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Buying and Selling at the Same Time, Oh My!!!!

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With the change of the season comes new sellers entering the market place—but where do they go? If you are considering selling and buying a home you may wonder what it takes to tie two transactions together.  I would like to talk about how that works in our current market.

So you are considering selling… Whenever I meet with people who are considering selling their home, my first thought is to make sure I understand their motivation. This is especially true if it is their primary residence. It is imperative to find out where they want to go and how they plan to get there. I never want to render anyone “homeless”! There are many strategies to successfully tie two escrows together and keep things as seamless as possible but let’s start from the beginning!

Timing is everything right? With homeowners gaining equity in recent years, many people have found that they have the opportunity to make a move. Be it downsizing or upgrading, whatever the situation is, one of the first questions I ask is “what are your top three concerns?” For someone who is in a position to sell their home with the hopes of buying another their concern is usually “timing”. This is understandable. My consult usually includes an in depth discussion about their options and what the process looks like. Some might think it will take a miracle to make it happen but, with the proper guidance and all expectations in check, it can be a smooth transition!

Training wheels and first steps… After initially meeting with potential sellers, I like to suggest, not only talking with a lender first which will take a lot of the guesswork out of the process, but also going out to look at current homes in their price range to hopefully manage their expectations. Most people do not hate the home they live in; in fact, there are usually many aspects of their home that they are afraid to give up. I want to make sure that what they are selling can be replaced by something that excites them! It should check most of their want boxes! This can be tricky so I always encourage them to keep their “eye on their why”. It is easy to lose sight of your motivation when you feel discouraged by low inventory or homes that feel “sub-par” compared to the one you are selling so it is important to go back to the initial reason. Sometimes it is something like wanting to be in a different school district or wanting to be closer to family. I always want to make sure that the trade off is worth it and if we can stave off any disappointments at the get-go, that is ideal!

So you want to sell and avoid being left homeless? As I mentioned, most people are worried about how the timing works. I like to explore the options with potential sellers in this situation all the while being very realistic about the market. There are a few options potential sellers have such as the ones below…

• Make your home sale “contingent upon finding a suitable replacement home”. Pro: gives some peace of mind that you will not be forced to sell if you can’t find what you want. Con: not all buyers are willing to get their heart set on a home that has no certainty of closing and/or they do not want to wait.

• Ask potential buyers for a longer escrow – Pro: gives a little bit of flexibility to your home search. Con: not all buyers are flexible enough for this option

• Ask potential buyers for a rent-back – This is the option that we usually use most. In a perfect world, you will find a home right away and we can run the escrows concurrently; either way a rent-back is ideal to allow some overlap and avoid sellers scrambling to get out of their home on time!

• Do a “Double Move” – this is NOT for the faint of heart; however, I love this option because then you do not have to buy a home “under duress”. The two biggest downsides are the effort and the ambiguity of the market and interest rates. Short-term rentals would be best and depending on how you do it, it can be worth it.

Some Quick Tips and Strategies… I know it can be a tough decision to sell your home but I usually recommend listing your home before setting out to buy one. Be it contingent upon finding a suitable replacement home or what have you, it just puts you as a BUYER in a better position when negotiating with sellers. Finding your replacement home while having your current home in contract is the best case scenario of course but I realize this is not always realistic. Most people want the assurance they can find what they want first and, because it is a sellers market and inventory is low, it can be a little more difficult. When I represent buyers, I do not want them to be bullied so the better their offering terms, the less likely that will happen! So tying two transactions together is not a mythical unicorn! It can be done and there are options for sellers. Timing is everything and so is good guidance! I am always here to help!

What Higher Interest Rates Can Mean for Buyers….

interest-rate

There was an article in yesterdays “Sacramento Bee” addressing interest rates and the fact that they are the highest they have been since 2014.  The are hovering around 4.5 percent.  I remember when I purchased my first condo and the interest rate was 18 percent.  Many of you may not have been in the market at that time and this is foreign to you but it was true.  We need to put in perspective that 4.5 is still a great rate.  I do know that for first time buyers a 1/4 of a percent can make a difference in being able to afford the payment they want.  I encourage you if you are thinking of buying a new home meet with a lender and get pre-approved.  I have some referrals I would love to share with you or if you have someone you work with and trust all the better!

Click here to read the article

 

 

Top Energy-Efficient Upgrades That Buyers Are Looking for in 2018

I came across this article in RISmedia written by Kaitlin Krull.  It is believed that in 2018 Buyers are looking for homes that have been designed with the environment in mind.  The homes to be more energy efficient and eco-friendly.  Read below on her comments on what are some of the top energy-efficient upgrades you may want to keep your eye out for…….. 

1. Smart Tech Upgrades

Home automation has finally reached mass distribution for residential consumers. Many homes are now equipped with smart technology, such as home hubs, smart lighting systems, energy meters and thermostats, security systems, and other appliances. Because these devices learn your individual preferences and can be linked together for peak performance, they can actually help homeowners save money on energy bills. In 2018, buyers want homes equipped with the latest smart tech devices.

2.  New and Updated Solar Panels

It’s no surprise that homes with solar panels sell for more than homes without, but the latest developments in renewable technology mean that just having rooftop panels isn’t good enough anymore for eco-conscious buyers. However, by upgrading existing units to incorporate a more streamlined look and efficient performance, homeowners can make their already eco-friendly properties more enticing for potential buyers. This can be done by investing in integrated solar roof tiles or battery storage systems (both of which were introduced by motoring company Tesla in the past few years) in order to prepare a solar-clad home for the future and attract buyers.

