Five Common Mistakes Sellers Make
May 8th, 2012 categories: Home buying, Home Selling, Real Estate, Short Sales
And how to avoid them (2 of 5)
2. Limiting Marketing Exposure
Often made by inexperienced real estate agents or FSBO (for sale by owner) sellers, this is a mistake that can be very costly. Newspaper ads, open houses and flyers on your front lawn are nice amenities when selling a home in today’s market but are ineffective in attracting qualified buyers. The truth is that your neighbors will be the first people to take a flyer, the open house will invite mostly unqualified buyers and the newspaper ads are ignored by the real buyers who are looking online or getting emails from their agents.
Seasoned realtors know that there isn’t a silver bullet to attract buyers but will instead cast a wider net utilizing several marketing strategies. The multiple listing service is the first step for all agents and only those that subscribe to this service can list homes for sale. Other online websites such as Craigslist or Realtor.com offer some additional exposure as does websites from the larger brokerages but again you need to be aware of who you are attracting to your home. The bottom line is that serious, qualified buyers know they need a real estate agent to access the best homes for sale and contact one as soon as they are ready to go shopping to buy.
Compromise in marketing yields a ” you get what you paid for” result so why take the risk? The average FSBO will list his home in the newspaper for a month before giving up with dismal results. Some agents make limited marketing sound attractive because they appeal to the uniqueness of their home and everyone wants to think of themselves as unique. Unfortunately it results in limiting exposure and you lose precious time. Social networking is a huge draw today but again it’s hard to sell a home without actually walking through it so my preference has always been face to face networking which is something I spend a lot of time focusing on.
I hope you gained some knowledge from this post, especially if you are considering putting your home up for sale. If so, I would love to chat with you regarding how I might help so don’t hesitate to give me a call or send an email.
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Five Common Mistakes Sellers Make
March 24th, 2012 categories: Citrus Heights, El Dorado Hills, Fair Oaks, Folsom, Home Selling, Real Estate, Rocklin, Roseville, Sacramento, Short Sales
And how to avoid them. (1 of 5)
As a real estate professional I work with many buyers and sellers every year and often hear stories about the seemingly small mistakes of past real estate transactions that ended up costing aggravation and more importantly money. In the spirit of prevention I offer this special report to those of you who are not my client yet and hope you will find it informative and help you to see that I am concerned that your transaction goes as smoothly as possible.
1. The Wrong Price
A surefire way to get less than the fair market value for your home is to overprice it in the beginning. It sounds contradictory, but it is true. There are several reasons for this. First, if you home is more expensive than the similar homes in the neighborhood, fewer buyers will choose to even look at it. Why would they waste their time? And the buyers that do decide to look at your home will likely use it for comparison to justify their decision to purchase a different home. “See? A similar home but a lot more expensive. We should get the one we saw yesterday – it’ a bargain compared to this one.” Additionally, the longer your homes remains unsold, the less interest it will generate among buyers. Eventually, when it’s been on the market longer than the other similar homes, buyers will start to think that there is something wrong with it. You are then forced to face the real possibility of being forced to sell it for less than its real value. So the lesson is to be sure your home is priced correctly from the beginning saving time, aggravation and money.
Overpricing is not the only pitfall that sellers fall into, some even underprice their homes. How do you know your home’s real value…by getting a professional Comparative Market Analysis (CMA). A CMA will show you what similar homes in your area are selling for and how long it takes to sell them. You will be able to see the range of values that your home falls into and then determine an accurate asking price. I offer CMAs for homeowners free of charge. Just give me a call or send a request via email and I’ll prepare it for you at no cost or obligation.
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Now is the Best Time to Buy a Home!!!
March 15th, 2012 categories: Folsom Lake Homes, Home buying, Home Selling, Real Estate
Warren Buffett says….”Historical Crossroads”
According to this article on the Loss Mitigation Network blog Warren Buffett says NOW is the best time to purchase a home. In fact he told his secretary of 37 years that it would be the best opportunity of a lifetime. Recently on NBC’s financial program Squawk Box he said he’d buy thousands of single family homes simply because the pricing and loan rates are at an unprecendented low in recent history.
So are you trying to find a home to purchase in our area and getting beat out by multiple offers? If so, you need to step up and realize that our market has done a 180 and competition will continue to be tough until the bank start releasing those unknown numbers of foreclosures. I’ve talked w/numberous bank officers and they don’t have a clue when or how many, for that matter, so there are no clear indications of when the inventory will increase. Until then be prepared and have your loan pre-approved or better yet approved to compete in the market place for your humble abode.
