Real Estate Tidbits

6 Steps to Buying a Home

May 2013: This Month in Real Estate & One Thing Sellers Can Do to Sell for More Money

Thinking of Selling? Where to Begin?

Have you been thinking of selling your home, but don't know where to begin?  You're not alone.  Many homeowners considering selling aren't sure how to get things started?  They have questions like "Is now the right time to sell?", "How much do I ask for my home?", "What are the costs involved with selling and how much will I 'net' if I sell?", "Am I qualified to buy another home and, if so, how much can I afford?", "Should I wait a little longer hoping for prices to increase and what if prices decrease instead?", and many others.

Selling a home can be a scary thing?  Would-be sellers don't want to make any mistakes; and they certainly don't want to lose money in the process.  That's certainly understandable... who wants to make a mistake that could end up costing potentially thousands of dollars.

So... how best does a homeowner thinking of selling begin?  Well... my answer may seem self-serving, but it is truly the best answer: Contact a Realtor.  A licensed, experienced Realtor does exactly what you're considering doing... and he/she does it for a living.

A Realtor can answer just about any question you'll have about selling such as:

• Is now the right time to sell or should you wait?  Timing is critical and can make a significant difference in your net proceeds.
• How much is your property REALLY worth in the current market?
• Are market values in your neighborhood trending up, down, or sideways?
• How does the current available inventory in your area affect your ability to sell your home?
• What kinds of repairs or simple improvements, if any, might be appropriate to complete before putting your home on the market?
• What other things might you need to do to prepare to sell?
• What are all the costs that go into selling a home and how can you maximize your net proceeds?
• How about if you have to buy locally, too?  What's the market like where you're going?
• How do you ensure your "qualified" to buy another home and, most importantly, how much can you afford based on how much you'll make selling your current home?  A good Realtor will have reliable mortgage professionals at his/her disposal to ensure you get those questions answered.
• How best to coordinate selling and buying so you don't have to move twice.  In other words, how do you "time" your sale and "time" your purchase?

Of course, one of the most important questions you must ask yourself is WHY you want to sell?  Your Realtor will need to understand your motivation for moving so he/she can help you.  A seller's "why" is critical to knowing how best to position your home in the market to sell, and important for finding that next home for you and your family.

One more thing: Be sure to contact an "experienced" Realtor with a long track record of success.  Using an inexperienced or part-time agent can be risky when you're considering selling something worth hundreds of thousands of dollars.

If you'd like to discuss the selling process and how best to begin, please call me today at 916-241-8000 or 530-677-1332.  No obligation, no pressure, and no fine print... you have my word.

6 Steps to Selling a Home

April 2013: This Month in Real Estate & What the Market Shift Means for Buyers

Want TOP DOLLAR for Your Home? Price It Right from the Start!

When selling a home, sellers want to get the most money possible.  I understand that... I've sold my homes over the years and I want top dollar, too.  However, there's a way to ensure sellers get top dollar and a way to ensure they don't.

Even when it's fairly obvious how much a home should be listed for, sellers often want to "try" a higher price, even if just for a short time, just "in case" they are able to get more money.  I understand... seems like a reasonable idea, doesn't it?  Well... not necessarily.  Let me explain.

Homes for sale get the most interest and activity when they are NEW on the market (see chart below). That makes sense, doesn't it?  And then, of course, it stands to reason that as time goes on, buyer interest decreases.  The listing is no longer fresh and new, other competing homes come on the market, and buyers start to question why the home hasn't sold yet.  Then, even if they are interested, they figure the seller must be getting desperate and buyers tend to make lower offers.  Ultimately, the longer a home sits on the market, the less it will sell for.

Sellers must ensure the property is priced "right" from the very start or they risk losing the vast majority of buyers who will be "interested" when it's first put on the market.  A home priced "right" will sell.  An over-priced home will sit on the market longer, "help sell" other homes that are more reasonably priced, and will ultimately have to be priced below what it would have sold for had it been priced right from the start. 

The bottom line: In order to get TOP DOLLAR, price it right from the start. And I don't mean priced "low", I mean priced RIGHT (according to the current real estate market).