3. Natural Materials and Furnishings

As far as interior design is concerned, the simplicity of Scandinavian design is still trending. Here are some of the hallmarks of this minimalist style:

  • Natural elements such as untreated wood, bamboo, wicker and other natural textiles
  • Chemical-free paints and fabrics
  • Sustainably-sourced materials like FSC certified wood

The most eco-friendly homes are better for the environment in nearly every way. Buyers with a vested interest in design trends and a serious passion for the environment will go to great lengths for a home with these kinds of features.

4. Ultra Efficient Windows and Doors

Although windows and doors aren’t exactly the most exciting part of a property, they make a difference in the minds of environmentally-conscious buyers. New energy-efficient windows equipped with two or three panes of glass offer added insulation, security and soundproofing for a home. They can also substantially lower energy bills. These multiple layers of glass—when coupled with low-emissivity coatings and insulating gases—can prevent heat from entering the home in summer and escaping in winter. This is a particularly useful upgrade for older buildings.

5. Sustainable Design

This applies more to new builds, but it’s worth noting that the design of a home can affect its energy efficiency rating in a significant way. Homes that have natural shade, for example, will generally stay cooler in the summer than homes that have no surrounding trees or shrubbery. A home’s exterior can also affect privacy and noise pollution levels. Although eco-conscious buyers have embraced the idea of passive design for new buildings, they will still be interested in existing properties that take steps toward increased sustainability in other ways (i.e., by improving landscaping to add shade and privacy or installing shutters and awnings to minimize solar heat gain).

 

Price Per Square Foot….

In my January newsletter I wrote an article on price per sq ft.  I wanted to share it on my blog as well as I had a lot of positive feedback.   Hope you find it beneficial and insightful!  Enjoy!

Price per square foot? Last month I attended a seminar put on by a reputable Appraiser in our area, Ryan Lundquist. The topic was “How to Think Like An Appraiser”. I would like to touch on one point that was covered in that meeting, “Price per Sq Ft”. When working with buyers and sellers this comes up quite frequently and it is not so simple. 4 principles to remember when using price per sq ft in real estate:

1) There is a price per sq ft “spectrum” in a neighborhood: There is never just one price per sq ft figure that applies to every property in a neighborhood. For instance, a neighborhood might easily see a price per sq ft range from $100 to $250 when looking at all sales.

2) Similar houses tend to have a similar price per sq ft: When homes are similar in size, location, bed/bath count, etc…, they tend to have a similar price per sq ft. That’s obvious, but the contrasting factor is that nonsimilar homes might have a VERY different price per sq ft that shouldn’t be used to value your home.

3) Property characteristics can quickly change the price per sq ft: When there are differences in condition, location, lot size, quality of upgrades, bed/bath count, size, etc… the price per sq ft can change dramatically. We might see a small remodeled home selling at $250 per sq ft, the same model match that is a fixer selling at $175 per sq ft, a short sale model selling at $185 per sq ft, and a home with an adverse location selling at $215 per sq ft. Thus even for one model there could be a price per sq ft range from $175 to $250.

4) Smaller homes tend to have a higher price per sq ft: It costs more to build smaller homes, so smaller homes tend to have a higher price per sq ft than larger homes. This is why it’s dangerous to use a price per sq ft figure from a smaller sale to value a larger home. A smaller home might sell at $250 per sq but a larger home might be closer $150 per sq ft.

Ryan used Starbucks to further explain this concept.

Starbucks cups and real estate - by sacramento appraisal blog

The Point: The larger the cup, the less you pay for each ounce of coffee. Or we could say it a different way. Smaller cups of coffee tend to cost more per ounce. This is interesting, but it’s not really surprising because it’s merely an example of economies of scale, right? We see this principle all the time when buying bigger or smaller items, yet it’s easy to ignore when it comes to housing. I hope this helps to give you a better perspective on how to look at price per square foot. It is not one shoe fits all. There is a lot more that goes into this equation.

New Tax Reform Law

 

 

The big question out there lately is how will the new-tax-reform law affect me as a homeowner.   I have attached an article that hopefully can help break it down for you.  Things tend to get complicated so the best advice I have would be to talk with your tax accountant.  They know the most about your unique situation and can advise you accordingly.  Click on the link below to read the article.

https://homeownershipmatters.realtor/issues/major-provisions-of-the-new-tax-reform-law-affecting-homeowners/?utm_source=newsletter&utm_medium=email&utm_campaign=awareness

Folsom School District Capacity Issues

I am attaching an article that was in the Folsom Telegraph this past week regarding the schools in Folsom.  Very interesting as Folsom continues to grow what restrictions take place as far as schools are concerned for students living outside of thback-to-schoole FCUSD boundaries (“Interdistrict” transfers). Take a look because if your looking to purchase in Folsom you may want to seek out certain neighborhoods.  Many of you may not know that a pocket in American River Canyon South (the West end) and the River Rock area which is behind Scotts Seafood is actually listed as in the San Juan School district.  Currently because they reside in Folsom students are able to attend Sutter Middle and Folsom High School but as we continue to grow things could change.  Just something to keep in mind.  Read the article below for more detailed information.

Click here to read the article

What Can You Afford in Sacramento?

This is a very interesting article about affordability in Sacramento neighborhoods…if buyers put 20% down on a mortgage, how much would they need to make to live in some neighborhoods around Sacramento.  Pretty amazing to see the amount you need these days…prices have definitely gone up over the past few years. Even North Oak Park has a median  home price of $304K from their analysis…needing over $60K in annual income to purchase in an area that used to be tough and is now a blossoming pocket of homes. Makes for an interesting read…and then click on the similar article about San Francisco to make you feel better about Sacramento!

Click here for the full article…