Should I Buy a New Home, or a Previously Owned Home?

This question's an easy one to answer:  It depends!  See!  Pretty easy!

Ok, all kidding aside, I'm a huge advocate for new construction.  My wife and I have owned 3 homes over the past 12 years. Two of those were new construction.  That shows my personal taste. However, there's always two sides to the story. You can't buy a new, 1907 Victorian home in Pleasanton.  You'd be hard pressed to find a brand new home in a neighborhood with 90 year old, beautiful oak trees. You probably aren't going to find a new home in Brentwood on a half acre lot.  So, who benefits from new home construction?  Who is buying them all...and why?


Here is a list of reasons that might compel you to buy a brand new home as opposed to one that is pre-owned.

• With little to no change in sales price, new home builders often offer choices as to color and styles of the features of your home. No, these aren't upgrades, but they're still choices. Carpet color, tile, vinyl, counters, cabinets, etc.  You'll often have 3 or 4 choices in each category to choose from at no extra cost.  
• Builders often use their own lenders, which gives me, as your agent, several opportunities to negotiate: 
• 1) The price of the home. 
• 2) The terms of the loan.
• 3) Closing Cost Credits
• 4) Design Center Credits
• In my family, we had little-ones crawling and rolling around on the floors. It brought us peace of mind knowing that not just the carpet was new (and in a color we loved)...but the carpet pads and sub-flooring was new as well.  No smokers, no pets, no allergies, and no spills that are going to resurface 4 months down the road.
• Competition: Typically you're not going to compete with several other buyers for the same house. You'll likely have the choice of many new homes and models, or even the same floor plan on different lots.
• When you buy a 35 year old home, you've got 35 year old...everything else...attached.  Infrastructure: In new home communities, you've typically get new sewers, streets, lights, and more.   
• Ahhh...the dreaded home inspection!  Everything is new!  What's to inspect?  With pre-owned homes, you've got those anxious days between the time you write an offer and the time you receive your pest and home inspections.  New home construction likely allows you to skip this step altogether.
• Appraisals?  Yes, your new home must appraise in order for a lender to fund, even on new construction.  That said, it behooves the builder to price their homes accordingly.  Have I seen a new home NOT appraise?  Yes...once.  In that case, the builder simply reduced the price to the appraised value.  
• Virtually all home builders will sell to FHA and VA buyers!  These buyers are typically well qualified and committed to the process.  
• Home warranty? It comes with one!  Wait...it comes with several: Foundation, Roof, Finish, Appliances...everything!
• You've got a builder's reputation at stake, and they'll stand behind you.  With pre-owned homes...the seller's likely moved on, and you'll never see or hear from them again.

I could easily create a list that's just as long and just as compelling advocating the purchase of pre-owned homes.  In fact, I'm sure I will.  However, at this point in my personal life, and with a young family in tow, I feel very peaceful living in a newly constructed home and I'm always at peace when I help a client negotiate a deal with a home builder.

Wait!  You mean...I help people negotiate deals with home builders?
Absolutely!  Countless times! Really, at this point I couldn't guess how many times. Often enough, in fact, that periodically simply accompanying my clients on their first visit to a builder's model homes pays huge dividends to the buyers. If I accompany a buyer to a builder's sales office, it often allows me the ability to negotiate on their behalf. I've negotiated upgrades, closing cost credits, appliances...even fully landscaped backyards...at no extra cost to the buyer.  But wait, do I get paid a commission?  Yes!  Well technically no. It's customary that the seller of a home pays both sides commissions.  In the case of virtually all new home communities, they aren't going to pay a commission.  They pay a marketing expense; a referral fee.  This is not a line item on your closing statement.  It doesn't come from the sale of the home.  It's paid by a different department all together.  Often the same one that pays for TV commercials, web presence, and print advertisements.  This mean that a) you do pay me, and b) I'm absolutely committed to giving you the very best service possible and negotiating aggressively and effectively on your behalf.

7 mistakes many new and veteran investors make when looking to secure income properties.