Of course, be sure and discuss with your Realtor the best pricing strategy for your property.

Call me at 916-241-8000 or 530-677-1332 with any questions or if you have property to sell.

 

Related articles

Real Estate Market is Like the Stock Market

Real Estate "Myth-Understanding": Pricing a Home High Gives the Seller "Room to Negotiate"

March 2013: This Month in Real Estate & Sell For More Money and Faster

Home Selling Tip: Prepare Your Entranceway

We've all heard the term "curb-appeal" which is the term to describe the "initial impression" of a home when a buyer first drives up.  In other words, it's how the house appears and "appeals" from the street.

Many of the posts on this site discuss curb appeal. This post gets a bit more specific on a specific aspect of curb appeal - the entrance to your home.

Again, first impressions are critical. As we've all heard, you never get a second chance to make a first impression. So, since the entrance to your home cannot be avoided when a buyer comes over, let's ensure the entrance provides a great first impression to the buyer (yes, the entrance is part of your home's overall curb appeal).

Here are some tips on what to do before putting your home on the market:

• Check doorbell and exterior lights (have the light on when buyers are coming - even during the day)
• Replace welcome mat
• Sweep or wash down the concrete
• Put out a planter or pots with fresh, colorful flowers
• Repair/repaint security door and/or front door
• Wash the windows (especially any right next to the front door)
• Clear interior entry of all clutter
• Clear and clean out front hall closet (yes... buyers sometimes check the closets)
• Walk to the sidewalk and look at your home's curb appeal from the street and ask your self how it looks

Not hard, is it?  Simple things, yet they can make a powerful impact.

What's interesting about some "home prep" recommendations is that sometimes they aren't even noticed by the buyers once they are complete.  However, if they are NOT completed, they are definitely noticed.  So, take some time and take care of these items.

Looking for other recommendations to prepare your home to get TOP DOLLAR in the current market?  Call me on my direct line at 916-241-8000 or 530-677-1332.

More home selling tips here.

Learn the Secrets Top Real Estate Agents Use When Selling Their Own Homes... and How They Make More Money

 

What is a Fixed Rate Mortgage?

What is a Fixed Rate Mortgage?

A fixed rate mortgage is a mortgage loan where the interest rate remains the same throughout the life of the loan.

 

Also see What is an Adjustable Rate Mortgage (ARM)?

 

 

What Inspections Should I Do When Buying a Home?

When buying a home, or any kind of real estate, buyers should ensure they have all the information they need about the property to ensure they know what they're buying.  Of course, the buyers will receive property "disclosures" from the seller (and maybe other sources), but that doesn't relieve the buyer of the responsibility to learn even more about the property. There are usually "issues" about the property the seller isn't even aware of... issues that may only be identified through various types of inspections.

Buyers usually ask "What inspections should I do when buying a home?"

Although optional, it is recommended that buyers have the property inspected by the "appropriate professionals".  Typically, the seller pays for a pest inspection which looks for wood decay, water/moisture damage, and various types of infestations.  As with most anything in real estate, who pays for the pest inspection is negotiable, but it's "normal and customary" for the seller to have this done, at the seller's expense, before or during a purchase transaction.

Once the purchase offer has been agreed to by both buyer and seller, and the escrow has begun, the buyer has the right to have other inspections performed, typically at the buyer's expense (unless it has been agreed to in the contract that the seller will pay for additional inspections - although this is not common). The inspection reports (the findings of these inspections) - any and all inspections - must be provided to the seller (in addition to the buyer, of course).

What kind of inspections are recommended that the buyer have performed?  At minimum, most commonly, a whole house inspection... normally referred to as the "home inspection."

Depending on the property features and condition of various systems, other inspections that can be considered include (in no particular order):

• roof inspection
• pool inspection
• HVAC inspection
• chimney inspection
• septic inspection
• well inspection
• sewer line inspection
• structural inspection
• misc others (although these listed are the most common)

The inspections in blue are the more common ones done in addition to a home inspection.

