Elaine's most FAQ's about Santa Cruz Real Estate.

Everyday there are new and interesting questions that arise during the typical course of Buying Homes and Selling Homes, in the current economic environment those questions can be overwhelming. It is my goal to help answer some of the most frequently asked questions and to provide good solid information to my clients. Please check back frequently as I will update this page on a regular basis.

What Is Escrow?

Escrow is the process that buyers and sellers of homes use to complete the monetary and legal details of a sale. A neutral third party manages the escrow, called an Escrow Officer, who generally works for a title company. Title is the proof of ownership of a property. The title company ensures that all terms of the contract are adhered to before the sale is complete and money changes hands.

In order to successfully bring an escrow to close, the title company will:

* Obtain a title report to ensure that the seller has the right to transfer ownership (title) to the buyer
* Ensure that any previous loans on the property have been paid off
* Acquire necessary loan and insurance documents
* Confirm that necessary inspection reports are on file
* Arrange for the buyer to sign all necessary paperwork to complete the close of escrow

When these details are complete, the Escrow Officer requests the funds to be released and instructs the title department to record the transaction at the County Recorder's Office, thereby closing escrow.

Who Pays For What in Escrow?

A major question in every escrow is: "Who pays for what?" The answers vary by county ordinances and standard practices. What is listed below are "customary" practices. All fees charged are governed by terms of the sales contract and other written escrow instructions. It is not unusual for some items to be split between the buyer and the seller.

Note: on some FHA, VA or other government-backed loans, the buyer will pay some fees that governmental regulations will not allow you to pay.

What do sellers generally pay in Escrow?

Sellers Generally Pay:

* Real estate commission
* Document transfer tax ($1.10 per $1,000 of sales price)
* Notary fees
* Property tax proration (to date of acquisition)
* Special delivery/courier fees, if required
* Document preparation fees
* Document recording charges
* Home Owner association statement fee and prorated dues
* Home warranty (according to contract)
* Work/repairs required (according to contract)
* Matters of record against the property or seller (loans, tax liens, judgments, etc.) and fees required to clear them (statement fees, re-conveyance/trustee fees and prepayment penalties)
* Bonds and assessments (according to contract)

What do buyers generally pay in Escrow?

Buyers Generally Pay:

* Title insurance policy premiums (lenders and Buyer's)
* Escrow fees
* Notary fees
* Property tax proration (from acquisition date)
* Special delivery/courier fees, if required
* Document preparation fees
* Document recording charges
* Home Owners association transfer fee and prorated dues
* City costs
* Home warranty (according to contract)
* Inspection fees (according to contract)
* Matters of record against the buyer including tax liens, judgments and fees required to clear them
* Fire insurance premium for the first year
* Assumption/change of records fees if the buyer is taking over an existing loan
* Lenders new loan charges
* Interest on new loan from date of funding to 30 days prior to the first payment
* Other prorations (rents, insurance etc.) if applicable

I am selling my home, what do I need to do?


1-Clean or paint your front door
2-Check that house numbers, mailbox, and exterior lighting are all in good condition.

In the yard-
3-Spruce up your garden and lawn; trim shrubbery and replace dead plants.
4-Make sure all yard furniture is clean and looks inviting
5-Repair loose trim, drain pipes,fencing,clean stains and window screens.

Once Inside
5-Apply fresh interior paint as needed... think about brightening your interiors with neutral-toned paint.
6-Clean the fireplace and remove smoke stains from the wall and mantle.
7-Replace burnt out lights, and light bulbs with fresh ones.

Remember the Kitchen
8-Sinks, appliances, and counter tops should sparkle; remove any clutter.
9-Clean the oven, range, and other appliances.
10-Organize and de-clutter panty and cabinets

11-Clean mirrors, glass, chrome, and porcelain surfaces.
12-Clean grout and chalking, replace if needed
12-Replace shower curtain if necessary.

13-Doors and drawers should open and close easily.
14-Remove clutter; tidy up shelves and racks.
15-Check the basics around the house. It takes just a minute to check all doors, windows and cabinets to make sure they don't stick, squeak or are too loose.

What is a Short Sale?

A short sale is when a home owner can no longer afford the mortgage on their home and opts to sell the property "short" of what is owed on it. This happens when the home owner has lost income to due several different factors, or looses equity due to declining property values resulting is owing more than the value of the home.

The home is then listed for sale, as a Short Sale, at a fair market value using comparable properties. Once an offer is received and accepted by the home owner it is then submitted to the lien holders for approval. The approval process can be very quick, (I have experienced a 2 day turn around) or can take several months depending on the lien holder and the qualifications of the buyers. Lien holders always prefer an all cash offer, as the question of loan appraisal is removed.

Once the sale has been approved, the process of the transaction is very much like that of a "normal" sale. The biggest difference is that the lien holders become the seller, and pay all sellers fees,including commissions. A home owner should NEVER pay anyone to negotiate a short sale for them.

As a buyer it takes a large amount of patience, as you never know when or if the sale will be agreed upon. The home owner is not allowed to receive any funds from the transaction. They are allowed to continue to live in the property until escrow closes, and any lien holder foreclosure is generally stopped by the short sale.

A Short Sale impacts the home owners credit much less severely than a bank foreclosure, helps retain overall property values, and maintains the overall property appearance.

As a Short sale Strategist I would be happy to help you navigate through the process, and help determine if a short sale is right for you.

Click on the question for your answer.

Email Elaine The Realtor with any questions you may have.