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Realtors provide valuable help to new home purchasers. Generally speaking the builders pay our fees and our assistance is provided at no cost to the consumer. To help you with you new home purchase the realtor has to go with you on your first visit to the developer. Otherwise the builder will not pay our fees. Why take a realtor to look at new homes with you? There are a number o reasons: - Most Realtors are familiar with the new home developments and know where the bargains are.
- Realtors will know the reputation of the builder and how responsive they are to consumer issues and problems. With my background in Risk Management and construction defect I am very aware and sensitive to the differences in the builder’s quality and reputations.
- Buying a new home is like buying a new car, there is a lot of hidden cost. There are also a number of incentives the Realtor can help you locate and take advantage of.
Every time I have taken a client to a new home development the agent for the builder gets my information and then tries to separate me from my client. Advising me they can help them from that point on. I like to stay with my client, advising them as they go through the purchase process and making the purchase decision. If I leave my client they might feel that the no longer have options. I have taken clients to look at new homes and after comparing they have decided they can get more for their money by purchasing an existing home. Realtors are more than “sales people,” our goal is to help the consumer obtain the right home for them and the best price. This includes shopping for new homes.
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You must see the inside of this home!
• 1,912 sq. ft., 3 bath, 4 bdrm 2 story -  MLS® $550,000 - Excellent Home & Price Hillcrest, Antioch - This is an incredible home that you must see to fully appreciate it. It is very clean and shows signs of long term care and maintenance. The entry way is a quite and sheltered area that opens into the vaulted ceilings in the living room. There is a formal dinning room off the kitchen. The double sided fireplace warms both the living room and the family room. The custom wall coverings and crown molding gives a rich feel to the rooms. Hardwood floors and tile pavers in the kitchen add more class to the home.
The new bathroom in the master suite has a large jetted tub and a separate shower unit. The walk in closet completes the remodeled master bathroom.
Outside you can relax on the patio, let the kids play on the manicured lawn, or enjoy the hot tub.
Property information
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Image is so important. I see a lot of Realtors who are dressed for success and whose cars always seem spotless. My first sales manager told me to always be dressed right when I went out as everyone out there was my prospect. I do like to try and appear neat and clean for my clients but I am afraid I am very hard to dress up. I have 4 kids 10 or less and my car reflects that fact. Yes I do try and get the worst of the fast food out of the back seat before my clients see it, but even a high end car wash that I cannot afford every other day cannot hide the facts. Somehow my ties always end up with spots on them, so I try to by ties that have a pattern that will hide food stains. I have taken clients through 20 or more homes in a day. To heck with nice shoes, go for comfortable ones that slip on and off easy. When I run over to the video store for a movie I like to wear my broken-in rugby shirt my wife wants me to throw away. It has taken 7 years to break in, it is comfortable, and hides my executive size. If a client sees me they will know that I am human. Now when talking to people, so many realtors have just the right words to reassure buyers and push the hot buttons to buy. There is a lot of research and training in this area. Our lives depend on being able to get people to buy and sell. Unfortunately I am not the smooth talker. Just ask my wife or all the women I could not get dates with when I was single. I just blurt out the truth. Do I try to be tactful with it? Yes! I have also come to learn people do not buy what they told you they wanted. So why bother to point that fact out to them. In general I always feel a little awkward when talking to new prospects at first. But once the ice is broken and I get past the initial get to know you phase I find my clients like me and my candor. I remember the night I spent 2 hours talking a prospect out of selling or refinancing their home. It would have been an economic disaster for him. He was in a bad loan and just needed to ride out the pre-pay period. The nice thing is he does refer his friends to me and he is going to have me refinance his home this spring, he is not even talking to anyone else. My dad told me you can spend a life earning a good reputation and blow it in just a few minutes. I think I will continue telling people the truth. I would like the car to be clean; maybe I can get the kids to wash it. Now if I can only find where my wife hid the Rugby shirt I might wear it for a client.
