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APR in the News

How can you tell when a property is overvalued?

February 2, 2016
Agents SOUND OFF
 

Matt Tenczar
San Jose – Almaden Valley
408.605.8124
tenczarteam@apr.com

Question: How might Warrior arena in Mission Bay affect our real estate market?
Answer: My initial response: “Is there such a thing in the Bay Area?” Consider Santa Clara County, where only 545 single-family homes and 171 condos/townhouses are actively for sale and the average home sells at 102 percent of its list price. Is it possible there might not be such a thing as an overvalued home? I often tell buyers when they ask me if a home is worth it that if it isn’t today, it will be tomorrow.
Having said that, the question remains how do you tell if a home is overvalued. It turns out there really is such a thing in the Bay Area. When looking at the statistics of home sales, the average home takes 35 days to sell, so that means not every home sells in one week and receives multiple offers that are hundreds of thousands of dollar more than the list price. So how do you tell? If you are a buyer, you start with looking at the days on market.
Any home on the market for more than 30 days possibly has something wrong with it, and whatever the “it” is, the price will be part of it. Homes that have been on the market for a long time sell for a lower price. So I would define an overvalued home as one that’s been on the market without receiving any offers for more than 30 days.

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APR in the News Buyer / Seller Information

Interest rate hike delay means what for Bay Area buyers, sellers?

September 8, 2015
Agents SOUND OFF
 

Tom Dreyer
Mill Valley
415.412.3443
tdreyer@apr.com

Question: Interest rate hike delay means what for Bay Area buyers, sellers?
Answer: If the Fed continues to hold rates at present extraordinarily low levels, it should support and enable the hot local sales market. Low rates provide a clear incentive for all types of buyers as they are able to leverage additional buying power — and are able to borrow more without dramatically increasing their expected payments. With a stable rate, buyers willing to hold a property for at least five years can increase the chances of making money on the eventual sale.
That said, a small, incremental increase in rates by the Fed over several quarters typically will create a spike in buyer activity, while they fear their “buying window” may be closing. Over the long term, it also may price out some buyers until the market becomes more balanced.
The past weeks’ volatility in the stock market, should it continue, is a greater concern to me insofar as consumer confidence is concerned. If consumers do not feel financially stable, it can have a large impact on the real estate market.
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APR in the News Buyer / Seller Information

Home warranty: Good idea?

August 3, 2015
Agents SOUND OFF
 

John Jenkins
Saratoga
408.741.1111
jjenkins@apr.com

Question: Home warranty: Good idea?
Answer: Home warranties are often an inexpensive way to give recent home buyers peace of mind.
The relatively cheap plans will protect homeowners from having to cover the cost of repairs to most major appliances.
Additionally, the warranty will handle all aspects of the repairs — meaning no headache of dealing with different vendors.
However, as with any insurance plan, there is always the possibility you will not need it, and there can be other limitations.
Home warranties will not cover issues determined to be pre-existing. Depending on your plan, they often may choose to repair appliances rather than replace them — no matter how out of date the appliance is.
It might sound simple, but one of the most important elements to getting worth from a home warranty is remembering its value and using it. If you have a problem and try to fix it yourself before calling in the issue, that can void it being fixed through the warranty.
It’s important to look at the specifics of the plan and the condition of the home you are purchasing when assessing if a home warranty plan is for you.
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APR in the News Buyer / Seller Information

What are the pros and cons of earthquake insurance?

June 22, 2015
Agents Sound Off
 

Kristan Marie Lynch
San Francisco
415.713.3547
klynch@apr.com

Question: What are the pros and cons of earthquake insurance?
Answer: As a realtor specializing in the San Francisco Bay Area, the topic of earthquake insurance comes up often, especially with first time home buyers. As far as I know, I only have one client that has ever purchased earthquake insurance. Property owners complain that the cost of earthquake insurance is prohibitively expensive and include very high deductibles. However, should your home suffer substantial damage when the ‘big one’ hits and you have earthquake insurance, I doubt you’ll be complaining about those insurance premiums.
Every property has different risk factors depending on where the home is located, when it was built and how it was built. A homeowner would be well advised to weigh these factors and the associated costs before making a decision.
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APR in the News Buyer / Seller Information

How much should clients believe what they read in online reviews about a Realtor?

April 29, 2015
Agents Sound Off
 

Rainy Hake
Executive Vice President
408.741.1111
rainy@apr.com

Question: How much should clients believe what they read online about a Realtor? How can they determine fact from fiction in online reviews?
Answer: Without question, asking friends, family or neighbors that you trust about an agent will always give you a more accurate impression of an agent than online reviews. Online reviews of real estate agents are often tricky to sort through. Unlike a restaurant that deals with thousands of customers a year, agents often deal with only a handful. As a result, because the sample size is so low, it’s very rare to get a complete picture based solely on online reviews. To add to this, sometimes the reviewers aren’t even the clients of the agent; they are just people who interacted with them in another capacity. While some sites (Zillow and Trulia) verify that the reviewer was involved in a transaction with an agent, many sites like Yelp, Google Places, and reviews on Facebook pages feature no such verification.
I would say that if there are numerous reviews and a pattern emerges that fits with your previous perceptions and interactions with an agent, they may have some credibility – both positive or negative. It also never hurts to ask the agent about any reviews you have concerns about; how they respond might shed some light.
When all else fails, choosing an agent that is affiliated with a respected brokerage with a professional, solid reputation in the community is typically a safe bet.
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APR in the News Buyer / Seller Information

When should I stage and professionally photograph?

