This Month in Real Estate: October

Choosing a Listing Price

Picking a Listing Price can be extremely stressful, what you think your home is worth might not be what the Market thinks your home is worth. A Real Estate Agent will give you their expert opinion, but make sure they explain the current market trends and have enough information to back it up.

Dangers of Overpricing

Broker- and buyer-interest is at its highest when a home is first put on the market — and that interest will remain high for about four weeks. But if a property is priced too high during this crucial period, it won’t attract the right buyers. Once that momentum is lost, it’s difficult to recover.

• By overpricing your home, you create the need to reduce the price at a later time in order to compete with the listings that are really in your price range.
• If you’re interviewing several Realtors to choose a listing agent, you may be tempted to pick the sales professional who suggests the highest price for your property. But sellers, like buyers, need to beware. The Realtor who provides the best comparative market analysis and explanation of how your home should be priced will be more likely to sell your home quicker and for a higher price than someone who tells you only what you want to hear.

Look at Comps

Talk to a Realtor and have them find Comparable homes,that are on the market and homes that have recently sold, also known as a Comparative Market Analysis . Your asking price should be within 10 percent of the average sold price in your neighborhood.

Realtors will evaluate three factors: comparing your home to others that have recently sold, others currently listed and adjustments needed for extraordinary improvements.

Although home improvements can increase the value of your property, it is more likely these upgrades will simply help the home to sell faster than the others without similar renovations. This concept is sometimes difficult for sellers to understand. They feel that if they spent a certain amount on a home improvement, they should be able to recoup that cost by tacking it on to the sales price. But unfortunately, that’s not always the case. According to Home Remodeling Magazine, very few home improvements return 100% of the investment, and that percentage of return declines as the years go by.

Upgrades are important, but buyers may not share the owners’ enthusiasm for — nor agree with — the owners’ perceived value of the improvements. And if a buyer doesn’t see the value, then there is no value.

A professional analysis of the market, will take all of this into consideration as well as analyze the price other homes have actually sold for, not just the asking price — there can be a sizable difference. The most common mistake sellers make when pricing their property is to only consider the asking prices of other properties. 

Remember, a list price does not suggest market value of a home. It is simply the “asking price” or “dream sheet” of another seller. Its relevance may, however, be in how you position your home with the others on the market.

Other Factors:

• Time of year -- Ah, spring. Spring is considered the best season to sell a home since families are trying to get situated before the start of the next school year; however, fall is a close second since it comes right after the quiet days of summer when most people are away on vacation. Winter is usually the worst season -- especially in areas where it snows -- but also because of the Thanksgiving, Christmas, and New Year's holidays when people's minds are on socializing, not buying or selling a home.
• Interest rates -- If rates are reasonable, it seems everyone is in the market for a home. But, if interest rates start to climb or they do not seem reasonable, you'll see less action on the street.
• Inventory -- In Economics 101, we were taught the basics of supply and demand. This theory laid the foundation of what drives costs, and so it goes with real estate. If your home is one of 20 in the neighborhood that's for sale, you will have a hard time getting your price since the supply is great and the demand may not be so great. However, if it's a hot market and you have a home in a great neighborhood, chances are you will get your asking price and maybe even more. Scope out the neighborhood to see if inventory is high or low. (And ask a real estate agent.)

Advice for First- Time Home Buyers

• Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home.
      
• Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You'll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you're interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.
      
• List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.
      
• Representation by a Professional: Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller.
      
• Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:         
  1. One or more detailed maps with your areas of interest highlighted.         
  2. A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.              
  3. Paper and pen, for taking notes as you search.              
  4. Instant or video camera to help refresh your memory on individual properties, especially if you are attending a series of showings.              
  5. Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?
           
• Visualize the house empty & with your decor: Are the rooms laid out to fit your needs? Is there enough light?
      
• Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later.
          
• Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don't forget such essentials as:         
  1. Include inspection & mortgage contingencies in your written offer.     
  2. Have the property inspected by a professional inspector.              
  3. Request a second walk-through to take place within 24 hours of closing.
  4. You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).
      
