A Buyer’s Market is a Trading Up Market!

Falling Home Prices Provide Opportunities…

Falling home prices in the Truckee real estate market, including Tahoe Donner real estate and North Lake Tahoe real estate, provide great opportunities for confident homeowners looking to ”trade” up. Even though your home sale price may be lower, the smaller loss at sale can be compensated by greater savings at purchase.

If home prices dropped by 5%, here’s what it could look like if you decided to trade up:

Home Price = $200K                          Home Price =$400K
Sell at $190,000                                   Buy at $380,00
= $10,000 Loss                                    = $20,000 Savings

More now than ever we are hearing reports from Media spokespeople that “now is the time to buy real estate”.  If you are thinking about buying or selling your Truckee real estate, call us today for free advice.

Buyers You Can’t Time the Market – It’s Time Right Now!

Hindsight is 20/20 Vision…Insight for Buyers

Buyers often wait on the sidelines for a clear sign that the market has reached rock bottom before they make an offer on the property they’ve been eyeing. There are two problems with this strategy. Too many times, the “other guy” that was eyeing the same property makes his move and purchases the property before you. The other problem is that too often we don’t know that the market has hit the bottom until it has turned the corner and starts going back up. You can only know for sure that a market has turned through hindsight. In other words, you can’t time the market

A risk of buying in a slow market is that the value of what you buy might drop before it rises. Or, prices could stay flat for some time, which means that you won’t build equity unless you pay down principal on your mortgage. If you should have to move during a time when prices are soft, you might not be able to sell for the amount you paid. To decrease this risk factor, don’t buy for the short term. Buy for the long term.

Give careful consideration to how you finance your purchase. Stay away from mortgages that have short due dates and balloon payments. If the market in your area stays soft for longer than anticipated, you don’t want to be caught having to refinance at a time when your home might not appraise for the price you need to complete the transaction.

A benefit of buying in a soft market is that you have the opportunity to buy at a reasonable price. But the key is to buy the “right property” at the “right price”. As professional Realtors, we can help you determine if a property is a “good buy”. We will give you solid advice about the home you may want to purchase and we will help you throughout the entire process.

Sellers – Pay Attention to All Offers!

Selling Your Truckee Real Estate

Whether you are selling real estate in Truckee or somewhere else, selling a home can be an emotional experience because most sellers have a lot more than money invested in their homes. So, it’s understandable that sellers might be reluctant to respond to an offer that is for less than the asking price.

Most sellers have a difficult time being objective about their homes. Detachment is something sellers should strive for, particularly when the market favors buyers. To be a successful seller in a buyer’s market, you need to be able to put yourself in the buyer’s shoes. Ask yourself, if you were a buyer, would you pay the price you are asking for your home?

In a soft market, like we are currently experiencing in Truckee, buyers are prone to making low offers. The exception is when a listing is priced so competitively that a buyer recognizes a good deal and buys the property before others have a chance.

Some sellers might be inclined to inflate their asking price so that they will have room to bargain with a buyer. This is a risky strategy for serious sellers. In a buyers’ market where there are a lot of homes for sale, the best listings at the best prices sell.

The listings that don’t sell usually need price reductions to get them to a marketable range. If the market is trending downwards, this could mean selling for a lower price than might have been possible if the listing had been priced competitively to begin with.

Sellers whose homes are not competitively priced are prime targets for low offers. Even if your home is not badly priced, you could receive a lower-than-asking-price offer if market conditions are uncertain. Rather than being insulted by a low offer, sellers should view it as the beginning of a dialogue that could result in a sale.

Pay close attention to the buyer’s financial capability. Gone are the days where buyers could buy a home with little or no cash down, and without verifiable income. Today’s buyers are subjected to far more financial scrutiny by lenders than they were a year ago. Ideally, buyers should be pre-approved for the financing they need before they make an offer. If they are not, make sure there is a clause in the purchase contract that requires the buyers to apply for financing within a several days of acceptance.

There is more to an offer than price. The terms and conditions of an offer are very important as well. For instance you will want to be aware of the length of the contract (close of escrow), is the offer All Cash or is the buyer going to obtain a loan?, who pays for what?, what is included? – is the buyer asking for all of the furnishings, the snow blower, etc., what are the contingency release time frames? These are all important parts of the negotiations. Buyers and sellers often don’t know in advance what price they’ll accept until they’re in the midst of a negotiation.

If you aren’t satisfied with an offer, you will enter into the counter offer phase. The counter offer process can happen quickly or it can be long and tedious. These days, sometimes, we see counter offers going back and forth a half a dozen times. Be prepared to explore all options before letting a negotiation fail.

Selling in Todays Real Estate Market

Seller Considerations for Selling in Todays Real Estate Market

We’re in the midst of a challenging market in the Truckee and Lake Tahoe real estate markets. One of the most difficult realities for most sellers to face is that prices in their neighborhood may have dropped during the last few years. The trick is to price your home right for today’s market.

