The holiday season has officially arrived. We hope you enjoy this wonderful time of year and make some fantastic memories.
We wanted to take a moment to thank you for your continued support. We love helping people make their real estate dreams come true, so thank you for working with us and supporting our business.
This may be a busy time of year, but we are always here to help you and answer any questions you may have. Give us a call or reply to this email; we’d love to help you.
In case we don’t hear from you until 2022, have a happy New Year!
Today we wanted to talk about the five reasons we are not in our normal buyer’s market:
Mortgage rates. According to Freddie Mac, in the 1980s, we saw rates over 12%, but today our rates are at ultimate lows of 2.875%. With those savings, people have been able to buy more and lock in that steady, low rate.
Appreciation rates. Black Knight has tracked our average appreciation rate, which has been about 4.14% over the decades. Currently, according to the National Association of Realtors, our national appreciation rates are over 14% which is impacting our market a lot.
Home supply. Having a six-month supply of homes is considered a balanced market. As of now, our supply has been very anemic which has made it harder for buyers to get a house.
Time on the market. Nationally and pre-pandemic, a home would take 35 days to sell on average in the market. Now, that average is less than 17 days.
More offers per home. In 2019, we were getting about 2.9 offers per listing. For 2021, we’ve been getting about 4.5 offers per listing. We’ve almost doubled the number of offers on the average house.
All of these reasons come together and create the craziness of our current market. If you have any questions about this or other real estate topics, feel free to call or email us. We’d love to help.
Dave Marzinke is back with us again to talk a little bit about appraisal gaps, the issues buyers are running into, and how we’re working together to solve problems.
If an appraisal comes in low, the important thing to know is that you have options. For example, if you’re putting at least 10% down, we can readjust the loan-to-value based on the new appraisal and not have to bring additional cash to close. It does include PMI in some cases, but in others, it doesn’t. It’s a great strategy to help you overcome a renegotiation in this competitive market, but it’s not the only one. There are multiple different options to address an appraisal gap depending on your situation.
Dave is seeing very few low appraisals. According to him, under 20% of the total appraisals coming in are coming in low.
"There are multiple ways to address an appraisal gap based on your situation."
If you have any appraisal or mortgage-related questions for Dave, give him a call at (949) 449-2477.
If you have any other questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
There are seven main ways you can update and improve your home. Even if you’re not looking to sell
immediately, these can still help bolster your home’s value and get you prepared in case you decide
to sell:
1.Paint your home. The least expensive way is to put a fresh coat of paint on everything: the exterior, ceilings, doors, or even wrought iron fences. It can even help protect the look of your home from wear and tear.
2. Update the lighting. This might be one that gets ignored, but your hardware store, a magazine, or even other open houses can show you how others are upgrading the lighting. Getting recessed lighting and putting dimmers on the lights are a couple of great ways to improve the value of your home.
3. Bring the indoor to the outdoor spaces. You can add sofas, fire pits, lighting, and carpets outside that can make it more enjoyable to stay out there. If you have a bit more budget you could renovate the deck or even add a pool.
"Even if you’re not ready to retire or move, you want to update your home."
4. Maintain your heating and air conditioning. I strongly suggest you service your units using some local heating and air companies. It can make sure they’re running efficiently and help lower allergens in your home.
5. Check or replace the windows. Replacing the windows is obviously the best, but if you don't have enough money, it still pays to check them, replace broken screens, or even apply some weather stripping.
6. Repair the roofing. Replacing the roof outright can be pretty expensive, so alternatively you can fix specific leaks or get some air vents to cool the garage and attic spaces and make your roof more efficient.
7. Add storage. Adding a room, if you have the space, will always bump up your home’s value. Particularly, bedrooms, storage rooms, and home offices are really good to add these days.
I hope these tips give you some ideas. Feel free to reach out to me by email, text, or phone.
I’d be more than happy to answer any questions you have.
Today I’m discussing how to set expectations with buyers and sellers both from the start and
throughout the process.
