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Category Archive: ‘Thinking of Selling?’

2016 Renter Survey

rentsurvey

Worried we might run out of buyers? Plenty are waiting in the wings – and working with their parents to achieve!

Current renters value homeownership and want to buy a home but many are encountering affordability and financial obstacles that prevent them from buying, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 Renter Survey.”

Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a downpayment would motivate them to buy now.

Of the 28 percent of renters who don’t plan to buy in the future, 50 percent said they can’t afford to buy, 20 percent will not buy because they prefer to rent, 19 percent said they can’t qualify for a mortgage, and 15 percent lack a downpayment. Job uncertainty (9 percent), economic uncertainty (12 percent), and housing market uncertainty (6 percent) were among other reasons renters cited for not buying a home.

Homeownership remains important to renters, with nearly half (45 percent) rating it 8 or higher in importance on a scale of 1-10, with 10 being extremely important. The average was 6.8. Nearly all renters (95 percent) see advantages to homeownership; freedom to do what you want with your home, building equity, and having permanence and stability were the top benefits mentioned by renters.

One of the surprising findings of this survey is that more than one in four millennial renters said they plan to purchase a home that will accommodate their parents, and about one in five millennials indicated they plan to pool funds with family members to buy a home.

Other key findings from C.A.R.’s “2016 Renter Survey” include:

  • Forty-six percent of renters claimed they currently rent because they can’t afford to buy, and 13 percent said they have poor credit and can’t qualify for a loan. The remaining renters choose to rent because they like the flexibility, freedom and ease of renting, are concerned about the maintenance costs of owning a home, or are not interested or aren’t ready to buy.
  • Nearly four in 10 renters (39 percent) indicated they plan to purchase a home in the same county where they currently reside, and 23 percent plan to buy in the same neighborhood.
  • Fifteen percent of renters plan to buy a home out of their current area, with 7 percent planning to move to another state, 7 percent to another county in California, and 1 percent to another country.
  • Of the renters who are planning to leave the area where they currently reside, 27 percent are moving to find lower housing prices, 24 percent are moving for a better neighborhood, 14 percent want to be closer to family, 9 percent want a shorter commute, and 7 percent are moving for a better school district.
  • Two in three renters have made some kind of preparation to buy a home: 25 percent have searched for homes, 16 percent have searched online for information about the homebuying process, and 12 percent have spoken to a REALTOR®.
  • Thirty-one percent of renters previously owned a primary residence, and 9 percent currently own real estate. Of those who previously owned a home, the reasons for selling included family reasons (37 percent), financial difficulties (28 percent), and work (13 percent).

survey
http://www.car.org/newsstand/newsreleases/2016releases/2016rentersurvey/?view=Standard#

Posted by on Jul 17, 2016 in Boomers, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 0 comments

MID and Home Prices

mid

This has my vote for the worst real estate article of the year:

http://www.realestateeconomywatch.com/2016/06/new-study-abolishing-the-mortgage-interest-deduction-would-lower-house-prices-by-nearly-20-percent/

Three Belgian economists have shown the world that they know how to work a calculator.  They concluded that if the mortgage-interest deduction went away, homes would be selling for 20% less.

They didn’t talk to any buyers…..they didn’t talk to any realtors…..and they sure didn’t talk to any home sellers.

There is more to it than that!

  1.  The benefit of the mortgage-interest deduction has been minimized by record low rates.
  2.  There are many other reasons to buy a home besides the MID.
  3.  Sellers will wait to get their price.

The MID is icing on the cake for home buyers.  It doesn’t impact their ability to get a mortgage, and if the if the government takes back a tax deduction, it’s not going to stop families from wanting to have a place of their own.

Don’t be surprised if you see this article flashed around by NAR types who want to keep their lobbyists employed.

Posted by on Jul 5, 2016 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 1 comment

My Sellers and Buyers

moving

Long-time reader (and client!) Just-some-guy asked about some where-and-why on my clientele to give folks a feel for who is doing what.