• All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please email me or call me directly to discuss any of these matters in further detail.

High-End Home Sales Soar throughout California

By RE Insider

While home sales throughout much of California have remained flat throughout this spring and early summer, a new study has indicated that multimillion dollar homes are selling in record numbers, offering hope that the market is still improving and prompting many to wonder what’s holding the rest of the market back.

According to a recent study performed by San Diego-based DataQuick, $1 million-plus sales grew at a 9.1% clip statewide compared with last year, while sales overall fell 7.4%. Additionally, California in the second quarter set all-time records for the number of homes sold for more than $2 million, more than $3 million, more than $4 million and more than $5 million.

What’s driving these high-end home sales? According to market-watchers, there are several factors.

One is the hot technology sector in the Bay Area and some affluent parts of Southern California, which is minting new millionaires who can afford seven-figure homes. Another is the 11.6% price growth in California over the last year, which means a house worth $925,000 last summer may be worth $1.03 million today. And there’s the influx of international buyers, which is pushing up prices at the high end.

“It’s always fascinating to watch this part of the real estate market. It behaves differently, responds to its own set of criteria,” said DataQuick analyst Andrew LePage. “These buyers, especially those in the multi-million-dollar market, are less likely to agonize over credit scores, income and job security, down payments and mortgage interest rates.”

With this in mind, do you think this the market is improving as a whole? And considering that mortgage rates remain historically low, what do you believe is holding other buyers back?

http://re-insider.com/2014/08/18/high-end-home-sales-soar-throughout-california/

First Step- Getting a Real Estate Agent in Rolling Hills Estates

If you are thinking of buying or selling a home, one of the most important decisions you will make is picking the right real estate agent. However, when most people give a great deal of time and thought to choosing a home, they spend very little time when they choose their real estate agent.

It should go without saying that if you want a smooth and trouble-free buying or selling experience for your home, you first have to find a competent real estate agent. Sadly, it doesn’t always turn out this way, as many homebuyers are anxious to buy or sell and rush through choosing a real estate agent.

Buying or selling a home is one of the biggest financial decisions that you will have to make. The process can be complicated. With so much at stake, you need to know you are working with a professional who will help find the right home for you and possibly sell your home at the right price and negotiate the best deal.

You may also be interested to know that the National Association of Realtors is the largest commercial association in the United States, with over 1.3 million members who offer a high standard of quality, so you should not find it hard to find someone qualified to help you.
How do you choose a good real estate agent? Start by looking outside your door. Drive or walk around your neighborhood and take a look at the for sale signs. Are there many different companies or does one seem to have the monopoly? Are the signs well maintained? Do you see SOLD signs within weeks, or rarely at all? This shows you if the properties are being actively marketed or not. If a real estate agent isn’t marketing other properties well, the chances are they won’t do any better for you either.

Talk the agent’s previous clients and ask them questions about the real estate agent, such as:
How well did they handle the process?
What did they like and dislike about the real estate agent?
Were their needs listened to?
Did he negotiate the best terms?

A good way to meet agents casually is to visit open house viewings that an agent is hosting. In this way you can tell how professional, informative and friendly they are. However, you should always interview an agent you meet in this way, as this might be his only area of expertise.
You might need more experience in an agent, so find out his specialties, success rate and experience. This applies equally to any agent whether recommended by a friend, relative, or someone that you cold called.

Looking at various company web sites can also provide useful information. Look to see if there are virtual tours, good photos and then decide how comprehensive they are. What about their information–is it descriptive or obviously over-embellished? Read real estate blogs. These will give an idea of the agent’s personality and the type of issues they are used to handling. You will need to read between the lines as some reveal little information whereas other will be frank and candid.

Once you have chosen your real estate agent, make sure you have a written agreement, which spells out your requirements and one where they work for you exclusively. Overpricing your home keeps it on the market longer. A good agent will assist you in setting a price that is in comparison with others like yours that have sold recently in your area. It should be high enough to give maximum profits, but not too high where it will scare off buyers.

