Bay Area Real Estate and Community News

Nov. 10, 2022

San Carlos Real Estate Market Update - October, 2022

San Carlos Single Home Sales Activity

 

The San Carlos real estate market (like all markets right now,) continues to be in a state of flux. As we continue to adjust to changes in the national economy and interest rates, we'll continue to see market statistics that we haven't encountered in quite some time. My job is to put this into perspective and help buyers and sellers to understand why now is an opportunity for everyone.

During October, San Carlos had 27 new listings, down from 37 last month. Sales held steady from last month at 21 in total. It's interesting to compare this to the same time period last year, when we saw 39 listings and 35 sales. Overall numbers are down in both these categories, but months of inventory has nearly quadrupled since this time last year (we'll talk more about MOI in a moment). The reason why we have more average inventory (that being months of inventory,) is due to the fact that days on market is up to 32, versus 14 this time last year. However, as recently as May, 2022, days on market was in the single digits. So why is this happening?

San Carlos List to Sell October 2022As I've discussed before, the market began to shift in the May/June timeframe this year, as the Fed began increasing interest rates. Their hyper-aggressive approach has had a significant impact on the housing market, causing buyers to move much more slowly in their purchase making decisions. As they slow their roll, days on market creeps up, and months of inventory increases, even though the total number of new listings has decreased since last year. So does this mean we're in a buyers' market?

This is  where months of inventory comes in. Months of inventory (MOI) is the relationship of sales pace to the number of properties currently on the market if no additional homes were added to the supply. It is calculated by determining the number of homes sold per month and dividing by the total number of properties for sale on the last day of the month. MOI is one of the key criteria for determining if we're in a buyers' or sellers' market. Less than 5 months of inventory, we're in a sellers' market, more than 6 months and we're in a buyers' market. While we've nearly quadrupled since last year, we're still only at 1.5 months of inventory in the San Carlos market. 

While this would imply it's solidly a sellers' market, the abrupt market shifts are leveling the playing field a bit and we're seeing long overdue corrections. Last year at this time, homes were selling at 109.6% compared to list price. For this time period (October, 2022,) homes in San Carlos sold for 96.0% of list price. 

San Carlos Real Estate Market TrendsSo, we're in a sellers' market for those sellers who are patient and practical with their pricing, and what prices they will accept. And we're in a buyers' market for those buyers who are savvy enough to see that there are opportunities that we haven't had in a dozen years to negotiate offers without excessive competition. Mortgages can be refinanced in a couple of years when rates go down, but as rates go down, more buyers will return to the market creating more competition. Now is the time!

There are still plenty of buyers for San Carlos and not enough inventory, continuing to make it a great time to sell in San Carlos. So if you're thinking of making a change, let's chat!

Have questions about the San Carlos real estate market? Give me a ring and let's discuss!

 

Note: All market data based on Single Family Residences in San Carlos for the time period of 10/1/22 to 10/31/22. Data above is pulled directly from MLS Listings.

Posted in Market Updates
Aug. 24, 2022

What's Happening in Mid-Peninsula Real Estate

From my July, 2022 Newsletter:

Changes are upon us in the mid-Peninsula real estate market, and this past period of time in June/July really highlighted that. We saw significant changes in the number of new and sold listings, in the list to sell ratio and in days on market. But while the market appears to be slowing down, I still believe it's a time of great opportunity for both buyers and sellers.

                      source: MLS Listings, Single Family Homes 6/25/22 - 7/24/22

The list to sell ratio feels like the most significant difference from the two years previously. These last two years it feels like we've mostly seen the ratio at and above 100% for most markets, with multiple markets regularly being above 110%. This period, we saw three markets fall below 100% and none have sell prices higher than a 105% ratio. The three markets below 100% were Atherton and Portola Valley, which isn't that unexpected due to their typically low levels of sales and high price fluctuation; but very surprisingly, Palo Alto ended up with an average sale price at 97% of average list prices. And this is with a healthy 29 sold homes. On top of this, only two markets had fewer than 12 days on market - so homes are on market longer and selling much closer to list price.

So what exactly is happening? A few things are going on, actually. For starters, with interest rates going up, and the stock market being volatile, some people are deciding to hold on any real estate selling or buying, waiting to see how things settle. From an inventory perspective, this hold has made an already low inventory season even lower, so there's not a lot of new homes for buyers to consider anyways. And a lot of people are traveling this summer, so there aren't as many buyers in town as in months past (and certainly not as many as the past two summers, when no one was traveling!) 

