Incline Village real estate: Who pays the bills in a real estate sale?
Special to the Sun-Bonanza
Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on 2/12/17
Houses Condos PUDs
For Sale 97 40 16
Under $1 million 17 34 6
Median Price For Sale $1,999,950 $579,000 $1,125,000
YTD Sales 2017 11 24 1
YTD Sales 2016 20 14 4
New Listings 4
In Escrow 5
Closed Escrow 5
Range in Escrow $478,000 - $2,799,999
These statistics are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of February 12, 2017
Each real estate transaction contains many details and one of the most important is determining which party pays for the various expenses incurred in the course of a deal.
The Incline Village Board of Realtors purchase agreement provides the opportunity for buyers and sellers to negotiate many of the expenses. Understanding and agreeing as to who is responsible for which expenses is an important part of each real estate transaction.
In Incline Village and Crystal Bay sellers will normally pay the real estate sales commission out of proceeds from the sale of their property. Sellers will typically pay for an owner’s policy of title insurance. Escrow fees and the real property transfer tax are often split equally between buyer and seller.
If the property is part of a Homeowners Association (HOA), then the HOA transfer fee might be paid by the seller or it could be split 50-50 between buyer and seller.
Buyers usually pay for the cost of inspections, although this can be a point of negotiation between the parties. Sometimes, the seller will pay for the backflow inspection since properties with certain types of appliances connected to the drinking water supply (i.e. fire sprinklers, irrigation system, hydronic boiler, etc.) are required to have the backflow device certified annually.
It is also typical for a buyer to pay the cost of a lender’s policy of title insurance and an extended coverage policy if one is desired. When a buyer is paying all cash for a property there is no lender’s policy of title insurance required and it is up to the buyer’s discretion if they wish to add the extended coverage policy.
Transactions involving the purchase of a condo or PUD normally require that the seller provide to the buyer the common interest community documents. These include such things as the HOA CC&Rs, Board of Directors minutes, financial statements, statement of demand and other information related to the HOA.
Nevada law provides that the seller is responsible for providing these documents and each HOA can charge the seller a reasonable fee not to exceed the statutory limit.
Where things sometimes get sticky is when agents are working on behalf of their buyer or seller to order inspections or repairs. When ordering services on behalf of a client it is very important for agents to stipulate that they are not the responsible party.
All billing issues are between the service provider and the buyer or seller depending on who is responsible for any particular expense. As agents we are assisting our clients with the details necessary to complete a transaction.
We are not assuming liability or responsibility for the cost of repairs, window replacements, inspections or other services provided by the plethora of individuals who may be involved with any particular transaction.
Unfortunately, many service providers simply put down the name of the agent or the real estate firm on their internal paperwork involving requests for repairs, inspections, etc.
This can be confusing for the escrow company since they need to allocate expenses to the responsible party. It can also cause consternation after the close of escrow if a particular invoice was not paid prior to closing.
It behooves everyone involved in a real estate transaction to make sure that the responsibility for each expense is clearly delineated in writing so that everything goes smoothly.
Don Kanare and Sabrina Belleci are the owners of RE/MAX North Lake. Read their blog and find weekly stats on their website at http://www.InsideIncline.com.