by Gagner | Mar 9, 2013 | Uncategorized
Ever watch “Flip this House” or any other TV reality show that illustrates real estate developers making huge returns on home remodels? It is true that there are big profit opportunities in flipping real estate, however just like any other investment opportunity, there are also risks. Whether or not you intend to sell your Cambrian home, this article outlines how you can safely add value to your home without taking big risks. Of course, remodeling requires some upfront capital that won’t be realized until you sell. Let’s take a look at those items that can really add BIG dollars to your home’s resale value. As a real estate developer myself, I can provide first hand examples of the value which can be created in remodeling homes. In my previous article I outlined simple cosmetic changes that add value (ie clean-up, landscape, paint, carpets, etc). The big ticket items are what add big ticket profits. Of course these are items like new kitchens, baths, roofs and fixing bad configurations. Can you live thru a remodel OR move out before selling? That is the question. If so, and taking a small risk is within your means and temperament, remodeling can pay great dividends. Expenditures for remodeling should match the quality of the home and neighborhood. It is not necessary to have a hi-end contractor do a remodel in an area of mid-end homes, no matter how picky you are. Remember, if you are doing the remodel to sell and make a profit, it is only necessary to make the house attractive to another retail buyer looking in your particular neighborhood (not...
by Gagner | Feb 26, 2013 | Uncategorized
If you have been reading the papers lately, you’ve probably heard that banks have started avoiding foreclosures, and are electing to either help home-owners do loan modifications (refinances and lender workouts) or a short sale. Why is this? It is primarily driven by government pressure and large lawsuits that the major banks lost in 2012. The conclusion by the major finance institutions is that it has become more cost-effective and lower risk to pursue loan modifications and short sales. There is a catch for home-owners considering approaching their bank for a loan mod or short sale….your request will not be considered simply because your house is “under-water”. In either scenario, the home-owner must prove a hardship to the lender. Hardships include: loss of employment, illness & medical, divorce or death, increase in mortgage payment and natural disasters. Hardships DO NOT include: loss of equity, wanting to resize, increased family size and excessive discretionary spending. If you fall into the category of a hardship outlined above, then there is a good chance it makes sense to approach your bank. Loan modifications typically add to the length of your loan, reduce interest or provide you a defined time frame to get caught up. Rarely are principals reduced, however it does happen, so it never hurts to ask. If you have a hardship and want to stay in your home, requesting a loan mod should be your first strategy. If a loan mod will not help you given your long-term goals and objectives, a short sale is an option to consider. A short sale essentially lets the owner with a hardship sell...
by Gagner | Feb 20, 2013 | Uncategorized
If you are somebody trying to buy a Cambrian house to live in, you’ve probably found yourself in a frustrating competition with buyers that have “all cash”. Why do they always seem to get the deals, even though their offers are often not the highest one? The answer is maddeningly simple. In this upward trending market, the appraisal price required for the bank to fund your loan often does not match the price required to win the deal. And sellers understand this, therefore often accepting a lower all cash offer which has no appraisal and finance contingency. There is a significant disconnect between appraisal values and today’s home prices, which is causing huge grief for buyers using conventional financing. The obvious question is this: why won’t appraisers recognize that prices are rising and appraise homes at a price required for your offer to get accepted? The reason is two-fold: 1. Appraisals are done using sold comps, which are backward looking and often don’t reflect current market realities. 2. The lack of inventory and sales in Cambrian makes it very hard to find recent comps reflecting the recovering market. These two factors force appraisers to often come in at very low values relative to the offers a seller has to consider. Given the scenario above, sellers often have a choice. They can either accept the lower “all cash” offer OR take a chance with a higher “conventional loan” offer that may not appraise for the offer price. By accepting a conventional loan offer, the seller accepts a certain amount of risk. Taking this risk means the seller is betting that...
by Gagner | Feb 16, 2013 | Uncategorized
As in most aspects of our lives, giving buyers a great first impression is critical when selling your Cambrian home. It can mean the difference of receiving multiple offers for your house or no offers at all. The good news is there are small repairs and items which can easily be done to add significant value. Let’s look at a few of the more common fixes and upgrades that leave great 1st impressions. For starters, the overall look of the home from the street can either keep the prospective buyer in their car OR excited to come in and see more. That means your yard should be clean of debris, lawn mowed and landscaping pruned and neat. Dark bark and some fresh flowers in the flower beds add color and an impression of a newly updated home. Park any cars in the garage or on the street, and pick-up any clutter that gives an un-kept look. Fixing or replacing gutters that are in poor condition, a new coat of paint and even replacing old garage doors are small expenses compared to the additional profits you will net. Once inside the house, the same basic issues apply. Keep all rooms in the house reasonably clean and uncluttered. Remove items like pictures and knick knacks that have personal meaning. The idea is for the buyer to envision himself or herself living in the home. Again, larger items like fresh paint and new carpeting can give the house a remodeled smell and feel, while paying for itself several times over. The more you can get someone to put themselves in the home...
by Gagner | Feb 5, 2013 | Uncategorized
With the Cambrian (and overall Bay Area) real estate markets very hot right now, it truly is a great time to consider moving up. This means different things to different people. Perhaps you have outgrown your house and are looking for something larger or maybe a nicer neighborhood. Whatever your goals, it may be time to consider making a change for the better. Why consider moving up now? Because chances are you will get a great price for your home in today’s hot market (if priced and presented well) and mortgage interest rates are still at historic lows. To be more specific, Zillow indicates that home prices in the Cambrian Park area were up 15.8% year-over-year in Dec 2012. Interest rates for 30 year fixed mortgages are well into the 3% range for those that have good credit. So the window to buy your dream home before prices rise too high and/or interest rates start to climb is open for now. When trying to move up, it is always a balance between a strong market that provides you a good selling price for your existing home and one where the “move up” home is still affordable. I believe we are at a point where this balance is very optimal. If anything, the sales trends for Cambrian area home prices are rising faster (as a percentage) on lower priced homes than higher priced homes. Couple this balanced market with sub 4% mortgage rates, and a new home might look more affordable than ever. Of course, all of this depends on your home having equity. A discussion with an experienced realtor...
by Gagner | Feb 3, 2013 | Uncategorized
Condo markets in the Bay Area are on fire, with most “priced right” properties getting multiple offers. Real estate experts agree that people have finally begun realizing it’s less expensive to buy a condo in many areas of San Jose, such as Cambrian, than pay rent. Because of their lower cost of entry, a 25% down payment on a condo is a manageable amount of money for many to come up with. Of course, at the current rate of price appreciation, this situation may not last for very long. Since the summer, the average days on market (avg DOM) for condos in the Cambrian 95124 zip code has ranged from as little as 9 days to as much as 25 days (even thru the typically slow months of Nov and Dec). This is incredible when you think about it. On average, condos in Cambrian are basically selling the week after their 1st weekend open house. The stats are even better in Cambrian zip 95118, where the avg DOM in July was an unbelievable 6 days!!! Such demand inevitably causes bidding wars that raise prices well above list price. In 95124, selling prices above list price started in July and peaked at 107% of list in the month of August. That is pretty phenomenal until you consider condo sales in 95118, where selling prices were above asking every month of 2012, and peaking at an eye-popping 122% of list in the month of August. It all makes sense when one considers that the majority of condos in both zip codes can be fetched for between $200K-600K. Considering the central location...
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