Specializing in Trilogy Resale Homes
and Rio Vista, CA Real Estate Office: (707) 374-5222
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Welcome to Diane's Blog!
Real Estate Trends and Homeowner Tips...from the desk of Diane Shafer.
Recent Posts:
(Click a link below to scroll to that topic)
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October 2009
Oct. 26, 2009 - California markets picking up in momentum
Oct. 26, 2009 - How do I purchase an REO listing?
Oct. 26, 2009 - How do I price my home to sell while competing with foreclosures?
September 2009
Sept. 22, 2009 - Market Conditions For Buyers
Sept. 22, 2009 - Market Conditions For Sellers
Sept. 22, 2009 - Short Sale or Foreclosure?
Posted: Oct. 26, 2009
California markets picking up in momentum
There was less or no room for negotiation in some California markets that have been hard-hit by foreclosures during summer months 2009. Asking price and selling price are getting closer to the same and in some cases sales price is over asking. According to Zillow, second quarter 2009 in some areas of California buyers paid 1.8 percent higher than asking price or an average of $2,150 over asking.
The strong summer selling season in 2009 is due to low prices and foreclosures, but with list-so-sale price ratios as the sales volume picked up the California markets are showing declines in discounts off the list price relative to levels at the start of the year.
Posted: Oct. 26, 2009
How do I purchase an REO listing?
That is a question we get asked a lot lately. Many people who visit our open houses want to know how they can take advantage of the great REO (foreclosure) priced homes. First, you have to know if the house is listed as a “Short Sale, Foreclosure or Resale”. Finding REO properties is easy but your realtor will need to sift through all of the listings because the MLS prohibits putting the type of sale in the public remarks.
Purchasing an REO is a good way to get a great price but you must be willing to make at least minor repairs and sometimes there are surprises after close of escrow. The seller (bank) has never lived in the home and will not disclose anything regarding the condition of the property.
Some buyers think that by going directly to the REO listing agent they have a better chance at getting the house. In some cases it’s better to have your own representation, as the foreclosure agents are too busy managing all of the foreclosure listings they took on. Also, a local agent knows the community better and can advise on the buyer’s behalf. Some banks will not provide a home warranty and you will definitely want one not knowing what might come up in the future. Sometimes the buyer’s agent will be willing to provide the warranty for their clients.
Posted: Oct. 26, 2009
How do I price my home to sell while competing with foreclosures?
It is sometimes difficult when I meet with sellers during a listing appointment. A lot of the time I’m the first agent telling them what their home is currently worth on the selling market and the shock can be overwhelming especially when they may have paid a lot more. Some have kept up with the market conditions and are better prepared.
Unfortunately for me, the ones who are not prepared end up listing with the second or third agent they meet just because they are tired of talking about the current market prices and just want to get the house listed. Remember, it’s always good to check out the agent you want to list with and make sure they sell primarily in your neighborhood. Good agents will be honest with their clients right up front and would rather not get the listing than promise a high price that cannot be delivered.
Posted: Sept. 22, 2009
Market Conditions For Buyers
The Bank’s Market
We are calling this current market a “Bank’s Market” because the Banks are really the ones setting prices right now. We had a “Buyer’s Market” for a very short time while many sellers were looking at the declining market therefore taking what they could get for the home before things “bottomed out”. Now there is little to no inventory and many buyers wondering if they will get the “Deal’s” they were waiting for.
The Deal or the House
Decide whether you want the “Deal” or “The House”. If you are looking for your next home, chances are the house will be more important. If you are investment shopping the deal will prevail. It’s almost impossible to find both the “house” and the “deal” in the same transaction because once you find the home you want to live in, you lose your ability to “walk away”, therefore you no longer have a strong negotiation position to get the “deal”.
It Never Hurts to Ask
In real estate, everything is negotiable. The list price the seller is asking is the first thing. Sometimes a seller will put a price out there to see what kind of offers come in. Look at the home and ask yourself “at what price will I be happy to live here” and then offer that amount. The value of a home is based on current comparable sales. The true value of a home is what a buyer is willing to pay for it.
Next are closing costs and things the buyer might want included. In a “buyer’s market” the buyer will sometimes ask for more things to be included in the sale and for the seller to pay most of the closing costs. In a “seller’s market” the buyer may offer to pay many or all closing costs.
What about Tax Credits?
The National Association of Realtors along with several Senators are pushing for an extension of the $8,000 first-time buyer tax credit. The program helped thousands of first-time buyers achieve their dream of home ownership, but expires later this year.. The hope is that this tax credit will carry the sales momentum from this year into next.
Other ideas on the table are removing the $75,000 income restriction and expanding the credit to all buyers, not just first timers.
