Do Real Estate Agents Under-Price Properties For Bidding Wars?

I frequently come across prospective buyers who hold the view that real estate agents deliberately price properties under the market to instigate a bidding war. I understand this  line of thinking, and while it is possible that this may be the case in some areas, I do have a bunch of points to make to help explain property pricing that can hopefully help. In my experience, there's a very different perspective to consider here. Many of us know this but may forget to recognize the fact that each house is different in terms of its condition, upkeep, upgrades, and location, and may not fetch the same price as the nearby house that just sold 30% over asking price, even if the house has identical square footage and lot size as yours and perhaps even has the same updated look as yours. There's a lot more to pricing a home than just size of home.  

School Boundaries

An angle to think of is school boundaries. Many homes are in a situation where crossing a certain boundary means another city's school district that may not be at the same comparable level as the sought-after school district on the other side. This means homes selling for hot prices just a block away may not mean that the same may come true to the home involved in the lower scoring school district. Many parents would give up on their list of preferences if the school district alone were to be a super stellar performer. 

Home Related Aspects

Additionally, factors such as the age of home, the level of upkeep, amount of repairs and upgrades needed to bring the home to a move-in condition, and direction of the home and resultant natural lighting, curb appeal, landscaping, etc come into play when considering pricing of a home for sale. For instance, even with all of these factors working in your favor, extraneous factors such as unsightly electric, phone and cable company wires criss crossing your home's backyard or a large electric tower close the house or a gas station close by are factors than have the potential to affect the pricing of the home. 

Sudden Market Moves

One other important factor is that pricing a home at the right level with some margin of defensiveness always protects the seller from sudden moves of the market where prices or demand moves down rapidly. For instance, in just a couple of weeks in 2014 when interest rates rose, albeit for a short period of time, many homes sold at much lower prices and with lower number of offers than anticipated premiums over list price.

Market Drivers

It is a considerable challenge for the real estate agent to price a property way lower just to attract high premiums. Its what the market will bear to offer. If there is an excess of buyers to number of homes available, bidding wars are an expected outcome. If there is significant moneys coming from international buyers, and low interest and low dollar values are the going trend, then this will over run any local demand and result in premiums. These market factors are a reality in the Bay Area. 

The Right Kind of CMA

Considering all of the above factors and more, an indepth comparative market analysis is prepared by a professional Realtor (not a standardized generated document) to present a well thought out comparison of nearby sold properties factoring in the differences, and pros and cons with respect to location, condition, schools, amenities, upkeep, etc in order to arrive at a recommended price range. I make it a point to visit all homes on sale in a neighborhood to learn everything about what is good and bad about the homes, in order to ensure easy comparisons for any upcoming listing of mine. This helps me put my best experience and expertise to work for you to price your home at a level that can attract significant interest and help sell at a good price. Even in the current sellers' market, there are some homes that are sitting for a long time specially because the pricing has not been done well. Price it appropriately and you have a winner. Don't hesitate to reach out for a friendly no obligation call.

What's your home worth? Don't rely on automated estimates. Click here to get your pricing done right!

Realtor Ranjana Shreedhar
To Contact me:   Click Here    Or    Call (408)861-8026

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Real Estate Tip: Red Flags In Preliminary Title Report

Look Out For These Warning Signs In The Preliminary Title Report 

Avoid Problems Prior To Or At Close of Escrow

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Problems with or related to the title deed/home ownership status can mar a smooth sale transaction unless these are identified early and addressed right at the outset. A variety of issues can be possible as outlined below so your best bet is to have these rectified early in sale / purchase to avoid problems, delays, frustration, and desperate situations for you, either as a Home Seller or a Home Buyer. As your Real Estate Agent I will help you with any of the following issues but read on to educate yourself about these.

VESTING

If the name on the title deed is different from the seller signatures in the purchase contract, you need to find out why. Determine if the seller actually has the right to sell or sign on behalf of the name on the title deed. 

TAXES AND ASSESSMENTS 

Look to see if  payments are current.  Be sure that all special assessments have been disclosed to the buyer. If payments are not made, the county holds lien on the property for the taxes owed. Ensure this is covered prior to closing. 

DEED OF TRUST 

Deeds of Trust that are paid off but are not reconveyed require a reconveyance from the trustee or a court order to remove it from the record.  Find out through your realtor if the seller understands that such loans or financial commitments affect his property.

IDENTITY MATTERS 

Judgments and Liens may be eliminated with an identity affidavit or an SI, commonly known as STATEMENT OF INFORMATION / CONFIDENTIAL INFORMATION STATEMENT,  if they do not affect the party in question.  If they do affect the party but have been paid and not satisfied, a release or satisfaction must be obtained and recorded or filed to eliminate these matters.

