You may have recently entered into an agreement to purchase a residential property or you may have completed a loan application to refinance your home.
Lenders are required to obtain an appraisal, prepared by an impartial and unbiased appraiser, and use it as the primary tool for assessing the sufficiency of your collateral.
You may want to retain an appraiser to provide an appraisal to help you make decisions such as buying, selling or refinancing your home.
The basics of an appraisal
An appraisal is an opinion of value.
For estate planning, financial planning, or sale price decisions, individuals or a trusted advisor usually orders an appraisal.
When an appraisal is used to obtain an opinion of value of a property for loan purposes, federal regulation requires the lender or its agent to place an appraisal order.
The lender contacts a state licensed or certified appraiser and identifies the property to be appraised and the intended use of the appraisal. The appraiser then determines the appropriate scope of work for the assignment.
The appraiser’s scope of work typically includes the type of property inspection (interior, exterior only or none), what approaches to value are required, and any lender-specific requirements.
In some cases, the lender may order the appraisal through an agent, such as an Appraisal Management Company (AMC).
For residential mortgage lending, Fannie Mae (FNMA) and Freddie Mac (FHLMC), which are Government Sponsored Enterprises (GSEs) that purchase mortgages on the secondary market, have developed residential appraisal report forms that are commonly used to communicate the appraisal of properties used as collateral.
Regardless of the type of appraisal report used, all appraisal reports must contain sufficient information to enable the intended users to understand the report properly.
Why is an appraisal necessary?
The lender orders the appraisal to obtain an accurate description of the property and an independent opinion of value. The lender uses the appraisal to document that the real estate is appropriate collateral and determine whether the value of the property is sufficient to support the lending decision.
Why isn’t the consumer considered to be the client when he or she pays the appraisal fee?
Federal banking regulations require the financial institution to be the client, regardless of who pays the fee.
How does the appraiser develop the value opinion?
The appraiser researches market data, public records and talks with buyers, sellers and real estate brokers active in the market area.
Data researched includes sales, leases, and current listings of similar properties. Other data include land sales and residential construction costs.
After all factors affecting the value are considered, the appraiser develops an opinion of value and prepares an appraisal report.
What is the appraisal process?
If an appraisal requires an interior inspection, an appraiser will contact the homeowner (or, in the case of a sale, an agent or the seller) to inspect the interior and exterior of a property.
As previously mentioned, an appraisal may not require an interior inspection.
An appraiser will research county and municipal records, Multiple Listing Service (MLS) records, and other data services for information and documentation concerning the subject property and market area.
An appraiser will review recent sales and listings of comparable properties.
Comparables are recently sold or listed properties that have similar utility, quality, age and amenities as the subject property and are located in the subject property’s market area.
In markets where few sales have recently occurred, comparables may be from similar or competing neighborhoods located some distance from the subject property.
An appraiser may use the sales comparison approach to develop an opinion of value.
What is the Sales Comparison approach?
Often the primary approach to develop an opinion of value for a residential property, the sales comparison approach utilizes recent sales of comparable properties.
An appraiser will analyze and compare characteristics that include the living area of the home, land area, style, age, quality of construction, number of bedrooms and bathrooms, presence or absence of a garage, etc.
What is a comparable sale or comparable listing?
A comparable sale is a recent sale that is similar to the subject property in terms of physical and functional attributes and location.
A comparable listing is a current listing that is similar to the subject property in terms of physical and functional attributes and location.
Comparable sales and listings are used in the sales comparison approach.
In most cases, the sales comparison approach is the most reliable indicator of value for a residential property because it most directly reflects the actions of buyers and sellers in the market.
The cost approach is another method an appraiser may use to develop an opinion of value.
What is the cost approach?
The cost approach is the appraiser’s opinion of the current replacement cost of constructing a reproduction of the existing structure, less any estimated depreciation, plus the value of the land.
The cost approach is a valuable approach to use when appraising newer homes that might have little or no depreciation.