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Adjustable Rate Mortgages (ARM) is the most popular type of mortgage on the market encompassing 63% of all residential mortgages in California. The ARM of choice for many borrowers is the Option ARM. The Option ARM allows the borrow to obtain a low monthly start payment rate, some as low as 1%, but the actual rate charged is a higher adjustable rate. The “Option” in the ARM is four payments to choose from every month: The principal and interest on the minimal start rate; the interest only at the actual rate; principle and interest based on a 30 year term; and principal and interest based on a 15 year term. The Good is an Option ARM allows flexibility in payment for people with fluctuating income. A buyer can obtain a home or an investment property for low initial payments; if property values are rising this can be sound investment.
The Bad is the minimum payment rises by 7.5% per year. For example if your 1st year minimum payment is $1,000.00 the second year minimum payment will be $1,075.00. This increase is factored in every year until the minimum payment is phased out. The interest not paid on the actual rate is deferred into the loan balance. The Ugly is the loan needs to be paid off within the 30-year term. To facilitate this, the lender will recast the loan, usually at Five years or when the loan balance reaches 110-115% of the original loan (this could happen 3-4 years into the loan). The payments could jump 50% or more. The Solution is a unique loan package we offer. - The start rate varies. Right now it is at 1.5%. This still provides a significant low start rate, but defers less accumulated interest onto the balance of the loan.
- The loan recast after 10 years or 125% providing plenty of time for the property to appreciate and allowing the start rate to phase out slowly naturally before a forced recast of the loan.
- This loan has a bi-weekly payment option with a true 14 day amortization cycle and no monthly fee. This option will allow minimum payments and make it possible to pay off the loan in 25 years.
- The loan has a fixed rate option
We have a number of Option Arm Products, including 1% loans. The above loan is a good choice for someone wanting the advantages of the Option ARM with the security of a steady payment with the goal of paying off the loan.
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One of the lessons I learned from my parents while growing up is to try and see things through the other person’s eyes and to understand their perspective. Sometimes people buy and sell real estate looking at things through their own eyes. Occasionally sellers will not see the problems in their own home and how it compares with what else is on the market. These sellers are often the same people that as buyers can find every fault in every home they look at. In short they expect to sell high and buy low. I imagine that sometimes this happens to people. But if you are buying and selling in the same market it is unlikely. I always recommend that buyers and sellers look at the market to see how comparable properties are selling, and consider the market direction. You also need to look closely to see if there are any issues with the home that would lower its value. When selling a home you need have a reason why your home is worth more than the other home that may seem identical to it if you are going to price it higher. Does it have nicer fixtures? Is the lot bigger? Is the location a little nicer? Are you offering financial incentives? Credits? Carry back 2nd mortgage? No one is going to pay you more for a house if they can get the same thing down the street that meets all the same buyer needs for less money. Now with many houses on the market they may miss a home that might be better priced than yours and meets their needs and go ahead and put an offer in on your homes. So as I have said in another post, exposure is important. There are many unique homes that are hard to price. I saw a home like this over the weekend with some buyers of mine. The home was very old but had been well kept and remodeled. It had a back yard with water falls, coy ponds, and aviaries, surrounded by terraced lush gardens with many seating areas to relax in a very private yard. At the back of the yard was another small cottage. It felt like a bed and breakfast. My buyers loved it but it did not fit their lifestyle. Not many people will want this home to live in, as much as they might appreciate its beauty. It will sell. I am not sure at what price, but it may take a while to find the right buyer. Some buyers may be willing to pay more for a premium home that is fixed up. Others may not be willing to do so, preferring a more standard arrangement that they may plan to upgrade themselves. When pricing you may wish to price your premium home at the same price as the standard condition home down the street if you want to sell quick. Most buyers will go for quality if priced the same as the standard home. When buying you should consider the offer carefully and try to ascertain the seller’s motivation. If the seller has financial pressures, lots of equity, a need to close so they can buy another home they want, urgent relocation needs, if the property has been on the market a long time, or other pressures they may take substantially less than the asking price. However, they will generally not take less than they could easily get if they just priced the house a little less.
