Things are really heating up in the real estate market in San Diego. Encountering multiple offer situations is not uncommon these days, especially with properties that are priced well and are in good condition. So, is it a seller’s market?

To answer the question we need to divide the market into attached and detached homes.

Attached homes: In the attached market many areas of San Diego are officially in the seller’s market territory. What does this mean? It means that sellers are receiving multiple offers, prices are going up, and sellers are able to often drive prices higher and pick their choice of offers. This means that buyers do not have as many opportunities to submit lowball offers, even when they would realistically pay more but want to “feel the waters.”

Of course, long gone are the days of severely inflated prices, but I will take a thorough look at comparable sold properties, and advise my clients to stay as close as they can to those numbers (assuming the properties are similar to the one on which they are placing an offer). Slight increases from the comps are definitely justified, as the market is trending upwards in many developments.

Overbidding is often something a buyer may want to do to secure getting their offer accepted, and as a listing agent I have received multiple offers sufficiently over the asking price. However, as much as I would like my sellers to get the highest price possible for their home, when I doubted that the offered price would survive an appraisal I counseled my sellers to choose not the highest offer, but the one most likely to close (cash offers first, and then loans with very qualified buyers and nice downpayments). So, it is not just about the numbers, but buyers DO have to be aware that if they truly want a certain property they need to present their highest and best offer in today’s attached home market.

Detached homes: Detached homes are still in the buyer’s market category here in San Diego in most areas, but in reality it depends on the area, inventory and price range. In most north county coastal cities, such as Carlsbad, Encinitas and Solana Beach, we have seen prices stabilizing and little change in trending. As more inventory comes onto the market as we head into summer it just may create a trend toward higher prices, but we will have to see how strong demand is at that time.

Personally, I have seen that listings are going very quickly in the detached market. Three recent listings of mine all received offers within days of listing, including multiple offers. So my advice is that it really matters in which area the property is located, and that buyers still want to write offers as strong as possible, unless they know there are no other offers and they feel they have time for negotiations. It is important you work with a skilled buyer’s agent who knows the local market and can negotiate well on your behalf.

The bottom line is that if you are a buyer looking for a detached home, it is still a great time to negotiate. Have your agent do her research on the comparables, and come in with a strong offer…but there is no need to offer an amount sufficiently above comparable solds. If your agent knows there are other offers on the property of course you need to discuss how to present your offer in the best light to give it the highest chance of acceptance.

Happy house hunting, and please let me know if you have any market questions you would like to see answered here.

Photos courtesy of Dreamstime.

Unethical people stink. We can find them in every profession, including real estate. I certainly have seen my share of such types and I know many other agents who have stories of their own. The frustrating fact is that many agents do not report ethical violations, and these people continue to work in such a manner. What can we do about it? It’s simple: REPORT THEM.

For those who are unaware, real estate agents and brokers, like many other professionals, are bound by a strict code of ethics. If you have never read the code you should – it is built on the idea that we are dealing with legal situations and that we represent others in these situations. It promotes professionalism and respect for our colleagues, and asks us to strive to do right by our clients, colleagues, our profession, and by society. It is something we should each read at least once a year.

There are a few ways you can report violators:

1.  Report to your local association. This is the quickest way to deal with an ethics violator. Associations may differ in their processes, but my local association has a simple way of doing so. First, a complaint form is filled out. It is submitted along with a written statement and any documentation that the complainant might possess. The complaint is reviewed by a committee, and then is scheduled for a hearing if found to warrant such (the complaints are deemed to be factual). The respondant is notified, has 15 days to respond,  and then both parties attend the hearing.

Many agents do not bother reporting violators because they do not want to face the respondant, or because they do not want to go through the time the process requires. But it is worth it to do so, because these unethical people will just continue to do what they are doing, and you could prevent innocent people from being hurt or damaged due to such actions.