April 20, 2015
Agents Sound Off
 

Nick Granoski
Palo Alto
650.269.8850
ngranoski@apr.com

Question: When should I stage and professionally photograph?
Answer: The speed at which our market moves makes it critical to get everything right from the start.
Many times buyers need to make up their minds about whether or not to make an offer after seeing a home just one time. With only one chance to make a first impression, I always recommend staging and professional photography.
The degree of staging will vary based on the home. The condition of the interior and exterior along with the price range are all factors in making a decision regarding how much staging to use.
If the house is barely inhabitable and needs all new electrical, plumbing, roof, etc., it doesn’t make sense to stage. You want to make the home look livable, but no need to overdo it.
On the other end of the spectrum, a high-end home may already have custom furniture and paint colors picked by an interior designer, but it will still need some degree of staging to make it shine. The art of staging and photographing a home to sell is unique to each transaction, but all homes will benefit.
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APR in the News Buyer / Seller Information

Do I Still Have A Chance if I’m Not the Highest Bidder?

March 30, 2015
Agents Sound Off
 

David Gunderman & Andrew Raskopf
Oakland Hills – Montclair Village
510.205.4369
dgunderman@apr.com
araskopf@apr.com

Question: Do I still have a chance if I’m not the highest bidder?
Answer: The highest bid almost always wins. Almost.
If you have the ability and the wherewithal to match your competition, there are ways to approach the terms and presentation of your offer to secure an opportunity to prevail in a counter offer phase (but never assume you will get that opportunity as you draft your initial offering.) One of your agent’s responsibilities is to try to find a way to get the seller to give you the opportunity to match or beat the best offer if it is not yours. There are also instances where the seller values something more than top dollar (i.e. a smoother closing, better terms, or they choose to bequeath the home to someone who has tugged at their heartstrings). In addition to assessing value and analyzing disclosures, it is important that your agent find out what the seller values and you should consider including a letter with your offer that builds emotional bridges to the seller while remaining true to who you are.
Lastly, relationships matter in real estate. Lower offers can prevail when the listing agent and seller trust the lender and/or the buyer’s agent to get the job done, especially if the highest offer seems uncertain.
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APR in the News Buyer / Seller Information

What do buyers and sellers often fail to account for?

March 23, 2015
Agents Sound Off
 

Nick Granoski
Palo Alto
650.269-8856
ngranosk@apr.com

Question: What do buyers and sellers often fail to account for?
Answer: The power of live conversation can be underestimated in this age of technology, especially as it relates to fast-moving real estate transactions.
Buyers and sellers are using technology to be faster and more efficient with communicating via text, e-mail, etc. While this does facilitate faster communication, it’s important to remember that real estate transactions can also be emotional, and technology does not always translate emotions effectively. Feelings matter, and deals come together (or fall apart) based on what is communicated or interpreted.
Live conversation during transactions can quickly clear up misconceptions or assumptions faster and more cohesively than an ongoing exchange of e-mails or text messages back and forth. Tone of voice, clarity and questions that evolve based on the flow of conversation can be assessed quickly, accurately and will save both buyers and sellers lots of money and time when done correctly. Don’t underestimate the power of communicating the old-fashioned way when it comes to effective real estate transactions.
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APR in the News

What features add the most value to a home?

March 9, 2015
Agents Sound Off
 

Lance Fulford
San Francisco
415.793.6140
lfulford@apr.com

Question: What features add the most value to a home?
Answer: Value — like beauty — is in the eye of the beholder, and in my 20-plus years of experience as a local Realtor, there are multiple differences between buyers in San Francisco and the rest of the Bay Area.
Across the board, however, I would rank a garage as the most valued. This is followed by outdoor space (patio, deck or gardens) and a remodeled kitchen and baths.
Many buyers will forgo remodeled features if they can get a “better” location or one that they put higher value on for their life stage and/or lifestyle.
Then we get into floor plan and functionality, and finer points such as hardwood flooring, moldings and other details including energy upgrades.
Buyers don’t put a value on structural items like foundation or a heating system because they expect those will be there and take that as a given. However, if structural items are an issue or are missing, most buyers will eliminate the property from their list altogether.
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APR in the News

How important is it for Bay Area residents to carry earthquake insurance? Why or why not?

February 9, 2015
Agents Sound Off
 

Julie Leitzell
Mill Valley
415.309.7074
jleitzell@apr.com

Question: How important is it for Bay Area residents to carry earthquake insurance? Why or why not?
Answer: Whether a homeowner should carry earthquake insurance depends on where the home is located, how it is built, the level of retrofitting and the kind of soil it sits on.
In Marin County, the majority of older neighborhoods are built on rock and solid soil. That’s one reason most of my clients forgo the earthquake insurance. Another big factor is how much equity they have in their home, and also the amount of damage that would have to happen to meet their deductible.
Given that our median price in Marin is hovering around $1 million, and many homes will cost at least that much to rebuild, those homeowners who have earthquake insurance will spend at least $100,000 on repairs or rebuilding before an insurer begins to pick up the costs. Given the history of Marin County’s earthquake damage, many residents feel it’s more financially prudent to ‘self-insure’ and have funds in the bank for repairs should they be necessary.
However, everyone should consider the possibility that their home could be a total loss in an earthquake. The Earthquake Authority has made its insurance more attractive in the last decade, adding content insurance, an allowance for temporary housing and an option for a lower deductible. Log on to the California Earthquake Authority website to find an easy-to-use calculator that estimates premiums based on various scenarios.
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