PENDING ACTIONS 

A civil action affecting real property will generally have to be dismissed or withdrawn before title to the land can be insured.  A pending divorce may not need to be finalized for a sale or loan to close, however there may be special requirements.  A probate may have specific requirements.  Please check with your Title Sales Representative or Title Officer for details. 

MAINTENANCE AGREEMENTS 

Roads, driveways, party walls, and access easements may be affected by joint maintenance agreements which may require future payments for general maintenance purposes.  

The title report will show such agreements if one is of record.  Be sure to request a full copy of the maintenance agreement read it.

LEGAL DESCRIPTION 

The legal description should always be compared to the map attached to the preliminary title report.  Be sure that all the property being conveyed has been included in the preliminary title report.  

NOTICE OF DEFAULT 

If the seller/owner is behind in his/her payments and has received a notice of default, the sale date may be set three months after the date of notice of default as that is the timeframe given to the seller to "cure" the default.

NOTICE OF TRUSTEE'S SALE 

The sale date has been set. This recorded document contains the date, time and place of this sale.  If you are the purchaser in this transaction you should verify for yourself that the COE (Close of Escrow) date is scheduled prior to the  date of that sale, or that the sale date has been postponed.

As your Realtor, one of the many services I bring to you is the ability to analyze the Preliminary Title Report in detail in consultation with Escrow professionals. My team of professional service providers includes very experienced Escrow officers who complement my real estate expertise to help you avoid such situations and more. 

Please give me a call at (408) 861-8026 for all your real estate needs, whether you are in the market to Buy or Sell your home. 

Republished with permission from Candice Francisco, Cornerstone Title Company

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How To Generate Wealth During Today's Real Estate Market Turnaround

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In the current real estate market, abundant opportunities are available for a home owner or a first time buyer to generate a sustained revenue stream from real estate that will last them for years to come. Read on to learn about the one real estate wealth generating strategy that you should look into.

Real Estate Market In Summer of 2012

The local Bay Area Real Estate market in California, and many other parts of USA's real estate market are showing great signs of a recovery amidst a gradual economic revival. The jury is out as to whether the real estate market is recovering or not, depending on where you live and how crazy it got to in the last bubble. There may be lingering doubts about whether the economic revival will continue into sustained economic growth and stability after the recent few depressing years. But it is becoming increasingly clear that this is a RARE ONCE-IN-A-LIFETIME REAL ESTATE TURNAROUND that you will see in many decades to come in your lifetime. 

The Ideal Real Estate Investor Of Today

Many of you may have bought your Bay Area houses during the peak and the low mortgage interest rates of the last few years may have possibly helped your finances become more manageable in terms of payoffs of the big balances. If you have managed to build a reasonable amount of savings through stocks, and other investments over the years, you are now in a better position than many others in the market.  

And there are legions of long term home owners in the Bay Area who bought houses long before the peak with much of the mortgages paid down leading to a relatively healthy financial situation. You have built up other avenues to shore up your savings through a good combination of investment in stocks and other assets - hopefully :-) 

Your home values are now rising as you see your property tax assessments move up and your local recent home sales data shows low inventory and many multiple offer situations with properties selling at or above Home Sale List Prices. Besides, the number of Foreclosures or Short Sales in your area has rapidly diminished. 

And then there are first time home buyers who are trying to buy their first home as a primary residence - there are some who are qualified for very good amounts allowing them to target $700K and above for a purchase. This segment of buyers could possibly look into the strategy below to yield lasting revenue streams while also gaining rapidly in the form of capital growth. 

You all are the ideal real estate investors  who can take advantage of today's rare market opportunity.

Obvious But Not-So-Obvious Wealth Generation Strategy

If you have been owning a home as your primary residence, you are probably satisfied with what you have and can depend on your regular employment to produce your regular income stream. If you are a first time home buyer with a loan pre-approval for a large amount, consider the upside potential for a large value home versus a couple of small homes - typically Condos or Townhomes. 

You should consider today's attractive environment that could soon evaporate as the real estate market and the economy regains its steam.  You have a rare opportunity to build a lasting revenue stream and generate capital growth in the next five-ten years through this approach.

Low Interest Rates That Won't Last Forever

The record low mortgage interest rates are not going to last forever - these are already showing signs of bouncing back off the lowest lows but at this point are still very low compared to the peak years when people were willing to buy their first homes. As the economy recovers, so will inflationary pressures that could be compounded by the worst drought in 25 years affecting food prices.This factor alone could lead to higher interest rates let along the impact of growing deficits and deficit-financing through Govt. bonds.