It seems like a lot of inspections but, keep in mind, inspections other than the home inspection are typically only performed if there are specific concerns by the buyer that can possibly be identified with a certain inspection. 

Buyers should consult with their Realtor to identify any other inspections that might be appropriate for the particular property. Of course, while a Realtor can provide guidance and advice, it's ultimately the buyer's choice if additional inspections are done.

If you have questions, please call me at 916-241-8000 or 530-677-1332.

 

Legal Mistakes Home Sellers Make - Part 2

This is the second article in a series about the legal mistakes many sellers make when selling real estate.

I must again state my disclaimer: Even though the title of this post includes the word "legal," I am not offering legal advice. I am not an attorney; I am a Realtor.  If you'd like legal advice, I recommend speaking with a real estate attorney. 

The issues I will discuss here are things we, as Realtors, deal with regularly and can certainly counsel our clients on a reasonable path forward and normally problems can be avoided.  Again, an attorney is the best person to provide legal advice.

OK... so let's proceed. Here is another mistake that many sellers make or "almost" make:

Not disclosing known material facts that affect the value or desirability of the property.  This is, in my opinion, one of the most significant risks to sellers.  When selling real estate, there are a number of "disclosure" forms that sellers must complete and provide to the buyer.  Typically, the seller's Realtor will provide the "required" forms and disclosures for the seller to complete.  There are a variety of disclosures, but they all share a common purpose: to provide the buyer with every "known" issue, fact, problem or circumstance about the property and the neighborhood/area. 

I think we all agree that a buyer should know everything there is to know about a house before completing the purchase.  Sellers are required to communicate everything they "know" about the property that could affect the "value or desirability" of that property. Of course, what one person thinks may or may not affect the value or desirability of a property may not be the same as what another person thinks.  This is where your Realtor can help. He or she can provide a seller with the guidance to properly communicate the appropriate issues to the buyers. Keep in mind that the most important person who ultimately determines whether an issue affects the value or desirability is the BUYER, so sellers should err on the side of "over-disclosure."

When there is some confusion if an issue is appropriate to disclose, most experts agree that sellers should disclose it.  It's better to disclose more than less.  I heard a while back that sellers should disclose "everything that the nosey neighbors will tell the buyers" once they move in.

If something significant (that affects value or desirability) is not disclosed and is discovered later, the buyer may have a legal action against the seller and/or real estate agents.

So, when it comes to disclosure, be sure and complete all forms completely and accurately and discuss any concerns or questions with your Realtor.

Considering selling or buying real estate? Call me and I can help.  My direct line is 916-241-8000 or 530-677-1332.

Learn the Secrets Top Real Estate Agents Use When Selling Their Own Homes... and How They Make More Money

Related articles

Legal Mistakes Home Sellers Make - Part 1

Inventory is Down... Prices are UP!

Finally... the real estate market (Sacramento, El Dorado & Placer counties) is showing signs of improvement. And home owners are finally starting to smile again.

The first chart below shows the inventory of homes on the market and the number of homes sold for the last 14 months. The number of home listings is down 51.4% (primarily due to a reduction in foreclosures), yet overall home sales remain strong. As the law of supply and demand says, when supply is down (as it is), then demand goes up... and so do prices.

The second chart shows the median price for homes in the three counties - up 26.7% in the last 14 months. There is some concern, however, that the current value increases could be a "mini-bubble" and that another foreclosure wave could his this year; if that happens, prices will likey head down again. 

Curious how this market affects your buying or selling plans?  Then call me and let's discuss it.  I'm at 916-241-8000 or 530-677-1332.

Learn the Secrets Top Real Estate Agents Use When Selling Their Own Homes... and How They Make More Money

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Real Estate Market is Like the Stock Market

Real Estate "Myth-Understanding": Pricing a Home High Gives the Seller "Room to Negotiate"

Real Estate Market is Like the Stock Market

Obviously, selling as many properties as I do each month, I have many, many conversations with sellers about price.  Of course, whenever any of us sells real estate, we want to sell for the most money possible to maximize our profits. 