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Short Sales: How They work
February 20th, 2012 categories: Folsom CA, Folsom Lake Homes, Foreclosures, Home Selling, Real Estate, Short Sales
The Process Explained
If you want to sell your home because your property value has decreased to less
than what you owe then read on to find out if you qualify.
Have you been denied for a loan modification and want to try something else to
avoid foreclosure… then a short sale might be your solution.
Afraid your home value has decreased and you won’t be able to sell…perhaps a short sale is your solution.
If any of these sound familiar, discover more about the
process and potential benefits of a short sale. Not quite sure how a short sale
works…then keep reading and I’ll do my best to answer your questions along the way.
What’ exactly is a short sale?
A short sale is just that—the sale of your home for a price that falls
short of the amount you owe on your mortgage. What’s the benefit to you? You get
to settle your mortgage debt and avoid foreclosure, even if property values have
declined in your area.
So, how does it work?
1. Your Realtor will help you to estimate the value of your home’s sale price.
The next step is to secure a buyer for your home. (The
buyer will sign a purchase contract and provide proof of financing, such as a
pre-approval letter for a new home loan.)
2. Submit your completed short sale
application package to your mortgage lender or servicer which includes:
- Application
- Last 2 months recent bank statements
- Proof of income: paystubs, tax return, etc.
- Listing history
- Executed purchase contract
- Purchaser eligibility certification
- Proof of buyer financing
- Estimated settlement statement from your title/excrow company.
3. Your Realtor will submit your package along with the necessary estimates from the title company to your lender/servicer.
Why is a short sale better than foreclosure?
Now that you know the basics of applying for a short sale, you might be
asking… how is this option better than foreclosure?
When foreclosure occurs, a homeowner is forced to vacate the property
and may encounter legal issues and costly fees involved with the foreclosure
process. This is undesirable for both the homeowner and the lender.
In a short sale, a homeowner enters into a mutual agreement with the
lender to end the mortgage. This is reflected on your credit report as
“negotiated settlement of debt,” which may be less damaging to your credit than
foreclosure.
For more information on the credit or tax implications of pursing a
short sale to avoid foreclosure, please speak with your tax advisor or a real estate attorney.
I want to apply for a short sale. How do I start?
First it’s important to keep in mind that when
you apply is very important. Once you’ve decided that you want to pursue a short sale, apply as soon
as possible. If foreclosure proceedings have already begun on your home, please
note that most banks want your short sale APPROVED at least 15 days prior to the
foreclosure sale date so time is of the essence.
For more information regarding short sales see:http://folsomlakehomes.com/2010/02/26/short-sales-know-your-options/
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Prevent Home Remodeling Stress
January 31st, 2011 categories: Finances, Folsom Lake, Home Building, Home buying, Home Improvements, Home Selling, Real Estate
Keep the sanity in your sanctuary
If a man’s home is his castle then when your castle is being remodeled, it can feel like your kingdom is under siege. It’s frustrating when you come home with groceries and find your kitchen counters gone; the contractor calls and says he won’t show up for another week and this is the 3rd delay; the painter says the designer colors are no longer available but you could pay extra for custom matches. Pitching a fit or firing the entire crew is not the best solution.
Home remodeling taxes your emotions so here are some tips to help handle the psychological stress. When you remodel your home, you can feel you’ve lost your sanctuary, the one place you can totally relax, decompress, be yourself. I encourage you to take breaks by physically leaving the house during the remodel phase. Call some friends for a long coffee break, work out or take a yoga class, this is the time to explore those areas you’ve left undiscovered. Now would be the time for a mini-vacation or a weekend get away.
When you feel you’ve lost control of your domicile with workers coming and going, it’s hard to enjoy your daily routine. This is where you might question the wisdom of what you’ve done. When you realize the project will take three times as long and cost twice as much your best defense is taking positive, decisive actions. This is where some pre-planning will make all the difference.
Before you first sit down with your contractor be certain to do your due diligence and check out his credentials, call his references and above all confirm his license is valid and up to date. Tell your contractor you reserve the right to question or challenge any decision made. Add contingencies to your contract, such as: the contractor gets less pay if the job goes overtime, more if it takes less time. It’s standard in the industry to pay a portion after each phase is completed so be sure to understand his or her process and what the expectations are at each point.
You can also benefit by setting goals to accomplish one task at a time. Break every phase of the project into small, manageable “to do” lists. This will help you to psychologically gear up for the next stretch and give a sense of accomplishment which puts is little wind in the sails to get you through the next segment to be done. It also prevents you from jumping the gun and clearing out the dining room prematurely and then getting angry when it sits empty for two weeks until they get to that phase of construction.
