Posts Tagged ‘San Diego real estate’
Saturday, June 10th, 2017
Upgraded and bright Santa Fe Ridge home located in South Carlsbad with award-winning Encinitas schools. 3 bedrooms, 2.5 bathrooms, 1953 square feet.
Features include private landscaped courtyard entry, upgraded kitchen and bathrooms, recessed lighting and vaulted ceilings, custom paint throughout, ceiling fans, dual pane windows and sliders, plantation shutters, tile flooring downstairs, new carpet upstairs.
Beautifully landscaped and well maintained spacious, private backyard with inviting patio and grass areas. Furnace and AC installed in 2015, new hot water heater. Located close to everything – shopping, dining, entertainment, schools and highways…and of course, the beach!
For more information and to view more photos please click here.
Open Sunday 6/11 from 1-4 PM.
Call Nicole to schedule a showing at 760-580-7992
Tuesday, May 30th, 2017
People are always asking me how they can save money on home purchases and sales, and legislation under California Propositions 60 and 90 is one of the best ways to do just that. BUT, you have to meet certain qualifications.
Proposition 60 and 90 help home sellers transfer their current residential tax base to the purchase of a new home, saving potentially thousands of dollars in taxes. Proposition 60 is for intra-county transfers (between the counties of San Diego, Orange Los Angeles, Riverside, Alameda, El Dorado, San Bernardino, Santa Clara, San Mateo, Tuolumne and Ventura. Proposition 90 allows for the same advantage with inter-county transfers.
This all sounds great, right? Here is the fine print…in order to qualify:
1. The home owner (only one of them) must be at least 55 years of age. Co-owners cannot both qualify.
2. The home being sold must be a principal residence
3. The present home must be sold and the new home must be equal or lesser market value to the original property
4. If the property is held in a trust the seller will need to be the beneficial owner of the trust, not merely the trustee
5. The replacement property must be purchased or built within 2 years (before or after) of the sale of the current property.
6. “Your original property must have been eligible for the homeowners’ or disabled veterans’ exemption either at the time it was sold or within two years of the purchase or construction of the replacement property.”
As an example let’s say you purchased your home many years ago for $400,000 and it’s current market value is $800,000. If you sell this home and purchase a home that is $800,000 or less, should you qualify under Proposition 60 or 90 you will be able to take your current tax basis (tax on the $400,000 home plus the increases that have accrued over the years) to a replacement home that is purchased for $800,000 or less. This is a huge savings because most counties tax about 1-1.25% on real estate purchases.
For more details on eligibility requirements to take advantage of Prop 60 or 90, click here.
Monday, May 22nd, 2017
Today Zillow announced that it has test-launched a new program called Instant Offers, which it claims will help home sellers and agents. But upon close inspection this program is full of legal caveats for home sellers and agents alike.
The new program claims to offer options to home sellers so that they can avoid traditional marketing such as open houses and photographs. Here is how it works, according to what I read: a seller decides to use the program, which offers 3 options –
1. Sell directly to investor buyers: Without placing the home on the MLS it is offered to investors for purchase – almost like a For Sale by Owner listing. The investors can make an offer. At that point the homeowner can decide whether to take the offer or list on the MLS with an agent the traditional way (Zillow will recommend the agent). Zillow will benefit financially from the agent referral as more agents will want to advertise with Zillow). It is not clear how Zillow will benefit financially when sellers do not want to work with agents, but maybe there will be some kind of agreement between it and the investors.
2. Sell to investor buyers and use an agent recommended by Zillow to assist with the sale: If the homeowner wants to list their home Zillow will recommend one of it’s “Premier Agents.” These are agents who pay Zillow for advertising. Zillow wins here (like above) because 70% of its revenue comes from these agents who advertise.
3. Reject offers and list on the MLS with an agent: Zillow will of course recommend one of it’s Premier Agents (note that Zillow is NOT a broker, rather these agents achieve this status by paying Zillow money to advertise their names and services).
Ok…so you may think this is good – it gives home sellers options. But here are the other points to consider for all home sellers:
1. Potential lower sales price – investor buyers typically do not pay high prices – they offer a quick sale but the catch is that they want to save money. For those who have to sell quickly this could be a good thing, but for those who want to realize top dollar this is not the answer. If you have a home that is a true fixer upper an investor buyer is great as well, but there may be competing investor buyers out there on the open market and you could end up getting more if you have multiple offers, so choosing the Zillow program really puts your back against the proverbial wall.
