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Archive for the ‘Buyer’s market’ Category

How Hot Can The Real Estate Market Get?

10 Aug

Is real estate in the Inland Empire teetering on the brink of another bubble?  From my recent experience in the last two weeks, you would think that Buyers have lost it.  Now don’t get me wrong, I love being a Buyer’s agent, that is my expertise.  But seeing a home on the market in Fontana for $325,000 receiving 25 offers and selling for $350,000, well that is something!  Some buyers are removing the appraisal contingency to make this work.  And this is just one example, it is happening in every neighborhood, in every price range.

Yes, interest rates are at an all-time historical low and rumors have it that they will go up next year after the election.  Who knows?  I heard Target sold out their inventory of crystal balls.

Ok, maybe it makes sense to overbid on a home that used to cost $450,000 a little over 5 years ago and can now be sold for $100,000 less.  If you can get a 3.5% fixed rate interest loan for 30 years on that, then you are set!

Real estate is supply and demand.  The other factor driving up home prices is the lack of available homes for sale.  If you have 10 homes in the best school district for sale and you have 100+ buyers wanting to buy it, well need I say more?

If you are in the market this summer, I think my best advice is to not get discouraged and be prepared with your loan approval in hand.

 

 
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Posted in Buyer's market, Homes For Sale, market value, Real Estate Update, Seller's market

 

The Buyer’s Love Letter

31 Jul

The Summer of 2012 is getting hotter every day in the real estate market!  Almost every home for sale today is experiencing multiple offers sometimes up to 20 offers in a week!  Interest rates are around 3.5% and inventory is in short supply.  Buyers know that if they don’t get in on this market, prices and interest rates will go up and they might not be able to afford their Dream Home!

Recently I wrote an offer on a Standard Sale for a very well qualified Buyer.  I already knew that there were multiple offers on the property.  2 offers were all cash, 3 were FHA offers and 2 were offers using conventional financing with 20% down payment.  So how did I get my offer accepted over all the others?

The Buyer’s Love Letter!

Sounds corny?  Well, it works!  I asked my Buyers to write a letter to the Seller describing who they are and why they wanted to purchase the Home.  In this case, the Buyer included pictures of themselves and their dog.  They explained how they fell in love with the house when they walked through the door.  They also went on to say that they were expecting in the Fall and could see themselves raising a family in the Home.

It turns out the Sellers had in mind their idea of perfect Buyers for their beautiful Home and guess what?  The Buyers matched the profile completely!

Now without the letter, the Sellers would have just seen another offer on their dining room table.  The Buyer’s Love Letter put a “face” on the offer.  We had our offer accepted right away and closed escrow with both parties feeling extremely good about the sale.

Real estate over the last 5 years has been a drag.  Smelly, trashed bank owned houses and “drive by only” short sales have made Buyers and Realtors crazy.  It’s about time that the market gets back to a more realistic place where there are “real” Sellers that care about their Home and neighborhood, not just the bottom line on a bank statement.

If you are a Buyer writing many offers on many houses, you just might want to use this technique.  Like I tell my Buyers, “There is a Home for everyone” but sometimes you need a little edge over the competition.

 

 
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Posted in Buyer's market, Escrow, FHA, Home inventory, Homes For Sale, Real Estate Update, REO, short sales, Uncategorized

 

What is a Final Walk Thru?

14 Jul

The final Walk Thru or final inspection occurs about 5 days before the close of escrow.  The Buyers and the Buyer’s agent conduct the walk thru and sometimes the Sellers and Seller’s agent are also in attendance.

The purpose of the final inspection is to satisfy the Buyers regarding the condition of the property.  The final inspection form that is signed by the Buyers and Sellers states:  Buyer and Seller understand and agree that unless otherwise agreed in the prior contractual agreement between Buyer and Seller, a final inspection is not a contingency of the purchase/sale.

Furthermore, the form states that the Buyer acknowledges that: (1) Property is in substantially the same condition as on the date of acceptance of the offer to purchase/sell and (2) Seller has completed any repairs, alterations, replacements or modifications as agreed to by Buyer and Seller.

The final inspection is also a great time for Buyers and Sellers to talk about things like: how to operate the sprinkler system, what day is trash picked up and what are the neighbors like?

 

 
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Posted in Buyer's market, Escrow, FHA, market value, Real Estate Update

 

3 Secret Ways Buyers Can Get Their Offers Accepted

28 Jun

It’s a frustrating time for Buyers in today’s real estate market.  But here are 3 ways to get your offer accepted by a Seller.

1.  Offer more than the list price.  What?  That’s not a secret!  What I’m talking about here is not $10,000 more just try $500-1000 more.  It is worth a try and should make the Seller happy.  After all, your mortgage lender will send out an appraiser on your behalf and that small increase in price could be justified with today’s rising prices.