Some doom-meisters may try to enthusiastically say that we're on the brink of a market crash, but that's just incredibly unlikely here on the Peninsula. All the reasons that have driven up our home values over the last 40 years, and that prevented us from having any significant value decreases during the 2008 national crash, should continue to protect our home values. At the end of the day, it's a simple case of supply and demand. And with more buyers than sellers, our home values hold. As long as we have people who have accrued significant capital gains in their homes, we're always going to have less turn-over, and there's just no place to build new homes. As a result, I expect we'll be holding fairly steady in value.

One of the biggest things is people accepting that the higher interest rates (though historically still VERY low,) are here to stay, at least for the next several years. If you look at the national economy, with its current inflation levels, there's just no way (or any reason,) to expect that rates will dip into the 2's or 3's again. So we need to adjust, adapt and then move forward. I still hold that this is a fantastic time of opportunity, especially for buyers. Somewhat gone are the crazy bidding wars of just a couple of months ago, so it's a great time to find a home and buy it at or near list price. Those who are bold will have great success.

Posted in Market Updates
Dec. 15, 2021

How Real Estate Commissions Are Paid

When it comes to buying and selling real estate, there are always various costs involved. Depending on your role (buyer or seller,) you’ll have certain closing costs and fees, and may also have costs for things like inspections. One cost a seller in California will always see on their closing sheet is agent commissions. But do you really understand what commissions cover, how they’re paid and how commission fees are achieved? Most people don’t, so let’s take a deep dive into commissions.

 

What Are Real Estate Commissions in California?

The standard commission in the State of California for real estate transactions is 6%. However, by law this commission rate is negotiable. Traditionally, the listing agent will split this commission with the buyer’s agent and they will each get 50%. So on a 6% commission listing, each agent would get 3%.

There are many brokerages who openly advertise having extremely low commissions - these are considered discount brokers. When it comes to real estate agents, you truly do get what you pay for. So when an agent agrees to a much lower commission (or worse, woos you with something like a 1% commission,) you can be certain that you will not be working with a full service agent. When we get down to the section on “What Do Commissions Cover”, you’ll see some of the services that are often eliminated by discount agents in order to accommodate these hyper low commissions.

Who Pays the Commission?

Per the closing sheets, it’s the seller who pays the commission to the listing agent (remember, the listing agent then shares half of that with the buyer’s agent).  But the reality is something different from that. Commissions are paid out of the negotiated proceeds of the sale of a house. In other words, they are paid out of the funds that the buyer pays the seller for the property. As such, commissions are really paid by both the buyer and the seller.

When working with the right agent, a seller can ensure that all of their closing costs are covered in the negotiation. This includes the commission fees. A good agent should be able to negotiate to cover their commissions.

What Do Commissions Cover?

An interesting point to keep in mind is that commissions are paid at closing. So that means that agents for both the seller and the buyer are working for free until the deal is done. For a buyers agent, this can mean the expense of time spent on the home search. But for a listing agent, this can include significant out of pocket expenses.

Commissions for listing agents generally break down in three expense areas:

  • 33% to the brokerage - for overhead, insurance, etc.
  • 33% to the agent - broken down further when you take out taxes and business operation expenditures
  • 33% for “other agent expenses” - this includes photography, advertising, printing, open house expenses and more, all focused on the promotion and sale of the listing

Oftentimes, a listing agent can work for months to get a property ready to sell, and all of this work is done without compensation. This means the expenses for marketing the property are coming directly from the listing agent’s own pockets.

If you take a look at these expenses and then reconsider section 1 above about discount brokers, it should make you wonder “where are they cutting expenses?” In most cases, discount agents have to cut their expenses by spending less of their time on the sale of your home and severely limiting their costs that support the promotion and sale of the listing. So while you may “save” money in your commission rate, you’re likely paying more than you save by having fewer buyers see your home, less adequate negotiations and ultimately getting less money for your home. Discounts can be expensive and when you're dealing with such an important asset the question is "Can you afford to cut corners?"

Overall, a good, full commission agent is worth their weight in gold. They are the agents who will take their fiduciary duty to you seriously and negotiate for you the highest possible price. And what can be more important than that?


IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Real Estate Basics
Nov. 18, 2021

Why Negotiating Matters

A home is most likely the largest financial investment that you have in your portfolio so when you’re selling, you want to make sure you’re getting the highest possible price. Conversely, if you’re buying you want that to be the best possible price. But there’s a lot more to negotiate in a real estate deal than just price, which is why it’s important to have a master negotiator on your side so you ensure you’re getting all you can out of the transaction.