Punishment: The local associations do not have the authority to take a respondant’s license away, but if they feel there are issues of public trust involved they can report the issue to the Department of Real Estate (DRE), which does have authority to revoke licenses.

The local boards can place a letter of warning in the respondant’s file, levy fines, require them to take ethics classes, and suspend membership from the association. If the agent’s association membership is suspended it will be published in the national database, where everyone can see it.

2.  Report to the DRE. The DRE’s role is to investigate potential violations of real estate law, such as financially related scenarios (e.g. where an agent/broker took monetary kickbacks), or loan fraud. Punishment is stricter, as the member could lose his/her license.

Check your agent’s status! You can check whether there have been any issues with your real estate agent/broker by clicking here. For agents and brokers, click on “Real Estate Brokers and Salespersons,” and them enter the required information.

If you are a buyer or seller and feel your agent may have committed an ethical violation, contact his/her broker. You may also want to contact their association and see what options you have in reporting them.

As professionals we need to report violations by other agents. If you are in a transaction and there is something fishy going on, you need to save all copies of communications with the other person, and any other evidence. Do not worry about getting involved in an investigation – we as a profession are only as strong as we choose to be. If we do not report those who don’t follow laws and rules, we are only hurting our profession and ourselves.

There have been many changes happening in the short sale arena, so if you are a buyer considering a short sale, or a seller thinking of selling short, here is the latest news:

New rules in June for lenders. Starting this June, most of the big banks will face new requirements that will hopefully change the length of short sale approvals. Fannie Mae and Freddie Mac have drafted new policies that will require lenders to review and respond to all short sale requests within 30 days of receipt. The lenders will have 60 days after receipt of an offer to make a final decision. If the lender has an offer under review for more than 30 days,  it will be required to provide weekly updates. Sounds like good news for short sale buyers and sellers, but will it lead to more short sale rejections if the lenders can’t get it together within the new timelines? Let’s hope not.

End of the year expiration on short sale tax liability still in effect – clock ticking to avoid taxation. I have discussed this in other blogs, but in case you need a reminder the Mortgage Relief Debt Forgiveness Act is set to expire on December 31 of this year. This means that unless it is extended once again all short sales could be subject to federal income taxation after that time. The act, which was created in 2007, allows short sales sellers to avoid federal taxation on the cancelled debt (the difference between the sales price and amount owed on the mortgage). For example, if you have a mortgage of $500,000 and short sell your home for $300,000, you could be liable for federal taxation on the $200,000. If you are considering a short sale, now is the time – contact an experienced short sale agent in your area.

Fastest Short Sale Lenders Report is Out. RealtyTrac recently released a report on which lenders are fastest with short sale timelines. The winner is Fannie Mae/Freddie Mac and FHA. Ally Bank came in second. Bank of America and Wells Fargo were at the bottom of the top 10 list. Read the DS News article to learn more.

Short Sale Surge Predicted for 2012. RealtyTrac released another important report as of late, which outlines the increase in pre-foreclosure sales (namely short sales). The study found a 33% year-over-year increase in these sales; the number in California is higher, at 52%. The downward trend of short sales is no more, and short sales have outnumbered REO (lender-owned property) listings in 12 states, including California. Based on this trend the report, and likely considering the end of the Mortgage Debt Relief Foregiveness Act, 2012 could be a big year for short sales.

Real estate agents or any professionals, take heed: Do you edit everything you send out? Do you read EVERY document the other side sends over involved with a sale? Do you read the contract (even better yet, have you EVER really read the contract in it’s entirety)?

In the real estate profession, as well as many others, there are those who are detail oriented, those who are completely sloppy, and just about all kinds of people somewhere in between. But it will never cease to amaze me when agents do not check their work product before sending it out. There is absolutely no excuse, as you are dealing with contracts that have legal ramifications.

If you represent somebody in a legal transaction, you better make sure you do the following – not only is the risk of a lawsuit great, but your entire reputation is on the line. As an agent, you are required to represent your clients to the best of your ability. If you cannot do so, you may need to seek another profession.

