RISMEDIA, October 17, 2009—(MCT)—You’re thinking of selling—but not just yet. Let’s say you’ve got a five-year plan to prepare an older, lived-in house for sale.
Maybe you’re faced with tattered carpets, battered appliances and dingy paint. Or maybe we’re talking about truly scary problems, such as asbestos, underground oil tanks or leaking roofs.
What should you take care of first? What can wait? What can be ignored altogether? And how do you keep costs under control?
“Basically what we’re talking about is good, solid preventive maintenance on your home,” said Barbara Weissmann of Friedberg Properties in River Vale, N.J. She recommends that homeowners looking at a sale down the road hire a home inspector to check out the house. “You’re looking to discover defects that you can fix over time,” she said. She and other experts say it’s possible to get a house ready for market without spending a fortune, especially if you have time on your side. And if you’re going to fix up the property anyway, Weissmann said, “why not do it several years in advance so you can enjoy it?”
The first jobs to tackle include anything that’s a danger to your health or the house’s future. If the roof is leaking, for example, that will damage the ceiling, walls and floors below. Funky wiring or leaky plumbing? Deal with it sooner, not later. “The biggest killer of a home’s value is no maintenance,” Weissmann said.
If there’s flaking asbestos insulation on the pipes, that’s a health hazard, and can also delay or kill a sale down the line. Don’t try to remove it yourself; get a licensed contractor.
You should also make sure you have working smoke and carbon monoxide detectors. Check with your town; some require that at the time of sale, the alarms must be wired into the home’s electrical system, a job that requires an electrician. Other municipalities will accept battery-operated alarms. Either way, you also want these in place for your own safety, along with a fire extinguisher in the kitchen.
When you’re ready to sell, the buyer will generally require that certain major issues be addressed. Better to handle them now than risk delaying or losing a deal later. Aside from asbestos, another big environmental concern is an underground oil tank, which can leak. Jeana Cowie, a RE/MAX agent in Oradell, N.J., recently advised a couple who plan to sell in a few years to deal with the tank now. “I felt that buyers will skip looking at the home because of oil heat,” Cowie said. “And a new gas furnace is a huge positive for all homes.” Maybe you’ve already dealt with the oil tank. But if it was only abandoned in place, be prepared: a buyer will often seek to have it taken out because of concerns that the job was not done properly, said Louis Chapman, a real estate lawyer in Wayne and Teaneck, N.J.. You might want to have it removed before putting the house up for sale. Check for radon gas and deal with it if it’s there; this is something a buyer will also insist on. Try your state department of environmental protection for testing and correction companies.
Basement moisture often is an issue in home sales, said Dominick Laurita of Interstate Home Inspections in Califon, N.J. It can lead to mold, which can scare buyers away. The most common cause: gutters that aren’t draining rainwater away from the house. “It’s a simple fix,” said Laurita.
A termite problem also could derail a sale, so you want to act quickly if you find evidence of that. Though inspectors can’t see termite damage hidden behind walls, the insects sometimes leave visible trails. Keep the paperwork on all these jobs to show an eventual buyer.
Once you get past the most pressing projects, there are a cluster of jobs where you have to weigh the benefits against the costs. In general, home sellers get back only 60% to 80% of the money spent on home improvements, according to Remodeling magazine. “You’re not getting a dollar back for every dollar you spend,” Weissmann said. “Don’t do any remodeling whatsoever, but anything that has to be replaced should be replaced,” said Dick O’Connor, a Dumont, N.J., real estate broker. “You can spend $50,000 to remodel and get only $30,000 back. Just be sure everything is in working order.”
Michael Fitzpatrick, a Hackensack, N.J., real estate lawyer, said it’s okay to leave some issues to be handled in a negotiation between the seller and buyer, rather than spend a lot to upgrade the house before you even put it on the market.
Most experts recommend against major kitchen or bath renovations. But less ambitious upgrades, such as replacing scratched countertops or outdated appliances, could make sense, they said. “You’ve got to make it look good,” said Maria Rini, a RE/MAX agent in Oradell. “But the spruce-up bill can be a lot less than you imagine.”
When it comes to cost-effective fix-ups, most housing experts have three favorites: clear out clutter, paint the walls and rip up old carpet. If the wood floors under the carpet are in good shape, great; otherwise, they can be refinished at a cost that typically ranges from $1.50 to $3 a square foot. Bob Olson, a contractor with Home Resources in Ridgefield Park, N.J., said updating doors, moldings and trim can give a home “a fresh new look” at a reasonable cost.