In this post, I will be brutally honest. Please don't be offended if this information hits a nerve. I've found after selling hundreds and hundreds of homes, that sellers really want to truth, even though it may sometimes hurt. 

Unfortunately, we, as sellers, often struggle to accept the realities of the real estate market.  We obviously want to list our properties for the highest amount to ensure we don't "leave anything on the table".  Often, however, the market doesn't agree with our perception of our property's value.  I'm saying "we" as I write this because even though I know this stuff, I have struggled in the past when selling my own properties, to price it where it should be priced.

And often the price seller expects for his/her home is more than the market says the home is worth.  Even though the market may give all indications that a specific property is worth, say $350,000, it's not uncommon for a seller to want to ask $400,000. 

And even though there's plenty of market data to indicate that $350,000 is the "right" price and that clearly indicates that $400,000 is way too high, would-be sellers often then try to justify why their home "defies the market".  They try to justify that extra $50,000 by saying things like "our house is nicer than the others", "we have a nicer backyard", "we just painted the entire inside", "the other homes were 'given' away", etc. 

And, as we know, some sellers want to price their home based on how much they "need" for their next purchase.  They're hoping that a buyer will willingly pay an extra $50,000 for their home, for example, because they (the sellers) need the money for their next purchase. Of course, when thinking about that for a moment, it defies common sense.

So, to help sellers understand "market value", I learned many years ago to liken the real estate market to the stock market. 

For example, let's say I bought Starbucks stock a few years ago for $80 per share.  And let's say I want to sell it today, but the price is down to $65 per share.  How much can I get for the stock?  Can I get what I paid for it a few years ago - $80?  Nope!  Can I sell is for $75 per share because I REALLY NEED the money to buy Apple stock?  Nope!  Can I sell is for $68 per share just to minimize my loss?  Nope! It's selling today for $65 per share and that's ALL I can get for it. That's what it's worth and that's how much I can sell it for. And no reason in the world will get me any more than $65 per share.

Now... I could consider waiting, and maybe the price will rise. But, then again, it could also drop.

Bottom line: Market value is market value.  The market, whether it be the stock market or the real estate market, may not be kind, but it is never wrong. And if we try and "argue" with the market, we'll lose.

If you have questions about selling your home, please call me at 916-241-8000 or 530-677-1332.

Related articles

Real Estate "Myth-Understanding": Pricing a Home High Gives the Seller "Room to Negotiate"

Legal Mistakes Home Sellers Make - Part 1

February 2013: This Month in Real Estate & Eco-Friendly Features Buyers Want

Real Estate "Myth-Understanding": Pricing a Home High Gives the Seller "Room to Negotiate"

A common "myth-understanding" when selling a home is that if a seller prices the home high to start with, then they'll have "room to negotiate" with a buyer.  In other words, a higher price allows them to be "flexible" and shows they're willing to come down on price during offer negotiations.

While this thought process initially sounds reasonable and appears that it could work, I've found over the years that starting high will more likely backfire and end up costing the seller rather than benefiting the seller.  Why?  Read on...

If you as a seller, price your home, let's say $20,000 above market value hoping for some "room to negotiate," instead of buyers liking your home and making an offer, a buyer may figure that since the home is overpriced - in this case by about $20,000 - that you might be unreasonable since the home was priced so much higher than what the market indicates the price should be.  So, that buyer may pass up your home completely.

In addition, let's say a buyer is only able to afford a home for no more than $250,000, for example. And let's say your home is really only worth $250k, but you priced it at $270k (to allow that room to negotiate).  The buyer, only being able to afford a maximum price, limits his online searches to homes priced at $250k or less, so your home doesn't even show up in his search; he never knows your home even exists. And, even though you were ultimately willing to come down to $250k, and ultimately this buyer would have been willing to purchase your home at $250k, the fact that it was priced so high (for that room to negotiate) completely eliminated the possibility of it selling to that buyer.

Another unexpected result of pricing too high is that since there are other homes in the area similar to the seller's home, and most of those are priced "correctly", in other words, they're priced at market value, the seller's overpriced home helps the other homes look more reasonably priced and ultimately "drives the buyers" to the other better-priced homes.

