A whirlwind process!

Recently, I represented the buyer on 9 Hansen Ct. in Moraga. My clients were very motivated, just moving back to the Bay Area from Texas. They were also living in a parents’ 2-bed home with four additional people and a daughter needing to be registered for high school. So all this put the house-hunting process on high alert.

As an agent, you often learn about critical information, or those that inform the decision-making process, as you go. In this case, it was how important being close to the high school would be, as the daughter would have to get there in the mornings and she doesn’t drive yet.

We put one offer in on a duet by Rudgear Park, but got beat out on a home with multiple offers. They had been eyeing Hansen, which had just reduced the price, so we negotiated down a bit more and then started doing inspections. The house had been beautifully updated after being a rental for 20 years, but we found the sprinklers had been leaking and there was water under the house. After the sellers addressed the sprinkler issue we got a credit for a few other repairs and closed the day after school started.

Luckily, this home is a block from Campolindo and the daughter was able to register, but proof of closing was required within the month. Now they are just waiting for their furniture to be delivered.

Buying or selling can be stressful at times. It is my job to consistently communicate the process and help mitigate some of the stress. Here are reviews on how I do just that. If you are thinking about buying or selling a home, let’s chat!

When appraised value is not market value

Sometimes, when the market is in a state of extremes, appraised value does not equal market value. Things are not appraising equally right now because the market stalled at the end of 2018, so homes sat and price reductions occurred. Now that the rates have dropped, buyers are back out, prices are up, but the comps are still off. Here is my friend Jay Vorhees at JVM Lending with more:

Image result for home appraisal
HomeLight

Because the market is heating up again, we have had several appraisal issues recently where there were simply no comparable sales available to support the contract price (despite multiple offers at that price). Because the agents involved in the transactions were frustrated, I thought it was necessary to repeat this blog.

Ten offers over $1 million; appraisal comes in at $850,000

We once had a transaction in Berkeley, CA involving a property that was listed for $850,000, and there were more than 10 offers for over $1 million. The market value for that property was clearly over $1 million because there were so many buyers willing to pay over $1 million in an open market. The appraised value, however, was much less because the highest priced comparable sale in the area was only $850,000. The appraiser knew about the other offers and he knew the market value was probably over $1 million, but he was constrained by appraisal guidelines.

The appraiser could only use comparable sales within one mile of the subject property that closed within the last three months. He could not correlate to the other offers or similar pending sales at all. So, the appraisal came in at $850,000 and this is clearly a case where the appraised value did not equal the market value. This happens all the time in “hot markets” where there are multiple offers and prices are increasing too fast for comparable sales data to keep up.

Why appraisers can’t “push” values

Image result for home appraisal
Credit.com

Further, if appraisers push value too far in an attempt to support a contract price, other issues arise. An underwriter will likely call for a full review of the appraisal that will probably result in a significant cut in the value. Or worse, if the appraisal makes it past underwriting, investors may refuse to buy the loan on the secondary market because they are unfamiliar with Bay Area markets and the property appears overvalued on paper.

In any case, prior to the meltdown in 2008, appraisers could correlate to other offers and even pending sales to some extent, but nowadays they are not allowed. Appraising is all about closed sales and tight appraisal guidelines, and not always about estimating market value.

Two Condos, Two Sellers!

I recently closed on two homes with my clients, and wanted to share their stories. I helped Kevin (below) buy a condo before he got married, back in the downturn of the market in Roundtree. I sold his cousin’s house and helped them get into another home, so they referred me to Kevin.

Fast forward a few years Kevin and Katie married and had a baby girl who starts kindergarten in the fall, and they moved into grandma’s house (whose home I also helped with when she moved up from Southern California). They had been renting out their condo and decided it was time to sell. They had done some remodeling and we staged the home. It looked great, was listed at $350,000, was on the market for 11 days and sold for $360,000. I feel so grateful to have met this extended family.


I met Jill (below) through a referral from her goddaughter indirectly through another client I had helped last year. She also was renting out her condo in Martinez and realized it was time to sell. We did a few improvements (painted kitchen cabinets and added granite – see the before and after kitchen pictures below). Farm Lane was listed at $387,000 and sold for the list price after being on the market for 15 days.


JVM Lending: Too busy for big houses!

I loved this blog from our friend Jay Vorhees at JVM Lending. It covers the trend in real estate towards smaller homes. I have been thinking of doing a blog on tiny homes and this may be the impetus to sit down and write about that trend! With millennial buyers angling that way and boomers finally wising up and heading that way too, the market for large houses is changing. Read on:

Image result for beautiful backyards

I hike for five or six miles every weekend in the hills around one of the Bay Area’s most high-end housing developments. The homes are huge, stunning, and fun to see, but the best part is the extremely elaborate backyards with vineyards, gazebos, massive pools, outdoor kitchens, terraces, fruit trees, play sets, sport courts, and immaculate landscaping.

The cost for those yards alone is often in excess of $1 million. And this is what I find most interesting – in over nine years of hiking, I have seen people in those backyards maybe five or six times; despite their beauty and allure, the yards are literally devoid of human beings.

