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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According to the National Association of Realtors  (NAR) now is the time to buy. Looking at the latest Rent vs Own chart on Trulia you can see why.  Foreclosure Radar, a leading website that tracks foreclosure activity shows the price decline in our market as much as 46% from the recent bubble. It’s obvious why buyers previously  unable to afford a home are feverishly submitting offers on our very limited inventory…especially since prices have increased this past Feburary!

Additionally the lending rates have been historically low but don’t expect that to last. According to Foreclosure Truth we should expect to see prices rise as the government implements more programs to make housing more affordable “Every single significant increase in home prices in the last 100 years was immediately preceded by government intervention. The evidence is irrefutable. Every time the government works to make housing more affordable, prices rise”.

So if that makes you want to get out there and shop then give me a call…I specialize in the Folsom Lake area and have been representing buyers and sellers since 1999.  Email me at Beth@FolsomLakeHomes.com or give me a call (916)947-3993 and I’ll help you get started.

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Since California is still rated at the #3 spot in the nation for foreclosure activity you would think the buyers have an advantage and can hold out to find the perfect house right? WRONG!!!

If you’re a buyer in the Sacramento valley and your price range is under $300,000 then you better get moving because you’ll soon experience the same lock out that fueled the last crazy market.

I’ve been shopping hard to find a home for a few buyers in that price range only to meet with multiple offer situations and over-bidding. Of course we’ll see how those over priced offers fare once the appraisal is ordered but buyers beware…it’s getting competitive out there!

Some interesting news is starting to surface regarding the housing market in Folsom Ca and surrounding areas. It’s well accepted that we are now bumping along the bottom of the market looking for a floor and it appears that we might have found it! According to a snapshot of statistics from the local MLS it appears prices are starting to go up! Oops! Wasn’t there supposed to be someone at the bottom ringing a bell or something?

As you can see  this chart of  home sales from Sept. 2005 to Sept. 2010 shows that the bottom of the market was somewhere around Janurary 2010!  That doesn’t mean that you’ve completely missed the bottom. If you are waiting for an approval on a short sale then you’re probably one of the lucky few who got your offer in at the right time.

Overall, Folsom has held onto the higher priced status in comparison to other communities but it still dropped significantly along with most of California. Tom Sullivan, who has since moved his show to the big apple, was right on the money when he said our values increased to 40% which means that we had to come down at least 37% to achieve a normal market. According to current statistics Folsom is down 37% from Sept. 2005! So are we there yet?

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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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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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The 2009 season came to a close with Folsom Park winning the final game against Roseville’s Sierra View with a score of 2-1. The women’s 6.0 doubles team started with lessons from Ed Mitchell’s Bryan Solem and within three years managed to take Top Dog status at the Sacramento Area Tennis Association’s (SATA) competition.

First line Antonette Clark and Norma Thomson lost to Kerry Weinroth and Robby Denning 6-1,6-1. The third line of Ellen Desvarro and Christine Volker won 6-0, 6-2 against Joyce Bray and Angelen Simao. During the last game, Ellen Desvarro pulled her calf muscle and was unable to run leaving little room for error. The final tie-breaking game was won by Sandy Kennedy and Beth Mergens 7-5, 6-2 against Sierra View’s Betsy Newington and Liz Adkins.

Spring 2010 tennis season begins in March so if you’re looking for some great tennis and fun gals to play with email me with your information or go to the Top Dog site for more information about Sacramento area tennis.

Some economists think we’re bumping along looking for a place to land and others fear we’re in for another down hill ride. One thing is certain; it’s a good time to buy a home. The trick is knowing what a deal looks like and writing an aggressive offer. Real estate has certain break points that are obvious to those of us who look at houses all day…not so much for the novice. Each tier offers a certain level of ”deals” to be had and I’ll attempt to define the differences so you can recognize the trends.

For obvious reasons price determines the location but within each area there are grades of desirability. The homes that are typically the lowest priced are bank-owned (REO). They can be damaged and stripped of appliances or have half-completed projects and are usually priced at the bottom of the neighborhood price scale. The banks usually respond quickly but don’t do much in the way of repairs. They can be good deals in the lower priced neighborhoods but when it comes to the better zip codes you’ll find the competition stiff.

Coming in at a close second are the fixers, which by definition need work to some degree. The nice part about buying a fixer is that there are loans (FHA 203) specifically designed to include the repairs and offers the potential owner their choice regarding those repairs. So if the house needs new carpet, the buyer gets to choose the color and style. Again location, location, location since these homes are much sought after by contractors who have lots of time to work on them.

