Buyer's Confidence Up But Not Enough

 

While buyer confidence has increased significantly during the recovery and caused home prices to significantly swing upward, we are not yet back to "normal" levels in the housing industry.   Granted, the real estate market, in general, has been brisk and there has been renewed hope and a lot of excitement.   Then things slowed down and perhaps you are wondering why.  

 

According to Fannie Mae's June 2014 National House Survey, consumer confidence in the housing market has increased significantly, but it is still not enough to bring the market back up to "normal" housing levels.

 

Chief economist and SVP of Fannie Mae commented this month that "the uptick in the share of consumers expecting mortgage rates to go up (55 percent) and the accompanying decline in home price expectations (the average 12-month home price change expectation fell to 2.4 percent) reflect the pause in activity in the housing market so far this year."

 

Before making any real estate decision, it is more important than ever to consult a local Realtor who is up to date on what is going on in your market.  If you have any questions concerning your own real estate needs, call or email me anytime.  I always enjoy hearing from you!

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com Nancy Puder Realtor and "like" her page to access other real estate related articles.

 

 

Negotiating the Sales Contract

 

Q. My husband and I made an offer on a house which we really like.  We were wondering, though, if we find another house that we like better, during the escrow period, can we cancel the contract?  My husband says that we can but it doesn't feel right to me.

 

A.  Buyers should understand that when an offer is made and accepted by all parties involved, that it is a contract and everyone involved is expected, whether legally or morally, to act in good faith. A well-written sales agreement will allow contingencies for the buyer to get a loan, have time to investigate the condition of the property or the area they are buying in and for the home to be formally appraised at the purchase price.  These are the most common contingencies, however, other issues can be agreed upon also.  

 

A well-written sales contract will have a specific time period written in that the buyer must adhere to. At the end of the time period, the buyer is required to remove their contingencies or cancel the contract, based upon their inability to obtain satisfaction  in the area of investigation, obtain the loan or if the property appraises lower than the contract price.  In most cases, if this occurs, negotiations are re-opened, buyer and seller come to an agreement and the property then moves to a successful closing.  This is the way most transaction go and is a fair way to do business.

 

At the time of submitting the offer, buyers should be fully committed, barring unforeseen circumstances.  From a legal standpoint, buyers need to understand that what they are signing is a legally binding contract. Your agent may tell you that there are ways they can get you out of a contract, but buyers should consider how their attitude when entering the contract and the decisions they make are affecting everyone.

 

Often, the buyer and seller do not actually meet during the escrow period for a couple of reasons.  Keeping the distance between the buyer and the seller allows the agent to objectively negotiate the needs of both parties.  This widely accepted process minimizes the emotional effect that many buyers and sellers experience during negotiation and escrow.   Another reason is that nowadays, so much business is conducted with the use of technology, there is no need to meet in person. Sometimes even the buyer and seller agent don't meet face-to-face during the entire escrow period.

 

Perhaps because of these reasons, buyers are becoming desensitized to the effect that "changing their mind" will have on a seller and their family.  Imagine receiving an acceptable offer which is due to close escrow in 30-45 days.  The loan is going well, the appraisal has come in (or at least everyone is confident it will come in at the right price) and the buyer is happy with their investigations.  You, the seller, have finally found another home to either buy or rent, made arrangements for a truck to help move the family in 2-3 weeks,  arranged for the kids' schooling, spoken to utility companies, the list goes on and on.  Then the buyer simply withdraws their offer at the end of their contingency period because they have found another home that they have decided they like better or just decided to wait.  How would you feel?  Now your life has been turned upside down and you need to start over. 

 

During the recession, making offers randomly and then backing out was a common occurrence. Many buyers felt no moral obligation because they weren't really dealing with "people" but just the banks through foreclosures and short sales.  Now the recession is over and most sales these days are regular saleswith regular people.   

 

Naturally, there will be some real circumstances where a buyer needs to withdraw an offer and this article is not intended for those situations.  My intention in writing this it is to simply encourage buyers to have the right attitude and level of commitment BEFORE signing the offer.  Remember the Golden Rule. Do unto others as you would have them do unto you!

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder &Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.

Cash is King...Not Always

 

Most of us have heard the statement "cash is king", when referring to a real estate purchase.  Listed below are the advantages of paying all cash to purchase a home. Be sure to read further, though, to see why this may not always be the case.

 

• The seller may reduce the price for those who pay in full up front.

