Wednesday, May 29, 2013

All-Cash, No Contingency Home Buyers. Where's It All Coming From?

If you are out looking for a home, and had have make a couple offers that were not accepted, chances are, you have heard that someone else with all-cash, and maybe even, no contingencies, got their offer accepted. These types of offers are spreading like wild fire. But...where is all this cash coming from? Who are all these people who have this type of money available? And no contingencies? That sounds crazy, right? To be honest, I have had a number of buyer ask me if all these people with all this cash are foreign investors. Everyone has their own idea, or conspiracy theory, of what is going on. Well...who better to ask than a real estate agent? So here we go:

Yes, there are foreign buyers out there right now, but...when has that not been the case? This is LA and we have always had a large variety of foreign money here. And no...I'm pretty sure there isn't someone sitting somewhere like China on the phone saying "buy now".  So, yes, there are a lot of foreign buyers in the market right now, but that isn't everyone with all-cash.

What about the real estate investors or "flippers"? Is it them doing these deals with all-cash? Yes, there are a number of investors and flippers out there buying houses with all-cash. But fact is, I've been on the buying side of a lot of deals, and I've seen houses being sold to all-cash buyers that weren't worth flipping because they were in good shape and there wouldn't have been enough room for someone to buy the house, put $ into it, then resell for a profit. And the people buying it, weren't going to rent it out, so, it's not totally all the investors either. Although, some investors are buying houses to rent out and sell in a few years hoping to turn a profit that way.

So...let me turn this article back on to you, the reader. Chances are, if you are reading this, that you are out looking for a home to buy. Well, where did you get the money for your down payment? Have you been saving it for when you felt comfortable buying? Or maybe it was left to you in an inheritance? Perhaps a family member who may have thought of leaving you some money after their passing decided to go ahead and gift it to you now while it was a good time to buy?  Well, these are the other people with all-cash. Some people are very meticulous about saving money and now that time has come where they feel comfortable about the economy and where it is headed, they are ready to spend it, on what they hope will be a good investment in their future. And there are a lot of people that inherited money years ago, or even just recently, but now this is the time to put it towards a home before prices soar again.

 So, there you have it. That is a mix of where the all-cash buyers are coming from. And it's no conspiracy. I mean, why are you looking to buy right now? Well, whatever your answer is, there are a lot of other people thinking the exact same thing. It's no secret. Prices are going up, rates are incredibly low, and people are feeling good about the economy.

And last but not least, the "no contingency" buyers. I honestly don't know what to make of this one. It is a risky move but if this is what you think will get you the house, and there is a good chance it might, than maybe it is something you are up for. Or maybe not. It really is a person to person decision you and your real estate agent should talk about. As always, if you are looking to buy or sell, feel free to call me. I will be available to answer any questions you may have about the real estate market any time as well.


Sunday, May 19, 2013

Good Home Inspections VS Bad Home Inspections

Have you ever wondered what makes a good home inspection good? Or just the same, a bad home inspection bad? Here are some clues to look for when choosing your inspector:
I hear it time and time (and time) again from people buying a home "I want an inspector that is going to be very detailed and go over everything" But, do you think that is the only thing you should want in an inspection? I hope not. Or sometimes I will get the buyers who choose an inspector based on price. Maybe the cheap inspection will save you some money, right? Not in the long run folks. If he misses things or doesn't recommend further inspections that may be needed, then you could be left buying a house and finding out very soon that there were things that were overlooked that can cost you a pretty penny to rectify. And at the other end of the spectrum, maybe the guy who charges more will be extra good, right? Not necessarily. So then what makes a good inspector and where do I find one? Well, the best place to find one is to ask your real estate agent. We see dozens of inspections each year, so it is likely that we have a few people's names and numbers that we can give you to choose from. It is also likely we have a few names and numbers you should avoid.
Finding a good inspector is really like finding a good doctor. And sometimes you want someone who delivers the news in a way that best suits your personality. Some people like it as frank as you can give it. Others need gentle explanations of what is going on. And a good inspector should be able to read you, read the situation, and do the same. They should treat a first time home buyer the way a first time mother-to-be should be looked after. You don't want an inspector to overload you with negative news delivered in a harsh, cold, matter-of-fact way. You want someone who is going to give you all the important news, in a way that you can understand, and also let you know that there are solutions to just about everything. And this is VERY important so listen up here...some inspectors like the roof, chimney and sewer inspectors may also give you news in the hope that they can benefit by fixing what they find (and I have seen inaccurate diagnoses plenty of times). I hope you got that point.

