Monday, October 27, 2014

Everything you need to know about real estate closing costs.

When you’re buying or selling a home, there are a lot of people working hard for you to make sure the transaction goes smoothly, is error free, and to safeguard your best interests. They include appraisers, banks, home inspectors, loan officers, title and escrow staff, and many more. The fees for the various services inherent with the purchase or sale of a house are collectively called, closing costs.

It’s estimated that closing costs usually account for around 3-5% of the purchase price of the house when you're a buyer though those costs could fluctuate based on your situation (like if you’re taking out a mortgage to buy the property or just paying cash.) The good thing is that when you buy a home, your Realtor’s commission is paid for by the seller, which is usually 2.5%-3%.

When you are selling your home you take on paying both commissions – for your Realtor and for the Realtor who brought you a buyer and represents them. But of course you don’t need to pay for a mortgage loan when selling or any of those costs.

Like we mentioned, closing costs vary from place to place and based on the individual situation. For example, some states use separate title and escrow companies, some use combined title & escrow firms, and some use real estate attorneys, instead. But the here is an explanation of the typical closings costs you’ll see in most residential real estate transactions.

A point is an amount equal to one percent of the total amount of the mortgage loan you are taking out (not the total purchase price.) There are two classifications of points you may see:

Origination fee (also called points.)
This is the fee you will pay the lender for their service of delivering an approval for your purchase loan.

Discount points.
These points are essentially up front money you pay to “buy down” your long term interest rate. Typically, for each discount point you buy, your long term rate will be lowered by 0.125 – 0/375 percent. For those who plan to stay in their home – and their loan – a long time, discount points may save them big money.

Application fee.
$250 - $750. Goes to the lender.
When you first apply for a mortgage loan to acquire the house you want to buy, lenders and brokers may charge this fee as a general cost of doing business. They also usually have flexibility to waive the fee, apply it toward closing costs, etc.

Appraisal fee.
$350-$500. Goes to the appraiser or lender.
Every bank or lender will require that you get a certified appraisal on the home you are buying, which is a assessment of its value. This is an important step in the process, as it ensures the buyer is getting equitable value for the price they are getting.

Credit report fee.
$25-$45. Goes to the lender.
This fee covers the lender’s cost to pull your credit report, which is part of the loan application process.

Processing fee.
$500-$1,000. Goes to the lender.
Almost all lenders have a staff of people who meticulously prepare the documents of the loan application and real estate transaction for submission to the bank or lender’s underwriters.

Underwriting fee.
$200-$800. Goes to the lender.
Underwriters at the bank or mortgage company where you are applying for the loan will scrutinize your application and details of the transaction and decline or approve the file, or issue a conditional approval (the vast majority of the time) with stipulations for the borrower to meet.

Escrow fees.
$ varies based on location and home price. Goes to the escrow company.
While a few states use attorneys, most still use escrow companies, which are neutral third-party companies who facilitate the whole transaction and coordinate closing between the bank, lender, buyer, seller, etc. as well as handle the money.

Title insurance.
$200-$900. Goes to the lender’s insurance policy.
Title insurance is insurance taken out and paid for by the seller for the home buyer, while the home buyer pays their own insurance to protect the lender, who has a legal claim against the property until the mortgage is paid off.

Transfer taxes.
$ Varies. Goes to the lender, county, or municipality.
This fee pays for the service of transferring the tax responsibility for the property from seller to buyer.

Title company fee.
$150-$400. Goes to the title company.
The title company does conducts their due diligence to make sure the property is free and clear from issues about ownership or disputes about use.

Survey fee.
$100-$400. Goes to the title company.
This fee pays for a land survey, which determines the legal boundaries and definition of the property being sold. Some times, survey fees are lumped in with other title fees.

Document prep fee.
$25-$200. Goes to lender or title company.
This is a fee for producing and printing the hundreds of pages of documents needed in any real estate ransaction.

Home inspection.
$350-$500. Goes to home inspector.
The best money you’ll ever spend as a home buyer is for a thorough examination by a well-qualified home inspector. They will prepare a detailed report disclosing the condition of your property and any problems or defects, particularly with electrical systems, plumbing, some appliances, foundation, etc.

Pest (termite) inspection.
$50-$125. Goes to pest inspector.
California requires a pest inspection for each real estate transaction, to ensure there aren’t problems with termites, other active infestations, dangerous molds, etc.