For buyers, despite how fast and crazy the real estate market has been lately, it’s still a good
idea to do a buyer’s consultation. We set up a 30- to 45-minute meeting, the family and I get together,
and we go over these four main things:
1.Ensure they have sound financial guidance. The first thing we do in our consultation is discuss their finances. Have they talked to a large bank, credit union, or broker? Find out what they’ve been told so far and possibly guide them to get another consultation with someone you’ve worked with who you know will be able to do what they need seamlessly. We need to get things done promptly and with a step-by-step process. We don’t want any delays or surprises amid escrow.
2.Set reasonable expectations. Next, you want to nail down what they’re looking for. Make sure what they want to buy fits with their finances and the location they want. Sometimes school district lines change, so if they want to be in a specific district, ensure you’re looking in the right area. Do they want more bedrooms, fewer bedrooms, a home office? You want to know what their home life is like so you’re not sending them homes to look at that aren’t going to fit into what they need.
3.Ask about commuting. Do they need to live close to work, or are they willing to commute? Many properties in eastern California are much less expensive, but they’ll have to commute, which could mean 45 minutes to an hour in the car. Are they willing and able to do that, or would they prefer to buy a smaller home and have more family time?
4. Ensure closing dates align with other housing arrangements. Escrows are commonly 30 days, so you need to make sure the closing matches up with the end of their lease or moving day. Movers may be busy right now, so we need to coordinate the closing date properly. Also, schools are starting at different times, so moving plans also have to match up with when kids need to be there.
"We need to set these expectations for buyers and sellers from the beginning."
Here are three things to do in service to your sellers:
1.Set reasonable sale time expectations. They might have heard from a neighbor that they will sell their house in one day. Yes, you may sell the house in one day, but it could take much longer to sell if it hasn’t been properly cleaned or scheduled correctly for showings. Take an assessment of the home, and check if it needs any upgrades or staging. Use the available data to see how long the home will be on the market.
2.Reasonably price the house. That same neighbor could have told your client that they will sell for $200,000 over asking price. However, you need to price it at value or a bit below it. Overpricing a house in any market is detrimental because you’ll likely have to decrease the price (possibly more than once) and chase the market downward. Buyers that have already seen the house probably aren’t going to come back once the price falls.
3.Don’t rush the closing process. Again, escrow usually takes 30 days, but some real estate agents are pushing that we close in 20 or 21 days. However, we have to ensure everyone is doing their part, there’s enough time for inspections, and everything is signed correctly. We don’t want an escrow to fall through because everyone’s trying to rush it.
We need to set these expectations for buyers and sellers from the beginning to ensure things go
smoothly. If you can, it will save everyone from tons of frustration. If you have further questions
about setting expectations or any other real estate matter, feel free to comment below or reach out
via phone, text, or email. We look forward to speaking with you soon.
In a market like this where multiple offers, overbids, and high prices are commonplace, I have some clients who are looking to the future. They are getting ready to retire in California in about two years, so we’re looking for a custom lot to build their home.
If you’re in the same boat, here are some factors to consider when purchasing a custom lot:
1. Physical inspection. Look for things on the lot itself such as trees, fences, or other debris. Check the property lines, whether it’s gradable or not, etc.
2. Utilities. What kind of utilities will you need? Are you in the city and hooked up to the sewage system, or are you out in the country and need a septic system? If you do need to put them in, it’s important to factor in those costs.
"Having the right title information will protect you now and in the future."
3. Soil report. This isn’t super expensive. An inspector will take soil samples, do measurements, and give you a report on the soil you have. It could be filler or clay, and there could even be bedrock underneath. You need to have the soil report in order to build a structurally strong foundation for your new home.
4. Title information. You’ll need to do some background research on this lot. A title professional can check for any liens, encumbrances, encroachments, or easements. This will help protect you in the future as well.
5. Check if you’re in an HOA. If you are, you’ll need to review the CC&Rs, HOA docs, and bylaws to make sure the home you’re building will fit in with the community around it.