Improving the landscaping, especially the front yard, is crucial. But it doesn’t have to look like a manicured estate. “Clean up the flowerbeds and trim back the bushes to expose the house,” Rini said. Plant flowers, especially in the front, for curb appeal, advised Barbara Ostroth, a Coldwell Banker agent in Oradell. In winter, you can plant cabbage plants with colorful leaves.
If your furnace or hot water heater dies, obviously you must replace it. If those items are old but still working, however, most real estate experts advise that you leave them in place and adjust the home price to reflect their age. “If the heating system is old but works, don’t touch it,” O’Connor said.
One option is to buy a home warranty when you’re ready to sell. A warranty “is a great way to overcome buyers’ objections to older appliances, pipes, electric systems, furnaces and hot water heaters,” Ostroth said.
New, energy-efficient windows? That’s a costly job that many sellers would rather just leave to the buyers, even it means getting a lower price for the property. “If you’re getting out of the house you would almost never redo the windows, unless they’re rotted through,” Rini said.
If you decide to renovate a kitchen or bath for your own enjoyment, keep resale in mind. “Try to pick something that is salable. Keep it neutral; don’t put in a green countertop,” said Margrit Vogler of Margrit Vogler Properties in Oradell.
Finishing a basement could be worthwhile if the house is small and there’s no other family room or play space for the kids. But otherwise, most real estate advisers recommend just tidying up instead, by throwing out clutter and painting the walls and floor.
More San Diego Real Estate articles at Gary Giffin web www.GaryGiffin.com or search for San Diego Real Estate at Gary Giffin MLS search www.SanDiegoHomeSold.com
RISMEDIA, October 16, 2009—MBA expects economic growth to continue through the rest of 2009 before slowing in the first half of 2010. Unemployment is expected to climb to 10.2% by the middle of 2010 before beginning to moderate as economic growth resumes sustained growth in the second half of the year.
Mortgage originations should reach $1.5 trillion in 2010. Modest increases in home sales should drive purchase originations but refinance originations are expected to decline as mortgage rates rise.
“The recession is behind us, but the effects of the recession will linger for some time in the form of higher unemployment, and lower levels of business investment and home construction. One of the big questions regarding growth will be the behavior of consumers. The large losses of consumer wealth in the form of reduced home values and stock market losses, as well as the absolute losses of income resulting from unemployment, reduced employment and the fear of unemployment have constrained consumer spending,” said Jay Brinkmann, MBA’s chief economist and senior vice president for research and economics.
“Timing of the economic recovery is very much tied to the growth in consumer spending. In addition, the effect of the bulk of the federal stimulus package, particularly the construction components, is not expected to be felt until 2010.
“Perhaps the biggest unknown is the level and volatility of interest rates. While the lack of inflation, high unemployment and excess capacity in the economy should hold interest rates down, there is a lot of uncertainty regarding rates immediately following the termination of the Federal Reserve’s purchase of mortgage-backed securities. No doubt the Fed will do its best to minimize adverse effects, but the elimination of these purchases will put upward pressure on all long-term rates as well as the spread between mortgage rates and Treasuries. The size of any resulting rate move will largely determine the size of the refinance market.”
Following are the key points of the latest MBA forecast:
-Real GDP growth was negative in 2009, with the economy contracting by around 0.5% resulting from sharp drops in the first half of the year followed by growth in the second half. Growth is expected to be about 3% in 2010.
-The unemployment rate will continue to increase from the current level of 9.8% to about 10% by the end of 2009 and peak at 10.2% in the second quarter of 2010, before declining slowly through 2011.
-Fixed mortgage rates are expected to average about 5% in the fourth quarter of 2009 and increase to 5.6% by the end of 2010.
-Total existing home sales for 2009 will end up about 2% higher than those for 2008. Existing home sales are projected to increase further in 2010, increasing by about 11.2%.
-New home sales for 2009 will be down by about 18% relative to 2008. Sales seemed to have bottomed in the first quarter of 2009 and have been rebounding modestly since. For all of 2010, new home sales should post an increase of about 21% from 2009’s very low levels.
-National average home price declines should abate by early 2010, but will vary by state and home value. The demand will be highest for entry-level homes.
