Is Your Home Smart Enough To Attract a Buyer?

It’s no secret that more buyers are on the prowl for turnkey homes in today’s market.  Ongoing research shows that 71 percent of buyers, in fact, are looking for move in ready conditions, and are more willing to put in offers on homes that require less work or updating.  The term “updated”, however, is starting to become subjective, but while any two buyers may have different “update lists”—a list of items that they believe will need to be done once they move in, and thus subtracted from their offer price, at cost and convenience—there are ways to hit those marketing buzzwords and appeal to more buyers if your putting your home on the market.

One of these ways? Making your home smarter.  Of those buyers looking for turn-key homes, 57 percent of those buyers said they would consider a home “updated”—and thus more appealing—if they have smart-home technologies and features already in place.  Fifty-four percent said that if given two otherwise identical homes to place offers on, one with smart-home technology, the other without, they’d buy the smart home, and they’re willing to pay more for it.

Previously, interest in smart-home technology was primarily found in the more expensive segments in the market.  Now, it’s seemingly at every price point, in both new construction and renovations, old homes and new homes.

But what makes a home “smart”? According to CNET, a smart home is a home that is equipped with network-connect products (WiFi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or other operating system.

In order to be categorized as a smart home, the property must have a smart security feature that either controls access or monitors the property, or a smart temperature feature, controlled over a reliable internet connection.  It must also include at least two additional features below:

lighting (smart light bulbs and lighting systems)

safety (smart fire/carbon monoxide detectors and nightlights)

entertainment (smart TVs)

appliances (smart refrigerators, washers/dryers)

heating/cooling (smart HVAC, fans or vents)

outdoor (smart plant sensors, watering systems)

security (smart locks, smart alarm systems or cameras)

temperature (smart thermostats)

We’ve rounded up a few useful and appealing smart systems to help bring up your home’s IQ, whether you’re getting ready to put your home on the market or not.

Nest Home Thermostat- Nest learns what temperature you like and builds a schedule around yours.  It can turn itself down when nobody is home to help you save energy.  New features monitor your heating and cooling systems, sending notifications to your phone if it looks like your furnace is acting up or if it’s so cold you’re pipes might burst.

August Smart Lock – The August Smart Lock turns your phone into a key, locking and unlocking your door through the systems connectivity.  While you’ll need to make sure it configures with your current deadbolt system, and shell out $199, a smart lock could be an attractive feature to any home.

SkyBell HD Wi-Fi Video Doorbell System – This smart video doorbell lets you see, hear and talk to the visitor at your door, whether you’re home or not.  SkyBell sends your alerts, snaps photos and records video.

Samsung Family Hub Refrigerator – This connected fridge lets you view notes, schedules, order groceries, play music and even watch video.  The cameras inside will take photos of the refrigerators contents and e-mail them to you when you’re at the grocery store – in case you were wondering if you were out of ice cream.

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6 Ways to Stress Free Showings

If you’re selling your home with us, we’ve probably asked you to be as accommodating for showings as possible, and for good reason.  Accommodating for showings lets potential buyers know your motivated and serious, and gives a glimpse into what the escrow process might be like with you as a seller.  It’s a first impression in many ways—of you as a seller, and of your home.

We know how tough frequent showings can be, especially when you’re trying to live your life!  We’re sharing a few of the tips we often share with our clients to help them live as normally (and sanely) as possible.

  1. Make yourself a pre-showing checklist.  It’s easy to forget things when you’re in a rush.  A checklist can help ensure that your home is putting it’s best foot forward for potential buyers.

Some items to include:

Make the beds

Puts dishes away or in the dishwasher

Clear countertops

Bathroom sink and mirrors wiped clean and toilet seats down

Toys put in baskets and bins

Messes from pets cleaned and deodorized

Entry clear of shoes and backpacks

Lights on and window shades open

Take out the trash

2. Show some self love.  Think of this selling period as your opportunity to have your home as you’ve always wanted.  Show yourself some love with fresh flowers, a bowl of fruit or that “fancy” soap.  They make your home look extra lovely for potential buyers, but you’ll enjoy the daily benefits after the showing is over.  GT Tip: If you’re working on a tighter budget, use succulents and bowls of fruit that don’t require much maintenance and refreshing.

3. Get non-transparent bins and baskets (with lids!) In a pinch, these can serve as a catch-all of items without making the house look cluttered.  Laundry baskets with lids and non-transparent containers will make it look like you’re as organized as your Pinterest makes you out to be.