In what circumstance would an appraiser use the cost approach and/or sales comparison approach?
The cost approach is based on the premise that an informed purchaser would pay no more for the subject property than the cost of constructing a substitute property with the same utility.
Differences between the sales comparison approach and the cost approach are particularly evident when the property being appraised involves older improvements where depreciation due to age and functional obsolescence are difficult to estimate, or when the improvements are relatively unique or specialized and there are few comparable properties.
If completed correctly, under ideal circumstances the indicated value by the cost approach should be similar to the estimated value by the sales comparison approach.
Why does an appraiser make “adjustments”?
In developing an opinion of the value of a property, an appraiser considers recent sales of similar properties. The sales that are the most similar to the property being appraised are the best indicators of value.
However, since rarely are two properties exactly the same, the appraiser must account for differences between the property that sold and the property being appraised.
These differences are called “adjustments.”
Adjustments are added or subtracted from the sale prices of the comparables to indicated an adjusted sale price for the property being appraised.
An appraiser may utilize the income approach.
What is the income approach?
The income approach is most often used in appraisals of properties that have two, three or four living units, where income is a factor in the decision-making process of buyers and sellers.
The income approach is based on the relationship of anticipated benefits (dollar income) to value.
The income approach in residential appraising generally consists of little more than a gross rent multiplier analysis (the sale price of a property divided by its income potential).
The gross rent multiplier (GRM) analysis is very reliable in markets where homes are rented and sold frequently.
However, the income approach is not applicable when the property appraised is located in a neighborhood where most homes are owner-occupied.
How does an appraiser develop an opinion of value?
After data collection and analysis, the appraiser will develop an opinion of value by considering the indicated value(s) of the sales comparison approach, as well as the cost approach and/or income approach, if applicable. The values indicated by the approaches utilized will be reconciled to a final opinion of value. The appraiser will present his or her findings and conclusions in a report to the lender.
What are the essential elements of a credible appraisal report?
• A clear, accurate description of the subject property
• Sales that are the most recent and most comparable
• Comments that explain important issues in the appraisal
• An opinion of value supported by the analysis of the comparable sales
Credible appraisals clearly identify the property appraised, the scope of work performed by the appraiser, the client and other intended users, and the intended use of the report.
The appraisal report must include the definition of value (e.g., market value), the effective date of value, the subject property’s relevant characteristics, and any other special instructions from the lender, Fannie Mae, Freddie Mac, VA, FHA, etc.
A credible appraisal must effectively communicate the data and analysis required to support the opinion of value.
A credible appraisal must comply with the Uniform Standards of Professional Appraisal Practice
and all regulatory requirements including the Federal Fair Housing Act, as well as client-specific requirements.
What is the importance of appraiser independence?
Appraisers are trained to deflect any attempt to influence the appraisal or value opinion, remaining independent, impartial and objective. The appraiser has the sole responsibility for the analyses, opinions, and conclusions contained in the appraisal.
Appraiser independence is a critical element to protect the client and intended users and to enhance the public trust that appraisals contain credible opinions of value. Both Federal and State law requires appraiser independence.
Without public trust, mortgage investors could withdraw funds from the secondary market resulting in a shortage of funds for residential lending.
What can be done if it is discovered that a correction is necessary or other relevant data should be considered?
After reviewing your appraisal, if you believe the appraiser did not consider important information about the subject property or available comparables, discuss the matter with your lender.
Submit your concerns in writing to the lender with a request that the appraiser be asked to address them.
For example, if the appraisal has an incorrect living area size for the subject property, provide factual evidence which supports your position.
If you believe the appraiser selected comparables that were not the most comparable, submit a list of the comparables you would like him or her to consider.
The lender will provide this information to the appraiser and request the appraiser to consider what’s been submitted.
The appraiser should review the appraisal and, if additional credible information is pertinent to the appraisal assignment, provide a revised appraisal with commentary addressing your concerns.
