The universe provides the right house

Don’t get me wrong – the right house for you won’t just magically appear out of thin air! People like me do a lot of work to find you your dream home and get it all properly situated. But there is a lesson in real estate that I believe is valuable: The universe always provides the right house in the end.

You can always look back with regrets, but there are reasons for everything. Even reasons for why getting your dream house took so long or why you didn’t get the first house you loved. The right one always comes along! Check out this graphic from the California Association of Realtors.


As you can see above, most homeowners didn’t find their home for at least 3 months. Whether it was price, location, aesthetics and amenities, or simply just being outbid, it is very common to not get the first house you offer.

That’s why you have me! I’ll be the one to help you attain your dream home by walking you through the process, preaching how important patience is, and making sure the whole, stressful process runs smoothly. In the end, the universe always brings you the right home!

Compare and contrast: VA vs. FHA

VA and FHA loans are both backed or insured by the Federal Government, so realtors often confuse the guidelines between the two types of loans. There are a lot of differences, however, and my friend Jay Vorhees at JVM Lending has the scoop below:

Image result for FHA loan

Appraisals: Similar

We’ll just let this blog, by JVM’s Appraisal Manager, do the talking.  I, Kristin added a few thoughts in brackets afterwards.

Appraisers: Different

The VA loan forces people to use “VA approved appraisers,” which they assign. That often makes the quality worse. The FHA allows us to pick appraisers from whomever we want.

Property Condition: Different

The VA requires clear Section I termite reports, and clear Section II if the items are health and safety risks. FHA allows for “as is” transactions, and does not require a clear Section I.  (There have been some recent changes regarding this, but not every lender is aware of them)

Closing Periods: Different

For VA loans, you need 21 days to close them because appraisal turn times are slower, and it’s generally just a more cumbersome process. For FHA, we can close the loans in about 14 days.  (Note these are amazing turn times, most lenders need 30 days or more)

Rates: Similar

Both types of loans have lower rates than your typical conventional loans. Lower rates are a major advantage for both.

Mortgage Insurance: Different

VA has no mortgage insurance, which is one of the reasons this type of financing is such a great opportunity for veterans. The FHA, on the other hand, has a mortgage insurance of 0.85 percent for most loans, with less than 5 percent down.

Image result for va logo

Up-Front Fees: Similar

The VA has a “funding fee” of 2.15 percent with 0 percent down that decreases with larger down payments. The FHA has an “up-front mortgage insurance premium” of 1.75 percent.

Down Payment: Different

The VA loan allows for 100 percent financing (0 percent down), whereas the FHA requires a minimum of 3.5 percent down.

(Final note:  most condo complexes are not FHA approved as they have not gone through the approval process which has to be updated periodically, I have not found that issue for the most part with VA because usually the complexes get VA approved at the time of building and it stays with the property)

Interest rates remain a gift

Recently, we’ve talked a lot about the rising interest rates. Everyone seems to be in panic mode over it, and my friend Jay Vorhees of JVM Lending is here to explain – in a historical context – why the reaction is overblown. He says the only people who should really be worried are businesses and companies that focus only on refinancing.

We’ve already touched on why higher interest rates are good, but an interest rate under 6 percent is amazing when put in a historical context, and should be treated as such. Here is a graph from Freddie Mac that shows an in-depth breakdown of interest rates over the past 30 years, but we’ve also shared JVM’s table on interest rates:

DATE                                      RATE                      COST
 
March of 2017                    4.2%                     0.5 Points

April of 2014                      4.34%                   0.6 Points

2008 (entire year)           6.03%                   0.6 Points

2000                                      8.05%                   1.0 Point

1995                                      7.93%                   1.8 Points

1990                                     10.13%                  2.1 Points

1985                                     12.43%                  2.5 Points

This shows that not only are rates much lower than they have been at the highest points of the market, but that loans are also much lower than usual – yes, I know our prices are higher than most of the country, but higher interest rates, always hurt you in the pocket book more than higher prices.  Anytime you can lock in a rate below 6 percent, you are doing quite well. So maybe now is the time to get into the market!