It’s easy to fantasize about the picture-perfect home, the magazine ideal, but the reality is always more costly and sometimes impractical. A gourmet kitchen with top-of-the-line appliances looks fantastic but if your home is in an average neighborhood be sure you’re not over-improving because if you should need or want to move you’ll never recover those costs. Stay flexible and consider lots of options and have a “plan B” in place at every turn…it will keep you sane.
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5 Reasons Your Home Won’t Sell
August 26th, 2010 categories: Home Selling, Real Estate, Sacramento Co. Real Estate
Avoid These Pitfalls and Sell Your Home Quickly
You’ve heard the expression “timing is everything” well, truer words were never spoken when it comes to selling your home. The number one reason homes don’t sell is due to overpricing. I often hear sellers say: We can always come down later- right? Well…there might not be a chance to do that if you overprice to begin with. Historically when your house goes on the market the greatest potential for buyer traffic is in the first 2 weeks. By pricing it high with the intention of dropping the price later you are completely bypassing your best candidates for purchase.
The standard purchase contract requires that agents have an obligation to do what is best for their clients. Clearly, showing overpriced listings does not fall into that criterion. With inventory high, agents will undoubtedly choose the homes prices within their buyer’s price range that meet the current Fair market Value. If your home doesn’t fall into that category it’s obvioulsy not going to be shown.
Your neighbors will love you because you help them sell their home. It’s simply the benefit of competition. When a home is overpriced, it not only sits on the market but acts as a selling point for homes that are at market. Buyers are looking for value so if they think I can get the same house for Less…down the block…then that’s where they will shop.
Some real estate agents use this desire against the seller. I know agents who will agree to list your home too high in order to get your listing…plain and simple. The issue becomes very clear once an offer has been presented…from the lenders point of view. Today’s lenders are extraordinarily cautious now and base their loans on accurate appraisals. Appraisers must base their price on comparable properties that have sold. If your home is not able to appraise then it’s usually the seller who has to reduce their price…why risk losing your buyer?
The first two questions that buyers ask are: What’s the price and how long has it been on the market? The reality is that overpriced homes will simply sit on the market. Unfortunately, extended time on the market forces the question in a buyer’s mind of possible bigger problems looming with the walls of the property. That’s a risky way to sell a home because it will create an atmosphere of distrust.
Statistically homes that start their listing life overpriced almost always sell for less than market. With fewer buyers to choose from , zero leverage because of time on the market, too high an asking price and carrying costs to maintain the property, most sellers find themselves getting the least from their investment rather than the most. It doesn’t make sense to follow the ball down the hill…you want to be in front and use the marketing time wisely.
As a real estate professional committed to happy clients who are eager to get the most from their investment, sharing this must know information with potential sellers in on the top of my to-do list. If you are considering selling your home please contact me for your free market analysis. I can be reached at Beth@FolsomLakeHomes.com
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Short Sales: Know Your Options
February 26th, 2010 categories: Finances, Foreclosures, Home Selling, Loan Modifications, Real Estate, Short Sales
With the recent decline in foreclosures due to banks holding back some REO (real estate owned) inventory, agents have begun to re-tool their marketing to target short sales. Clear guidance is the key to getting your home sold via a short sale so when hiring a broker to sell your home ask if they will be personally handling the transaction. It’s imperative to let the broker know the date of the last payment made or how many payments you are behind. These details will determine the success of your short sale so providing as much information up front will help speed the process. Below are some of the pitfalls facing sellers as their broker attempts to negotiate with the banks to sell short.
Each lender has its own criteria and level of tolerance for short sales. Multiple levels of approvals with varying conditions are common in short sale transactions. Once a sale is submitted and uploaded to the system, it must fit the pre-determined criteria dictated by the banks loss mitigation dept. Loss mitigation is the first department that grants approval. The initial package typically takes about 3 weeks to be uploaded to most banks systems. Recently banks have begun to streamline the process and are utilizing online software which is supposed to speed response time. This is relatively new so we hope to see time frames shrink as new requests are processed.
Every short sale is unique and the amount of time it takes to get the home closed will depend on how many liens are attached to the property. There are so many possibilities when it comes to lien holders but here are a few that hold sway. Home equity lines of credit (HELOC), Home Owners Associations (HOA) that can have multiple assessments attached, tax liens (income, estate or corporate franchise tax) real property taxes and mechanic’s lien holders. Additionally, any unpaid utilities will need to be paid and if maintenance has been neglected and the city has to mow the lawn there will be a lien for that service attached.