After asking for a reconsideration of value, the appraisal remains flawed. What are your options?
You may request the lender order an appraisal review assignment or to order a second appraisal. Keep in mind the lender is not required to do either.
An appraisal review is completed by a different appraiser who will verify the facts and data in the appraisal, search for additional comparables and provide a conclusion as to whether the comparables used in the appraisal are the most comparable.
If the review appraiser does not agree with the opinion of value in the original appraisal, he or she will complete a sales comparison approach and provide his or her own opinion of value.
What can be done If you suspect fraudulent or incompetent appraisal practice?
Submit your concerns in writing to the lender.
Also, you may consider filing a complaint with the state appraiser regulatory agency in the state in which the property is located. The contact information for each state is available at www.asc.gov.
You may also contact the Financial Fraud Enforcement Task Force at www.stopfraud.gov.
Be advised that state appraiser regulatory agencies will generally not act as a resource to you in trying to resolve any issues with the appraisal that may affect your transaction.
Instead, the agency will consider your complaint in light of the appraiser’s responsibilities under the law, and may take disciplinary action against the appraiser, if necessary.
I have heard about problems with appraisers traveling long distances to appraise homes?
How far is too far? The issue isn’t so much “distance” or “how far is too far,” rather the question that should be asked, “Is an appraiser from outside of my area competent to appraise my property?”
Some appraisers work in many geographic areas and are knowledgeable and competent in all of them.
Other appraisers have a limited range in which they normally appraise and they may not have the data or the experience to be competent outside their local market.
What information should you provide to the appraiser?
The more information the appraiser has about your property, the better he or she will be able to develop a credible result.
The appraiser will be interested in knowing if there are any private agreements or restrictions, easements or rights of way, encroachments, “agreed to” arrangements with abutters (e.g., fences, walls) on the property, etc.
The appraiser may ask about the property’s title, sales and rental history, and occupancy.
He or she might ask if the property is under a pending purchase and sales agreement or option and, if so, the details about the agreement or option.
If the property sold in the past three years, the appraiser may ask about the details of the transfers.
Finally, the appraiser may inquire about physical characteristics of the property, including any additions, permits, etc.
If you are hiring the appraiser directly, the appraiser will want to know what the intended use of the appraisal will be.
If you are engaging the appraiser to prepare an appraisal for a federally-related transaction, you should know that the lender or the lender’s agent is required to engage the appraiser
What should the appraiser do when he or she inspects my home?
Based on the client’s intended use of the appraisal, the appraiser determines whether an interior and/or exterior inspection or no inspection is required.
Under many circumstances, the lender will require a full viewing of the property including an exterior and interior inspection.
Assuming that a complete inspection is required, the appraiser inspects the site, site improvements, and building improvements.
The appraiser considers the site’s size, shape, topography, drainage, and any other attributes that may affect value.
He or she views the site improvements (e.g., paving, fences and walls, landscaping) to determine their contribution of value to the property.
Finally, the appraiser inspects any structures. Some of the items considered are building style, number of stories, size, number of rooms (including bedrooms and baths, etc).
He or she observes the structure’s condition as an aid to estimating depreciation.
In addition, the appraiser considers the property as a whole, including the dwelling and any other improvements as well as any visible encumbrances (e.g. power lines, encroachments).
Finally, the appraiser considers the property in relation to the neighborhood.
An appraiser’s inspection and a home inspection are different.
An appraiser gathers information to develop a value opinion and a home inspector gathers information to identify construction features, structural integrity and any needed repairs.
The appraisal report has codes describing elements such as condition, construction quality and location. How do I find out what they mean?
At the request of the lender/client, the appraisal report may be prepared in compliance with the Uniform Appraisal Dataset (UAD) developed by Fannie Mae and Freddie Mac.
The UAD requires the appraiser to use standardized responses that include specific formats, definitions, abbreviations, and acronyms. Look through the appraisal for the UAD Definitions Addendum.
