Countdown to Home Buying

The market is improving; inventory is low.  Check this countdown list to make sure you are ready to purchase:

1.  Get Pre-approved.  You are pre-approved when your credit has been checked and confirmed and your income, assets and employment history have been verified.  Be careful; some so-called pre-approvals are not worth the paper they are written on.  I have received “pre-approval” letters from lenders and submitted them with offers to purchase only to find out later that the buyer was not able to obtain a loan.  Sometimes it is advantageous to work with loan officers at the bank with which you do business, as they have a vested interest in your continuing to do business with them.

2.  Temper your expectations.  Listing inventory in the Palos Verdes area and the entire South Bay is only 50% of what it was last year.  This means that if you want to stick to any sort of budget, you are not likely going to get everything you want or you will have to be patient.  Have a clear understanding of your needs, wants and wishes, so you will take action when the right home becomes available.

3.  Be ready to compete.  Unless you are willing to purchase a home an outlying area or in need of a lot of repairs, prepare yourself to make multiple offers and compete with other buyers in the market.

4.  Be prepared to act quickly.  When you find the home of your dreams, you need to be ready to rush to get it.  If you do not act quickly and start making preparations right away, you may find yourself left out in the cold when it comes time for your offer to be accepted.

5.  Watch your behavior at open houses.  Everything you do and say when in front of the listing agent (seller’s agent) or his representative will inevitably be shared with the seller and may come back to haunt you when your make an offer the purchase the home.  Both being too excited about the home or nit-picking the condition of the home can put you at a disadvantage at the negotiating table.

6.  Call your real estate agent.  Actually, this step should be first.  Contact me at 310-995-3754 or Katie@katiemuck.com as soon as you would like to begin the process!

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.