There are some realtors, possibly even a majority, who feel that you shouldn’t negotiate. That if someone makes an offer on your home, you should just take the highest offer and be done with it. Some agents feel like buyers shouldn’t get involved in negotiating because the agent themselves may not be comfortable being a negotiator and may be fearful of losing out on something for their clients. But for both the buyer and the seller, negotiating is the most effective way to have a successful transaction that all parties are happy with.

A good negotiator knows that the power of negotiating is in being able to walk away, but the skill is in never having to. Contrary to what is shown in the movies, negotiating, when done right, is not a cut-throat blood sport. It is an exchange out of camaraderie that seeks to find the best outcome for all interested parties. Doesn’t that sound like the type of process you’d like to go through when buying or selling your home?

So what exactly can be negotiated in a real estate transaction? There’s actually a lot, so let’s explore.

  • Price - this is obvious, and the most commonly thought of in terms of real estate negotiating. Sellers want the highest possible price, buyers want the best possible price. Working together, a resolution can be reached that everyone can agree to. The problems arise when one party is afraid to negotiate, or is afraid to counter something that has come their way. Even if the counter is the same thing you originally proposed, it still keeps the conversation going and shows the other party that you actually are interested in working out a deal.

  • Contingencies - there are all kinds of contingencies, and some of them can be negotiated. Often times a financing contingency is hard to negotiate as that is driven by the lender. However, if the lender wants an appraisal, the buyer could decide to waive their appraisal contingency, taking on the risk if the property doesn’t appraise. When you’re negotiating on contingencies, you’re negotiating for the days within that specific contingency.

A subsection of the contingency negotiations has to do with home inspections. Here on the Peninsula, most sellers will do all the home inspections prior to putting the house on the market, and those will be a part of the disclosures. Buyers can negotiate to have their own home inspection done, but can also negotiate to have the seller cover some of the required home repairs that come out of the inspections. Not uncommon is to negotiate for costs for pest remediation or general handyman type repairs around the home.

  • Personal property / inclusions - sometimes there's just something in the house that the buyer feels “makes” the home, and they want it. It could be a piece of art, or furniture or a free-standing sauna. The general theory is that if you see it, you should always feel free to ask for it. The worst that can happen is the seller says no. Sellers shouldn’t be offended by these requests - they usually show that the buyer loves everything about the home, including your style!

  • Timing / Closing date - as mentioned above in contingencies, time is often negotiated. You can negotiate timing on contingencies, but also on closing dates. Maybe a seller wants to shorten the time frame, or they have holidays coming up and need to stretch out their time in the home. With both parties working in good faith, you can find the timing that works best for all.

  • Occupancy / rent back - rent back is when a property closes, but the seller stays in the home at a negotiated rent amount for an agreed upon period of time. This has been especially popular over the last several years with homes closing so quickly on the Peninsula. It’s not uncommon for buyers to offer free rent back to sellers, making their offers more appealing, but rents can be negotiated as well. 

  • Closing Costs - there are all sorts of closing costs, and all of them can be negotiated. Most common ones are escrow fees, title fees and city / county transfer taxes. 

As you can see, there’s a lot that can be negotiated when buying or selling real estate, and this isn’t even the total list. At the end of the day it’s important to remember that if you don’t ask, the answer is always no. But if you do ask, you may just get into a conversation where you can secure some additional benefits for yourself.

One final note. I can’t stress enough the significance of having a master negotiator acting on your behalf. Someone who is fully committed to representing you and only you. You don’t want to work with an agent who is representing both parties - their loyalties will be too divided. I mean, how can they negotiate with themselves. Find an agent who is solid, strong and amiable, who isn’t afraid to push back some, who encourages you to identify your self-imposed limits, and who isn’t afraid to walk away. You never want to be pushed into a decision and if your agent is trying to do that, you may want to seek different guidance.

If you’d like to learn more about how I approach buying, selling and negotiating, feel free to reach out to me at sally@illuminateproperties.com. I’m always happy to grab a cup of tea and talk business.

 

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Financial
Nov. 1, 2021

All About Off-Market Homes

Off-Market Homes

You may have heard about buying or selling a home ‘off-market,’ but what does that actually mean? An off-market home is a property that is for sale but not made available to the general public through the multiple listing services (MLS). It may also be referred to as a “pocket listing”.

As such, the real estate agent must do extra legwork marketing a home to potential buyers. This type of sale can be perceived as more ‘exclusive’ however is it right for you? Let’s look at some pros and cons to listing and selling off market, as well as some new guidelines set forth by the National Association of Realtors (NAR).

Why List a Home Off-Market?

There are a handful of reasons a seller may opt for an off-market sale. Sometimes a seller wants to test the value of their home without accumulating excessive days on market and the potential of lowball offers. Others simply prefer a private sales process or feel they can maintain more control through an off-market home sale.

