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
Please follow and share at YucaipaRealEstateTrends on Facebook
E-mail me on Andy.Blasquez@gmail.com

How much should I list my house for?

Home is where the heart is, but it can also be where the anxiety and stress is if you're planning on selling anytime soon. 

Selling your home can be an incredibly stressful and emotional time, BUT with the right guidance and support it can (and should) be a smooth, exciting, and hopefully profitable experience. 

Probably the biggest source of anxiety and stress when selling a home is arriving at...and agreeing on...your home's list price.  Below are a number of ideas, thoughts, strategies, and points of view that will leave you best equipped to tackle this seemingly daunting task.  Let's call 'em the Dos and Don'ts of Home Pricing.

DOs

1. Consider your motivation and timeframe
• Do you have a new job that you're moving too?  How about kids starting school? Be at peace with the reality of your unique set of circumstances.  Be realistic with yourself.  Do you have times to 'test' the absolute limits of the market, or are you serious about making your move?
2. Wear 3 sets of glasses

• Consider all of three of these points of view when determining your list price. 
• You HAVE TO think from your buyer's point of view. How do they look for a home?  If you were a buyer...what would attract you? 
• More importantly, you have to think about your buyers' Realtor's point of view.  Your buyers' agent is the one that influences the actual buyer.  Think about it...most parents don't go to the store with the idea of buying Captain Crunch cereal and Sponge Bob Krabby Patties!  But kids influence parents (the buyers) actions. If you influence your buyers' agent, the buyer's will take action.  
• Anyone else?  Oh yea! You have to think about the appraiser's point of view as well! If you've overpriced your house but you're fortunate enough to find a buyer at that inflated price...the appraiser is likely going to pop your bubble, and you'll be back down to reality before you know it, so you might as well start there.
3. Rely on clearly understood "Comps."  
• Comparative Market Analysis, CMA, or "Comps." Use the following criteria to help establish a realistic starting point:
• City, town, or area: Outline your specific development on the map and use homes that are 'model matches' of your particular house.  If you can't do that, start with a half-mile radius from your home. 
• + or - 10 years from the year your home was built
• + or - 10% of the square footage of the home
• + or - 20-30% of the square footage of your lot
• # of bedrooms...until you get to 5, then simply use 4+
• This is a sound starting point. You'll want to find at least 5 properties that are very similar in kind to yours that have closed recently (within the last 90-180 days). If you don't have 5, broaden your search criteria. However, the less refined the search criteria, the less dependable your comp data will be.
4. Look at the median number of days homes are on the market; DOM:
• Look at homes that have been on the market for 90 days or more without selling!  As of the date of this post, the average DOM for local homes is 41 days. If your "Comp" is still on the market after 90...there's a good chance that it's overpriced. You might not weight that comparable home as heavily as another.
5. What time of year will you be selling?
• Ah, spring is here. Spring is considered the best season to sell a home since families are trying to get situated before the start of the next school year; however, fall is a close second since it comes right after the quiet days of summer when most people are away on vacation. Winter is usually the worst season -- especially in areas where it snows -- but also because of the Thanksgiving, Christmas, and New Year's holidays when people's minds are on socializing, not buying or selling a home. Note: This can be an excellent time to buy!
6. Look at inventory; the number of homes for sale in your market
• This is right out of ECON 101; Supply & Demand are inversely related.  Simplified...lots of inventory means lower prices, and little inventory means more buyers bidding on each house, driving up prices.  What's your current inventory level? Is that more or less than 3 months ago? Is inventory increasing or decreasing?
7. Consider psychological price caps
• Although these numbers are arbitrary, we live in a society where they actually matter! We don't see a candy bar for sale for a dollar.  It's 99¢.  Billions; probably trillions of dollars have been spent by marketers around the world verifying that yes, we actually DO think that 99¢ is less than $1.  What does this mean for your home's list price? Don't list your home for $512,000.  List it for $499,900.  At $512,000 you'll miss ALL of the buyers who are willing and able to pay that much, but they never saw your house because their arbitrary search criteria was capped at $500,000! On the contrary, if your home is undervalued at $499,900, it will receive multiple offers and likely bid up to or even beyond your estimated value of $512,000.  If that strategy doesn't actually work...guess what...your house wasn't worth $512,000 in the first place.  
8. Look at Current Mortgage Interest rates