Go Green in Rolling Hills

The cliff dwellers had it right. They went high on the slopes and built their homes so they would face south. By doing this, they solved the heating/cooling problem that the modern high-rise has yet to work out. The cliff dwellers got the angle just right so that in the winter when the sun was low, they got the heat from it; at the same time, in summer time when the sun was high, it was blocked during the hottest hours of the day. Energy is so plentiful that we don’t consider using even that basic knowledge. Architects don’t pay for the heating and cooling, after all. Even multi-dwelling structures can be heated and cooled much more efficiently by designing them using green principles. The same is true of single homes. The good news is that there are some urban planners who are working on green communities.

Some municipalities are encouraging this trend by adjusting their policies and by subsidizing so that there are financial incentives for building green. There is a development in New York City, for example, where seventy green homes, some of them triplexes, have been constructed on vacant lots and around public housing towers. The cost of each house was increased by $8000 for energy-efficient furnaces and appliances; however, the state, in partnership with a bank foundation, refunded some of that. The two have teamed up to reduce energy costs and to motivate builders to go green.

Ninety-three subsidized “green” condos were built in Harlem by another developer. These have geothermal heating and cooling as well as appliances chosen for their efficiency and cabinets in the kitchen that don’t put out volatile organic compounds, which many laminates do. This developer estimates that the people who live in these energy-efficient homes will save $1000 per year per unit. This is one thing developers can do to make homes available to families who can’t afford to live in decent housing. These particular condominiums are located near public transit stops which is another important consideration for people who don’t own a car.

If you are interested in getting on the go-green bandwagon in your own home, research to find out whether there are local, state, or national subsidies that may help. If you’re planning to have a new home built, talk to your developer/builder about such things as more efficient heating systems, triple-glazed windows, solar panels, formaldehyde-free carpeting, and the many other things he can do to make your home safer, cleaner and more efficient. Keeping the energy levels as low as possible is in our own best interest because we don’t know where the prices are going–it looks like they’re stuck on UP right now. The ideal green home provides the best conditions possible for human health and comfort. They also operate with the least possible environmental impact.

Rolling Hills Estates Saving for a Down Payment

As a country, Americans have not been the best at saving money. A report recently released by the Bureau of Economic Analysis charts our efforts to save continually spiraling down and it also indicates the amount we save is minus half a percent. With this in mind, it is easy to see why first-time homebuyers struggle to find a down payment.

Here in America, home ownership has increased from 25% at the start of the twentieth century to 67% at the end of it. Throughout those years, many homebuyers worked hard to come up with a down payment. In particular cases, the banks expected as much as 50% down payment prior to lending on a mortgage.

Today, the preferred down payment is normally 20%; however, very few people have that much ready money on hand. Although many lenders offer mortgages without a down payment, it is always makes more sense to save up as much as possible. A down payment has many advantages. The more you put down, the lower your mortgage will be, which means lower mortgage repayments.

Additionally, the higher the down payment is the more you will be able to pay for a home. Lenders have learned from experience that more homeowners default on their mortgages if a down payment is less than twenty percent of the sale price. For this reason, they may require you to pay private mortgage insurance until the equity in your home reaches twenty percent of the sale price.

It is not easy to save for a mortgage down payment if you are not used to saving money. However, you might find the following tips useful:
If you lack the discipline to save, try saving your tax refund. Change your withholding payoff from 1 to zero. This means your employer will have to pay more to the I.R.S and downgrade you paycheck accordingly. In this way, you may receive a larger income tax refund.
Will your parents give you a down payment? The law allows each parent to give a gift of a specific amount without any tax consequences.

If this is not possible, you may be able to ask them for an unsecured loan where they give you a better interest rate than you would get from the bank. A good way to make savings accounts grow is to save the same amount each month.
Perhaps you could take on a part-time second job or ask your boss for a raise. Spend an evening jotting down every accomplishment over the past year and times you have increased the company’s bottom line. Take this to your boss and point out your value to the company.
If he undervalues you, perhaps you can find a better paying job. Network with your peers, send resumes or cold call on companies where you would like to work. Don’t wait for them to advertise a position, as you may be the very person they need.