Rents Are Rising As Economy Grows

As the economy shows gradual signs of recovery, employment situation stabilizing,  and growth in increasing number of parts of the country, people who still cannot afford homes or are vary of the commitment of owning a home are choosing to rent. As a result, in 2012, rents for housing in apartments, condominiums, townhomes and   single family residences have risen rapidly. One of the reasons some renters have turned into buyers in this market is in fact this rapid rise in rents. The current renters are future property buyers. 

Home Prices Are Rebounding But Are At Historic Lows

Another factor to consider is that home prices although seemingly moving up near term, are not at their historic highs from the crazy bubble peaks. In fact, many homes are at least 30% - 50% lower than their peak values depending on where you look. For instance, homes on the fringes of the Bay Area were the ones that lost most of their value but have bounced back from the low values.  Looking at various types of homes from condos all the way to single family homes to duplex units, you have a spectrum of real estate units you could look into for the right opportunity. 

Invest Now For Lasting Returns - here's how

Real Estate Investors both within USA and from other parts of the world, including China, have realized this rare opportunity and have been buying properties in the USA over last year primarily as an investment vehicle. While some of the large foreign economies show signs of slowing, and this trend of money flowing from abroad seems to have shown some signs of cooling,  you have a level playing field to invest today. 

Scout for a housing area which is in close proximity to medium to large employers and reasonably good schools. Make sure you look for either an up-and-coming area or an attractive neighborhood for future returns. Check out recent rentals in the area to get a sense of how much these units rent out for and their characteristics, in addition to how long the units stay on market before renters sign. 

Consider setting a target of, say, $250,000 to $400,000 price range depending on where you target and your financial situation, assuming you can put down 20% - 25% - the rest can come from a low-interest mortgage or your existing home equity line of credit depending on your situation. 

Target to buy either a Condo unit, or a Town-home unit, and by all means, a Single Family Home if you have the financial wherewithal, in that reasonably good location with proximity to good employers and schools. 

If you are a first time home buyer with a large pre-approval, split the same for two houses - one a condo and another a townhome. The condo unit can be rented out for very good rentals in the Bay Area while the Townhome becomes your primary residence. The leverage from low interest mortgage outflow coupled with high rents and the tax deduction, leads you to a net income stream for many years (assuming you tied up a long term fixed interest mortgage). The Townhome, being your primary residence, now has a better cash flow management in that part of the mortgage payout on that home is paid for by the Condo rental.  Thus, you have a far better cash flow situation than what would have been if you had gone in for a large value single family home as your primary residence. Besides as years go by, you would have rapidly paid down the Condo mortgage freeing up equity for you for future investments in other real estate. In addition, capital appreciation in the condo and townhome units would be better relative to single family homes allowing you to move up to a great single family home in a few years with a much better cash flow situation than most other large mortgage based home buyers. 

Again, do the math in terms of the cash outflow of principal and interest and factor in the Tax deduction you will receive out of the additional home mortgage interest you will be now paying. 

As described above, you now have the opportunity of continuing to stay in your current home enjoying the peace and pride of home ownership, and also receive potentially net income of rentals over the mortgage payout and tax benefit of the second home. In addition, the lower price segments tend to register better longer term returns as the economy and market improves beyond the turnaround. 

At this juncture, you  have a rare wealth generating opportunity with the above combination of events helping you get real returns over several years. 

Ideal Places To Invest

If you would like to get help with the above strategy, don't hesitate to contact me for places where you can invest for a possible additional income stream with potential future capital appreciation. Contact me at (408) 861-8026 or through the handy form on the right hand side of this page!

Author Ranjana Shreedhar, Realtor:

If you are planning to Sell your house, learn how to make the most for your house in this market and to attract the best offers for your valuable property. Call me for a no-obligation evaluation, and a listing presentation at 408-861-8026.

If you are in the market to buy or invest in a home, learn how I can help you find your ideal home for primary or secondary residence, and be there for you throughout the purchase process.

If you or any of your friends are in the market to sell or buy a home in the Bay Area, I'd be delighted to help you or your friends, as the case may be, achieve your real estate goals with exceptional service, high integrity, and market savvy. 

Contact me through Email or on phone (408)861-8026 or through the handy contact form on this page.

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How to Get Your Dream Home Fast For Real

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Home Buyers: Make Your Buying Experience More Effective

A number of Home buyers prefer to take the route of visiting open houses on weekends as a way to start their real estate search for their dream home. Doing so gives them a broad based view of several things including seeing various kinds of homes, features, localities, decor, landscaping, and importantly meeting and quickly interviewing Realtors of various caliber. This is certainly the good part of this approach. 

