Work with an Agent Who Makes Education a Priority

Education a priority Recently, the California Association of Realtors (CAR) made major revisions to the state real estate purchase contract.  This is probably one of the most significant revisions I’ve seen in many years.

CAR is also in the process of training real estate agents on these changes and how best to work with this revised document.

It reminds me of how important it is that we real estate agents continue to train constantly on changes in our industry – not only on changes like this with real estate contracts and other documents – but also on industry happenings, market trends, legal issues, etc.

I personally attend classes, seminars and training sessions regularly so I can stay current and up-to-date with changes in our business and industry.  I am scheduled to attend training on this new contract and will likely end up teaching it to other agents, too.  I teach classes regularly to new and experienced agents in a variety of real estate topics and that, too, helps me keep education a priority in my business.

When you decide on an agent to work with, whether you’re a buyer or a seller, be sure an choose an agent who makes education and learning a priority in their business.  You need an agent who is up-to-date and knowledgeable not only with real estate paperwork, but also with industry and market trends, local market statistics, marketing techniques, etc.

If your agent is not focused on ongoing training and education, find one who is.  You owe it yourself.

Sellers… Landscaping Makes a Strong First Impression

Lawn makes a difference When selling a home, first impressions are extremely important… especially in today’s challenging real estate marketplace.

Neglecting to maintain your lawn by letting it turn brown or become overgrown may discourage potential buyers.  To prevent this, homeowners should cut back or remove trees and bushes that are overgrown, especially if they are hazardous.  Watering, too, is obviously vitally important to ensure a nice, green, healthy lawn.

Weeding and laying fresh bark in planter beds can also contribute to a favorable first impression.

When selling a home… EVERYTHING COUNTS.

Sellers… Make Sure You “See the Light” When Selling

See the lightAre you aware of one of the simplest secrets - ”tricks of the trade” – that homebuilders and other savvy home sellers use when selling homes?  They “see the light.”  Yes, this is one of the easiest and most effective tips sellers can use when selling… simply turn on the lights.

Have you ever walked in to a model home?  Have you ever seen it dark and dreary?  Nope!  Model homes are always well lit… all lights are on and all window coverings are open (natural light is important, too).  It makes the house look lively and bright.  Lots of light even makes the space look larger.  It also makes the house much more inviting and may even make the difference in the house appealing to that one buyer who makes an offer to purchase it.

Which lights should you turn on?  ALL of them.  Hall lights, under-cabinet lights, ceiling fan lights, bathrooms, exterior, etc.  Turn ‘em all on.  If you’re worried about your electric bill due to the extra lights on while selling… then don’t.  The small extra cost is trivial compared to the dramatic results you’ll likely get from keeping the lights on.

Of course, lights and any other tips for selling won’t make any difference at all if your home is over-priced… so make sure you’re priced right to start with.  If not, then you can use every tip in the book and they won’t make any difference whatsoever.

As always, consult with your Realtor on pricing, lighting, and other “secrets” to a successful sale.

Avoiding Foreclosure: A Couple Options

These days, with the economy suffering and property values plummeting, many home owners are struggling to avoid foreclosure. So many home owners are “upside-down” (they owe more on their homes than they are worth) and they don’t know what to do.

When someone does owe more than their property is worth, and they can no longer afford to make their payments, there are two options to consider in order to avoid a foreclosure – a short sale and a deed-in-lieu of foreclosure:

SHORT SALE: The home owner lists their home for sale and attempts to sell it. Since the mortgage (possibly multiple loans) exceed(s) the value of the home, the idea of a short sale is to negotiate with the bank to “settle” for LESS than is owed. For example, if the outstanding loan balance is $300,000 and the property is only worth $200,000, the goal is to get the bank to take a $100,000 loss and accept $200,000 as “payment in full.” Of course, I’m just using round numbers here to illustrate how a short sale would work. Now, you ask… why in the world would a bank agree to this and take a $100,000 loss. Well… it’s really very simple… the bank, facing a possible foreclosure on the property, and additional value loss, would likely “come out ahead” by taking just a $100,000 loss in a short sale… rather than a possible, say, $150,000 loss down the road once the property goes to foreclosure. So, it’s often a better business decision for a bank/lender to agree to a short sale than allow the property to go to foreclosure.

DEED-IN-LIEU: With a Deed-in-Lieu of Foreclosure (DIL), the home owner transfers the ownership of the property back to the owner of the mortgage in exchange for a release from the loan and all payments. Some people consider this option if they’ve been unable to successfully sell their home via short sale or do not want to go the short sale route.

Of course, there are additional things to consider in both of the above options. Both require some sort of “qualification” process and steps to take to complete either a short sale of DIL.