Representation Basics:

1.  Read. This is so basic a requirement, yet it never ceases to amaze me how many agents do not read contracts, both before and after they have written them. First of all, if you have never read the required forms, you should! Once you have filled it in on behalf of a client, make sure you go over it with a fine tooth comb and fill in items you may have missed, change those that need changing, etc. If you forget to check or uncheck a box, it could cost your clients money, heartache, loss of a sale or subject them to a lawsuit. They are trusting you!

2.  Explain. It is important to go over the contract with your clients before and after it is written. Explain to them what the terms mean, and make sure that you have conveyed their wishes properly.

3.  Proof/edit. This instruction applies not just to a contract or other document you have written, but to everything you do. I am often dumbfounded by some of the marketing pieces I receive in the mail from real estate agents – typos, improper grammar, unfocused photos, blurry words…I would never send anything out like that! Even some big agents in my area do, and it usually makes me both laugh and feel angry…after all, it doesn’t raise the bar too high for the rest of us, does it?

4.  Put all communications in writing. As a lawyer I know how important this is – even if your client is your family member. If you have a conversation with a client, make sure to send a message referencing what you discussed, and keep all communications in an email folder. If anything happens down the road, like a lawsuit, this is the only way you will be able to prove what was discussed.

5.  Admit when you don’t know the answer, and get help or advice! It is ok to not know the answers sometimes – we all face this issue, and we are only human. Admit that you do not know and then find someone who does. This applies to tricky situations too, where you have to make a call. Getting the feedback of another whom you trust (like your broker, or if you are the broker, another trusted broker or attorney) could be a major difference in the outcome. The California Association of Realtors (C.A.R.) has a free legal hotline for members, as most associations do – take advantage of it.

6.  Do your homework first. No matter what you do you need to investigate before submitting any offers, taking any listings, or venturing into a short sale or lender owned property. Contact your title representative and find out if title is clean and find out about liens on the property. Contact the listing agent and make sure s/he knows what they are doing if it is a distressed property. Pull up the assessor record. Don’t ever jump into something blindly without knowledge of what you may be getting into – it simply isn’t fair to your clients.

7.  Always act professionally. This applies not only to your interactions with your clients, but also to fellow real estate agents and brokers. There are too many people in many industries who do not treat others in a professional manner. Eventually you will sink yourself with a bad rap if you can’t be a true professional. Real estate agents all know whom they don’t want to work with in their area…you don’t want to be that person.

As in any profession, there are always bad seeds who will tarnish things for the group as a whole, but if we all make sure that we do right by our clients, colleagues and by ourselves, we will not only make others happy, but we will also feel happier and have a productive career.

[ey•juhnt]  noun  1. a person or business authorized to act on another’s behalf  (via Dictionary.com).

Those who have worked with a good real estate agent understand the value such an agent adds to the purchase or sale of a home. Sure, you can sell your home by yourself, and you can search for homes on your own as well, but the skills of a seasoned agent can help you through tricky situations, where a decision can make or break a sale. Let’s look at some of the things a good agent can offer a buyer or seller.

Experience. An agent’s experience with multiple issues can be helpful to a buyer or seller. These issues can include how to negotiate with a particular agent, trends in a certain neighborhood, advice in tough situations, staging and showing advice in a sale, and numerous other issues that an agent may have encountered during her career. All this experience is a benefit to a buyer or seller.

Advice. This goes hand in hand with experience. Agents know their hyper local market well. They understand trends in different areas and neighborhoods, and can compare and contrast a property  to recent comparable properties. This is helpful in deciding at what price to write or counter an offer – such knowledge can be critical in multiple offer situations, where there is a big price discrepancy, or other issues regarding the home  that could alter the value. A good agent’s advice could mean the difference between a sale and a cancelled contract.

