It's a Seller's Market

You read it right. Sellers are in charge in today's real estate market. Here's an article from CNN Money about selling your house and pricing it right.

Selling your home? The cards are in your favor

 

Selling your home? In most parts of the country, you have finally regained the upper hand.

To get your best price, though, you need to finesse your timing, list competitively and match your marketing strategy to local conditions.

Lower your sights to make more money.

Rising prices breed rising hopes: In a recent poll, brokers complained that 75% of homeowners think their agent's recommended listing price is too low. Pricing your property above recent sales to cash in on the momentum may slow down deals, and sitting on the market too long can stigmatize a house.

Catch buyers' attention -- and get multiple offers -- by pricing your home in line with comparable sales, says Rick Turley, president of Coldwell Banker San Francisco: "Then let the market take it higher."

Trading up? Move fast. Downsizing? Go slow.

It's tempting to postpone selling to hold out for a better price. But if you want to move to a larger place, act sooner rather than later. True, higher-end homes aren't rising as quickly, but the gap is small. So while you'll be able to sell your home for more if you wait, the appreciation on the trade-up home will be greater.

When you're downsizing, the math works the other way, so it pays to wait.

The case for these strategies should strengthen as gains slow for cheaper homes. "Investors are driving the lower end of the market, and there is a point when the investor opportunity becomes less attractive," says Richard Green, director of the University of Southern California's Lusk Center for Real Estate.

Smooth out your home's rough patches.

Repair that leaky roof and address other obvious structural problems, or you'll have to subtract the cost of doing so from your price. "In today's economy, many buyers don't have as much savings left over after their down payment for improvements," says Teri Herrera, a broker in Bellevue, Wash.

Smaller fixes that pay off the most, according to a HomeGain poll of real estate professionals and consumers: cleaning and decluttering, brightening (adding lamps and clearing window obstructions), and solving electrical and plumbing problems.

Get ready for your home's close-up.

Sellers who stage their homes -- rearranging or replacing furniture to bolster appearance -- usually do so just before an open house. The better time to glamorize: right before you post your listing online, where 90% of buyers look first. Says Realtor.com president Errol Samuelson: "Web appeal is the new curb appeal."

Guard against low appraisals.

While rapidly rising prices may attract more buyers, the upswing can make it harder to close a deal. One-third of realtors polled in December reported setbacks from low appraisals, including delays in closing, lowered prices, and cancellations.

The problem: Appraisals can come in low because they're based on transactions as old as six months out of date, perhaps, in today's market.

Solution: Have your agent personally oversee the process, accompanying the appraiser to point out improvements and supplying data about the latest comparable sales.

 

By Beth Braverman @Money

Delinquent Borrowers Get a Lifeline

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

 

Here's some news from the past week that could potentially impact thousands of homeowners:

 

Fannie Mae and Freddie Mac's regulator last week said they would begin offering lower payments to borrowers without having to prove hardship – an obstacle that previously kept a lot of borrowers from modifying their loans.

 

Starting in July, borrowers who are 90 days or more past due on mortgages backed by Fannie Mae and Freddie Mac may be eligible to reduce their monthly payments by about 30% on average. Eligible borrowers would receive an explanation of the offer and then enter a trial modification period in which they make three monthly payments under the new loan terms before they become permanent.

 

The news here is that borrowers would be able to do this without having to document their financial situations. It gives delinquent borrowers a means to avoid foreclosure.

 

And although the new program doesn't call for documentation, officials said they would still encourage borrowers to submit paperwork as it could help get them even better modification terms.

 

The question begs: Will this encourage and lead to an increase in strategic defaults – the decision to intentionally fall behind on payments when the mortgage is underwater and the borrower can still afford the payments?

 

Freddie and Fannie's regulator, the Federal Housing Finance Agency, says no. In announcing the program, officials said that they have screening mechanisms in place to detect strategic defaulters, but failed to give much detail beyond that.

 

State of foreclosures

 

Speaking of foreclosures, we got a fresh look at what's happening with this portion of the market this past week too. Close to 1.2 million properties were in some stage of foreclosure in February, according to data firm CoreLogic. That was 21% lower than the same time last year.

 

RealtyTrac also released foreclosure numbers last week showing a higher number (1.5 million), but noting that their number includes homes that have already been repossessed by banks.