This is a great time to “move up”. In Tahoe Donner, for example, with today’s lower prices, it is an advantageous time to buy a newer, bigger or different house. As a seller, you may have to sell for less than you would have a few years ago. But, as a buyer, you may also pay a lot less for the next home you purchase.

When should you list? A seller usually has an advantage selling when there isn’t much competition from other listings. Listing before the busy summer months can put you ahead of the game. There will be more listings coming on the market in June and July and the vacation home market in Truckee is in full swing by August and September.

Thoughts about pricing: Today’s home buyers are extremely price-conscious. If there is alot of inventory to choose from, price will certainly be a big factor. A price that’s too high for the market won’t bring the desired result.

In the current environment, buyers are more cautious about what they buy because they know that the property they buy might drop in value before it starts appreciating. They buy for the long term and are less prone to make compromises.

Condition and maintenance: The condition of your property will be scrutinized more carefully in the current market than it would have been a few years ago. You can sell a property that has deferred maintenance. But, you will sell it more quickly and for a better price if you can repair defects and have the property looking great when it hits the market. If this is not possible, take this into consideration in your list price.

Price reductions: It’s difficult to hit the market price for a property if there haven’t been many recent sales in the neighborhood. If you miss the target and find that your home is priced too high, lower it as soon as possible. A price reduction is no longer a stigma in this market. Letting a listing sit on the market too long at a high price sends the wrong message to buyers and could result in a lower sale price if market prices in your area continue to decline.

When we work with you to sell your home we will provide objective opinions about pricing, repairing, replacing and staging. We want to help you get your home sold in the shortest amount of time for the most money. Give us a call at 530-550-5142.

Keller Williams Real Estate Update: April 2010

Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to provide real information on real estate.

Pricing Your Home for Todays Market

You Don’t Want to Chase the Market…
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Things change, kids grow up, jobs transfer us to new places and all of a sudden there’s a house that needs to be sold. In our current market, sellers are often asking us what they need to do to get their homes successfully sold. The first thing a seller must do if he wants to sell his house is to price it correctly for the market we are in. Many of the homes that aren’t selling are priced too high. According to MLS data, the median sales price for single family homes sold in Tahoe Donner during the 1st QTR,  dropped 35% from 2005 to 2010.

[Illustration: If sellers fall behind a market with falling home values, they can end up chasing the market down, because home values tend to fall faster than their price reductions].

If you need to sell your property now, it is important to price “on the money” right from the start. Chasing the market is not the position you want to be in when you are trying to sell your house. In other words, you don’t want to be two steps behind the market. You want to be slightly ahead and if you want your house to sell it should be priced better than your competition.

Pricing a home for sale is not an easy task for anyone. It’s tough to be objective because a house represents so many things to each person. It is often said that sellers are the last to know when it comes to the value of their home and buyers, on the other hand, are often ahead of the game. Buyers know the market better than most sellers and they are aware of the risks involved in todays market and they gauge the price they’ll pay accordingly.

When it comes to pricing your home for sale, we give you individualized and objective information so that you can make an informed decision. In addition to determining the right price for your property, based on an in-depth analysis of comparable active and sold listings, we will also create a marketing program for your home. We utilize Internet resources, print advertising, open houses, virtual tours and more. We work hard at creating a win-win opportunity for everyone.

The state of our current real estate market has provided some excellent opportunities for new buyers to invest in the Truckee real estate market and it can also be a good time for others, who already own, to sell and buy a bigger or different place while the prices are so good.

Our goal is to help you sell your home for the most amount of money in the shortest amount of time and to help find good investments for those who are ready to make purchases.

Truckee Home Buying Tips Revealed

Avoid Common Buying Mistakes When You Purchase Truckee Real Estate…

Most buyers want to make sure they get a good deal on the new home they buy and this is especially true if they’re buying in todays market. For a property to be a “good deal”, a buyer has to take a look at its condition, the location and the price they’ll wind up paying when the negotiations are all said and done! 

The first rule of thumb for buying a new home is to get very involved in the inspection process and to leave no stone unturned. The Home Inspection is very important. There are several home inspection companies in Truckee and Robbie and Karen Huntoon can make recommendations. The home inspector will spend several hours inspecting the home to make sure that all systems are in working order and that there aren’t any serious defects that might affect your decision to buy. Home inspections range in price depending on the size and condition of the home. We usually see price tags between $375 and $450. Most of the reports are easy to read and even go so far as to give estimates of how much it will cost to fix items deemed as defective. 

