Will Lower Commissions Become Standard in Real Estate?

April 25th, 2016

For years the idea of lowering real estate commissions has been the topic of conversation amongst many in the real estate industry. Since the discount brokerages came onto the scene in full force back in the early 2000s, many home sellers have sought out agents who will cut commissions to save sellers money. Could lower commissions eventually become the norm? http://www.dreamstime.com/-image4640694

A recent study by Realtor Magazine indicated that 62% of buyers and sellers want lower fees in real estate transactions, yet of those 22% still want to receive quality service and worry that low fees do not go hand in hand with that type of service. So while sellers want to pay Wal-Mart fees, they obviously still want Nordstrom service.

I have written many blogs over the years about the benefit of working with agents who provide stellar service – not just in marketing a property or knowing a neighborhood, but with respect to the very important legalities of real estate transactions – negotiations (by the way, 89% of sellers in a recent study indicated that negotiation was the number 1 skill they desired of their real estate agents), paperwork, disclosures and other potential liabilities.

Many sellers for years have complained that it is not right that an agent can be paid 2 1/2-3% of the purchase price for a million dollar home and the same for a $300,000 home. The real question is how much work is that agent doing? I personally know of listing agents who “list and pray,” doing virtually no or little work to market a home and bring a buyer without spending time or money out of pocket. Also, what about the buyer’s agent who has been working for months with her buyers, showing them 20, 30+ homes, driving the around to show them areas and being there on hours of phone calls, writing offers…that agent gets nothing until she actually closes a sale, which may or may not happen.

If you wonder what agents actually do, here is a list of some of the things your agent should be doing…so do not be afraid to ask your agent what he or she is doing for you.

1. Marketing – this varies vastly so make sure you understand the marketing plan that is proposed

2. Open houses – if desired

3. Broker caravan

4. Professional photography

5. Creating custom flyers and other marketing pieces (mailers, ads, emails, etc.)

6. Showing advice/preparation and staging, if necessary

7. Handling all paperwork and explaining it all to you

8. Showing the property (being available to do so – you’d be surprised how many agents are not)

9. Negotiations with the other party/agent – this does not stop after a contract is signed, as it is still often necessary for repairs/credits.

10. Providing a list of repair people if needed

11. Constant communications with all parties involved – agents, lender, escrow, title, and of course, you

12. Making sure you have copies of your entire file at the close of escrow, and helping with other things like finding agents out of the area if you are moving somewhere else, or helping you synchronize closings of current and new homes. I have even helped clients move out and clean up after everything is taken from a home.

Of course each listing may require a different plan, and some may need more pre-listing work or more marketing than others, which of course means more money. So, will lower real estate commissions eventually become standardized? That remains to be seen but hopefully if they do, quality service won’t go down with them.


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Just Listed: Model-Perfect Carlsbad Townhome

April 21st, 2016

Welcome to 4102 Karst Road!

Offered at $495,000 1_8201474_72550_EA-72550-101

Absolutely immaculate tri-level Carlsbad townhome in Mystic Point – shows like a model with soaring ceilings and natural light everywhere. Granite kitchen with stainless appliances, crown molding, custom paint, beautiful tile and upgraded carpeting in bedrooms. Separate office/den/playroom with balcony. Attached 2 car epoxy garage, community pool/spa and tot lot, and steps to Calavera Hills nature preserve and trails. 5_8201470_72550_EA-72550-105

Features include:

  • 2 bedrooms plus office, 1341 square feet
  • Gorgeous white cabinet kitchen with dark brown/black granite counters
  • Stainless appliances
  • Custom paint throughout
  • Crown molding
  • Cathedral ceilings
  • Large tile flooring and upgraded carpeting
  • Extra sink adjoins bathroom in downstairs bedroom
  • Ceiling fans
  • 13_8201473_72550_EA-72550-113Air conditioning
  • 2 car garage with epoxy flooring and built in storage, laundry area
  • Community pool, spa, BBQ and play area
  • Steps to Calavera Hills nature preserve and trails
  • Carlsbad schools
  • Close to shopping, dining, beaches, schools and parks

