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Category Archive: ‘Thinking of Buying?’

733 Stratford Drive

733-stratford-dr-076

I love my new Encinitas Highlands listing at 733 Stratford Drive, which is at the top of the hill and offers some of the best ocean views in EH!  This is another property that is ideally suited for the multi-generational buyers because there are bedrooms and full baths on the ground floor plus a detached 1br/1ba cottage out back.

This is my first real tour of a house with the new camera (and because I’m trying to move slower and smoother), so this is the extended full version of the whole property:

http://www.zillow.com/homedetails/733-Stratford-Dr-Encinitas-CA-92024/16718577_zpid/

Posted by on Apr 14, 2016 in Boomers, Bubbleinfo TV, Encinitas, Klinge Realty, Listing Agent Practices, Market Buzz, Osmo, Thinking of Buying?, Why You Should List With Jim | 3 comments

Is It a Good Time to Buy A Home?

A twitter guy wants a yes or no answer to whether it’s a good time to buy.

He claimed that I said Yes, because of my post about it being a great time to buy if you’re selling a cheaper home and buying a more-expensive home. It’s because the higher you go price-wise, the colder the market gets.  Fred said it is a good time to buy as long as you don’t plan to move in the next five years.

It’s a question that deserves a full answer, not just yes or no.

The most common blog chatter is that history always repeats itself, and it will just be a matter of time before this cycle runs out.

The economic cycle will sputter again, but the housing market is different now.

Why?

Because distressed sales are well-managed. 

The California Homeowner Bill of Rights mandates that loan modifications be dangled in front of anyone in trouble.  The foreclosure process gets drawn out for months and years so we’ll never see a flood of trustee sales again.

As a result, making your mortgage payments has become optional.

If we have another economic downturn where homeowners can’t pay, then the government will insist that lenders give them a break.  The cast was set in the last crisis – the government will create bailout programs that allow everyone to kick the can down the road.

With distressed sales few and far between, the vast majority of home sales will be elective.  Sellers with the mantra – “I don’t have to sell, I’m in no hurry, and I’m not going to give it away!”

Prices will maintain a tight range of +/-5%, because the minute a seller thinks he is being forced to ‘give it away’, he will object.  Different neighborhoods will have periods of stall-out, where few or no buyers will pay what sellers want, and real estate loitering will be common.

But days of drastic price dips are gone.

The other buffers to a housing downturn include reverse mortgages, rampant flipper business, and baby-boomer estate distributions.

If today’s buyers have assurances of pricing protection, is it a good time to buy? Well, yes, if that’s all that matters.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

But for most, it is a terrible time to be a buyer, which is different.

If you are on the low-end of your market, you can forget about buying your “dream house”.  The competition is fierce, and compromise required – if you can even get your hands on something.

2022-cherokee-ln-004_web

My listing at 2022 Cherokee in Escondido – the one priced at $549,000?  We had six offers, and four of them were all-cash.  All were at list price or higher.

It was viewed 3,198 times on Zillow since Friday, and I received 100+ phone calls and texts from agents.  I had over 200 people visit the open house on Sunday, and it was probably shown at least 50 times between Monday and Wednesday.

http://www.zillow.com/homes/2022-cherokee,-escondido_rb/

Almost all of the lookers didn’t offer, so they will be competing against each other on the next one – literally hundreds of buyers floating from new listing to new listing, hoping for a miracle.

Was it a giveaway?  Agent comments included, “Price was fair and reasonable’, and ‘The defects were properly discounted’ (defects included no direct access from house to backyard, master suite downstairs and kids’ bedrooms up, and it backs to the I-15 freeway – the rear fence was the CalTrans chainlink).

Buyers have to endure bidding wars on anything decent, no rules about how to win, and shady realtor tricks that seem to favor insiders.  Buyers are quick to jump to that conclusion, but it is more due to a realtor’s incompetence that bidding wars are vague and hard to win.

If you can get a house into escrow, it almost always happens that it’s condition is worse than imagined.  But sellers are in the driver’s seat, and do little or nothing to assist. Buyers usually end up feeling like they are buying an over-priced turd.

But it will probably be your turd forever!

Posted by on Apr 7, 2016 in Bidding Wars, Frenzy, Jim's Take on the Market, No-Foreclosure as Banking Policy, Thinking of Buying?, Why You Should List With Jim | 5 comments

Reasons Why Parents Should Buy for Kids

house

Do you worry about your kids’ future, and this crazy world in which we live? What can you do?

REASONS WHY PARENTS SHOULD BUY A HOUSE FOR THEIR KIDS

A way to distribute the inheritance while you are alive to see it.

Senior care – You might need them to take care of you some day!