Pros and Cons of Off-Market Home Listings

Pros and cons of off-market home sales

Pro - Seller: 

Selling a home off-market offers more privacy. Homeowners who are living in their homes can avoid the intrusion of open house foot traffic through personal space and posting photos of their home on the internet.

Additionally, in a low inventory market some sellers feel that an off-market home will be perceived as more ‘exclusive’. They hope that buyers are willing to pay a premium to avoid competing with other potential buyers. 

Con - Seller: 

Less exposure to the public means less exposure to buyers. Interest creates competition therefore, a home that can be marketed to generate as much interest as possible is more likely to sell for the highest possible price. You’ll never know if you’ve left money on the table.

Pro - Buyer: 

Off-market home listings provide additional inventory to buyers. The major advantage is less competition. A trade-off is that typically, the list price is firm and less negotiable. It is always a good idea to have your agent review recent sales comps for the home to support the price.

Con - Buyer:

You will never know if you paid too much or too little. This may be fine for you depending on your situation. Remember that if you are getting a loan, the house will still need to appraise for the loan to be approved. With any home purchase it is important to be in close communication with your lender!

MLS Statement 8.0 Clear Cooperation Policy

In an effort to curb this secondary market, NAR (the National Association of Realtors,) has enacted the MLS Statement 8.0 Clear Cooperation Policy as of January, 2020. This policy aims to create a more equitable market for all buyers. It states:

Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public. (Adopted 11/19)

This limits an agent's ability to market an off-market property outside of his/her office. It does not apply to commercial properties, rental properties or new construction with multi units.

Exemptions are allowed if a seller wants to keep the listing private as an office exclusive listing. In this case, the marketing can not be passed outside the office of the listing agent. At this time, we have yet to see how this will impact sales in our Bay Area market.

Is buying or selling an off-market home right for you? You now know the advantages and disadvantages that are involved and what it really comes down to is what best suits you and your housing needs. When working with an experienced local agent, you are exposing yourself to their vast agent network where off-market opportunities will undoubtedly present themselves.

To receive the off-market properties in your area, contact me directly at sally@illuminateproperties.com. I can't wait to work with you! 

 

Post by Lindsey Matthews

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Oct. 14, 2021

12 Home Buying Mistakes to Avoid

Top 12 home buying mistakes to avoid


Do you want to overpay for your home? Would you like to get stuck in a mortgage that is all wrong for you? How about swinging and missing on an opportunity to purchase your dream home? Of course the answer to these questions is a "no", but these are the results of the common home buying mistakes buyers make.

Buying a home is something that you may do only a handful of times in your life. Don’t learn by trial and error - it’ll cost you too much. Instead take it from a seasoned professional on which pitfalls of home-buying you should avoid. Here are the top 12 home buying mistakes to avoid.

#1: Not Getting Pre-approved

Imagine the stars align and you find the perfect house that fits perfectly within your budget. You write an offer over asking, and maybe it’s even the highest offer, but the sellers go with another buyer. Why?

The accepted offer included a pre-approval letter (not just pre-qualified). A fully underwritten pre-approval letter shows the seller and seller’s agent that they are dealing with a serious buyer and that the deal will move faster because a large part of the paperwork process has already been taken care of. Getting pre-approved in a rapidly paced market like the Peninsula is a key element in making a strong offer. 

#2: Getting The Wrong Mortgage

Many loans like ARM, FHA, VA, and USDA are designed to help you buy a house, no matter what your financial situation is. It’s best to speak with a few different mortgage professionals before you decide on which mortgage product you will go with. It’s important to understand the actual costs involved and how they will affect you for years to come. Some products may end up costing you tens of thousands of dollars in fees and interest.

 #3: Not Saving Enough for a Down Payment

home buying mistakes - not saving enough<br />

One of the worst home-buying mistakes you can make is not saving enough for a down payment. Although it is possible at times to put 5% or even 3% down, anything less than 10% is way too low! The extra fees and interest charged in the types of mortgages that allow these smaller down payments will bury you and you’ll feel like you’re never going to pay off your mortgage. 

So how much should you save for a down payment? As much as you can, but set a goal for 20% of the purchase price. With 20% down you will avoid having to pay PMI (private mortgage insurance) which is an insurance for your lender if you were unable to make your mortgage payments. 

#4: Not Using a Real Estate Agent

It is important to not only use an agent but to use a local expert. Buyers who decide to go it alone without the use of a real estate professional tend to overpay. With so much information available online to the public, buyers feel they have all the information they need to make an offer on a home. What agents understand are the intangibles that don’t show up on a spreadsheet or can’t be reflected in an online algorithm.