For more photos and information please click here. To schedule a showing please call Broker Rachel LaMar at 760-310-9466. MLS #160021250

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Report: San Diego March Home Prices Were Highest in 9 Years

April 19th, 2016

A study just released by CoreLogic states that homes sold in San Diego this March had the highest prices in 9 years, with a median home price of $478,000. How is this possible with such low inventory, you may ask? Well, it is likely because of that low inventory that prices have skyrocketed. When levels are low affordability tends to increase as homes sell for higher prices, making it a seller’s market. statistics

Another factor contributing to the current market status is that interest rates have remained exceptionally low, creating a surplus of buyers (some rates are reportedly under 4% for 30 year fixed loans). Spring  and Summer – the traditional “big” selling seasons – are in full swing with qualified buyers abound who have few choices. We are seeing multiple offer situations all over the place (I just wrote an offer the other day and there were 6 offers, all at or over asking price). Buyers are ready to buy and when a home in a desirable area is listed it likely will sell quickly – a strong reason to make sure you are preapproved if you are planning to purchase a home soon.

According to the report, home sales increased 5.1% year over year, with new home sales leaping 28.1% last month. All of this makes it a great time to sell, but many sellers do not do so because they are afraid they won’t find replacement property, putting many in a Catch-22 situation. On the other hand, home improvement stores have been doing very well since the start of the year, as many homeowners may be deciding to make improvements rather than chance selling with no where to move – we seem to be stuck in a rut of sorts.

Here in North San Diego I have seen a lot more off-market homes being marketed to real estate agents. In other words, agents list properties and market them without putting them on the MLS (a VERY good reason why all buyers need to have agents!). Many of these homes do not make it to the MLS until they are in escrow, giving buyers no opportunity to view them or make offers. This is frustrating but the early bird gets the worm I suppose. I have received emails and recorded phone calls about property that are not on the market yet but are being marketed to brokers or agents.

The bottom line is that prices have definitely risen and inventory is tight, but if you do your homework and prepare before buying or selling, you should be able to do well. If you are merely selling and have an appealing home in a desirable neighborhood you will be in the driver’s seat. If you are buying make sure to get preapproved, work with a real estate agent, get educated on the market in which you focus your search, and be ready to write the strongest offer you can.

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Who is the Best Presidential Candidate for the Housing Market?

April 13th, 2016

If you have been paying attention to what is going on in the political circus…I mean arena…you may or may not understand how different candidates feel about certain issues. While some have not made clear statements on many issues, and others have literally changed their minds and don’t appear to have opinions (or don’t care to share them with the American people), some have wondered where the candidates stand on housing. protect-house

It is a fact that many people in this country were affected by the crash of 2008-2010. Many lost homes, lost jobs, declared bankruptcy. Although the economy has come a long way since then, as has the housing market, there are many who still distrust putting their money into home ownership for fear of another collapse. The number of renters has skyrocketed since the crash (according to the Huffington Post there are 9 million more renters today than existed a mere decade ago), and renting in many areas (including most parts of California) costs more than home ownership – and rents continue to rise in most areas. But of those who would like to purchase, many cannot afford a downpayment.

So you may wonder what will happen to housing once a new President is elected, and whether the choice of candidate will make a difference. Let’s take a look at party philosophies first to get an idea of what might happen depending on whether a democrat or republican is elected.

Hillary Clinton is the only candidate who has authored a specific plan for housing and home ownership attainment. The plan aims to provide better support and credit for those who wish to own homes. Under a Clinton presidency rentals will be more affordable as well, benefitting lower and middle class Americans. The plan details job creation, apprenticeship and investment in American youth, as well as the creation of job programs for convicts re-entering the work force and investment in small businesses. Where will the money for all this come from? Do your research.  Click here to read her plan in detail.

