3 Tips for Seller’s ‘Stay Or Go?’ Dilemma

3 Tips for Seller’s ‘Stay Or Go?’ Dilemma
Written by PJ Wade

Although the focus is on selling price during negotiations, sellers know that how they use their real estate, and all that represents, present and future, is the true measure of value. It’s this accumulated value, not just how much money they’ll get, that sellers should concentrate on when tackling the “Should we stay, or should we go?” dilemma.

Lack of experience or uneasiness with the unknown should not dissuade you from the mental adventure of weighing your options. Don’t shy away from a thorough, creative comparison of all that can be gained by staying and all that this would cost versusall that can be gained by going and all that would cost. Have fun talking to friends and exploring the internet to discover other people’s successes and experiments. Here’s 3 tips to get you started on your real estate adventure:

1. Don’t just compare possible selling price to potential purchase price.

When deciding whether this is the real estate market to jump into, many sellers concentrate on the possible selling price of their current real estate and the potential purchase price of the next property. These dollar figures get the most attention, but they are not all that buying and selling real estate involves. Yes, selling and purchasing prices matter, but it’s your TOTAL NET GAIN from the combined sell-and-buy real estate transactions that really counts:

TOTAL NET GAIN = NET GAIN from Sale + NET GAIN from next Purchase

Your real estate professional can help you estimate how much will end up in or out of your pocket after mortgages and a long list of fees (including theirs) for both the sale of your current real estate and the purchase of your next property. Add to the “sale cost” list any long-standing service contracts for which you’ll lose price benefits when you move, and any accumulated benefits like-lower-than-neighbours realty tax, earned by consistently disputing tax increases. Moving, legal, and renovation costs must be included in the equation, too. Broad strokes will get you started, so you can assess net benefits and net losses in every aspect of life and homeownership. Often this exercise reveals clear “stay” benefits or disadvantages that make deciding easier.

2. Don’t let financial promise distract you from assessing the true value ownership represents to you.

Before setting goals and scribbling down a “what comes next” action plan, assess the true value of ownership of your current real estate and all it connects you to, not just its financial value. One measure of what your home means to your life and family is whether you want to move out of the neighbourhood or just to a new location within it. If you don’t want a dramatic location change, list what you value about the neighbourhood. Will these items persist, or is social or economic change putting those value elements at risk? While you assess what’s keeping you here, consider these connections with open eyes not just nostalgia for what was. Moving to a new location brings change on many levels. How will the new neighbourhood enrich life and what will be sacrificed?

3. Don’t overlook how ‘staying’ could involve significant change.

Just because you are not handy and have never undertaken a renovation before does not mean you can’t or that you won’t be great at it. If there is a strong pattern of extensive renovation and new builds in the neighbourhood, take a close look at what these options, or a less ambitious refreshing of your property would give you and at what cost. If this pattern is common in your area, moving to a new location in the same neighbourhood may represent a lateral financial move or even require additional expenditure. Then, your choice may be to renovate your current property or move to a less expensive area. Also, check with your municipal office to see if secondary suites or duplexing would be an option for your property. Adding an income-generating suite will also give you choice in the future.

For example, you could live in the suite and spend time travelling on the rental income from the rest of your home. Tied to these considerations are modernizations and upgrades that are necessary, or will be, since 15 to 20 years is the average life of most residential systems. If you project ahead 5 or so years, what overhauls will be necessary? If a new furnace, roof, windows…are on the horizon, a renovation now may make sense. This may allow upgrades like solar panels, heat pumps, and energy-efficient windows which can also improve building efficiency, increase comfort, and reduce maintenance and costs, while increasing property value. Architects, renovation contractors, builders, and real estate professionals are the idea people to involve in these value investigations.

This mental exercise will open doors and expand horizons in ways you may not have been able to foresee. This is research, so step back from anyone intent on getting you to sign a contract for anything until you have had time to explore your options. This may take a while, especially if you have only a few gripes about your current home or cottage.

