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Category Archive: ‘Tips, Advice & Links’

Home Maintenance Costs

repairs

Back in 2009, we ran the first post entitled, Home Maintenance Costs:

http://www.bubbleinfo.com/2009/09/17/home-maintenance-costs/

After discussing the need for home maintenance with several clients  recently, I thought it would be a great time to review.

Every condo association in California is required to complete a Reserve Study so they are socking away enough money every month to repair and replace every item needed over time.  Homeowners should do the same!

Examples of things that need regular repair/replacement:  Air conditioning, appliances, BBQ, ducting, faucets, flooring, furnace, lighting, painting, roof, siding, sinks, toilets, windows, etc.

These are pure home repairs and replacements – they don’t include exterior maintenance or home improvements/upgrades/updating, which all matter too.

I came up with my own formula to estimate how much money homeowners should spend each year just on maintenance – try it out:

Age of home X square footage/15 = Annual spend

The 15 was derived from a reasonable number of years it will take to catch up on everything if you start today.  You may want to re-start again in year 16!

My formula is unscientific, but it is close enough.  Spend something!

Doing regular repairs will help you avoid multiple major expenses, and save you from needing a complete redo when it comes time to sell.

The joys of homeownership!

Posted by on Aug 9, 2016 in Jim's Take on the Market, Remodel Projects, Repairs/Improvements, Thinking of Buying?, Tips, Advice & Links | 0 comments

Avoiding the BOM

When thinking about selling your home, do you have concerns that a sale could blow out and leave you hanging?  Have you heard stories from others like that?

It is a real concern.  If a deal blows out, the sellers have to go through the hassle of showing the house again, and the listing agent has to find a way to re-ignite the urgency.

What are reasons for a cancellation?

  1. Buyer didn’t like being worked over by the seller and listing agent during the negotiations, and is looking for any reason to cancel.
  2.  The house is in worse condition than expected.
  3.  Sellers won’t do enough to satisfy the buyers’ request for repairs.
  4.  HOA docs reveal conditions that are overly-restrictive.
  5.  The buyers’ family squashes the deal.

Our contracts create a legally-binding agreement, and the sellers are locked in – you can’t cancel.  Wouldn’t you want to do as much as possible to lock in the buyer before signing?

There are two easy things for sellers and listing agents to do to drastically cut down the chances of a sale cancelling:

  1. Have buyers also qualify with your lender of choice.  Deals can cancel later from lending factors that were unknown in the beginning, but typically those were unknown because the lender was inexperienced and didn’t see them coming.
  2. I love the new practice of sellers providing a pre-listing home inspection report.  Include the HOA docs, termite, and title report too – up front!

About the only thing left is the appraisal, but because you had an attractive price from the beginning, the value shouldn’t be too hard to substantiate.

I just had one where the inspector drove up in a $500 car, spent seven hours doing his inspection, and finally produced his written report a week later!  Of course, he says the house is falling down!

This sale hasn’t cancelled yet – we are busy on supplying our own reports and demonstrations to offset the inspector’s findings.  I should have gotten my own report in the beginning!

We’ve been doing it backwards all these years – supplying the due-diligence materilas from the start is a great way to avoid cancellations!

Posted by on Aug 3, 2016 in Jim's Take on the Market, Listing Agent Practices, Tips, Advice & Links, Why You Should List With Jim | 3 comments

Lowball Strategy

typical agent

Have you seen a home sale close at a surprisingly-low price, and you said,

“Geez, I would have paid that!”

Usually the house has been on the market for months, and everyone else has forgotten about it. The seller doesn’t want to lower the price, but tells his agent, “Just bring me an offer”.

The agent revises the MLS remarks, adding gems like ‘Extremely Motivated’, and ‘All Offers Considered”.  A buyer who saw it earlier with another agent decided to approach the listing agent directly with an offer 20% below list – take it or leave it.

With visions of two commissions twirling around in their head, the agent tells the seller this is the best they could do. The seller really is motivated, so after months of failure at a too-high price, frustration sets in and he signs it.

If any seller is tempted to take a lowball offer – more than 10% below list – they should instruct the listing agent to immediately lower their list price to the midpoint between the offered price and current list price.

Let’s see who else is out there!

Watch how many you see that close at 15% to 20% below list and the listing agent represents both parties.  It isn’t enough to change the market, but a notable strategy.

You shouldn’t burn your old agent though – there are enough listing agents who are wimpy about dual agency and prefer that you have your own agent anyway. It is the same net to the seller, so he won’t care either.

Posted by on Jul 20, 2016 in Ideas/Solutions, Jim's Take on the Market, Thinking of Buying?, Tips, Advice & Links, Why You Should Hire Jim as your Buyer's Agent | 0 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

Taller Walls

We’ve talked about the importance of staging, but there are other simple things you can do to improve your look.