7 home maintenance tasks sellers must do before listing

It is that time of year when the housing market starts to heat up. If you’re one of the homeowners who plan on selling this summer, there’s a lengthy list of must-dos to complete before you actually list. Take a look at the following ideas from Inman, with input from yours truly, on how to make your home more attractive.

1. Spruce up the exterior

This is the first thing your prospective buyers are going to see. They want something with literal curb appeal, and if you have overgrown bushes, peeling paint, dirty windows, or poor lighting, the first impression won’t be very good.

2. Service the heating/cooling system

Home inspectors have to check this anyway, so you might as well beat them to it. Waiting until a buyer makes an offer to service this system may cause issues, so get ahead on it!

3. Check your lightbulbs

Check every single one of them on both the interior and exterior. Make sure they are clean and bright. It is essential to have the home as bright as possible. In my experience, this is a tiny thing that is very noticeable if not addressed.

4. Check all smoke detectors

We’ve all pulled batteries out of our smoke detectors when cooking, but don’t forget to put them back in. Make sure all your detectors are working. A home inspector will ding you if you don’t.

5. Blue tape it

If there are nicks, chips, scratches, etc. in the walls of your house, blue tape it! No buyer wants wear and tear on the interior walls or molding, so make sure the rough areas are marked for repair before you list. My stager blue tapes what needs to be removed, painted or fixed at the staging consult I provide as part of my services.

6. Deep clean and declutter

And we mean deep. If you can, hire a cleaning crew to get a small army of people cleaning every corner and crevice (think baseboards, light switches, etc.) of the house before it goes on the market. And don’t forget to gather all your extra junk and either store elsewhere or donate.

7. Don’t forget the garage

This is often an overlooked space, but prospective buyers will want to see a clean, organized garage. Consider painting the floor or putting an epoxy down. And don’t forget to repair cracks in the ceiling of the garage!  Side note, in this area most people store all of the noted blue taped items, just make sure if you do a pest inspection, you do it before you store all your items in the garage.

BONUS! 8. Stage the property

This is my personal addition to the list. There are people who stage homes for a living. They are experts at making a house as attractive as possible to buyers. I can’t recommend having your property staged before listing highly enough!  You only get one opportunity to make a first impression!

Open House at 407 Midway Pl. (Martinez) this weekend!

Come check out 407 Midway Place in Martinez this weekend for a home with great curb appeal! It’s situated on a cozy court and has a large, flat backyard with redwoods scattered throughout with enough space for a pool if so desired! An entertainer’s delight with plenty of privacy, good shade and stone retaining walls with landscaping, and a basement area with water that can be built for an outdoor bathroom.
In total, it is a 4-bed, 2.5-bath with vaulted ceilings, multiple decks, a formal dining room and a kitchen-family room open-concept combination. The master bathroom is delightfully decadent, and the half-bath upstairs also draws high praise.
 The home contains triple-pane windows, and welcomes in lots of light. An Owens Corning roof, new rain gutters, a high-efficiency water heater, and exterior paint creates the charming curb appeal. The landscaping in the front and side yards were re-done in 2014, and solar panels with a 20-year lease were added that year, too.
The aforementioned master bathroom was remodeled as recently as 2015, and an entertainment system with surround sound was added to the family room in 2016. The pictures, beautiful as they are, do not do this place justice. You have to swing by and check it out for yourself. You will be amazed!
The Open House will be held from 1-4 p.m. this weekend, on both Saturday, Mar. 10th and Sunday, Mar. 11th.

Why higher interest rates are good

This may surprise you, but higher interest rates aren’t always bad! In fact, sometimes they can be really good for the real estate market. Jay Vorhees at JVM Lending gives us some good reasons why. I’ve summarized those points below with commentary.