May I suggest a great place to start? Write out a two or three sentence description of how you want your life to change. Be very specific. I suggest this exercise to clients who want things to improve or who are faced with change they wish to triumph over. The clearer the future is to you, the more likely you are to achieve it. Finish this sentence with what a brilliant outcome represents to you: “When I/we are successful…”. If you don’t know where you want to end up, how will you know the best way to get there?

Onward & Upward…The directions that really matter!

Sacramento County Relaxes Affordable Housing Requirements.

Sacramento County relaxes affordable housing requirements

 

 

Remodels coming up again in Sacramento…

Remodels ramping up again in Sacramento area

 

 

Home Prices Rise Overall but Some Areas Decline…

Home Prices Rise Overall, but Some Areas Seeing Sharp Declines

Home prices rose again nationally in September Lender Processing Services (LPS) said today, but in many areas, notably a lot of the older mill towns in the Northeast, prices are still declining, in some cases sharply.  LPS's Home Price Index (HPI) was up 0.2 percent from August to $232,000 and has risen 8.2 percent since the beginning of the year and 9.0 percent since September 2012. 

Nationally the HPI has climbed back to within 14.1 percent of the peak level reached in June of 2006 when the index was at $270,000.  In many states however, such as Florida (-35.1 percent) and even, despite its recent unprecedented gains, California (-25.3 percent) prices have far from fully recovered.  

LPS derives its data from residential real estate transactions and its own property and loan-level data bases.  The HPI is the result of a repeat sales analysis representing the price of non-distressed properties by taking into account price discounts for bank-owned real estate and short sales.

Five states had increases in their HPI of half a percent or more from August to September, Nevada was up 0.8 percent, Georgia and South Carolina increased by 0.7 percent and both Florida and Illinois were up 0.5 percent.  The largest month-over-month declines were in Connecticut (-0.9 percent), New Hampshire (-0.6 percent), Massachusetts (-0.5 percent) and Colorado and Pennsylvania each of which declined 0.4 percent. 

Colorado along with Texas established new peak prices in July but while Texas has gone on to even higher HPI levels and established another peak in September, Colorado has declined every month since.  The state is now down 0.7 percent from its recent peak.

The biggest price gains among metropolitan areas were almost all in the south.  Myrtle Beach, South Carolina gained 1 percentage point in September followed by Charleston South Carolina, Atlanta, and Miami with 9 percent increases.  There were five metro areas that were up 0.8 percent, Naples, Florida, Reno and Las Vegas, Ocean Pines, Maryland; and Key West. Austin, Texas gained 0.6 percent and established a new peak price at $241,000.

The big losers were mostly in New England.  Torrington (-1.0 percent), Bridgeport (-0.9 percent), and Norwich (-0.9 percent), Connecticut were followed by Springfield, Massachusetts and New Haven, down 0.8 percent.  York, Pennsylvania and Kennewick, Washington, down 0.7 percent.   Worcester, Massachusetts and Manchester, New Hampshire each lost 0.6 percent in value from September.  Denver, which had, along with Colorado, set a new peak in July is now off that peak by 0.8 percent after falling half a point in September.

 

Inventory up in July

Local home inventory rises 21% in July

 

Published: Saturday, Aug. 17, 2013

The number of homes on the market inSacramento County and the city of West Sacramento jumped by more than 21 percent in July compared with June, helping to ease a severe inventory shortage that has forced up prices this year, the Sacramento Association of Realtors said in its latest report.

In July, there were 2,071 active listings in the group's coverage area, up from 1,706 the month before and more than double the all-time low of 984 units in Jan- uary, the association said.

Housing inventory is typically measured as the time it would take to sell all the homes on the market. In July, there were 1.3 months of inventory, compared with 1.1 months in June. Earlier this year, there was less than a month of inventory on the market. Anything less than three months of inventory is considered a sellers' market.

The ultra-tight supply of homes for sale has been a major factor in pushing prices skyward this year as buyers tried to take advantage of historically low interest rates and relatively low prices.