Here are a couple of real stories from inspections:

 During a recent sewer inspection the man doing the job said there were a lot of roots in the pipes (by the way, no trees anywhere near the front yard where the pipes are) as well as some separation. (This man was hired based on his low quote to do the inspection) He estimated anywhere from $5,000-$10,000 to fix the problem. Another sewer inspector came out for a second opinion (this company cost a only $100 more than the other one) and wound up cleaning the pipes out, which were just filled with bathroom products and viewing the separation with a higher grade camera to point out that the separation was extremely small and minor. The total cost from this company for repairs was about $200.

At a home inspection this week the buyers chose an inspector that was recommended by their friends because he was said to be thorough.  This inspector delivered his findings to the buyers in the same manner Rush Limbaugh delivers his news. This inspector was so over the top, matter-of-fact, and dramatic. And the clients are first time buyers. Some of the issues he pointed out were that the board along the floor surrounding the water heater in the closet it too high and could cause you to trip and that, to him, was a big safety issue. To paint a clear picture to you about this, the closet was only big enough to hold the water heater and not much else...therefore walking into it is not an option. He also mentioned that a small pipe that drains water from the A/C needs to be looked at since the water coming from this pipe can create a puddle in the dirt on the side of the house. When I asked him why this was a problem his answer was "Because mosquitoes like water and you don't want that" This puddle is situated just near their pool, by the way. 

So hiring the right inspector is a very important decision and the cost of a good inspection is worth more than you will ever know.  Your real estate agent most likely knows a number of good ones you can call, or they should easily be able to find some from other agents they know. So please take the time to find a good one, and listen to your real estate agent's advice. After all, our main job is to look after you and your best interest.  And if you live in the LA area and would like any recommendations on good inspectors, feel free to give me a call and I would be happy to help. And when you are ready to buy or sell, I am happy to help with that as well.

My First Time Home Buyers Just Got Their Keys

Congratulations Justin and Kelly on your very first home together! After over a year of trying to buy a home, we crossed paths and just a few short months later, they had the keys to their first house.

Thursday, May 16, 2013

Pocket Listings: Real Estate's Hottest Password That May Get You In The Door

It's May 2013 and the real estate market here in Los Angeles looks like the grand finale of the 4th of July Fireworks. It is just exploding. There is so much demand to buy a home right now, that there are a number of growing trends to help both buyers and sellers get the best outcome they desire. One thing that is popping up everywhere are Pocket Listings. So, what are pocket listings, how do they work and how can you find out about them? Well, here are all those answers:
A pocket listing is an agreement between the seller and their agent that they prefer not to have their home publicly listed on the MLS (multiple listing service). There are a number of reasons a seller may choose to do this. One may be that the seller lives in an home where they don't want just anyone off the streets to come walking though it.  This is typical of homes in affluent neighborhoods where the seller prefers that their agent find only qualified buyers through resources other than the MLS.  In today's market a seller may have other important reason to not have their home publicly advertised. I have heard a number of sellers say that prospective buyers have just knocked on their front door with no appointment or realtor by their side. This is not invasive but it may be a safety issue for the seller as well.  Therefore, some sellers are choosing to have their agent go out and find buyers themselves. Another thing that is happening all over is that some houses are getting 20 or more offers on them. Now I know what you may be thinking "How is having 20 offers bad thing?" right? Well folks, to sell a home, all you need is one good, strong offer.  Having 20 offers in front of you can, not only, be overwhelming, but there is a good chance that 18 of them aren't strong buyers that will be able to close the deal. If you have your eye on the market right now, you are seeing a lot of houses come "back on the market". This can be frustrating and time consuming for a seller to think their home is being bought...and then it's not.  Buyers don't believe they have the luxury of time where they can see the house a couple of times, think things through, weigh their options and then make an offer....and they are kind of right. They may not. So they are making offers on home just because the home is in their desired location and the price range is what they are looking for. Buyers are also assuming their offer may not be accepted so sometimes, they aren't even serious about making this offer. If I am listing your house and we decided that we are not going to put in on the MLS, I can find serious and well qualified buyers that are more likely to get you that good price you are looking for and actually follow through with the purchase. If you are a well connected real estate agent in the community, then you have surely been speaking with other agents that you know have good buyers ready to make a purchase, and that is how we find you one, or a few good buyers to choose from as oppose to the 20 that may or may not be real. Another reason to not publicly list your home may just be a convenience factor. You may not have a flexible schedule where you can make your home available for showings all the time. Or maybe you don't live in your house and you have tenants there. They may not want to open their doors a dozen times a day to let people in to see this house. So maybe, you just want your agent to bring a few serious buyers in to see and get an offer that way.
There are a number of reasons, as a buyer, you will want an agent that has their finger on the pulse of this market as well. Not only should your agent be connected with the agents in their office, but they should also be connected with the agents that are listing a lot of homes right now. I get to hear about these pocket listings and if I believe that my buyer will put in an offer at a respectable price, with good terms and conditions, then I may be able to get you into seeing these houses that aren't on the MLS. But please realize this, just because you are in the market to buy a home, doesn't mean that any agent will be willing to help you. Because the market is so competitive, your agent may need to know and understand that you are ready, willing and able to make a purchase before they decide to work with you. So if you are someone who is looking to buy or sell your home, and you have questions about how to go about doing it in the best possible way, call me and lets talk over your options. I look forward to hearing from you!