After the most recent presidential election, interest rates went up 3/8-1/2%, and the real estate market seemed to come to a standstill. It scared everyone into thinking that higher rates would severely impact the market overall. But, it was really just “uncertainty” that kept everyone on the sidelines, and not the higher rates.

Rates might continue to rise, but that’s a good thing, and here’s why:

  1. Slowly climbing rates often push would-be home-buyers off the fence. Higher interest rates heat up the market by pushing people to buy sooner, rather than later.
  2. Higher rates give the Fed “ammo” for the next recession. One of the Fed’s most powerful recession-fighting tools is lowering rates. But, if rates are already low, that tool becomes worthless. To restore the power of this, we need higher rates.
  3. Retirees and savers get higher returns. Artificially low rates that benefit big banks and borrowers hurt savers who live off of their savings. The higher the rates, the better for retirees and savers.
  4. Banks lend more money with high interest rates. There is a much better incentive to lend when rates are higher. More economic growth, higher wages and more home-buyers result from higher rates, too.
  5. Stronger dollar and continued tamed inflation. A stronger dollar makes traveling abroad cheaper, investing in the U.S. more appealing, and importing goods cheaper. Higher rates also keep inflation in check for a variety of reasons.

Higher rates hurt mortgage companies that rely on refinance business instead of purchases, and it hurts home-buyers to the extent that their payments will increase.

But the payment factor is often overstated. A rate increase of 1/2% might push a payment up about $150 for a $500,000 loan. That is real money, but it won’t break the bank for most of our borrowers whose income is well into the six-figure range.

What are your thoughts and how would higher rates affect you directly?

11 reasons your home isn’t selling

RIS Media shared a story from Charles Muotoh giving 11 reasons your home may not be selling. I found the piece very interesting and have summarized the points below, and added some commentary. Let me know what you think!

You overvalued your property: Overpriced homes will not sell. Simple as that. If you have an experienced real estate agent, they can give you an accurate value of your home.

Your listing is poor: You can’t poorly write the description of your home without any images. It will be skipped. Work with your realtor to make the listing attractive and interesting.

You’re always present at showings: Do not get in your agent’s way at showings. Let them do what they are experts at. Buyers don’t want you hovering over them the whole time anyway.

You’re too attached: If you are too stubborn to refuse to negotiate your price down, then there’s a good chance that you’ve become too attached to your home. That will make selling difficult.

You haven’t had your home professionally cleaned: What kind of buyer in their right mind will want a dirty house? Ask your realtor to recommend a professional cleaner for the carpets and windows before showing your home.

You haven’t staged your home: Never show an empty house, because it’ll make it hard for buyers to picture living in it. Always have it staged. Your realtor should have a stager on speed dial!

You kept up all of your personal décor: If you keep your home personal (with pictures, etc.), buyers will feel uncomfortable in your house. Take those down before showing the home!

Your home improvements are too personalized: If you tailored your kids’ rooms to their specific obsessions, that’s great…until you need to sell the home. Those little touches could scare off buyers.

Your home is too cluttered: Clutter can still be an issue in a clean home. Don’t keep too much furniture in the rooms – it will make your house feel smaller than it is!

Your home is in need of too many repairs: If a buyer knows he or she has to do a bunch of repairs, they are less likely to want to make a move. That’s a lot of extra effort and cost on their parts, even if the repairs are minor.

You choose the wrong real estate agent: You may have noticed a theme throughout many of these previous points. Choosing the right real estate agent is absolutely essential to the selling process. We can make all the difference in selling your home for the right price, in a reasonable amount of time!

How to get your offer accepted in a crowded market

Our friends at JVM Lending shared a Redfin link recently that had a ton of great information on how to get an offer accepted. I currently have two homes on the market and the amount of offers on each are on opposite ends of the spectrum; I have one with 21 offers, and the other with 6. It’s funny to see that disparity between the two, and strategies to get an offer accepted and/or a house sold, can vary greatly because of it.