The most likely end result?  Since the home was overpriced for the market, it didn't sell.  It sat on the market while others sold. It became a "stale listing".  The seller gets frustrated and ends up reducing the price in order to revive interest in the home. However, since it's been on the market a while, lowering it to the originally-correct market value is no longer prudent.  It must be lowered to a "better than market value" price in order for buyers to become interested again.  Remember... the longer a home is on the market, buyers wonder why it didn't sell. They start to think something might be wrong with the property since it hasn't sold. And sellers must price it below market value in order to sell it.

The home ultimately sells for well BELOW market value - BELOW what it would have sold for had it been priced correctly in the first place.

The moral of the story: Price it at market value (or below) from the start to generate interest and get it sold. If offers come in too low, then the seller can make a counter-offer. If the home is truly worth the price, then "room to negotiate" won't be necessary.  It will sell.  Of course, consult your Realtor on the best pricing strategy for your property.

By the way... if a seller wants to build in a LITTLE room to negotiate - maybe a few thousand dollars - that's fine. It's just so many sellers think $20k or $30k or more gives them more room. That's what I'm talking about... small amount, OK... large amount, not OK.

Questions?  Call me at (916) 241-8000 or (530) 677-1332.  Or email me.

Other pricing-related articles for your review:

What a Seller "Needs" or "Wants" Has Absolutely Nothing to Do With Pricing a Home For Sale

Home Seller Tip: Pricing Right Nets MORE and Sells FASTER

The Simple Truth About Pricing a Home to Sell

When Should a Seller Lower Their Asking Price?

Comparing a Home's Value to a Stock's Value

What is an Adjustable Rate Mortgage (ARM)?

What is an Adjustable Rate Mortgage (ARM)?

An ARM is a mortgage loan where the interest rate, initially at a fixed rate, can fluctuate after a specific period of time, based on some financial index, most often on an annual basis.

Legal Mistakes Home Sellers Make - Part 1

This post is the first of multiple articles that will discuss some of the more common mistakes sellers make when working with buyers in a real estate transaction.

I will say first that even though the title of this post includes the word "legal," I am not offering legal advice. I am not an attorney; I am a Realtor.  If you'd like legal advice, I recommend speaking with an attorney. 

The issues I will discuss here are things we, as Realtors, deal with regularly and can certainly counsel our clients on a reasonable path forward and normally problems can be avoided.  Again, an attorney is the best person to provide legal advice.

So, with that said, here are two common mistakes sellers make and "almost" make:

1. Accepting a buyer's offer just because it's a high or "right" price without regard to other contractual terms.  Keep in mind there are many things to consider when evaluating an offer from a buyer. Things like the type of financing, inspections, contingency periods, down payment, deposit, closing costs, escrow period and closing date are all things that should be considered by sellers when reviewing an offer.  The offer is not just the "price"... it's many things.  And while the price is certainly important, your Realtor can advise on how to evaluate the offer in its "entirety" (all terms and conditions) and not solely on price.

2. Not providing the buyer the legally-required disclosures.  There are certain forms and documents, referred to collectively as "disclosures," that are required in a real estate transaction. Other documents may be recommended, but not requried.  Disclosures inform the buyers what is "known" by the sellers about the property that could affect its value and/or desireability. This is one area where having a competent and experienced Realtor is critically important since your Realtor can advise and guide you on which documents are required and how to complete them.  Failing to disclose certain things could put the seller at legal risk.  Sellers should take their time reading and completing the disclosures to ensure they provide the buyers what they need to know about the property.

I was going to include a few other issues in this article, but I realize this is enough for now. I can't stress enough how important it is to ensure your Realtor understands these and other issues relating to a real estate purchase transaction. And, as said previously, if you need legal advice, an attorney is your best resource.

What is a home inspection?

What is a home inspection?

A thorough inspection by a professional that evaluates the structural, mechanical and overall condition of a property. A satisfactory home inspection is often included as a contingency (or "condition") by the purchaser.

