Home Sellers ~ Why Your Home Didn’t Sell the First Time

Home Sellers ~ Why Your Home Didn’t Sell the First Time

First of all, I want to say I’m truly sorry you had to go through that experience, but I want to at least give you some honest answers as to why that didn’t happen.

1. Marketing

The first reason is marketing. Maybe you had little to no marketing on your property. In today’s age, it’s a lot more than just putting it on the MLS and waiting for a buyer to come to you. You have to have someone like me who has a killer proven marketing strategy that’s gonna get your home exposed to the highest amount of buyers possible.

2. Your Agent

I don’t really like to talk about this, but it is a truth and I want you to hear it. Your home may not have sold due to your agent’s incapability to sell it. Maybe they didn’t have the skills, the tools, the resources, the communication to get the home sold. I don’t like to say that but it is a truth that we do see.

3. Price

Maybe you had to price your at a certain point for it to make financial sense in order to be able to sell it. If that’s the case, then that’s what it is. But maybe you had some misinformation and thought the home was worth more than it truly was and you could have adjusted and compensated for that to ultimately achieve your goal and sell your home.

In Conclusion

I deal with a lot of people–like yourself–that were on the market and didn’t sell and then ended up relisting with us. It’s funny because I ask them why the home didn’t sell and 60% of the time they say they don’t know. 40% say the price. In my situation specifically, from what I’ve seen it’s never been price. It’s 100% of the time been the marketing. In fact I have two listings that are in escrow right now; expired listings that we took, rebranded, repackaged and got them out there using our market strategies and approach and in under 30 days we had both of them in escrow for above list price. So if this is you—you were on the market before and your home still didn’t sell but you want it to sell however you’re reluctant because you don’t want have to go through that process of keeping the home clean, showing it, being available and all that, give me a call. Let me show you how I can help you accomplish your goals of getting your house on the market and sold for top dollar.

Home Sellers ~ What to Know about Types of Agents

What is a discount agent?

  • Fewer services than full-service, but cheaper (sometimes by a large amount, typically 3.5-4% commission)
  • Usually very limited marketing, or marketing available at an additional cost (this can allow you to pick and choose what marketing you want on your house to save money)
  • Good for people who know the industry or are able to do the marketing themselves

 

What is a full-service agent?

  • An agent who works with a brokerage company and provides extensive marketing for your property (far more than just signage)
  • Charges full commission (5-6%) but covers all fees – no paying for anything extra

 

Who should you go with?

  • Everything is circumstancial, but more often than not choosing full-service is the best way to go. These agents are reliable, have proven track records, and can net you potentially thousands of dollars more in the sale of your home
  • Hiring a professional is important, and hiring someone who can really get you top dollar in a reasonable amount of time is essential
  • Next Level Realty is a full-service agency that provides aggressive marketing and strategic listings to net you the highest profit. Check our track record!
2015 Year End Real Estate Market Evaluation

Wheeew!! What a year we had in real estate! We saw lots of sales take place with values still holding strong and even increasing slightly throughout the year. Low interests rates and the fact that a lot of “boomerang” buyers are coming back to the market seemed to be what kept things pushing along smoothly.

As for 2016 we are not too sure what changes if any we will see in our local markets. The FED has already announced they will be increasing interests rates slightly throughout the year with the expectation of a 1 point increase 12 months from now. How will that impact us? We’ll just have to wait and see. I’m sure there will be some from of compensatory factors, but at the same time shouldn’t be too significant.

What are your predictions for next year?? Leave your comments in the comment box below.

If there are any questions you should have please feel free to leave them in the comment box below as well and I will respond promptly!

Helpful Hints for Getting a Mortgage Loan

Moving Money Around

The person who actually approves your loan will be looking at all your money for at least two-three months. They will be looking at your checking accounts, savings, deposit slips, stocks, 401k and retirement accounts. When you move money around from these, it makes it harder for them to document, which means they will be asking you for a lot more paperwork concerning large deposits or withdrawals.

So, unless advised to do so by your loan officer, don’t move your money around or change banks.

Changing Jobs

When it comes to getting a house loan, normally changing jobs doesn’t really affect your qualifications, but for others it can be quite detrimental. If you are going from one salary job with no commissions or bonuses to another, it shouldn’t be a problem. The same goes for a full-time hourly job.