Flood certification fee.
$15-$30. Goes to lender or insurance issuer.
Some times it’s necessitated that the insurance company determines whether your home lies in a flood zone or special flood zone, which is paid by you.

Recording fees.
$50-$200. Goes to the county or municipality.
This fee covers the cost of having your home sale or purchase officially registered as a matter of public record with the country government, meaning it’s official!

Courier fees.
$50-$150. Goes to lender or courier company.
Courier fees cover the cost of transporting documents back and forth between the lender, title company, escrow company, state recorder, etc.

20 Tips for a safe Halloween.

Halloween is one of the favorite holidays for children, a time for them to dress up, go trick or treating, and enjoy all the spooky rituals on the last day of October. Every year, it seems Halloween becomes an even bigger holiday – among both children and adults – including Day of the Dead celebrations, mischief night October 30th, and school parties sometimes spanning the whole week. But while you focus on finding the perfect costume, decorating the house, and fill your candy bowl, it’s important to keep safety in mind.

In fact, only 1 out of 3 parents talk to their children about safety precautions before Halloween at all, though 3 out of 4 of them have serious concerns about their health and safety. On average, children are twice as likely to be hit by a car and killed on Halloween than any other day. 

So here are some great tips for children, parents, and folks in the community to share so we can keep our kids safe and happy this Halloween:

1. Don’t eat candy along the way.  Wait until they get home, so you can pour it out and have an adult sort through it, throwing out anything suspicious.  Some parents purchase their own assorted candy and give that to their kids, throwing out what was gathered from strangers. 

2. Don’t play in piles of leaves along the street.  This is important in places with large amounts of fall foliage, where the piles of leaves can get pretty high as people rake them onto the side of the street for pickup.  Children sometimes like jumping in these piles of leaves to play, but passing motorists can’t see them. 

3. Walk in groups and with supervising adults – don’t wander off.

4. Don’t go inside stranger’s houses and never accept a ride from a stranger.

5. Fasten some reflective tape to your children’s costumes so drivers can spot them at night.

6. Give them a good miniature flashlight they can strap around their wrist.

7. Have a pre-set route with designated street crossing points, “safe” houses of friends or family in case they need to use the bathroom or warm up, and a meeting point in case anyone gets separated.

8. Never eat candy that’s not packaged or wrapped.  Don’t eat apples, home made treats, or anything not still in its original seal.

9. Organize Halloween parties instead of trick or treating on neighborhood streets.

10. Make sure you child wears a costume that fits correctly so they can walk in it without tripping, their vision isn’t impaired, and the costume is flame resistant. 

11. Test any makeup or face paints on a small area of their skin first to make sure they don’t have an allergic reaction.

12. Use electric lights in Jack o’ lanterns and electric candles to avoid fire risks.

13. If a sword, stick, or cane is part of your child’s costume, make sure it is made of shatter proof plastic with no sharp tips or edges.

14. Do not use decorative contact lenses without checking with an eye care professional first.  Many of the lenses that say: “One size fits all,” or claim to be safe can actually cause scratching, infections, or injuries to children.

15. Don’t let kids carve pumpkins with knives.  Allow your children to draw creative faces on the pumpkin with a magic marker, and then let the adults do the actual carving.

16. Make sure your outdoor lights work, and your walkway, front steps, and porch are unobstructed and not slippery.

17. If you are going to be answering the door for Trick or Treaters, put your dog in a side room so they won’t be tempted to rush at visitors or try and run outside.

18. Give your kids a safety whistle and write their name, phone number, address, emergency contact numbers, etc. on an index card and have them carry it in their pocket.

19. Let them go out early, starting in the late afternoon, so they’ll be walking around when it’s mostly light out.

20. Consider letting your child carry a cell phone for emergency use, with 911 and your home phone number preset.


Friday, October 24, 2014

The Only Moving Checklist You'll Ever Need!

8 Weeks Before Your Move:

Create a binder or folder as your "move file,” allowing you to keep track of quotes, receipts, phone numbers, and other important information.

Start going through every room of your house with a roll of blue tape. That which is going to be packed gets tagged with tape; the rest can be sold, donated, or given away.  

Start looking online and calling around to find a reputable moving company. Ask for references from friends, or the Alfano Real Estate group would be happy to give you recommendations in Sacramento and Placer County. Make sure all estimates are in writing and companies are approved with the USDOT (U.S. Department of Transportation.)

