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The Best Month To Buy A Home

This article describes the price swings per season for each town – San Diego is among the least-affected because our weather doesn’t change much.

https://www.nerdwallet.com/blog/best-month-buy-home/

The off-season may have somewhat-lower pricing, but that’s also when inventory is the leanest!

Buy when you find the right house/location, and make the best deal you can.

Buyer’s Worksheet for Home Showings

It’s more complicated to look at homes for sale these days.  Open houses have been banned, everyone who enters must sign disclosures for each house in advance promising not to sue realtors if you get the bug, and of course you have to wear the PPE and sanitize before and after the experience.

It was already a challenge before Covid-19 to gather enough information in 10-20 minutes to make a decision that will affect the rest of your life.  Compound the difficulty with a mask that makes it harder to breathe (and fogs up your glasses) while the listing agent is pestering you not to touch anything.

Today’s covid tip: TAKE A WORKSHEET WITH YOU.

Customize it with your own questions – here’s a start:

  1. Is there a suitable downstairs-bedroom suite?
  2. Is there extra space for office(s), or do I need to use a bedroom?
  3. Is the floor plan suitable for longer quarantines?
  4. Do I feel secure? Is it possible to improve security, and if so, how much cost?
  5. Can I go in the backyard and relax day and night?
  6. Does the kitchen have a gas or electric stove?
  7. Is the fridge built-in, and if not, do I want the sellers to leave it behind?
  8. Do I want the sellers leave the washer and dryer?
  9. Does the garage have extra storage?
  10. What improvements need to be done just to move in?
  11. What improvements are needed long-term?

If the listing agent didn’t get the memo that matterport 3D tours are the worst thing for sales and is using them as a substitute for live showings, then use your worksheet while navigating the online tours too.

BioDisco

When we were selling REOs, the bank clerks objected to reports that their properties had mold in them. Why? Because we weren’t mold experts, so how did we know for sure? Out of that, a new description was created, ‘biological discoloration’, which we shortened to BioDisco.

We still run into the discoloration, and it’s usually a hot topic for buyers – and a big ticket for the mold-remediation companies. But how bad is it? From the U-T:

One must know what kind of mold it is. Mold consultants and injury attorneys often describe some molds as worse than others. Their star is Stachybotrys chartarum, a black mold reported to produce infinitesimal quantities of a toxin. It sounds frightening, but the scientific community long ago debunked the myth that this or any mold was poisonous to breathe. For example, read the National Institute of Health Fact Sheet on Mold, found at www.niehs.nih.gov, or visit the Center for Disease Control site at cdc.gov/mold/faqs.htm. Nevertheless, the mold industry continues to call mold “toxic.”

Always start with a mold test. The Environmental Protection Agency recommends against mold testing. As confirmed by the DPH, there is no standard as to how much of a given airborne mold is “unhealthy.” Furthermore, indoor air sampling tests are extremely vulnerable to recent events in the home. For example, a recent shower, window opening, or carpet cleaning can completely change the test results. So, mold tests mainly unnecessarily frighten the home’s occupants with disembodied meaningless spore counts. There is rarely a legitimate reason to spend money on a mold test.

More tips here:

Link to U-T Article

Home Pricing Tips

I spoke to a seller of a home in Texas that isn’t moving, and offered these tips:

My Pricing Rules-of-Thumb

1. Pricing Gauge for Anywhere, Any Time, Any Market:

  • If you are getting offers, then your list price is about right.
  • If you are getting lookers but no offers, your list price is about 5% to 10% too high.
  • If you don’t have any buyers looking at the home, it’s more than 10% wrong on price.

2. Buyers are watching the days-on-market statistic, which is out in the open, and they are seeing other listings pop into escrow quickly (the median days-on-market today for those NSDCC homes in escrow under $2M is 16 days).  Buyers are subtracting about 1% from your original list price for every week the house is on the market. You can ‘refresh’ your listing every month, but you’re not fooling the serious buyers.

3. As a result, sellers should lower their price by 5% every 2-4 weeks until they start getting offers.  Mondays and Thursdays are the best days to lower your price.