Legal issue avoidance. Many people seem to forget that selling or buying a home involves legal paperwork, and can lead to lawsuits if the paperwork is not filled out properly, or if things are not handled correctly. A good agent will not only make sure that you are doing everything correctly to avoid litigation down the road, but will be able to offer advice and discuss options so that this type of situation does not become reality. Think of it as someone looking out for your best interests.

Getting you in the door first (literally). If you are a buyer and work with an agent who is really in touch with the local market, you have a big advantage. In the last year I have helped several clients purchase homes before they came on the MLS, all because I either knew about an upcoming listing or because I did research and found distressed sellers who were about to sell their homes. These sales worked out great for my clients, because they made offers before the properties hit the MLS, with no competition from other buyers. It is another plus of working with an agent who is on top of things.

All in all, it is important to have a trusting relationship with your real estate agent. You should be able to discuss things with your agent and be aware of the ramifications of your decisions throughout the sales process, whether you are buying or selling real estate. Listen to your agent’s advice before making a decision – agents work for you, and with your best interests in mind.

Home prices are rising and have been doing so for the last three months.  According to Standard and Poor’s newest Case-Shiller index report, prices have actually showed a decline, but that fact has been disputed by other reports. In North San Diego, I agree that prices seem to be rising and market times, not including short sales, are decreasing.

The discrepancy between the Case-Shiller report and other reports that have studied markets across the country is that the other reports focus on when contracts are signed – it uses the prices agreed upon at that time, even though it could be months until the properties close escrow.  Case-Shiller uses the prices reflected at the close of escrow, so there is quite a bit of lag time, up to several months, which skews the results.

Market Trends: The general consensus is that if you focus on what is trending, rather than waiting until close of escrow down the road, you get a clearer picture of price increase. Of course, there is the possibility that some of these sales may not close escrow, or may not appraise at the agreed price, but there is still a valid argument that focusing on what people are WILLING to pay and do get into contract for is a more accurate measure of hyper-local market analyses.

North San Diego: From a personal standpoint, I agree that prices seem to be increasing in the North San Diego market. We are seeing a lot of multiple offer situations, especially in the lower price ranges (under $400,000) across the county. Also apparent is that that the days on market time seems to be decreasing. In Carlsbad alone the average market time (for all four zip codes combined) for detached homes is 76 days, but if you scroll through all the pending listings you will notice many that sold in under a week. For attached homes in all four Carlsbad zip codes the average market time is 84 days, but again, you will notice a handful of properties that went into pending status quickly.

Sales Time Trends and Short Sales: Another trend I am seeing is that short sales contracts are being presented and accepted faster, especially in the under-$400,000 price range, with both attached and detached homes. These sales go into contingent status (meaning an offer has been signed and accepted by the seller pending approval by the short sale lender(s)) much quicker these days, but the market times are longer because the parties await short sale lender approval. The wait time, which can take months, throws off the market time numbers and makes them longer, so that has to be considered when looking at the sale times.

All in all the news is positive that the market here in San Diego is improving,which is great news for homeowners and buyers alike. According to Altos Research, the statistics indicate that the tables have turned slightly in the condo market, making it a seller’s market for the first time in a long time; the detached home market is still a buyer’s market. Hopefully the road ahead will continue to bring us closer to a more “normal” market.

Please feel free to contact me if you would like any detailed market reports and statistics sent to you, and I will be happy to do so. Send your request to Rachel@LaMarRealEstate.org.

There has been a great deal of real estate news making headlines lately, so if you want the latest scoop here you go:

1.  Bank of America is about to launch deed for lease program. After much controversy over this type of program, it seems B of A is going to jump into the deed for lease program arena. The program will target underwater homeowners, who are in danger of foreclosure, and will provide an alternative that allows them to stay in their homes: the homeowner turns over the deed to the property, and in turn gets to rent the property back as a tenant, at current market rates. The former homeowners would be given one year leases with options to renew. There are many questions as to whether this program will work, and whether it is good for the housing market. We will just have to wait and see. Stay tuned for more on this topic.