In most cases, the addendum will be in the appraisal. If not, either request it from the lender or access it online
Having an appraisal contingency in your purchase contract is important because if the appraised value is less than the agreed upon purchase price or repairs are required, you can renegotiate the sales price, require the seller to make the repairs, or back out of the offer altogether with the return of your deposit money.
Hiring an experienced Realtor to represent you will help you navigate through this complicated area.
Call or text Pete Sabine with your questions. 925.297.5335 or send an email to Pete@PeteSabine.com.
Discover more real estate pro tips. Find our podcasts at FiveStarRealEstateTeam.podbean.com.
Compass. License #00880760
The Advantages of Professional Property Management
Being a landlord requires effort and dedication. If you live far away from your rental property or have other personal commitments, hiring a property management company is a good option. Some of the benefits of hiring professional property management services include:
Finding High Quality Tenants
The biggest challenge for most landlords is to find responsible tenants for their rental homes. This ensures timely payment of rent, proper maintenance of the home and fewer problems during the tenancy period. Professional property managers have defined criteria for screening applicants and selecting the most suitable occupant for your property. Experience in scrutinizing thousands of rental applications will extract the facts and identify warning signs. In-depth research about the tenant’s background, employment, rental records, income, criminal history, previous rental experiences ensures that you are renting your property to the best qualified tenant.
Effective Property Advertising
A property manager uses the most effective resources to market your property to a large pool of prospective tenants. Posting high quality photos and virtual tours of the home will help to set your property apart from the competition. Property managers will offer effective staging tips and evaluate the condition of your home to recommend improvements that will increase its appeal and rental value.
Strict Rent Collection Process
Collecting timely rent every month is important to ensure a consistent cash flow. When you work with a property management company, you can be assured they will collect the rent on time and deposit it into your bank account. They demand that tenants follow the lease terms and pay the rent by the due date. In case of delays, they know the proper and legal ways to deal with the situation.
Property Maintenance and Repairs
Performing maintenance and repair tasks on time not only ensures a comfortable stay for the tenants, but also retains the value of your investment property. By hiring professional property management services, they will outsource the task to licensed and qualified contractors. The property manager will conduct regular inspections of the rental home to identify and repair any potential issues before they pose larger and more costly problems.
Better Tenant Retention
Property managers act as a point of contact between the landlord and tenants. When all the maintenance issues are addressed timely, tenants are less likely to look for another place to live in.
This, in turn, will lead to shorter vacancy cycles for your rental home. You will also be saved from all the efforts of finding and screening new tenants, marketing, arranging visits, re-painting the home etc.
A property manager has in-depth knowledge of the tenant-landlord laws and the property manager will ensure that the process is carried out in a legal manner, saving you from exposure to costly litigation.
Contact us to discuss your options for property management of your rental property. We are affiliated with a local professional property management company and we can relieve you of the burden and hassle of managing your income investment properties.
Listen to our podcast with a professional property manager.
Find our podcasts at FiveStarRealEstateTeam.podbean.com
We are the Five Star Real Estate Team, and we know how to set the stage for your success.
Pete Sabine & Leslie Whitney
Call or Text 925.297.5335
By Pete Sabine
There are so many choices for a real estate professional, does it really matter who you choose to represent you when you buy or sell a home?
If all real estate companies are the same, why are the results so different for each company?
Even more true when focused on the personal performance of a Realtor.
Why are two Realtor’s results so different in the same profession and local market?
Athletics can be a measure of comparison. For one reason, athletics are designed to be clean and pure in results. The scoreboard generally defines the finest of top performers. Each performer knows the start, the finish and event rules.
How each athlete prepares for the event physically and mentally makes a world of difference. The tenacity of training, the focus of mind and nutrition of the body are all contributors of success.
The same is true in the real estate profession.
Athletes generally get to train and prepare for several days or weeks to compete at an event. Realtors train, compete and recover daily.
