The Questions to Ask Before Buying

When beginning a home search, you wanna narrow down what you’re looking for. Here are six things to determine before buying.

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Before you buy a home, there are a number of questions you should answer about the type of home you want to buy and where you want to buy it. Here are the riddles we recommend you solve first:

1. The neighborhood and surrounding area. What kind of place do you want to live in? Do you want to be within walking distance of amenities like restaurants or stores, or more spread out in a quiet area?

2. Is there new construction going on? If you’re buying a new home, that’s great. However, if it’s a newer neighborhood, you should know if there is any new construction ongoing in your neighborhood and how long it will be that way.

3. Do you want to live in a certain school district? If you’d like to live in an area with good schools for your children to attend, we’d be happy to provide you with a list of the best schools in the area. Even if you don’t have children, living in an area like this can have a significant impact on your home’s resale value.

It’s not always about just the house itself.

4. Meet with your lender and talk about payments. You should also discuss your utility bills and how much those are. There are a lot of different factors to look at when determining the affordability of the home.

5. What is the condition of the major systems in the home? There will be a lot of maintenance tests going on during the buying process. You want to set aside some money for repairs, or better yet, ask the seller to include a home warranty with the sale.

6. Look at the comparable homes. If a lot of homes in the area are selling quickly, it’s a good indication of positive resale value.

Sometimes it’s not just about the house itself, it's about the lifestyle you want to live and how the neighborhood affects those things. Regardless of when you plan on buying, make sure you pair up with the right Realtor so you can have a professional on your side to help you along.

If you have any questions for us, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

How Can You Save Money During the Selling Process?

When selling your house, there are a number of ways you can save money during the process.

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If you're selling your home, there are a number of ways you can save money before the sale.

One trend we see a lot now is buyers really scrutinizing homes during the inspection period. Sellers can save time and money by hiring an inspector of their own before selling. We call this a pre-inspection. This will help sellers find issues before buyers or their inspectors have the chance to find them and mitigate any surprises before buyers see them. With a pre-inspection, sellers can save money by making repairs on their own terms.

Get a pre-inspection so you can make repairs on your own terms, not the buyer's.

You can also save up to 50% of the cost by telling the inspector that you don't need a report, which can be time-consuming. Instead, just ask to walk through the property with the inspector so they can point out where issues might arise. No two inspectors are the same, but it's worth the investment.

If you have any more questions about saving money before selling your home, you can always call us or shoot me a text or email. We'd be happy to help!

1 Easy Way to Make a Strong Offer in a Seller’s Market

In this hot seller’s market, writing a personal letter to the seller with your offer is a nice touch. However, here’s how you can take it a step further.

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The Bay Area market is extremely hot for sellers right now, and as a home buyer, you may face more competition for a home now than you may have in the past. What can you do to make your offer stand out and win the home you want?

Many Realtors would suggest writing a personal letter to the seller. Writing a “love letter” to the seller about their home will inform them about who you are, what you love about the home, and why they should choose your offer over others.

Let the seller see who you are and why you’re passionate about the home.

Though we think that this is a great idea, as a cutting-edge brokerage, we’d like to take another step up from this concept.

What we’re doing instead is encouraging home buyers to create a short video to send to the seller to let them see who you are and how passionate you are about their home. This will really help you stand out from all of the offers on the table.

This kind of emotional appeal to the seller will go a long way in getting your offer accepted. If you have any other questions about the best ways to get your offer accepted in a hot market like this one, give me a call or send me an email. I’d be happy to help you!

3 Things to Know Before Buying a Home

If you're in the process of  looking for your next home, these are the things that you should keep an eye on at each house you consider.

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If you're purchasing a home, there are three main things you should look for:

1. Foundation issues. If you're walking around the house and you see large cracks in the wall, the foundation may have issues that you need to repair. Common signs of foundation issues include cracks or crumbling, water damage, shifting soil, sagging floors, buckling walls, or doors and windows that don't fit properly. Cracks in concrete floor slabs like the garage floor are rarely a structural defect. Shrinkage of concrete as it cures or the settling of the ground beneath the slab contribute to cracks opening up in the slab. The cracks, however, are not defined as a structural issue unless they have an opening of 1/8th inch or more across or it has differential, which is where one side of the crack is raised above the other.