 

• All-cash purchases streamline the home-buying process: No loans means less paperwork and no delays for mortgage approval.

 

• Cash buyers can save money on closing costs, bank appraisals, mortgage applications and fees, title insurance, and so on.

 

• Cash purchases eliminate the risk of loan denial.

 

• Cash buyers pay much less for their homes in the long run: No loans means no interest.

 

• Cash buyers never have to worry about losing their homes because they can’t afford to repay their mortgage loans.

 

• Cash buyers gain full, immediate equity in their home.

 

• Financially and emotionally, paying with cash benefits the home buyer.

 

• Sellers often show preference to cash buyers

Home sellers generally prefer quick, smooth sales. They know that even buyers who have been pre-approved for mortgages might be denied by the lender later on. Sellers are often willing to reduce the house’s price for cash buyers.

 

•  Cash purchases avoid the risk of low appraisals

 

 

 

Home appraisals are notoriously fickle. Lenders determine a home’s worth by weighing it against comparable sales — other homes in the neighborhood that may have sold at low prices for unknown reasons. A low appraisal could lead the lender to reduce the amount of the loan offer, even after seller and buyer have agreed on a price. If the loan amount comes up short, the buyer often cannot afford to buy the home. All-cash buyers sidestep mortgage applications, avoiding the need for a potentially deal-breaking home appraisal.

Cash is a powerful tool when buying real estate, however, cash buyers should know that making an all cash offer does not guarantee it will be accepted or that the seller will work with you.



One reason that an all cash offer would be rejected in favor of a financed offer would be if the seller receives a cash offer that is significantly lower than the asking price, the seller will often choose a higher offer even though it involves financing in this case.  Many homeowners need every dollar that they will net from the sale of the home and if they feel that the difference between the cash offer and the financed offer is worth the risk, they will often go with the financed offer.



Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.

Home Prices Dip Slightly in June

Home prices dipped slightly in June but homeowners should not be alarmed as this is just part of the recovery process. The real estate market adjusts itself every 3 weeks and is affected by several other economic factors like job growth, wages and the amount of other competing homes on the market.

 

The good news is that this is definitely a great time to buy or sell real estate. VP and chief economist at C.A.R. Leslie Appleton-Young, commented that “Home prices are finally increasing at a healthier pace, and the smallest year-over-year price gain in more than two years suggests that prices are stabilizing...Last year’s frenzied market of multiple offers, which drove sales prices above listing prices, has tapered off as the sales-to-list price ratio has dropped to a more normal level at nearly 99 percent, which signals a return to a more balanced market.”

 

Here are some statistics you may find interesting..

 

• Statewide housing inventory edged slightly higher in June, with the available supply of existing, single-family detached homes for sale increasing from 3.6 months in May to 3.7 months in June. The index was 2.9 months in June 2013.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered typical in a normal market.

• The statewide median number of days it took to sell a single-family home also rose in June, up from 31.6 days in May to 33.9 days in June and up from 27.8 days in June 2013. 

• Mortgage rates dipped in June, with the 30-year, fixed-mortgage interest rate averaging 4.16 percent, down from 4.19 percent in May but up from 4.07 percent in June 2013, according to Freddie Mac.  Adjustable-mortgage interest rates in June averaged 2.40 percent, down from 2.43 percent in May and down from 2.60 percent in June 2013.

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.

 

 

China Leads the Way in U.S. Real Estate

Chinese buyers have become the fastest growing segment in the real estate market, followed closely by the Canadian buyer.  Chinese buyers have also become the largest source of foreign cash in the U.S. real estate sales in the United States.

 

Over the past several years, American real-estate markets have been viewed alternately as a safe haven and a bargain amid concerns over geopolitical instability or unsustainable asset values abroad.

 

U.S. real-estate also continues to be popular thanks to the dollar’s weakness against some currencies, though the currency advantage has dimmed somewhat for Canadian buyers that had been particularly aggressive property buyers in the U.S. in 2011 and 2012. Some agents say that American higher education is also a top draw for some trophy-property buyers.

 

Steve Brown, president of the National Association of Realtors (NAR) said that “Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future. "

 NAR estimates that 35% of Chinese buyers selected homes in California. Around 40% of Canadians bought homes in Florida, while 23% of Canadians bought in Arizona.

 

China was the largest source of transactions on a dollar basis, and it represents the fastest growing buyer segment. But Canada remained the largest share of clients. Canadians accounted for 19% of property buyers last year, down from 23% in the previous year. Chinese accounted for 16% of buyers, up from 12%. The NAR survey includes buyers from Taiwan and Hong Kong in that tally.