Check into whether you can tap into your retirement funds, as some allow you borrow from them, in order to buy a home without penalty.

If you have served in the armed forces, it is always a good idea to check out government programs. You might meet the criteria for a loan sponsored by the Veterans Administration.
The government is also running a number of assistance programs for down payments, tailored around the first time homebuyer. There are also neighborhood specific programs to help encourage home ownership in some neighborhoods.

Call Gordon or Keith today for a recommendation to a good lender.

Owning your own home is the American dream. Start planning and saving today!

Rolling Hills Estates Investments. Why is it good?

There are fewer investments that have shown a better return than real estate. However, the key to investing wisely in real estate is understanding how the industry differs from others. Real Estate is actually an industry and investment driven by local conditions. One community may suddenly lose a manufacturing facility, and almost overnight the market is flooded with properties for sale. Obviously this is not a good thing. At the same time, communities with strong job markets and proximity to business centers have real estate that is in high demand. As with any investment, you should begin with the end in mind.

What are your goals and objectives?
How does real estate fit in with your overall investment plan?

It is important to get pre-approved with a lender. Take the steps necessary to get a letter from the lender stating you are “pre-approved” for a loan in a specific price range. It’s important to have this letter before you make a contract offer to buy real estate. Once you are pre-approved, you know what price range of homes you should be looking at.
Then you need to determine the specifics you want or need in a home.

• What are your day-to-day and future needs?
• Do you enjoy swinging a hammer?
• Older houses have great charm, but may need updating.
• New homes offer the latest energy efficiency and design features.
• Larger lots can give room for additions and swimming pools.
• A fixer upper can dramatically increase in worth.
• A PUD may have private recreational facilities such as a pool and play parks.
• A condo or town-house will relieve you of yard work and exterior maintenance.

Sit down with your real estate agent and make up a wants and needs list. Knowing your price range, your agent can help you determine in what neighborhoods or towns to start looking. You may find that you are limited to where you look based on your situation. There is no sense in wasting your or your agent’s time looking in areas out of your price range.

Right now is a great time to invest in property.

There are many short sales and foreclosures available on the market, and The Inman Team can help you through this process as efficiently as possible. Call them at 310-944-5554 to get started today!

How to Successfully lower your Mortgage payment in Rolling Hills Estates

Most homeowners are seeking creative ways to lower the mortgage payment but many of you fail to look at your first line of defense – property taxes, homeowners insurance and deductibles.

Just like your auto insurance, everyone can lower his or her homeowners insurance by increasing his or her deductible, thereby saving money each month on their mortgage payment. It’s not the best solution for everyone but tough times require tough decisions. Many homeowners pay their homeowners insurance into a escrow account that’s a part of your monthly mortgage payment; by lowering your homeowners insurance your required escrow payment will change, thereby lowering the amount you must pay.

Some homeowners also add riders onto their policies and years later forget to review for changes. You may not even need the riders anymore and don’t think the insurance agent will remind you that you could be saving money. Another area to review is you’re Property Taxes. Home values plunged over the last few years and your property taxes should have been re-assessed. Property taxes are based upon the market value of your home – what it would sell for right now. If the value of your home decreases then your property taxes should follow suit. And many homeowners have stampeded their assessor’s office, especially during the last year to demand hearings about their taxes.

Normally a county assessor will come around to review your home and prepare comparisons in your neighborhood – or that’s the way it’s supposed to work. But it’s really up to the homeowner to make sure they are properly assessed the fair market value. Your property assessment is recorded on the books and your tax amount is prepared and forwarded to you and the mortgage lender. The mortgage lender calculates how much you should pay into escrow each month and calculates your monthly mortgage payment.

If your property taxes are lower than your monthly mortgage amount should be lower each month as well. This is yet another way to lower your monthly mortgage payment.