An experienced local real estate expert will help you to:

  • Find the latest homes available through the MLS and their agent network
  • Give insight about neighborhoods and specific homes and WHY they sold at that price 
  • Negotiate the best possible price for you

Let’s not forget that buyers’ agents are paid out of the seller's proceeds. Buyers will essentially get this wealth of knowledge and expertise for free!

#5: Assuming The List Price is The Sale Price 

Buyers often look at the list price and imagine the home will sell for that price. What you need to consider is how homes are priced. Sellers and their agents will approach the listing price with different marketing strategies in mind. Some homes are priced to sell exactly at listing price, others are priced purposely low for the area so as to attract more interest and get the home maximum exposure. 

For this reason, it’s important for buyers to look at homes below what their pre-approval amount is and give themselves room to negotiate up.

#6: Holding out for the "perfect" home

Home buying mistakes - seeking perfection

Waiting to find the perfect home that checks off every single box is most likely not going to happen. Nothing in this life is perfect and if that’s your objective, you may be looking for a long time. Instead, looking for a home that has about 80% of what you want is much more attainable. Hopefully, as you grow into your new home you can make the changes that will close that 20% gap a bit.

#7: Passing on a Great Home Early in Your Search

This happens all too often. A buyer may come across a home they absolutely love and instead of making an offer they opt to keep looking to see what else is out there. It is very possible that you may find the home you want to buy in the beginning of your search. 

It’s important to clearly understand what type of home and what neighborhood you want so when you find it, you can pounce on it. Don’t let it be “the home that got away.”  

#8: Buying Without a Home Inspection

Spending a few hundred bucks on inspections could possibly save you hundreds of thousands of dollars in the long run. Uncovering issues with the property’s condition can be leveraged in negotiations to help get the buyer a lower price. Not to mention, it gives the buyer a clear picture of what it is they are truly buying and taking away any unfortunate surprises down the road. 

Typically in a fast-paced market like the SF Bay Area, sellers will provide inspection reports as part of their disclosures. However, buyers are always encouraged to conduct their own inspections to satisfy themselves to the condition of the property.

#9: Taking on Credit While Closing

Home buying mistakes - don't buy a boat

Buying a house with debt is not a very smart thing to do and taking on new debt while you are in the process of purchasing a home is just as bad. Any changes to your credit score or debt-to-income ratio may cause a delay in the closing process. At worst, it could potentially disqualify you from a loan altogether. Make sure you are up-front about all of your financial obligations to your lender and hold off on buying that boat or quitting your job until after you close that escrow! 

#10: Not Walking Away From a Bad Deal

Buying a home can be scary at times but overall it should be exciting for the buyer. If you find yourself doubting or second guessing a property more than you are looking forward to it, you may want to consider passing on it. Your Realtor should be able to give you perspective on the home and may be able to substantiate your concerns about the home.

#11: Forgetting About Closing Costs and Moving Expenses

Another common mistake buyers make is focusing so much on saving for a down payment, they forget about closing costs and moving expenses. Closing costs may include loan origination fees, escrow fees, property taxes, insurance, the appraisal fee, and legal fees.

Home buyers in California can typically expect to pay closing costs between 2% and 3% of their home’s purchase price, depending on price, discount points, transfer taxes and other factors. And unless you plan on moving everything yourself, moving fees are generally around $1,000-$2,500 for a three-bedroom home.

#12: Not thinking about resale value

Most buyers are focused on how much a home will cost them, how many bedrooms and bathrooms it will have, or if there’s an extra room for their Star Wars memorabilia (some do). Buyers should also be thinking about the home’s resale value.

At some point in the future you will eventually sell the home so it’s important to pay attention to the health of the neighborhood. Are the local businesses thriving, are the parks well-maintained, do the schools have high ratings? Most things with a house can be fixed but you can’t change the location. Buy LOCATION!

Honorable Mention:

Buying More House Than You Need or Can Afford

A mortgage is not the only payment you need to make. Consider costs of insurance, HOA fees, property taxes and living expenses.

Not Seeing The True Potential of a Home

Don’t get distracted by easily replaceable ugly carpets or old kitchen cabinets. Focus on layout and buy something with good bones.

Making a Lowball Offer

You don’t want to offend sellers with low ball offers. An experienced agent with local knowledge should help guide you as to price.

Everything That Glitters Ain’t Gold 

Don’t focus on the shiny things.  Buyers should be looking at the quality of materials, the quality of construction and the level of finish used.