4. Make your bed as soon as you wake up.  This simple task can make you feel accomplished, set the tone for the day, and make that last-second showing a total breeze.  If you have kids, make their beds too or get them in the habit of doing so.

5. Keep a spare rack of fresh towels on hand.  It seems fussy, but having nicely folded white towels can make a bathroom feel cleaner and more spa-like.  Keep clean towels that you’ve already folded in the cupboard, or somewhere you can easily pull them out.  This will help eliminate the stress of worrying about whether the towels are clean all the time.

6. Know this—it only takes 30 days to make a habit.  If you can get through the first month, then going through that pre-show checklist will be a breeze, and the stress of last minute accommodations will have dwindled.

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You Might Want to Consider a Solar Panel System

Solar panels are becoming increasingly beneficial with the rising costs of electricity.  You’re probably feeling that high cost over these summer months when the air conditioning is running high and the kids are home from school using more electricity than normal.  With rising utility costs, there are more government and economic incentives to reduce your carbon footprint and lower your monthly bill, not to mention the increased value added to your home.

Depending on your method of purchase for the equipment, solar can be a long term investment with a sizable return.  Many people lease their energy system from a third party developer, at no upfront deposit or downpayment, and pay the electricity produced by that solar system, at a lower cost than the current rate.

When you invest in your own energy system through a cash deal, you gain complete ownership of your system and electricity produced from day 1.  Cash deals have government tax credits, up to 30% of the cost of your energy system.  While the upfront costs are high, the long term return is even higher.  For example, a $30,000 investment would cost you $21,000 after a 30% tax credit.  Taking into account a $3,600 savings (based on an average $300 utility bill), the system is paid off in 5.8 years, and you save $90,000 after year 25.

Even if you don’t plan on staying in your home for 20 years, a solar energy system adds incredible resale value.  In the same way that swimming pools typically garner larger sales prices, so too, does an energy system.  Best case scenario, your system cost $30,000 to install (before government tax credits), and sells for $30,00 higher.  All the while, you still enjoyed the benefits from eliminating your electricity bill.

The maintenance? Solar panels don’t have moving parts, so much maintenance isn’t required.   You’ll want to occasionally rinse the panels with soft water to eliminate any bird droppings, dust or leaves.  In most areas, a little rain does this nicely.

We’ve had an amazing experience ourselves with solar energy.  Tell us how you feel about solar, if you’ve thought about it, or some of the experiences you’ve had!

Source: Barnes Solar Engineering & Installation CSLB #943909

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4 Ways to a Better Lease

There’s a lot of optimism and excitement surrounding your need for a new lease.  “Maybe the next one will be better than the last.” There’s also a lot to realize.  Over the course of your last lease the lease market may have changed.

Fortunately, a lot of the issues that plague renters can be avoided just by being aware of the current market and choosing a lease a little more carefully.  We often work with renters who have had success in setting realistic goals to obtain that new lease, so we’ve outlined a few tips to try:

  1. The grass isn’t always greener.  Be honest about why you’re moving.  Aside from common relocation reasons, ask yourself why it is you’re really looking for a new lease.  Moving is stressful and carries a long list of expenses.  Every living space has its pros and cons, especially in the lease market.
  2. Stop falling in love too soon.  Looking for a lease online is kind of like dating online.  Landlords and agents have ways of manipulating photographs of their units to make them appear cozier and more attractive then they are.  Before you get caught up in the idea of a rental, take the time to schedule a showing and be realistic about it’s affordability and your budget.  Even so, chances are, if you’re in love with it, there might be 10 applications in from 10 other people who love it too.
  3. Craig’s List? Move on.  It’s tempting to answer posts made on Craig’s List, we know, but signing a lease without proper vetting puts you in a dangerous position.  Doing so without representation also does not give you any chance of protecting your interest.  Most Craig’s List listings are fraudulent and out to separate you from your hard earned money.
  4. They’re vetting you, vet them.  Some landlords care about their properties and their tenants while others… not so much.  A good landlord will take your calls and fix leaking toilets and send an exterminator in to deal with an ant problem, all within good reason.  Be sure to run a check on your landlord before signing a rental agreement.  Do a Google search, ask your agent if you can call previous tenants or check with the Better Business Bureau to see if any complaints have been filed against the landlord or property management company.

If you’re looking for a lease, ask us how we can help get you started.

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This Simple Plan to Boost Your Credit Score May Surprise You

We’ve all been there.  Well, hoped we be there.  We’ve all set timelines for ourselves and thought, “I should have xyz by now” or “I thought I would be in a position to do xyz.