There are additional pitfalls that can also prevent the short sale by way of lender required mortgage insurance on the loan. The way this works is that the bank is obligated to allow the mortgage insurer to be party to negotiations. This is part of the servicing agreement initially set up by the mortgage insurer with the bank. The reason being that the insurer will have to pay out a claim to offset the lender’s loss in the short sale. Some mortgage insurers require a side note to be executed in order to transfer title. This is another item of negotiation that can halt the transaction so knowing upfront if there is mortgage insurance certainly helps.
The failure rate of short sales is relatively high due to the complexity of the processes involved. Numerous parties to the transaction, fickle buyers unable to perform or worse walking away from the purchase complicate an already frustrating experience. Inexperienced agents who do not understand basic procedure can jeopardize the sale because time is of the essence. Auctions do happen and most of them are for homes that failed to sell short.
Short sales do adversely affect a person’s credit score although the negative impact is typically less than a foreclosure. Short sales are a type of settlement and remain on a credit report for seven years. Some lenders are designing loans for those customers who have experienced a short sale with some buyers able to re-purchase in as little as 13 months. The determining factors are keeping your other credit obligations under control and no late payments exceeding 90 days. Of course, you have to qualify your income and work history but the banks realize that there is a distinct need for these loan products and it will grow as we get out from under this current market.
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Five Common Defects in Homes to Avoid
February 18th, 2010 categories: Folsom Lake, Home buying, Home Selling, Real Estate, Sacramento
Growing up in a family of tradesmen has given me an advantage in matters of construction and enabled me to help clients think through a particular design flaw or anticipate potential construction issues. One of my pet peeves is shoddy workmanship but sometimes home buyers are so dazzled by the process that they fail to see obvious flaws. The old adage that the devil is in the details works well when it comes to finding potential problems when purchasing a home, so I thought I’d offer the top 5 hidden defects that can shipwreck your home purchase.
Top on the list is foundations. Talk to any concrete expert and you will learn a lot about curing times and it’s relationship to the strength of a home foundation. Living in this valley has taught me many things and one of them is that you don’t pour a foundation in the middle of July and expect it to dry property without a lot of babysitting…with a hose. Concrete needs to cure slowly so when I purchased my last house I was ecstatic that the foundation was being poured in February. Cracks in foundations are allowed to a certain degree (hairline) but when the gap gets to 1/8 inch then you start to have issues with moisture and pests. One trick is to look closely at the garage floor for separation because this is your clue into the rest of the structure.
Roofs are at the opposite end and can cause major damage to the structure if not installed correctly. A few years ago I listed a home for a client and we found that the entire parameter of the roof needed to be replaced due to incorrect installation of the original flashing. The builder had flipped the flashing upside down so instead of the rain running off the edge, it was held there and wicked back up the roof. The homeowner didn’t have a clue since she had purchased the home when it was relatively new. Roof inspectors will check for those and other issues at the time of purchase. Don’t assume because a home is new that the roofing is installed correctly or is not damaged.
Water is the most intrusive element known to man and poor drainage can cause numerous problems from mold and mildew to undermining a foundation. Homes that have a down slope are more prone to water problems but equally important are runoff and standing water issues. I once looked at a home in the bay area and had my soils engineer out to take a look. His assessment was that the foundation was sound and that the fireplace cracks were nothing to be concerned about. It was only after the fireplace had fallen off was it found out that there was an underground spring running under the home. Needless to say I was very happy to not have purchased that home.
Pest reports reveal intrusion from pests, dry rot or any other critters known to destroy real property. In certain parts of the country it is expected to have a home treated for termites, or as is customary in our area, to deal with dry rot. When my seller’s get a pest report back that has a repair bill around $1000, they might wince but that’s considered average for this area. When purchasing a home with obvious deferred maintenance it’s not a bad idea to ask to be present when the pest inspector comes. Seeing the damage can educate you to the causes so you can do preventative maintenance.
Finally inadequate systems, such as wiring, plumbing, or HVAC can empty you pocket fast. When purchasing a home that has been retrofitted or remodeled find out if these systems have been updated along with the new cabinets. Permits for this type of work is required but sometimes “Tim the tool-man” decides he can do the work for less. Recently a buyer client purchased a home and as part of the negotiations demanded that the repair work be done by a certified professional and not the homeowner. Unfortunately the home inspector revealed the seller’s skill level and it was apparent he liked Lowe’s and wasn’t so much concerned with accuracy. Keep these tips in mind when shopping and you will prevent additional cost and much frustrations.
