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The market in East County is still hot, although if inventory continues to rise, we may see appreciation slow later this year.


Here are all the good things going on right now for our real estate market: Inventory (number of homes for sale) is still very low and buyers are plentiful. Many people who lost a home due to foreclosure or short sale 2-5 years ago can now qualify to buy again. Interest rates are still incredibly low. The economy appears to a muddling through into a tepid recovery, but a recovery nonetheless. Maybe wages aren’t as high as they could be, but at least the massive layoffs we saw during the “Great Recession” have slowed. The Silicon Valley continues to go gangbusters, and real estate prices there are above the peak prices of a few years ago. That’s driving homebuyers out our way again in droves as they seek affordable housing. Highway 4 is getting better and about to get a whole lot better when the current expansion is completed. Bart is coming to Antioch soon and e-Bart is coming to Brentwood (sometime in my lifetime).


Here are the things we need to monitor that may slow things down: Inventory, while low, is starting to rise again, and I’m hearing a lot of agents talk about the new listings they are going to put on the market soon. Many of the investors that bought homes at “the bottom” are looking to cash in their profits. Plus all the homeowners that really wanted to move the past 5-8 years but were “trapped” with no equity can now sell, so look for more homes on the market over the next few months. Affordability is also becoming a problem for many buyers because prices have risen so quickly the last few years.


Do you have an FHA loan where the rate is higher than today’s market rates? Then there is good news for you! Rates are still very, very low and it’s not too late to take advantage of them. And if you happen to have an FHA loan, there is a program you need to know about.


It’s called the “FHA Streamline Refinance,” and it’s only for borrowers that already have an FHA loan. They are very fast and simple to do. You can lower your rate and your payment and it’s a pretty easy process. There is no credit check, no employment verification and not even an appraisal! On top of that, the rate that FHA charges for PMI (private mortgage insurance) went down recently. So not only could you get a lower interest rate, but lower PMI, too.


There are some qualifications, but they aren’t too cumbersome: You must be current on your existing loan, it must be at least 6 months from the date you bought the home, you can’t take cash out, and it must reduce your mortgage payment by at least 5%. There are fees associated with this process, but you can usually roll them into your loan.


One thing I like to point out whenever anyone considers a refi is the payoff period. Some people refi if it will save them anything per month, even $50. But keep in mind that if you’ve had your loan for 5 years, and then you refi, you now won’t pay it off for another 30 years. So you always have to weigh the savings NOW against having to make 5 more years of payments at the end (IF you are planning to keep the loan and home for 30 years, which very few people do nowadays!).



If there are minor repairs that need to be made around the house you are about to sell, you might as well leave them for the buyer to take care of, right? Wrong! The less that you have done to prepare the home for market, the less you will get for it. Buyers always over-estimate what it costs to repair or replace deficiencies. There is also the psychological factor of them thinking, “If they let these small items go, I wonder what else is wrong with the home?”


Let’s say that you have some peeling paint on the front door, a loose outlet, and a sliding door that is tough to close. These repairs might take an afternoon of work if you are handy, or a few hundred dollars if you hire a contractor to fix them. However, if these repairs are not done, the buyer could discount your home by several thousand dollars, or worse, write an offer on another home that is in prime condition.


Remember that some of your biggest competition nowadays are the new homes that appear “perfect” in the buyer’s eyes. You want to minimize the gap as much as possible between your home and the new homes to compete.


HOWEVER – Please note that I said “minor” repairs should be taken care of. It’s a whole different story when we are talking about major repairs like kitchen and bathroom remodels. You usually don’t recoup your investment in those. So remodel them if YOU want them and you plan to live there for a while. But don’t sink $50K into a house you are about to put on the market without getting a second opinion from your real estate agent first to make sure it’s money well-spent!


You are walking through the home you are about to sell and everywhere you look, you see wonderful memories. You also see all the tasteful things you did to improve the appearance and livability of your home to the way that YOU like it.


What is tasteful and full of memories for you may not be so for others. Your buyer wants a personalized home, too. So it stands to reason that making the home as neutral and clutter-free as possible will make it easier for buyers to imagine themselves living in the home with their own things. We want your home to appeal to the largest number of buyers possible, so we shoot for almost bland. YOU may love Elvis, so you may have Elvis-themed wallpaper, light fixtures and bedspreads. Maybe there is someone else in the world that would pay extra for all that. But if they aren’t looking for a home when you put yours on the market, you could be turning off all the other buyers that come through.


Take a look around the home as if looking at it for the first time. Do you have bright custom paint? Do you have an excessive amount of family pictures? Do you have your kid’s measurements marked up along one of the door jambs? Have you made any modifications to the home to fit YOUR needs that a buyer will immediately want to change?


Buyers walk around your home and make a list of all the things they will need to do to make the home “theirs.” If the list is too long or too expensive, they’ll expect a big discount off of your asking price, or they’ll pass on your home altogether. Better to create a neutral, clean environment for the buyer before they even walk in the door.


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