Bernie Sanders does not have a specific housing plan, but plans to raise taxes across the board – both for individuals and businesses. This would likely mean salaries will decline, as businesses will have to pass the tax increases along to employees. However, other things would be beneficial to Americans under a Sanders presidency, like free colleges and medicare. As for housing, it will of course be affected by lower wages and higher taxes, so one has to weigh the positives and negatives.

Ted Cruz has vocalized his across-the-board tax plan, which would put everyone in the same 10% tax bracket. Sounds good, especially if you pay a lot more, but he also wants to institute a flat tax on business payroll and profits. This could lead to salary cuts for workers, which would be detrimental to the real estate market (lower salaries mean no new home buyers and many owners that could need to sell to heed their new lower income levels). With the promise to end local and state tax deductions as well American homeowners could get hit hard, depending on where they live.

Donald Trump also has no specific housing plan, but has talked about substantial tax cuts and less tax deductions. The big tax cuts could cause interest rates to rise, which will likely affect mortgages – again, this could make homeownership less attainable.

John Kasich plans to cut the tax rate, but there is not much more about his proposal for housing or direct effects on housing due to his plans.

Housing plays a very important part in our lives as Americans, so make sure to do your research and decide whom has the best plan for your needs. Hopefully whomever is elected will keep housing on track so people to afford to become homeowners in the future and the housing market will continue to thrive.

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How Much Commission Will You Charge to List My Home?

March 31st, 2016

Today I received an email from a home seller who found me online and wanted to know how much commission I would charge to sell his home, without meeting me or having me see his home. I have had this question before, and it got me thinking. Many sellers want an answer before an agent even meets them or sees their home, and this is a bit challenging. Of course, commissions are negotiable – some agents will lower them and others will not, and some may even have a set low number they’ll provide before seeing your home or meeting you. images

While a low commission will save you money, here are some important points all home sellers should adhere to when selecting an agent:

1. Understand what the agent will do for you. Full service and partial service brokerages vary a great deal, so make sure you know what you are “getting” for the low commission an agent has proposed. Will your agent provide:

– Professional photography

– Custom color flyers

– Marketing – online, print, social media, etc.

– Showing tips and staging (if necessary), as well as referrals to service providers that may be needed

– Broker caravan tour

– Open houses (if desired)

– Take calls and show the property

– Vet potential buyers before accepting an offer

– Communicate with all parties involved in the sale – escrow, title, lender, buyer’s agent, inspectors, repair people

– Handle all paperwork, including disclosures, amendments, repair requests and contingencies

– Negotiate with the buyer – it is important to note that getting a contract accepted is only the beginning. There is still negotiating to be done (unless the buyer agreed to purchase as-is and has no contingencies). Many sales fall through because of a weak negotiator, so make sure your agent is going to be there to do so.

– Keep the buyer in the sale – this really is similar to the point above, but a little different. Sometimes a buyer may discover something that makes him/her uncomfortable, so it is important to have an agent who can think outside the proverbial box and lessen those anxieties.

2. Understand what the agent will NOT do for you. Make sure you have a clear idea of what will not be included in the commission – some low commission brokerages only list your home on the MLS and leave it at that. If you run into any negotiations – over price, repairs, etc. you need to have a strong negotiator on your side or the sale may fall a part. Make sure you know your agent’s role.

3. Understand YOUR role in the sale. Again, if you hire an agent who is pretty much just placing your home on the MLS, you need to understand it may be your responsibility to hold open houses, let agents in and schedule showings, and provide all required paperwork. Some people don’t mind doing these things, but others don’t have the time nor want to be bothered with them. Also, if during the course of the sale bumps arise in the road, it is important to have someone to rely on for advice. If your agent is not going to do so I strongly recommend having an attorney in your corner – of course this will cost you extra money so look into it first.