-Purchase originations for 2009 will be $718 billion, about 2% below the 2008 level of $731 billion. Purchase originations should rise about 12% in 2010, as existing home sales recover and home prices stabilize.
-Refinance originations will end 2009 at $1.245 trillion, up about 60% from $777 billion in 2008. Refinance activity will likely decrease in 2010 to about $745 billion as mortgage rates increase
More San Diego Real Estate articles at Gary Giffin web www.GaryGiffin.com or search for San Diego Real Estate at Gary Giffin MLS search www.SanDiegoHomeSold.com
$8,000 Tax Credit’s Hoops Frustrate House Hunters
RISMEDIA, October 16, 2009—Mary Shanklin (MCT)— This summer, Brian Smith decided he should buy a house. Prices were at record lows; “for sale” signs were common, and, most important, he could get a tax credit of as much as $8,000 for first-time buyers if he bought before December. But four months later, after looking at more than 40 houses and condominiums, Smith quit his search in frustration.
“Honestly, my heart was so broken,” said Smith, an associate at a financial-investment company. “I hate that I am going to miss out on the tax credit. But it’s better to wait and get the place you need and want than to get a place and not be happy with it.”
As the Nov. 30 deadline nears for the first-time home buyer tax credit, no hard numbers suggest how many buyers are in Smith’s position. But interviews with real estate agents, lenders and buyers suggest that the number of first-time buyers who are encountering challenges is rising.
At least some are learning they must play by a whole new set of rules from just a few years ago. Stung by a real estate meltdown fueled with free-flowing mortgages and runaway prices, regulators have reacted to the downturn by forcing lenders to be stingier with loans.
Buyers in Orlando, one of the hardest-hit markets in the country, must compete with multiple offers on bargain properties. Short sales can take months to finalize. Foreclosed houses often need repairs that disqualify them from federally backed mortgages. And, amid the free-falling prices, deal-killing appraisals often fall short of sales prices.
Smith found monthly fees on the condos he was interested in would have cost more than mortgage payments. He endured a trail of “junk” houses that needed new roofs and other repairs. Some of the foreclosed properties had no power, and he had to view them by flashlight or cell phone light. And finally, the four-bedroom pool home he wanted the most failed to meet federal lending rules.
“In a nutshell, it’s a whole different world out there,” said Judi Northrop, the Equilliance LLC loan officer who worked with Smith. She said he was a great candidate for a mortgage, but the days of someone with a pretty credit score skating through the process are over. Now lenders want documents to address every note in a mortgage application.
The real estate industry continues to hope that the tax incentive will revive the sagging market. A study released earlier this month by the Fisher Center for Real Estate and Urban Economics at the University of California showed the credit has spurred sales. The supply of homes priced at less than $300,000 decreased by 26% compared with a year ago; and the amount of homes priced within the $300,000 to $500,000 range dropped by only 18%. Study author Kenneth T. Rosen, lead researcher on the study and Chairman of Rosen Consulting Group, credited the federal tax break.
In the Orlando area, it’s not clear how many first-time buyers are hitting snags while investors and others scoop up bargains. Though sales overall for the year are up 45% from last year, the percentage of home sales with prices from $300,000 to $500,000 grew more during the last year than home sales under $300,000, according to a review of data from the Orlando Regional Realtor Association. Investors are definitely making their mark, said Les Simmonds, president of the association. “Multiple offers are there because investors are getting back in the market,” Simmonds said. “Traditional buyers coming in are going to find they’re in that mix with those bids. The frustration is understandable.”
Until the tax credit emerged, buying a home had not been on Smith’s to-do list for a long time. In 2002, he considered purchasing a house but “chickened out” after declines in the stock market. For years, he rented from a roommate. Smith, who was earning $39,000 at his job in Maitland when he started his search, targeted homes priced at $100,000—about $28,000 less than the area’s median price. His loan officer said he could have afforded more, but he wanted to play it safe. Early in his hunt, he found a real estate landscape defined by foreclosures and distressed properties, which constitute about half of the sales in the Orlando market. Of the 20 houses or condos he had seen by June, only two had people still living in them.
Northrop recalled that one of the houses Smith zeroed in on was in such rough shape that the drywall was missing in some places and only the studs showed after owners did not complete a renovation. Smith was getting a Federal Housing Administration-backed loan because those mortgages require down payments of only about 3%, compared with 10% or 20% for conventional loans. Those loans also require solid houses instead of makeover candidates.
