by CRESTICO | Feb 9, 2009 | CRESTICO
Buyers often have a difficult time determining how to arrive at a price to make an offer. Often, avoiding an offer at full asking price, can save the buyer money. Other times, full asking price is the only price at which a seller would be willing to let go of a property. Read further to learn about some of the things that affect the price at which a buyer is willing to make an offer.
Condition. A property’s condition certainly plays a factor in determining the price a buyer wants to offer. A smart buyer will have a good idea of how the condition of the desired property compares to the general neighborhood; namely whether it fits in or stands out. Condition takes many things into account. For example, structural condition is probably the most important to consider. Walls, ceilings, floors, doors and windows and the paint, carpets, and floor coverings will provide indications as to the condition of the property. Whether they are new, slightly worn, very worn, or in utter disrepair will affect the price a smart buyer is willing to offer. Often, bathrooms and bedrooms will need to be checked and seen whether the plumbing and electricity work efficiently. An intelligent buyer will also pay attention to fixtures, such as light switches, doorknobs, and drawer handles. Your agent will be able to complement the information you gather, by providing you with information regarding the other neighborhood properties.
Improvements. Smart buyers will note whether previous owners have made any improvements on the property. However, only take into consideration improvements such as room additions, because superficial or cosmetic improvements should not result in an increase of the price the buyer is willing to pay. However, be careful when considering things like expensive floor tile or swimming pools. A pool that costs $20,000 to install does not normally add $20,000 in value to the home. Ask your agent to give you guidance in this area
The Market. A hot market is often called a "seller’s market." During a seller’s market, properties can sell within a few days of being listed and there are often multiple offers. Today, however, we are living in a largely "buyer’s market," which means properties are staying on the market for extended periods of time and there are fewer offers being made. As such, a buyer has flexibility and should offer a lower price for the home.
Finally, comparable sales information is some of the best information to help a buyer determine a base price range for a particular home. Taking into consideration various factors like property condition, improvements, and market conditions help determine whether a "fair" price would be at the upper limit of that range or the lower limit. The "fair" price should be approximately what you are willing to pay at the end of negotiations with the seller. Although your agent may provide advice and guidance, you are the one who makes the decision. The price you put in the offer is totally up to you.
by CRESTICO | Feb 5, 2009 | CRESTICO
Get The Best Deal on A Home
While buying a home can be a stressful process, it can also provide you great sense of achievement and satisfaction. Here is some helpful advice for you to consider when trying to get the best deal.
Vacant Properties are a great way to get good deals. Properties that are vacant do not have anyone living in them and are not making any money for the seller. Often, sellers are very willing to enter negotiations to get these properties off their books. This can be a great negotiation point for you, the buyer.
Do not underestimate the value of a fixer upper! While it may not be the most attractive house on the block today, it very well may be tomorrow. New carpets, a coat of paint and landscaping can turn a seemingly dilapidated old shack into a sparkling new home. Try not to get distracted by things that are easily fixed. If the home has no structural issues and matches your needs, consider the potential when making your decision. Often, homes that are not initially aesthetically pleasing, will turn out to be the customized home of your dreams!
Get an accurate idea of how many homes in the area you are considering, truly match your needs. Having a solid idea of this number will help you determine your negotiating power. The more homes there are that match your needs, the greater your ability to negotiate. Your agent can help you find this information.
Survey the area’s schools. Just because you do not have children now does not mean that you will not in the future or that you should not consider the schools. Schools can be a great negotiating tool, as well. Good schools are an indication of property value that is underlying and potentially long-lasting. Not-so-good schools in the area can give you another bargaining chip when entering negotiations with the seller.
Have a flexible touring schedule. Often, and especially in this market, sellers rent their properties while they are trying to sell them. This means that there may be tenants living in the property, or perhaps there is no lockbox and tours may be on an appointment basis only. While this may seem burdensome, consider this. A home that is not often viewed, is not often made an offer on. As a result, your offer may be taken more seriously. Minimally shown homes do not pull in offers the way open houses do, so the seller may be more willing to entertain and negotiate your terms.