The bottom line is that pretty much everyone wants a “deal.” Since commissions are negotiable there is a good change sellers will find one if that is what they are looking for, but keep in mind that selling a home is a legal transaction, one for which there could be liability and potential lawsuits – even long after the home has been sold. Saving money is nice but when it comes to legalities personally I would rather know that I am protected in the best way possible, and if that means spending a bit more I wouldn’t mind – often in life you get what you pay for. You have to decide what you think is important.

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Real Estate Buyers and Sellers Beware: Internet Scam

March 28th, 2016

If you are a buyer, seller or real estate agent involved in a sale transaction, or may be in the future, please read this important warning from the Federal Trade Commission as posted by the National Association of Realtors (NAR):

“On March 18 the FTC Consumer Blog issued a post focused on hackers who have been breaking into some consumers’ and real estate professionals’ email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last minute change to the wiring instructions, and tells the buyer to wire closing costs to a different account. But it’s the scammer’s account. If the buyer takes the bait, their bank account could be cleared out in a matter of minutes. Often, that’s money the buyer will never see again.” – NAR

To read the article in it’s entirety click here. The bottom line is that during the course of the transaction if you receive any emails asking you to wire money to escrow or the lender, you must contact the sender first and verify the account number prior to sending any wires. If you do not do so, you could lose the entire sum. PLEASE never wire money to anyone based on an email until you confirm the account number with the sender. It is too easy for hackers to get into accounts, as I am sure you may have seen before, and phishing is on the rise so protect yourself.

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Will Lack of Home Inventory Curtail Spring Selling Season? Buyers: Prepare

March 24th, 2016

Many agents and home buyers are aware of the current shortage of homes for sale in many areas. In California there is currently a 4 month supply of homes, where 6 months is the norm and heading into the Spring it usually is higher. When desirable listings do come onto the market there is a rush of activity and often a quick sale. What will happen to the normally busy Spring selling season if inventory levels do not grow? http://www.dreamstime.com/-image27659734

With interest rates still low and inventory levels down, it is more important than ever for buyers to be as prepared as possible to write a successful offer. Before buyers even start looking at homes, it is important to make sure to do the following:

1. Get preapproved. This is essential. You need to speak with a mortgage professional and get preapproved – not just prequalified – so that you know exactly how much of a loan you can afford and what you will need for a downpayment. There are different products out there so make sure you know which loans will work best for your circumstances. Talk to a qualified mortgage professional and get the preapproval letter before you start home shopping so you are ready to make an offer.

2. Find a good real estate agent. It is great to look at homes yourself online – in fact I always encourage doing so – but to have a skilled agent on your side provides you with an edge. Local area agents often hear of listings before they hit the market, or may even have “pocket” listings (contracted upcoming listings that are not yet on the MLS) themselves. Also, when a listing is on the MLS there may be important confidential agent remarks listed (that only MLS subscribers can see) that could help you prepare in writing an offer. Finally, some third party real estate sites do not list new properties immediately because they don’t sync directly with MLSs, so you may miss out on new listings that other buyers have already seen – even a day can make a difference in a tight inventory market.

3. Write the strongest offer possible. Depending on the circumstances you need to be ready to write the best “on-paper” offer possible, especially in situations where there are multiple offers on a property. Of course, you may not be able to compete with some things (for example, if another buyer is a cash buyer or offers over asking price when you are not qualified to do so), but it is still important to make the offer look as good as it can. This is another reason to have a strong agent on your side – she or he will advise you of the best tactics after assessing the situation, the comparable sold properties, the market and speaking with the listing agent. Your offer still may not be chosen, but there is a chance the one that is chosen could fall through, so you want to be the next best.

4. Be Ready! Make sure you are accessible by phone/text and email, and that you are able to view properties as soon as possible once they list. If a property lists on a Thursday and it looks like a home that meets all your criteria, waiting until the weekend to view it may increase the competition. Even in cases where the seller wants to wait the weekend to evaluate offers, getting yours in first could put you in a better position.