Rooms with low ceilings can feel smaller and darker than they actually are.  Here are some great ideas to offset that feeling!

http://www.contemporist.com/2016/06/20/11-ideas-for-making-a-room-feel-taller/

taller walls1

tallerwalls4

taller walls3

Read full article here:

http://www.contemporist.com/2016/06/20/11-ideas-for-making-a-room-feel-taller/

Posted by on Jun 21, 2016 in Jim's Take on the Market, Staging, Tips, Advice & Links | 0 comments

Buyer Tips in a Seller’s Market

buying

Hat tip to bode for sending this in, and noting the importance of #3!

http://www.trulia.com/blog/mistakes-buyers-make-in-sellers-market/

The real estate market fluctuates often, making it tough to predict whether the market will favor buyers or sellers when it’s your turn to buy. If you’re shopping for real estate in a market that currently favors sellers, you need to know some tricks of the trade to help ensure you don’t make any mistakes.

Buyers in a seller’s market can get what they want, but they need to bring their “A” game — buying a house in a hot market isn’t for the indecisive. Here are six common mistakes many buyers make — mistakes that you can learn to avoid — when shopping in a seller’s market.

http://www.trulia.com/blog/mistakes-buyers-make-in-sellers-market/

 

Posted by on Jun 11, 2016 in Jim's Take on the Market, Market Conditions, Thinking of Buying?, Tips, Advice & Links, Why You Should Hire Jim as your Buyer's Agent | 0 comments

Home Buying Tips

Julie Gurner

Answer by Julie Gurner, doctor of psychology, multiple time home owner, on Quora – the knowledge sharing network where compelling questions are answered by people with unique insights.

I have invested, done some flipping, and tastefully renovated old homes.  I’ve bought (and sold) a lot of homes (my mother says I buy homes like others buy shoes), and these are tips that have worked for me.

  • Buy a home you can easily afford. A lot of people buy homes at the top of their range, and that’s a huge mistake for most…never be a paycheck away from foreclosure or struggling.
  • Find a house with bad aesthetics and fantastic “bones.” Buy the house that looks decent on the outside but has internal superficial ugliness – gross paint, carpets, etc.. As long as the major systems are fantastic (plumbing, electrical, roofing, etc..), superficial things can be fixed and will add instant value.
  • Buy the crappiest house in the nicest neighborhood you can. It will always sell for more than what you paid for it, if you put in some elbow grease.
  • Get an amazing home inspector, and follow him/her around with a clipboard asking questions and writing down every little problem. Use it for negotiations, and later as a personal checklist of things to take care of.
  • Be sure to get a “fixed” interest rate with your mortgage…and have great credit. No matter what happens in the market, you’ll be grateful.
  • Know your market. Go to Zillow and see what houses have sold for in your area, before making an offer…know how competitive the market is, so you know how competitively to bid – how long do homes stay on the market? I’ve offered prices $100K less than ask and gotten homes, but also gotten homes by offering the asking price.
  • Look at the crime map for your area. There are beautiful cheap homes out there in neighborhoods you’d never want to live in. Don’t be suckered in.
  • Don’t ever buy anything with an HOA. (additional fee for living there) – you can never get rid of it, it can go up, and you can never truly pay off your property.
  • Think of additional income streams. Does it have an in-law apartment or space you could rent out or use for Air BnB? Could you rent out a room or two if you were in a jam?
  • Have enough money down that you will not be paying PMI (mortgage insurance)…this can be hundreds a month that doesn’t even go toward your balance. Your payment per month will be far lower.
  • Renovate…this is not HGTV. If you buy something completely finished, you are likely wasting a ton of money, and overpaying. You can usually have everything you want for a price you can afford if you’re willing to do the back end of it.
  • Have a list of things that are “must-haves,” things “that would be a +1 but wouldn’t be dealbreakers.” Know that going in.
  • Don’t be “wowed” or turned off by the appearance going in. They hire professional staging companies for a reason…to make the house more appealing. They also have trouble sometimes selling great homes because hoarders or messy people live there. Look beyond the grit, or beyond the flash.
  • Think about maintenance. A place with a huge backyard might *seem* awesome…until you are mowing all day every Saturday just to keep up. Things to consider – long driveways (plowing in winter), big back yards (mowing/trimming), etc…

These are just a few tips for a newbie, but a lot of things come from experience also. If you have a friend in real estate, or know an experienced investor – take them with you when looking for homes – they’ll often point out things you wouldn’t have seen otherwise.

Posted by on Jun 4, 2016 in Jim's Take on the Market, Tips, Advice & Links | 5 comments