What a Homeowner Should Know Before Selling For Sale By Owner

The Homeowner Who Represents Himself is Dumb and

A well-known legal profession axiom:

“The attorney who represents himself is dumb and has a fool as a client.”

We believe this also applies if you attempt to sell your own home as a For Sale by Owner (FSBO). In today’s volatile market, you need an experienced professional!

You and your family need a skilled negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible re-negotiation of that off after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

Here is a list of some of the people with whom your agent will potentially negotiate on your behalf:

• The buyer
• The buyer’s agent
• The buyer’s attorney
• The home inspection company
• The termite company
• The buyer’s lender
• The appraiser
• The title company
• The town or municipality
• The buyer’s buyer
• Your bank (in the case of a short sale)

How do you know if an agent negotiates well?

Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer in your deal.

Bottom Line

You need a great negotiator. We believe that famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

The Need for a Professional When Selling Your Home

Anyone in the real estate industry for any length of time realizes that the education required and the resources necessary to be a true industry professional have dramatically increased over the last two decades. In today’s volatile market, it is necessary to have a true real estate professional if you want to sell your home for the best possible price in the shortest amount of time – and make sure the deal gets to the closing table!

The National Association of Realtors (NAR) has recently reported that as many as 15% of all deals never make it to closing. Tighter lending requirements, stronger disclosure forms and tougher appraisal standards have all contributed to the more treacherous minefield through which today’s seller must navigate.

The good news is homeowners have realized that attempting to sell their home on their own is an arduous process best left to an industry expert. According to NAR’s most recent Profile of Home Buyers and Sellers, the percentage of sellers selling on their own, known as For Sale By Owners (FSBOs), has dropped in half over the last 20 years; from 19% to 9%.

Bottom Line

If you are selling a home in today’s confusing real estate market, it is best to take on the services of a local real estate expert. He/she will guide you through each step of the transaction thereby increasing the likelihood that there will be fewer inconveniences for you and your family

California home prices hit highest level in five years

California home prices hit highest level in five years
Driven by strong sales in high-end coastal areas and shrinking inventory, California's median home price hit its highest level in March since May 2008, according to the CALIFORNIA ASSOCIATION OF REALTORS®


Closed escrow sales of existing, single-family detached homes in California totaled a revised seasonally adjusted annualized rate of 417,520, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.
March closings were up a slight 0.1 percent from a revised 417,310 in February but down 4.9 percent from a revised 439,260 in March 2012.  The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the March pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.
The statewide median price of an existing, single-family detached home climbed 13.7 percent from February’s $333,380 median price to $378,960 in March, reversing a two-month decline.
The month-to-month increase was the highest since C.A.R. began tracking this statistic in 1979.  The March price was up 28.2 percent from a revised $295,630 recorded in March 2012, marking the 13th consecutive month of annual price increases and the ninth consecutive month of double-digit annual gains.
The available supply of homes for sale fell significantly in March, falling to a 2.9-month supply, as measured by C.A.R.’s Unsold Inventory Index.  The March Unsold Inventory Index for existing, single-family detached homes was down from 3.6 months in February and down from 4.2 months in March 2012.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered normal.

5 Tips for First-Time Home Buyers

Buying a first home can be a scary, confusing and stressful process. Many would-be buyers are understandably nervous at the prospect of making the largest purchase of their lives. Rather than diving in and hoping for the best, you should prepare carefully before you begin the house search.

Following some useful tips will help you turn an overwhelming and intimidating experience into an exciting search that yields the right home!

1.) Establishing a Realistic Price Range

A common mistake among first-time home buyers is purchasing more house than they can afford. You should not rely on banks to determine what you can comfortably spend on a new home. Banks are adept at determining the amount of monthly debt in the form of mortgage, insurance, credit card, student loan and auto loan payments. They have no way of knowing, however, what you spend each month on groceries, entertainment and utilities.

You should make a list of all monthly expenses, excluding rent or your current mortgage payment. Whatever is left after monthly expenses is the amount available for a mortgage payment and housing expenses such as taxes, insurance and home maintenance. Carefully consideration of your budget saves time by weeding out homes that you cannot afford and guards against overspending.

2.) Seeking Pre-approval

Getting pre-approved for a mortgage prevents a deal on a dream home from falling apart due to failure to obtain financing. You should compare loans from several lenders to see which one best suits your needs. A pre-approval letter will give you some power to negotiate on a home’s price because the seller will view a pre-approved offer more favorably than an offer that comes without lender pre-approval.

Keep in mind that pre-approval is different from pre-qualification. During pre-qualification, the lender estimates what you can afford. Preapproval is a more involved process in which the lender looks at your credit report and performs an extensive financial background check. At this point, you will get a good idea of the mortgage interest rate as well.

3.) Setting Priorities

You should compile a list of what you need and want in a house. Needs might include the number of bedrooms, square footage, high-quality schools and commute time. These needs are aspects of the house that either cannot be changed or cannot be changed without substantial cost to you.

Wants, on the other hand, are something you would like and that can be changed. Wants may include a pool or hot tub, landscaping, finished basement or hardwood floors. Making a list of wants and needs helps you focus on what is really important in a house, narrowing the list of prospective homes. Ideally, the new house will include all of the needs and a few wants.

4.) Choosing the Right Neighborhood

Crime statistics, insurance rates, property taxes and school quality are important considerations for you. Because the neighborhood makes up a large part of a home’s value, take your time to find exactly what suits your needs. You should also consider job commute, traffic during rush hour and proximity to amenities such as shopping, churches and libraries.