Are you looking at buying rental properties this year?

Here are 6 mistakes most landlords make…and you don’t have to.

I could sum up these six short but important points with two words: “Don’t wonder!”

1: Don’t “Wonder” what you should be purchasing: KNOW!

Do the research.  Don’t wonder what is best for you.  KNOW what you want.  Better than that, know what you should be buying in order to put you in the financial position that you are building toward. This is a huge step and must be the 1^st step.  It requires substantial research.  You have to be honest with yourself.  That said, when it comes to market research, ‘substantial’ doesn’t mean difficult. It doesn’t even mean that you have to do any of it yourself.  Call a Realtor or two.  Not only do they do it…but they do it all the time…for free!  Use this research to bring certainty into the process. Be sure to know what you should purchase, create a plan, and then stick to it.

• ·         Only spend the amount that makes financial sense.
• ·         Determine how much cash flow you need to make.
• ·         Never let emotion override the numbers. 

Be thorough in your internal ‘research’ as well as your market research.  Do you need your property to be local, or can it be in an area where lease prices are higher and home prices are lower?  Are you going to manage your rental(s) yourself or will you be using a property management company? Should you buy a condo?  A duplex? An older home? Is there new construction, with loan programs that provide easy AND responsible entry into the rental market? All of these questions, and dozens more, are vital to decide on BEFORE you get in your Realtor’s car to go house shopping. 

2: Don’t wonder how much should you spend: 

First, determine how much can you spend. Then determine how much you SHOULD spend. Do you have funds in reserves to update/upgrade/repair your prospective property? Do you have funds to cover months where you may have vacant properties? Find a lender near you that will sit down and discuss special loan programs?  Do you need to request a credit to cover closing costs when you write an offer? etc.

3: Don’t wonder what your prospective property will rent for:

Ask a Realtor, or a team of Realtors to draw up a lease/rental survey for the area(s) you’re looking to purchase in.  Also, and this is key, do a simple ‘rental survey’ of your own!  Often, Realtors use MLS exclusively to find rental properties for their clients.  At the time of writing this post, Oakley and Brentwood showed a combined 51 homes active on MLS.  Compare that to 181 homes for rent in the same areas on Craigslist.  Use ALL of the data you can.  It’s all relevant, and it should all be considered.

4: Don’t “Wonder” if the information you have on prospective homes is accurate

The internet is full of sites posting real estate listings online, but is that information accurate? Virtually all of the information you’ll find online is fantastic.  Very little of it is inaccurate, however, I have seen, and continue to see gross miss information on several internet real estates.  Beyond the miss information is the fact that the asking price of a property is based on countless variables.  If you don’t know those variables intimately you may end up heart-broken or worse….broke!

Each of these sites pulls data from the regional Multiple Listing Service; MLS, which all real estate agents have direct, live access to. However these online sites do not always pull the best, most accurate, most up to date information. For this reason, it’s important to get in touch with a local real estate agent that you can trust to get you the facts.  What is the rate of property tax rate on the property that you’re writing on? 1%? 3%?  Is the Home Owners Association really $485 annually, or is it actuall $485 monthly?

5: Don’t wonder what the seller is looking for:

Even the smallest part of an offer can land you the deal you’d been looking for. See, "How to get your real estate offer accepted."  proceeds, timing, a possible rent back, a quick close, a long close, inspections, etc. You/we may not know (although there are strategies to find it) the real motivating factor behind the sale of a property you may have interest in.  So addressing ALL possible terms of an offer will leave you with the best odds of having your offer accepted.

6: Don’t wonder what you’re getting: Due Diligence

If you’re not an absolute expert, or you’re not buying new construction, I strongly advise that you hire an inspector to perform a home inspection and a pest inspection.  Don’t let the market push you into buying without inspections unless you have sufficient funds to literally demolish your new home and replace it.  These inspections run in the range of $400 & $200 respectively.  You maybe be buying a 100, 200, $600,000 investment.  Don’t let a few hundred dollars stand between you and your security.