Most people struggling to make their payments attempt to do a short sale instead of a DIL… or at least they may try a short sale before they consider a DIL.

Is It Still a Good Time to Buy Real Estate? Here are 3 Reasons the Answer is YES!

3 great reasons to buy With all that’s been going on in the the stock market, the real estate market, and in the global and nationwide economies, many wonder if now is a good time to buy or invest in real estate.  While that’s certainly a fair question, think about the positives of buying in today’s historically-low real estate market.

  1. Prices are LOW:  Home prices are down by 50% or more in many areas, especially here in the Sacramento area.  El Dorado and Placer county values have dropped significantly, too, within the past five years.  Think of it this way:  Homes are ON SALE… up to 50% OFF and MORE!
  2. Interest Rates are LOW:  Interest rates are the lowest we’ve seen them in decades.  They can’t get much lower.  Those buyers who wait for lower real estate prices, may possibly pay less in price but, when interest rates go up, that savings on price may be lost by the interest rate increase.
  3. LOTS of homes to choose from:  We’re seeing available home inventories at some of the highest levels in many years.  There are LOTS of choices… regular sales (those with equity), short sales (those where the current owners owe more than the homes are worth), and REOs/foreclosures (those owned by the banks following a foreclosure).

So… as you can see, now may be the BEST TIME to buy.  Remember… the greatest opportunities are often had within the worst of times.  Those who succeed greatly often do it when others run for the hills.

Call me and we can discuss the potential opportunties available for you.

How To Buy a Vacation or Second Home Online

Real Estate Investing and Vacation Home Buying is evolving with technology. Especially if you plan on investing abroad or plan on purchasing a second vacation home in a hot spot.

And guess what?

You no longer do you need to travel to South America, the Caribbean, Miami, Vegas, Arizona or Europe to scout for your next vacation home or international investment property.

Whether you’ve been thinking about buying an oceanfront villa, retirement home or a stylish urban condo – you can find out about many of these real estate deals online.

Online Tours & Auctions

There are free online “tours” that give you inside access to an assortment of international vacation homes, retirement villas, ski chalets and luxury rentals in places like Saint Kitts, Belize, Miami, Portugal, Canada and even Australia.

Not only do you discover different global properties you may not find anywhere else, online property tours & auctions also provide great information about the area and some of the local customs.

Online property auctions and online property tours are the latest trends in buying overseas, luxury and retirement property investments.

Benefits of Online Tours & Auctions

Here are 5 benefits of attending an online event:

Log in from anywhere and attend at your convenience
Meet online with real estate experts from around the world
Save on travel expenses
No vacation time required
No high pressure salesmen or timeshare presentations

Law Of Scared Money

Don’t Roll the Dice on Your Financial Independence!

Luck is not your friend in real estate investing

I’ve never been a big gambler. But I know plenty of them. A couple of times a year, a bunch of guys I know organize trips to Las Vegas or Atlantic City, to play craps, poker, you name it. They swear they have a great time. Personally, I’d rather go to the dentist.

That might surprise you. I know it shocked my friends when I first turned them down. Somehow they figured that since I was an investor, I’d want to play games with my hard-earned money.

But let me tell you something – serious real estate investing, or any type of investing – should have nothing in common with gambling. Gambling is a game of chance. Sure, you can study and practice and learn to play the odds. But it’s still play, it’s still a game – and frankly, I don’t play with my money.

How many times have you heard about a guy who wins a bunch of money, then ends up blowing it all plus some because he doesn’t know when to walk away? How many lives have been ruined by people who bet themselves into a hole because they were sure the next hand, the next roll, the next horse race, will be different?

Sure, there are investors who get themselves into that kind of hole, too – particularly people who try to flip houses. They buy a house, dump a bunch of money into renovations, and then they can’t sell it. They’re stuck paying the mortgage each month with no cash flowing in, and they don’t know when to walk away. They keep throwing good money after bad, hoping that something miraculous will happen and they’ll get it all back.

That may happen in the movies, but I’ve never seen it happen in real life. The hard-nosed truth is, good luck never comes to people who need it. It’s like some ugly looming law of the universe. And if you’re betting on good luck to get you out of your hole, you’re probably already too far gone.

I call it the law of scared money. If you’re in a place where you can’t carry a property anymore and you’re afraid of what comes next, you’re not in a place where you can make good decisions. This is the point where people start gambling, start playing the odds, start praying for some of that elusive good luck – and it usually leads to disaster.

Here’s rule #1 of real estate investing, and of life in general: you can never be absolutely sure of anything. That’s not to say that flipping is a bad idea – I’ve made plenty of money doing flips. But I always have an exit strategy going in.