If you are moving out of state or far away to a place you’re not familiar with, start researching your new community online.

7 Weeks Before Your Move:

Start organizing and collecting your medical, dental, shot and prescription records. If you’re going to change doctors, ask them for a referral in your new city.

Do the same for your pets at the veterinarian.

Make an appointment with your children’s school and ask for their records to be transferred to their new schools.

Put together copies of your important legal and financial records.
 Empty out and cancel any safe deposit boxes.

Call your insurance agent to see what changes need to be made to your new policy based on your new house.

Contact your gym and any other clubs or services to cancel or transfer your membership.

Order moving supplies like boxes, tape, Bubble Wrap, and permanent markers. Make sure you have enough specialty containers for dishes, breakables, and unique or valuable items.

6 Weeks Before Your Move:

It’s a good time to start using up things that you don’t want to take in the move like frozen or perishable foods, cleaning products, aerosols, or miscellaneous garage supplies.

Begin to plan you moving day, including how you will transport valuables, plants, pets, and of course the rest of the family!

Call your insurance agent to see what changes you need to make to your new policy.

Contact health clubs, organization, and groups to cancel or transfer memberships.

5 Weeks Before Your Move:

Begin packing items you don't use often, going from nonessential rooms like garages, storage closets, extra bedrooms, etc.

Number each box and catalog the items on a master list. Clearly label each box with its contents and the room in the house where it needs to end up.

File a change of address by going online or walking into the local post office. Also ask them to hold your mail at the post office in your new city.

4 Weeks Before Your Move:

Reserve your moving truck or service and make sure you receive a copy of all documentation.

Notify these utility services of your move (both at your old and new locations):
            Cell phone
            Cable/Satellite and Internet
            Trash Collection

Throw a garage sale to get rid of all unwanted items you’re not planning to bring. Donate the remainder to charity.

3 Weeks Before Your Move:

Properly dispose of flammables, corrosives, and poisons around the house. Usually, your moving company will provide a Do Not Ship List.

Start documenting needed information for the new owners/renters that will be moving into your place. Write down paint colors, gather manuals for appliances that stay, and document any upgrades or warranties.

Put in a request with work to have moving day off so you can be there to supervise and make sure it all goes smoothly.

2 Weeks Before Your Move:

Notify these professional services of your move:
            Financial Planner
            Health Insurance Provider
            Insurance Agent

Notify these services/accounts of your move:
            Auto Finance Company
            Bank/Credit Union/Finance Companies
            Credit Card Companies
            Health Club
            Home care service providers (lawn, exterminator, snow removal etc.)
            Laundry service
            Monthly memberships (Netflix, book of the month, etc.)
            Store/Gas Charge Accounts

Notify these government offices of your move:
            City/County Tax Assessor
            State Vehicle Registration
            Social Security Administration
            State/Federal Tax Bureau (IRS)
            Veterans Administration

1 Week Before Your Move:

Plan meals for the last week to use up your food.

Confirm parking for your moving trailer or moving container at your new house.

Print out a Moving Notice postcard and send them to all of your friends and family.

Pack a bag of essentials to keep with you during the day of the move.

Drain gas and oil from lawn equipment, gas grills, heaters, etc. Drain water hoses and waterbeds.

Measure furniture and doorways to determine if larger pieces will fit through the door so you won’t have any problems on moving day.

Take photos of the condition of your house before the move.

Buy a few rolls of heavy paper to lie on the floor during the move – if it’s raining on moving day, it will be an investment that saves your floors and carpets.

Empty and defrost refrigerator at least 24 hours before the move.

Fill any prescriptions you will need during the move.

Double-check the details. Reconfirm the moving company’s arrival time and other specifics and make sure you have prepared exact, written directions to your new home for the staff. Include contact information, such as your cell phone number.

Moving Day Checklist.

Check every room and closet one last time to make sure nothing is left behind.’

Leave a note with your new address so that future residents can forward stray mail.

Introduce yourself to the neighbors.

Pick up any mail being held at the local post office.

Unpack starting with the bedrooms and kitchen and then move to other rooms.

Your first days in the new place:

Check all boxes and furniture to make sure nothing was damaged during the move. You should also make sure everything arrived and nothing was lost. If anything is amiss, contact the mover and insurance company and file a formal complaint.