Affordability – If prices stay strong, buying a house could get out of reach for most. A salary of $100,000 can barely buy a $600,000 house with 20% down today – and you have to go to an outlying area to find a decent house for that money.

Appreciation – Even if price didn’t go up much, paying down the mortgage builds equity.

Rental income – Pay cash or low-leverage a house purchase and hand over to a property manager.  The resulting positive cash flow will help pay their expenses while searching for a high-paying job.

Help to establish an investment portfolio, and to diversify their holdings.

Create a cap on kids’ housing expense.

Safety Net for emergencies – Ill-liquid, but that ensures it’s only used for catastrophic events.

Help the kids grow up. Owning real estate is for adults, and it inflicts responsibility.

Relieve pressure on kids from having to marry rich.

Help determine where the grandkids grow up.

Ensures they live in a quality area with good schools.

Taking care of the kids and grandkids makes grandma happy.

If Grandma ain’t happy, then nobody’s happy!

Posted by on Feb 29, 2016 in Jim's Take on the Market, Market Conditions, Real Estate Investing, Thinking of Buying? | 9 comments

3D Home Tour

3D camera

Carlos Hernandez from www.touritnow.com did a 3D home tour of my new listing, using his Matterport camera.  Here’s how it turned out:

http://www.touritnow.com/3d-model/7249-ocotillo-street/skinned/

This technology will be the next step in selling houses from afar – do busy people really need to visit in person after seeing these video presentations? It helps to screen out the actual showings too, because there is no hiding anything – if a viewer sees something they don’t like, they can save themselves a trip.

Big picture?  Eventually, the Matterport company will have a library of every house in America….but wait, it’s my listing, and I paid for the tour!

Here is Carlos describing what he does:

Posted by on Jan 28, 2016 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, The Future, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links, Why You Should List With Jim | 6 comments

Downsizing/Multi-Gen

multi-gen

Not only are retirees trying to downsize, but the kids are hanging around longer too.  The excellent research by John Burns has put some numbers on the one obvious outcome – multi-generational living.

Percentages in the 40s and higher are more than a blip – the vast amount of downsizing and multi-gen households is a game-changer:

14% of all US households (16.5 million households!) now live multi-generationally, and the numbers continue to rise for three reasons:

A. Delaying marriage has increased the number of young adults living with parents.
B. Surging retirement has increased the number of retirees living with children.
C. Significant immigration from countries where multigenerational living is the norm has also helped boost the numbers.

Most of the US housing stock was not built for multigenerational living, providing a tremendous opportunity for home builders. According to our Consumer Insights survey of more than 20,000 new home shoppers, 44% would like to accommodate their elderly parents in their next home. Additionally, 42% of today’s shoppers plan on accommodating their 18+ older children in their next home.

This focus on providing housing to extended family or friends may also account for 65% of respondents desiring a bedroom with bath on the ground level and 24% wanting a suite with a kitchenette and small living area.

Click below for full article and designs:

http://realestateconsulting.com/multi-generational-households-on-the-rise/

Posted by on Jan 26, 2016 in Downsizing, Jim's Take on the Market, One-Story, The Future, Thinking of Buying?, Thinking of Selling? | 0 comments

Pride-of-Ownership Test

PoH

Anyone who has looked at homes lately can attest to the surprising conditions in which people live.  The lack of maintenance transcends all price points too.

But it’s nothing money won’t fix.

Buyers should surrender early on……and expect to spend at least $25,000 to $50,000 on any house they buy.  It’s easier than trying to find the perfect house that doesn’t need anything.

But looking at houses then turns into a job of making lists of the repairs required. Is there a way to short-cut that process, and just use one simple gauge to know if the house could be a money pit?

When I enter a house, I still walk straight to the backyard first.  It is there that you will find the items that are hard or impossible to fix; yard too small, road noise, neighbors looking in, over-sized pools, etc.

Once we’re past that test, and everyone is getting comfortable with the interior layout, I make my way to the place where you can find the most clues about the seller’s pride of ownership.

The Master Bath – a place where the sellers spend time every day.  The most extreme conditions exist too – high use of hot and cold water, steam and mold conditions, multiple plumbing functions, venting, several appliances in use, laundry processing, etc.  There’s a lot of action going on in the master bath!

With all the action, is somebody keeping up with repairs?

If any room is going to be well-maintained, it is the master bath.  It’s not that big, and the moving parts are simple – a towel rack, a toilet-paper roller, lighting, fan, grout, window, sinks – easy stuff.

Plus, every guy wants to keep his wife happy – so if he is going to fix anything, it will be here.

