Absolutely Real Real Estate: July 2015

Sunday, July 19, 2015

Should I Buy a New Home, or a Previously Owned Home?

This question's an easy one to answer: It depends! See! Pretty easy!

Ok, all kidding aside, I'm a huge advocate for new construction. My wife and I have owned 3 homes over the past 12 years. Two of those were new construction. That shows my personal taste. However, there's always two sides to the story. You can't buy a new, 1907 Victorian home in Redlands. You'd be hard pressed to find a brand new home in a neighborhood with 90 year old oak trees. You probably aren't going to find a new home in Yucaipa on a half acre lot. For me, this question points directly back the the first question you should ask yourself: "What lifestyle do I want to live, and can I do it here?"

Here is a list of reasons that might compel you to buy a brand new home as opposed to one that is pre-owned.

Choice! With little to no change in sales price, new home builders often offer choices as to color and styles of the features of your home. No, these aren't upgrades, but they're still choices. Carpet color, tile, vinyl, counters, cabinets, etc. You'll often have 3 or 4 choices in each category to choose from at no extra cost.
Flexibility! Builders often use their own lenders, which gives me, as your agent, several opportunities to negotiate:

1) The price of the home.
2) The terms of the loan.
3) Closing Cost Credits
4) Design Center Credits

It's New! In my family, we had little-ones crawling and rolling around on the floors. It brought us peace of mind knowing that not just the carpet was new (and in a color we loved)...but the carpet pads and sub-flooring was new as well. No smokers, no pets, no allergies, and no spills that are going to resurface 4 months down the road.
Less Competition! Typically you're not going to compete with several other buyers for the same house, like you would on an existing home found on your Realtor's MLS. You'll likely have the choice of many new homes and models, or even the same floor plan on a different lot.
Infrastructure! When you buy a 35 year old home, you've got 35 year old...everything else...attached. Infrastructure: In new home communities, you've typically get new sewers, streets, lights, schools, shopping, and more.
No Inspections! Ahhh...the dreaded home inspection! Everything is new! What's to inspect? With pre-owned homes, you've got those anxious days between the time you write an offer and the time you receive your pest and home inspections. New home construction practically allows you to skip this step altogether.
No Appraisals! Yes, your new home must appraise in order for a lender to fund, even on new construction. That said, it behooves the builder to price their homes accordingly. Have I seen a new home NOT appraise for the purchase price? Yes...once. In that case, the builder simply reduced the price to the appraised value.
FHA & VA Buyers Welcome! Virtually all home builders will sell to FHA and VA buyers! These buyers are typically well qualified and committed to the process.
Don't need an additional Home Warranty! It comes with one! Wait...it comes with several: Foundation, Roof, Finish, Appliances...everything!
Who's standing behind your purchase? You've got a builder's reputation at stake, and they'll stand behind you. With pre-owned homes...the seller's likely moved on, and you'll never see or hear from them again.

I could easily create a list that's just as long and just as compelling advocating the purchase of pre-owned homes. In fact, I'm sure I will. But at this point in my personal life, and with a young family in tow, I feel very peaceful living in a newly constructed home and I'm always at peace when I help a client negotiate a deal with a local home builder.

Wait! You mean...I help people negotiate deals with home builders?
Absolutely! Countless times! Really, at this point I couldn't guess how many times. Often enough, in fact, that periodically simply accompanying my clients on their first visit to a builder's model homes pays huge dividends to the buyers. If I accompany a buyer to a builder's sales office, it often allows me the ability to negotiate on their behalf. I've negotiated upgrades, closing cost credits, appliances...even fully landscaped backyards...at no extra cost to the buyer. But wait, do I get paid a commission? Yes! Well technically no. It's customary that the seller of a home pays both sides commissions. In the case of virtually all new home communities, they aren't going to pay a commission. They pay a marketing expense; a referral fee. This is not a line item on your closing statement. It doesn't come from the sale of the home. It's paid by a different department all together. Often the same one that pays for TV commercials, web presence, and print advertisements. This mean that a) you do pay me, and b) I'm absolutely committed to giving you the very best service possible and negotiating aggressively and effectively on your behalf.

Thanks in advance for remembering my name when the topic of Real Estate comes up in conversation. If you're local , just remember Andy@LoisLauer.Com I'm always here to help.

My business thrives by word of mouth. If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.

Until next time.

Andy Blasquez Cell ~ 909.539.3292
BRE#01826135
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E-mail me on Andy.Blasquez@gmail.com

Real Estate Values in Yucaipa - 2nd Quarter of 2014 to 2nd Quarter of 2015

"So Mr. Realtor! How's the Real Estate Market?"

Well...the facts don't lie, so let's look at the facts. Let's compare apples to apples...to apples.

First...let's take a quick look at the 2nd quarter of 2014 as compared to the 2nd quarter 2015.

Q2 - 2014: 144 homes sold with an average sale price of $313,723
Q2 - 2015: 154 homes sold with an average sale price of $319,116
That is a modest 2% increase in home prices.
Now, consider Q2 - 2013 when we saw 168 homes sold with an average price of just $278,623 and we'll see that from 2013 to 2014 Yucaipa showed nearly 13% growth in home values.

Why does this matter?

Most of the public is still expecting huge growth, but that's not happening right now. Modest, real, sustainable growth is happening. However, as a result of the prior year's exaggerated growth rate, many home sellers and their agents (who probably don't 'geek out' on market data like I do) believe that their homes are worth more than they actually are. As a result homes are often listed above market pricing and sell at market pricing, but below the original asking price. Over the past 30 days alone, 65% of the homes sold in Yucaipa sold at a price lower than the original asking price. That's 38 of the 58 homes sold actually sold for less than the asking price compared to only 10 which sold at asking and 10 which sold above asking.

And what do I want you to take from this? Whether you're looking to buyer or sell, don't put so much weight into the asking price of a home. Trust a real estate professional to run comps on a home you may be interested in. Make sure that they're putting much more weight into "Sold" data than they are into Active or Pending prices. The "Sold" price is a fact. The "Asking" price is a wish.

As always, if you know someone who may be looking to buy or sell real estate, I'd love the opportunity to provide them with the very best service. If you know folks in a area I don't personally serve, let me find an agent in their area of interest. I'll ask that agent some really tough questions in order to improve the chance that you're exclusively and meticulously represented by an ethical and professional Realtor.