Here are some pro tips from the Redfin piece:

Nearly 1 in 4 (23.6%) homes that sold in 2017 went for over asking price, up from 21.8% in 2016. This means that buying a home has become more difficult and expensive in a hot, crowded market. You can’t simply offer the highest price and expect to be selected by the seller. Instead, try other strategies like offering all cash, waiving the inspection, or writing a personal cover letter to the homeowner. Above all, make sure you talk to your agent to create the right combination of strategies for the home you’re bidding on, or for the seller you’re trying to woo.

Here is some information from the Redfin article that breaks down data on thousands of offers written over the last two years, to see how effective these other strategies can be in improving a buyer’s chance at winning a bidding war:

Rank Strategy Improves a Competitive Offer’s Likelihood of Success by… Improves a Competitive Offer’s Likelihood of Success in the Luxury Market (Top 10% by List Price) by…
#1 All-Cash Offer 97% 438%
#2 Waived Financing Contingency 58% 76%
#3 Personal Cover Letter 52% No Significant Gain
#5 Pre-Inspection No Significant Gain No Significant Gain
#6 Waived Inspection Contingency No Significant Gain No Significant Gain

Cash is king, as you can see above. That’s because it allows for smooth, fast transactions without the hassle of loans or appraisals. If you don’t have the means to make an all-cash offer, you can always waive your financial contingency, which means you won’t have to wait for a loan approval. That will still increase your odds by 58%, according to Redfin! However, I find that the cash offers – especially if they are investors – will not be the highest price. On the home that had 21 offers, the key to the winning bid was who removed a portion of their appraisal contingency as the offer was so high we all knew it wouldn’t appraise, but that means the buyer has to have extra cash. That can be tough when it is an entry-level condo.

All this said, sometimes it just takes a personal touch to win over a seller. Writing a letter to the seller can be effective and increase your odds in a bidding war. Fortunately for most buyers, cash is not the only way into a seller’s heart.  Often these letters can forge a powerful connection between the buyer and seller, highlighting shared hobbies or interests, earning a seller’s compassion or trust, or ensuring that the home will be loved and cared for in the years to come.

So, whether you are offering all cash, waiving contingencies, writing a personal letter, or trying any number of other strategies to win the bidding war on the house of your dreams – especially in a saturated market like the Bay Area – always remember to consult your realtor first. He or she will have great insight into the market and what extra touches it might take to get the home, but at the end of the day the buyer has to be comfortble with the offer they are making!

Client Appreciation Party

After sending out invites, speaking with past clients and those who have referred me, coordinating with the venue, and designing the event, I am happy to share some pictures of a fun day with my wonderful clients and friends. I also want to give a big shout-out to Prima Ristorante, where we enjoyed appetizers, wine tasting of old and new-world wines, great company and friendship all in the cozy space of their room with a fireplace.

Frank, our sommelier, did a wonderful job of introducing us to the nuances of French vs. California wines, and we finished with a blind tasting of a white and red. We had to guess if it was a French or California wine based on the taste. We also had a seasoned waiter who served us some amazing appetizers of  calamari, shrimp, antipasto platters, rice balls and deep friend olives – yum!

We also gave away some door prizes: two $50 gift cards to Whole Foods donated by Lukasz Wilk of Wolf Construction, a certificate for house cleaning donated by my stager Heather Farry, and two bottles of wine from Prima as part of the day’s event.

Many may think the job of a realtor only involves buying and selling homes with my clients. But being a guide, friend and advocate for my clients is actually the biggest part of the job and celebrating them is my favorite part! I look forward to seeing new and old faces at future events!

Top 5 Housing Predictions for 2018

As the first month of the new year closes, we are starting to see the 2018 market take shape, and getting a clear look back at the 2017 year. Last year was a strong one for sellers – interest rates remained low, but are now rising, and refinancing plummeted. So, what’s next for 2018?