Success in the real estate profession can be measured in different ways. One measure is the sales volume recorded in the MLS. A more meaningful and relevant measure of success is defined by the tears of happiness in a client’s eyes and referrals to their friends, family, and co-workers.
As the legendary NBA coach Phil Jackson said, “You're only a success the moment you do a successful act, so these acts have to be repeated all the time." So true and drives the good to become the great.
It is the work ethic, the focus, and the competitive drive! The perseverance, the training, the mental toughness, and it is the way you show up every day…without a ranking, without results to rest on, and power through your day to get results. It is your internal drive to make a difference in someone’s life.
You do so as a role model, a parent, a significant other, a sibling or a friend. You do what you do every day to make a difference on your own scoreboard in life, not anyone else’s scoreboard.
Now, more than ever, experience and knowledge matters in real estate. In challenging times, you are best served by a seasoned real estate professional who can help you navigate through a transaction that can often be complex and with frequent changes in the market that can affect the outcome.
What is your scoreboard to measure a Realtor? Discover how we can help you reach your goals.
Pete Sabine & Leslie Whitney. Call 925.297.5335. Experience. Innovation. Results. Compass. License #00889760.
#successfulrealtor #hiretherightrealtor #experiencecounts
BY PETE SABINE
A bridge loan is a short-term loan that uses the equity from your current home to help you make an offer on a new one, without rushing to sell. A bridge loan is a simple solution to bridge the gap between the home you have and the home you want to buy.
A bridge loan can be a viable option if you can cover the cost of the loan along with the additional monthly payments due until your current home sells to pay off the short-term bridge loan.
Here are the key benefits of a bridge loan to buy your next home:
• Avoid weakening your negotiation position with an offer contingent on the sale of your home.
• Take the anxiety of selling your home first without having another home to buy in a competitive real estate market with limited inventory.
• Avoid the hassle and expense of a double move.
The Bridge Loan Advance Solution
The Compass Bridge Loan Advance is available exclusively for our qualified clients with a traditional bridge loan who are working with us to sell their existing primary residence. If you are approved for the Bridge Loan Advance, it has a 0% APR for the life of the loan and has no additional application or loan fees.
What rates and fees accompany a bridge loan?
The rates and fees for each bridge loan are determined by the lender. We recommend reaching out to a bridge loan lender directly to learn more. The bridge loan can be from any lender of your choice.
What is covered by the Bridge Loan Advance?
The Compass Bridge Loan Advance can equal up to 6 months of monthly bridge loan payments and eligible closing costs incurred from the bridge loan. Eligible closing costs include the dollar value of any loan fees paid upfront, origination or application fees, if applicable, and appraisal fees.
How it works
Step #1 - Inquire directly with a bridge loan lender, such as Better.com or Freedom Mortgage, to see financing options and conditions for your loan qualification.
Step #2 - Apply to get pre-approved for a bridge loan with the lender of your choice.
Step #3 - If approved for a bridge loan, apply with Notable, an independent lender, for the Bridge Loan Advance to cover the first six months of your bridge loan payments.
Step #4 - Then use your approved bridge loan to strengthen your offer for your next home.
Step #5 - Move into your new home while we market to sell your current home.
Pro Tip: Use Compass Concierge home improvement services to sell your home faster and for more money.
Step #6 - Use the proceeds from the sale of your former home to pay back the bridge loan and Bridge Loan Advance.
Contact us to find out the current value of your home to determine if you have enough equity for a bridge loan.
Call or text 925.297.5335. Pete Sabine & Leslie Whitney. Compass #00889760
By Pete Sabine
In a seller’s market, you may have to compete against other buyers, which raises the stakes and makes it especially important that you move through these steps quickly. When you have found a home you love, here is what you need to do to craft an offer that appeals to sellers.
Use an escalation clause
In a multiple-offer scenario, the last thing you want to do is assume another buyer is paying far above the asking price and submit a higher offer based on this assumption — you might get the property but end up realizing you could have gotten it for less. Consider including an “escalation clause” which states that you are willing to pay a specific dollar amount over the highest competing offer.
