is not intended to cover ever issue, it is just a guideline. Many
of these are recommendations not mandates. You REALTOR will explain which ones are required and which ones
are optional. If you are unsure about any topic or legal document, hire a real estate attorney before signing anything.