A continuation of the great COVID migration

You may remember what I wrote about a few weeks back: the belief that people are fleeing big cities during COVID and moving elsewhere. While we determined that specific claim was a little bit exaggerated, the pandemic still definitely has an impact on real estate.

One interesting thing I read was that there are actually way more people in the U.S. looking to BUY a new home than there are owners looking to SELL right now. That has led to low inventories across many cities and suburbs. Overall, the tight market is more being driven by low mortgage rates and that COVID migration.

The Wall Street Journal says all of this, plus that Americans are holding on to their homes longer than usual, which is costing would-be homebuyers. This all contributes to the low inventories and record-low sales (which, in turn, helps contribute to high prices). According to Redfin, the typical homeowner had remained in place for 13 years, up from 12.8 years in 2019, and way ahead of 2010’s 8.7 years.

One factor to consider, too, is that with so many people now working remotely, many home buyers are in the market for more space. If their home is going to double as a workspace now, it makes sense to look for a larger home. With that though, potential sellers are being scared off by the day-to-day of having strangers enter their homes during a pandemic. All of this adds up to a crazy COVID market!

I recently put an offer in for a client listed at $1,075,000 in San Ramon. There were 19 offers, the seller gravitated to offers that removed all their contingencies. The home (4 beds, 2 baths, 1447 sq. ft.) had been renovated prior to going on the market is pending at $1,310,000 and it appraised! Hopefully we start to see more equilibrium between a sellers and buyers market, but for now, hold on, it is a wild ride for buyers, but great for sellers.

Top 6 reasons you should hire a professional Real Estate Agent

The house-buying and selling processes can be tricky, to say the least. Luckily, there are professionals (like me!) to guide you through it! I recently sat down with a first time home buyer who doesn’t understand the value of a real estate agent. He wanted to know what I do as he can find the houses himself.

The rubber really hits the road when you find the house you want to write on. This particular buyer was interested in a house, but now it is pending. If he had an agent working on his behalf, that agent would have called the listing agent, found out if they were looking at offers on a specific day or as they come and then find out if there is interest in the home. That all could have been communicated to this buyer and they might have put in an offer.

We are all very busy, and real estate can be a stressful process, taking up a lot of time on top of everything else you have going on. Why wouldn’t a buyer want an experienced professional to help them? It doesn’t cost them a cent as the seller pays the commission. For a seller, it is very apparent why you would hire an agent, but here are the top six reasons. At the end of the day, I think it is about trust. Do you trust this agent to work in your best interest?

1. Neighborhood Knowledge

Agents either possess intimate knowledge or they know where to find the industry buzz about your neighborhood. We can run a neighborhood comparative market analysis, in addition to pointing a buyer where more data on schools, crime, demographics and open house listings exist.

2. Price Guidance

Contrary to what some people believe, agents do not select prices for sellers or buyers. However, an agent will help to guide clients to make the right choices for themselves. Buyer’s Agents will ask buyers to weigh all the data supplied to them and to choose a price. Then based on market supply, demand and the conditions, the agent will devise a negotiation strategy.

3. Market Conditions

Real estate agents can disclose market conditions, which will govern your selling or buying process. Many factors determine how you will proceed. Data such as the comparative active/pendings/solds of similar homes, median and average sales prices, average days on market and ratios of list-to-sold prices, among other criteria, will have a huge bearing on what you ultimately decide to do.

4. Education & Experience

You don’t need to know everything about buying and selling real estate if you hire a real estate professional who does. Henry Ford once said that when you hire people who are smarter than you are, it proves you are smarter than they are. The trick is to find the right person (back to trust). For the most part, they all cost roughly the same, so why not hire a person with more education and experience than you? We’re all looking for more precious time in our lives, and hiring pros gives us that time.

5. Professional Networking

Real estate agents network with other professionals, many of whom provide services that you will need to buy or sell. Due to legal liability, many agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency, and competitive pricing. Agents can, however, give you a list of references with whom they have worked and provide background information to help you make a wise selection. If an agent has a great reputation amongst their peers, it can help a buyer get into contract. Agents want to work with agents that are professional, communicate and are known for a smooth process.

6. Negotiation Skills & Confidentiality

Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction and because they are skilled. It’s part of their job description. Good agents are not messengers, delivering buyer’s offers to sellers and vice versa. They are professionals who are trained to present their client’s case in the best light and agree to hold client information confidential from competing interests.