Interest rates change buyers' behavior

• Low rates = More Buyers = Higher Demand = Higher Prices
• Stable rates = Current market data becomes even more relevant
• High rates = Fewer Buyers = Lower Demand = Lower Prices
9. Look at expired and cancelled listings
• Almost nobody looks at these numbers, but they tell 'the rest of the story.' This is a look into the recent past.  If a home didn't sell, it's a virtual certainty that it was overpriced.  Keep that in mind when pricing your home. 
10. Look at List Price vs Sold Price
• This adds credibility to your "Comp" data.  It shows recent trends with regard to homes selling above or below their initial asking price.  For example: Over the past 90 days 144 homes sold.  Their combined list price was X and their total sold price is Y. Comparing those two numbers illustrates a trend of overpricing vs. underpricing.  It usually only varies by about 4%, but can really help guide you in terms of direction.
11. Contact a Local Area Expert
• The “art” of choosing the right price for your home comes after you've pulled the data you need to make an educated choice.  Your Realtor's experience & knowledge of your local market is not a logarithm or spreadsheet.  It's expertise.  Chef Ramsay can't tell you exactly how much salt to use, he tastes...and makes a judgement based on decades of experience.  Local experts know intimately the things home sellers probably never even thought about, like...which HOA is having financial troubles or is in litigation? Which side of the street sells for more money; the hill-side, or the golf-course side? Which neighborhoods have excessive special tax assessments or Mello Roos? Did the school boundaries change recently? What is the city doing with that empty lot on the corner? Have you seen that updated FEMA Flood Map? Are there any short-sales or bank owned homes left in your area?  ALL of this knowledge comes from your Realtor's time and commitment; it's knowledge that your iPhone app and your aunt Mable from out of town couldn't possibly know.

DON'Ts

• DON'T look at your Zillow Zestimate as anything but a generalization



Ethically, Zillow notes that Zestimates should not be used for pricing a home.

• Sure, use this figure as your starting point, but don't take it as a fact. These "Zestimates" are admittedly inaccurate.  In fact, Zillow  advertised, to Realtors, a free downloadable PDF file on how to overcome objections to their own data.  These Zestimates are always wrong, but are sometimes HORRIBLY wrong!
• DON'T consider what you paid for your home
• Maybe you still owe $400,000 on a $280,000 house. Maybe you inherited the home and paid nothing! The only thing that matters is the home's value right now.
• Ignore the News; both local & national
• Ignore the News. No matter how "local" the news says it is, it's not local enough to do anything other than create hype or scare the pants off of you.  That's what the News gets paid to do; freak you out.  What's happening within a major metropolitan area is rarely what's happening in your town...much less on your street.  Don't believe the hype; good, bad, or indifferent.
• DON'T put too much weight into what is currently on the market.  
• Sure, those homes might be your competition, but they also could have been on the market and are never going to sell!  I recently saw a listing that had been on the market for 985 days.  How relevant is that?  Remember, what your neighbor 'wants' for his house and your other neighbor 'wants' for hers is no guarantee that either of them will get it. Yes, look at the active market, but more importantly look at what has closed recently (lets call 'recently'...90 days or so).  

Let's review your offers!

I encourage my clients to list at absolutely the most competitive price possible. This creates the highest number of showings. It also creates a bit of a 'feeding frenzy' which plants a seed of urgency within your buyers. Buyers usually have lots of options, and they won't have time to look into all of them. Price is always a motivator for prospective buyers and their Realtors, so let's make the list price an intelligent and competitive one. Consider best-case and worst-case: If the offer you receive is too low, you can accept it or make a counteroffer.  If your price is too high...you'll never get an offer to accept or counter.  That idea alone illustrates the importance of not overpricing your house.

Click Here to read a very recent (current at the time of this post) real world case of exactly how this works:

Having a stale, overpriced house on the market is ineffective, inefficient, and frankly...embarrassing for the sellers and their Realtor.  When your home is priced right...it feels right, and the activity you'll see proves that it is.  THAT is when you know you hit the sweet spot.

Click here if you'd like a FREE, no drama, no spam e-mails, no phone calls Home Valuation (CMA) created for your current home, or for one you're interested in buying!