Sellers

Reason for Selling
Number
Comments
Excess Property
7
Six of those 7 got big tax benefit
Downsized
5
3 in SD, 2 out-of-state. Four purchased
Moved Out-of-State
4
Three of the four have purchased a home
Moved w/i California
3
New jobs
Moved Up
3
I also sold them their move-up house
Divorce
1
Estate
1
Proceeds benefited the Ayn Rand Foundation

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

Buyers

Reason for Buying
Number
Comments
First-timers
4
Three of the 4 used 20% down payments)
Downsizing
4
Move Up
3
All were sellers and buyers
Relo from Outside CA
2
Relocating here from CA
1
Divorce
1

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

Notes

A. One of the sellers who moved out of state took a job in Toronto.  The weekend we sold the house, the temperature in Toronto was 1 degree!  I told the seller to hang onto my card!

B. Four properties sold were dual agency – we represented both buyer and seller.  It sounds like a high wire act, but I am clear about my duty – I give advice based on what’s best for the person with whom I’m speaking with, and don’t disclose anything about the other party.  When you can keep it clear in your head, it’s not a problem.  None of them were ‘sold before processing’.

The commercial brokers do it all the time, and it’s likely enough to come to the residential side that keeping my dual-agency chops up will pay off someday.

C. Seven of the 24 sellers sold a house that I sold them.  I can’t rely on past clients as my only sellers – people aren’t moving like they used to!

D.  Two-thirds of the buyers expected to invest more than 10% of their purchase price into repairs and improvements.  Fixers provide additional inventory, and I think we did a good job to adequately discount the price paid.

E. All of my listings were featured here at bubbleinfo.com, and my SP:LP ratio was 99%.  Do the video tours and blog exposure help?  They must!

F.  A sign that the frenzy is over and the market is flattening out is the second negotiation – the request for repairs.  None of them go down easy.

Save

Save

Posted by on Jun 29, 2016 in About the author, Bubbleinfo Readers, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments

Making a Lower Offer

2016-06-25 07.26.42

It is rare in today’s market that you will find a truly motivated seller that will give it away (discount more than 10%).  Of the NSDCC sales closed over $1,000,000 in the last 30 days, the average sales price has been within 5% of the average list price.

Does it hurt to try?

Lightweight agents will warn you not to ‘offend’ anybody with a lowball offer.  But let’s assume that sellers have a thicker skin.  There is a tactical problem that makes it very difficult to come to terms when a buyer presents a low offer.

My rule-of-thumb is that we have two days or two counter-offers, whichever comes first, to make the deal.  If the initial offer is 15% or more below the list price, there is too much ground to cover.  You’re more likely to run out of time or counters, than to reach an agreement.

The biggest problem is that both sides become attached to their price once they put it on paper, and feel the need to defend it no matter how that price was determined.

Typical Example:

Buyer offers 85% of list price.

Seller thinks it is low, and counters 98% of list to send a message to the buyer that this house isn’t going to be stolen.

But the buyer becomes attached to his 85% offer, and he’s not going to be pushed around! The fight is on – and the buyer counters at 88% of list.

Seller thinks we’re going nowhere fast, and drops the negotiations.

Example that has a Better Chance:

The buyer offers 85% with low expectations, knowing the seller won’t be pleased.  The seller counters at his 98% number.

The buyer’s response to the seller’s counter needs to be at least 90% of list, for  two reasons: A) to impress the seller that a deal could be made here, and B) beat the clock.

Typically, the seller will then counter at 95% of list, and hope the buyer just signs it.  But the buyer splits the difference instead at 92.5%, and hopes the difference is small enough that the seller shrugs it off and signs.

The key is the buyer’s counter to the seller’s first counter – it has to be high enough that the seller stays in the fight.  If the buyer doesn’t come up much, it’s too easy for the seller to give up.

Tips:

  •  If you want to buy at 85% of list, then have the agents discuss it on the phone.  You have to convince both the seller and the listing agent, so you might as well start with the agent first – if they blow you off, just wait and see if they lower the price later.
  •  Determine a price strategy in advance, and respond promptly.  The egos on both sides will run out of gas within two days.
  •  Make a clean, crisp offer – include a solid prequal letter and proof of funds.
  •  Provide convincing data why your price is right, especially if there have been new comps since the listing began.
  •  Don’t justify your price by dogging the house, and all the repairs needed.
  •  Include other sweeteners like free rent after closing.
  •  Keep in mind that you are only fighting for the last 2% or 3%.