No need to get into any personal items – just checking the hardware:

  1.  Are the towel racks secure?
  2.  Toilet-paper roller intact?
  3.  Drywall outside the shower or tub wet or damaged?
  4.  Adequate electrical outlets?
  5.  Toilet secured tightly to floor?
  6.  Toilet works properly?
  7.  Sinks drain normally? (two sinks are a must)
  8.  Adequate water pressure at sinks and shower?
  9.  Fan is quiet? Window works well?
  10.  Any sign of biological discoloration?
  11.  Baseboards are dry and tight?
  12.  Mirrors look good?
  13.  Ample lighting?
  14.  Mineral deposits on glass doors?
  15.  Shampoo bottles have a home?
  16.  Solid coat of semi-gloss paint?
  17.  Crisply-applied caulk, especially around the shower faucet?
  18.  Solid and tight grout lines?
  19.  Door that locks easily?
  20.  Is the floor of the sink cabinet dry?

If you are in a hurry or tend to get caught up in the excitement of looking at houses, then just concentrate on what you see in the master bath.

If you check off every item above, then the rest of the house should be in good shape too.  But if the sellers aren’t maintaining this room that has complex features but simple fixes – especially when on the market – then they probably haven’t done much to keep up the rest of the house either.

Posted by on Jan 19, 2016 in Jim's Take on the Market, Repairs/Improvements, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links | 4 comments

Sniff Test

Snifftest

With inventory scarce and buyers aplenty, there really shouldn’t be any reason a house doesn’t sell these days.

Yet, they’re not all selling.

In 2009 and 2010, buyers couldn’t go wrong – all you needed was guts.  But as our market hits a maturing stage, the risks are higher that buyers can pay too much, and/or buy a money pit.

How do you know?  Let the days on market be your guide.

A. If a new NSDCC listing under $1.5 million doesn’t have offers in the first 7-10 days, then something is wrong with it (and it might not be price).

B. If any listing has been on the market for more than 30 days, or has been refreshed, it confirms that something isn’t right.

It’s a buyer’s job is to figure out why it’s not selling, and in most cases it is just price. The most common marketing plan for sellers is to wait until the market catches up, or until they just get lucky. Buyers decide the rest.

But if the price seems close enough and a house still isn’t selling, how can buyers protect themselves from getting stuck with a house with undesirables?

The sniff test is when you know others buyers have considered the house, and passed on it.  If you hear a listing agent say they’ve had lots of showings or you see a number of agent business cards left at the house, you have to wonder why it hasn’t sold.

Be rigorous during your tour of the house. Once you have enjoyed the positives, find the negatives and determine if they can be remedied and at what cost.

  1.  Be listening for road noise and dogs barking – the two most annoying sounds to avoid. Visit at different times of the day.
  2.  Are the grounds wet? Compare to neighbors to see if it is just over-watering or a bigger problem.
  3.  Listen for aircraft – is the house under a flight path?
  4.  Talk to neighbors about house defects and neighborhood concerns.
  5.  When in backyard, are neighbors looking in?
  6.  Does it have a pool?  They are usually a neutral value at best, due to risk.
  7.  Once inside the house, are the upgrades current? Or were they done 5-10 years ago, and now getting the dated look?
  8.  Is there enough natural light inside? Turn lights off to test.
  9.  Is the ceiling height acceptable?
  10.  Does the floor plan make sense?  Larger rooms?
  11.  Is there separation between the master and kids bedrooms?
  12.  If homes are close together, are there smokers or noise-makers around?
  13.  Check crime statistics and sex offenders’ website.

These are items that may not get divulged on the seller disclosures, nor the home-inspection report – because these items are more concerned with personal taste and tolerance, and not about things that are broke.  But you want to factor them into your decision – because if buyers aren’t buying this house today and you can’t fix it, you will have the same problem when you re-sell it.

Divide defects into curable and non-curable categories, and determine what you can’t live with, and assess a value to those you can. Many buyers throw homes out with the bath water, so this could be an opportunity, for those willing to tackle a fixer.

There is a difference between fixes and improvements too.  You can fix just about everything for $5,000 or less – things like roof repair, new furnace, removing a cottage-cheese ceiling, etc. – those are fixes.  Major improvements such as kitchen or bathroom remodels are more extensive but there are several online estimators to get ballpark ideas on costs.

It is easy to get caught up in the moment and relish the positives when seeing a house the first time.  To keep it all in perspective, remember one question.  If it is such a great house, how come it’s still for sale?  Doing your own head-scratching might save you a few home-inspection fees – or more!

Posted by on Jan 16, 2016 in Jim's Take on the Market, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 4 comments

Sellers Have Teflon Memories

boring

As the refreshed listings continue to pour onto the MLS, the calls are coming.

“Jim, let’s send in a low offer!”

These refreshed listings aren’t fooling as many people these days because the listing histories are on the front page of the portals (including realtor.com).

