When Should You Sell Your Home?

Years of experience have led me to believe that the best time of year to put your Palos Verdes home on the market is March through July.   However, I decided I wanted to see some statistics from our Multiple Listing Service to support or dispute my theory.  Unfortunately, the study is not entirely scientific, as I am not able to see historical data about open sales like I am able to see with closed sales.  So, I took a look at properties in escrow as of today, May 17, 2013.  There are currently sixty-five properties in escrow (pending sales).  There were no pending sales in January; there were three in February; only two in March; twenty-seven in April; and thirty-three so far in May.

I recommend listing your home in the months of April, May, or June.  Another very slow month for open sales is August, as many take vacations that month and listing in July may be too close for comfort.

Other factors to consider include the number of competing properties on the market in your neighborhood; whether your home is in marketing condition; and of course, the price you will be asking.  Be sure to look not only at comparable homes that have sold over the last six to nine months, but also those that are currently pending.  Many home sellers believe they need to ask a higher than market price so they will have room to negotiate.  This strategy is not a good idea, as you may never get an offer to negotiate at all.  I think a good thing to remember is that it is hard to under-price your home.  If the asking price is less than buyers and their agents know it is worth, the property will most probably receive multiple offers, often for more than the asking price.   The bottom line is that properties sell at their market value.  Another thing to remember is, “timing is everything”.

 

Boost Your Home’s Value: 4 Projects with the Greatest “Bang for Your Buck”

No matter if the housing market is up or down, you always want to ensure home remodeling projects are wise investments.  According to Remodeling Magazine’s Cost vs. Value Report 2011-2012, there are several home improvement projects that will provide significant enjoyment to you now and could recoup a majority of your dollars whenever you decide to sell.

Beautiful bathrooms:  According to the report, a mid-range bathroom remodel ($16,000) can recoup up to 62% of the investment when it is time to sell…and in the meantime, add significant enjoyment with a new, relaxing retreat.  To start determine which updates matter most and how much assistance you will need for each.

Complex projects, such as structural, electrical or plumbing changes or installing countertops or flooring, may be best left to the professionals.  However, there are many updates you can tackle yourself.  Painting is an easy and ideal do-it-yourself task that can make a large impact with minimal cost.  Similarly, installing new faucets, accessories and showerheads can be simple, even for a novice. 

Classy kitchen:  Once you have updated your bathrooms, the kitchen is a rewarding home renovation that when done moderately can recoup up to 72% of your investment.  Based on your budget, you will need to determine whether to update with a lower-cost laminate or a higher-priced option, such as granite or marble, that can offer an upscale look, added durability and functionality.

Lighting, while functional, also adds a significant style element to a kitchen.  Replacing fluorescent fixtures with recessed cans or pendants will add ambiance and luxury to your room.  Update your old appliances.  Add a splash of paint to the walls and trim for a polished look.  Finish off the counter area with a new high-end kitchen faucet.

Envious entry:  It is the first thing your guests and future home buyers see when they approach your home, so if your front door is not appealing or does not have significant features, it is time for an upgrade.  A new entry door adds instant curb appeal for a minimal price and can recoup up to 60% of your investment.

When choosing a new door, fiberglass options are an ideal choice.  The material resists denting and scratching, is easy to maintain and can make your home more energy efficient.

Wonderful windows:  Similar to the front door, replacing your existing windows with new vinyl windows will give your whole home a new look and feel, both inside and out, and payback of up to 68% of your investment.  As a larger-scale project, this is likely a project left for the professionals.

Look to your local window distributor to refer you to a reputable contractor to ensure your new windows are installed properly.  When it comes to selecting windows, vinyl is an all-around excellent choice.  Unlike wood, vinyl windows resist rotting and do not require repainting.  Unlike aluminum, vinyl windows will never pit or flake.  Plus, you can enjoy a pay off immediately with increased comfort and lower utility bills, while potentially adding significant resale value to your home in the future.

