Myth #1:  Buyers agents want you to pay more to get a higher commission.

Wrong. The value of the home has to meet the lenders appraisal.  If it doesn’t meet the lender’s appraisal the mortgage loan won’t get  approved.  The seller, having now expected a higher price,  will be disappointed having to  accept a lower offer.    Your agent wont get paid and you don’t get the home because the seller becomes uncertain and reluctant.   It is always better to make a reasonable market wise offer that has potential for negotiating, especially if there are multiple offers.

Myth #2:   Listing agents want you to accept any offer quickly so they can get paid.

Wrong. If you are provided a Market Analysis then you should know the current market price.   This puts you in the driver’s seat to consider only those offers that are reasonable.  Most listing agents want you to get the most for your home. That allows them bragging rights to gain more listings.   Simply ask for a new market survey to give you comfort in support of accepting an offer for your home.

Myth #3:  All agents conspire against their buyers/sellers to get a sale.

Wrong. While they are sales persons, they have a fiduciary responsibility to show good care and ”Realtors” abide by a strict code of ethics.   The best agents enjoy the art of negotiation (fighting for their client). It’s in their DNA to win and only win- losing sucks.   However, every industry and market sector have their bad apples and Real Estate is not immune from worms.   Always ask for at least 3 referrals from an agent’s past clients, call them and you will know if your agent really cares about you.

Myth #4:  Foreclosures are the best deals.

Wrong. While buying a foreclosure feels like a great deal they really aren’t.   There are inherent issues with foreclosures that price alone does not overcome.   In today’s volatile market foreclosures are often found in distressed areas.  Location is still the number one factor in home value.  Historically distressed areas reduce the upside potential. If the home is below market now it will likely be below market when you want to sell.    Not to mention the number of potential hidden conditions that are not readily identified or disclosed.   Be sure to have a thorough property inspection from a reputable inspection company, analyze every value factor and consider future upgrade costs that will meet the neighborhood standard.

Myth #5: Making a cash offer is better than one with a mortgage loan.

Wrong. The process of escrow still remains.   While a cash offer can close escrow in a short 21 day period, an offer with lending can close in the same period or within 30 days, typically.   The seller still gets cash in the end so, waiting an extra week or two and sell for a higher price trumps a cash offer.

Myth #6:  Having an Open House will sell your home.

Wrong: Having an open house does not sell your home 99% of the time.    Statistics show that only 1% of homes sold actually sold from  having an open house.    With so many internet sites providing virtual tours and numerous pictures more and more buyers pass on spending the time to visit an open house. An open house does allow all the neighborhood looky loos and wannabe buyers to traipse through your home.   Serious buyers  will call an agent to schedule a private tour.   Great Pictures, a Virtual Tour and a liberal showing schedule will sell your home 100% of the time.

Myth #7:  Short Sales are a waste of time.

Wrong. If the best home that suits you is a short sale then it is never a waste of time.    Agents often refer to short sales as a waste of time because it takes so long to close the sale.   Waiting an extra month or two to get the perfect home is worth every delay. Buying Real Estate should always be done in a patient and thoughtful manner.  Hire an experienced Realtor who has a track record in all types of sales to help overcome foreseeable delays.

Myth #8:  Making a low ball offer for your primary home is the best way to get a deal.

Wrong. When you have identified a home that you want make an offer that is market worthy, at least. Low ball offers always create an adversarial environment and will cause your offer to be rejected out of hand. Low ball offers are best suited for investment property strategies where the outcome is based solely on numbers and not where you want to live. Offers that will initiate some negotiation are far wiser and more successful.

Myth #9:   Listing my home at the highest price leaves room for negotiation.

Wrong. Buyers search for homes in specific price ranges.   If you would accept a lower price then list it closer to that price where more buyers will find it. Listing your home at the highest price reduces the number of buyers that will consider making an offer. Most buyers search for homes priced below what they actually qualify for.  Price your home competitively to increase your pool of buyers and encourage multiple offers.

Myth #10:  If one Agent is good two is better.

Wrong. Trust is more important than pitting one against another.  Partnering with a trusted professional will always prove to be more beneficial.  A full time committed Realtor will present guidance and opportunities not found if you waste their time.   Interviewing a few recommended Realtors and committing to one will prove to be more advantageous to you.

