Facebook
YouTube
LinkedIn
You are here: Home » 2016 » July

CAN YOU TRUST THE NEWS?

 

We are seeing more and more reports about how great the real estate market is doing. Sales are up, prices are up, etc. However, there is one important thing to keep in mind about these news stories that quote market data. In the vast majority of the reports, they are talking about SOLD homes and comparing it to some time period in the past. For a home to be sold, you have to figure an average of 30-45 days for an escrow period, plus at least a few weeks if not a month or so for the time on the market. And then add on top of that that sometimes it takes a month or two for these reports to be compiled and published.

 

So here is my point: When you see a report on the news talking about how great the market is, keep in mind that they are talking in reality about what happened as long as 5-6 months ago, but is just now filtering through the system to be reported on.

 

That’s why to really determine how the market is doing, you look at solds, plus the pendings, plus you have to look at what else is for sale right now. If a home sold for $600K three months ago, but there is a similar home for sale now at $575K, which number does the buyer look at? In that situation, sold prices are likely to go down because buyers have cheaper options.

 

On the other hand, if homes have been selling for $575K, but the cheapest home like that on the market is $600K, and the sellers drop their price, the buyers can either pay the price, or look elsewhere to find a cheaper home. In that situation, you’ll likely see higher sales prices reported a few months later.

QUARTZ IS “HOT”

Seems like not too long ago white tile counters were the norm, and granite counters were only found in high-end custom homes. Over the past 15-20 years, granite has become VERY popular and still is. Some builders include granite as a standard item because so many buyers request it. But the tide may be turning where buyers may start preferring quartz counters. There are several good reasons for it’s popularity.

 

Quartz is actually harder and longer-lasting than granite. This means it’s harder to scratch and burn it and less chance for staining. Some people are surprised when they spill certain oils or wines on granite which can permanently stain. Quartz is also more non-porous, meaning less chance for mold and bacteria to grow. This also means less maintenance than granite, which should be sealed every year. Granite should also be cleaned with bacteria-preventing soaps. This is less important with quartz which can be cleaned with regular soap and water, so daily and yearly maintenance is less.

 

Since granite is a natural product, there are variations even from slab to slab. If you are really picky you have to go pick out each individual slab to get exactly what you want. There are more choices and more control with quartz since it’s an engineered product. This also means it doesn’t need to be quarried in some far-off country and shipped in. Basic granite can be cheaper than quartz, but the exotic granites are often more expensive.

 

Quartz is better for large surfaces. If you are doing a large kitchen island, you’ll likely need two slabs of granite, which means you’ll see a seam. With quartz, the slabs can be made in such a way that the seam is much less noticeable.

CREDITS OR FIX?

My normal rule of thumb is to spend as little as possible fixing the house up, but still get the job done. You don’t want to spend money on items where you won’t get your money back. For example, it’s not worth putting a pool in just to sell the home. However, I will suggest my clients paint or put in new carpet when warranted. That’s ESPECIALLY true right now since we are competing against all the bright and shiny new homes again!

 

Sometimes my clients will say, “Let’s just offer them a credit for the carpet (or paint, or whatever). I’m sure the buyer can look past it. Besides, what if they don’t like what I put in? Isn’t it better to let them pick their own color, type, style?” While logically, this makes sense, it assumes that buyers buy based on logic. They don’t! They buy based on emotion, but justify with logic. Many buyers make split-second decisions based on how the home “feels” to them the moment they walk in. The assumption that buyers will want to put in their own carpet (or whatever) is wrong, because they are never going to buy the house in the first place! I’ve found that very few buyers can “look past” things that need fixing, even when they say they can.

 

It is better to either fix the condition, or reduce the price to compensate for it. However, if you reduce the price, a buyer might still expect a price reduction later to compensate for the issue. This is why it is usually better to just fix it, whatever “it” is. If you are considering selling your home and you aren’t sure if you should fix something, let me know and I can stop by and give you my opinion.

STALK YOUR NEXT HOME

I’m always surprised when a buyer can spend 10 minutes at a home and then declare, “This is the one!” I tell them I don’t mind if they want to go back to the house several times before submitting an offer. But when properties are selling quickly, that may not be an option as you sometimes have to decide quickly.

 

However, after you have your offer accepted, I STILL recommend more visits. A buyer will usually have an inspection contingency where you can inspect the physical properties of the home, but it’s really more than that. I always tell my buyer clients to go back and visit the home at different days and times. Just park your car for a while on the street and watch the activity there You may want lots of kids for your children to play with, or maybe you prefer a neighborhood that DOESN’T have a lot of kids. Go knock on the neighbor’s doors and ask them what they think of the neighborhood. You may find out about a problem neighbor that’s driving everyone crazy. I’ve seen some situations where there is some unsightly vehicle or home on the street that gets “cleaned up” right before a home goes on the market, but then the problem returns after escrow closes. Contact the police and ask them what calls they go to in that area.

 

What you DON’T want to do is rush into a decision and then find out AFTER closing about some nuisance that drives you crazy that you could have discovered with a little bit of sleuthing. And this doesn’t have to be something that the seller is “hiding” from you. It just may not bother them so they don’t think to disclose it to you.

 

CORRECTION AND PACE LOANS

This is two articles in one. First is a correction for a recent article I wrote about Homeowner’s Associations. In my article I incorrectly stated that when you see the HOA board go into “executive session” where no minutes are kept they may be contemplating litigation. I was politely corrected by a local board member that they go into executive session in order to discuss discipline against homeowners for violating rules, and they don’t want the names in the public minutes but they DON’T discuss potential litigation there.

 

Secondly, I wanted to let you know about some issues with PACE/HERO loans. These are relatively new loans where you can get some energy-efficient home improvements done like improved HVAC, solar, etc. You may be getting solicitations in the mail or by phone about them and the salesperson may tell you how this is an easy way to get home improvements done with almost no qualifying needed (you do have to have equity) and stretch the payments out over many years. What’s different about these loans is they are repaid through your tax bill. This means that when you sell the home, it stays on the home for the next buyer to deal with. This creates a couple of issues. The buyer may not WANT to pay for this and therefore may not want to buy your home or ask you to pay the loan off. In addition, their lender may not even agree to loan on the property because the PACE/HERO loan is part of your tax bill, which makes it the primary lien on your property. Some people are having issues even refinancing their regular mortgages because of these liens. So be sure to check into it fully before you sign up for one of these loans.

Return to top of page

Contact Us

  • Sharp Realty
  • 320 Fairview Ave.
  • Brentwood CA 94513
  • P: 925.240.6683
  • F: 925.524.2302
  • E: info@SharpHomesOnline.com
  • DRE# 01858431