5. Keep an open mind. Check out homes that you may not necessarily find appealing on line, or may not be in your preferred neighborhood. Sometimes buyers reject seeing a listed property, only to later realize that it could have been a great home for them. Pictures can be deceiving, and for the right price a home that needed something to make it “perfect” – like a little updating, could be a great home for you at the right price. The same goes for a home outside of your desired neighborhood.

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The Importance of Homeowners Insurance for ALL Properties

March 10th, 2016

Most homeowners have insurance, since in order to obtain a loan they have to have proof of home insurance. But what about a homeowner who owns a condominium that is used as income property? Do you need to have home insurance on that property? Insurance on single family homes can vary a great deal from insurance of attached homes where an HOA is involved, and homeowners need to clearly understand the policies and liabilities. th

Condo Insurance Coverage

There are 3 important insurance considerations when it comes to condo owners who rent out their properties:

1. HOA master insurance policies: Most HOAs have one of two types of insurance master policies – the majority I have seen are exterior coverage only, so the outside of the units are covered, usually including the roof and any decks, stucco, etc. Some have extended policies that cover more – make sure that you understand exactly what your HOA policy covers. These policies will cover damage from events like wind blown rain, fire, etc., but do not cover any personal belongings inside the home.

2. Liability insurance: If your HOA covers the exterior and you have tenants in the property, it is the responsibility of the tenants to obtain content coverage for their interior belongings and personal property. If they do not have such coverage and there is an issue that causes damage to their things that is not covered under the HOA master insurance policy – for example, say a pipe burst in the wall – you are not off the hook as a landlord/owner and could be sued. You can obtain liability insurance to cover yourself in such situations. Usually this can be done through your homeowners insurance policy on your primary residence, via an extension of the liability policy to your other (non-primary) property. Check with your insurance agent.

3. Tenant content coverage: As I mentioned above, tenants should obtain content coverage for their personal belongings.

4. Optional coverage: As a landlord-owner your insurance company can likely offer you other forms of insurance coverage to protect you in case of damage to the home, such as personal property coverage or optional replacement cost coverage (say there is a fire or flood and your appliances and flooring are damaged). It is important to talk to your insurance agent to determine what is available to you and which coverage is best for your protection.

Single Family Home Insurance Coverage

If you own a single family detached home it is a different scenario, even if you rent it out. You must have homeonwers insurance on the property in order to close escrow if you are obtaining a loan. If down the road you don’t pay your insurance policy, the insurance company is required to notify the lender in 30 days. The lender sends out a letter to the homeowner giving him/her 30 days to get insurance back up and running.

If the homeowner does not obtain insurance within the time frame after the letter is received, the lender can order a forced place insurance policy on the home and tack the balance onto the homeowner’s loan amount. This protects the lender should the home burn down or suffer from some other natural disaster or issue.

Sometimes the lender is not notified that the homeowner’s insurance policy has lapsed, due to faulty paperwork or failure of the insurance company to notify the lender for some other reason. This can create problems for both the lender and the homeowner if there is ever a problem with the property.

It is in your best interest as a homeowner to make sure your insurance policy covers you in the best way possible. If you own investment property that you rent out, or even a second home, make sure you understand how you are covered, especially when an HOA is involved. If you have a condo/townhome, make sure you are covered there as well, and look into liability insurance to prevent lawsuits. Make sure you have a smart, informative insurance agent who can help you decide which coverage is best for you.

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Beware: IRS Phone Scam!

March 1st, 2016

Beware!! There is a large scale phone scam going on right now and I was just a victim. Someone is calling “from the IRS” stating that you are being sued because you have not responded to certified letters that were sent to you regarding an audit. He had my name and address, and obviously my phone number. th

I kept asking questions and did not give out any personal information, and eventually the man became angry with me and told me I was being rude to a federal officer. I had to keep interrupting him because there was a lot of background noise and it was difficult to hear what he was saying. The next thing I know he said something to me that is too foul to repeat here. I then hung up.