6. The city. Go into the city records and find out whether there are future city plans down the line for the area in which you’re building. Will you have a giant skyscraper built next door, or will it stay in a secluded area?
If you're set on building a new home, a custom lot is a great way to go. If you have questions about how to start this process or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
In this time of bidding wars, multiple offers, and everything moving so quickly, make sure you’re doing the right things when submitting your offer as a buyer. Here are three dos and two don’ts to keep in mind:
Dos
1. Get pre-approved. I always tell my clients we need to bypass the pre-qualification and go straight to pre-approval. You’ll go into underwriting with your lender, which means they’ll get all the information and qualify you for a loan. They’ll ensure all your forms are done, your income checks out, and everything is verified. Underwriters go through steps the federal government requires for a loan, so the sellers will know that you will be able to close on the home.
2.Make a strong offer. Make sure you’re putting as much money down as you can; the more money down, the stronger you appear. There are a few ways to do this, but one way is to put down more earnest money. An experienced real estate agent can guide you on this, but generally, the earnest money is 1% to 3%, but if you can put down double or four times that amount, your purchase is almost guaranteed, as long as your agent doesn’t remove any contingencies. Put down as much money as you can to help cover all of your closing costs, escrow fees, etc. The seller will take notice if you’re putting down more money than any other offer.
3. Take note of the condition when considering buying as is. When you’re walking through the house, take notes on the eaves, woodwork, plumbing, furnace, air conditioner, and roof, and write down questions to ask the selling agent. Make sure all the maintenance has been updated. These are things you should know about before going under contract. If you decide to buy as is, you’ll know what may need to be repaired. Often, it’s just something small, but if you’re not paying attention, there could be a large expense you’ll be required to pay for after you close.
" Bypass the pre-qualification and go straight to pre-approval."
Don'ts
1. Don’t eliminate the inspection. I would never buy a house without a home inspection, even if it looks great. Make sure it’s done by a qualified inspector who will give you the report in a timely manner so you know exactly what needs to be done when you buy the house.
2. Don’t remove your financial contingencies. If you’re buying with a loan, you have to get an appraisal and get the loan approved. If you remove the loan contingency, you could have huge issues when it’s time to close.
If you have any questions or comments about these points or real estate in general, feel free to leave them below or call, text, or email me. I would love to help you.
Is now the time to buy a second home or investment property? Today I’m sharing recent examples of a client who bought a second home and one who bought an investment property to help you decide whether now’s the right time for you.
" Average prices nationwide have increased by about 21%."
The pandemic made people need to stay home more, so many couldn’t wait to get away from home again when they could. A bunch of states had regulations, and plenty of hotels and airlines were closed for business. One of my clients looked into and recently closed on a second home about two and a half hours away in the desert. They have a pool, a different climate, a place to play tennis, ride motorbikes, and more. That’s what people are looking for—a place to drive away to and not have to rely on anyoneor anything except transportation.
Another client of mine just bought an investment property. When investing, you need to pay attention to the price point. Average prices nationwide have increased by about 21% to around $420,000. My clients purchased a duplex, which will have a positive return cash flow, and the amount of money they had to put into it was small.
This is something to discuss with your financial planner and see how it may benefit you while the interest rates are still very low and there are multiple properties available for investors. There are currently more opportunities for investors because those who have been investing in real estate for a while are seeing such a rise in their equity that they’re taking advantage and selling, and you can benefit from that.
If you have any questions about buying a second home or investment property, feel free to reach out to us via phone, text, or email. We look forward to speaking with you.
Here are four misconceptions about a hyper seller’s market that you shouldn’t believe:
1. You have to have a plan to sell. It’s good to have some type of outline, but you don’t need to have it down to an exact science. A lot of sellers think they have to sell their homes and have an existing home available right away. However, it’s common for sellers to sell their homes, have a 30-day close, and then have a 30- to 60-day rent-back period. Sometimes, this rent-back period is free. In any case, this gives them time to figure out how to move into their next home.