2.  Work with a well respected Buyer’s Agent and Mortgage lender.  When thinking of hiring a Buyer’s Agent, check with sites like www.Redfin.com to read reviews of local agents.  Interview several agents and don’t forget to “google” them.  An agent with a good reputation in the real estate community will be one that writes a strong offer and is known for closing escrows.   I have a local lender that I have used for about 10 years.  He is pro-active and will actually call the listing agent shortly after the offer is made and verify that the Buyer is well qualified and that he is available to answer any questions during the escrow process.  What a breath of fresh air when many times the lender cannot be reached.

3.  With all the short sales and bank owned homes on the market in recent years, it  has lead to a market place that was not personalized.  Offers have been emailed or faxed off to listing agents with little regard as to who the Buyer is.  With more standard Sellers coming in to the market, I think the time is back when a previously well used tool can be used again- the Buyer’s Love Letter.   I ask my Buyer to write a brief letter to the standard Seller telling them about who they are and why they want to buy their home.  If nothing else, it will usually produce a counter offer and maybe a sale!

 
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Posted in Buyer's market, Homes For Sale, market value, Real Estate Update, Seller's market, total listings

 

Real Estate – Myths or Facts?

25 Jun

Myth or Fact?  A Seller will always choose an all cash offer over an FHA or conventional loan offer.

Myth – Many all cash offers now are low offers.  Investors are usually the all cash buyers and they are still looking for a “deal”.  In my opinion, an offer from a First Time FHA Buyer should be given first consideration.

Myth or Fact?  If my offer is in backup position, I will never get the house.

Myth – There are always reasons that an accepted offer can quickly go sour.  The appraisal might come in low, financing for the buyer might not work out or the first buyer can get cold feet.  Be happy to be in backup position, you might get a call from your agent with good news that the first buyer’s offer didn’t work out.

Myth or Fact?  I don’t want to look at short sale homes for sale – it will take forever to close escrow.

Myth – As of June 1st, there are new rules in place that require the lender(s) involved in a short sale to act promptly – within 30 days.  Of course, your agent should still be diligent in asking the right questions of the short sale listing agent such as:  How many loans on this home and who are the lenders, also does the seller have a hardship and have you started the short sale process?

Myth or Fact?  I have a letter of approval from a direct lender and my money is in the bank, will I be able to compete in the real estate market for a home?

Fact – You are in the best position because you are fully prepared – Congratulations!

 

 

 
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Posted in Buyer's market, FHA, Home inventory, Homes For Sale, market value, Real Estate Update, Seller's market, short sales

 

5 Things Home Buyers Need To Do Today

05 Jun

The Summer buying season is here…time to get ready!

#1 Talk to your bank, credit union or a mortgage lender and get approved for a loan.  So many Buyers think they can skip this step until they find a house.  Getting approved and knowing what your monthly payment will be is the best thing you can do for yourself.

#2  Have your Down Payment and closing costs saved in the bank – at least 3.5% down payment for an FHA loan – more is better!   If you are lucky and receive gift money from Mom and Dad, be sure it is documented.

#3  Find a Buyer’s Agent – go to Open Houses, go online,  get referrals from friends & family.

#4 Keep current on all bills and don’t buy anything on credit while you are in the market.

#5  Sit down and talk with several Realtors and pick One!  After all, you want someone on your side when you are shopping for a Home!

The Buyers who are the best prepared are the ones having their offers accepted at this time so don’t be left behind!

 
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Posted in Buyer's market, Home inventory, Homes For Sale, market value

 

Buyer’s Agents – Do You Need One?

02 Jun

The Summer of 2012 is here and the real estate market looks like it will be a challenge for buyers.  Why?  The inventory is extremely low and investors are still trying to grab the best deals for themselves.

Home Buyers have had a pretty good time in the last 3-4 years as we have seen prices dropping, more homes on the market and homebuyer’s credits from the government.  But all that has changed as of the Spring of 2012.  Prices are heading up in most cities of the Inland Empire.  Inventory of homes for sale is shrinking and there are no more homebuyer’s credits.

So what should a buyer do?  Well, with interest rates hovering around 3.75% which is amazing, I say buy if you can!  First and most importantly, get approved for a loan.  The interest rates are low but will your credit score allow you to get that good rate?  Find out first and then when you have your approval letter in hand – find a Buyer’s agent!  A Buyer’s agent will be working for you.  If you see a sign and call on it then you will be dealing with the Seller’s agent.  That agent has a signed contract with the Seller not with you – they represent the Seller.  So why not have someone represent you?

Just like a Seller will interview several agents before choosing one, a Buyer should do the same.  Go to Open Houses, ask friends and family, research online.  Sit down and talk to Buyer’s Agents and ask questions.  Find out if you are a good match – does the Buyer’s agent get you?  It’s important that they do, after all you will be working with this agent for 2-6 months or more, so choose wisely.  A good Buyer’s Agent is worth it!

 

 

 
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Posted in Buyer's market, Homes For Sale, market value, Real Estate Update, Seller's market, total listings

 

Face to Face – is it still the best way to do business?

