Archive for April, 2016

Will Lower Commissions Become Standard in Real Estate?

Monday, 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

Thursday, 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

Tuesday, 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?

Wednesday, 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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