4.  An exciting price creates urgency and enthusiasm among both buyers and agents.  Without it, your listing goes stale quickly, usually after two weeks – and then lookers dwindle down to just those occasional stops by agents to help them sell the better-priced house down the street.

5. Buyers are using their online tools to make decisions, which aren’t the same as visiting a home in person – but they only want to venture out if it’s an obvious contender.  Can you blame them? As a result, the online video presentation needs to be spectacular.

6. Rotate the photo gallery and change up the description regularly to highlight different features.

7. Make the home easier to show. It’s best if you move out in advance, and use staging.

8. Tune up the home before listing, and keep improving while on the market if necessary – and get new pro photos of the changes.

9. Donna’s hot tip – clean sells!  Wash the windows, and replace the flooring.

10. If you don’t want to do the extras, then your price needs to be adjusted to reflect – and it needs to be low enough to solve all the problems.

11. Get Good Help.  Your agent’s ability to operate successfully during the coronavirus can be determined by their sales on Zillow.  Those who have closed sales with buyers and sellers over the last three months have what it takes to get you through!

3D Tours – The New Open House

We’ve touched on two differences that the coronavirus is causing in residential real estate sales; the cumbersome arrangements now required just to see a house for sale, and how wearing masks will help buyers hide their interest in a home.

What else is changing?

The real estate flyers are gone now, and public open houses are heading for extinction too – and the 3D tours are being heralded as a worthy substitute.  It’s too bad too, because the industry never fully grasped the biggest benefit of open houses – helping to create urgency in the buyers, especially when the home is fresh on the market.

If you haven’t seen a 3D tour, here’s an example:

https://my.matterport.com/show/?m=pznhRXGpYoS&mls=1

The 3D tours are very crafty, and buyers should love them for offering maximum convenience within minutes – or seconds.  Sellers don’t have to leave their house every Sunday afternoon, and agents won’t have to work weekends any more.

What’s wrong with that?

Have you ever seen a perfect house?  Me neither.

The 3D tour allows the viewer to scroll around the home at their own pace, which is a plus.  But it’s too easy for viewers to give up when they see something unusual or have trouble navigating.

You gotta give the house a chance.

Rather than relying on a thorough walk-around with an agent who is explaining every nuance, the home-buying decisions will be based on fancy imagery on a computer screen.

Won’t the interested parties pursue an in-home visit?  Yes, and they are the most likely real buyers.

But it’s the internet viewers who click out too quickly who will miss out – and fewer buyers relying on less information isn’t a positive for home sales.  Instead, the sales process gets dumbed down further, and those who support the 3D tours as an adequate substitute for agent advice are contributing to the downfall.

It’s all going that way anyway, but at least you can say you saw it coming!

Rule-of-Thumb for Affordability

Generally, the cost of homeownership is under-stated. Let’s figure this to be around 0.175% of purchase price:

For many Americans, their expected mortgage payment may not be all that different from their current monthly rent. But even if you have a down payment saved up, you still may fall short when it comes to paying for all the monthly expenses of owning a home.

When you buy a home, you have to pay property taxes, insurance and maintenance costs on top of your mortgage payment, Suzy Orman says. Plus, if you put less than 20% of the home’s purchase price as the down payment, you’ll also have to pay private mortgage insurance, or PMI, to offset the risk your lender is taking in approving you for a home loan.

Those costs add up. Orman estimates that these extra, but necessary expenses, will cost you an additional 45% over your mortgage, just to keep your home.

In order to figure out if you can afford to buy, Orman says first-time homebuyers should test their finances. “I want you to play house,” says Orman.

Let’s assume you pay $1,000 in rent and estimate that your mortgage will cost about the same.

Over the next six to eight months, take $450 a month and put it in a savings account on the first of every month. That’s in addition to the eight-month emergency fund and the 20% down payment that Orman recommends having in place before you even start to look at local real estate ads.

“If in six to eight months from now, you are able to do it on time every single month, you can afford that home,” Orman says. Plus, after eight months, you’ll have almost $4,000 to put toward your closing costs.

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