I know several families who live in the development, and I know exactly why they are never in their backyards. With sports practices, games, private coaching, tutoring, volunteering, homework, social obligations, etc., they are far too busy to ever find time to venture into their outdoor paradises.

So, that is point #1 – families looking to buy their ultimate dream home might do well to remember that they may be far too busy to enjoy it. Point #2 was illuminated in a recent WSJ article called A Growing Problem In Real Estate – Too Many Big Houses.

It turns out that far too many baby boomers built monstrous dream homes that they no longer want or are able to take care of. According to the article, in February in Scottsdale, AZ alone, there were 390 homes on the market at prices in excess of $3 million. The market for large homes is dwindling because more and more boomers are wising up and moving to smaller homes with much less maintenance, and younger buyers aren’t interested in the large homes either.

Image result for tiny home

Another problem is that we old people like earth tones, crown moldings, and other styles that younger buyers hate, only making boomer homes that much less appealing to younger buyers (when my wife Heejin and I stay in modern AirBNBs, I drive her crazy with my non-stop complaining about the concrete floors, stark colors, and what seems like ridiculously cold decorating to me; and don’t even get me started about those silly little pedestal sinks…).

Anyway, if you have a client looking to build or buy their monstrous dream home, you might remind them that they either might be too busy or too old for a huge home.

Many of those boomers in the Walnut Creek area bought those big homes with big yards and as the kids grew up, they have sold and moved downtown to places like the Mercer on California where they can lock up for three months, not worry about a yard and travel or just walk downtown have dinner and a glass of wine and walk back home…more to come for that future blog!

Another closing at Tampico!

I recently closed a townhome on Tampico, and I’m so happy to have helped Tyler and Yana. They relocated about a year ago and decided to rent in San Francisco for a year and get a feel for the area. Tyler works down in Pleasanton and their San Francisco rent recently went up. They were very motivated to move back into home ownership.



We met one day over coffee and talked about the market, what they were looking for, timing, and the area they were most interested in. They loved Walnut Creek with Broadway Plaza, all the restaurants and overall vib. Since I had a previous appointment, we looked over some open houses in Walnut Creek and they decided to go look at a few. He called me later that day and said they really like a home on Tampico and wanted more information.

This home had been bought in July by an investor who flipped it. Timing is everything and the seller had the unfortunate experience of a soft second half of 2018. There had been a handful of price reductions until January where it was listed at $699,000, down from $775,000 – an opportunity for a buyer! It took a few days to get the financing and all the details, so about three days later we submitted an offer less than asking. In the beginning of January, the market again began to shift, this time upwards, and another offer was submitted and countered to $715,000. Their offer was accepted and then we started the inspections. They ended up with a $5,000 credit and some things that HOA needs to fix. Overall, it was a very smooth process and they are excited to be living in Walnut Creek with a yard for their dog and a nicely updated home! Congratulations!!!!

Congrats on the closing!

I met Lisa and Grant in the middle of November and by the middle of January, we closed on their new home. They lived in Daly City, work in San Francisco and just had a baby and decided it was time to buy a house – the East Bay is more affordable than the city or the Oakland area.

They were initially not in a hurry, but were very active right out of the gate; then I found out that it made sense for them to purchase before Lisa’s maternity leave was over in February, thus a couple of weeks later we were in contract! There was one other offer, we got a Seller Multiple Counter and in the end their offer was accepted.

After all the inspections were completed, they received a credit and a slight price reduction because of a couple of unfinished portions of a recent remodel job. I have to give a big shout-out to Tobi, the Escrow Officer at Fidelity, on this transaction. She went above and beyond to work through a title issue. Overall, the process was smooth, JVM (the lender) was on point, and they got the house before Lisa goes back to work.

They now are in the process of doing some repairs prior to moving in and putting their personal touches on the home. They were so excited! I wish them many wonderful memories and happiness.

Reasons to buy in the off-season!

Lizzie Weakley of RIS Media’s Housecall wrote a blog recently about why it’s okay to buy in the off-season. I want to piggy-back off of that here. First of all, yes, there is an “off-season” in real estate. For the most part, winter is the time of year that the industry slows down in markets around the country.

Image result for house in snow

However, there are a few good reasons why the off-season might actually be a great time to buy a home, especially in the Bay Area! As Weakley lists, there are fewer buyers crowding the markets. This decrease in competition is an excellent advantage for any prospective home-buyer. On that note, sellers seem to accept lower bids in the winter because of the low competition.  In our area, we also don’t have to worry about trudging through snow storms to see a listing (one of the major reason for a slow-down), in addition to the holidays when most people are entertaining or having family visit.

Everything can move a little bit faster in winter. Home inspections can get done quicker, and mortgage companies tend to finish paperwork faster, too, because – again – they don’t have as much traffic.  I should mention that in the Bay Area, with our warmer climate in Spring, the winter “off-season” tends to be much shorter than in other places, but still usually extends for a couple months at the end of the year and wraps around into January (we are nearing the end of the off-season now).  Often buyers are out in January, but the sellers have not yet readied their home for sale, so we often find a switch back to a seller’s market this time of year.  We will see what 2019 holds.