Thursday, May 9, 2013

Getting the 411 On Houses Before Seeing Them

So you are out looking for a home to buy and you have a lot to consider when buying a house. But you'd like to keep your search to homes that better fit your criteria rather than seeing every house out there, right? What can you do to find out more about a home before going to see it that can help you keep your search more focused and time efficient for your busy schedule? Well, there are a number of things you can do, so let me tell you about some of them. 

Are you wondering about a potential house but don't know how safe the area is? Well one way to tell is by going to this site   Type in the address of the house you are looking for and see what comes up on the crime map. Now, don't jump too quick at what you see. Try entering in an area that you already feel safe in, or live in and really like, and now compare what see. And remember, you may see more crimes in busy shopping areas so keep that in mind as well.

Maybe you have kids or think that having some may be in your future and you would like to find out about where they may go to school if you bought a particular house. Well this site may help you some when it comes to the local school systems  When you enter in the address of a home, it will tell you what school is closest to that home. But be reminded that this does not guarantee that your child will be able to attend that particular school. Please also check with the school by calling them or visiting the principal to ask about future enrollment of your child.

There is actually a lot you can find out about a house by going to this site Google Maps  Either you are already using this method to find out about a home or you think I'm giving simple advice by pointing out that you can see where a home is located on a map right? Well try this..go to the site and type in the address of the home and hit the search key. Okay, so now you see the pin point of where the home is located. Now go back to the search bar and erase the address and try typing in something like "restaurants" or "parks".  You can zoom in and out and the map will show you where these types of locations are in your area.  So if you are someone who likes to be near a lot of restaurants or maybe you want to know where you can take you dog to the park, this is a great way to find out. Now you can also re-enter your potential home's address back in the search bar and search it again. But this time when it points it out on the map, look to the left of the map and see if there is a photo of the property. If there is, then there should be a little orange symbol of a person in the corner of that photo. If you click on this orange person symbol, it will show you a front view of the home. Once the picture shows up on your main screen you can use your mouse pointer to move around the angle and position of where the camera is coming from. Here are a number of things you can find out about the house just from these photos:
Do you see any new additions in the listing that weren't in the google map photos? Maybe an extra wing of the house? If so, you may want to go to your local building and safety and see if that was permitted. What about a garage? Do you see one? Sometimes we forget to look for one in the listing because it's not pointed out to us in the listing that there isn't one. Or maybe there is one, but it's only accessible by an alley and in order to get to it, you have to manually open a gate in the alley to enter into it. You can sometimes see this on google map too. So the listing says the lot is 21,000 sqft in the hills? Wow, that is a lot of land here in LA. But maybe if you have searched the house on Google Maps, you can zoom in with the Satellite View and maybe see that most of that properties land is really hillside?   Have you ever gone to a listed house and not even recognized it from the street? Maybe because there is a large wall that surrounds the house? Well, the photographer of the listing may not have wanted that part of the house featured but Google Maps will show that big wall just fine. And what about the neighbors and the street the home is on? You can preview that on Google Maps as well.  And there are other things you can see from this site as well. Like maybe this home backs up to the rear of a grocery store. Or you would like your home to have some elements of Feng Shui? Well, you can see if this home's front door faces the South from Google Maps as well.

And last but not least, just try entering the potential home's address into a search engine and see if anything of interest comes never know what you could find out there as well.

So before you set aside a whole day to go look at houses, try using some online resources and seeing if you can weed out the ones that already may not fit into your criteria and when you are ready to go out and start seeing some homes, call me. I am happy to help you with all your Real Estate needs (323)828-7777


Tuesday, May 7, 2013

Does My Agent Get Kick Backs From Recommending Certain Businesses Or Vendors?