2. The condition of the house doesn’t matter. You always want to make sure your home is in good condition when selling, no matter what market you’re in. Even in this hyper seller’s market, your home needs to be in good condition. If you accept a buyer’s offer but they discover a whole bunch of problems with the home during the escrow period, they may back out of the deal. To prevent this, make sure your home goes through some type of inspection before selling (which you’d attend with your agent).
3. Price doesn’t matter. It’s true that if you list your home, it will likely sell quickly (hopefully with multiple offers). However, we’re seeing sellers get on the greedier side and list their homes above where they should be. The problem with this is that buyers have a certain limit, and if you overprice your home, they won’t even look at it.
soon.
" You always want to make sure your home is in good condition when selling."
4. You can sell as is without any professional help. You might get a few offers by doing this, but there are a lot of things to consider when listing a home. For example, is it staged correctly? Is it marketed correctly? How will you deal with multiple showings the first weekend after you list? If you get multiple offers, how will you navigate through them and make sure you choose the best one?
Selling by yourself is not a good idea. Get a professional to help you. You’ll have a much easier transaction and deal with far less stress.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’m happy to help.
Today I want to talk about the top three buyer preferences that sellers should know about. When getting ready to sell your home, buyers are specifically looking for a couple of things this year:
1. Office space. Since COVID, the main thing buyers are now looking for is an office space where they can close the door and have some quiet while they're on Zoom calls. They want a nice background behind them without a lot of clutter.
2. Storage. Buyers want a nice organized storage place. This goes for all kinds of areas such as the garage, in the kitchen, and closets.
3. Outdoor space. Having a place outside where we can get some fresh air is a huge selling point. These include backyards, a patio, or even a balcony. This is somewhere where people can get out and relax with comfortable furniture, plants, and maybe a barbecue.
If you have any questions or comments, reach out to me either by phone, text, or email. I look forward to talking with you soon.
How much home can you afford with the present low interest rates?
This week, I had a client interested in a property that was valued at $500,000, which she’s been approved for, and she’s putting 20% down. With the current interest rates at 2.875%, her monthly payment would be $2,285. A few years ago, that same property valued at the same price with a 4.5% interest rate would have been $2,652 per month, which is a difference of $367. As you can see, an increase in interest rates is the most crucial thing to consider when buying a home right now.
"Locking in a lower interest rate is the best decision, even if you have to go a bit higher in price."
If we took this example a step further, and now the property is valued at $550,000 with that 2.875% interest rate, her monthly payment would be $2,513. Now let’s say she decided to wait a while; she didn’t want to get into a bidding war and drive up the price, so later the home is worth $450,000 but interest rates rose to 4.5%, her payment would climb to $2,387, which is still more expensive for her with the $50,000 drop in price than if she would have bought the house with a lower interest rate. In today’s market, locking in a lower interest rate is the best decision, even if you have to go a bit higher in price.
If you have questions or comments about interest rates or anything else, feel free to leave them below or call us. We look forward to helping you.
Low inventory and interest rates are causing absolute craziness in our real estate market. If you’re thinking about selling your home, you should hold off until you’re able to answer all five of these questions confidently:
1. Where are you going to go? Are you going to sell and buy another home right away? Are you going to rent instead?
2. Are you ready for the showings? We can’t have open houses, so we’ll have to stack showing appointments on top of each other. Within the first seven days that your home is on the market, you could have up to 70 people coming through the house.
A real estate professional is the best hire you can make.
3. Is the house ready? You might need to make some renovations. You’ll need to do some deep cleaning and decluttering and possibly some staging before listing the property.
4. How will this affect my finances? Talk to your CPA, accountant, or tax person because if you have a large gain, you’ll likely have a larger tax bill. Know this info ahead of time and run the numbers.
5. Are you ready to hire a Realtor? A professional is the most important person you can hire. They will be able to negotiate, handle the contracts, do disclosures, and deal with any problems that might arise. You’ll be better off if you hire a professional.
These are the five big questions every home seller should be asking before they list their home on the market. If you have any questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