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I also provide lending through our sister company Discovery Mortgage. Frequently people want me to tell them what type of loan I can procure for them. They proceed to share with me their credit score taken from another source. Well it is not that easy. I want to cover a few of the factors that go into a loan and provide you with things to consider as you prepare for your next loan. Credit Score: The Credit Score on a home is figured differently than loans for other purposes. It is also constantly changing. Rarely does anyone have the score they think they have. Multiple Credit Checks in a 30 day period all for the purpose of obtaining a home loan does not negatively impact your credit score. Credit History: You may have an excellent score, but lenders also want to see credit lines that have been open at certain levels for certain periods of time. For example a lender may want to see three credit lines open for 24 months, one with a high credit limit of $5,000.00. Without this requirement they don’t care how good your score is. Debt to Income (DTI): Lenders will only make loans that will allow so much of your income to go to debt payment, including the loan they are making to you. For example: If your credit report shows you are currently making payments totaling $500.00 per month and your new home purchase (including tax and insurance) will cost you $3,500.00 a month you have a monthly debt payment of $4,000.00. If the lender has a 50% DTI requirement you need to have earnings of $8,000.00 per month. Loan to Value (LTV): Lenders want to see equity in a home. The more equity a borrower has in the home, the better chance of getting a loan and the better rate the borrower can get. There are some lenders that do loan 100% or more LTV, this is at much higher rates. The most frequent 100% financing involves 2 loans, one at 80% of the value of the loan and another loan at a much higher rate for the 20% balance. Cash Out: When a home is refinanced and the borrower takes cash out, usually the rate is a little higher. If the borrower just pulls enough out for their refinancing cost (closing, appraisals, etc.) this is usually not viewed as a cash out loan. Verification of Rent: When a buyer of a home has rented before the lender will want to see verification of timely rent payments. Usually a letter from the landlord will suffice; some lenders will want to see the checks. Mortgage Lates, Default, Foreclosure, and Bankruptcy: Any one of these factors can make it harder to obtain a loan. (However, not impossible, I have qualified buyer for 100% financing just out of Bankruptcy.) The further in the past the issue is the less important it is. Reserves: Many lenders will want the borrower to have reserves. Basically, enough cash to pay the mortgage in the bank, a pension plan, or some other liquid form that can make the payments for 2 to 3 months. Full Doc., Stated Doc, & No Doc.: There are lending requirements as how a borrower documents income. A “Full Doc.” loan is usually verified with w-2’s bank statements, or tax returns. “Stated Doc.” loans usually involve only a verification of employment with no income documentation required, although the income stated needs to be reasonably possible for the job. A “No Doc.” loan generally requires no documentation of income and sometimes even no claim of income. Each lender varies in regard to these requirements. Generally speaking more documentation results in lower interest rates. There are many other issues to consider, closing cost, escrow accounts for taxes and insurance, appraisal issues, etc. . . . In the competitive free market environment there are many choices and many lenders with different requirements and standards. The job of a mortgage broker is to help you sort through the choices to find the best loan for you.