However, there is something that you can do to make your home buying experience more effective and efficient enabling you to land your dream home faster. 

Hosting open homes on a frequent basis, I come across many prospective buyer clients looking to buy their first or second home. Visiting open houses, the prospective buyers can ask very good questions to try to get a hang of the buying process intermingled with questions around the house they are looking at.  I provide folks with direct, clear answers to the best of my ability in the short time we get to interact amidst the busy time with others wanting to ask similar questions. I try to provide as much guidance as possible around how to go about their home search successfully as well.

In many cases, I prefer to have prospective home buyers come over to my office to spend quality time 1x1 to help them understand the real estate purchase process better and to educate them about the many things to look out for when buying a home and go over the offer documents ahead of time. 

In many cases, the home search goes on for months without ending in a home purchase due to various reasons. As market situation improves, buyers are confronted with multiple competing offer situations, and the number of houses on sale that are within their budget dwindles down leaving them frustrated and disappointed. I can totally relate to this situation and I have myself been in that situation in the past as a home buyer. Many of my buyer clients have related such experiences and in some case, it is only after such long winding experiences that I see them coming back to me after meeting initially at an open house months ago, to learn about the buying process to make it more effective.  

What can the buyers do to get more effective results? 

Buying a house is a huge financial decision and while you should avoid getting into unsustainable over-budget bidding, there are often things you can do to target the right homes to focus on. The key to any successful financial decision lies in getting organized and doing the necessary research to get fully educated about what's involved. Buying Real Estate is no different. Getting organized and getting educated lays down the necessary foundation so that you will have set out on your home search on a stronger footing. In order to better achieve this goal within a set amount of time, it is essential to get organized with all the necessary information.  Getting a good Realtor, who will educate and guide you, besides writing offers and negotiating for you, is one of the first and best steps to do this but there are things you can do even before that step.

Know What You Want From Your Dream Home

Put together an organized list of wants and needs. We all have many wants but real needs are usually a smaller set than our wants. Without an organized list of wants and needs, going house to house is akin to losing your way in a jungle. It costs you time, money, emotional drainage, and frustration.  

Another impact of the lack of preparation is that once you're in the thick of viewing homes, it's all too easy to fall in love with the interior decoration or a home’s outstanding architecture. You may end up completely overlooking the fact that there aren't enough bedrooms or bathrooms to fit your future needs. Or that the layout of the house would not help as you grow as a family over the years.

Here's what you can do

Get together as a family/couple/partners and draw up a list of dream home requirements on a writing pad or your favorite tablet device starting with a Goal and Justification. The goal will have a mission statement on what kind of home you want, and why you want to buy a home. 

Now add a column in the body of the page, named Home Buying Requirements Description. This column would capture features and facilities that you will expect a home to have in order to qualify as your dream home. Many folks do not know what they are looking for in a house other than the neighborhood, and general looks of the home compared to others they have seen. This is at best a cursory way to organize your needs for such a huge decision.  

As you prepare your list of requirements, add a column next to the Home Buyring Requirement Description, named Priority. This column would capture the relative importance of each requirement versus the others in terms of numbers starting from 1-Must-Have (most important and a deal breaker if not met) to 2-Desired/Preferred (preferred requirement the meeting of which will motivate you more to make an offer) through to 3-Nice-To-Have( not meeting this requirement is not a deal breaker but will make it imperative to make an offer in a hurry). 

As you put down your requirements first and then go over the prioritization of it all, you will gradually realize a picture of what you are exactly looking for. Don't hold back on these requirements - try to put in every conceivable want of yours - for instance, neighborhood, schools, size of house, lot size, age of the home, updated house, HOA fees, hill-side, flat land, Roof age, Direction of the house, two-level house, double pane windows, updated heater, water boiler, insulation levels, and the list goes on....

Now, once you have an exhaustive list of requirements with prioritization, separate out the 1-Must-Haves AND 2-Desired/Preferred list into one page, and the 3-Nice-To-Have list into another page. 

Essentially, what we are doing above is ensuring that before you step foot into the first home you look at, you are thoughtfully determining your wants and needs, and the difference between the two! By analyzing your needs you will be able to get a clear picture of exactly what you want your new home to look like and have, and how it should function for you. 