However, if most of your income comes from commissions, changing jobs is not recommended. Mortgage lenders average your last two years to calculate your income. So, if you change jobs before you buy a house, the lenders can’t predict your future earnings because there isn’t a past income they can base it off.

If a new job will supply you with bonuses that will make up the majority of your income, you may want to put it off. Lenders rarely add in the prospect of future bonuses unless it’s the same job you already had for two years and have already received similar bonuses. Don’t risk losing that two-year track record.

If you’re a part-time employee and your hours fluctuate each week, don’t change jobs. The lender can’t predict how many hours you’re going to work at your new job, but he could average out the earnings from the last two years.

Over-time follows the same line as bonuses. Since each job pays differently for overtime, the lender can’t determine the income you would receive if you change jobs. However, they can calculate your over-time to a monthly average over the last two years of your current job.

Do not think of going to self-employment if you’re thinking of buying a house! Buy the house first! As you might have guessed, lenders like for people to have a two-year track record for employment. When you are self-employed, you have a lot of write offs on your taxes that can minimize your income to buy a home.

No Large Purchases

Don’t dig yourself further into debt, whether you’re buying vacations, weddings, jewelry, etc. And of course, do not buy a car.

When you have a growing income, you may feel so inclined as to spoil yourself; most specifically a new car. However, this debt and car payment can be the determining factor when trying to qualify for a house. Lenders look at your debt-to-income ratio, which is the amount of your income that you spend on debt. This includes your monthly living costs. Your living costs can be your consumer debt, credit cards, loans, and especially car payments.

To put it simply, you will qualify for less than if you did not have a car payment.

Financing and Your Offer

Financing and Your Offer

In most cases, buyers don’t have the cash to buy a house, so they get a mortgage to finance. Since you will most likely make your purchase based on getting a mortgage, the seller has the right to know you plan on financing.

Down Payment

You will have to state the amount of your down payment in your offer. This helps the seller evaluate the likelihood of you being approved for a mortgage. The higher the down payment, the better chances of getting approved.

Interest Rates

Putting finance information in your offer is a way to protect yourself. If interest rates shoot up, you might be paying a higher payment than you wanted. By stating a maximum interest rate in the offer, you’re saving yourself from this happening.

However, the seller might not accept the offer based on this. If you state that the current rate (say, 6%) is the highest you can go, you can cancel the contract if rates increase. The seller would suffer because they lost potential offers and any future plan they based off the transaction.

Closing Costs and Incentives

As part of your offer, you can ask the seller to pay your closing costs or even provide funds to temporarily buy down your interest rate for the first year or so. These incentives can be really effective if you’re tight on money or trying to max out the qualifying ratio.

When you ask for these kinds of incentives, the seller may be more firm on the price since you are basically asking them to help buy their house. In the end, a little help in the beginning will allow you to pay more in the long run.

Seller Financing

Another request is to have the seller get a second mortgage to help ease your purchase of their home. This is when the seller doesn’t need all the profit from the sale to buy their next house. By combining the down payment and the second mortgage from the seller, you might be able to avoid paying mortgage insurance and save some money.

If such a “carry back” is part of your offer, you should include the term on paying the second mortgage. Remember that your first trust deed lender has to know this information so they can underwrite your loan. The shortest term of the second mortgage can be five years with the minimum payment being “interest only”.  Longer terms and payments that include principles are available as well.

Cash Offers

If you are one of the few people that can afford a cash offer, make sure to provide proof that you have the funds available; like a bank statement. If you have to liquidate stock, make sure to provide when you’ll be able to show proof of the cash.

Benefits of Home Owning

It is the Best Investment

Depending on the neighborhood and area, houses generally appreciate 5% a year. Some years it may be more, some years it may be less.

Let’s put it into numbers.

If you bought a 320,000 house with a mortgage and put $64,000 (20%) down, that would be an investment of $64,000. With a 5% appreciation rate, a house at 320,000 would increase in value $16,000. So you earned $16,000 plus your investment of $64,000. Your annual return on investment would be 25%.

Tax Break

When you buy your house the government is basically funding your purchase. Any of the interest and taxes, including property taxes, it can be deducted from your taxable income.