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
Please follow and share at YucaipaRealEstateTrends on Facebook
E-mail me on Andy.Blasquez@gmail.com

What's the value of your home? FREE Home Valuation.

I've got to say that the hardest part of my job isn't the fact that I'm on call 24/7. It's not the fact that one day I'll be talking to a prospective seller about a million dollar listing and the next day I'm running to a listing with a raincoat, boots and shovel (dealing with some unforeseen circumstance)! The real tough part of this job is having to overcome the lack of trust laid down before me by my predecessors. As a Realtor I often hear my chosen profession as "One step above a Used Car Salesman." So, in an effort to remedy that, here are a my first promise to you; several promises to you in an effort to earn your trust:

• I will complete a fully customized CMA (Comparative Market Analysis) of your home or a home you may be interested in buying. This is the best way to determine what your home might sell for on the open market. 
• I create this free of charge, leaving you with absolutely no obligation to contact me in the future.  
• I will not contact you without your permission.
• I will deliver this comprehensive report to you via e-mail, through the united states postal service, or in person: It's your choice.  
• I will not pester you with phone calls or countless e-mails. 
• I will simply provide the best information possible in an effort to earn your trust, and someday...your business.

How does it work?

1. Simply e-mail me (my contact information is below) the property address that you'd like analyzed. I'll e-mail you back a .pdf file with an estimated market value of the subject property.  
2. I will create this report within 24 hours of your request. If you'd rather have your CMA mailed to you, I will do that. If you'd rather have your report delivered in person, I will do that.

Note: Without the benefit of actually seeing the subject property in person it would be irresponsible of me to claim that the value I give is 'the most accurate estimated value possible.'  However, if you'd like for me to come by and see the property in person, I can make arrangements to do just that. Doing so provides more information, leading to a more accurate valuation.

Click here for a copy of my resume.

Again...this is all done with no obligation on your part.  The information is free.  Use it as you see fit. My goal is never to 'trick' you or pester you into allowing me to bombard you with unwanted e-mails and fliers. My goal is to attract clients; informing clients, in hopes of working together in the future.

I wish you the very best, and thank you for the opportunity to serve you.

Andy

I can be reached at:
Andy.Blasquez@gmail.com
or
Andy@LoisLauer.com
or
909.539.3292

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The Pros & Cons of Homeowners Associations: HOAs

If you're shopping for a home there’s a good chance that some of the homes you’ll look at, especially brand new homes, will be part of a homeowners association; an HOA. There are literally tens of millions of homes in the US that are part of an HOA, with more coming with each passing day.  I've created a short list of the most commonly recognized Pros and Cons of living under supervision of a Homeowners Association.

PROs

• HOAs provide access to community amenities like parks, pools, tennis courts, clubhouses, fitness centers, and the list goes on.  Want a nice pool to lounge around during the summer months?  How many months of HOA payments would it take (at $48-$95 per month) to pay off a $45,000 pool…plus the service and maintenance of that pool?
• HOAs assume many responsibilities that would otherwise be yours…or perhaps nobody’s.  Most of these responsibilities are referred to as ‘common area maintenance,’ such as landscape maintenance, paint, park upkeep, pool servicing, etc.
• HOAs keep up the appearance of your community. By enforcing bylaws, your HOA encourage the original integrity of the development by requiring acceptable appearance of buildings, gardens, and common areas.
• Neighborhoods and developments supported by effective HOAs often command higher sales prices as the development as a whole tends to be more sought after.
• Often time, HOA fees include other services such as water, sewer, and/or garbage.
• HOAs can often mediate between neighbors rather than giving in to calling the police or resorting to lawsuits.

CONs

• HOAs can be mismanaged; resulting in loss of reserves needed for operations, and can result in an increase of HOA dues. 
• HOAs can be perceived as a bit too “Big Brother,” asking you to remove lawn decorations or to repaint the front door that you just painted red back to its original color.
• HOAs can limit or prevent the lease or rental of any or all of your property.
• HOAs can actually foreclose on your home if dues aren’t paid.  Although this is a last resort and is very infrequent, it does occur and remains a possibility.
• Although there are benefits to being a member of an HOA, buyers may be turned off by the idea of following the bylaws and/or paying the non-tax-deductible Homeowners Association Dues.