Can we be of assistance to you?  Please let us know.

Away.  From Harry.

Maybe you should buy a home in Los Gatos or West San jose.  is that far enough?   Cambrian sounds pretty good.   You need to sell your house first though.

You have decided you are going to save money and do it yourself.    More money for you will help you  get further from Harry.  So, where do you start?

Figuring out what your house is worth is probably what you are thinking.   Not exactly… and…. yes, it is.   Better be  quick.  Harry is getting really Buddy-Buddy since he learned you are selling your house.   Saving that 6% Realtor fee should help get it done faster.

Think about it.   You have more room to negotiate!

Do you have experience selecting the prospect pool or knowledge of tested marketing techniques?   How about relationships with hundreds of Realtors who have buyers that are best suited, qualified and ready to buy your home?   Probably not.   But…Harry would love to give you his 2 cents.    2 cents you don’t need.

Selling a house is more of an art than a science.

You are smart though.  You can learn, right?   You are smart enough to read marketing flyers,  read other listing comments, you can get tips from a Real Estate forums about how to negotiate sales price and terms etc.  Great.  Except half of what you learn will be wrong.    About as wrong as Harry’s 2 cents.

I would bet only 1% of what you read will be usable.   The fact is, 80% of homes sold are sold by less than 2% of all the real estate agents.    That means  most of what you read will be sourced from 98% of Realtors who are listing homes that will eventually be sold by, you guessed it, the other 2%.

Can you compete with professionals of that caliber?

To be frank, yes, many homes do sell when listed for sale by owner.

The statistics for those sales are very poor though.  If  a ‘Realtor Listed’  home will sell faster for more $$$, even after all Realtor costs are deducted,  why wouldn’t you hire a full time professional?

In the coming days I am going to present a series of articles to help guide you through the morass.

You won’t have to feel sorry for lonely Harry either.   He will be as happy to see your house sold as you are to say goodbye to old Harry.  Maybe that house you saw for sale in Los Gatos is closer than you think!

131 Millrich Dr.  this Los Gatos house sold for nearly 1% less than the asking and 411 Clearview Dr., a townhome, sold for nearly 5% over the listing price !

A reminder that ’sweet spotting’ your asking price will always pay off.

The good news….neither property was a short sale.

2 Los Gatos Houses sold this week,

131 MILLRICH DR, Los Gatos 95030 (Los Gatos)Single Family Home 3 bed(s) Baths: 4|1 bath(s)   SqFt: 2,593  Lot: 9,100 sq ft

List Price: $1,449,000     Sold Price $1,332,000.00

______________________________________________________

411 CLEARVIEW DR, Los Gatos 95032 (Los Gatos)Townhouse  3 Beds, 2|1 Baths:  SqFt: 2,122 Lot: 2,220 sq ft

List Price: $749,000 Sale Price: $780,000

Assoc. Fee: $428

We see a crossroads ahead…one where the buyers in the Los Gatos Real Estate Market aren’t in the driver’s seat.    Could this mean the homes for sale are in a Seller’s market?

Remember…

Spring is coming and the end of the $8000 First time buyer’s credit is there waiting.   I wonder if will  lead to more vigorous sales?…bidding?

The new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. The IRS has stepped up compliance checks involving the homebuyer credit, and it encouraged homebuyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period.

what you can and cannot deduct as a homeowner

Get your taxes done FREE

Great short Video Explanation of Credit

The Haitian earthquake reminded me of the 1989 Loma Prieta earthquake and how hard it hit Los Gatos.    I was lucky no one I knew was hurt.   I only had to fix a cracked coupling on my grandmothers gas pipe in the Carlton Meadows neighborhood where she lived.

Think ahead!

I added a couple of links below this post to help you obtain the items discussed here.

‘Safe Up’ your home by addressing these 10 things.