Housing Costs Stabilized

If you have ever rented a house or apartment, you know that your rent can increase each year. Fixed mortgages make it so that you pay the same amount for the next thirty years. Even if you get an adjustable mortgage, payments generally stay in the same range for the remainder of the loan.

Savings

Buying your house helps you gain savings in two ways. The first way is simply by making your monthly payment. With each payment you make, part of your payment goes towards your principle balance.

The second way is that your house appreciates. As stated above, 5% is the average appreciation for a house per year. Some years it may fluctuate, but overall it’ll be your greatest investment.

Freedom

When it comes to renting a house or an apartment, you are generally very limited in what you can or can’t do to improve your home. You may not find yourself eager to spend thousands of dollars on improvements such as paint, carpet, and tile when it doesn’t belong to you personally. When you own your own house, you can do whatever you like and have the benefit of living in an environment that fits your needs, not a landlord’s.

Space

Relating to the renting of a condo or apartment, you know that space is an issue. When you buy a home, you have much more room both inside and out. The rooms will typically be larger and you’ll have your own outdoor space to do as you please.

6 Tips for Buyers to Get the Most Bang for Your Buck!

1. Sell Your House First:

If you’re looking to buy a new house, make sure you sell your current one first. Contingency offers aren’t always a seller’s first choice; they’d rather go with a buyer who is willing, ready, and able. With contingency offers, sellers can view you as a risky deal and may have you pay full price instead of reducing it to fit your needs.

Then, if you bought a new house first, now you have to sell your house in a hurry! Hurrying in your selling may push you in taking an offer that is much less than you wanted just to make sure you get the house you want.

2. Get Pre-Approved:

Getting pre-approved to buy a house is a great way to strengthen up any offer. While getting “pre-qualified” is nice, it doesn’t mean that it is set in stone that you will be approved for the loan amount. You need to get all your information verified before you put in an offer so that you can avoid any hiccups down the road.

3. Make a List:

When you think of yourself in a new house, you should have a mental checklist of what it will and won’t have. Don’t hesitate to write this list down! Use it as a guide when you’re house hunting. The houses that have more of what you want will be more at the top of your list when deciding to buy.

Always take into consideration that cosmetic things can be changed, but others, such as the locations and neighbors, can’t be. Buy the house for the foundation and location, not necessarily the stylized choices.

4. Window Shop:

If you’re exactly sure what you’re looking for or you don’t think there’s a house for you yet, go look around! Find an area you like as well as houses that fit your fancy. The list from number three would really come in handy with this process.

5. Beware of Ads:

Advertisements for houses are meant to benefit the seller, not the buyer. It’s very common for ads to purposefully cut out certain facts about the house that you would want to know. Your agent will always be your second set of eyes when it comes to a house. They will point out what may be wrong with the property and if it meets your needs.

6. Don’t Settle:

Don’t get forced into buying a house! Agents can be pushy and you may feel pressured into buying one that may not be up to your standards. Don’t choose a house unless you feel that it is the absolute best one. Stick to your list!

Hot Housing Market

Current demand exceeds last year’s height that was reached in April.

Initially, 2015 started with muted demand and looked like the year would be a repeat of 2014, not too exciting. Then February rolled along and the housing market picked up steam. It wasn’t an anomaly either because the trend continued and demand jumped another 10% in the past two weeks. Demand has nearly doubled from the start of the year.

craig blog photoThe current expected market time for all of Inland Empire is 56 days, a sellers’ market. That is significantly different than the 101 day expected market time posted right after ringing in a New Year. Back then it was a balanced market that did not favor buyers or sellers. Since then, buyers have been cashing in on an interest rate environment that provides “easy money.” Everybody has been listening to reports that the Federal Reserve is going to start raising the short term rate; thus, buyers are jumping at the opportunity to cash in while borrowing money is cheap.

The Inland Empire housing market is back to a Seller’s market. How should a seller approach the current market? Right now homes are able to push the envelope a little bit in terms of pricing. Multiple offers are back and homes are selling for a bit more than the most recent comparable sale. Open house activity is up and buyers are competing to purchase.

But, let’s not get ahead of ourselves. Yes, the market is tipping towards sellers again and prices are beginning to rise, but there are major differences from the heydays of the 2013 market, the last time we witnessed a big push that favored sellers. For proper perspective, two years ago demand was nearly identical, but today’s active listing inventory is 68% higher, 5,433 homes compared to 3,237. The expected market time back then was a little over a month versus about two months today.