Something tells me that you have thought to yourself, "Why is my real estate agent recommending these certain professional people and what do they get out it?".  Sometimes I can tell that my clients think this even if they don't ask...but, why not ask?  I say go ahead and see what your agent says. Because here is the scoop you've all been waiting for:

There are a number of people your agent might suggest you call and see if they can help you during your home buying process. Some of these people are general inspectors, roof, chimney and sewer inspectors. You may get the contact info of a few different loan officers and also an escrow company.  So why are you getting these people's contact information? And what do I get out of giving them to you? Well.....I get peace of mind.  Not the answer you thought you'd hear, right? Well, it's true. These people are people that I have worked with before or have been referred to me by other people I trust. When it comes to getting a house sold, whether you are on the selling side or buying, it is important that you use people that are good at what they do. It's not just as simple as calling an inspector and asking for their prices. I mean, does this inspector really know what they are talking about? Are they going to explain it to you in a way that you can understand? Are they going to point out the difference between what type of work needs to be done now and what can be done in the future? If you were looking to get your car repaired, would you just look over the yellow pages and choose someone or would you go with a person that is recommended to you? Well, who could be a better person to ask than someone who works with these people on a regular basis?

And if you think getting a loan funded and closed on time is just a matter of going over your financial papers and checking your credit then sitting back and waiting to hear a "yes" or "no" about the loan, then you are really in need of some recommendations. The loan officers are much more than the fees they charge.  They really need to know there way around HUD houses, FHA loans, investor ratios in condos, and all the lovely hiccups that are almost inevitable in every loan process.

So, yes, I may ask if you want me to send you some numbers of some loan people. And yes, I will ask you if you already have some inspectors names in mind. But to answer that burning question...No, I don't get anything when you call them besides knowing who they are as professionals and understanding how they work.

Thursday, May 2, 2013

Hot Tips For BuyersTo Use In This Hot Seller's Market

I've recently been working with a lot of buyers and I've heard a number of them ask about the comps (comparable recent sales) of a house they are interested in putting an offer in on. There have been a number of times that once the buyers find out what the comps are for a house, whether it be from me telling them or the online Real Estate websites (zzznot the place to look for za compz!) that they base their offer on the average comp price. No no no no.....In case you were wondering, we are now in a seller's market and a very competitive one at that. If your goal is to get a house then you must try to be the highest and best offer. So if you are making an offer that is not close to, at, or above the highest comp out there, then truly, you are not in the market to buy a house at this time. If the house is priced well, and in a desirable area, and you make an offer at or under the listed price, you are most certainly not getting the house. I know that it is hard to come out of a market, where not too long ago, there were a lot of short sales to choose from and you could negotiate the home price with the seller, but that time is gone. And I highly urge anyone in the market to buy a home right now to go into the process with the goal of buying a home, and not trying to get "a deal".  The deals are still out there which is why the market is so hot right now. And here are the deals: the low loan rates, the houses (while going over list price a lot) may still continue to rise for years from now. Those are the deals. If you choose to look for any others, you may be out of luck and spend good time getting beat out of the market. And when putting your offer together, ask your Realtor what else you can put in your offer to make it desirable, other than the price.
There are many other things in the offer that you can include, or not include, that may get the seller's attention and get your offer chosen.  Here are a few things you should talk with your Realtor about concerning the offer:
1. Do you really need the refrigerator and washer/dryer? Maybe don't ask for those and if you really want them, maybe offer to purchase them separate from the home purchase.
2. Can you offer a shorter escrow time period? Seller's would love to see the money from the sale sooner than later.
3. Can you shorten your contingency periods and maybe do your inspections in the first few days? Or talk over the other contingencies with your Realtor and see if those may be shortened.
4. What about the costs for Retrofitting and certifications for this? Ask your real estate agent what this may cost and is this something you can pay for?
5. Home warranties are great! I recommend having one. The average home warranty may run $400-$600. Is the house you want to buy worth you paying for this yourself?
6. Ask your broker about the NHD report. This is usually at or under $100. Do you need the seller to pay for this?
7. And what about the termite and pest inspection and correction? Depending on what the inspection says, if you offer to pay for this, it could be in the thousands...but maybe this is something you are willing to do as a buyer?
8. And last but not least, and this one doesn't cost you a dime; write a letter to the seller with your intentions for the house, and be honest. Are you going to move into the home and make it your home for years to come? Are you going to care for the house and yard the way the sellers have done for so many years? While a letter like this may not mean much to some sellers, it may make a huge difference to others...and it's totally free.

Talk about all these options and more with your real estate agent and good luck with buying and selling your home. And when you are ready to list your house, I can walk you through the best way to get the best dollar for your home, so call me anytime.