Market Conditions For Sellers
The Bank’s Market
We are calling this current market a “Bank’s Market” because the Banks are really the ones setting prices right now. We had a “Buyer’s Market” for a very short time while many sellers were looking at the declining market therefore taking what they could get for the home before things “bottomed out”. Now there is little to no inventory and many buyers wondering if they will get the “Deal’s” they were waiting for.
It Never Hurts to Ask
In real estate, everything is negotiable. The list price the seller is asking is the first thing. Sometimes a seller will put a price out there to see what kind of offers come in. Look at the home and ask yourself “at what price will I be happy to live here” and then offer that amount. The value of a home is based on current comparable sales. The true value of a home is what a buyer is willing to pay for it.
Next are closing costs and things the buyer might want included. In a “buyer’s market” the buyer will sometimes ask for more things to be included in the sale and for the seller to pay most of the closing costs. In a “seller’s market” the buyer may offer to pay many or all closing costs.
Open House Anyone?
We think open houses are extremely important in any market. Open houses get your house shown even if it’s neighbors looking. You never know, they may have friends or family who may want to move to the area and they may be pre-viewing. We hold houses open every weekend.
To Stage or Not to Stage
There are quite a few things needed to prepare a home for sale, not just putting out a “Fore Sale” sign. I believe Staging is a Number One important thing to consider.
Stagers will come into your home and for a small amount of money ($150 - $500) in some cases will move your furniture in a way that may show the room better. You might even like it as well. They will sometimes bring in staging tools for a larger fee.
There are things you can do for free like de-clutter. Remember to remove personal items and lock them away in a safe place. In a subdivision when the builder is still building homes you have to compete with the new home models where the builder paid a lot of money for designers to make the house look its best!
Easy to Show
Make sure your house is easy to show. If there are restricted hours or the buyer’s agent has to give a lot of notice before showing they may move on. Make sure there is a lockbox installed. If an agent has to jump through hoops to show the home they may not.
Short Sale or Foreclosure???
There are many questions regarding our current and ever changing market. It used to be that we were comparing new home prices to resale. Now we are faced with foreclosures and short sale listings in addition. I will explain the difference.
Normal Resale Home: This is a home owned by someone who wants to sell. They own their home outright or have a small loan. They want to relocate and want to feel they aren’t “giving the home away”. This home should be priced at a fair market value based on recent closed sales. However, if the owner purchased the home in the last few years 2004-2009 they may have paid more than the home can be sold for at this time.
New Home for sale from Builder: This home has a fair market value price also, but the base price may be without upgrades. It may include incentives from the builder to pay for some of the upgrades but the buyer may be required to use the builder’s lender for any or all of these incentives. The buyer pays all closing costs including some costs normally paid by seller when purchasing resale.
Short Sale: This home is owned by someone who needs to sell, but they owe more on their loan(s) than they can sell the house for to pay off their mortgage. The seller asks the bank to take less than what’s owed. These are complicated because the seller’s agent chooses where to price the house. The agent typically will want to price the house lower than a normal resale or new home to entice buyers to wait for the bank to decide about the short sale. This is tricky because the house has to be priced high enough for the bank taking the loss to see that other homes are also selling at this price but low enough for the new buyer’s lender to appraise.
The seller of the home has to provide the bank(s) with a lot of personal information and a hardship letter explaining why they can’t pay the loan anymore. The banks take several weeks to several months to decide. Sometimes there are many offers on a home because buyers get tired of waiting and end up buying a foreclosure or a regular resale or even a new home. If the bank(s) approves the short sale, the buyer is given a normal close of escrow time period as well as inspection period. The seller typically will make no repairs because they aren’t getting anything out of the sale.
Foreclosure Sale: This home has already gone through the foreclosure process and is now owned by the bank. The bank chooses an agent who specializes in listing real estate owned (REO) which are bank owned properties. These agents typically don’t show the property because they are usually out of the area. The bank has an appraisal to find out where other homes have closed escrow and they then price the home lower. This usually brings out a lot of buyers, which will bring the price back up. The banks usually have their own contracts and addendums letting the buyer know that the bank is not responsible for any existing damage to the home or any repairs needed. Also, the bank does not provide disclosures because they did not live in the home. The buyer is allowed a shorter than normal inspection period and is solely responsible for any repairs. The buyer does get clear title to the home at close of escrow and sometimes the bank will pay for the title and escrow costs.
Short Sales and Foreclosures are all decided by banks who tend to like cash buyers. They don’t have to wait for appraisals, worry if the buyer’s lender will hold up closing or if the buyer will qualify during escrow.
Shafer Real Estate specializes in Trilogy Resale Homes.
We can also help with short sale, foreclosure and new home purchases.
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