2. High Fees – People always complain about high fees for selling homes. This program appears to charge a 9% service fee to those who choose to sell to one of the Zillow partner investors. Rather than pay such a high fee for a likely lower net sales price, it’s better to interview professional skilled area agents. Standard commission rates in CA are around 5% but commissions are negotiable.
3. THE LEGALITIES – Selling a home is a legal transaction, with contracts, paperwork and deadlines that are imperative to get right in order to prevent a lawsuit down the road. Although Zillow says it will recommend the seller work with an agent to get through the paperwork process with the new program, sellers have the option to forgo this. This is problematic, to put it mildly.
If I can give you one piece of advice only when it comes to selling your home, it would be this: have a lawyer review all your paperwork, including seller disclosures. If you do not want to hire a lawyer, make sure your agent has a good broker and have that broker review all your paperwork (or better yet, find an agent/Broker who IS an attorney). There are also many highly skilled agents who know what they are doing – find one.
4. Errors and Omissions insurance and lawsuits – Every broker (at least here in CA) must carry errors and omissions (E&O for short) insurance. It protects them in the event of a lawsuit brought by a party to a real estate transaction. Here’s the biggest problem with Zillow’s new program – Zillow is NOT a broker. If a home seller opts into the program and elects not to work with an agent, who is going to assume liability for contractual paperwork? What happens if disclosures are not filled out correctly, or if there is a problem with the home that is discovered after closing? The seller is put in a very bad position.
Agents could be hurt by this new program if they do not advertise with Zillow, as they will not be recommended by the company program. This is a lose-lose for hard-working professional agents everywhere who do not choose to pay money to Zillow, as home sellers in their areas may not even come across those skilled agents if they opt for the Zillow recommended agent.
These and many other questions do not have clear answers and as an attorney I say this program is fraught with potential problems for home sellers. So while Zillow may think the Instant Offer program is a great new “thing,” in my opinion, or until I see otherwise, sellers should steer clear. This program is in a test phase right now and is only available in Las Vegas NV and Orlando, FL.
For more information on the legalities of selling your home please contact a skilled attorney or broker in your area, or feel free to contact me with any questions by responding to this post.
Tuesday, May 16th, 2017
Appraisals are causing problems again for buyers and sellers for the first time in many years. Many appraisals are not coming in at value, despite comparables that support contract prices, leading to problems between buyers and sellers.
Prices have come up quite a bit in many areas in the last few years, San Diego County included. That means that when an agent goes to list a home there are usually comparables to support a higher price. But I keep hearing stories about homes that are not appraising, and it just happened to my buyers as well (even though the offer we wrote and had accepted had comps that supported our price).
So what is a buyer or seller to do if the appraisal does not come in at value?
1. Renegotiate. The first thing to do is to try and renegotiate the contract price. I had a home that appraised $8,000 under contract price (which was completely ridiculous given a smaller home had sold for more just months before). We tried to get the seller to drop the price to the appraised value, or at least meet us in the middle but he would not. He had received multiple offers and there were buyers waiting in the wings who would still move forward with the higher price.
2. Buyer contributes the cash difference. This means that the sales price will remain the same, and the buyer will have to put the difference between it and the appraised value on the table (come up with more money) in order to close. The bank will only lend on the appraised value, but this option allows the buyer to move forward and purchase the home.
3. Challenge the appraisal. This can be done only when there is information that the appraiser did not take into consideration that could alter the evaluation, such as comparable homes that were not reviewed, or maybe a comparable sale that closed immediately after the appraisal was issued which had a higher price, or a sale that closed which was not on the MLS. Or, there may be upgrades to the home of which the appraiser was not made aware. But a challenge needs validation, so the fact that parties do not agree with the appraisal is not a reason for a challenge.
4. Cancel the contract. This is the buyer’s right when an appraisal does not come in at contract value. However, it is important to take into consideration the status of the market – if inventory is low and there is a lot of competition it may be smart to stick with the sale, since getting another contract accepted could be difficult and the buyer could wind up paying even more money for the next opportunity.