Having a strategy is important.  Too often a buyer will just throw a price out there, without having a path to follow – and the path is predictable!

The prevailing market theory employed by nearly every realtor is to wait until someone comes along to pay their price.  Your negotiations have to go perfectly to disrupt that belief!

Get Good Help!

Posted by on Jun 25, 2016 in Jim's Take on the Market, Listing Agent Practices, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 5 comments

Preparing Your House For Sale

scotts

When it comes to getting the best price for your house, there might be no higher-profile experts than Drew and Jonathan Scott, the personable hosts of several HGTV series including the long-running “Property Brothers.”

The 38-year-old twins started their real-estate ways while still in college, first leasing out a building to fellow students and then flipping a house for a $50,000 profit a short time later. They’ve put the lessons they’ve gleaned from nearly 20 years of buying, renovating and selling homes into their first book, “Dream Home: The Property Brothers’ Ultimate Guide to Finding & Fixing Your Perfect House.”

“Everybody always thinks that their house is nicer than the one that just sold for more money,” said Drew, a licensed Realtor. (Jonathan is a licensed contractor.) “But the fact of the matter is, most homeowners are blind about the flaws in their home. Which is why you have to value using professionals who will step back and give you an honest opinion.”

Here are the Scotts’ five top tips for getting your home ready to sell:

Read full article here:

http://www.latimes.com/home/la-hm-property-brothers-20160613-snap-story.html

Save

Posted by on Jun 24, 2016 in Jim's Take on the Market, Thinking of Selling?, Tips, Advice & Links | 0 comments

Handling Multiple Offers

offers

 

Our listing on Cherokee closed yesterday.

It was the 2,527sf three-story house that backed to the I-15 freeway – the one where we had 200+ people attend the open house.

The final tally at the Zillow page was 3,745 views, and 77 people had saved it as a favorite home, which are both extremely-high counts. (Josh was the seller)

2022-cherokee-ln-004_web

Yesterday, we marveled at how the bidding war ended up.  The listing had hit the MLS on a Saturday, we had the open house on Sunday, and by Monday we had six offers.

Because not every bidder knew there was competition, we gave everyone the chance to submit their highest and best offer by Tuesday at noon.  I like to keep a tight timeline and promise buyers that we’ll select a winner promptly in order to retain as much urgency as possible.

The list price was $549,000.

At the end of the highest-and-best round, we had a $565,000 financed offer, a $570,000 cash offer, and a verbal $571,000 cash offer (the other three stuck with their $549,000 or $550,000 original offers).

The agent who wrote the $570,000 offer was 80 years old, and was using forms from five years ago.  I actually had to hand-write his original offer for him, but thankfully he was able to scratch out a one-sentence H&B.

Because I had concerns whether he could make it to the finish line, I pressed the $571,000 agent to get his deal in writing.  But he called back with bad news – his buyer, a savvy, multiple-property owner, decided it was too rich.

I called back the $570,000 agent, knowing that I’d be carrying his luggage for the next three weeks.  But he had more bad news – he took his buyer’s family to the house, and they vetoed the sale.

With the other three bidders unwilling to budge, we signed the $565,000 financed offer…..before they changed their mind!

Most people would have been tempted to hold out.  Yes, it would have been sexier to close escrow in 2-3 weeks with a cash buyer. But after 200+ open-house attendees and 50+ showings, are there two in the bush?

Though my phone hasn’t rang like this since back in the REO days, there was no disputing the facts – most people didn’t make any offer, and those that did weren’t in love enough to go crazy.  It was a trend that was likely to continue.

In spite of casual observers telling me we were giving it away, or it was too cheap, the actual results were telling.  The duty of the listing agent is to check the ego at the door, and focus on the facts.

We made the deal at $565,000, and it stuck.

Posted by on May 10, 2016 in About the author, Bidding Wars, Frenzy, Jim's Take on the Market, Listing Agent Practices, Market Conditions, Thinking of Selling?, Why You Should List With Jim | 3 comments

NSDCC Avg DOM, 1st Qtr

sell

Our low inventory has buyers starved for houses to purchase.  When they see a good one, they react immediately – an attractively-priced house will have people driving by within the first hour or two on the market!