2.  Bank of America is offering principal reductions up to $100,000. Sound too good to be true? It may well be – the requirements are very specific and do not apply to Fannie and Freddie loans. Your loan has to have originated with Countrywide AND you have to have been 60 days delinquent as of January 31, 2012. For more information click here.

3.  New study finds buying is cheaper than renting in 98/100 major U.S. cities. According to a study by Trulia, it is more cost-effective to buy rather than rent in many places. This is due mostly in part to the rising rental rates and the flat housing prices – combine that with the extremely low interest rates which make now a great time to buy. Buying rather than renting can also avoid other potential headaches, such as finding properties to rent (a big problem in my area), or the surprise of a landlord facing foreclosure. For more details on the report click here.

4.  Best February for home sales in 5 years. Yes, last month was the best February for resale homes of the last 5, according to the National Association of Realtors. Combined with a nice sale number in January, the year seems to be off to the best start since 2007. Hopefully this good news will continue.

5. Assets of 5 California mortgage companies are frozen by federal court. This came after investigations were opened against five California mortgage companies for fraud in scamming homeowners facing foreclosure. All the companies were owned by Sameer Lakhany, who apparently charged customers up to $10,000 for legal advice and forensic audits, encouraging them to join lawsuits against their lenders for fraud.

6.  The blame game – are you surprised? The FHFA (Federal Housing Finance Agency) is claiming that the lengthy foreclosure timelines are the fault of state laws. These laws have been enacted by different states in order to protect homeowners, but the FHFA claims they are instead delaying foreclosures, which hurts neighborhoods and the homeowners in the long run. What do you think?

Thank you to Roxanne Kelemen, with Advantage Title for the above information!

There has been a great deal of conflicting news in the real estate industry as of late: it’s a great time to buy, we haven’t hit bottom, the market is on the way to recovery, we are heading for another dip, distressed property sales are at an all-time low, there is a load of shadow inventory and another wave of foreclosures coming, prices are going up, prices are dropping…it’s enough to drive anyone crazy. So what are you supposed to believe?

First of all, it is important to provide one major caveat, and the premise for which you should base all opinions when focusing on the latest housing news: FOCUS ON THE HYPER-LOCAL MARKET. What is going on in the Cincinnati, Ohio housing market really has no relationship to what is going on in San Diego’s housing market. If we keep this premise in mind, it will be much easier to decipher all the jumbled reports and understand whether buying or selling in your specific area is a smart move or not.

Recent statistics released by the National Association of Realtors (NAR) demonstrate the confusion and the need to focus on your local market. NAR reported that while existing home sales increased in January, national median existing home prices were down in January compared to the previous January. Many people believe that the reports indicate prices are going down, but this is not necessarily true in all markets – in fact, it is to the contrary in many areas.

What the reports fail to explain are twofold:

1.  Focusing on median price is not realistic. The median price is not a valid way to measure sales, especially between different areas. If we focus on median price across the country we will never get a true sense of what is going on in our own markets – the median price on one city can be completely different from another. What we need to focus on in our individual markets is the sold price per square foot, which is a better indication of comparable values.

This is evident even within counties, such as San Diego. There is no comparison between, say, Rancho Santa Fe and Chula Vista median sales prices. Certain areas like Del Mar have not been hit hard and we are seeing increased prices and demand there, whereas some other parts of the county have not been so lucky. If you are selling a home in Del Mar it doesn’t make a difference to you what the median sales price in the county is – the only important information is what is selling in Del Mar.

My general rule of thumb is to not even pay attention to national median home price analyses, other than to get an idea how the housing market might be effecting the national economy. But if you are selling or buying a home, your agent is not going to take those statistics into consideration.