Start planning the housewarming party!

Join the local neighborhood watch or other civic organizations.

Re-catalog all of your possessions and document them with photos and a list of items, serial numbers, etc. Send that info to your homeowner’s insurance agent.

Check major appliances like your stove, dishwasher, and washer and dryer, and electronics like your televisions check to make sure nothing was damaged during the move.

If you've moved out of state, register your car and get a new driver's license, tags and/or plates for your vehicles.

Register to vote. Again, if you've moved cities, it's important to make sure you're on the voter's registration for your local area. You should also make sure you've updated all important files and documents with your new address.

Buy a subscription to the local newspaper or community magazine. This will quickly get you up to speed on what's happening in your neighborhood.

Create a new emergency contact list. Make sure your children know their new address by heart.

Get a library card - one for each member of the family.

Scout out your new favorite coffee shops, nearby restaurants, super markets, gyms, parks, etc.

Start planning the housewarming party!

If you'd like a printable version of this list with check boxes and bonus information for moving, email us.

Wednesday, October 22, 2014

10 Reasons our super busy lives aren't more like the Jetsons.

Do you remember the old cartoon, The Jetsons? First produced in 1962, it was about a typical family in a utopian futuristic society 100 years later, in 2062. We watched George, Jane, Judy Elroy, and even Rosie, their robot maid, and Astro, their robot dog, go about their daily lives. If you recall, with all of their space-aged hi tech gadgets like appliances that manned themselves, kitchens that cooked automatically, and flying cars, the Jetsons had little to do but interact and enjoy each other’s company, even when George went to work for Mr. Spacely with his 5-second commute and 1-hour work day.

Believe it or not, that’s really how people thought our current society would look back in the mid 20th century. It was widely believed that technological innovations would free us up from life’s mundane tasks. Furthermore, we would live longer, have a shorter work day, widely eliminate poverty and disease, and live much longer, happier lives with far more time for recreation thanks to our space aged technology.

However, it hasn’t quite worked out like that. In fact, we’re busier than ever – a nation of over-stressed, over-worked, over-scheduled individuals with seemingly twice as much to check off our To Do lists, not far less. We wear our “busy-ness” like a badge of honor, proclaiming, “Oh you know, just super busy,” or “I’m good – too so busy,” when someone asks us in earnest how we are doing.

It’s to the degree that being busy has become its own virtue, socially accepted and reinforced. We answer 15 emails, let the plumber in, drive the kids to school, grocery shop, drop off dry cleaning, and do a load of laundry – and that’s just before and after work, at a pace so frantic we barely take time to breathe in between. And we’ve managed to pass that busy gene on to our children, who fill every free hour with school activities, sports leagues, video games, television, social media, and other activities we see as essential.  No wonder we are the country with the highest rate of anxiety in the world, affecting up to 1 in 4 people. It’s to the point that we’re the richest country in the world, but suffering an epidemic of “time poverty.”

But is all of our dusk-'til-dawn go-getting necessary?

In 1928, John Maynard Keynes, one of the leading economist of his day, wrote an essay titled, “Economic Possibilities for Our Grandchildren.” In it, he outlined what he though the world and U.S. would look like 100 years in the future, just like the Jetsons. By 2028, Keynes predicted, the standard of life in Europe and the U.S. would be so improved that no one would need to worry about making money. Thanks to an unprecedented flood of technological and mechanical innovations during the Industrial Revolution like electricity, rubber, steel, the chemical industry, automated machinery and the means for mass production, people would only work three hours a day and there would still be a surplus. Even with 15-hour workweeks, the global economy would increase sevenfold, according to Keynes.

The newfound problem in 2028 would be how to occupy all of our newfound leisure time. “For the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won,” said Keynes.

Fast forward 80-something years, and our U.S gross domestic product has actually increased sixteen times over, and our per capital income is six times greater than when he made his predictions in 1928. But for some reason, we seem to be twice as busy, even more hurried and harrowed, not enjoying more leisure time.

Why is that? Here are 10 reasons why we’re not living like the Jetsons:

1. That which you possess, possesses you.
Our technology takes time and energy to maintain, repair, use, update, and buy. We never anticipated that!