One of those variables may have been buying a house this summer.  You’re hoping to stop wasting your money on rent and start putting money into your own asset, but a few hurdles got in the way.  One of them may be your credit score.

Of course, there are many steps to take before you even begin looking for a home and for most of us, that’s going to be obtaining a loan of some sort and finding out how much you can borrow.  This will be heavily determined by your current income, down payment and credit score—which is where some people fall short and give up.

To get a loan, and to get a loan quickly, you as a potential homebuyer need to keep an eye on your finances and credit.

Our experience over the years of working with preferred and qualified lenders has supplied us with a list of basics for you to refer to when monitoring and building your credit.

  1. Always, always pay on time.  No lender likes to lend money knowing that an individual has a repeated record of skipping payments.  This indicates a lack of discipline and poor financial management.  If it’s just a matter of discipline, enroll in AutoPay, set a calendar and keep track of what you owe and when.  This can account for up to 40% of your FICO score.
  2. Keep a good debt-to-income ratio.  Someone with a good ratio has unsecured outstanding credit that is below 50 percent of their annual salary.  Try keeping your credit card balances within half of the allowed limit.  If your limit is $10,000, restrict your statement to $5,000.
  3. Pay high interest loans first.  Typically, personal loans have the highest interest, so it’s wise to pay those off first since they don’t create any type of asset for you.  Home loans, on the other hand, are an asset and can be paid off over a longer period of time.
  4. Check your credit report.  This can be done at minimal cost or you can obtain it from the official FICO site.  Checking at least once a year will help you seek any clarification that is needed or  allow you to correct any mistakes that have been made.
  5. Let them know if you can’t pay on time.  Most often, people know in advance if they’re going to be late on a payment.  If you do, taking action to notify the institution can reduce any penalties or late fees and make a good impression.

This will all take time, but if home ownership is your goal, use these tips to help build your credit and obtain a loan more easily.

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Baby Boomers vs. Millennials

Two demographics influencing the housing market are baby boomers and fist-time buyers plagued by student loan debt. Both groups are leaving stagnant markets and low turnovers.

Baby boomers themselves control about two-thirds of the nation’s aggregate home equity, which computes to about $8 trillion. Whether they decide to move from their current place, downsize or age in place, the cumulative impact of their decisions on mortgage demand, housing options to Millennials and other aspiring homeowners will be substantial.

In a recent survey by Freddie Mac, 63 percent of respondents age 55 and over prefer to age in place, which computes to 42 million homeowners spread out across the entire 55+ demographic. These numbers suggest baby boomers’ housing decisions over the next few years “will take our market to brand new places.” says Freddie Mac Economist Sean Becketti.

Not only are baby boomers staying put, so are Millennials buried in student debt. Nearly three-quarters of people who are repaying student loans say their debt is hindering them from buying a home, according to surveys released by the nonprofit American Student Assistance.

More staggeringly, nearly half of those surveyed said their debt is expected to delay their home buying for at least five more years.

The housing market feels these affects keenly, as the homeownership rate among the 35-and-younger crowd has plummeted from 44 percent at the height of the housing boom to 34 percent today.

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Getting the Right Representation When Buying A Home

So, you’ve decided to do it.  You’ve set a goal, set your budget and location, got pre-approved and you’re ready for it.  You’re doing it.  You’re going to buy a home.

Now what? A home purchase is a significant and expensive transaction with long-term implications. You want to buy wisely, at the right price and on good terms.  But if you overpay for a home or buy one that involves more upkeep than you can manage, you may end up with buyers remorse.

In order to make the best decision on buying your home, you need to have the best possible information and guidance to make a well-informed decision from someone who’s fiduciary duty is to you solely.  Using an Exclusive Buying Agent provides you with the level of representation you need to make sure you aren’t overpaying, overlooking the upkeep, or buying on bad terms.  This also helps to avoid any conflicts of interest.

An Exclusive Buyer’s Agent is just that: a real estate professional branded towards representing homebuyers exclusively.  Compare this with a dual agent, or sellers agent, who’s vested interest lays across multiple platforms—to the seller and to the homebuyer.

An Exclusive Buyer’s Agent will:

  • promote and protect the interests of the buyer with the utmost good faith, loyalty and fidelity, by law
  • educate you on local market conditions and the home buying process in general
  • perform cost comparisons to protect you from overpaying
  • negotiate price and terms exclusively on your behalf

If an agent gives you dual agency disclosure, they aren’t representing you.  Conflicts of interest arise when a selling agent represents both the buyer and the seller, and still carries a fiduciary duty to the sellers, which means you don’t get the best deal possible.  If you meet a seller’s agent at an open house, for example. and mention to them your need to relocate in one month’s time, that agent must promote the interests of the seller by law and inform the sellers of your situation, thus diminishing your negotiation power.