In my buyers’ situation they decided to stick with the contract price (after the seller would not negotiate) and pay the cash difference. Since it was only an $8,000 difference this was the smart choice, as they ended up with a beautiful home that likely would have sold for even higher than their contract price had they canceled.
It is important to discuss options with your real estate agent and tax adviser or financial planner if needed. Every situation is different and buyers have to feel comfortable in their decision. But it is tough out there in certain price ranges for buyers right now, and inventory is low, so oftentimes it makes sense to stay the course.
Tuesday, April 18th, 2017
Sellers get ready! Not only are we about to embark on the busy Spring/Summer selling season in real estate – which actually seems to be well under way – but according to Zillow we are entering the best 2 weeks out of the entire year to sell a home.
Zillow reports that the period between May 1-15 is the BEST time of the year in which to sell a home. The study found that homes which sell during this time sell on average 18.5 days faster and for more money (1% more than the average listing).
It is important to note that some areas may have different results, so I suggest contacting an experienced agent in your neighborhood/surrounding areas to find out when the best time to list your home may be, and how the market is doing.
In Carlsbad CA for example, the market is currently very hot. Many homes are getting multiple offers and inventory is historically low, so desirable homes are selling quickly. Buyers are waiting for homes to pop up in certain neighborhoods; I get many phone calls from agents asking if I know of any upcoming sales in a neighborhood in which I have sold many houses.
The bottom line is that if you are considering selling your home, now is one of the best times to do so. There is a healthy buyer pool out there so contact an experienced agent and find out what you need to do to be sale-ready.
Thursday, April 13th, 2017
If you are a listing agent or a seller who has hired an agent to sell your home, this is an important rule that is often ignored by agents – and it can cost home sellers a sale. It is not written down anywhere and is not required, but it is necessary in order to assure smooth closings. What is this rule? Listing agents must prepare reports for appraisers.
As long as I have been listing properties I have been preparing reports for appraisers. The appraiser, who is sent out by the buyer’s lender to evaluate a property that is in escrow, may not know the neighborhood well or even be from the immediate area. He or she also may not understand why a similar home sold for more or for less. Since the buyer’s agent is not allowed to communicate with the appraiser it is in the best interest of both parties that the listing agent take this advice to heart and come prepared.
I have had many appraisers tell me that they did not need me to meet them at the property or prepare anything, but I still do both and I have to say that almost all of them end up spending at least a few moments at the end going through my report with me.
Here is what I include in my appraiser reports:
1. A brief but concise analysis of all comparable sold properties – usually within the last 6 months, comparing and contrasting them to the subject property. I also let the appraiser know if there were multiple offers, as this can attest to the fact that many thought the property value was accurate.
2. A list of any upgrades or improvements in the subject property
3. Analysis of any pending sales, including prices I can usually obtain from the listing agents to help
4. A comparative market analysis sheet that lists all the comps and the pending subject property
5. All relevant listing sheets (for each property analyzed)
6. Any relevant sales statistics graphs for the area, and
7. A listing flyer
I have never had a listing that did not appraise.
Every listing agent should be sure to include this report as one of their duties. It is the duty of a listing agent to represent their sellers to the best of their abilities, and this simple step – which usually takes about an hour (more for tricky comparable listings) could make a difference in getting the buyer and seller to closing.
Friday, March 10th, 2017
This seems to be the million dollar question right now as home buyers survey the lack of inventory and multiple offer situations present in many markets. A strong seller’s market and high prices make some buyers nervous. So is it better to buy now or wait?
There are a few very good reasons why now is the time to make that home purchase:
Interest rates are rising – We have already seen this happen and word is they will do so again this year, likely several times. This affects mortgage payments and down payments, so jumping in and securing that lower rate now could be smart. It is also important to note that some lenders are charging a lot more for interest rate lock extensions, so that is something to think about if you have a long escrow period or are pursuing a short sale.
Lack of inventory – Inventory in many markets is still very low – San Diego County included. Many buyers cannot find properties to purchase and when they do there are often multiple offers, especially in the $650,000 and under price range. Cash buyers are out in force as well in many lower range markets, making it even harder for first time home buyers. Being picky is getting more and more difficult – right now is a good time to be preapproved and ready to write an offer once you find a home that meets your criteria. See the home as soon as it comes on the market and submit your best offer right away.