13 Feb

For the last week I have been driving past an apartment building on my way to the office with a For Rent sign in front.  An older gentleman in a cowboy hat is sitting on a folding chair next to the sign.  I’ve seen him there in past years but this time I had to stop and talk to him.  I wanted to find out more about him and his way of doing business.

I introduced myself and as I expected, he is the owner and builder of this building with six apartments.  He’s retired and likes to meet the people who will eventually rent from him. He showed me the apartment and we had a great talk about real estate.

Very refreshing!  This is the way real estate used to be done – face to face.  When I received my real estate license 15 years ago, real estate agents would “present” offers to the Sellers in person.  Of course there were no cell phones and email was just becoming popular.  Now days offers are emailed, scanned or faxed back and forth with buyers, sellers and agents never meeting.  Ok, I admit the world works faster now but sometimes I wish I could present my offer to the Seller so that my Buyer would have their offer looked at in a better light.  Investors are snapping up properties that in my opinion should be going to first time buyers.  The investors have cash and “cash is King” so they say.  My buyers want a piece of the action!

 
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Posted in Buyer's market, Escrow, FHA, Homes For Sale, market value, Real Estate Update, Seller's market, Uncategorized

 

We Have An Offer!

23 Jan

This is such an exciting thing to say to a Home Seller!  All the hard work has paid off.

As a listing agent, the first thing I do is verify all the information on the offer.   The source of funds for the deposit and down payment should be a part of the offer package that the Buyer’s agent has sent over.   A letter of approval from a bank or direct lender should also be in the offer package.  A call to the lender will confirm the ability of the Buyer to purchase the home.  The lender has verified the Buyer’s funds and FICO scores and is willing to give a loan to the Buyer based on the information they have obtained.

With the Buyer’s qualifications verified the offer becomes valid.  The next thing to check are the terms of the offer.  How much is the Earnest Money Deposit (EMD)?  3-5% of the sales price is acceptable.  The length of escrow is important – 30 to 45 days is the most common.   Does the Buyer want the Seller to contribute to the Buyer’s closing costs?  Does the Buyer want a termite inspection and clearance?  What other reports or services is the Buyer asking the Seller to contribute?  And of course, what is the dollar amount offered?

Once the offer is reviewed by the listing agent, a net sheet can be prepared.  The net sheet tells the Seller what amount of money they will walk away with from the sale of their home to this Buyer’s offer.   After all this information has been gathered, a meeting as soon as possible between the Sellers and the listing agent is suggested.  You can strategize with your Realtor and decide if the offer is good enough as it is or if you want to counter offer any of the terms of the Buyer’s offer.  If the offer is not quite what you had hoped for in terms of dollar amount, length of escrow, etc.  don’t fret – Counter offer.

On the other hand, you might have several offers to review.  Now that is a nice problem to have.  You might want to pick the offer that is the highest dollar amount – but will it appraise at that amount?  Maybe you were home when one of the Buyers toured your home and you have a “gut” feeling that they are the right people to buy your home, then go with it.

 
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Posted in Buyer's market, Escrow, FHA, Home inventory, Homes For Sale, market value, Real Estate Update, Seller's market

 

How Many Homes are for Sale?

19 Jan

Its been a while since I posted the number of homes for sale in the Inland Empire/Foothill corridor area of Southern California.  We are two weeks in to 2012 and the news is that home sales are up.  Is inventory up too?  Well not yet but we are about 6 – 8 weeks from the start of the Spring selling season so let’s take a look at how many homes are for sale right now. Why is this important?  For the same reason you get a checkup at the doctor’s office, it’s good to know how healthy you are.

Upland has 207 homes for sale – 61 are short sales and 29 are REO’s (bank owned)

Rancho Cucamonga – 454 homes for sale – 220  short sales and 47 REO

Ontario – 377 homes for sale – 199 short sales and 52 REO

Montclair – 56 homes for sale – 28 short sales and 3 REO

Fontana – 574 homes for sale – 301 short sales and 67 REO

Claremont – 89 homes for sale – 21 short sales and 5 REO

La Verne – 86 homes for sale – 26 short sales and 7 REO

Pomona – 355 homes for sale – 175 short sales and 47 REO

San Dimas – 99 homes for sale – 29 short sales and 11 REO

Total homes for sale – 2297.  Short sales – 1060 and REO – 268

Overall, 46% of homes for sale today are short sales and only 11% are REO, 43% are standard sale.

But wait, didn’t the banks foreclose on 1000′s of homes in southern California the last week of 2011?  Yes, but they have not hit the market yet.  At the end of the 1st quarter we will take another look at the numbers.  Real estate has always been a numbers game,  by keeping track of the numbers we will have a good idea about the health of the real estate market.

 

 
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Posted in Buyer's market, Escrow, FHA, Home inventory, Homes For Sale, market value, Real Estate Update, REO, Seller's market, short sales, Title, total listings