In fact, I have an exit strategy with multiple doors. My primary intention may be to sell the place in a few months – but I’ve also run the numbers and done the research to know that if it doesn’t sell quickly, I can rent it for enough to cover my expenses and generate some positive cash flow. If I can sell it quick, that’s great – but I know that if I can’t, I can still afford to hold on to it long term. If the numbers don’t add up, I don’t buy it – it’s a simple as that.

It’s that law of scared money again. If the deal depends on lucky breaks, you’re not going to get them. As soon as you invest in a property that breaks even or loses money in the hope that you’ll sell it real fast, the market will go down. I’ve seen too many times investors get stuck renting a house they can’t sell for less than their monthly expenses on the property. That’s not what you’re getting in to this for.

Remember, the goal of real estate investing is financial independence. You’re not in control of your own destiny if you’re relying on luck. Data, facts, and numbers – those are things you can rely on. There’s no guess work – either they work or they don’t.

Many Buyers Think Foreclosures are Hard to Buy… Think Again!

Foreclosures are easy It’s true… many of the buyers I talk to try to avoid foreclosures because they think the buying process for foreclosures is more complex and takes longer than traditional sales.  As a Realtor who has sold literally hundreds of foreclosures in the past few years, I can honestly say that, in many respects, foreclosures are much easier to buy than a home sold by an actual homeowner.

Many people get confused between foreclosures – also called bank-owned or REO (real estate owned) properties – and short sales.  Short sales are those properties where the homeowner owes more on the mortgage than the property is worth and the sellers are trying to get their mortgage holder to agree to take less than the outstandning mortgage… those sales (short sales) can indeed take much longer than a traditional sales… often many months.

Foreclosures, on the other hand, are bank-owned properties that the bank wants to sell, mitigate their loss, and get the property off their books. Those properties, contrary to popular belief, are actually very easy to buy.

And while there are some typical restrictions to buying foreclosures, like often they’re sold AS-IS, and there’s little negotiation after the escrow process has begun, the process overall is much like a traditional sale. Even the time lines are consistent with a traditional sale… often 30 – 45 days to close a transaction.

In addition, many people think all foreclosures are dumps or in poor condition. While that’s true for some properties, many are very nice homes where the previous owners fell on hard times, but took great care of the property.  I’ve sold many, many foreclosures that were absolutely gorgeous.  So, just because it’s a “foreclosure,” don’t automatically think it’s in bad shape.

So… if you’re in the market to buy, either to live in or for investment, certainly don’t pass up looking at the foreclosures that are for sale.  They make up a large portion of the available properties on the market… check ‘em out.

REITs hit slump in stock market

Publicly traded real estate investment trusts underperformed compared to broader equity markets in the third quarter, according to analytics firm Barclays Capital. However, the forecast is not all doom and gloom.

REITs invest in real estate holdings and mortgage-backed securities. REIT performance for each sector is as follows: technology -12.8%; regional malls -14.2%; shopping centers -15.6%; office -21.0%; industrial -28.8%; and brokers -45.9%.

Even the multifamily space, which is seeing a renewed interest with rising rentals, fell 11.5%.

The NAREIT Equity Index fell 15.1% on a total return basis versus the S&P 500, which posted a quarterly 13.8% drop. Year-to-date, the NAREIT Equity Index is down 6.1% on a total return basis, outperforming the S&P, which is down 8.5% over the same period.

“Looking forward, the increased economic uncertainty is likely to contribute to continued volatility for both the broader markets and REITs in the near term,” BarCap analysts said. “We will look for a more cautious tone in management commentary as we head into 3Q earnings.”

The analysts are not expecting recession-like conditions to return in the commercial real estate markets, they add. Furthermore, REIT balance sheets are in a stronger position than in years’ past.

They also predicted GDP growth to accelerate into year-end, increasing from the 3Q11 estimate of 2% to 2.5% in 4Q11.

“Despite current economic headwinds, real estate fundamentals remain relatively solid,” they write, “although the pace of recovery and improvement continues to vary by geography and property type.”

Buyers: Do Your “Home”Work… Have a Home Inspection

Homework home inspection One of the most important issues we discuss with buyers is home inspections. Although home inspections are always strongly recommended, it is especially important in today’s market since such a large percentage of homes for sale are distressed properties – foreclosures and short sales.

Yes, a home inspection costs money. And sometimes that’s something a buyer doesn’t have a lot of. However, the $300 – $400 a buyer invests in a home inspection could end up savings thousands or even tens of thousands of dollars later.

If you’re buying a home, discuss with your Realtor how to approach getting a home inspection. Most Realtors have access to excellent home inspectors; you can consider one of their recommendations, or find one on your own. I do recommend, however, not to use Uncle Wally because he’s a contractor, and he’ll do it for free. You can certainly ask Uncle Wally’s advice, but you should still hire a professional home inspector.

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