Prudential

Getting Your Home Ready To Sell

Presentation is first and foremost when selling a home for top dollar.  Buyers are looking for a clean, spacious home to make their own.  Recall the feeling you had when purchasing your home.  This is the same feeling you want to exude to your potential buyers.  Some sellers have no clue where to start in preparing their home for sale.

John and Megan want their home to sell quickly.  They are a little overwhelmed about how to get their home ready for the big sale.  They hear about Susie down the street that sold her home in less than a month.  Before Susie put her home on the market, her knickknacks made the home look cluttered and the yard was in disarray.  During the open house John and Megan “happened” to drop by the house and noticed how the home sparkled from the manicured landscaping to the open feeling in the home.  They were dumbfounded on what Susie’s agent sold the home for and wanted the same result.

Here are some easy steps to get your home ready to sell:

  1. The first step is usually the hardest.  You must say goodbye to your home.  Realizing the property is no longer your home, but merely a house.  Some things to dissociate yourself is to say goodbye to every room or think about your future home.
  2. As a seller, you need to remove personal objects, such as family photos and family heirlooms that associate you with the home.  Buyers have a hard time seeing themselves in the home when the seller’s possessions are at every turn.
  3. Since your agent will be showing your home to many guests it is always a wise decision to put expensive, easily accessible items in a safe or  better yet a storage facility.
  4. To make your home aesthetically pleasing to the buyer, remove all pieces of excess furniture, knickknacks and other items that are cluttering the overall look of the house.  Consider that you will be doing this eventually anyway, so might as well start now.  If you have not used an item in a year, Goodwill is recommended.
  5. Now it’s time to organize.  Buyers like to snoop around opening doors and such.  In your closet, color organize your shirts, pants, etc along with lining up your shoes.  In the kitchen stack your plates, bowls and even your tuber-ware.  Make sure that you have a place for everything.
  6. After you are organized you will clearly be able to identify the objects that you would like to keep.  Remove and replace these objects, such as window coverings, appliances, fountains or other fixtures, so the buyer doesn’t have the option to mention your great-grandmother’s drapes in the purchase contract.
  7. Most sellers have possessions that need to be removed from the home, but they are in a dilemma about where to put these items.  The best choice is a storage unit, but in a last ditch effort you could try stuffing everything in your garage.  After this step, all your walking paths should be clear and there should be just enough furniture in each room to showcase it’s purpose.
  8. Fix any minor repairs.  Go through your house checking to see that everything works.  The last thing you want is a buyer irritated by a leaky faucet or a broken doorknob.
  9. Now it’s time to make your home shine.  Wash all the walls top to bottom. Dust everything. Open up and clean those windows.  Re-caulk that grimy tub. Wax and vacuum floors.  Wash your linens and towels.  Anything that looks dirty needs to be cleaned thoroughly.  These small touches will make your home light and bright.
  10. Now it’s time to check out your curb appeal.  Check that your bushes are trimmed, sidewalks and driveways are clear, lawn is mowed and that your house number is visible from the street.  The color yellow promotes buyers to pull the trigger, so plant some of your favorite yellow flowers, such as inexpensive marigolds.
  11. Well you are almost finished.  Go through your home inside and out to judge whether your home is welcoming.  Make sure that your home sparkles.
  12. Lastly invite your most detailed, critical friend or real estate agent over to check out the house with a fine tooth comb.

If you have any more questions on how to prepare your home to sell, do not hesitate to contact me at (818) 447-1024.

JoAnna Selby

 

 

Reasons Why To Sell Or Rent Your Home

 There are many reasons why a homeowner chooses to sell.  Did you ever suspect it would be beneficial for a homeowner to sell in today’s market?

Here are various cases why selling would be the best option from a financial perspective:

  • The seller’s current home needs upgrading or deferred maintenance and the homeowner would like to purchase a home that is turn-key.
  • Their starter home is too small, so the sellers would like to purchase a larger home more suitable for their lifestyle.
  • The homeowner’s neighborhood is no longer ideal.  The sellers are planning on moving to an better location.
  • Some homeowners feel they purchased a home that no longer suits their needs.  They are considering another home with a backyard, open floor plan, etc.