7: Don’t wonder if your new property is being cared for:

Use a property manager. Include Landscaping and/or housekeeping if you must, but don’t let your property go.  I personally know dozens of landlords with wonderful and respectful tenants.  That, however, isn't a guarantee.  Realize the the behaviors and actions of your tenant can help or hinder the value of your home, up to and including behaviors that may need to be disclosed to prospective buyers, in the event you choose to sell some day.

Now there are many, many more influences, considerations, and concerns to keep in mind.  I hope that this post has at least given you more tools than you had prior to reading it.  

Until next time, and thank you in advance for remembering me when the topic of real estate arises.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com
Click here to reach Macky Hensel.

Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook 
Finally, please comment or ask questions.  Other readers may be wondering the same thing.  I love the feedback, critical or otherwise, and love the interaction: I love this job.

Thank you always for your support.

Tips from your listing agent: Who is the biggest influence in the home buying process?

You may think it's the bread winner.  You may say "it's the Mrs., of course"!  You may think...it's you!  So who is it really?  It's often actually the buyers' Realtor.  They are, after all, the resident expert with experience and exposure to confidently guide home buyers toward the right home!

Like many of my posts, I'm pretty certain that this post will annoy a few agents.  No disrespect or judgement intended, but it is what it is.  These are simply my thoughts. I write what I practice, and I practice what allows me to sleep peacefully, knowing that I've given my clients the very best possible representation possible.

Here's a bit of background on commissions.  In the areas I serve, since the beginning of my real estate career, 6% is the standard sales commission paid buy the seller.  This commission is typically shared equally between the cooperating brokers; 3% and 3%.  Listing Agents and Buyer's Agents both have their fair share of responsibilities, tasks, hurdles, and headaches that they encounter throughout their days, weeks, and months.  Some transactions are simple.  Some are complex.  It's my belief that, at the end of the day, it all comes out in the wash.  "But I worked so hard on this one!  I deserve more!"  Yea?  Maybe you don't?  Maybe you made bad choices when screening your client.  Maybe the property you wrote on was a money pit.  Maybe you had a cash buyer with low expectations who's buying everything in site and all those transactions are simple!  It all evens out in the end.

So looking at the question posed at the beginning of this blog, why does it even matter who is the biggest influence in the home buying process?  Because, and here comes the part that can make folks uncomfortable, it's very easy to see how (with a Realtor's personal income as a direct function of the sales price of the house and percentage commission to be received at closed) an agent might encourage their buyers to write on one home over another 'like' property, based on the commission.

Of the 85 homes sold in Brentwood in April of 2013, only 14 had the buyer's agents commission at 3%.  Most were 2.5% with a few as low as 1%.   As someone looking to sell my home, don't I want the market (buyers' agents) to be motivated to show my house as often as possible, with as much enthusiasm as possible?

Here's the cold, hard, ugly question.  If an agent is looking at like properties, one paying her 2% and another paying her 3%, which one is she likely to encourage her buyer to write an offer on?  But aren't agents supposed to have their clients best interest in mind? Absolutely!  Many, many agents do!  Some...don't.  After all, although sometimes we're not treated as such, we are actually human.

There are exceptions to this rule, as there are to most.  But it's a safe bet that a relevant percentage of homes closing with a cooperating broker commission split that is out of balance likely closed at a price lower than they might have if the buyer's agents had been sufficiently (or equally) motivated.

As someone looking to sell your home, please discuss this topic with your Realtor.  If your Realtor addresses this topic in a manner that leaves you with a comfortable understanding...game on!  If they hem and haw around the issue, press on until you have an answer that satisfies you.

Until next time, and thank you in advance for remembering me when the topic of real estate arises.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com

Active homes In Alamo, CA for those in the market. For for the rest of us, a pleasant day-dream.

Homes for sale in Alamo, CA on May 3, 2013

For a $13,800.000, it's nothing a quick coat of paint can't fix up! 

Start your window shopping with this beautiful home at 9 Country Oak Lane.  Active homes in Alamo, CA range in price from $13.8M to $849,900.