Like with so many Real Estate related questions, there is no one ‘best’ answer.  “To HOA…or Not to HOA” is another of those questions.  What''s my advice? Stick with the idea of buying with a particular lifestyle in mind and you’ll do just fine. 

 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
Please follow and share at YucaipaRealEstateTrends on Facebook
E-mail me on Andy.Blasquez@gmail.com

Should I Rent or Should I Buy?

How do I know if I should keep renting or try to buy a home?

Unless you're planning on marrying a prince...or tying the knot with the next heir to the Wal-Mart fortune, how else are you planning on building, or rebuilding, your financial future? After all, Our president, Donald Trump, didn't make his billions by renting. By the end of this post you'll quickly notice that this is really less a question of 'Should I buy?' but more a question of 'Can I buy?' 

There are a number of concerns that stop the home buying process before it even gets started.  The most common obstacle is fear.  It's the all too common fear that, "I can't" or "I probably won't be able to." More often than not, the fears and obstacles that hold buyers back are absolutely manageable. Here's a list of the most common concerns and objections I hear when I meet prospective buyers:

1. I had a short-sale a little while back, so I probably won't qualify
2. I had a foreclosure, so I probably won't qualify
3. I filed bankruptcy, so I probably won't qualify
4. My credit is probably too low, so I probably won't qualify
5. I have a huge monthly boat payment, so I probably won't qualify
6. I have student loans that I need to pay off, so I probably won't qualify
7. I'm too young, so I probably won't qualify
8. The payments will be too high, so I probably won't qualify

...and the list goes on and on.  Let's get rid of the "probably" and actually learn the truth. I'll help.

Let's start here:

Here are two fun applications that illustrate under what circumstances it's best to rent and when it's best to buy.  See what's best for you.  It's a pretty compelling experiment.

SmartAssets Buying vs. Renting Calculator
New York Times Buying vs. Renting Calculator

How do I know if I even qualify to buy a house?

Don't get overwhelmed. Ask for help.

Simple! You go into a lender's office and ask. Really! Just do it! I don't 'wonder' if I need to have a cavity fixed. I ask my dentist! Don't waste time wondering if you might qualify.  Ask a lender. "But I don't want to go through all of that paperwork drama." OK. I'll make it even easier.  Find a lender. If you don't know one, ask your friends and family who they use. Don't want to ask them?  Ask me! Simply call or E-mail your lender and say this: "I'd like to buy a home but I'm not sure what I qualify for. Will you help me with that?" That's all it takes. Just start the process. Once the ball is rolling it's really a straightforward process. I'm happy to help if needed; sorting, scanning, copying, organizing, e-mailing, delivering, documents, etc.  It's all part of the process.  Your lender and I can help make this process as smooth as possible.

Your lender will probably ask for what I call "Your 2, 2, & 2."

• 2 years of taxes (or at least your W-2s or 1099s to start with) 
• 2 months of bank statements
• 2 months of pay stubs 

Your lender will take it from there.  Did you know that you can be approved for a mortgage with a credit score as low as only 600.  Sure...a credit score of 750 or 800 might qualify you for a lower interest rate, but the average credit score in California is only 651. You probably qualify right now and don't even know it. There are grants and programs that provide downpayment assistance and help with closing costs. There are even areas such as Calimesa, Cherry Valley, Oak Glen, and parts of Beaumont and Yucaipa that qualify for a USDA program with up to 100% financing. Your lender knows what's possible...and what's best.

Need more reassurance?

In my opinion, even in the worst markets, owning is better than renting. Here are just a few more compelling reasons:

• You become your own landlord.
• You build equity; net worth. 
• The Federal Reserve reported that, on average, homeowners have thirty times higher net worth than renters. That's not 30%, that's 30 times...it's 3,000% higher net worth on average. 
• You benefit from tax write-offs which often makes owning a home less expensive than renting. Writeoffs may include:
• Interest Payments
• Property Taxes
• Parts of Your Closing Costs
• PMI/MIP (Mortgage Insurance Premiums)
• Interest on equity lines of credit, and more.
• Even Forbes agrees with me, that buying is better than renting...and they're no slouch!  

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
Please follow and share at YucaipaRealEstateTrends on Facebook
E-mail me on Andy.Blasquez@gmail.com