Troubled house hunts aren’t unique to Smith. Orlando resident Darby Miller said he has found the market so competitive that one house had 12 offers by the time he looked at it. The biggest problem, he said, was that he did not qualify for a state program that would have given him the $8,000 tax credit money upfront to use as a down payment. “At this point, it’s very inconvenient,” Miller said. “I’m going to have to draw from funds I didn’t really want to use.” For Smith, any condos and houses that were in his price range and in good condition quickly disappeared from the bargaining table. Two months into his search, Smith had made no offers. “By the time I’ve said I’m interested, they’re gone,” he said. “Someone got to them before me.”
More San Diego Real Estate articles at Gary Giffin web www.GaryGiffin.com or search for San Diego Real Estate at Gary Giffin MLS search www.SanDiegoHomeSold.com
If you have been looking to purchase or sell real estate, you may have heard the terms sellers’ market and buyers’ market. You may also have wondered what these terms mean and how each market impacts you as a buyer or seller. Here is a brief explanation.
When there are more buyers than homes for sale, a sellers’ market is in effect. As you might expect, the conditions in this market favor sellers over buyers. During a sellers’ market, you will generally find that home prices rise higher than they normally would and that homes tend to sell more quickly.
At other times buyers have more negotiating power. In a buyers’ market there is a surplus in housing inventory. In other words, there are more homes on the market than there are willing buyers. During this period, prices tend to rise more slowly and may even fall. Also, homes typically take longer to sell.
When conditions do not necessarily favor either buyers or sellers, you have a transitional market. This period occurs between moves toward either a buyers’ or sellers’ market. When the market changes, it doesn’t do so overnight. There is a transitional period in between when housing demand and supply are approximately equal and pricing typically stabilizes.
Buying a home in a sellers’ market is a very fast and competitive process. Multiple offers on the same property are not uncommon. Some of these offers may even be above the asking price. To improve your negotiating position as a buyer, have your finances in order, get pre-approved for a mortgage, be prepared to act quickly, and make a strong offer. Even so, don’t be surprised and try not to be frustrated if you still get squeezed out of the market by escalating prices and bidding wars.
If your home is for sale when conditions have created a sellers’ market, your timing is ideal for reaping the rewards of price appreciation. Generally speaking, you also have more leverage in the negotiating process. Remember however, that regardless of your more favorable position in this market, you would be wise to set realistic expectations and remain flexible in negotiations. It is unreasonable to think that a sellers’ market automatically means you will get full price, agreement on all terms, sale within a few days, or sale regardless of property condition. Hold your ground beyond a reasonable point and you could be left with your home still for sale when the market swings in the other direction.
If you are selling when a buyers’ market is in effect, be prepared for a challenge. Buyers tend to be more demanding with higher expectations for seller incentives and concessions. If you need to sell, you must be ready and willing to consider sensible compromises with respect to both price and terms. More aggressive marketing may be needed to attract buyers and extra attention to getting your property in the best possible condition will help improve your competitive edge in the marketplace.
Purchasing a home in a buyers’ market presents you with a great opportunity to find the right home at the right price. Along with this opportunity though comes a different set of potential challenges. With a greater number of homes on the market and bargaining power in your hands, you are faced with numerous choices and the temptation to negotiate on just about everything. To make the process easier, focus and narrow your search based on needs, wants and affordability. And when you find the right home, focus on which concessions are really critical to helping you meet goals and needs.
The housing market tends to cycle between shortage and surplus. Therefore factors that impact supply and demand influence housing market changes. Factors that have a widespread effect include interest rates, economic conditions, and consumer confidence levels. For example, low interest rates, good economic conditions and high levels of consumer confidence can increase the number of potential buyers. Since housing supply tends to lag behind demand, the result is movement toward a sellers’ market. Reverse those factors and buyer demand will most likely slow. When the market reaches the point where there is an excess of properties, a swing toward a buyers’ market generally occurs.
The short answer is: it varies. Either market can last months, sometimes even years. Much is dependent on the driving forces behind the change. Even for experts, forecasting the duration and timing of changes is difficult at best. What is certain, however, is that sooner or later the housing market will change. Neither buyers nor sellers have the upper hand all the time. For you as a buyer or seller, knowing that market change is inevitable as well as which market your area is currently experiencing will give you an informed advantage as you make decisions about buying and selling real estate.