It is strongly recommended that buyers have a home inspection on any property they intend to buy. Often, it makes sense to hire multiple inspectors to inspect different "systems" on the property such as HVAC, roof, pool, well, septic, etc.

Buyers looking to buy in the Sacramento area (or any area) should consult with their Realtor to help determine the most appropriate inspections to have completed.  Most inspections are done at the buyer's expense, however, sometimes the cost of inspections are negotiable between buyers and sellers.  Again, the buyer's Realtor can provide guidance in this area.

If you have questions about inspections or anything else related to buying or selling real estate, call us and let's talk.  Call today at 916-241-8000 or 530-677-1332.

Also review:

Buyers: Do Your "Home"Work... Have a Home Inspection

Buying a Home? Check Out the Neighborhood Before You Buy

Buying a Home? Disclosures will give you the "Scoop"

Buying? Walk the Neighborhood and Check It Out

If you are considering buying in a particular area or neighborhood, or if you're already in escrow on a home, there's one important home buying tip you should consider before you close the sale: Walk or drive the neighborhood.

This is one of the best things a buyer could do when they are looking to buy a home. You may notice something you didn't see the first time you saw the home.

Neighborhoods can be deceiving.  During the day, for example, the street could be peaceful and quiet. But if you come by in the evening or over the weekend, things could a lot different.

You could find the street lined with cars. Or even lots of traffic (not good if you have kids that may play in the street). There might be dogs barking constantly. Maybe by visiting again, with the wind blowing from a different direction, you smell the water treatment plant that you didn't even know was so close by.

Buyers need to inspect, not only the property they want to buy, but also the neighborhood. The neighborhood makes a big difference to the desireability of, not only the property, but to the overall area, too.  And consider coming by at different times.. morning, evening, weekends. Each time you come by, you may discover something different.

Do your homework... check out the neighborhood.  You'll be glad you did.

January 2013: This Month in Real Estate & The Spring Home Shopping Season

Home Not Selling? Could It Be the Price?

Remove the Ugly Wallpaper

Home sellers always ask me how they can best preapre their homes for sale.  While the typical stuff is important, like cleaning, de-cluttering, dusting, and putting stuff in the garage or in storage, there is another recommendation that makes a big difference.

It's the wallpaper. Yes... the wallpaper. While there is often very attractive (and "current") wallpaper in the bedrooms, bathrooms or kitchen, there is also often very ugly wallpaper.  And wallpaper can really make or break a room, especially when it's "busy" and/or has a "dated" look or colors. 

Just because you may like it, doesn't mean others will, too. You have to be honest and logical about it.  Maybe ask a friend or a relative to be honest with you and give their opinion.

So, consider removing the wallpaper and painting before putting your home on the market. Even if you think it's attractive, buyers may not.  Especially when the wallpaper has been there since the 1970's or 80's.

If may be a hassle to remove the wallpaper and paint, but the difference may be several thousand dollars or more in your sale.  It can be worth the time and effort.

If you'd like to discover the best ways to prepare your home for a top dollar sale, call us at (916) 241-8000 or (530) 677-1332.

More home selling tips.

 

Related articles

Home Selling Tip: Create a Great First Impression with Great Curb Appeal

What a Seller "Needs" or "Wants" Has Absolutely Nothing to Do With Pricing a Home For Sale

What is Credit and How Does It Affect Your Ability to Buy a Home?

To many people, their "credit" is a puzzling thing.  Credit scores, FICO, credit history are all synomous with "credit."  This simple 90-second video explains this often mysterious aspect of our financial lives.

What is "appreciation"?

What is "appreciation"?

Appreciation, as it relates to real estate, is the increase in the value of a property, over time, due to changes in market conditions, inflation, or other causes. It is the opposite of depreciation, which is the decrease in value.

The greater Sacramento area has been plagued with declining prices (real estate depreciation) over the past several years.  However, market conditions are starting to change, and we are seeing more appreciation in real estate values.

 

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Buying a Short Sale

Buying a short sale can be rewarding, but can also be frustrating for both sellers and buyers. This video provides a quick overview of the short sale process from the buyer's perspective.

Also read Buying a Short Sale Home