So, next time you’re in the market for buying or selling, and start thinking it’d be easier and cheaper to do it without an agent, think again! These are just a few of the reasons why hiring an agent ends up being the best way to go. Give me a call if you’re looking to buy or sell!

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

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.

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!

Open House Saturday 1-4 pm, Kirker Pass Rd. in Concord

Offers Due Monday 2/5 at noon!

Selling a home without an agent is risky!

When you sell a home, you don’t need a real estate agent, just like you don’t need a lawyer when facing criminal charges. You can, if you want to, represent yourself in a court of law, and you can always put your home up for sale by owner (FSBO).

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But, it’s an extremely risky proposition. As outlined in this Inman article, there are many things to consider when putting a home up FSBO. Here are eight things, summarized from said Inman article, that sellers risk when they don’t have a realtor representing them:

1. Knowledge

Realtors are professionals in this business. They have expansive knowledge of the complicated home-buying and selling processes, possess loads of helpful data, and have large networks of people who can help minimize the difficulties that arise.

2. Time

The non-realtor probably doesn’t realize how many hours are put into any given home, buy or sell. Real estate agents are available for clients around the clock, on a whim, and can confidently and smoothly quell any concerns by potential home buyers.

3. Presentation

Preparation is essential to selling a home – what buyers see when they walk through the door will determine if your home sells. Agents can prepare the finest details and have stagers, professional photographers and others who will help make the space beautiful.

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4. Marketing

Anyone can draw up a “For Sale” poster, but realtors will design, distribute and widely market the home to a huge number of potential buyers. Realtors can access predictive analysis and promote to those demographics on social media. Also, they know just what to write to draw interest.

5. Negotiation experience

If you’re doing FSBO, what do you do when you actually receive an offer? There’s a purchase agreement to be discussed, price negotiations to be had, and so on. Realtors will make sure you don’t get screwed by a buyer, and that you only incur costs you’re supposed to pay.

6. Inspection and repair know-how

One of the most important parts of any real estate transaction is knowing which inspections to expect and how to get them done. This is where the realtor’s web of resources comes in handy again – he or she should be able to provide repair people to fix anything discovered in an inspection.

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7. Transaction management

Once a home is in contract with a buyer, there are more steps to close the deal. Realtors can make sure the right people are contacted to handle the closing, appraise the property, repair anything found in inspections and anything else to follow up on.

8. Closing finesse

There are expectations upon closing a property. Non-realtors probably don’t understand what the buyers expect, in terms of when move-in/move-out occurs, the condition one should leave their home in, or what to do if a last-minute issue arises. Realtors do know, and they are worth the time and money to ensure your sale is in good hands.

FSBO’s may be intriguing to the cheap and/or self-confident, but the small savings on a realtor’s commission is not worth the hassle that comes with navigating such a difficult process without professional help, and often a house sells for less than what it would have with an agent even after the commission has been paid.

On that note, there’s a reason I do what I do! I’d love to help you buy or sell a home. Please reach out any time for information regarding the current, local real estate market!

Donna is our latest satisfied customer!

My assistant Lilly and I recently closed on a home for Donna, an 85-year-old client. Donna lived in San Mateo many years ago before moving to Las Vegas to be closer to family.

It didn’t take long for Donna to realize that Vegas wasn’t her scene, so she moved back to San Mateo. Once there, she quickly learned that she’d been priced out of her little town, and needed to find a less expensive option.

So, Donna started exploring Concord! That’s where we met – at one of my listings. She told me she was looking for a white kitchen in a traditional rancher. A few months later, she found her dream home in Concord

I stopped by on Saturday before a hike with my dogs to give Donna the key and help her carry in a few items she brought over. They would have loved to help too and I would love to help you – dogs are extra ;-).

Tax returns and your loan approval!

Our friend Jay Vorhees at JVM Lending came up with another relatable blog recently: Tax Transcripts and 4506-T forms. It generally explains how those forms work, and reminded me of an experience of my own. First, a summary of Jay’s blog:

Every time a lender gets a loan from a borrower, they also have to get the last two years of tax returns. This is why borrowers sign IRS Form 4506-T as part of their disclosures. It formally authorizes lenders to request tax transcripts, which then show the filer’s status and income information.