Prices are not dropping as we head into the “busy season” – Lack of inventory is making it difficult as demand outpaces supply. Unless this changes we will not likely see price drops in the busy Spring and Summer months to come. The buyer who decides to wait this period out may find herself down the road with still low inventory and higher interest rates.
Here is an example: A house that currently sells for $766,000 with an interest rate of 4.75% and a 20% down payment would yield a payment of a little over $4000 a month. To get that same payment down the road with a home price drop to $727,000, assuming a higher 5.125% interest rate increase, the buyer would be losing $1585 over 3 years. So even if prices drop 5% and rates increase 3/8th of a percent, the buyer who purchases with a lower rate now will be ahead in the long run.
Uncertainty – Worry about the future and economy is still prevalent among home buyers. Uncertainty about taxes and home write offs, as well as the expected rise in interest rates, make some buyers hesitate to make big purchases. The real estate market, like any market, is cyclical. If you are buying a home with a long term commitment then it is a great time to do so, before there are more rate hikes.
Before you decide whether it is best for you to purchase now or wait, it is important to discuss your scenario with you accountant or financial adviser, an experienced real estate agent in your area and your mortgage professional. Information is power.
Friday, March 3rd, 2017
Home buyers these days have many hurdles to jump through in order to finally purchase a new home, from finding a home, to making an offer in possible multiple offer situations, to actually getting to closing without other issues. One such issue is appraisal – with inventory so low and prices climbing to meet demand it is not out of the ordinary for an appraisal to come in on the low side. But have no fear – there are a few things you can do to keep the sale moving along.
1. Renegotiate price/ compromise. If the home does not appraise there is always an opportunity to renegotiate price with the seller. Either the price can be negotiated down to the appraisal price, or the buyer and seller can agree on a compromise (for example, if the appraisal comes in $10,000 under contract price the parties can split the difference – buyer pays $5,000 more in cash and seller lowers the price by $5,000). However, if the seller had multiple offers there may be another buyer willing to pay that high price just to get into contract, so sometimes a seller will not renegotiate. It is always worth a try though, because if the other potential buyers are getting loans the seller could wind up in the same position.
2. Pay the difference with cash. Lenders are only concerned with the appraisal only because it affects the borrower’s loan-to-value ratio. The lender will only make a loan based on the contractual amount or appraised value.
3. Seller can carry a second loan. If you cannot lower the price and the buyer cannot pay cash over appraisal value, the seller can offer to carry a small second loan to make up the difference. The problem with this is that often the interest rate is higher than normal, but you can negotiate with the seller
4. Challenge the appraisal and ask for another to be ordered. Depending on the type of loan the buyer is obtaining this can be a possibility. If there is a good reason to challenge the appraisal with a conventional loan, say the appraiser was from out of the area or did not know the reasons why comparable properties sold for different prices (maybe your home is highly upgraded or has a better lot or view, etc.), then the appraisal can be challenged and you can ask for a second appraisal. Make sure that you provide comparables and an analysis of their sales to the new appraiser or to the lender – a job that the listing agent should have done (but even if s/he did there could still be other issues that did not bring in the appraisal value to the contract price). Talk to your agent and mortgage professional and figure out a plan that works best.
5. Cancel the sale. If there are no other options available the buyer has the right to cancel the sale without losing any deposits (unless otherwise agreed in the contract).
The bottom line is that there are potential solutions if your appraisal does not come in at contract value, so don’t panic. Make a plan with your agent and mortgage professional and see what you can do. Most of the time there will be a valid solution.
Friday, February 10th, 2017
Real estate agents wear many hats – from negotiator to chauffer to therapist, and that’s just for starters. A real estate agent often must take clients by the hand and walk them through the home search or listing process, as well as the subsequent purchase or sale transaction. But there is one thing that agents need to keep in mind during these busy and sometimes emotional times – responsibility for clients.
Responsibility for one’s clients as it relates to agency comes in many forms – some are spelled out in the ethics code (such as the duty to disclose), and some come from law (such as anti-discrimination, personal injury, tort and criminal law). But many situations with clients fall into a gray area when it comes to responsibility. One of those most important is the responsibility to accompany clients when viewing a property. If an agent does not do so there could be legal ramifications, say for example if an injury or property damage occurs.