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Silent destroyers of your home
December 31st, 2009 categories: Folsom Lake, Folsom Lake Homes, Home buying, Home Selling, Real Estate
The condition of a home is something people pay close attention to when purchasing ,and sometimes try to ignore when selling, so it’s prudent to keep a close watch on the condition of your property. This time of year offers a great opportunity to observe the condition of your home from an up-close perspective as you hang your Christmas decorations. Of the many things that are investigated it’s the silent destroyers that cause the most harm, but can be prevented with some simple maintenance. Here’s a brief punch list of things to watch for when putting up the decorations so you can start budgeting time or money to take care of them after the holiday.
Water is the most intrusive element known to man and gutters are a wonderful invention to control it around your house. They function to keep the water from pooling at your foundation but aren’t effective if they’re clogged with leaves and debris. I once paid to have a client’s gutters cleaned on a home she was purchasing since I knew she would never sacrafice her manicure. Pine needles are especially toxic since they leech acids which rust and gutter guards don’t completely prevent their intrusion. There are many handyman companies that will clean them but make sure whoever you hire to check out their insurance policy…it could be a very costly mistake should they not carry one.
Most people think of getting pest inspections done just prior to listing their home for sale but did you know it is recommended to get one every 5 years? I never thought twice about getting one until I isted my 17 yr. old house for sale. Since maintenance is something I’m very attuned to I didn’t think I’d have any issues until the inspector found Borer beetles. Fortunately for me the beetles had a terrible sense of direction and made a right turn upon entering my trim board on the corner of my home. I guess it’s their natural inclination to go up, which saved me from having to tent my house. That saved about $6000 which is the average cost of tenting a 2 story structure.
Another critter that loves to live with you is the dreaded termite. My neighbor was sprucing up the house for the holidays and as she was wiping off the window sills noticed some holes bored through. The pest inspection found a colony of termites had infested her walls due to the Oak trees on her property. Apparently termites like to switch it up and find Doug Fir a nice diet change from Oak. Since her home was on a slab foundation she had to have holes bored into her concrete and poison injected under her foundation. The fun didn’t end with that becasue she had to wait 3 months to see if it took…which it didn’t. After a second application had to be done she finally received a clear report . Her new carpet was not exactly the Christmas present she was hoping for.
These are just some of the horror stories I hear from clients regarding deferred maintenance. So take some extra time to tune up the exterior while taking down the decorations and save yourself some serious money this new year.
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Real Estate Holiday Slump
December 12th, 2009 categories: Home buying, Home Selling, Investors, Real Estate
The myth that homes don’t sell during the holidays is just that, so why don’t people take advantage of the natural marketing that occurs during this time of year? It might seem like a good idea to take your home off the market or hold off from putting it up for sale altogether, but here are some reasons why keeping that For Sale sign up can work to a seller’s advantage.
Black Friday signals the beginning of decorating to impress friends and family and this is a natural segue way for selling a home. Colorful lights and pleasant smells all create the “ideal home” which translates into open escrows and closed sales. New holiday towels spruce up the house and keep the decorating budget in check. Take advantage of the emotional connection your home offers and don’t forget the cinnamon spiced pinecones on the entrance table.
Initially, getting the house ready can create a sense of orderliness but having to leave every time someone wants to see the house grows old quickly. Holiday shoppers are serious, pre-qualified and ready to buy. Having showings at this time of year reduces the number of “tire-kicker” showings. You can also get away with restricting the showing times, as most people are more respectful for family gatherings.
Did you know that January is the biggest transfer month of the year? Transferring employees use the holidays to shop for their new home and feel pressured to find a home by the end of the year. Additionally, as Dec. 31 draws closer buyers want to have some time for family so make the extra effort to finish inspections quickly. Not only do you have a pool of committed buyers but they start to panic knowing they have to close by yearend so tend to be more agreeable.
Investors are another group of buyers that focus on quick closes at the end of the year. I had one client who didn’t want to face his CPA until he closed escrow and with the limited time frame was willing to soften on some of his demands. These serious buyers do not have enough time to start their search over so are more willing to negotiate.
Many sellers hold off listing their property until the spring due to family obligations and entertaining. This means less competition during the winter months, therefore less for a buyer to choose from. So take advantage of the slow down and showcase your home with your favorite holiday décor, you might be pleasantly surprised by how convenient it is to sell during the holidays.
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