Overlooking Important Details

Pay attention to the big ticket items such as the roof, furnace, and electrical system. If these problems exist, repair/replacement could be costly.

Buying with confidence is priceless. Educating yourself on the process and working with a knowledgeable Realtor who can expertly guide you will go a long way. Now sit back, take a breath, and get ready to enjoy what you’ve worked so long to achieve….

Congratulations, you’re about to buy a house!!

 

Post by Vincent Ergas

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in House Hunting
Sept. 21, 2021

Are You Giving Away Leverage By Working With The Listing Agent?

Should buyers work with the listing agent?


As agents, we run into buyers that believe they will have an advantage over competing buyers if they chose to work directly with the listing agent. On one level it makes sense, but is it really in the best interest of the buyer?

Listing Agent’s Motivation

When representing both parties, the listing agent is incentivized to have the sellers accept the offer from their buyer and to just get the deal done. They would then receive both commissions offered to the seller’s agent and the buyer’s agent, thus doubling the amount they would have received if they would only have represented the seller. While that may work out great for the agent, does it really work best for the buyer?

Double-ending & Lawsuits

The majority of lawsuits that occur in real estate transactions happen when a deal is double ended. If you’re not familiar with the term, it’s pretty self explanatory. Double ending is when an agent represents both ends of the transaction, the seller’s end and the buyer’s end. 

When you use a buyer’s agent, you are hiring a professional with a trained eye who will look over the disclosures and call out any items that may be of concern to you. A buyer’s agent has only your interests in mind and one of their jobs is to help you to avoid lawsuits in the future. Even if a listing agent’s intentions are honest and pure, mistakes still happen and you better believe that when there’s a lawsuit their doubling-ending will be scrutinized.

You wouldn’t hire a defense attorney who was representing the plaintiff as well, would you?

Negotiating

Real estate negotiations.

The very word “negotiations” bring to mind an image of two people playing cards against one another, both keeping their cards close to their chest so the other can’t get a peek. Can you imagine one person playing two different hands of poker against themselves? At some point they’re going to have to make a decision who wins.

Now let me apply it directly to real estate. Let’s say you submit an offer on a home using the listing agent to represent you. You write the offer at the list price of $2M and when the listing agent calls your lender, your lender says that $2M is perfectly fine. In fact, they have pre-approved you for $2.5M. Now the listing agent has a dilemma. Their duty is to their seller but now it is also to their buyer thus creating a conflict of interest. 

As a seller’s agent they should be trying to get as much of that $2.5M for their seller as they can while still keeping the deal alive. As the buyer’s agent they should be negotiating the best possible price for you.

So if you can’t gain an advantage from working directly with the listing agent then what is the best way to get a leg up on the competition? Your best course of action is to find a buyer’s agent who will represent you exclusively, is a local expert and has relationships with all the agents in the area you are looking to buy in. But most importantly, an agent who can negotiate the best possible price for you.

If you are looking for representation, drop me an email to sally@illuminateproperties.com to ask for a consultation so we can see if we would work well together.

 

Post by Vincent Ergas

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Aug. 31, 2021

Home Design Inspiration

Round Top Crowded Table
Round Top, TX - Finding My "Crowded Table"


Inspiration. It’s what keeps us growing and being creative. It’s something we should be seeking out in all aspects of our lives. And when it comes to our home design, it is hopefully never ending. I know people who will rearrange their homes twice a year, to change the feel and flow. There are people who repaint rooms regularly. And of course, there are those who see a wall and imagine the room without it.

So how do we keep inspiration coming - especially if you’ve been in your home 15-20 years? There are so many fantastic opportunities in front of us every day that can help to inspire and motivate us. Sometimes we need to just open our senses to what’s already around us. But, if you need a bit more help on finding home design inspiration, here are some of my favorite ideas.

Open Houses

Often, people will come into my open houses who live in the area and have no intention of selling their home or buying the one I’m holding open. So why do they come in? Usually, they’re looking for inspiration. They may be thinking about a remodel or redecorating, and taking a peek at someone else’s house may be just the inspiration they need.

Open houses are a great way to get ideas for a remodel, for how a particular layout will work for for home design ideas. With interior designs, you can think of an open house as a designer showcase, in many situations. Most top stagers are also interior designers so staging is much more about the feel and style than just plunking furniture any which way.

Pinterest

This one is pretty obvious, Pinterest is the mecca for all things inspirational. But are you using it in a way that can truly help you? I have a lot of different boards for the various things I want to do in my home. Whether it’s furniture styles, paint colors, kitchen design or landscaping, I love to be able to have all the ideas in one place.