Lenders are required to request transcripts from the IRS before a borrower can (borrowers can only request them directly if the IRS reject’s a lender’s request). If there is a minor error between the 4506-T and the tax return, this rejection may occur, so it happens pretty often.

That covers the basics of how the 4506-T form works and the role it plays in a real estate transaction. It’s a more subtle part of the process, but can cause huge headaches when done incorrectly. Take, for example, my experience with a property at Madeira in Pleasant Hill last year.

I represented the seller, and the buyer had their lender in Oakland, with a Bank out of L.A. Unbeknownst to us, the bank was being bought out and the new bank was called Bank of Hope – yes, really. But it turned out to be the Bank of Hopelessness.

Processes changed, the lender in Oakland was let go and nobody knew what they were doing. Communication was terrible. One of the balls that got dropped was getting the tax returns. We closed almost two weeks late and the only way this ended up closing at all is by the processor who I had been speaking with regarding other issues. They actually went down to the IRS office and got the tax returns. She went beyond what is required (and probably got tired of our phone calls), but my seller is an attorney and also made multiple phone calls as they had already purchased a new home that was about to close.

This is one of the best reasons to get fully underwritten before you start to write offers. If all the documentation is in upfront, there won’t be any surprises or delays once you get into contract. Selecting the right lender can be the difference between smooth sailing and dark nightmares.

New review from a happy customer!

One of the greatest joys of working in real estate is sharing in the excitement (and relief!) of buying or selling a home with a client.

Oftentimes, I become close with my clients just by virtue of developing a personal connection while I vet houses for them. Throughout the process, we usually text, call, email and meet in person dozens of times. So, when we succeed together and find the perfect buyer or the perfect property, it’s extra special for me to get a great review!

For example, I recently helped my client and friend Mckenzie with a transaction, and here’s what she wrote for me:

Kristin is amazing-she went above and beyond as my real estate agent; as a first-time homebuyer, I am SO lucky that I found her!! I found Kristin on Zillow, I was interested in a specific property and sent an email. She followed up and was immediately so helpful over the phone. As I said, I am a first time home buyer, and she gave me lots of advice. She met with me in person to go through the home buying process (like a crash course) which was VERY helpful, and something she didn’t have to do, as I wasn’t even looking at properties yet. She went out of her way, she knows her stuff, she is quick, gives good advice that isn’t biased, and made sure through the whole process I was finding what I wanted. She has a great reputation with other agents in the area and has lots of people she works with that she recommends in terms of home repairs etc. Even after escrow closed, she is still talking with me making sure I have what I need, helping me find handymen and other things I hadn’t even thought of. On top of how capable she is-she is also so fun and has personality plus! It was actually an enjoyable process for me (who would have thought!?!?) I have already been recommending Kristin to friends looking to buy in the area, and if I ever buy/sell again, will definitely be contacting Kristin to be my agent!

What a sweet note from Mckenzie! I loved working with her. If you want to be like Mckenzie, and be my next satisfied client, please give me a call or shoot me an email!

The VA loan is the best loan going!

With Memorial Day around the corner and a time to honor and remember all the brave heroes who served to hold our flag high, I thought it would be a great time to mention the benefits of a VA loan and what is currently happening in that arena.

There’s a bill in Congress that eliminates loan limits for the VA. The current VA limit for Contra Costa is $636,150, so eliminating the limit will help our vets who qualify for more to still be able to purchase with their VA benefits. I specialize in working with VA buyers and sellers, and have a strong passion for it given my family’s history in service.

There is also a rebate available of up to $2,500 in Contra Costa County for qualified buyers with approved lenders. I can connect you with a qualified lender. The VA loan is the best loan around – low rates, nothing down, 25% of the loan is backed by the federal government, lowest loan foreclosure rate, plus many additional changes over the years to help make a VA offer be accepted such as the seller no longer has to pay for the pest inspection.

Did you also know, you are eligible for a VA loan after 90 days active duty in wartime (we are still considered in wartime which started with the Gulf War)? You are eligible after two years of service if no longer on active duty and six years of service in the National Guard or Reserves.

If you’re a veteran looking to buy or sell in the Bay Area or know somebody who is, please give me a call so we can get the ball rolling on helping you land a rebate and get your VA loan accepted!