I called my accountant and was told that many of their clients had received similar calls, and that eventually they ask for money to be sent to make the lawsuit go away. Of course I didn’t let it get that far. These calls are being made from numbers all over the US – mine “came from” Washington state, others have received calls from Virginia and other area codes. Obviously they are routing the calls but I have been told they likely originate overseas.

Here are some VERY important things to remember if you ever receive a call from the “IRS:”

1. The IRS does not call citizens. Period.

2. The IRS would NEVER ask you to send money even if you called them.

3. The IRS must notify you in writing via mail if you are being audited.

4. NEVER send money. Period.

5. Report any suspicious calls. If you are the victim of phone scam please contact the Federal Trade Commission at 877-382-4357 to report. My report was number 70 million plus – and that is just this year! You can also visit the FTC website for more information by clicking here. Please share this with everyone you know, especially the elderly as my accountant said many have been scared and have made payments.

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Lessons to Be Learned from Recent Carlsbad Election

February 29th, 2016

As a Carlsbad resident I have to say that I have never been so happy that an election is over. For those who do not know, on February 23 the city of Carlsbad voted on Measure A – a decision which would decide on the fate of the Aqua Hedionda Lagoon and whether  it would become the new home of a upscale shopping and dining destination. I have never seen this city so divided. classy

People were very vocal on both the “No” and “Yes” sides of the spectrum. There are 2 things I found prevalent among many people, as evidenced on social media:

1. Many residents did not truly understand the issue on which they were voting, and instead listened to all the negative propaganda on both sides. It was clear from many comments posted that people did not really understand the ramifications of a “no” or “yes” vote. Many based their decisions on opinions or fluff spewed out by those passionately representing one side. For example, a few people commented that they were voting “no” in order to keep the lagoon in it’s natural state.

The fact of the matter is that the lagoon land, which is owned by SDG&E, WILL be sold and developed. Whoever goes through the proper means to make this happen (the City allowed the current purchaser to cut corners and did not bring it to the voters until they raised a stink) will develop. It may be something not as nice as the current plans specified – such as housing – I heard a rumor about apartment buildings – which may not allow Carlsbad residents to enjoy the space.

2. Many residents acted immature and rude to those on the other side, resorting to name-calling, destruction and stealing of signs, and even threats. Behavior was disappointing. I even posted a comment on Nextdoor.com about a week before the election, trying to appeal to neighbors to be positive and to use their voices to educate the undecideds instead of lashing out insults on the other side. For about a day or 2 people responded to the post in a positive manner. But as soon as one person got nasty it went downhill from there.

Next time there is an election of any type I recommend every citizen do the following prior to voting:

1. Get educated. Read the material you can find on the topic, research it. Truly understand the issue and the opposing arguments. Don’t just rely on what your neighbor or co-worker says, or what angry people say online or write on signs posted in the city. In law school I learned to study arguments on both sides in order to prepare to make my arguments – this is a valuable lesson for everyone.

2. Keep it Classy. This was what I called for when I posted the comment I mentioned above. We live in a democratic society. People will have different opinions – how wonderful that we are allowed to express them. Embrace them and try to understand them – you don’t have to agree. Don’t go online and rant, don’t resort to violence (defacing signs, stealing signs – both of which are illegal and can get you arrested). Each one of these incidences is a valuable lesson to teach our children. Calling your neighbor a name on social media and getting angry because others don’t share your viewpoint is not classy, and teaches young people that it’s ok to not be classy.

Of course, there are some people who insist they are right and they will not refrain from shouting about it, even it it means stepping on or insulting others. My advice is to not respond to these people when they post rude comments. They are obviously looking for fuel to incite them – don’t go there. As I suggested to Carlsbad citizens, use your voices in a positive way – go stand outside a store with pamphlets or blog about your views, write an editorial in a local publication, talk with neighbors and form groups to get out there and teach others.

Keep in mind that every situation is a both an opportunity for each of us to show our true colors, as well as a teaching opportunity. Become a community leader and a teacher by staying educated and being classy.

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