Phillips Ranch, CA

Number of houses sold last month in June 2009 went up dramatically and the buying frenzy continues in July.

Why is it important to hire a agent who is familiar with the area you are buying or selling instead of an out of the area agent who is a trusted friend? The answer may be very simple.

1. Convenience

Is it easier for a local agent to drive 5 to 10 minute or out of the area one to drive 30 to 60 minute to the house for showing? It is more practical to hire a local agent who is nearby due to the showing convenience.

2. Area Knowledge

On top of that, the local agent who specializes in the area knows the neighborhood by heart. They are familiar with the rating of the schools, the crime rate of the area, and where the parks and shopping malls are. Those local knowledge may require some research if the agent is out the area and could be totally unaware of.

3. Pricing Knowledge

A local agent who monitors the real estate market in the area is familiar with the pricing of each home sold on a daily basis. The agent understands the type of buyer for each type of house from experience and can price the house accurately.

There was one bank owned home in Diamond Bar for sale that is located in a extremely busy main street in June 2009. It is difficult to drive in and out of the house due to the street traffic. The same house was sold frequently every few years. It was normally priced about 10% below the market price in the past due to it's functional obsolescence.

It was sold 8 days after it was listed at regular market price. Buyers normally believe bank owned homes are good deals and especially if the value of the property checked out with appraisal site such as Zillow.com. This kind of situation could be easily prevented if buyer is assisted by a competent local agent.

With a good local agent working for you, it can help prevent selling your house too low or buying too high. Therefore, it is to your best interest to hire an agent who is familiar with the area you are buying or selling.

Below is a chart showing the number of houses sold in Phillips Ranch from 2006 to 2009. In April 2009, 7 properties were sold and 19 properties went into escrow. Of the 7 properties sold, 1 is regular sale at bargain price, 2 short sales and 4 bank owned properties.

17 properties went into escrow in March and only 7 were sold in April showing the level of difficulty to close escrow successfully. Unless the property is an outrageous deal like the bank owned or short sales selling 10% to 40% below market, buyers are not that desperate to get the deal through in today's buyer's market.

Transactions could easily fall apart in escrow due to buyer's inability to secure a loan or buyers' change of mind. Unless the escrow is closed successfully, sellers need to psychologically prepared for the worst scenario to put the house back on the market if buyer back out from the deal.

The sales volume is almost double this April comparing to last April in 2008. We are continue seeing market price rebounding rapidly for about 10% to 15% since January.

Since the interest rate is still below 5% for 30 year fix rate loan, it is great time for buyers to secure good deal at low interest rate.

After the passing of the new federal tax credit of $8000 for first time buyers, we are seeing a crazy frenzy of buying in Phillips Ranch and neighboring cities. Buyers with large cash down payment of $100,000 to $250,000 saved in their CD accounts are coming out to make purchases now.

Above is a chart showing the number of houses sold in Phillips Ranch from 2006 to 2009. In March 2009, 15 properties were sold and 17 properties went into escrow.

March sales volume is 3 times more than last March in 2008 and is highest since 2006. We are also seeing rapidly market price increase of 10% to 20% since December 2008.

Since the interest rate is still below 5% for 30 year fix rate loan, this may be the last opportunity for buyers to capture excellent deal with low interest rate.

In a down market where most houses stay unsold, in order to get the house sold successfully, there are 3 important steps for sellers to prepare themselves and the house ready for sale.

I. Treat The House As A Merchandise
Psychologically, sellers need to get emotionally detached from the property and treat the house as a merchandise by making it available for showing as much as possible.

II: Hire A Good Agent
Seller will also need to hire a good agent who is a neighborhood specialist. A good neighborhood agent shall be able to perform 2 tasks.

1. Price the house correctly
Houses with pool and/or view worth about 5 to 10 % more depending on the neighborhood. Houses sitting on the t-junction or bordering the main artery route may sell up to 10% less. Does you agent has that level of market understanding? Will your agent be able to articulate the correct value by supplying comparable to substantiate the claims?

House will not be sold if it is overpriced. Most houses for sale will sit on the market for 6 months until it is expired. After 6 months of down market, it may be huge financial lost for sellers since home value dropped about 25% to 45% in one year depending on the area.

Therefore, it is very important to pay close examination of the value the agent is advising and make sure it is calculated by adding and subtracting the pool, view, t-juntion, main artery route factors into the calculation to ensure accurate assessment of the true market value.

2. Market the house correctly
Check the agent's marketing efforts with his/her other listings. Does the agent take good picture of the house? Is the photo of the houses showing only part of the house but not the whole house? Are the interior photos very dark and make the house look ghostly and undesirable? Does the agent makes good marketing flyers that are informative and pleasant to look at? Compare the marketing efforts of the agents (photos, flyers...) and see which agent's promotion makes more sense to you as a buyer. House will not be sold with poor marketing promotion. Therefore, it is very important to look at this aspect closely when picking the right agent to market your house.

III: Dress Up The House Like A Model Home
Sellers need to depersonalized the house by dressing it in a desirable decor very similar to what they do in the model homes by performing the followings:

1. Paint the house with stong color such as red, blue, green, yellow, black walls to neutral tones such as white, beige, mocha and chocolate colors. It is the same for the carpet as well.

2. Remove the clusters on any counter surface. Leave only couple of decorated items.

3. Maket the house as bright as possible during showing by roll up all the blinds and turn on all the lights.

4. Use a shopping cart test to see if you can push an imaginary shopping cart through the house, remove those excess furniture to the garage that is blocking the hallways so the house will look spacious.

5. Fix all the defects of the house and modernize the faucets and light fixtures. If budget allows, hardwood floor and granite countertop will also be a plus. Those are small upgrades that can bring sellers higher selling price.

One of the houses I sold in 2009, the seller put in $2000 upgrades and sold the house for $30,000 more than what their previous agent was listing the house for. Painting, woord flooring and countertop upgrades are always very good investment when it comes to selling of your house. They works wonders on increase the value of the property.

Once seller is ready to let go of the house emotionally, hire a good agent to price and market the house correctly, and dress up the house like a model home, the property shall sell itself the moment the buyers step into the house!