 

Six Paths to Success for Buyers in Tight Markets

In low-inventory markets, some buyers are having a hard time finding a home to buy. There are steps you can take to improve your odds of finding a home at a time when interest rates are at record lows and affordability is high.

One approach is to broaden your search. You should be clear about what it is you want to buy. But, homebuying involves making compromises. Just make sure you don’t give in on the essentials. You need a home that will last you for the long term. Avoid listings with major defects that will be expensive or impossible to fix.

The sorts of features you should be willing to give up, if necessary, are house style, or a large yard, which can be a maintenance drain. If you’re having no luck buying in your first-choice neighborhood, check out the adjacent areas. These could be the next turn-around neighborhoods when the overall housing market improves.

You could also do an about-face and consider condos rather than single-family homes. This might have the advantage of shortening your commute to work.

Ask your agent to cull the inventory of expired, withdrawn, and canceled listings that didn’t sell in the last year or two. These may not have sold because they were priced too high. If the sellers are still interested in selling, and aren’t locked into a lease, you might be able to work out a mutually acceptable price.

Be open to making improvements rather than holding out for a home that’s in move-in condition. Major fixers will probably be snapped up by investors to rehab and resell at a profit. This is a competitive market and not one for novice homebuyers.

However, if a listing isn’t receiving attention because of its dated décor, this could work if you intend to live in the property and not try to flip it for a profit. Be sure to work with an agent who has experience with cosmetic renovations, or consult with a decorator.

You’d be surprised what updated plumbing and light fixtures, new paint, floor finishes, appliances and improving the outdoor living can do to turn a dowdy listing into a comfortable abode. Just make sure you don’t tackle too much. You don’t want to over-improve for the neighborhood, and structural issues are taboo.

Don’t exhaust yourself by bidding on a house you can’t get. A home was recently listed for $985,000. Seventeen buyers made offers. It sold for $1.2 million. Underpriced listings are often bid up in a low-inventory market. Wait to make an offer until you find a listing that’s priced within your affordability range.

Don’t be afraid of accepting a backup offer if your bid isn’t accepted. The transaction fallout rate is pretty high in this market. Keep looking for another listing while you’re waiting to see if the first deal goes through.

All-cash offers tend to win in multiple-offer competitions. To be competitive, try to put yourself in a position to pay all cash. If you have savings you can tap and you can secure a private temporary loan from parents or borrow from a 401(k), you might be able to make a cash offer.

If your parents are providing some of the financing, ask them to write a letter that you can provide to the sellers that confirms your source of funds. This should be accompanied with documentation of the parents’ funds. You can refinance into a conventional mortgage later.

THE CLOSING: If the market where you’re looking is too hot, you can take the watch-and-wait approach. The market is always changing. When inventories increase, there will be more opportunities for buyers.

Go Ahead; Make the Offer

The inventory of homes on the market in the Palos Verdes  is only 40% of the inventory last year; therefore, some homes are getting multiple offers at present. If you find a home you like, make an offer.  My listing partner and I recently put a very desirable home on the market and held it open to the public the Sunday after we took the listing.  We did not advertise in the newspapers, but we put out ten lead-in signs.  We opened at 1PM and planned to close at 5PM.  We had so many people viewing the home that we did not close until 6:30 PM; definitely one of the best open houses ever.  One couple came through and said they wanted to submit an offer through their agent.  They said the house was over priced and asked me what they should offer.  I told them to talk to their agent, as I represent the seller.  Their agent called me and said they might make a low offer or simply wait until the price came down.  I told the agent, “That won’t happen with this property.  It will be sold by the end of the week.”  Another couple came through who really liked the home.  The wife is an agent and I told her not to wait and to make the best offer they could because there were other people interested in the house.  They wrote a good offer and the house sold for near the asking price.  The couple who were waiting for the price to come down were very disappointed and their agent called me urging me to let him know if anything went awry with the accepted offer.  Again, if you find a home you love, make the offer.