1. Make sure shelves are fastened securely to the walls.
2. Place large, heavy objects on lower shelves or on the floor. They might fall. You can also screw them onto things, such as on desks.
3. Place breakable items (bottles, glass, china, etc.) in closed cabinets that have latches. Make sure to board them up so that the cabinet doors won’t fly open.
4. Heavy pictures and mirrors should be hung away from beds, couches, and anywhere that someone might sit.
5. Overhead light fixtures should be braced to prevent falling.
6. Evaluate your electrical wiring and gas connections and repair if needed. During an earthquake, these can become potential fire hazards. Additionally, turn them off and unplug them, so the outlet is not neat the metal part of the cord.
7. Secure your water heater by strapping it to wall studs (not just the drywall) and bolting it to the floor.
8. If you have any deep cracks in the ceiling or foundations, repair these immediately. You might need to consult an expert if there are signs of structural weakness.
9. Store flammable products in closed cabinets with latches on the bottom shelf.
10. Prepare a Grab Bag

Have you ever watched a spy movie or the TV series “24″?

Every good spy has what is called a ‘Grab Bag’.  This is a bag you can grab on the run in an emergency.  Your Grab Bag should have these items in it.  If one bag is too heavy have 2 or put heavy stuff in your car trunk.

Gather these  disaster supplies to place in your ‘Grab Bag’.

1. Flashlight light with extra batteries (preferably one for each individual)Portable, battery-operated radio with extra batteries
2. Purchase and use “Self Powered Radios” and “Self Powered Flashlights”. Batteries will be hard to find, if you can find them. Some models will charge cell phones, but the cell phone towers may be damaged, even destroyed.
3. Purchase and use “Glow Sticks”. These are SAFER than candles, since you will be dealing with ruptured gas lines, flammable, explosive gas.
4. First aid kit and manual
5. Emergency food and water (some sources say you should have up to 2 weeks worth of extra food on hand in case rescue workers cannot reach your location)
6. Nonelectric can opener
7. Essential medicines
8. Cash and credit cards
9. Sturdy shoes for each family member

Home Survival kits

Car Earthquake kits

Tait Ave Home Sold In Los Gatos

You can do a detailed search for homes available for  sale in the  the Los Gatos Real Estate market here.

Loan servicers may be required to reimburse Fannie Mae for a loss if it turns out the original mortgage on the home did not meet its eligibility or underwriting requirements.

Fannie Mae previously allowed servicers 15 days to turn over loan files for review if there was a question over whether a mortgage on a repossessed property met Fannie Mae’s requirements. Loan servicers then had the option of trying to find a better offer for the property or buy it themselves rather than reimburse Fannie Mae for any loss.

To speed up sales of foreclosed properties, Fannie Mae says after beginning the property disposition process by obtaining opinions on the market value of a repossessed home and listing it with a real estate broker, it may now accept a purchase offer without first notifying the servicer, whether or not a final decision has been reached with respect to the review.

“If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss,” the company said in a bulletin to loan servicers.

In its most recent quarterly report, Fannie Mae said it had 72,275 REO properties on its books at the end of September, up 7 percent from a year ago. The company acquired 98,428 homes through foreclosure during first nine months of 2009 — 40,959 in the third quarter alone — and sold 89,691.

Fannie Mae’s sister company, Freddie Mac, reported REO inventory totalling 41,140 homes at end of September, up 46 percent from a year ago. The company acquired 24,375 home during the quarter, and sold 17,941.

In its most recent monthly summary, Fannie Mae said the serious delinquency rate (loans three or more months behind in payments or in the foreclosure process) on single family home loans it owns or guarantees jumped to 4.98 percent in October, up from 1.89 percent the same time a year ago.

Additionally, Freddie Mac’s single-family portfolio delinquency rate rose to 3.72 percent in November, up from 1.52 percent in November, 2008.

This may increase foreclosure activity in the near term and help get this housing issue off the news block.

The median price of a home in California experienced its first year-to-year gain in over two years during the month of November, as the California housing market continued recent trends in terms of prices, supply, and sales. The monthly median price crossed the $300,000 threshold in November with a median of $304,520, up 2.4 percent from the October median price of $297,500 and up 5.8 percent from $287,880 a year earlier. The situation has improved greatly from a year ago during the worst of the financial crisis, when the median price had registered 41.3 percent year-to-year decline.

This supports the conclusion

After a 59 percent peak-to-trough decline, the California median price has increased 24.1 percent from a trough of $245,170 that occurred in February 2009.  The increase in price has been sustained by a combination of lean supply and high demand, the latter triggered by historically high affordability (See November article). By comparison, the NAR national median price for existing single family homes, which experienced a 29 percent peak-to-trough decline, has increased by 4.7 percent from its trough of $164,200 in January 2009 to $171,900 in November 2009.