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A Realtor told me, “I don’t sell houses.” Naturally he says this to get peoples attention. He says there are only 3 things that sell houses, “location, price, and condition.” And he cannot do anything about any of those factors. Now a Realtor cannot change the location of your home, but a Realtor can help you set the pricing and make recommendations on getting the property in condition to sell. However there is a fourth element that a Realtor brings to help sell your home. That is Exposure. The primary exposure for a home being sold is the MLS (Multiple Listing Service). The MLS is an information exchange where Real Estate Agents list homes that are for sale so other agents can take clients to see them. Most Realtors feel 90 to 95% of home sales are a result of the MLS. To a large extent this is true. However, there are many other forms of exposure that drive people to buy and drive them to look at homes. When they decide to look at homes or a home they will then get a copy of the MLS listing(s) and the MLS gets credit for the sale. It is important to create buzz and have good contacts to sell a home. It is not enough to put a sign up and list it on the MLS. Realtors have many marketing tools at their disposal and we get a constant barrage from sales people telling us how their system will help us sell more houses faster at a higher price. If we used them all I think it would be overkill. As a Realtor we need to select the best tools and use them properly. A good tool used wrong is not effective. As an example there is a system that broadcast a radio message about a house if you tune to a certain frequency in front of the house. As I was going around with the client we spotted a house and my client asked me to stop. We listened to the message. The system may have been novel but there was nothing about the message that made me want to enquire more about the house. In fact it was more of a promotion for the Realtor. Is it a good system? I don’t know, but it was not used to the best advantage of the client. Good marketing systems should drive the potential buyer to want to ask more questions and see more. It should provide tantalizing information and leave the client wanting more information. You want to get them to take the next step until ultimately the come and see the house and consider buying. Many buyers in the early stage do not want to have to deal with a “pushy” agent or seller. A number of internet marketing tools are the best way to get the client to look while being anonymous. The information in front of the home should drive them to the internet for more information and the internet should be a place where the home can be found. Most home buyers start their search on the internet. I will not cover the many ways to market on the internet at this time, but good internet marketing is the most important way to get ahead of the competition. I do not know if there is a way to quantify the effects of good marketing versus just putting a sign in the lawn and listing the home on the MLS (sadly this is all many agents do). But if effective and coordinated marketing tools can even drive 20% (and I think this is a reasonable and conservative figure) more traffic to your home this is a big difference. In baseball it is the difference between a .250 hitter (average) and a .300 hitter (superstar). How much would 20% more traffic increase the value of your home. Increasing traffic to your home is especially important if you have a very nice home and are looking for a higher than average price based on the size. Many people will look on the MLS and judge homes based on size or number of bedrooms and bathrooms for the price. If you have a very nice home you need to get people to look and consider how much more you are offering that goes beyond size. When someone goes to search for a home on the MLS in this market there may be over a 100 homes that fit the criteria they set. They may not even see your home with all the choices on the MLS. You need other tools to set your fine home in front of potential buyers.
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Frequently I have people come to me looking for a bargain, some kind of a distress sale, or a fixer upper. Well there are a lot of good buys these days in general. Periodically especially good buys like those mentioned above do come along. They are priced low for a reason people want to sell them quick. Even in distress sales the market sets the price. No one is going to lower the price more than they have to in order to make a quick sale. When making a purchase on a distress sale there may be multiple offers and the quality of the offer is frequently a factor. In short you need to be pre-approved, have a good deposit and down payment, and be willing to waive inspections or accept current sub-standard conditions. I do not recommend waiving inspections, but the buyer should be making the inspection with thought of finding extreme hidden damages and getting an idea of cost to repair the property. Most sellers on a distress sale are not going to make repairs for the buyer. The need for a solid offer on a distress sale often precludes the first time buyer looking for an affordable bargain. These first time buyers are looking for a bargain because they cannot afford the normal going price for a home not being sold at a distress price. Yet they also have a lack of deposit, down payment, and credit that prevent them from putting in the best offer in a competitive situation. As an agent working with buyers the frustration I run into is when I actually find distress sale homes for my buyers. Usually it is two issues that cause the buyer to balk. First, they really do not want a fixer upper. They just wanted something they maybe needed a little paint, maybe a new carpet and some landscaping. The potential buyer is not really ready for the hard work or cost of a true fixer upper. You can get a bargain on a true fixer upper that will appreciate profitably after the fixing is complete, but there is work involved. For the fist time buyer these bargains also represent a financial challenge as they not only need to afford the house (which may not qualify for the best loan) they also have to get a loan for or afford the repairs. The second issue is people are afraid to pull the trigger fast enough when the bargain is available. Recently a very nice three bedroom and one bathroom home came on the market. It had a two car garage on a large lot. The seller wanted to avoid going into foreclosure and priced the home about $50,000.00 under market. I advised several of my clients about the home and showed it to one of them. The feed back I got was that they wanted to think about it. Fear was expressed over hidden damages and possible unknown issues I explained that the home would not stay on the market long. I also explained even though it was a distress sale normally contingencies would be in the contract and an investigation should be completed before the sale was final. By the time my client was ready to move the house was in contract with another buyer. The home was on the market for about five days. If you want a bargain you need to be ready to move on it financially and psychologically.