Here are some tips to use when showing property to keep you and your clients out of harm’s way and avoid potential legal action:
1. Never let clients visit a property alone. While this seems obvious to many of us, I have read stories of agents giving clients one day lockbox codes or passing along entry instructions. As the representative of your clients you need to understand that this action can land you in hot water – unless you have been authorized by the property owners in writing to allow your clients to enter on their own (and I still would never allow that). Let’s just say there are a handful of legal issues here – from trespassing to other issues of someone gets injured or breaks something, or leaves a door/window open which could allow a thief to access the property.
2. Make sure you stay with your clients as they tour a property. Again, if you allow your clients to wander off it could cause problems. If it is a large property you especially need to stick with your touring clients. Make sure you and they have access to all areas of the property. If your clients have small children and there are potential hazards (steep or dangerous areas or animals, for example), make sure your clients do not wander off alone without permission and without you at their side.
3. Ask the owner or listing agent if you are allowed to access areas about which you are unsure. If there is a part of the property that you are not sure about, ask the listing agent or owner if you have permission to explore there. For example, a guest home, separate structure or animal pen, or flowing water. Oftentimes a listing agent will specify whether such areas are able to be viewed, but if not don’t ever assume.
The bottom line is that if your clients are not in your presence while touring a property, they could end up creating problems or suffering injuries to themselves or their property. If they were being careless and wandering around without permission, they likely will not have rights to recover for injuries suffered. Make sure to establish this right off the bat in order to protect yourself and your clients.
Tuesday, January 31st, 2017
The new housing report was released yesterday by Case-Shiller, indicating that U.S. home prices are still rising. Of course this is really area dependent, but if you are a potential buyer or seller you might feel worried, and justifiably so. Keep reading for important information and advice.
The report covers major metropolitan cities and states that prices in these areas rose by 5.27% in November – above expectations of economists, and also up from the previous month of 5.1%. What does this mean for buyers and sellers? Let’s take a look at some important considerations.
Local markets: Of course these studies are general and tend to focus on big cities, so it is important that you contact an experienced real estate agent in your local market to see what is going on in the area. But, the thing to take away from this data is that prices are not easing up. Combine that with the next factor…
Inventory is still very low: Again, your local market must be studied to get an accurate glimpse and set expectations (your real estate agent can help with this), but using my local North San Diego market as an example I know that this is painfully true. I have buyers who simply cannot find homes, and multiple offer situations in some categories – like properties under $600,000 – are still the norm. With low inventory and prices staying put or rising, a buyer does not benefit from waiting to purchase, especially considering the next factor…
Springtime is coming: Traditionally the “hot” season for housing, spring and summer are just around the corner. But in my view we are already in the heat of things. Hopefully more inventory will pop up as we head into that “busy” season, but honestly I think the entire last year and especially this Fall and Winter, can be considered busy in housing – at least here in San Diego. Waiting until Spring could put buyers in even more of a quandry, bringing an increase in the buyer pool: more competition can drive prices up again.
The National Home Price Index also rose by 5.6% annually – up from 5.5% the previous month. High demand is causing these prices to continue on an upward trend. It is important to note, as some doubters or “bubble-talkers” as I call them, may believe, that these trends are NOT similar to those that occurred prior to the last housing crisis in the early 2000s.
How is this market different than that prior to the last crash?
1. Factors driving prices are not the same. Prior to the crash people were driven by speculation and anticipation of growth. Instead, healthy market factors like a strong job market and low mortgage rates are driving this market.
2. Lending is stricter. Lending requirements are not as loose as they were during the time prior to the last housing crash, so not everyone can qualify for a loan.
3. Demand is high but supply is not. Prior to the last market crash, there is a much lower supply of inventory in most areas. It is not so easy to find property to purchase. Many would-be sellers are afraid to sell, as they don’t know where they will move if there is such low supply and so much demand – so it’s a great time to be a seller if you have the time to wait it out on a subsequent purchase.
The moral of all this information is that if you are a potential seller you are in a great position. But if you have to buy after selling you need to have a “plan B” in place – e.g. stay in a furnished month to month apartment or temporarily move in with a relative or friend will put these people in ideal situations to sell and wait for the right home. But buyers have it a bit tougher – the best advice I can give is to BE PREPARED. Get preapproved, start looking at everything in your price range and desired area – even those homes that may not be as upgraded as you like or in the exact neighborhood you wanted. Do your homework and be ready to pounce once you find that “right” home.