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder &Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com Nancy Puder Realtor and "like" her page to access other real estate related articles.

 

8 Reasons to Choose a New Home Instead of a Resale

There are several reasons to buy a brand new home when you are ready to purchase. Here are 8 top reasons to choose a new home over a resale.

 

1. Customization -  Even in a semi-custom home where options are limited, a homebuyer can frequently choose the type of flooring, colors, fixtures, appliances, etc., therefore, putting their own personal signature on the home.  In addition, if there are several homes in a subdivision, the buyer can handpick their lot.

 

2. Efficiency - Building codes have required higher energy-efficiency standards over the years.  In many cases, your utility costs will be lower because of energy efficient products in the home that are now government mandated.  As homes that meet code are being built, it's pretty clear that they are going to be more efficient.

 

In addition, newer homes tend to have a tighter-sealed building envelope, or the enclosed part of a structure, that helps prevent conditioned air — cool air in the summer, warm air in the winter — from escaping. Features that create this envelope include higher-efficiency insulation, doors and windows.

 

Owners of existing homes can always retrofit their property or buy higher-efficiency appliances, but doing so can be expensive.

 

3. Fewer repairs - The features of new homes should also hold up better than those of existing homes, which may have experienced years of wear and tear.

 

4.  Less maintenance - Today’s new homes are engineered specifically to minimize maintenance requirements. 

 

5. Warranty - Builders often agree to take care of the necessary repair work in a new home for at least the first year.  Some builders even offer a 2/10 warranty which provides limited coverage for up to ten years.

 

6 Fire safety - New homes often include fire-safety features that may not be in properties built years ago. For example all new homes are required to include hard-wired smoke detectors.  In addition, some homes are equipped with fire sprinklers and fire retardant materials. 

 

7. Concessions - Builders are accustomed to selling homes on a regular basis and have the experience and knowledge of how to transact a fair deal with the buyer.  This experience will often allow them to be flexible in areas where a private seller may not be able to.

 

8. Financing - Sometimes home buyers can take advantage of mortgage-financing perks available through their builder.

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.

 

 

Tips for Kitchen Remodel

Have you wanted to update your kitchen for a long time and are finally ready to get started? Be sure to read these tips first to be sure that some of your ideas have not become dated.

1.  Chef Stove - a stove with a flat griddle or area to place a searing pan or an extra burner ranks top choice. Even people who don't cook are attracted to a cool looking stove.

 

2.  Eco-Friendly features - Energy star and green certified appliances were among the most popular as people are becoming more environmentally conscious.

 

3.  Granite or Quartz Countertops - Granite still ranks most popular, but quartz is beginning to emerge as a top choice because it is stain resistant and doesn't burn as easily if a hot pan is set on it.

 

4.  Tile Backsplash - Tile is the number one choice for the backsplash in the kitchen  rather than other choices that are available. Many people consider the backsplash the "jewelry" of the room.  This is where you can add a pop of color if you choose or get a little creative.

5.  Flooring  - Hardwood is still the number one choice of flooring with tile coming in at a close second. 

6.  Stainless Steel - Stainless steel appliances continue to be the number one choice among buyers and homeowners when thinking about their dream kitchen.  

 

7.  Islands -  Islands are desirable but if you don't have adequate room for one, don't do it.  Having to squeeze around an island because the kitchen is not large enough to accommodate one will make you regret spending a big part of your budget on this item.

 

8.  Transitional Style - Transitional design has elements of the past, but presents them in an updated, fresh way.

 

9.  White Cabinetry- White or off-white cabinets continue to grow in popularity.  White kitchens look clean and un-fussy and continue to gain in popularity.

 

10. Shades of Grey - Although it is hard to go wrong with a white kitchen, grey tones have been very popular over the past couple of years.

 

Remodeling a kitchen can be exciting. The best advice I can give you is to keep these trends in mind when remodeling but be sure not to get carried away.  What might seem exciting and cool to you now, may not seem that way to a buyer purchasing your home in a few months or a few years.  You do not want to ask yourself down the road "What were we thinking?"

 

If you are thinking if selling or remodeling your home and would like a free consultation and perhaps a little direction before spending your hard earned money, call me at (805)710-2415. I always enjoy hearing from you!

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. at Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or Nancy@NancyPuder.com.  Go to Facebook.com/NancyPuderRealtor and "like" her page to access other real estate related articles.