Notice how in the preceding cases the homeowners wanted to sell their property, and buy a more expensive home.

Since these sellers want to “move up”, they have an advantage in the marketplace.  Hypothetically let’s say that their current house sold for $400,ooo 5 years ago, and its current market value is $320,000.  These homeowners are thinking about purchasing a home worth $500,000, which sold for $625,000 5 years ago.  While the seller is losing $80,000 in the sale of their home, the market value gained on purchasing a better home is $45,000.  All the houses took a hit of about 20 percent in the marketplace not just the seller’s property.

Some other instances in selling need further evaluation.

  • Death of a family member
  • Divorce
  • Marriage
  • Being closer or further from family or friends
  • Health problems with back or joints preventing the seller from climbing stairs
  • Flipping a house

These sellers need to evaluate whether they are moving up or down in market value on their next home.  If their market value will decrease, another option is to rent out their home.  They could rent until the market eventually increases with inflation or they increase their equity to move up in market value.

If you are interested in selling or renting your home, please feel free to call me at (818) 447-1024 .

JoAnna Selby

 

Los Angeles: Rent vs. Buy 2012

Looking to move and wondering whether to rent or buy in Los Angeles?  According to Trulia’s Winter 2012 Rent vs. Buy Index buying is the right decision for 2012 in 98 out of 100 metropolitan areas.  Considering that home prices have fallen since 2007 and rents have increased, now is the time to buy.  The only exception for renting over weighing purchasing a home are Holmby Hills and Bel Air enclaves.  Los Angeles is one of the most expensive cities to buy comparatively speaking to the overall United States housing market, but Los Angeles is following the pattern of being cheaper to buy vs. rent as a whole.

The rental market has changed since the housing crash.  After the housing crisis, The Los Angeles Department of City and Planning noticed that the average monthly rent for two-bedroom, one-bath apartment almost doubled, from $870 to around $1,650.  Nationally, Zillow estimates about a 3% increase in rental income annually since 2010 and Hotpads shows a growth of 3.75% for the 20 largest cities.  Due to the foreclosures, many market researchers state rental housing will continue to rise in future years.

When considering the home size of a townhouse or condo, it makes sense on average to buy a smaller unit like a 1 bedroom versus purchasing a larger home of more than 4 bedrooms.  For instance, a one bedroom or studio has a price-to-rent ratio of 11.6, whereas a 3 or more bedroom’s ratio is 14.1 in Los Angeles.  A price-to-rent ratio of 15 or less shows that buying a home that the owner is planning on living in for at least 5 years is a better deal than renting.  There’s also a mortgage-interest tax to take advantage of after 5 years.  The price-to-rent ratio is based on home sales and rentals for December 1, 2011 to February 29, 2012.

Obviously to compare a rental to home ownership, one must compare two like properties.  To compare properties, there are a couple things to take into consideration.  A single family house is only comparable to another single family home.  Townhouses are commensurable to other townhouses or condos and vice versa.  When looking at a single family home, the lot size, square footage and condition of property can be similar, but the bedroom and bath quantity should be identical.  As far as townhouses and condos, be sure to look at a similar square footage, Home Owner’s Assocation Fees (HOA), Amenities (pool, workout facility, etc) and the same amount of bedroom(s) and bath(s).   “Location, location, location.”  If you would like to compare a property in Encino to Studio City the price per square footage would be drastically different, so one would need to know the average square footage for each area to obtain a proper analysis.

If you have any questions in regards to comparing your rent vs buy properties, please do not hesitate to call me at (818) 447-1024.

JoAnna Selby

 

What Are The Pitfalls to Avoid When Negotiating a Short Sale?

Short sales are more likely to go smoothly if you know the right steps to take in purchasing a short sale.

These are some steps to avoid short sale pitfalls:

Step 1:  Be prepared to purchase and move into your short sale property anywhere from around 3 mo to a year.

– Some buyers are not prepared for the wait when purchase a short sale.  Once you put in your offer, everything has to be approved by both buyer, seller and the bank.  The banks are faster these days as there are so many short sales, but it’s best to be prepared for the worst.  The average time to close on a short sale is 90-120 days.