But you can take Pinterest one step further. My sister has been thinking about a redesign of her house for a long time. She’s created her own boards, and shared them with key people with strong opinions (mainly me and her daughter,) and we can look at them together from different locations and share comments. Much like Compass’s “Collections”, Pinterest allows for review by many and meaningful feedback by key decision makers.

Fixer Upper

Granted, it’s not just “Fixer Upper” that is great inspiration - pretty much any show on HGTV can be - but this is the show that has created a full industry around it (and driven the white farmhouse popularity on the Peninsula).  Part of what makes Fixer Upper such great inspiration is Joanna Gaines’s approachable manner and how she keeps all of her design ideas functional and livable. Also, shiplap! 

Thinking of remodeling your kitchen? There are shows for that. Bathroom? Ditto. Basically, you can get a million remodel and home design ideas from these shows. So find the ones whose style you connect with, and spend a day or two binge watching.

Antique Fairs

Round Top Big Red Barn
Round Top, Texas - Antiquing Mecca

This one is a bit of an off-shoot of the Fixer Upper inspiration. If you’ve truly indulged in the show, you know that Joanna Gaines takes regular treks to antiques fairs, especially the grand-daddy of them all, Round Top (in Round Top, TX, population 90). Finding ourselves in Texas during one of the semi-annual fairs recently, my friend and I carved out two days to spend antiquing. We easily could have spent two weeks, there was so much to see.

Not only did we buy a few things (we would have bought more if we’d driven a U-Haul home,) but we got tons of inspiration. I got ideas for home decor, home furnishings, design styles and ways to display mundane items to make them really interesting.

Round Top Home Design

I learned ways to mix beautiful old pieces with current, less special pieces, to make for great home design. I’m prepared that when the time comes to remodel my home, it will require another trip to Round Top - this time with a truck.

Round Top Doors & Windows

You don’t have to go all the way to Texas, though. There are great antiquing opportunities around the Bay Area. Alameda has a monthly antique fair, which is pretty good sized (not Texas big, but big enough). Mill Valley, Carmel and Napa all have fantastic antique stores, and there may even be traveling antique fairs you can go to when they come around. Take a look at the past to get ideas for now and into the future.

Now that you’ve heard some of mine, tell me what are your favorite sources of home design inspiration?

 

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Home Decor
Aug. 2, 2021

Closing 101: Ways to Hold Title

Ways to hold title

Your offer has just been accepted on that home you’ve been dreaming about - congratulations! ? You’re ready to wrap up escrow and move on in, right? Well hold on just a moment. Along with all of the other things to consider during the escrow process is to determine how you will hold title on your new property.

No idea what I’m talking about? Let’s dig in a bit on title - what it is, why it matters and what your options are.

What is Title?

According to Wikipedia:

In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.

It’s important to note that title is separate from a deed. Title is the concept while a deed is the physical certification reflecting title.

Why does it matter how Title is held?

How title is held affects the legal rights of title holders and their heirs, so having title done correctly is crucial. Before finalizing your purchase, it’s important to consult an attorney about how title should be held. Your legal advisors are the only ones who can provide you with an accurate recommendation relevant to your situation.

Ways to hold title

There are several common ways to hold title, broken down into three sub-groups.

Sole Title

1. A Single Man or Woman, an Unmarried Man or Woman or a Widow or Widower:

A man or woman who is not legally married or in a domestic partnership. How this might look on title is: Stella Smith, a Single Woman

2. A Married Man or Woman as His or Her Sole and Separate Property:

A married man or woman who wishes to acquire title in his or her name alone. This could be as part of an inheritance or a separate investment not purchased through marital assets. In this situation, the spouse would be required to relinquish their rights to title and property. How this might look on title is: Stella Smith, a Married Woman as Her Sole and Separate Property.

3. A Domestic Partner as His or Her Sole and Separate Property:

A domestic partner who wishes to acquire title in his or her name alone. This would be for the same types of situations as a married couple, but apply to those who are registered domestic partners. How this might look on title is: Stella Smith, A registered Domestic Partner, as her sole and separate property.

Joint/Common Title

Title to property owned by two or more persons may appear on title in one of the following ways:

1. Community Property:

Typically used for property owned together by married persons or by domestic partners. Community property is distinguished from separate property (see above,) which is agreed in writing to be owned by one spouse or domestic partner.

In California, real property transferred to a married person/domestic partner, is presumed to be community property, unless otherwise stated. Both parties must sign all documents to sell the property in full or use it as security for a loan. However, each party is free to sell their half of community property whenever they want. How this might look on title: Stella Smith and Steve Smith, who are married to each other, as community property; or Stella Smith and Maddie Smith, who are married to each other, as community property.