2. Being “super busy,” is largely a U.S. problem.
In fact, the average employed American now works about 140 hours more per year than the average Englishman and 300 more hours than the average Frenchmen! French workers get at least 30 days paid vacation per national law and Brits, 28 days. U.S. workers have zero mandated paid vacations days. And though the Germans and Italians also work almost half as much as Americans, they are known for efficiency and productivity. According to the Journal of Happiness Studies, “Americans maximize happiness by working while Europeans maximize happiness through leisure.”

3. Social media.
The perilous paradigm of social media is that it keeps us connected like never before, blurring the lines between work, leisure, socializing, and information gathering. Maybe more than time and even money, it seems like brainpower or focus is our most finite resource. Yet we exhaust ourselves mentally by taking in thousands (I if not millions) of sensory cues, even multi-tasking our multi-tasking. With that mind-numbing barrage of stimuli, it’s no wonder we are busier but not more productive.

4. Our culture.
Maybe it’s something about the Puritanical Ideal of hard work for its own sake or the mass hysteria of consumerism starting in the 1980’s, but our popular culture doesn’t just reinforce the notion that we should feel guilty if we’re not working at 110% capacity and running a mile-a-minute, it has become our culture.

5. The standard rises equally.
More than ever, we compare ourselves to those around us, intent on keeping up or even surpassing the “Joneses.” We’re worried about what a smaller house or an old used car or hand-me-down clothes might say about us to others, so we avoid the negative perception at all costs. Our societal hierarchical patterns have made the scale of achievement and consumption a never-ending, no-win game that most of keep playing, anyways.

6. Disproportionate distribution.
Just like the share of wealth has been gobbled up by the 1% of richest Americans, (and really, the top 10% of those 1%,) eviscerating the once-stable middle class, the allocation of working hours versus leisure time also seems to follow that financial disparity.

7. Women entering the workforce.
Unlike in 1928 or even 1962 when the Jetsons were created, now, most American women are in the work force. In fact, about two-thirds of American mothers with school-aged kids are employed outside the home. Of course that adds extra income to the household (which is necessary in most cases) but it all subtracts from someone managing the valuable domestic tasks we saw in traditional roles, like housework, cooking, and of course child care. Whether the man or the woman stays home in modern families, having one person to do the domestic work creates a far greater balance and more leisure time, but it’s all-too rare in our society.

8. We’re amazingly proficient consumers.
Even twenty years ago, it was unimaginable that someone would sleep in line for a chance to buy a brand new phone. But we do that, to some extent or another, with phones, computers, televisions, appliances, cars, and even homes.

9. We’re engaging in the wrong leisure activities.
More and more, our down time consists of mindlessly tuning out in front of the television instead of engaging in more human interaction, slower-paced socializing, and pursuing recreational hobbies. Studies show that watching television does little to replenish brain waves, energize us, or provide much needed stress relief.

10. Or is it just our perception?
Maybe this notion that we’re super-human hustle machines is all in our heads? After all, didn’t farmers used to work from dawn to dusk every day? In fact, comprehensive studies that track the sleep and leisure logs over the last 60 years show that the allotment of sleep the average American gets per night or the average amount of leisure time we enjoy hasn’t really changed at all. The average person (including children and the elderly) still sleeps 8.74 hours a night and enjoys 5.26 hours of leisure time a day. According to sociologists John P. Robinson and Geoffrey Godbey, that’s almost a full hour more of leisure time than our parents or grandparents had in 1965. So the problem very well could be how we spend that leisure time and the quality of sleep, not the quantity. 

The interesting thing is that in no way does our eagerness to run ourselves ragged with work, tasks, information overload, and consumerism equate to more fuller, enjoyable lives – or even increased productivity. As some sociologists point out, giving the brain time and space to ponder life’s mysteries and dilemmas – to sit under a tree daydreaming until an apple falls on your head – is the best way to serve humanity.

Buckminster Fuller, one of Keyne’s contemporaries and a great mind of his time, diagnosed the human crisis of industrialization, and the future, more aptly:

“…we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.”

So where are we headed? Will we ever achieve the ideal of that post-industrial futuristic society we saw on The Jetsons? We still have plenty of time before 2062 rolls around to adjust our patterns of work and scheduling, find a healthy balance with social media, enjoy a cultural shift towards leisure, and slay the dragon of consumerism for its own sake. But until the time our lives seem to more closely resemble the perpetually busy Rosie the Robot than the carefree Jetsons.