Step 2:  If you need to purchase and move in within around 8 mo, then I would recommend to put in an offer on a short sale that already has an approved sale price from the bank.

– When you put an offer in at a lower price than the bank would accept, they are more likely to negate the offer.  It’s best to find out what the bank would accept and put an offer at the that price.  Otherwise you might be waiting sometime up to a month just to hear that your offer was rejected from the bank.

Step 3:  Check with your agent and make sure there are no other offers on the property.  If there are other offers ask your agent, whether the bank will accept backup offers.

– Some banks only look at one offer at a time.  Even though, your offer might be more than the other offer, some banks will not review your offer until the other offer has been denied.

Step 4: Ask your realtor for any prior inspections on the property.

– The banks are legally responsible to send you any and all inspections that they have on the property.

Step 4:  Be sure to talk to your realtor to find out where he/she would suggest putting in an offer.  They usually have a good idea, what offer would be accepted or declined.

–  Some buyers want a price way below market value and end up missing out on the property.

Step 5: Review with your realtor the checklist that the bank is requiring to put in an offer on the short sale.

– The last thing a buyer wants when purchasing a short sale is that their realtor has failed to follow all the instructions from the bank when your realtor puts in the offer.  After talking to many banks, I have realized this is a key mistake that realtors make when drawing up contracts for short sales.  Some offers in this case might be rejected prior to the offer ever getting to the bank.

Step 6:  Sometimes banks will not pay for inspections or any repairs on the property.

– When writing up the contract be sure that you and your realtor discuss not paying for inspections.  After your inspections are completed and you know the repairs necessary, then during your contingency period for inspections you may accept or reject the property.  If you are not pleased with the inspections and they are an exorbitant amount sometimes the realtor can negotiate to fix the unforeseen circumstances.

On one of my transactions, there were $37,000 dollars in termite damage.  The bank was not willing to help cover any costs.  This was an exorbitant cost for my buyer, so we chose to decline the property during the inspection period because the banks were not willing to assist with costs.

If you have any more questions in regards to the short sale process, feel free to call me at (818) 447-1024 .

JoAnna Selby

“Oh, by the way, I am never too busy for any of your referrals.”

Will The Home Affordable Refinance Program Cause An Economic Boost?

President Obama spoke in Las Vegas on October 24th about altering the rules to the 2009 Home Affordable Refinance Program, HARP to help stabilize the economy.

Homeowners of Los Angeles are crossing their fingers for an upturn in the housing market.  Realty Trac reported that in Southern California alone Los Angeles homeowners lost nearly $80 billion in home values since 2008.  Many analysts have their own opinion on whether these new mortgage rules will be beneficial.

CNN Money is not on board with the fact that there will be much of an impact. “The program is being touted as a way to help stabilize the housing market and stimulate the economy. But without addressing distressed homeowners and helping to clear the foreclosure glut, the effects will likely be limited.”

The chief economist, Mark Zandi at Moody’s Analytics has a different perspective. He predicts that 2.85 million homeowners will refinance before the end of 2013, which is 1.6 million more than anticipated with the old mortgage rules. In an email to CNN Zandi states his opinion clearly, “The program will ultimately provide a meaningful boost to the broader economy as financially stressed households will benefit from much lower mortgage payments…It will also provide a bit of help to the housing market by forestalling some mortgage defaults.”

At Macroeconomic Advisers is taking both sides as they state, “HARP refinances might double under the revised guidelines,” but they do not believe that would “provide a major stimulus.”

Even though this is an improvement to HARP, these new rules are not likely to effect the economy on a mass scale. If we want a national change, we are going to need monumental changes in programs, such as HARP.

Homeowners are wondering what the qualifications are for this new HARP.  First off, homeowners must be current on their mortgage payments with no late payments in the past 6 months.  To qualify the loan has to be over 80 percent of the current market value of their homes.  Also, the loan origination date must be on or before May 31, 2009 by Fannie Mae or Freddie Mac.  To those distressed homeowners possibly fit for this plan, checkout the new guidelines for the changes to HARP on November 15 by The Federal Housing Finance Agency.