Click here to view active listings in Alamo as of 1PM on May 3rd, 2013.

Until next time, and thank you in advance for remembering me when the topic of real estate arises.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com

Is the Real Estate Market Getting Better? ~ March of.2013

Current Real Estate Market Trends in Alamo, Walnut Creek, Brentwood, and Oakley, CA

Several months back I posted a sort of snap-shot of the real estate market in the areas I service most often.  As this post continues to be the most read on my blog, I thought it could use a little freshening up!  So what are the real questions and answers?

Q: Is the real estate market getting better?

A: For whom? Let's be more specific. 

Q: Ok.  Are home prices increasing in Contra Costa County?

A: Yes; dramatically. 

Q: How long are they likely to increase?

A: With no sarcasm intended...the answer is and always will be, "Until something changes!" (Read, wouldn't we all like to know?)

If you're looking to buy a fixer-upper and flip it, or if you are ready to take that that jump and risk and buying at auction, then cleaning it up and renting it out,...that ship has sailed!  

Or has it?   

Looking at the graph below, home prices have risen consistently over the last four years.   

(click on all images for a larger view)

Median Home Prices in Contra Costa County between March of 2009 and March of 2013

So looking above, at trends over the last four years, it appears prudent to invest in real estate.  (I honestly believe it always is: Yes, even in a seller's market) If you bought in March of 2009, or March of 2012, you did well!  Sincere congratulations.  And what is it going to look like in March of 2014?  It's hard to tell. Let's widen the lens a bit:

Median Home Prices in Contra Costa County between March of 2007 and March of 2013

The chart above illustrates the same data going back two more years; to March 2007.  What do you think now?  It looks like we have a lot of room for growth!  

Go back yet again, to 10 years back.

Median Homes Prices in Contra Costa County between March of 2003 and December of 2012

Median home prices in Contra Costa County are, for practical reasons, back to where they were before the bust; before the boom. 

So back to the question at hand:  

Q: Is the Real Estate Market Getting Better?

A: Again, I have to ask: For whom?

Are you a home buyer?

Do you have enough cash to cover a down-payment and closing costs on a conventional loan?  Are you looking to purchase using an FHA or VA loan and need to ask for a seller's credit in order to close?  Are you a cash buyer who thinks cash is going to land you any house you choose to write on?  

Are you a home seller?  

Are you willing to wait for the ideal buyer?  Are you willing to negotiate with the 'best' buyer?  Are you willing to do inspections on your own and possibly make repairs proactively in order to market the availability of your home to FHA and VA buyers?  

Keep in mind that home prices (thus, median home prices as well) are a function of several factors: 

• Interest Rates (the cost of borrowing money)
• Demand (the number of willing and able buyers)
• The supply of homes on the market (what the industry calls 'inventory')
• Relative confidence in the economy (am I going to have a job it 6 months?)
• ...and many other factors.

Look at the four charts below as they apply to your specific area's of interest.  If you don't see your area, drop me a line and I'll e-mail you market data for your specific market(s).

Above: Homes for Sale in Walnut Creek - Homes Sold in Walnut Creek - New Listings in Walnut Creek 2 years back

Above: Homes for Sale in Alamo - Homes Sold in Alamo - New Listings in Alamo 2 years back

Above: Homes for Sale in Brentwood - Homes Sold in Brentwood - New Listings in Brentwood 2 years back

Above: Homes for Sale in Oakley - Homes Sold in Oakley - New Listings in Oakley 2 years back

The number of homes for sale in each area have fallen dramatically over the last two years.
The number of homes sold continues to remain almost predictably cyclical.
The number of new listings is down a bit, but appears to be reacting to continued price increase and limited inventory.

Q: So what does this mean to you?
A: After reading this blog post, it simply means that you're better informed.  The best indicator of future events is past event.  That said, it's only the best indicator, not a precise and fool proof indicator.

More to come!

(Previous post below)

Sunday, August 19, 2012

Is the Real Estate Market Getting Better?