Image result for real estate sign

One more perk to buying homes in the winter? Us real estate agents have more time to dedicate to you! Sure, we love to give as much personalized attention as possible to each and every client, but the truth of the matter is that we get busy in peak seasons too. When I can focus all of my energy on one listing, it’s almost always smooth-sailing and everything gets finished at the speed of light!

Next time you are thinking of buying a home, and read that you should wait until the weather warms up again, give it a second thought. There are some big-time perks to buying in the off-season!

The first-time buyer’s guide to real estate

Jim McKinley wrote a blog that I’ve made slight edits to below. Let me know what you think!

Buying your first home is exciting, but it can also be full of confusion, fear, and apprehension. After all, buying a home is a huge commitment, and if you’ve never done it before, there can be a lot of questions. However, by getting informed and preparing yourself appropriately, you can avoid many of the common pitfalls of buying your first home and step into this new stage of your life with confidence. To help everything go as smoothly as possible, follow these tips and tricks.

Get your Finances in Order

Many people might assume that it is time to become a homeowner based on their life situation, such as recently landing a well-paying job. However, no matter where you are at in your life, it takes quite a bit of financial preparation to correctly prepare for buying a house. First and foremost, you need to ensure that you have a solid budget. Some people might encourage you to put this off until after you buy your house, but your budget is an indispensable tool to figure out how much home you can afford. Secondly, save up a reasonable down payment. According to the Motley Fool, squeezing out enough money for a down payment might require a lot of expense cutting. We recommend using a savings calculator to help you figure out how much you’ll need to save each month.

Get Pre-Approved

Before you even begin to look at houses, go to some lenders to get pre-approved for a mortgage. This is not as scary as it might sound and can take a lot off your plate later. To be approved for a mortgage, the lender considers your credit score, how much you make, the amount you put down and your debt-to-income ratio, among other things. There are many different financing options available and a good lender will advise you accordingly.

Find a Great Agent

A good real estate agent can provide you with huge benefits when it comes to looking for your home. The housing market and lingo can be confusing. When you work with a real estate agent, they can advise you on how to write the best offer and discuss the current market so you can focus your energy on searching for a home. According to The Balance, an agent is a great asset; they can ask questions for you and obtain disclosures. Real estate agents are particularly helpful for first-time homebuyers who might not be aware of the home-buying process and a good referral source for reputable lenders.

View Houses in Your Area

Now that you have all the preliminary work squared away, it’s time to start looking at houses. Preferably, you’ll want your real estate agent to set up showings based on your criteria. Your agent can point things out that you might have missed and help gauge whether the home is listed for a good price.

Image result for house for saleNegotiate your Closing Costs

Once you find your perfect house, you need to close the deal. There are fees tacked on to buying a home called closing costs. Everything from lender fees, title insurance to title search fees. To the average person, these can begin to sound like a second language. You can shop a rate, but many lenders will quote you the lowest rate of the month, because until you lock in a rate, it is a moving target. Look to reviews and potentially how smooth your closing will go. Review your Loan Estimate closely and ask about all fees you do not understand. Once you understand everything, negotiate with your lender for lower fees.

Move

Give yourself more than enough time to pack and move to prevent yourself from rushing. If you hate packing, you might even want to consider hiring a moving agency. If you have children, you might drop them off at a family member’s house to give yourself a couple hours of uninterrupted packing.

Home buying is an exciting, nerve-wracking process. By following these steps (and hiring the right lender and agent), your can home-buying process will be a lot smoother.

Congrats to my clients who bought in Pleasant Hill!

I want to congratulate my recent client Vimi and her partner Liz for closing on their new home! They celebrated in a unique, cultural way that I found really interesting and was thankful to be included in such a personal experience. As you can see in some of the pictures below this was a house blessing which they called a puja. It’s always exciting to help a client find their home, get their offer accepted, and then close. This was definitely a first; they were not allowed to move in until the blessing occurred and they spent the night in the vacant home after the blessing!

This slideshow requires JavaScript.

Vimi is of Indian (Hindu) descent and this is how it was explained to me:  A “puja” ritual, which is performed many times to mark lifetime events (birth, wedding, new home, etc.), is not required in their religion but many do it. Some Hindus do a daily puja ritual in the home, some do it at regular temple ceremonies or festivals, and some don’t do it at all! It was a very cool spectacle to witness. We started with an incense stick, flower petals, bananas, spilled rice, boiling milk, fire, and red and yellow powders (that, when mixed with water, allowed them to mark the Om symbol on the frame of the door). There were songs and hymns, and personal prayers.  A Ganesha statue was also part of the ceremony, who is the remover of obstacles. As the god of beginnings, he is honored at the start of rites and ceremonies. What a beautiful way to honor and celebrate a new home.

Everyone has their own way to celebrate buying a new home. I was honored to be a part of this ceremony, and am really happy that I was able to help Vimi and Liz find their home.