Is it a Seller’s Market or a Buyer’s Market?

A question most often asked by someone thinking about buying or selling a home is, “Is it a buyer’s market or a seller’s market?”  It’s a bit surprising how often real estate professionals don’t know the definitive answer to that question!

Experience shows that 6 months of available housing inventory is considered to be a balanced market.  Less than that favors sellers and more than that favors buyers.  In the greater Tehachapi area, you can’t just consider the entire region because the absorption rate varies significantly from one community to another.

The real answer though is. “it depends.”  It depends on a number of different factors beyond the actual calculation of available inventory and probability that a particular house will sell.  It depends on things like the popularity of a particular area, what’s going on politically in that community, whether or not the community is showing up in local media in a positive or negative way.

The truth is that even if the numbers show that it is the type of market that you would prefer the reality may be different.  Want to know more?  Call 661-375-7325 today and let’s talk about the specific neighborhood you are interested in moving from (is it a seller’s market?) or moving to (is it a buyer’s market)?

 

Energy Upgrades Can Improve Property Value, But Are There Financing Pitfalls?

There are loads of good reasons to make energy efficient improvements to your home but choose wisely to get the most bang for your buck.  Not only does it matter what you upgrade but even more important is how you pay for those improvements.  That tankless hot water heater could land you in financial hot water if you’re not careful!

New windows, doors, roof, insulation, et cetera will all make your home more comfortable and potentially more attractive as well as increasing the value.  Few people have the cash available to do the upgrades they intend and so will resort to financing the improvements.  That can be a great way to get the improvements you want with a relatively low pain point in your monthly budget.  Here’s where you need to be careful.

  • There’s a relatively new (since 2010) loan program available that allows local governments, state governments, or other inter-jurisdictional authorities, when authorized by state law, to fund the up-front cost of energy improvements on commercial and residential properties, which are paid back over time by the property owners.  The program is called PACE (Property Assessed Clean Energy).  What this means is that certain lenders are funding the improvements for you and attaching a lien to your property that is repaid through your property taxes.

On the surface it sounds like a great idea and for some it may be but there are some pitfalls to be aware of.

  • Many times the contractor that is arranging to do the work is also the contractor providing the financing for the PACE program loan.
    • Be sure that both the cost of the improvements and the cost of the loan are within typical costs for the kinds of improvements you are considering.
  • Take your time in making your decision.  An offer that is good “today only” may not be your best choice.
  • Understand exactly the cost of the improvements with the financing cost and the terms under which you are repaying the loan.
    • Remember that the loan payments are added to your property tax bill as an additional assessment.  This means that if you become delinquent on your property taxes, you are also delinquent on your PACE program loan and your PACE program lender would be able to foreclose on their lien and you could lose your home.
    • A PACE program loan can also make it difficult or impossible to sell your home.  Most buyers will not be willing to accept your loan obligation as part of the sale.  That means that the PACE program loan has to be paid off before you can transfer ownership to the new buyer.  If you don’t have enough equity in your home to cover the cost of the lien, you may have to bring in additional funds.

Even if everything else looks good, you love the cost of the improvements and the PACE program financing terms, check with your lender before doing this kind of loan because the PACE program loan is recorded as a super lien.  This means that in most cases it is in order of priority above other liens on your property (including your primary mortgage)!  Your mortgage lender will probably not allow you to put them in this position.

In conclusion, as with most things, do your homework, make sure you know what you’re getting into and make your best decision based on the facts.  If you want to talk about your specific situation and how it relates to buying or selling your home, start the conversation with me at 661-375-7325.

How Likely Are YOU to Find Home Buying Stressful?

Thinking About Buying?  NerdWallet has released their Home Buyer Reality Report and it has some interesting findings.  If you read the entire report, there are insights as to who is most likely to find the process stressful.  Frankly the findings were a bit surprising to me.

I would have expected the Millennials to have been the most stressed by the process because as a group they are most likely to be going through the home buying process for the first time.  I was wrong.  It was actually the Gen Xers that were most stressed.  Baby Boomers were least stressed overall.

So what causes the most stress?  Across the board, the biggest stressor seems to be the mortgage process.  Apparently many folks found it difficult to understand and navigate.  Millennials prefer to do an online application which is cool, but they also found the loan process complicated and confusing.

Generally, all generations were happier with their Real Estate Advisors than with their Loan Consultants.  That is both good and bad from my perspective as a Real Estate Advisor.  Although I’m thrilled to get higher approval ratings than lenders, the problem is that for most buyers a good loan is a necessity.

I think part of the comparative dissatisfaction with lenders may be that buyers are often unprepared to have the conversation with the lender.  Typically buyers are excited about the prospect of the new house and so they want to go look at houses (go sight-seeing) without having addressed the availability of the right loan to complete the purchase.

The entire purchase process is made up of lots of moving pieces and experience shows that putting together a strategy to help buyers get the education and understanding that they need reduces the stress and increases the chances of success.

So, the first step is to choose a Real Estate Advisor that you trust to hold your best interests paramount, someone that can ask you insightful questions to get clarity around what’s important to you so that you have a clear roadmap.  The next step is to work with your Real Estate Advisor to obtain a loan pre-approval that will let you shop confidently.

And, no, you haven’t even begun to look at potential new houses yet.  First things first!  A strategy that works will target the properties that are within your budget.  We don’t go out sight-seeing, rather we pick the best possible houses and look at them with a critical eye to determine which one will be the next best home for you.

 

Do you Know How to Recognize an Email Scam?

Email scams are on the rise.  Do you know how to recognize an email scam?  The scammers have become much more clever than they used to be and are spoofing different service providers than were previously targeted.  Check out the video to learn how to recognize a scam and protect yourself from theft of money or identity.

The latest scams purport to be from Docusign, a trusted eSigning service and Amazon, the popular shopping site.  Don’t be fooled into clicking a link that looks legit!

Did you know that Gmail will show you if it believes an email is legitimate? Look for the key symbol in front of the sender’s name.  

That symbol was missing in the examples in the video.  Go back and have another look.

Just to be safe, use both methods of verifying, checking the link location and looking for the key symbol.

Hope this helps you stay safe!

 

 

661.375.7325