Driving through the neighborhood at various times during the day and night will provide a more complete picture of the location. Don’t forget to talk to potential neighbors, who can be a good source of information regarding the neighborhood and residents in the community. Take note that bad neighbors can bring down the value of a house.

5.) Finding the Right Home Inspector

You will also need a professional home inspection. Even new houses may present costly problems evident only to a home inspector.

You should talk to several inspectors before hiring one. You should ask about the inspector’s qualifications, scope of the inspection, how long it will take and the nature of the report you will receive at the end of the process. Main areas covered by the inspection should include quality of construction, integrity of the foundation and condition of plumbing, electrical, heating and cooling systems. If the inspection uncovers serious issues, such as cracks in the foundation, you may decide to back out of the contract or ask the seller to repair the problem.

3 Reasons to Sell Your House Today! (Part III)

Part III – New Construction Will Soon Be Your Competition

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. As an example, the National Association of Realtors revealed, relative to last year, year-to-date new home sales are up 19%.

These ‘shiny’ new homes will again become competition as they can be an attractive alternative to many of today’s home purchasers.

Here are the numbers regarding new construction about to come to market from the Census Bureau:

BUILDING PERMITS

• Single-family authorizations in February were at a rate of 600,000.
• This is 25.5% above February 2012.

HOUSING UNDER CONSTRUCTION

• Single-family housing starts in February were at a rate of 618,000.
• This is 18.5% above February 2012.

HOUSING COMPLETIONS

• Single-family housing completions in February were at a rate of 574,000.
• This is 32.9% above February 2012.

As we mentioned, new construction can be strong competition to a seller of an existing home. It may make sense to list your home before this new inventory makes its way to market.

Part II – Housing Supply is Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

• 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
• 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
• 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.

Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price.

Part I – Demand for Real Estate is Much Stronger This Year

When selling anything, owners can only hope there is a strong demand for that which they are selling. The great news for today’s home sellers is that the current housing market is experiencing a stronger demand than we have seen in some time.

The  spring housing market of 2013 is projected to be one of the best in years.

Home Sales

The National Association of Realtors (NAR) reports monthly on bothpending sales (houses going into contract) and existing home sales(actual closed sales).

In the first quarter of 2013, pending sales have consistently outperformed the numbers reported in 2012. Contract activity has been above year-ago levels for the past 22 months. Before this year, the last time the index showed a higher reading was in April 2010, shortly before the deadline for the home buyer tax credit.

NAR also revealed that closed home sales have been above year-ago levels for 20 consecutive months and sales are at the highest level since the tax credit period of 2009-2010.

Impact on Sellers

This increase in demand has created bidding wars for properly priced homes across the country. This has resulted in two favorable changes for home sellers:

1. They are receiving offers closer to (if not greater than) the list price.
2. The average days it takes to sell a home has dropped by over 20% from last year.

If you are thinking about selling your home, don’t miss out on the strong demand that exists in the current spring market.

In hot market, bid first, see house later

The lack of available homes for sale is creating a sellers’ market, and in some areas generating offers from buyers who haven’t even seen the home on which they are bidding.

Making sense of the story

• Buying homes sight unseen is a small but growing trend in some areas, fueled by the over-competitive market and burgeoning interest by international buyers – and enabled by technological advances.

• Buyers might make offers without seeing a house for several reasons: They live elsewhere or are away for business or personal reasons; they had scheduling conflicts and couldn’t visit before bids were due; they’re investors accustomed to buying just based on property characteristics; or they’re taking a scattershot approach of making lots of offers and seeing which gets accepted.

• Although some buyers are making offers without seeing the properties in person, they’re not going in completely blind. In addition to extensive photos and video tours, plenty of websites offer buyers the opportunity to learn about neighborhoods and schools and research comparable sales.

• Often, those who bid sight unseen have a chance to tour the house during escrow and can still cancel the deal. Some sales, such as courthouse auctions that are the final stage in the foreclosure process, don’t offer a chance to see properties in advance, nor is there an inspection period.

Crazy Real Estate Headlines

WTH(eck)!?! More Crazy Real Estate Headlines Posted: 02 Apr 2013 04:00 AM PDT Number of Loans in Foreclosure Reaches a Three-Year Low Foreclosure Activity Rising in 2013 Both headlines above appeared in the media last week. The amazing part is that both headlines appeared on the same day and from the same media source (HousingWire)!! The first headline commented on the recently released Office of the Comptroller of the Currency (OCC) study: “Loan quality on first-lien mortgages improved significantly in the fourth quarter of 2012, with the OCC reporting that the number of loans in some stage of foreclosure fell below one-million for the first time in three years.” The second headline reported on recently released study by RealtyTrac: “In its first-ever U.S. Foreclosure Inventory Analysis, RealtyTrac revealed that 1.5 million U.S. properties were actively in the foreclosure process or bank-owned in the first quarter of 2013. This number was up 9% from the first quarter of 2012.” Are both headlines correct? Yes. Each study is revealing information on a different set of data during a different period of time. However, to a person who is not an industry expert, the headlines could be very confusing. If foreclosures are decreasing, future prices should increase. If foreclosures are increasing, there would be downward pressure on values.  Knowing whether foreclosures are actually increasing or decreasing should have an impact on a consumer’s decision to move forward. Any confusion could lead to a consumer making a poor decision. In today’s real estate market, whether you are thinking of buying or selling, it is CRUCIAL for you to seek out the advice of a professional who truly is a market expert.