I had another listing recently where a prospective buyer asked me to find out what the sellers’ bottom line was because he did not want to go back and forth with offers and counter offers.  I got the sellers’ bottom line and relayed it to the buyer, but he continued to dally.  Another offer came in and I called the dallier.  The bottom line is that he ended up paying a hefty sum more for the home than he would have had he made the offer before another offer came in.

I know that there is still a lot of fear about paying too much for a home in today’s market, but remember that a home is more than just an investment.   Your home is where you will live and not just any home will do. When you find the home that you love, make an offer.

 

Palos Verdes is a Great Place To Live

The Palos Verdes Peninsula is less than a 30-minute drive from downtown Los Angeles or LAX Airport and about 45 minutes away from Hollywood.

A Few Tips for Leasing Your Property

Having owned my own rental properties and having helped many clients rent theirs, I have had some experiences and suggestions that I’d like to share.  A few years back I was screening a tenant for a client who had a lot of investment property.  When I ran the credit report, I discovered that the prospective renter had no credit at all, which surprised me because he was in his forties and was not a foreign national or anything.  I told the landlord, “Al, I don’t think you should rent to this person because having no credit is as bad as having bad credit.”  He said the tenant was in the carpet business and he was going to re-carpet the unit at no cost.  He rented the unit out to the man and his family; they did pay the rent, but guess what?  The carpet he installed was a horrible bright blue color and when they moved out, the landlord had to replace it.  The moral to this story is when a tenant tries to con you, he is probably not the right person to rent your place and also, it is unwise to rent to someone who has no credit.

Another experience was with my own property.  My husband was in charge of making repairs and interfacing with the tenant.  One day when he was over fixing something, the tenant apologized for the stains on the carpet.  My husband said, “Don’t worry about the carpet.  We’re going to replace it when you move out.”  When we went to do the inspection of the property when the tenant was moving out, the carpet was filthy.  I was furious at my husband but mostly at the tenant who said, “So I spilled a cup of tea, so sue me.”  I said to her, “Did you spill a cup of tea all over the condo?”  She said, “Your husband said it was okay because you are replacing it anyway.”  The moral of this story is don’t ever say the condition of the property does not matter; it does.  We found numerous other problems as well but luckily we had enough deposit money to cover most of the damage.  My advice is to always require a security deposit that is two times the amount of the rent or the maximum that is legal in your state.  That way, if they don’t pay the rent and damage the property as well, you might have enough to make repairs.

Speaking of rent, I used to think that putting a late fee of 6% of the rent was a good idea, but now I’m leaning toward not requiring a late fee.  That way, if the rent is not paid when due, the tenant knows they can be served with a 3- day-pay-or-quit notice the day after the rent is due.  Whether there is a late fee or not, always call the tenant if you do not receive the rent on the due date.  That way he will know you care about receiving it on time.  (Many tenants, unfortunately, think landlords are rich.)

If you say you do not allow pets and you become aware of their having a pet, immediately serve the tenant with a 3-day-notice-to-perform-covenant-or quit.  I like pets and I have two cats, but frankly, I do not know how well other people take care of theirs.  If the rental market is decent I would not accept a tenant with pets.

I recommend using caution when renting to a tenant who tries to pressure you into making a decision before you are able to investigate his credit.  I have heard things like, “I’ll pay you an extra $200 a month if I can move in tomorrow.”  It is tempting but always do the proper screening or you may be sorry.

I have shown some properties listed for lease on our Multiple Listing Service that have been left wide open with an open house sign and their is no one hosting the open house.  This could be perilous, because I have been told by my attorney that if a person squats in the property, it may take years to eject him.   My advice is to never leave access to a property when you or your agent is not present.

Another tip is do not get too chummy with tenant.  Renting your property to another is a business transaction and it should stay that way.  It is easier to not pay rent on time or damage a property if you think the landlord is such a good “friend” that he won’t do anything about it.

I want to add that I have had many, many good experiences with tenants and that most treat the property with respect and pay their rent on time.  I recommend working with a good real estate agent who has the connections to rent the property in a short period of time and who can stay at arm’s length and make decisions based on facts rather than emotions.

Real estate is the best!  What other investment can you live in?