 

In addition, Inman News points out an interesting nugget of info from RealtyTrac's report: When broken down by listed and unlisted status, the number of homes in foreclosure or bank-owned that were listed for sale has fallen 43% this quarter compared to a year ago.

 

That of course suggests that there may be some shadow inventory coming down the pike. Shadow inventory – homes that have started the foreclosure process but have not been listed for sale – may be just what inventory-starved markets need. In some cases, the buyers are there but the homes are not.

 

CoreLogic estimates that about 2.2 million distressed and bank-owned properties will hit the market this year.

 

This will get interesting. In some markets, you may even feel a kick into high gear.

Sorting Out Your Personal Paperwork

We don't know about you, but we've just completed sorting and stacking and entering and reconciling in preparation for handing it all over to our tax preparer. Now we're ready to throw something, anything, away. But we want to do it right. Here's some advice from CBSNews.com on what paperwork to keep and how long.

Congratulations to Sheryl Cather, local Gilroy artist, on winning the Garlic Festival Art Poster contest this year. Her poster will be sold at the Garlic Festival as well as at the Gilroy Garlic Festival office in downtown Gilroy, and online. We love Sheryl’s poster, as well as her art on display around Gilroy, and that a local artist won.

New Listing - 1201 Kimberly Ct., Hollister

The Return of Boomerang Buyers

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Another page is turning in the real estate market this year – "boomerang" buyers are returning to the market with gusto.

A boomerang buyer is the name given to a homeowner who's gone through foreclosure or short sale and re-enters the market through a new purchase. When you think about the massive effect of the 4.8 million borrowers who lost their homes to foreclosure since the market collapse, you begin to see the magnitude of impact boomerang buyers could have on sales.

How do we know they're returning? While there's no official research showing hard statistics on the number of boomerang buyers, CNN published a story this week with plenty of examples. One broker they spoke with said he worked with 12 boomerang buyers last year and expects that number to double in 2013.

Some may say this doesn't make sense. How do borrowers who foreclosed just a few years ago qualify for another home loan? How has their credit score recovered so quickly?

Some of the buyers interviewed in the CNN story had foreclosed as recently as 2010, but others in the market today may have foreclosed a few years prior to that. Experts say it takes an average three to seven years for a score to recover from foreclosure or short sale. A secret to fast-track success is to pay all other bills on time and continue the habit after foreclosure as this alone can speed up recovery.

During the downturn, a lot of owners made a calculated decision to "strategically default" or walk away. These are families that looked at the big-picture housing situation and their underwater mortgages and decided it made more financial sense to get out.

Because of this, it's not surprising to see more of this type of defaulter getting back in the market. After all, these were owners at heart. These were people who wanted to own their home and probably planned the whole time to buy again.

Boomerang buyers are yet another interesting element to the current state of the market. It's nice to see terms like this and "positive equity,” "multiple bids" and "IPOs" coming back to the vernacular in real estate reporting.

There are some great triumphs happening. Just as we watched the horrible details of the market fallout unfold, let's highlight these stories as wins along the way back up.

Local Wineries Show Their Stuff

It's Passport Week-end here in Gilroy. Many local wineries are on the ticket. Hope to see you out and about tasting our award-winning local wineries.

Make Sure Your Rental Security Deposit Is Safe

For those of you considering moving out of your rental, securing your security deposit can be a make-it-or-break it moment for your finances, as you will most likely need a security deposit for wherever you’re headed. Unfortunately, many renters never see their security deposit again. Recently, Rent.com surveyed 1,000 U.S. renters, and the results were startling:

More than a quarter (26 percent) of all renters have lost their security deposit at some point

37 percent of men and 44 percent of 18-24 year olds said they did not get their deposits back because they moved out early

More women (9 percent than men (3 percent) lost a deposit due to pet damage

36 percent of renters who did not get their deposits back said the landlord gave no explanation. This is likely illegal although tenant/landlord laws vary by state but according to several state law sites (ag.ny.gov, ca.gov, oag.state.tx.us, illinoisattorneygeneral.gov, mass.gov) the landlord must return the deposit less any lawful deduction.