A common point of contention between buyers and sellers is the closing date. Buyers are often eager and want to close as soon as possible to meet their own personal deadlines, be it the opening of school or beginning of summer or recently after a wedding. Sellers are often eager for many of the same reasons as well. However, it would be beneficial to the Buyer to determine the Seller’s deadline when making the offer. This way, the seller may be more likely to accept the offer.
Using this advice and help from the right agent, you’re sure to get the best deal possible!
by CRESTICO | Jan 31, 2009 | CRESTICO
What is an REO? REO means Real Estate Owned. Everyone is talking about REOs these days. But before you consider buying one, there are a few things you should know about REOs. These properties are generally owned by banks, credit unions, mortgage companies and sometimes private companies. It has become increasingly common for the news to report foreclosure issues and homeowners losing their houses and other effects of the mortgage crisis. As a result there have been dramatic increases in the marketing of REOs to the general public. It used to be that you could barely get your hands on lenders’ foreclosure lists. But these days, everyone is trying to sell REOs.
The people that are being marketed by these REO sellers are mainly first-time and minority potential homebuyers. Fannie Mae works with many companies to help these types of homebuyers realize the American Dream of owning your home using reasonable and affordable loans. There has been a shift in the industry from marketing REOs to those who “flip” houses to first-time homebuyers. The dramatic increase in foreclosures has left many lenders with high inventories of REOs, resulting in potentially advantageous opportunities for individuals who never has access before, to gain access to the real estate market. Additionally, the number of foreclosures is allowing simple real estate investors to diversify and expand their portfolios.
There are many laws regarding foreclosures and the process. Mainly, when the property is in the pre-foreclosure and auction stage, the bank (owner) is only legally entitled to its losses and expenses. This is to say that the bank (owner) is not entitled to gain a profit from the sale. This changes however, after the property has been foreclosed on it becomes an REO.
REOs are often considered to be fabulous starter homes because the sales prices for these properties is generally lower than that of a similar non-REO property. In today’s market however, this may not always be the case. This is mostly due to the fact of the number of such properties in the market. Even though a property is an REO, it does not mean that the owner will not make a profit off the sale. Remember, after the foreclosure process, the REO owner is now allowed to make a profit, which may affect the sale price. A buyer will generally be more likely to get a lower price when purchasing a home in the pre-foreclosure or auction stage.
Let’s say now you’ve decided you want an REO. You should know there are risks associated with this “great deal” you are getting. When considering your REO purchase, make sure you have access and contact information for various experts who will guide you in the inspection process.
You will need a Realtor, who can protect your interests and make sure you get the best deal possible. Your Realtor will be able to generate reports for you showing comparable sales prices which will enable you to assess whether the asking price for the REO you are considering is appropriate. There are some statistics that show the average price of an REO is 15 – 30 percent lower of comparable sales prices. However, there are REASONS for this.
REOs are sold AS-IS. This means that what you see is what you get. You will need a qualified home inspector to guide you with this step of your REO purchase process. Only a qualified inspector will be able to reveal latent flaws or issues that you will need to consider before you purchase the REO. You will need to factor in the costs of potentially repairing, replacing or rehabilitating the necessary sections of the property into the price you will be paying.
REOs take longer. When purchasing an REO, you are not dealing with Joe and Jane Smith homeowner, you are dealing with either a Bank or an Investment Company. The decision making and sale approval process in a business takes much longer than with individuals. It could take weeks to get an approval on your offer. Additionally, even though most banks will remove tax liens and occupants (if need be) from the property, in order to protect yourself, you should perform a title search. Now you may not personally be able to do this, which is why you will hire a company to perform such a search for you, and the results may take up to a week to review. Another potentially time-consuming process is getting an appraisal. As a buyer, you should not trust the seller’s appraisal blindly, get your own! Any time or money you spend beforehand may well be worth it in the long run. You want to know that you are getting what you are paying for!
With the right amount of patience and knowledge and the care of a Crestico Agent, buying an REO will seem like a breeze. We have agents that specialize in purchasing REOs. When you work with a Crestico Agent, he/she works for you to get all the experts you need! From inspectors, to title searches to appraisers, your Crestico Agent takes care of it all for you!! Call us today!
by CRESTICO | Jan 31, 2009 | CRESTICO
You’ve been hearing a lot lately about foreclosures, REOs and short sales. There are conflicting reports about whether or not they can be good investments. At Crestico Realty, we pride ourselves on giving you the most up-to-date information on making the best Real Estate decisions for yourself and your family’s future. Buying a foreclosed home may not be for everybody, but keep reading and find out if it’s right for you.