2. Community Property with Right of Survivorship:

This form of title is also for community property between spouses or domestic partners. The difference here is that it provides the for the share of one party to be transferred in full to the other upon the death of the first. This could provide tax benefits and should be discussed with your attorney and CPA. How this might look on title: Stella Smith and Steve Smith, husband and wife, as community property with right of survivorship; or Steve Smith and Michael Smith, husband and husband, as community property with right of survivorship.

3. Joint Tenancy:

Joint Tenancy works for properties owned by 2 or more people, regardless of their relationship, who have equal interests in the property. Joint tenancy provides the right of survivorship (as explained above). There are some guidelines - title must be acquired at the same time, in the same way, and the document must make clear the intent to create a joint tenancy holding. Joint tenancy is not subject to disposition by a will, as the right of survivorship is built in. How this might look on title: Stella Smith, a single woman, and Dave Smith, a married man, as joint tenants.

4. Tenancy in Common:

Tenancy in Common is similar to Joint Tenancy, in that it works for properties owned by 2 or more people. However, with Tenancy in Common, interests  can be unequal in time or amount, and may start at different times. A tenant in common essentially owns a share of the property and any income or expenses for the property will be split proportionally based on share level. Each tenant in common can sell, lease or will their share of the property belonging to them. How this might look on title: Stella Smith, a single woman, as to an undivided 60% interest and Craig Smith, a single man, as to an undivided 40%.

Other Types of Title

1. A Corporation:

A corporation is a legal entity, created under state law, consisting of one or more shareholders but considered to be a separate entity from the individual shareholders.

2. A Partnership:

A partnership is between two or more people, carrying out work for profit. Title can be held in the name of the partnership.

3. Trustees of a Trust:

A Trust is an arrangement whereby legal title to property is transferred by a grantor to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called the beneficiaries. A trust is generally not an entity that can hold title in its own name. Instead title is often vested in the trustee of the trust. For example: Stella Smith trustee of the Smith Family Trust. (definition by California Land Title Association)

4. Limited Liability Companies (LLC):

Similar to corporations and partnerships, an LLC can hold title, which is separate from its owners. Tax implications may vary from those for a corporation.

As you can see, there are a lot of options so determining how you will hold title on your new property is critical. So don’t wait until the 11th hour. Prepare early and talk to your expert advisors on what will work best for your situation.

 

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Closings
July 2, 2021

Hot Water Made Easy - Tankless Water Heaters

tankless water heater

For decades, we’ve all had giant tanks that have created and stored hot water for us. The bigger the better, so we never run out. Of course, bigger works to your disadvantage if that tank springs a leak and floods your house or basement. How can you avoid this and still get all the hot water you need when you need it? Why a tankless water heater, of course.

I see more and more properties with tankless water heaters, so thought I’d dig in a bit to what they are, how they work and what the pros and cons are of having one in your home.

What Is A Tankless Water Heater?

A tankless water heater provides on-demand hot water, without the storage element (hence the “tankless” part). These systems can run on propane, natural gas or electricity. They provide heat as needed, when the faucet is turned on, versus trying to keep 50 gallons of water hot all the time.

tankless water heater


Tankless Water Heater Pros

There are a lot of advantages to this type of heater. For starters, they take up much less space than traditional tanks. They also use 30-50% less energy (as they are only heating as needed,) allowing homeowners to save money. Tankless heaters offer a continuous supply of hot water, so you never have to worry about running out when your teenager takes a 30 minute shower.

Unlike tank heaters, tankless units prevent major leaks and flooding and won’t tip over in an earthquake. Without the tank, you don’t have bacteria being harbored and causing health issues.

Gas heaters can operate up to 20 years (7-10 years for electric,) which is significantly longer than the lifespan of a tank heater, saving the owner additional money.

Finally, tankless water heaters can work with your smartphone to help you monitor the system. They can identify problems, and allow the owner to monitor temperature, as well as keep track of gas and water usage.

Tankless Water Heater Cons

Tankless heaters tend to be more expensive upfront. While a tank runs about $400, an electric tankless heater can run up to $900. A large gas tankless heater that can run 2 showers at the same time could run up to $2,000.

Tankless heaters also have special venting requirements, that can result in increased labor costs upon installation. Additionally, annual servicing is required for a tankless water heater to remain in tip top efficiency shape.

If your water heater tank is reaching the end of its lifespan, or if you’re undertaking some construction on your home, it’s definitely worth exploring the installation of a tankless hot water heater. Everyone’s situation is different, but a tankless heater may just be the right next move for your home!

 

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Home Maintenance