In addition to the home inspection, most buyers also hire a Termite or Pest Company to perform a Pest Inspection. The findings on a termite report are typically described as Section 1 and Section 2. Section 1 items are current and ongoing problems and, depending on your contract negotiations, the seller is usually responsible for taking care of Section 1 problems. Section 2 items are those that are not active but “could” become problems down the road. The Buyer is typically responsible for Section 2 items.

A recommendation that is often overlooked is to research the Permit History. A quick call to the Town of Truckee building department can reveal if there are any pending or expired permits. If you don’t check the permit history, you could find out later, when you want to take out a permit for a renovation, that there are expired permits for work that never received a final approval from the town’s building department. You might then be required to reinstate the expired permits and finish the job to the building department’s satisfaction before you can take out a permit for a new project. This could be expensive, take time and at the very least be a hassle.

Another item buyers ignore is the cost of Routine Maintenance. Some homes cost more to maintain than others. Well-maintained homes will be easier to maintain because you’ll have little deferred maintenance to repair. Ask the sellers for information about how much they pay per year for tree trimming, painting and servicing house systems such as the roof, furnace, and drainage systems. Also ask about utility bills in an average winter. All of these things will factor into the cost of owning the home.

The area that your home is located in is also an important, yet often overlooked, component to wise home buying. The home is not a good value if you find out a year later that the neighborhood is declining. Check out the neighborhood. Look at the other houses. If you are in a planned development with amenities, look at the amenities. You’ll get a pretty good idea and feel for the new place you are thinking about calling home!

A little homework in the beginning will have great pay-offs down the road. Take the inspection process seriously. 

Thinking About Listing Your Property?

Active Listings vs. Recent Sales

When we analyze the current active listings vs. the recent sales we can gain some knowledge about what people are buying and how a new listing should be priced.

Of the Tahoe Donner single family homes that sold during the month of February, 82% sold under $750,000. One half of those sales were under $500,000. It has been very evident in the last couple of years that buyers are looking for “the deal”. When it was a seller’s market, buyers would often be willing to step up their purchase price a bit to get the nicer house, location, etc. Now, given a choice between places, most buyers lean towards the lower price and are choosing based on price/value.

For sellers, the good thing right now is the inventory is low with only 71 single family homes on the market. This summer will most likely bring the number of listings to 150 or more. So, if selling is a consideration, we recommend getting your property on the market now (less competition). Pricing is important as always and if your home is value is teetering around $750,000 or so, we recommend trying to price it so it falls into the lower brackets. You want to have your house listed in the price groups where people are looking.

In the end, pricing too high historically leads to a lower selling price and increases your carrying cost of the property, i.e. the “cost of money”, taxes, and other expenses. Pricing well is the key, your property will sell faster and offers usually come in much closer to asking price.

We often hear people say they will hold onto their place until the market gets better. If you want to get the use out of your place then that is a fine strategy, but be prepared to wait 2 years or so. Even then don’t expect the value to skyrocket. So, holding the house to get a higher price is not a good plan if selling is what you ultimately want to do. Sell now and eliminate those carrying costs.

Getting Your Home Ready to Sell

Small Things Can Make a Big Difference…

The Truckee real estate market is no different than any of the others. Getting your home ready to sell is very important. Don’t be tempted to put your house on the market until it is in “show” condition. First impressions count.

There are basically two reasons why sellers go to the effort and expense to prepare their homes for sale. One is that it helps to bring a higher price. The other is that it usually results in a quicker sale.

It’s important to make cost-effective cosmetic improvements in order to realize an increase in profit when you sell. Major renovations made just before selling — such as completely remodeling kitchens and bathrooms — are not cost-effective. Although they improve the appeal of the home, you aren’t likely to recoup the full amount of your investment on a quick turnaround.

But other cosmetic improvements such as refinishing hardwood floors, replacing outdated floor coverings, replacing outdated light fixtures and painting are worth the money. The reason these improvements tend to bring a higher price is that most people have difficulty imagining what a house will look like fixed up. You do the fix-up work so that you don’t leave the sale of the house to chance.

If you leave the work to the buyer, fixer-uppers appeal to those who usually want a break on the price to compensate for the condition of the property. By sprucing up the property for sale, you appeal to a much broader audience. The more interest there is, the more chance there is for a sale at a higher price.

Buyers are less likely to reject a house that is “move in” ready. Often, with vacation homes, buyers don’t want to do alot of work before they move in.

Buyers are pickier than they were a year ago when home prices were rising quickly. Many buyers are concerned that prices are falling. So, their enthusiasm for paying higher prices regardless of the condition of the property has waned. Buyers are looking for value.

Sellers often resist spending money on a property they’re selling. This is particularly so in the current market, where they may have less chance of receiving multiple offers and a generous price. However, properly preparing your home for sale can give you an advantage in today’s challenging market.

How Mortgage Rates Move

Invest Now Before Rates Climb

What should you do? Be proactive. Act now before mortgage rates move up.