But sellers want to blame the holidays for not selling, and believe the new year will bring better luck!  Add one more tool of deception – the listing refresh – and they have a new listing, a new year, and new excitement!!

Everyone just wants to be excited!

Well, except the buyers who just want to buy a house, not play games.  But refreshed sellers and their agents will wait for weeks or months before adjusting their price – hoping there might be one more buyer left who isn’t tracking the total days on market.

Buyers: Let the ‘refreshed’ sellers go first.  Wait until their next price reduction before offering – at least then you have some indication that they might be more motivated than the rest.

Posted by on Jan 6, 2016 in Jim's Take on the Market, Listing Agent Practices, Thinking of Buying? | 0 comments

No More Doom

govt loves bubbles

As a new year begins, there has to be people wondering how much longer the market can stay buoyant.  Even with rates staying low, home buying is out of reach for many, if not most San Diego residents, and wages don’t seem to be going up much.

Is the bubble going to pop again?

This guy has been our perpetual doomer, and is one of the only four ‘experts’ out of 108 who said that prices could go down in the next five years. He has summarized all the reasons of possible doom here:

http://mhanson.com/archives/1968

The thing he ignores is that the government is totally supportive of housing.  They bailed us out last time, and it left an indelible mark.

The turning point for The Big Bailout was in 2011 when Bernanke literally told the banking industry to ‘not do anything to harm the economy’, which was code for ‘Stop Foreclosing’:

http://www.bubbleinfo.com/2014/03/03/bernanke-stopped-the-flood/

Since then, the number of  foreclosures have dropped like a rock, and after Kamala passed the California Homeowners’ Bill of Rights, lenders are required to coddle defaulting homeowners for as long as possible.

The result is a very soft landing for any borrower who doesn’t feel like making their payments.  The banks can stretch out any necessary foreclosure activity for months or years, and spread them around evenly so they don’t ‘harm the economy’.

If you are a potential home buyer who is concerned about future foreclosures causing home prices to drop, I hope that relieves any fears.  Buy a house you can comfortably afford, and stay forever.

For those who want to check for foreclosures, see below:

Posted by on Jan 5, 2016 in Foreclosures, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 2 comments

Real Estate Tips for 2016

moving tips

Happy New Year!

Are you thinking of selling and/or buying this year?

Here are some ideas to hopefully give you an edge in conquering what usually ends up being the 1% to 2% difference between the thrill of victory and the agony of defeat!

Home Sellers

  1.  The new listing agreement suggests getting a home inspection prior to hitting the market. It’s a good idea; fix what’s wrong in advance, and then give buyers a copy to demonstrate your pride of ownership.
  2.  Know where you are going to move, and only hit the open market when you are 100% committed to selling. You might get an offer the first day.
  3.  Showing the house is inconvenient but necessary – the more you do it, the better your chances.  Be ready to show the house on the day it hits the open market – and expect dozens of lookers to visit in the first 7-10 days.
  4.  Do two things to make a great first impression; spruce up the curb appeal and insist on top-quality photos.
  5.  Be smart about price.
  6.  Ask agents about bidding war strategies, and recent experiences.  Spreading out the offers on your coffee table and picking one isn’t a strategy.
  7.  Avoid gimmicks like range pricing or ‘coming soon’.  A clean, straight-forward approach is attractive to buyers.
  8.  Determine if a company brand name is a benefit or a crutch.
  9.  Real estate ‘teams’ means you get passed around. Make sure to identify who handles the buyer inquiries, and that they are top-notch sales people.
  10. The buyers you want to attract – the ones that pay too much – are represented by lousy agents who don’t know the difference.  Get Good Help – hire a listing agent who can carry any agent to the finish line.

Home Buyers

  1. See more houses in person.  You have to keep your chops up, because low inventory causes complacency.  If all you do is shop online, you’ll look for any reason NOT to buy, and stay home. But there are no perfect houses.
  2.  Start looking at least six months before your lease is up.
  3. There aren’t many rules, and every listing agent is different.  Work with an agent who has a track record getting buyers to the finish line.
  4.  Don’t expect much from sellers regarding repairs.
  5.  Be open to fixers. To get more comfortable, line up contractors in advance and ask for a sample quote so you know what to expect.
  6.  Expand the target zone, but buy in a great school district.
  7.  If affordability is an issue, compromise on size before location. You can always add on later.
  8.  Properly evaluate the negatives, and the appropriate discounts.
  9.  Know what to do in a bidding war.
  10.  Your agent should suggest an offer price, and a strategy behind it.

These are some basic, general tips, but the best thing you can do is to get an experienced agent on your side – someone who is closing at least a sale per month (check at zillow).  I am available, and would love to assist you!

Posted by on Jan 1, 2016 in Bidding Wars, Jim's Take on the Market, Listing Agent Practices, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links | 4 comments