Here is an example:
A home is listed for $850,000 and it has three other offers. You submit an offer of $850,000 with an escalation clause that says you will pay $5,000 more than the highest offer, up to a maximum offer price of $860,000. Then, if another buyer comes in at $855,000, you will automatically offer $860,000 to secure the deal, without going over the maximum amount you are comfortable spending.
Accommodate the seller’s timeline
Ask if the seller needs a quick close or an option to rent the home after closing to allow enough time to pack and move. For some sellers (like those buying another home or relocating for work), timeline can be as important as the sales price.
Most buyers include contingencies in their offer. In a competitive market, waiving contingencies can make your offer stand out. You can remove the appraisal contingency that is usually included for buyers financing a home purchase as well as the loan contingency only if you are fully pre-approved by your lender. Inspection contingencies are common — and some buyers waive their inspection contingency in hot markets, but this can be risky.
The home sale contingency, where your offer is contingent on selling the home you currently own, is included when you need the equity from a home you are selling to purchase your next home. This can make your offer less appealing to a seller, who wants certainty in their plan to fit their own timeline priorities. It is best to complete the sale of your existing home before making offers for your next home.
Write a personal letter to the seller
Some sellers are sentimental about selling their home and may focus on their desired buyer profile over the highest sales price. When dealing with a seller who has lived in their home for many years with pride of ownership, they might be focused on selling their home to someone who will take good care of it. Write an insightful and sincere letter about why the home is a perfect match and what you love about the house and the community. Let the seller know you are a serious buyer.
Over the past 35 years, we have successfully negotiated over 1000 real estate purchase agreements. Call or text 925.297.5335 to benefit from our real estate expertise for your next home purchase.
Pete Sabine & Leslie Whitney. Compass. License #01866771
By Pete Sabine
After you put your house on the market, you might be hopeful for a quick sale—especially if you've invested a lot of money improving the house and if your neighborhood is in high demand. While you should not panic if the house does not sell right away, you should be concerned after 6 weeks without receiving an offer. Here are some reasons why your house may not be selling.
The asking price is too high. If your house is overpriced, it is not going to sell. The longer your property stays on the market, the less likely it will sell at the asking price. Compare your property to similar properties that recently sold within your area to get an accurate idea of its true value. Do not make the mistake of adding 100% of the cost of any renovations you made. The cost of all renovations does not always translate to equivalent added value.
Poor presentation. If the listing of your home has a poor description and/or amateur photos, most buyers will not want to visit. Make sure your Realtor creates a listing that attracts the attention of buyers with professional photos and video of the interior and exterior of your home.
Houses that smell do not sell. A dirty house leaves a bad impression on buyers. Hire a professional to clean thoroughly the interior including appliances, carpet and windows before showing your house.
Lack of emotional appeal. If your home is vacant, do not show an empty house. This makes it difficult for buyers to imagine living in it. Stage your house with furniture and decor to give buyers a sense of space and how it can be used. You want the buyer to feel at home when they tour your home.
The décor or remodeling is too personalized. Take down your personal décor so that buyers can have an easier time imagining themselves living there. You might think that dark paint and fixtures in the master bathroom is incredible, but that does not mean potential buyers will agree. If your home improvements or decor are too personalized, most buyers will not get past your unique style and choices for fixtures and finishes.
Less is more. If you have too much furniture, it will make the house feel smaller than it is.
Too many repairs needed. The more repairs needed, the less likely a buyer will want your house. Many buyers do not want to deal with the cost or effort of doing repair work, even if it is just small repairs, such as tightening a handrail or replacing a broken tile.
The market trend changed. Sometimes a hot market can temper by the time your home is offered for sale. Your Realtor should be monitoring the competing home for sale and the supply/demand ratio and communicate with you to make any adjustments in your marketing strategy.