Sometimes, foreclosed homes can be good investments, because often, they sell for less than market value. For a first-time homebuyer, the process may seem more complex and time-consuming but that’s why we, at Crestico Realty, are here to help! A foreclosure is a property that is being “foreclosed” upon by a bank or some other lending institution. It is a legal process through which the homeowner's rights are terminated, generally as a result of his/her failure to pay the mortgage.
One thing that is important when considering the purchase of a foreclosure, is where and how the home is being sold. Often, real estate auctions are where foreclosures are sold because the lender is generally trying to sell the property as soon as possible. At auctions, buyers are generally expected to pay for the house at the end of the auction, which means the financing must already be in place. At Crestico, we work with a preferred lender to make sure that if you want to purchase your home from an auction, we have your financing ready to go.
However, in today’s market, auctions are not the only way to purchase foreclosures. Many REO (real estate owned) companies purchase these foreclosures and list them for sale, essentially performing the function of a “homeowner” who does not live in the house. When making an offer on such a home, it is still a great idea to have your financing in place, so that your offer (which will most likely NOT be the only one) will be easier to accept.
Buyers often ask, regarding foreclosures, “Will I be able to gain equity in an REO?” The answer to this question is generally dependent on (1) the current value and (2) the sales price of the property. If a buyer purchases a property for less than it is worth, there is automatic equity. With foreclosures, and an experienced Crestico agent, you can have the peace of mind that we will find you the right foreclosure to purchase.
If you are interesting in purchasing a foreclosed property, your Crestico agent will work to find you the best home! Your Crestico agent has access to many services that track foreclosures in and neighborhood you are looking to move to, in California. We stay on top of your search. With foreclosures, you have to move quickly because the lucrative investments get snatched up quickly. Call today and speak with one of our REO Buyer Specialists!
by CRESTICO | Jan 31, 2009 | CRESTICO
LISTING YOUR HOME AT THE RIGHT PRICE
You have finally decided that you want to sell your home. Where to start? The most important thing you must consider is the price. This is going to be the first impression a potential buyer gets of you and your home. If you price it too high, you risk discouraging buyers and reducing your home’s appeal after only a short time. Industry standards dictate that most listed homes see a reduction in demand and interest after about 3 weeks. Industry practice has also shown that if you price your home too low, market factors will raise the price to market. This is because you will receive multiple offers on a low price and potential buyers will end up bidding more and more to get your home. 2 things you should consider when attempting to determine a price are Supply and Demand. Now, we have all heard these terms in our high school economics and government classes but what do they mean to you, a potential home seller? They mean you must consider how many homes are on the market in your area (supply) and how many people are looking to buy them (demand).
Here are a few other thing to consider when trying to set a sale price for your home:
Comparable Listings. A good starting point is to take a look around your neighborhood. Compare your house to the others on your block (we generally recommend considering homes up to but not further than a 0.5 mile radius from your home). And don’t just look at today’s prices. Do a little research and go back a few months. Look at recently sold as well as currently listed properties. Spend some time gathering information, this will all be useful to you in determining a price base. Compare things like year built, square footage, lot size, pools, second stories, driveways, garages and carports. Look at old listings, expired listings and withdrawn listings to determine the number of days each comparable property was actually on the market. Pay attention to sales price in relation to listing price. Discrepancies in the two may indicate trends in the local area.
When considering active listings, remember these are the homes that buyer looking to purchase in your area will be looking at and mentally comparing to your home. Attend open houses in your area and take tours, check out the competition. Make a note about anything that strikes you and apply your perceptions to your own home’s open houses and tours. We at Crestico have preferred partners that are specialists at Staging. Staging is when you prepare your home in an aesthetically pleasing manner so as to entice and induce buyers.
After you have gathered all the information you need, your next step is to make sense of it and set a price. Another thing to consider would be what type of market it is, buyer’s or seller’s. This seems tricky, but your Crestico Agent will be able to sort it all out with you and explain it in easy to understand terms. Call today to speak with an agent who is ready, willing and able to help!