2.  The report focuses on a traditionally slow sales month in the housing market. With the Spring months ahead – which usually mean more inventory and more sales, focusing on January as any indication of what is to come is not realistic. January is not typically one of the busier times of year in housing, since holidays just ended, it is winter, people are getting back into a routine. It is understandable to compare market data from one year to another, but those numbers are not likely going to influence a buyer’s decision to buy, nor a seller’s decision to sell if they need to do so.

The best advice I can give is to take all the conflicting news you hear with a grain of salt. If you really want to understand what is going on in your market, you need to connect with a local, experienced agent who truly understands that market. He or she can provide you with detailed information that will truly impact your buying and selling decisions.

There are times in any business where one must laugh at some of the antics that go on behind the scenes, some of the unprofessional things others in the business do and say. We have all been there, no matter in which field you work….I am sure you can conjure up a few times you were left scratching your head over something a colleague did. The real estate industry is no exception, and in fact I think there is even more room for inexcusable behavior because most agents are independent contractors and do not have anyone looking over their shoulder most of the time.

Listing agents have been made fun of in other blogs for lack of proper grammar, spelling errors, and all kinds of other things. I have to admit despite my shock at the lack of editing, I do find these blogs humorous (albeit sadly so). But there are a few things that REALLY make me question some agents’ professional goals. Here are the top 5 on my list:

1.  Listing a property and being unresponsive. If you list a home, obviously the seller thought highly enough of you to give you the listing…so now you actually have to do some work! Placing a listing on the MLS is an open invitation to people to ask questions. If you are not going to make yourself available to do so, than what are you doing listing homes?! This is one of my biggest frustrations, and I have had to tell many clients, “the listing agent has not returned my calls/emails.” I had one agent just last month who didn’t respond to calls, emails and texts about a property for almost a week! My client finally then wrote an offer, only to be rejected because another had come in during the noncommunicative time. This is not right, folks.

2.  Copying information from similar listings without verification. As agents are aware, when a buyer purchases a home there is a period of due diligence, where the buyer conducts inspections and investigates the property to her/his satisfaction. However, when you are inputting a listing to the MLS, it is so important to get the information right. If you find another similar property in the neighborhood and merely copy that information into your listing, you could be providing false information to buyers. Even though they have time to discover this, doesn’t it make more sense to get it right from the start, so as to avoid wasting anyone’s time, including yours and your seller’s?

3.  Directing agents to a website to book an appointment. In this day and age we are so technologically savvy, and I love that, BUT…real estate is still and will always be a business about people. We are not selling widgets, we are selling more than just a home – we are selling a lifestyle. The more personable and friendly you are, the better it is for everyone. If you want to have your showings scheduled via a website, fine. But I have 2 caveats: make sure the website works properly, AND provide a phone number where the agent/consumer can reach a live individual with questions!

4.  Limiting the method of communication with the listing agent.  I agree that there are times when a quick question can be addressed via email, but there are times when I like to speak with the agent, so I can get a feel as to how the agent works and ask multiple questions, especially if the property is a distressed property. An agent should NEVER limit the means of communication between other agents who may have interested clients with valid questions, as this is doing a disservice to your sellers.

5.  Placing viewing restrictions on the property. I understand there are times when some viewing restrictions must be imposed, such as in the case of tenants, a family with a baby or very young children, unfriendly pets or perhaps a homeowner who works at night and sleeps during the day. But if you want to get the home sold you have to coach your clients about being as flexible as possible. Putting a home on the market and telling agents it is a “drive by only, then submit offer in order to view property” is plain ridiculous and a waste of everyone’s time. Similarly, if you do not plan on letting people in the home, for pete’s sake have your sellers fill out a Instruction to Exclude the Listing from the MLS until it is ready to be viewed, and then place it live! Do what you can do to make the property as accessible as possible.

The real estate industry is not only consumer-centric, but is based on good old-fashioned principles of cooperation. If you want to represent your sellers to the best of your abilities, you and your listing need to be as accessible as possible.