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What's Happening With the Housing Supply?

If you’re currently working with us, you may have heard us talk about the short housing supply in recent months; the home buying demand continues to outweigh the number of homes for sale.

Nationally, the inventory of homes for sale in May is 3.8 percent lower than this time last year, according to data from the National Association of Realtors.  Redfin, the leading site for home buyers, has also reported a drop in new listings.

Simple economics teaches us that when supply is low and demand is high, price goes up.  Home values across the country were expected to rise by a mere 2 percent growth from this time last year, but Zillow’s latest data shows values soaring more than 4.9 percent increase in value.

But why?  Why is the inventory so low? Economics, demographics, tax policy, are all playing a role.  Current homeowners are simply staying put longer.  Here in California, only 4.8 percent of of single-family homes turnover, as opposed to the 9 percent back in the late 70s.  Most homeowners stay in their homes 5-7 years, but now we’re seeing homeowners staying put for an average of 10 years or more.  Low rates on current mortgages, low property taxes, and capital gains hits are just a few reasons long-time homeowners are staying put.  When they do the calculations and look at what they would be giving up compared to what they would be getting, many decide to stay.

So if the turnover rate is low, and demand is high, what can we expect from new construction? New homes add to the housing stock and provide much needed housing for the many regions that are undersupplied.  Many areas in California are struggling to keep pace with local growth — job growth and household growth.  California is amongst the most underbuilt areas in the country, with only one permitted new unit of housing for every 1.6 jobs, compared to the U.S. average of almost two permits for every job created.

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It's More Common Than Ever: Kitchens and Baths

It’s so often that we as buyer’s agents hear our clients say, “But we’ll have to redo the kitchen and update the bathrooms…”  Sellers know this and we know that what typically sells a home is the condition of the kitchens, and the condition of the bathrooms.

It’s no surprise that the most common remodeling jobs performed in 2015 were bathrooms (leading with 81 percent) and kitchens (79 percent).  As selling agents, we often hear our clients worries with remodels, the extent of remodeling and the costs.  Remodeling your home for sale, and remodeling your home for your own personal use, are very different, so we’re giving a few of our tips below:

  1. Decide what your goal is.  If your goal for remodeling is to earn top dollar for your home when you go to sell, then updating the kitchen and bathrooms is going to help you achieve that. The less a buyer has to do, update or fix once they move in, the more selling power you’ll have as the homeowner when it comes to the negotiations.
  2. Myth: you need to spend a fortune.  You’ll want to set a budget and pick the best returns on your money — i.e. functional, practical and appealing items in the kitchen and bathrooms that help bring the home up-to-date.  Think quartz, granite, butcher block and subway tile as opposed to marble, rare wood species and custom tile (though those do tend to add value).  Don’t go wild with colors, stick to neutrals, whites, grey and black.  Yes, we said black.  Black is very in right now.
  3. Tip: get three quotes from each vendor and pick the middle man.  The middle man will typically do as good of a job as the highest bid, but at the more fair price.
  4. Stage it.  If you’ve gone through all the work to bring the home up to date and appeal to current home buyers, you’re old and out-dated furniture may bring the value back down.  A home stager can help highlight the new upgrades and create a beautiful scheme that helps sell your home faster.

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Rent Expected to Rise by An Average of $100 Per Month

In their report analyzing rents, housing supply and population grown in Southern California, researchers at USC have forecasted the average rent on an apartment will rise by at least $100 over the two years.

Housing supply remains low in Southern California.  You probably know this if you’re knee deep in a home search and meeting 20 other offers on every home you see.  (See our guide to beat out the competition here.) When supply is low, and demand is high, basic economic principles kick in and landlords are able to fetch higher rents on their units.

But why is demand so high? Population and employment growth are driving up demand faster than inventory can hit the market—recession recovery, economic growth and job placements all lend support to an increase in demand.  With young adults in the Millenial Generation entering the rental market, and the older generations still enveloped in it, the normal turnover cycle hasn’t spun over.

In 2015, the average rent in Orange County was $1587 per month.  By 2018, USC’s Lusk Center for Real Estate expects rent to increase to an average of $1736.

We can expect more supply in the coming years, but not enough to satisfy the needs of most would-be renters—in 2015, more than 38,000 construction permits were issued in Southern California for new apartment units.

The forecast by USC also looked at the national rental market, which is beginning to cool as more renters become home owners.

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