Not if you're an investor, or looking to do your first flip!  If you're trying to buy auction properties (foreclosed homes) on the courthouse steps, the environment is like the proverbial feeding frenzy.  Lots of buyers. Very few homes.  Investors' margins are dwindling as the supply of foreclosed homes at auction continue to dry up.

However, if you're in a position to sell, you're in the strongest seller's market that I've seen in the 6 years I've been practicing real estate.  How might today's market conditions help you in your current circumstance?

"I'm upside down in my home. Should I short-sale now even though the market is going up?" 

That is a complex question that depends on a number of important circumstances, unique to each homeowner.  That said, considering that the Mortgage Forgiveness Debt Relief Act of 2007 applies to homes that close escrow on or before December 31st of 2012, and the limited supply of homes on the market are driving prices up quickly, I can guarantee one thing; it's definitely time to stop guessing and get the facts.  My partner, Macky Hensel, and I are truly experts at closing short sale transactions. (see our contact information below to have your questions answered).

"Should I sell my home now that I'm in the black?"

This seems like is a more cut and dry question, but this answer too depends on a number of critical factors as well.  Although we're in an excellent market to sell, home values are still well below where they had been several years back. As a rule, a down market is an excellent time to upgrade, but not an ideal time to "get out of the market." Lets look at a simplified illustration of how upgrading in this market, even though it's a seller's market, is ideal:

Imagine that you want the buy a larger house, or you'd like to move to a more convenient or sought after area, so you're selling your current residence. We'll call this property "A", which was originally purchased at $500,000, but now has an assessed value of $300,000.  This is a difference of 40% or $200,000.  One might say, "We are going to lose $200,000 if we sell." But now you'd like to purchase property "B", a home that originally sold for $800,000.  For simplicity's sake, we'll say that this property also dropped by 40%.  That puts the new purchase price at $480,000.  This is a difference of $320,000.  One might say, "We saved $320,000 when we bought."  Compound that virtual savings with the literal savings of historically low interest rates, and you may just land that home you've dreamed of...locked into a 30 year fixed rate mortgage...at or below 4%. 

US 30 Year Mortgage Rate data by YCharts

The example above is a simplified example of how to upgrade in this market. There are many variables that change the value of a given property, but this example is not unrealistic at all.  In fact, in many communities the larger, more sought after homes took the biggest hit. In other words, the bigger they are, the harder they fall.

Perhaps the best thing you could take from this post is that the real estate market is simply a market; not good or bad; not better or worse.  "Is the Real Estate Market Getting Better?" By itself, it has no "quality".  Your unique circumstance; your point of view make it so.

I'll leave you with this "Taste of Wisdom" from Mark Twain:

" Always tell the truth. You'll surprise some and amaze the rest." 

Until next time.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

Click here to e-mail me.

Click here to reach Macky Hensel.


Ps. If you enjoy Social Medial, please "like" this post, Re-Tweet, etc. this blog at will.
I appreciate your support, and thank you in advance for remembering me when the topic of real estate arises.

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What You Paid Has Little or Nothing To Do With Your Homes Value: Part 8 of 8 - How To Effectively Price Your Home For Sale

Are you going to list your house for sale?  Are you writing offers to purchase, only to be turned down?  This post is for you.  Perhaps the hardest thing for sellers (and buyers for that matter) to wrap their heads around is the cold, hard fact that what you paid for your home, improvements, upgrades, etc. has absolutely nothing to do with its market value.  

Maybe you bought at the height of the market?  Maybe you bought at the bottom?  Maybe the home was part of your inheritance?  Maybe you bought it 45 years ago? Maybe the home across the street fell into the ocean and now you have the ocean view you always dreamed of!  It's all irrelevant.  100 years ago, today, and 100 years from now, real estate is, and always will be worth exactly what an able buyer is willing to pay.  

The house I grew up in was purchased, in Alamo, for $188,000 to be sold at a later date for  $1.4M.  Move forward 30 years and I hear, over and over, "I paid $859k for my house 5 years ago, now it's valued at $340k!  That's just not fair!"  What isn't fair?  Making a million dollars or losing it?  It's not a matter of fairness.  It's a matter of fact.