2. Systems of the house like the water heater, furnace, air conditioning, etc. They may all look old, but you should know that they only represent a marginal percentage of the overall cost of the house. Replacing a water heater, for example, will only cost about $800 to $1,200, which is by no means a reason not to buy a house.

3. Permitting. Remodels, major repairs, or major upgrades will all require some sort of permit from the local municipality. Most of these permits are readily available through an online search, or you can call the building department.

Most permits are readily available online.

If you'd like any more information about things to look out for when buying a home, feel free to reach out to us. I'd love to help you in any way that I can!

Smart Home Improvements With the Best ROI

Did you know that it's actually the smaller changes to your home that will earn you the most money in resale value? Things like a new front door can actually provide a return of more than 100%.

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There are many small improvements you can make to your home that will improve its resale value.

Large-scale fixes and upgrades are unlikely to return their full cost to you when you sell your home. If you're anticipating selling your home, these small changes can provide up to a 100% return on investment. Not all will give you a 100% return, but they will help improve the market position of the property in relation to the competition.

For example, the national average cost to replace a steel front door is $1,230, which is the least-expensive project on the list and ranks highest on the payback scale with a 108% return on investment on average. In 43 of the 102 markets surveyed, Realtors say that a new front door will recoup more than 100% of its cost.

Small changes can provide more than 100% return on your investment.

Mid-range and high-end garage door replacement is another improvement expected to top 100% payback in multiple markets. The same goes for replacing windows and minor kitchen remodels.

Notice a pattern? With the exception of the kitchen remodel, these are all replacement jobs. Replacement jobs provide a much better payback than remodels or new additions to a home. First impressions are important, so the improvements that offer the greatest payback are the ones that are obvious to buyers when they see your house online or in person. This includes your front door and garage door, and possibly siding, too. This year, manufactured stone veneers are expected to recoup 92% of their cost on average across the nation.

Inside the home, kitchen remodeling still offers the most bang for your buck. The only remodeling job that breaks the top 10 in payback is a minor kitchen remodel, with a national average cost of about $19,000 and a national average return of 79.3%.

If you’d like any more information about home improvements or how to improve the value of your home, give us a call or send us an email today.

When Should You Consider Refinancing?

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A lot of homeowners have been making the decision to refinance. We wanted to explain the process in a little more detail today so you can determine if it’s the right move for you.

First of all, there are three important factors to consider that may affect your interest rate. They are your income, assets, and credit. If any of these factors change over time, you may be able to get a better rate.

For example, let’s say a borrower has a score of 680 when applying, but a couple of years later their credit has improved to 740. With a score of 740 or above, the borrower can get the best interest rates, which will significantly lower their payment.

Here are a few terms you should be familiar with. The first is your loan-to-value ratio, or LTV. The lower the LTV, the lower your interest rate will be. The second is your debt-to-income ratio, or DTI. It’s your monthly debt divided by your monthly income. Generally speaking, this ratio should be no greater than 43%.

A better credit score equals a better rate.

The conclusion here is that if your loan scenario has improved in any way since you got your mortgage originally, it makes a lot of sense to refinance.

What if your scenario has not changed? Well, with interest rates as low as they are right now, it still makes sense to refinance. See how much you can save on your payment; we have tools that can help you with that.

There are rumors that rates are going to go up this year, so take advantage of them while you can.

If you have any questions for us about refinancing or real estate in general, give us a call or send us an email. We would love to hear from you.

How Do You Determine a Good Investment?

If you’re thinking about purchasing an investment property, it’s smart to do some deal analysis first.

How do you analyze an investment property deal? There are three factors in deal analysis that you need to be familiar with: the GRM, or gross rent multiplier, the cap rate, which is the rate of return on the sale price, and ROI, which is your return on investment.

To show you how to calculate each of these important factors when analyzing a deal, I’ll use one of my clients’ recent purchases of an investment property as an example.

This client bought a property for $750,000 and put 25% down. His scheduled gross income is $88,830 and his debt service is $54,312.