You hired a novice Realtor. A seasoned professional Realtor makes all the difference in selling your home at the highest possible price within a reasonable time. All these things can be remedied, however, one of the best ways to avoid making these common mistakes is by hiring an experienced Realtor.
We know how to set the stage for your success.
Call us to win with us! Pete Sabine & Leslie Whitney. 925.297.5335.
Discover more real estate pro tips. Find our podcasts at FiveStarRealEstateTeam.podbean.com. Compass #01866771
By Pete Sabine
Our local real estate market is one of the hottest I have experienced in my 35 years of selling real estate. The current real estate “Seller’s Market” trend is driven by a lack of supply of available homes for sale, low home loan interest rates and strong buyer demand for homes in our area.
How long will this trend last? Most likely through the remainder of 2020 and into the first quarter of 2021. Beyond then requires a crystal ball.
Here is the formula for selling your home at 10 to over 20 percent above the fair market value list price…Preparation. Presentation. Pricing. Read More: http://petesabineteam.com/sell-home-record-high-sold-price.
Preparation prior to offering for sale. Obtain property inspection reports. Complete recommended repairs related to systems operation (appliances, mechanical, etc.) and safety hazards.
Obtain a proposal from a professional home staging company. The proposal should include recommendations for interior and exterior paint colors, landscaping, light fixtures, flooring, plumbing fixtures, and cabinet hardware. Beware of Realtors who “self-stage” homes. Hire a professional with liability and workman’s comp insurance and controls their own inventory of staging furniture and accessories.
Follow the recommendations of the staging proposal to update your home. Have your home professionally cleaned including windows and tune up your landscaping.
Presentation preparation. Have your Realtor hire a professional photographer and videographer to capture the essence of your home. Home buyers scan for homes online and your home must present well with a high level of emotional appeal or most buyers will not make the effort to visit your home.
No showings equal no sale.
Price your home strategically. Review recent Sold Properties that are nearby and “like-kind” in size, location, and condition characteristics. This data will set the current “fair market value” of your home.
Review Pending Properties of similar homes that recently went into escrow. Focus on the List Price of these properties to provide insight of the price point that attracted buyers to make an offer.
Review Active Properties currently for sale in your targeted price range. Determine how well your home will compete with homes priced 10 percent above and below your target List Price.
Buyers base their decision to buy a home driven by its emotional appeal and supported by a perception of fair market value of the List Price when compared to other available homes for sale with similar intrinsic qualities.
Set an Offer Date to review purchase offers 7 to 10 days from your MLS debut date. The offer date strategy ensures that all buyers currently in the market will have a chance to view and bid to purchase your home. It sets the stage for multiple offers with offer prices above your List Price.
Hire a skilled negotiator. Your Realtor should have a proven track record.
We have been selling homes in your area since 1985 with over 1000 successful sales.
Call us to win with us! Pete Sabine & Leslie Whitney. 925.297.5335. Compass. #01866771
By Pete Sabine
Conventional wisdom says people should wait until the spring to get the most from a home sale. Inventory usually increases to meet Buyer demand in the spring when the weather gets warm and daylight savings begins. This often leads to multiple offer competition breaking out in coveted neighborhoods. A home in a great area with high buyer demand can sell in few weeks or in some cases, a few days.
If you cannot wait until the spring to get your house on the market, consider offering your home for sale during the holidays. It may not seem like the most ideal time, but it does have its benefits—provided you position your home in just the right way.
There’s Less Inventory
But that does not mean people do not buy homes at other times of the year. In fact, there are homes listed during the holidays that could command more money when the inventory is limited. If you play your cards right, you may even be able to sell your home quicker than in the spring. One of the reasons is the lack of competing homes for sale during the holidays.
The limited range of homes available to buy means you might be able to command a higher asking price for your property. Do your research about the supply and demand, stage your home properly, price it competitively and you could receive an attractive purchase offer and be on your way to your next home.