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A friend tells me to always go counter to market trends. Right now the conventional wisdom is it is not a good time to sell. So I thought why not find some good reasons to sell, and there are. I will admit the prices have come down a little and the market is slow, but her are some good reasons to sell: 1. In November interest rates hit a two year low (they have crept up a bit since then). When interest rates are low buyers have more buying power and are given an incentive to purchase. 2. There are fewer homes on the market now than last summer. Right now there are about 33% fewer houses on the market in Antioch than there was over the summer. Prior to the annual season slow down sales had began to pick up over the summer and I think the spring may show a similar increase. 3. If you want to move up this may be the best time to sell and do so. If you sell low you will probably buy low. In general you will save more money on the purchase of the bigger house than you might "loose" on the sale of the smaller house. Buying at a lower price will also provide a lower tax base for property taxes 4. If you want to sell a income property and do a 1031 exchange you obtain all the benefits noted in # 3. But if you want to take the money you will have to pay capital gains taxes. In this market there is a need for creative financing. You may be able to sell the property and carry a portion of the loan. This can provide a method of deferring taxes and possibly saving some money. If you are providing the financing you are in a better position to negotiate price. Please check with your account as to the tax consequences and potential advantages. If you can think of other good reasons to sell now let me know.
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Everyone says I need a Real Estate Blog. Why a Real Estate Blog? Well first off, I am in Real Estate and therefore if I am going to have a Blog that should be the subject. But the entire Blog issue ties into the revolutionary changes the Internet has brought and continues to bring. I come at this from a non-techie background. However, I have learned how to do the techie things my job requires. For many years Real Estate marketing involved, print advertising, door knocking, signs, and personal relationships. Now most people start the home search on line. Internet marketing is critical to success of any Real Estate business. Although the old ways of marketing can have some impact and still work. Some of the old marketing techniques are now used in conjunction with the Internet, such as print ads that point to a web site. Most web marketing was similar to print and ink marketing except it was electronic. E-mail instead of snail mail, web sites instead of signs and Yellow Page ads, etc. . .Well as the Internet has evolved and with that comes the blog. Kind of like an on-line newspaper, diary, journal, and flyer. They are supposed to be personal and somewhat informal. That fits me well as I am basically an informal type guy. The Internet and Blogging also provides a chance for consumers to get to know you at a distance. Where is this headed. I do not know. I have been on commission or self employed most of my life. I have done Consulting, Risk Management, Insurance Claims, Private Investigations, Game Design, Marketing and Distribution, and Real Estate/Lending. When computers were starting to take off I wanted to be ahead of the crowd and spent a lot of money on technology that did not take off. In the mid 90's I had an internal e-mail set up for my employees based on dial up for my remote employees. In short, I wasted a lot of money and time. Computers, Internet, communications, and entertainment technology are still evolving and defining themselves. Maybe something else will replace the blog, like IMing and Text Messaging replaced the chat room. Like many people I want to be with the evolving technology, but I don't want to be so far ahead I look back and find everyone else is going a different direction. The purpose is to connect with people in a meaningful way, not to be so far ahead of people you loose touch. My biggest struggle with the evolving Internet/communications is the multiple streams of input coming at you from a number of different directions. If you want to know what I am talking about look at a teenagers Myspace site and the connections. This has been going on before I was born. I am sure older people could not understand people listening to the radio and reading or working at the same time. But it does make it harder to educate people with meaningful information when you have to compete with loud short blurbs of visual and audio. My goal is to provide people with information on Real Estate and maybe ways to look at life in general while letting them get to know me in an informal setting.
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