It is important to identify what you envision your home to look like and what features it should have. Writing this down helps to avoid ambiguity later in the home search process. By separating out the Must-Haves and Desired/Preferreds into one page and the Nice-To-Haves into another, you just made two lists: one that describes everything you would like in an ideal world, and the other that lists the features of the home that are an absolute must. It is most likely that you will blend the two lists into one as you progress through the homebuying process. This is a natural and evolutionary process that becomes clearer as you determine what you want and what is available.

To make it easy for you, I have made a template Home Buyer Requirements Document for you to download. 

Home Buyer Requirements Doc

Click Here To Download. 

In sum, getting educated, and getting organized takes you farther along the way in terms of what you exactly want in order to realize your dream of buying a home and enjoying the joys of home ownership. And stay in touch with me and do not hesitate to ask me questions that you want clarifications or guidance on and I will be most happy to answer them and provide you market updates. 

Author Ranjana Shreedhar, Realtor:

If you are planning to Sell your house, learn how to make the most for your house in this market and to attract the best offers for your valuable property. Call me for a no-obligation evaluation, and a listing presentation at 408-861-8026.

My goal is to make the sale of your home smooth, successful, and worry-free, with my core marketing skills, integrity, and exceptional service! 

If you are in the market to buy your dream home, learn how I can help you find your dream home, and be there for you throughout the purchase process. My goal is to make you a happy and proud homeowner.

If you or any of your friends are in the market to sell or buy a home in the Bay Area, I'd be delighted to help you or your friends, as the case may be, achieve your real estate goals with exceptional service, high integrity, and market savvy. 

Contact me through Email or on phone (408)861-8026 or through the handy contact form on this page.

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Learn Everything About Home Buying Process

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Doing Your Home Work About Real Estate Buying Pays!

Learn everything you need to know about home buying before you embark on your searching for your dream home. Having more information than less will ensure your success. 

When I meet buyers at open houses or at my office, I determine how aware my clients are about the buying process. My success entirely depends on my clients’ success, and towards this end, I make sure that the more informed you are about home buying, the more you know what to expect, and have an enjoyable experience.

Here are some things I would highly recommend you do, to better prepare for a smooth home buying experience:

1. Determine how much home you can afford. Make sure you have a good FICO credit score. Hire a Mortgage broker/lender to secure a Pre-Approval for a loan if you are not an all-cash buyer. This is a full loan pre-approval and is not a pre-qualification. I can put you in touch with mortgage lenders/brokers to get your pre-approval with good loan options.
2. Determine how much down payment you can put in. Typically, a down payment of 20% of home value is expected in the current market.
3. Know what your monthly payments will be ahead of time. Consider Principal, Interest, Property Taxes, Insurance, HOA dues, if any, and plan your cash flow.
4. Always provide for a significant buffer in your savings beyond the down payment to help overcome any post-purchase expenses and living costs.
5. Gather information on target neighborhoods in the price range. Factor in commute, schools, amenities, crime rate, safety, and housing trends in the locality. As your Realtor, I monitor many areas and will help you narrow down your search.
6. Hire and commit to a real estate agent (a buyer’s agent). As your Realtor, I will work with your needs, your budget, your conveniences, and your preferences. You are the focus here.
7. Come up with a list of features that you must have in a house you’d call home. Add to it, a list of features that are nice-to-haves but not critical to the purchase. This can significantly speed up your home selection, as not all homes are 100% perfect. Think about what features you’d give up in preference for other features. Make notes as you visit houses for crucial details in terms of future expenses.
8. Understand the Escrow Process from your Realtor. As your Realtor, I will be there with you throughout the purchase process to educate you on critical process steps, and help you make informed decisions.
9. Learn all about the offer process, counter offers, contingencies, inspections, purchase contract, mortgage funding timelines, documentation, home insurance, home warranties, and much more. As your Realtor, I will commit to helping you by educating you on all these aspects. Also watch for this blog space for educational articles on these critical steps to get your home. 

Author Ranjana Shreedhar, Realtor:

If you are planning to Sell your house, learn how to make the most for your house in this market and to attract the best offers for your valuable property. Call me for a no-obligation evaluation, and a listing presentation at 408-861-8026.

My goal is to make the sale of your home smooth, successful, and worry-free, with my core marketing skills, integrity, and exceptional service! 

If you are in the market to buy your dream home, learn how I can help you find your dream home, and be there for you throughout the purchase process. My goal is to make you a happy and proud homeowner.

If you or any of your friends are in the market to sell or buy a home in the Bay Area, I'd be delighted to help you or your friends, as the case may be, achieve your real estate goals with exceptional service, high integrity, and market savvy. 

Contact me through Email or on phone (408)861-8026 or through the handy contact form on this page.

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