Things to consider before selling

Often times when listing a home for sale, the seller asks what they can personally do to help sell. There are always four main suggestions I give them. The first and foremost is always to remove any clutter that may be present in the house. When rooms have many items and objects lying around, it often comes across as ‘thrown together’. The clutter distracts the prospective buyers from the room, or house as a whole, and can greatly sway their opinion.

The next two points go hand-in-hand with each other: walls and floors. These are part of the foundation of your house that makes a huge impact on your buyers. Possible buyers don’t want to see holes and mismatched paint nor do they want to see stained, ripped up carpet. The number one reason that these two things turn buyers away is because it seems like too much work. Think about it, for the most part they are already using all their savings to purchase your home; they don’t want to immediately splurge on fresh carpet and paint. So do yourself, and your buyers, a favor and slap on a fresh coat of paint and at least steam clean those carpets!

As for the next suggestion, let me set up an image for you. Imagine two identical houses for sale for the same price right next door to each other. Envision one with a beautiful front yard with lush green grass and colorful, thriving flowers. Now, visualize that the other has dried up brown grass and weeds sprouting up from a dry patch of dirt.

Which house would you choose?

The one with the flourishing front yard, right? That’s the same thought process as your potential buyers. They want the home to appear to be a welcoming, warm place and they don’t want to spend the money to fix it up to make it that way. So, I always recommend planting a few flowers and work on getting that grass green and healthy!

So, if you have any other questions, or if you are looking to sell in the future, please feel free to call us for a free, personal evaluation!

The market is starting to shift

In the video I released prior to this blog (linked referenced below in the notes)  I was mainly speaking to sellers when I was emphasizing the importance of timing as it relates to the supply and demand curve during this time of the year. Today I will be talking more about the market as a whole and how whether you are a buyer or seller you need, and should, take action immediately!

It is clear today that the distressed foreclosure market of a few years ago is long in our past. We had great gains throughout 2013 and even modest gains so far in 2014, however I believe things are about to slightly change. As you may or may not have heard the FED is planning to increase interest rates throughout the course of next year. No one can be certain as to how much but most reputable sources are stating 0.75% increase within Q1 of 2015 and by Q4 2015 upwards of a total increase of 1.25-1.5%. 

So what does this mean for home buyers and sellers? If you buy now you will be able to take advantage of the extremely low interest rates (which at the time of this writing are the lowest they have been in the last 18 months). Why is this important? Because the same house you are buying for $500,000 today and the same house you are buying for $500,000 next year could cost you over $400/mo more. Wow!! That’s pretty significant. Same example at $350,000 is over $300/mo more.

So if you are a home seller you are probably now asking yourself, with all this talk about interest rates increase and potentially higher monthly payments how is there an advantage for me to sell my home now? Well, the answer is simple. For the most part a home seller is also a home buyer at the same time. You are selling your home to then in turn buy another one, but even if this is not true, and you are just a straight home seller, it is still to your advantage to sell immediately regardless of your next move, I will explain… Going back to the video prior to this blog we know that real estate is based off of supply and demand. What my prediction is once rates start to climb up, the affordability will go down and ultimately demand for buying will go down. Now I do not think it will be anything too significant. However if you are a seller counting every penny of your sale at $500,000 today and fast forward 6-12 months, and you now have to price your home at $475,000 to compensate for affordability, this could have a significant impact on your bottom line. 

Now, I certainly did not write this to say that the market is going to go down or anything like that, in fact I still anticipate the market to be very strong throughout the year, but expect this little shift/change in the upcoming months. With this all said I am extremely optimistic about the remaining months of 2014 and certainly 2015. Without a doubt it will be our BEST year in real estate yet!

So, to sum everything up, in my opinion if you are a seller you need to SELL NOW and if you are a buyer you need to BUY NOW!

Video blog reference: https://www.topproducingbroker.com/list-home-sale-summer

Sources: http://www.bloomberg.com/news/2014-09-17/fed-officials-predict-fed-funds-rate-to-rise-to-1-375-end-2015.html

http://moneytothemasses.com/owning-a-home/interest-rate-forecasts/latest-interest-rate-predictions-when-will-rates-rise

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