Buyers Are More Serious
If your house is for sale in the winter and someone is looking at it, chances are that person is serious and is ready to buy. Anyone shopping for a new home around Thanksgiving, Christmas, or New Year’s is undoubtedly going to be a serious buyer—they are not going to spend their precious time around the holidays seeing how the other half lives. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sales process.
That Warm and Cozy Feeling
The holidays are often a time when people gather around the fireplace with hot chocolate and enjoy entertaining friends and family. Homeowners who put their houses up for sale during the winter months can stage their house to give off a cheerful and cozy vibe that appeals to many buyers.
Buyers tend to be more emotional during the holidays and many will make a buying decision based on how they feel about vibe of the home for sale.
An Appealing Neighborhood
One of the traditions of the holiday season, particularly around Christmas, is that many homes are adorned with festive lights and decorations that can pull on the heartstrings of a buyer.
The end of the year is typically when people are notified that they will be moving because of a job transfer. Those people are going to need a home as soon as possible and they will be searching for a new home during the holidays. These buyers cannot wait for the spring, which is why listing your home during the holidays can get the home sold quickly.
Hiring an experienced Realtor who will attract serious buyers during the holidays. We know how to set the stage for your success. Call us to win with us! Pete Sabine and Leslie Whitney. 925.297.5335.
Discover more real estate pro tips. Find our podcasts at FiveStarRealEstateTeam.podbean.com.
By Pete Sabine
There are two main parts to the law and two major deadlines. New rules for transfers of inherited property will begin Feb. 16, 2021. New rules for taking a favorable assessment on a home purchase begin April 1, 2021 and the replacement home must be purchased within 2 years of the sale date.
The main provision of Prop 19 allows the owner of a primary residence who is 55 years of age or older, or severely disabled or who lost their home to wildfire disaster, to transfer the taxable value (its tax basis) of that residence to a replacement primary residence anywhere in the state. If you sell your home, with a taxable value of $100,000, and buy a new primary residence in California, you will be able to keep the benefit of that basis for your new home.
Prop 19 allows for the easier movement of a primary residence’s taxable value. The old law only allowed a basis to be moved between two counties if those counties opted into the law. Prop 19 on the other hand, allows for that movement “anywhere in this state.”
Additionally, contrary to prior law, Prop 19 allows a primary residence’s tax value to be moved three times as opposed to only once. So, if you are over 55 years old, it is easier to move and keep the tax benefit of their original home. The law provides that if the taxable value of a home is transferred to a replacement that is “of equal or lesser value,” then the taxable value of the replacement primary residence will be the same as the taxable value of the original. The basis of your original home gets transferred exactly to your new home.
If you transfer your basis to a replacement property that is of greater value, then the basis for your new home is calculated as follows: the taxable value (basis) of your original primary residence is increased by the difference between the cash value (sales price) of your original residence and the cash value (purchase price) of your replacement residence, and that new number becomes your replacement home’s basis.
As an example, if your current, original residence has a tax value of $100,000, but a cash value of $500,000, and you buy a replacement primary residence for $1 million, then the tax value (basis) for the new home will be $600,000 (the original tax value ($100,000) plus the difference in cash value between the two properties ($1 million minus $500,000). Even though there is a step up in basis that recognizes the increased value of my new home, it is kept down by using the basis of my original residence as a starting point.
While Prop 19 still covers the transfer of a family home between parents and their children, including through inheritance, the tax value can only be transferred if the property continues as the family home of the transferee.
If you inherit your parents’ property, you can only keep their tax basis if you continue to use that property as your primary residence. If you want to use the property as an investment, you will not get the benefit of the property’s original basis.
The reduction in tax income resulting from the easing of tax basis transfers for older homeowners has been offset by an increase in tax income from inherited investment properties.
Some will save money because of Prop 19 (homeowners over 55 who move within California), while others will pay more tax (children who inherit property for use as an investment). Please consult with your tax professional to understand your specific tax issues.
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