This has been obvious in the Bay Area market, especially affluent areas such as Los Gatos and Cupertino.

Nine consecutive month-to-month increases in the California median price have been the result of the lean inventory conditions throughout the year. The MLS-based unsold inventory index for California has averaged 4.8 months since the start of the year, well below the 7 month long run average. (See the October article for an analysis of the relationship between MLS-based unsold inventory, defaults, and foreclosures). By comparison, the national unsold inventory index for single family homes has averaged 8.4 months over the year. Inventory levels in both California and the US have trended down for most of the year.

As for sales, California returned to pre-peak levels of sales in late 2008 and sustained them throughout 2009. With sales of 536,720 homes in November, the market was 4.6 percent lower than the October sales figure of 562,400, but 4.7 percent above the November 2008 figure of 512,840. Sales throughout the year have averaged 545,600, compared with the pre-peak monthly average over the 2000-2002 period of 537,300 homes. Over the 2000-2002 period, US sales of existing homes averaged 4.8 million homes, compared with the low- to mid-4 million range of sales that the national market experienced from late 2007 until late this year when sales

The year-to-year increase in the California median price is the latest sign of turnaround from the dire circumstances facing the statewide housing market a year ago. Its foreclosure problems notwithstanding, California’s housing market appears to be ahead of the national market, both in terms of hitting bottom and in demonstrating important signs of market stability and improvement.

A) We all know that pricing is the most important part of marketing your home for sale.

B) A willing buyer and seller are key to executing a sale and buyers set market price for everything.

Right? Not so fast.  We have experienced a climate change in the entire real estate market specifically, Los Gatos and comparable San Jose neighborhoods.

Today, the appraisal has become a problem for some.  Just look at Los Gatos  homes for sale they are like a floating iceburgs…. some underwater.  The appraisal issue has created some warming and chilling.  Why appraisals? It’s called HVCC (Home Valuation Code of Conduct).   Basically, it means a buyer’s lender will have little, if any, persuasion in the appraiser’s valuation.   Cooling home prices and heating up debate.

When the Poole family wanted to make an offer on a home recently they were surprised I suggested a number much lower than the listed price.  It was obvious to me the home was poorly priced.   Due to the HVCC issue the appraisal came back even lower!  This was great news for us and terrible news for the seller.

Appraisals are now ordered and obtained through appraisal firms who then distribute the appraisal orders to their list of appraisers. The chosen appraiser may not be familiar with the Los Gatos Real Estate market, the surrounding neighborhoods in Cambrian or the broader San Jose Real Estate Market that they are being asked to evaluate.  Real climate change.

Should you ask your Real Estate Agent to provide a market analysis to help set a Los Gatos ‘market price’ for you?  Yes, but not any “agent” will do anymore.

In the end the appraisal will make or break the pending sale.

A market analysis report provided by an agent is derived from the MLS and misses a few appraisal factors as part of the equation.  Alternatively, an agent who provides BPO (broker price opinion) to lenders will have experience using a more accurate formula as opposed to an ordinary agent’s market analysis.

Lenders order BPOs from qualified Broker/Agents, as an analysis tool,  for refinancing, loan modifications, short sale approvals and foreclosure pricing.   Using a Broker/Agent, who is qualified to provide lenders this kind of  information is a better choice.

So what do you do?

• Interview several Realtors to help you ‘range’ your price.
• Request contact information from their past clientele.  Not simple ‘textimonials’.
• Choose one who provides 3rd party resource material as part of their pricing quote.
• Try to find a Realtor who is a BPO provider and request their BPO documentation that supports their familiarity with your neighborhood.

Using these simple tips alongside a common sense marketing approach will help you price your home realistically.  Remember,  the appraisal will ultimately define the selling price and it is of enormous importance to get it right from the start.

How would you feel if you accepted a “pie in the sky offer” to only have the buyer’s lender not grant loan approval?  You would probably go off like Mt. Vesuvius and that won’t help the climate change debate.

I can give you a value

23 mistakes you better avoid

Realtors Lie?