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Customary Fees for Selling a Home in Sacramento
A sure sign for a Sacramento listing agent that the buyer is “not from around these here parts” is when the buyer’s agent submits an offer that is not in line with customary standards for selling a home in Sacramento. While the seller’s closing costs are not actually etched in stone and they are negotiable, there are still customary ways of splitting costs or paying the fees that parties come to expect.
It’s kinda like how you know if it’s August, it’s time to put up your hair, wear minimum jewelry (because anything metal will burn) and limit your exposure to the sun. Nobody really tells you how to survive our extreme 100+ summer heat, it’s just common sense. Or, alternatively, you just hop in your car and head for the Bay area.
As you’re leaving town, the buyers from the Bay area are heading this direction, pulling their Bay area agents in tow. Our lockbox keys are not yet reciprocal, so it’s often difficult for Bay area agents to show homes in Sacramento, not to mention there is the whole pricing issue and being unfamiliar with neighborhoods that can lead their buyers to overpaying for homes, which is not unusual. Sacramento sellers often pray for a Bay area buyer. Please send me some fool from San Jose, they beg.
If a Bay area buyer would like to downplay the fact that they don’t know the area and their agent may be unfamiliar with customary ways of writing offers in Sacramento, then at the very least there should be a discussion about fees in the purchase contract. It is permissible to pay all of the fees, if the buyer wants, but it’s not always necessary. It is not customary for the seller to pay all of the fees, however.
Your best bet is to call the listing agent and discuss the offer beforehand. When the seller is paying title and escrow, for example, typically the seller chooses the title company in Sacramento. The trend seems to be moving toward sellers and buyers splitting the escrow fee as well, just like the city transfer tax is often paid 50 / 50. But there’s no law that dictates, except for RESPA, and that doesn’t affect fees the sellers pay. For more information, call Elizabeth Weintraub, Sacramento listing agent, Lyon RE, at 916.233.6759.
Should the Buyer or Seller Order a Sacramento Pest Inspection?
Who pays what fee in a real estate transaction is negotiable in Sacramento, but there are customary fees that the parties generally pay, and a Sacramento pest inspection is no exception. For example, most sellers would not pay for a home inspection on the buyer’s behalf. A seller might order a pre-home inspection before putting the home on the market, but the buyer will still be advised to request and pay for her own home inspection.
Like with any legal matter, there are rules and guidelines to follow. Such as the seller can’t demand that the buyer use a certain title company, because that would be a RESPA violation. Buyers are certainly free to pay for their own title insurance policy and the lender’s title policy, and then the buyer can select the title. Most buyers won’t do it because a title policy is as good as the insurance backing it, and most of the companies who have bit the dust aren’t leading others into that grave at the moment, plus, those fees can top easily $2,000.
When it comes to a Sacramento pest inspection, though, it’s a common practice for the seller to pay for it. The problem that arises is when the buyer’s lender spots a pest report inspection as a condition of the purchase contract, the lender will want to receive a copy of the inspection. If there is work suggested, again, the lender will expect the work to be completed. Who pays for the work, whether it’s the buyer or the seller, is also negotiable. More often than not, though, it’s the seller who foots that bill.
It becomes a little more complicated when the seller has agreed in the purchase contract to sign the WPA, Wood Destroying Pest Addendum. Some buyer’s agents will include this document with their contract paperwork. A seller who agrees to sign an agreement to complete pest work for which the seller has not yet received a report is a seller who could be suddenly responsible to pay thousands of dollars.
Lately, the practice has been not to include any reference to a pest report in the purchase contract. This is not to say that if the buyer’s appraiser spots a condition of dry-rot or suspects infestation, that the appraiser won’t “call it out” on the appraisal, because the appraiser might.
In the opinion of this Sacramento real estate agent, when representing the buyer as a buyer’s agent, it’s generally better to let the buyer pay for the Sacramento pest inspection report, and allow the buyer to choose his or her own pest company. Then, if repairs are noted, the buyer can negotiate for the repairs with the seller. This does not apply to a short sale, btw. Buyers are on their own in a short sale, no repairs. But with a regular transaction, the buyer has the option to ask the seller to pay for the repairs or agree to a closing credit and finish the repairs after closing, or if the seller refuses, to just suck it up and deal with it later.
Most sellers will give the buyers a closing credit because a) if the deal fell apart due to the pest repair negotiation, the next buyer would receive a copy of the pest inspection and that buyer might demand the same thing, and b) escrow won’t be delayed while everybody waits for the pest company to finish the work and c) the buyers might be able to complete some of the work themselves after closing and save a little bit.
On the other hand, if the buyer pays for the pest report and the deal falls apart, those pest inspections stay on record for two years at the Pest Control Board. The seller is now stuck with a pest inspection report from a company that the seller might not feel has done the best job possible. There is controversy around pest companies that issue reports and also accept payment for completion work.
Just stuff to think about before allowing your agent to automatically include in the purchase contract that the seller will pay for the pest report. You might want to reconsider how it has always been handled. If an agent is representing the seller, it might be a good idea for the agent to advise the seller to order the pest before receiving a purchase contract. That was the seller is in control. Likewise, if an agent is representing a buyer, the agent might recommend the buyer pay for a pest inspection as part of the inspections allowed under paragraph 14b1.
It depends on which side of the fence an agent sits.
If you take the last route, be sure to let the seller know a pest inspection is in the works. Otherwise, your pest inspector might meet that old guy out in the yard, waving his fist and screaming for the pest inspector to stop poking holes in his house.