Take a look at the summaries of Summit Funding’s Top 5 Housing Predictions for 2018, with commentary from yours truly:

  1. A rise in cash-out refinance

Low-interest rates have fueled buying, kept inventory low, and likely even helped speed up housing recovery in Miami and Houston after their 2017 hurricanes. Interest rates will continue to rise in 2018, but not high enough to deter interested homebuyers. We should, however, keep an eye on a potential rise in cash-out refinance, as Americans’ home equity wealth is at an all-time high. We are also seeing the rise of all-cash purchases, a high rate of home purchase co-borrowers, and increased buying assistance from family. As home prices become even higher — and overvalued, according to CoreLogic — expect to see more parents cash out their home equity to help their adult children begin building their own housing wealth.

  1. Return to services

With higher home prices come great risks and more compromises for homebuyers, who will become ever more reliant on experienced and informed housing professionals to make buying and mortgage decisions. Mortgage rates will continue to become a commodity; homebuyers have access to rates on their devices and know mortgage brokers are quoting from the same rate sheets. As homebuyers evaluate their partners, they should look for realtors and mortgage professionals who offer value that protects the clients’ bottom line. Housing professionals who deliver this will be the ones who can truly stand out and have longevity in this crowded market. A great lender and agent can make all the difference in the world. Be careful you are comparing apples to apples when getting rate quotes, as it can’t be locked in until you get an accepted offer so lenders can you give varying rates as they know they will be different the day you get an offer accepted.

  1. Advancement in housing Fintech

Expect technology to continue to make breakthroughs in housing. The proliferation of information has made everyday consumers more demanding of progress and fairness, which is a good thing. They demand more competition for their business and stronger customer empowerment. New housing financial technology will not just be about faster search results or more photos, it will be expected to serve up more home buyer protection. In 2018, homebuyers will increasingly question why they could sell a home at a loss when realtors still collect their brokerage fees. When they see a pre-closing statement listing fee paid to protect their lenders, they would demand to see the calculation of risks and returns designed to protect their purchase. Getting ahead of these questions and demands will become table stakes in the advancement of housing financial technology.  This may be a ways off.  There is a lot of buyer protection now as a result of the downturn.

  1. Millennials may continue to prolong homeownership

Americans — including millennials — want to own homes; we knew this already. However, millennials may want other things in life more than homeownership, or they don’t want to be “house poor.” Affordability is definitely the top barrier to home buying, no doubt. However, there are increasing indications that millennials are not pulling out all the stops to buy a home even if they could afford one. In ValueInsured’s latest Modern Homebuyer Survey, 36% of millennials who want to buy a home say they are delaying buying in order to keep their options open. Nearly half (47%) of millennials also say they worry their job future is uncertain and want to figure that out first. Instead of paying high home prices, millennials have proven unafraid to give up buying and go back to renting. A generation known for defying conventions and expectations may change the housing market forever in 2018 if they say “enough” to high home prices and decide to do their own thing.

  1. The next Seattle or San Jose

In the future, scorching-hot real estate markets will give rise to more calm and cool emerging markets. Places like Provo, UT, Athens, OH and Aberdeen, SD may be hot spots in 2018. More Americans will telecommute to their jobs or shop from their devices instead of at malls. This is simply a fact of life. So, as real estate prices and commercial rents increase, more Asian fusion restaurants, CrossFit studios and organic micro-breweries will open in previously ‘B’ or ‘C’ designated counties. Once upon a time, Portland, OR and Chattanooga, TN were seen as hidden real estate gems, and now they are cities millennials are leaving behind in search of more affordable homes. Millennials’ tendencies to be nomadic and to reject established institutions (or markets), and their sophistication in forming their own community, could prove to be very interesting in challenging traditional housing cycles and expectations.

Stay tuned for December to see if these things panned out or were just a pie in the sky.