Hope You find this information useful.

Best regards, Capital Valley Real Estate

 

 

Making a Low Offer

 

 How to Make a Low Offer on a Home

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The market is rebounding in many parts of the country. With low interest rates and little inventory, many properties are seeing multiple offers. Homes that show well and are priced appropriately are selling quickly.

In this environment, getting a “deal” on a home may seem an impossible dream. But in some cases, savvy buyers can still make a low offer on a home — and win. Here’s how.

Look for sellers who don’t listen to their agents

Smart sellers hook up with a good local agent early in the process, are informed about the market and the comps, and take their agent’s recommendations regarding pricing and how the home shows. Months in advance, they discuss small cosmetic changes that need to be made to get the best price for the property. These smart sellers go to market with their best foot forward and can command top dollar.

And then there are sellers who don’t take their agent’s advice. They don’t even want to hear what their agent has to say. These sellers can provide the real opportunity for smart buyers.

Consider two similarly sized homes for sale on identical blocks in a subdivision in El Dorado Hills, CA. Both homes were built around the same time and have similar finishes and fixtures. Home A is well- priced at $699,000. Home B is overpriced at $759,000. Ultimately, they’re comparable homes in a frenetic market with little inventory and lots of buyers. Buyers assume that all homes should sell over asking because that’s what they’re used to.

Home A, listed at $699,000, receives multiple offers over asking and sells for $745,000 in the first week. As for overpriced Home B, weeks go by. It sits. And sits. And sits. Buyers think there must be something “wrong” with it. After 30 days and no offers in today’s fast-paced market, it becomes a “stale” listing.

This is when a smart buyer will come in with a low offer. That seller, having shot himself in the foot for pricing too high at $759,000, now must entertain an offer of $725,000 and ultimately settles at $735,000. The result: The buyer of overpriced Home B gets the house for $10,000 less than the buyer of Home A, which had multiple competing offers and sold for more than the asking price.

Look for homes that don’t show well

Consider a third home for sale, Home C, also priced at $699,000 in El Dorado Hills. But this is the home of a hoarder. There is so much “stuff” in the house, too much furniture. The house hasn’t been painted in years. The kitchen cabinets have seen better days. The wall-to-wall carpet in the living areas is filled with stains. To top it off, the seller is a smoker, and you can’t miss that smell. The seller has resisted the agent’s suggestions to thin out the home, put some things in storage, do some painting and get rid of the smoke smell.

The result? This home, too, sits on the market for weeks and weeks. Buyers know what’s wrong with it. But the savvy buyer realizes that nearby Home A sold for more than the asking price. The buyer does the math and realizes that it would only take a few weeks’ worth of work and about $20,000 to make Home C move-in ready.

The buyer makes a low offer and gets the home for $687,000. After the cleaning and cosmetic work, the buyer spent a total of $707,000. The comparable property, Home A, went for $745,000. This buyer was rewarded with nearly $40,000 in equity for thinking outside the box, rolling up his sleeves and getting a little dirty in the process.

In all markets, there will be sellers who resist the advice of their real estate agents and don’t put their best foot forward when going on the market. Their homes sit on the market while others move quickly. Don’t be turned off by these homes like most buyers are. Instead, see them as an opportunity. Think outside the box and do your homework. These homes can provide a nice opportunity for a smart buyer to make a low offer on a home in this competitive market — and ultimately get a good deal.

Read More from Zillow.com

Brendon DeSimone is a Realtor and one of the nation’s leading real estate experts.  He has collaborated on multiple real estate books and his expert advice is regularly sought out by print, online and television media outlets including FOX News, CNBC, Good Morning America and Forbes. An avid investor himself, Brendon owns real estate around the US and abroad and is licensed to sell in California and New York. You can find Brendon on Facebook or follow him on Twitter or Google Plus.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow

Read more: http://www.foxbusiness.com/personal-finance/2013/07/29/how-to-make-low-offer-on-home/#ixzz2aTKPWaT0

How to Make a Low Offer on a Home