Let’s calculate the GRM first. The GRM is important because it will let you know how long it will take for you to see a return on your investment. The GRM formula is the sale price divided by the scheduled gross income. With this in mind, we would divide this particular client’s initial sale price of $750,000 by his scheduled gross income of $88,830, which gives us 8.44. This means that this client can expect to see a return on his investment in about 8.5 years.

Three factors that will help you determine whether a property is a good investment.

Next, let’s determine the cap rate on this property. The cap rate refers to the rate of return on the sale price. To find out the cap rate, we’ll divide the net operating income by the sale price of the property. In this client’s case, we’ll divide $54,852 by $750,000, which gives us 7.31%.

Finally, to determine the ROI, which is basically the return on the down payment, we’ll divide the client’s cash flow by his down payment. Cash flow is calculated by subtracting your service from your net operating income. The ROI is about 2.9% in this instance.

In order to determine whether a real estate investment fits your real estate goals, it’s crucial that you analyze each aspect of every deal that interests you. A good real estate team will have systems and tools in place that will run all of the numbers for investor buyers, so be sure that your agent can do this for you.

If there is any way I can help you run a deal analysis on an investment property, or if you have any questions about real estate in general, please don’t hesitate to contact us by phone or email. I look forward to helping you!

5 Ways to Get Your Home Sold for Top Dollar

If you’re looking to sell your home for the highest amount of money possible, you may be wondering which improvements will make the most difference in offer price. Today I’d like to share five improvements you must make to your home in order to sell it for top dollar:

1. Work on the landscaping. Weeds, dead plants and overgrown grass can negatively impact your curb appeal and potentially cost you a sale. Your lawn is going to be the first thing that potential buyers see when walking into your home, so be sure to keep it in as close to perfect condition as possible.

2. Be sure that the interior and exterior paint are in great condition. Paint is one of the most cosmetically appealing aspects of your home. Think about it this way: if you wanted to sell your car, and the paint was fading, would you expect a dealer to give you top dollar for it? Absolutely not.

3. Clean the floors and carpet. Cleaning or replacing your floors can make a big difference in the kind of offer you receive from a buyer.

4. Make sure your home is clean and clutter-free. I’m talking about having the home professionally cleaned from top to bottom. Nothing deters a buyer more than a dirty home because it tells the buyer that the home has not been well-maintained.

5. Use professional photography to market your home. I pay for professional photographers on all of my listings, but that’s not something that a seller will incur as a cost. I’ve seen million-dollar homes look completely unappealing with low-quality photos, so photographers are definitely a worthwhile investment. When you have buyers looking at your house every day online, you want to make sure that your home is being shown in the best possible light.

Nothing deters buyers more than a dirty home.

If you have any questions on this or anything else about selling your home for top dollar, give me a call to schedule a free consultation with me. I look forward to hearing from you!

3 Easy Ways to Make Your Offer More Attractive

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Today I want to talk to you about buyer strategy. Because the market is strong right now, buyers often find themselves in multiple offer situations. What can you do as a buyer to make yourself stand out? Here are three important courses of action you can take:

1.    Get your loan pre-approved. This will give you a clearer picture of your buying power.
2.    Position yourself as a cash buyer. In this market, sellers will always choose cash buyers over other buyers because cash buyers can close in seven to 14 days.
3.    Package your offer to include information about yourself and why you see yourself in a particular home. When we submit an offer, it is usually 20 to 40 pages long and includes a lot of information about the buyer. This will attract the eye of the seller.

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Sellers will always choose cash buyers over others.

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If you have any questions or would like any more details about buyer strategy, please email me or call me for a free consultation. At our meeting, I’ll even give you a copy of my new real estate book as well as our VIP buyer brochure, which contains a wealth of information that could save you thousands of dollars when buying a home. Looking forward to hearing from you!

Introducing My New Bay Area Real Estate Blog

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Welcome to my new Bay Area YouTube channel! You can expect excellent tips for buyers and sellers alike, in addition to timely market updates. Ultimately, I want to be your one-stop shop for your local real estate needs!

If you’d like to know more about a specific real estate topic, reach out to me. I’m available by phone and email. I can answer any questions you might have, as well as consider those questions for future video topics.

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I want to be your one-stop shop for your local real estate needs!

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Take a look around! Let’s talk soon!