If you’re renting, review the following tips—provided by rent.com–for maintaining your apartment and your relationship with your landlord:

• “It’s better to beg forgiveness than ask for permission” does not apply here. When renting, it is always best to get written permission from your landlord before doing any renovations, changing paint color, etc.
• Read your lease. Many renters miss the specific guidelines laid out by their landlord regarding the return of their deposit. A list should be made and agreed upon regarding the conditions of the apartment at the end of the lease BEFORE you sign it.
• Snap a photo. It’s always a good idea to take some photos of the apartment when you first move in. Make sure they are time/date-stamped! Then repeat the process on move out day. This way pre-existing damage is documented and the blame cannot fall on you!
• Be reasonable and your landlord might be too. There is no guarantee that a landlord will negotiate you breaking your lease but maybe there is a compromise that can be met. For instance, you could help find a replacement tenant, agree to pay rent for an additional number of months or until a new tenant is found.

Why Higher Interest Rates Aren’t Scary

 

 

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

To be clear: no one is advocating for higher interest rates. But we’re about to venture down a path of thinking about what the world looks like with rates that will be higher than the lows we’ve come to expect these past few years.

In today’s market, borrowers with 5% interest rates are running to refinance – and saving thousands of dollars in the process. When put in historical context, this is astonishing. Many of us have worked through markets with double-digit rates in decades past. 3.75% on a long-term mortgage did not exist.

But experience shows us markets are cyclical. There is a bottom. We all know it’s coming. And although the Fed hasn’t indicated it will sharply raise the key short-term rates that are tied to
mortgages any time soon, it will raise those rates at some point as the economy improves.
Maybe that’s not such a scary thing.

An article in CNNMoney this week argues why higher mortgage rates will help the housing
market rather than hurt it.

I think it depends on the market you’re talking about – as with all things real estate, generalizations are rarely unflappable.
But mortgage rates indeed have been rising – the latest average on the 30-year fixed was 3.63%, the highest its been since the week of August 23, according to Freddie Mac. Let’s think about what that means for current markets.

In many markets, recovery over the last year has turned to growth mode. In Silicon Valley, many of our local markets are already back at peak pre-recession levels. What’s driving it? Job growth and demand.

Sure, low rates have been great. But they’re not the sole driver.

In our markets and others including Washington, D.C. and several other California markets, the bigger obstacle would be in supply. There just aren’t enough homes on the market to serve new buyers or spur move-up activity from existing owners.

Upward movement in interest rates may actually incite even more demand in these markets as buyers start to feel pressure to move quickly. In these cases, higher rates may actually be an incentive that fuels market activity and growth.

We’ll find out soon enough how higher rates will impact our markets. In the meantime, if your credit is good it’s still incredibly cheap to borrow money for housing. If you want to take advantage, it’s time to get moving.

How To Prepare Your Home For The Photo Shoot

You’ve heard it before, you only have one chance to make a first impression. A prospective buyers 1st, 2nd and sometimes 3rd impression of your home is online, so the photos taken of your home really set the tone for your sale. The photos need to rock and should always showcase your home in the best light possible. No matter how picture perfect your house might look to you, you should consider the following tips before having your home photographed:



Home Exterior – walk across the street to your neighbor’s house and take a look at your home. Do you like what you see?

1. Remove cars from the driveway, front of house and garage.
2. Hide recycling and trash receptacles, garden tools and hoses.
3. Have lawn cut, mulched and add flowers if weather permits; remove dead anything.
4. Have windows washed and remove screens if possible.
5. Power wash walkways, patios, siding if necessary.
6. Neatly arrange patio furniture, uncover barbecue so scene is set.

Home Interior – take your time and go room to room to enhance the look and feel of each room.

1. Replace all burned out light bulbs.
2. Clean and neaten all closets including removal of all items from the floor.
3. Set the scene in each room by arranging furniture and accessories; remove excess (you may need a stager) to make rooms look open and large. Remember less is more!
4. Have carpets cleaned and/or stretched if needed. Replace capret if needed.
5. Touch up paint.
6. Remove excess art and photos, but not all. You are living in the house after all!
7. Clean off counters in kitchen and baths; add fresh looking towel sets to bathrooms.
8. Make sure all beds are made, clothing and personal items are put away neatly.

What have you noticed at open houses you have visited? What did you notice that left you with a negative feeling? Be sure to take care of that in your own home.