Sellers should be aware, and expect to sell their house right away.

Those who don’t shine up their house before listing, or those who get exuberant about price – thinking they have plenty of time – will miss a golden opportunity.  The most desperate buyers are motivated to pay top dollar in the first few days on the market!

Here are the number of NSDCC houses sold up to $1,400,000 in the first quarter, ranked by days-on-market:

Avg DOM
2013 #/SP:LP
2014 #/SP:LP
2015 #/SP:LP
2016 #/SP:LP
0
19/97.0%
8/98.2%
6/91.9%
9/97.4%
1-14
205/99.5%
169/99.4%
160/98.6%
125/99.3%
15-30
80/97.2%
58/97.7%
65/96.7%
64/97.7%
31-60
68/96.5%
78/96.5%
83/96.7%
72/97.0%
61+
157/95.5%
96//94.8%
104/96.1%
89/95.9%

Sellers – you want to get your price, right?

The houses that sell closest to list price are those that go pending in the first two weeks.  These SP:LP ratios are based on the list price on the pending date – the price which typically needs to be lowered first to get a buyer to offer, because they know it isn’t working after the first few weeks.

Hire a listing agent who can handle the immediate urgency – Get Good Help!

Posted by on Mar 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Thinking of Selling?, Why You Should List With Jim | 0 comments

It’s Go Time

springkick

We’ve all heard the rule about listing your home for sale in the spring.

But when are buyers actually buying?

Are there any times when the demand could wane, and sellers should avoid?

There are three events that could cause a lull in the demand:

  1.  Easter/Spring Break
  2.  Tax Day/Season
  3.  Graduation Season

If all we had to worry about was Easter Day, then we might lose a few hours – there were plenty of open houses on Saturday.  But families with school-age kids get 9-10 days off, which is tempting for them to spend on vacation.

Should sellers wait?

Then you have the tax-day slowdown, which is usually the 1-2 days that people waste having to arm-wrestle with their income taxes.

Keep waiting?

Graduation season is more than it used to be, with every kid from pre-school through college getting the pomp and circumstance fit for a king.

Good grief – it will be mid-summer by the time every distraction clears!

Let’s examine the most important fact – when are buyers buying?

These intervals below were based on the hunch that the combined spring-break/tax-day season (3/16-4/15) might show some weakness:

NSDCC Detached-Home Closed Sales – Dates They Were Marked Pending:

Year
2/16-3/15
3/16-4/15
4/16-5/15
5/16-6/15
7/16-8/15
2012
264
297
309
307
231
2013
293
362
340
326
248
2014
231
271
303
261
264
2015
264
318
308
311
289
Avg
263
312
315
301
258

How about that!

The spring-break/tax-day season was the hottest of the year in 2015, and on average about as good of a time to sell as any!

It’s Go Time!

Posted by on Mar 28, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick, Thinking of Selling?, Why You Should List With Jim | 4 comments

Pricing Triangle

pricing triangle

Sellers who price their home above market value will appeal to a smaller number of potential buyers.  But there are other variables too, the most important of which is timing.  Once the listing has been on the market for a month or so, buyers expect sellers to lower the list price.

From this article:

http://www.keepingcurrentmatters.com/2016/02/29/how-to-get-the-most-money-when-selling-your-house/?

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.

Realtor.com, gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

Posted by on Mar 1, 2016 in Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 0 comments

Premier Agent Home Video Tours

zpa

Here’s a great reason to list your home with Jim the Realtor – Zillow is giving ‘special preference’ to listings by Premier Agents that feature a video tour.

  1.  Hopefully this will help bring home video tours into the forefront of real estate marketing.  It is time for agents to embrace video – finally!
  2.  This will help to further magnify the superiority of Zillow’s website over our local MLS, who refuses to allow agent videos to be publicly displayed.
  3.  It demonstrates how Zillow will keep developing exclusive benefits for the Premier Agents who pay them to advertise.

Home sellers will have one more way to evaluate which listing agent to hire – who does the best video tour!

The home video tour also gives the listing agent direct access to the buyers, allowing them to sell the house using video and audio – which might be the more important benefit of the two.

Posted by on Feb 16, 2016 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim, Zillow | 0 comments