I recently had an experience with a buyer (whom I subsequently fired) who repeatedly remarked, "But this home was just bought at auction for $X!"   Had my filter not been in place, my response would have been more along the line of my thoughts, "So what!"  As a buyer, the only home values that matter are recent (and in the market the VERY recent) comparable homes sold.  I appreciate that it's difficult to sort of divorce yourself from this information, but...it's effective, and that's where we need to be. Pending home prices tend to be inaccurate.  Active prices are just that, asking prices.  Recently sold homes is the data you're looking for; specifically, that data as it compares to the subject property.

If you're selling, the same principles apply to you.  Don't get hung up on the amount you paid for your backyard hardscape.  Don't over estimate the value of that imported Italian ceramic tiles.  Your ideal buyer may rip it out anyway.  Yes, talk closely with your Realtor, sharing everything you've done to improve your property, but don't get caught up with how exactly how much each project cost.  Look at the market trends, and at comparable properties (if there are any). Depend on your Realtor to establish the best price to list at, then have him or her explain exactly why that is the right price!  Ultimately, the price you list your home for is your choice.  One thing is certain: If that price is too high...or too low...the market will let you know!

Until next time, and thank you in advance for remembering me when the topic of real estate arises, and THANK YOU SO MUCH all the referrals.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com
Click here to reach Macky Hensel.

Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook 
Finally, please comment or ask questions.  Other readers may be wondering the same thing.  I love the feedback, critical or otherwise, and love the interaction: I love this job.

Thank you always for your support.

How Micro-Markets Effect Home Prices: Part 7 of 8 - How To Effectively Price Your Home For Sale

Micro Markets 

~Make sure you're comparing Apples to Apples~

Micro Markets - Make sure that you're pricing your property according to trends and comps within your unique "Micro-Market."  You may live very close to another property or development with a particular activity level, yet that area may have very, very different features that attract...or detract willing and highly qualified buyers.  Using a local area expert is the safest way to ensure that you are listing your special and unique property at the absolute best price.

So...your neighbor across the street just sold their house for $X, and their house is virtually identical to yours!  Virtually, except for the fact that it's on the other side of the street...with an unobstructed view of the Golden Gate Bridge.  One 'smallish' feature that your property may or may not have.  How much is that view worth anyway?  Doesn't that depend?  That's a pretty subjective question, isn't it?  Sure! On a property by property basis, it is impossible to be exact.  However, looking at dozens of closings, over a long period of time, an experienced agent can determine, with great accuracy, the market value (or percentage over like models without the view) of that view; that pool; that lot; etc. 

Here are a few features that often heavily influence the final sales price of a home:

• Is your community gated?
• Are your comps all custom custom homes that are varied in age and architecture?
• Is there an HOA?
• Are the Melo Roos, Special Assessments, or other high-tax burdens?
• Are there plans for new residential or commercial properties in the immediate area?
• Are you on the gold course, or simply in the golf community?
• ...and on and on.  

Using a local area expert can pay big dividends with regard to listing your home for sale within a Micro-Market. It can also save you big money when you're looking to purchase a home.  If you're not working with a Realtor already, interview at least three local area experts in order to get a strong opinion of pricing.   If you interview only two, you don't really have a choice, but really just an "either-or."  Three or more opinions starts to create a more statistically relevant picture to base your decision on. Ask several Realtors to name subtle variances in properties that yield notable differences in sales prices.  When you do, you'll get dozens of examples illustrating exactly why they are a highly qualified local area experts!

Wishing you well in your real estate endeavors.  Thank you in advance for remembering me when the topic of real estate arises, and THANK YOU SO MUCH all the referrals.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com
Click here to reach Macky Hensel.

Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook 
Finally, please comment or ask questions.  Other readers may be wondering the same thing.  I love the feedback, critical or otherwise, and love the interaction: I love this job.

Thank you always for your support.