More San Diego Real Estate articles at Gary Giffin web www.GaryGiffin.com or search for San Diego Real Estate at Gary Giffin MLS search www.SanDiegoHomeSold.com
RISMEDIA, October 15, 2009—“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said California Association of Realtors (C.A.R.) President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
The median home price in California will rise 3.3% to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3% to 527,500 units, compared with 540,000 units (projected) in 2009.
“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.
“2009 marked a unique opportunity for first-time home buyers,” Liptak said. “Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the federal tax credit and to expand it to all buyers, not just first-timers.”
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000.”
“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.
“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.
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If you are a 1st time Home Buyer, Real Estate Investor or just need to prepare your home to sell quickly please allow me to help you through your Real Estate transaction.Visit www.SanDiegoHomeSold.com
You will find me to be a careful listener, a prudent advisor, a shrewd negotiator and very familiar with what is currently happening in the real estate market in the San Diego area. I approach each transaction with dedication, integrity and a sense of humor. I work in partnership with each client to ensure his or her success.
I have lived and worked in San Diego for over 25+ years. I currently live in Carmel Valley ,CA and hava an office on Prospect Street in La Jolla. Keller Williams Realty office locations in La Jolla, UTC, Carmel Valley, Rancho Bernardo, Escondido, Carlsbad , Mission Hills, El Cajon & La Mesa. As a local area expert with knowledge of the communities, my objective is to work diligently to assist you in meeting your real estate goals. I'm a standing member with these real estate organizations:
Not only have I learned to work smart in this business I'm not afraid of working hard to achieve my Goals!
San Diego encompasses a large area with many communities. I live in Camel Valley but I do sell homes in these other San Diego County Beach communities: La Costa, Carmel Valley , Cardiff ,Del Mar, Torrey Pines, Rancho Santa Fe, Solana Beach, La Jolla, Fairbanks Ranch all the way up to Carlsbad. My home is right off the highway 56 so I also cover these Golf communities of Rancho Bernardo, Carmel Mountain Ranch, Poway & Rancho Penasquitos. My office is on 848 Prospect in La Jolla. Although I do sell high-end homes I have been currently working with investors and 1st time home buyers to help them buy pre-foreclosure propertys, fixers and Short Sale homes in San Diego County. Some of these investors turn the properties for profit others keep them for the rental income.
Most of my business is by referral so If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call or e-mail me
"Donna and I really enjoyed working with Gary Giffin. He made us feel at ease knowing that the sale of our home was in good hands with a qualified real estate expert. Keller Williams and Gary took care of everything, advertising, holding open houses, displaying the proper "For Sale" signs, following up with prospective buyers and of course selling our home. Escrow was a breeze because Gary handled it all! I would highly recommend Gary Giffin and Keller Williams for the sale of your home."
Mike & Donna Krytek ~ 2221 Vita Rodeo, El Cajon CA ~ Sellers
THE ENGLISH RESIDENCE
THIRTY-SIX O-FIVE-DASH-TEN SAN DIEGO, CA~ Buyers
GARY, JUST A FEW WORDS OF THANKS FOR THE WAY YOU TOOK CARE OF ALL MY NEEDS DURING THE PURCHASE OF MY HOME. YOU WERE ALWAYS READY TO HEAR WHAT I WANTEDAND LET ME CHOOSE THE HOME FROM THE ONES THAT YOU TOOK ME TO VIEW. I KNOWTHAT YOU TOOK CARE OF A HUGE AMOUNT OF THE BURDEN KNOWING THE LACK OF TIME IHAD TO COMMIT TO THE DETAILS. YOU HELPED MY BROKER GET THE HELP THAT HENEEDED TO GET THE LOAN APPROVED AND CLOSED. THE ADDED SURPRISE OF SPONSORINGA HOUSE WARMING RIGHT DOWN TO THE DECORATIONS WAS A TRUE EXAMPLE OF YOURPROFESSIONALISM. MY THANKS TO BOTH YOU & APRIL FOR YOUR COMMITMENT TO MYHOME LIFE AND I LOOK FORWARD TO OUR FUTURE AS FRIENDS AND ASSOCIATES.
MY SINCERE THANKS,
PATRICK ENGLISH
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