Next is the much-dreaded short sale. Depending on the skill of the listing agent, these homes can be a great deal but you have to have the patience of a saint. Buyers need to be clear about the waiting period for short sales. Each bank has a different process and some manufacture delays by the methods they demand for submission of offers. Currently I have a short sale that requires submitting the entire package via snail mail, not very efficient given today’s technology. These properties are deliberately priced low to attract offers quickly to get the process going. Of course, the bank will send out their appraisers to determine value but if priced right you will find they will accept a solid offer to avoid foreclosing.

The last tier is the forced sale due to some misfortune and the fair market sale, which represent about 25% of the current market. Varying value structures but all are based on the assumption that within a given radius each home would be of equal value given the same degree of interior upgrades, lot size and age of bldg. The bottom line is that every sale that takes place in that neighborhood affects the next sale good or bad, so the deal you buy today might not be the last one found in your neighborhood.

Condominiums are a great way to get into the housing market and take advantage of the $8000 tax credit and it appears that a lot of people are thinking along the same line. As of today, Sept. 5, 2009 there are 47 condominiums for sale in Folsom with 39 in some sort of available status. The other 8 are currently pending sale which means that barring some catastrophe the property should close escrow within a reasonable period of time. In the previous market “reasonable” meant approximately 30-60 days. This market shows the longest days on market (DOM) for condos in Folsom at 846 days…certainly gives new meaning to a long escrow doesn’t it?

Another interesting statistic is that of the 47 condos currently listed there are 9 REO’s (bank owned) and 20 in a Short Sale status. The average DOM is coming in at 177 so you can see how short sales are impacting the market and extending the average time on the market. Last month in Aug. 2009 there were 6 closed sales for condos in Folsom and 50% of those took longer than 120 days to close. Kudos to those patient people because they paid on average $149.14 per sq.f t. for a condo just 3 years old in Folsom. They averaged a 1470 sq.ft. home  and paid an average of $220,000…not bad for starters!

There is a rule of thumb in real estate and that is: Never sell your first home. The reasoning is that your income will increase so  affording another property later on is highly likely. By keeping the first home you diversify your retirement income, can utilize the property for additional funds should the need arise, and have someone else paying that mortgage. With that in mind, a condo is the perfect vehicle to invest in. It provides shelter, tax write-offs, future liquidity and the best part is that you don’t have to maintain the property once you move out. If you find that you like Folsom and want to know more about condos please give me a call and I’ll be happy to assist you.

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High school was a great learning experience for me because I learned how to trust my gut. High school is the first time you get to choose which  teachers you have for each class. I soon found  those that I enjoyed I learned a lot from, and those I endured didn’t learn much from. By my senior year walking out of a class after the first day and heading to the counseling center to re-schedule wasn’t a big deal. I wasn’t intimidated and didn’t make excuses…if I didn’t like a teacher on the first day, it wasn’t going to get any better.

Searching for a real estate agent is similar to finding a good teacher. You want to find someone who will teach you the ropes and who you can trust to give you good information. After all, a home purchase is statistically the biggest purchase you will ever make. This video makes a humorous point about intimidation when it comes to real estate agents but unfortunately some agents still use these tactics…Click here to view the embedded video.Professionals Teach -

My attitude has always been to get the information to my clients in order for them to make an intelligent decision. The Realtors Code of Ethics requires that I offer my clients the utmost in service, and intimidation shouldn’t be part of the package. If you feel uneasy or that your requests are not being heard, find another agent who will take the time necessary to help you find your home. Referrals are a good start but don’t stop there. Interview at least three agents and get an idea of their approach. Some agents don’t work weekends, and others only work business hours, so if you want to go shopping after work, or need to list your house after dinner, you’re out of luck.

One of my clients purchased a house from me a few years ago, sight unseen. He worked for the government and had only one week to find a home. The market was hot and my client put in three offers before he left to go back to his job but none of them panned out. He had used up all his vacation time and decided to trust me to find him a home. He said he felt he could trust me because while we were previewing homes he heard me comment on everything he was concerned about. If the house was located on a busy street, I commented on that. If the house had a smaller than average master bedroom, then I commented on that. I didn’t ignore the obvious, nor did I pressure him into making a decision…I simply gave him the information and let him decide. He found he could trust my information and that enabled him to find a home that he eventually re-sold at a tidy profit.

So to bring it all together trust your gut. If the agent seems to be something other than what they appear, you’ll probably find proof to support your intuition once you get to know them, so don’t waste your time. Secondly, make sure they listen to you. If you say you only want to see single story homes and they show you two stories, then realize they are not looking out for your best interests. And finally, if you feel pressured into a purchase and don’t feel you have enough information don’t be afraid to ask for more. If the agent counters with more pressure then you know he is only looking to make a sale. Remember this is a decision that you only make about once every seven years, so enjoy the process. A good agent removes the pressure and intimidation from the process…they don’t create it.

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