As a Central Coast Real Estate Broker I often get asked to do some rehab work on investors’ properties to ready them for sale. This year has been no exception. I started the year with a property built in the late 60s, and like most 50 year old homes it needed some updating: new counters, windows, plumbing fixtures and general cleanup and painting. A real surprise was the pipe from the house to the city sewer main which the prospective buyer had “scoped” by a local (and respected) plumbing company. They came back saying the pipe from the house to the sewer main was bad, de-laminated, with massive root invasion and just had to be replaced. Their plumbing company gave us an estimate of over $20,000 to replace the line. I hired an engineering company and they offered to change the line for a third of that price. The real kick in the head was we opened the old line… and there was NOTHING wrong with it! I was there when the backhoe uncovered it and it was it was in perfect condition. No collapsed or broken sections and water flowed at full force through the entire pipe! I am telling you this so you know that you must be there when they “scope” the line and see it for yourself. There are some major plumbing companies that are preying on the public and during a sales transaction most sellers want to please the buyers. Do not just trust a company just because they are large, have a fancy truck or show you a video from who knows when. Continue…
Broker Assoc. ABR, RSPS BRE# 01417114
(805) 698 - 3770
Record 57 Million Americans Living in Multi-Generational Households
Source: Wall St. Journal
A record 57 million Americans—or 18.1 percent of the population—lived in multi-generational households in 2012, according to an analysis of Census data by the Pew Research Center. Overall, the share of Americans living in multi-generational households continues to climb, and the recession accelerated the trend. Making sense of the story The number of multi-generational households has doubled since 1980. The arrangement of having multiple generations together under one roof spiked during the Great Recession of 2007-2009 and has kept growing in the post-recession period, albeit at a slower. Young adults ages 25 to 34 have been a major component of the growth in the population living with multiple generations since 1980—and especially since 2010. Continue…
Over the last few years while the bubble was bursting and everyone’s home value plummeted, the issue of how to place monetary value on a home came front and center. Appraisers whose job it was to estimate those pre-bubble values were assailed daily for making a valiant attempt to keep up with market conditions. Prices were changing every day and almost daily they would have to adjust their mathematical formulae. It was a daunting task to say the least.
Fast forward to today’s Central Coast Real Estate Values and marketplace: The Feds, in their infinite (sic) wisdom, decided to set arbitrary conditions and limitations on how this industry was going to operate. Like most knee-jerk reactions by our members in Congress this was done with good intent but did not have the desired result. This law, The Dodd-Frank Interim Rule on Real Estate Appraisal Requirements hamstrung appraisers and stopped most, if not all home appreciation in its tracks. Since that time homeowners and Real Estate professionals have struggled, applying more realistic values based on supply and demand principles. They soon found other methods, such as using the CPI (Consumer Price Index), for instance, does not work for all homes in all neighborhoods. Every home is unique and as such has potentially different values. The only way forward was the willingness of the population to drag the market values up by offering over asking price or appraised values. The chart above proves that point. This method to increase values takes a firm resolve by the buyers who perceive value as what it is worth to them at a given time for a desired product. Home inventories are still very low and demand is still high which is driving values higher. Many of our transactions exceed appraised value based on this understanding, not CPI.
Every home is different and every transaction is based on perceived value. I could go on about quality, maintenance, curb appeal, staging, neighborhoods, schools and a myriad of reasons of what creates that perceived value in the public mind. However, the bottom line of price to value is still the 400 lb gorilla in the closet: Appraisers who were the first to feel the pain of this law are reluctant to allow their appraisals to rise too fast lest they get accused again of inflating the market. That lands us back to the question of what the sellers and buyers are supposed to do. Offering more than appraised value or listed value is one of the only possible solutions out of this conundrum but cash sales are becoming more common. In March cash sales almost doubled in Santa Maria, being 43 for March versus only 24 for February.
I was recently involved in a transaction where the actual value exceeded market value by tens of thousands of dollars. It was perceived by the buyer that the desirability of the home made appraised value a moot point. Obviously the banking/lending industry whose sole purpose is to protect investors prefers to base their decisions on appraised value. The banking industry is not happy about buyers and sellers taking these decisions out of their hands. This trend is allowing the market place to set the equilibrium, which in my opinion is a more natural and desirable state of affairs.
If you are thinking of buying or selling I recommend having a serious conversation with a Real Estate professional so you have a firm understanding of the market forces that drive values in today’s market. Trends like the one discussed in this article will definitely affect your buying and selling strategies and your Realtor or Broker is the one best equipped to give you timely advice.
We on the West coast know full-well how valuable water is. It has become a serious issue for all California Central Coast homeowners & residents. This month we would like to focus on what you can do for very low cost and what would provide the highest return on your investment.
Since spring has come and we look to our gardens and yards that are hopefully springing back to life, I wanted to start there. As you can see by the informative chart, our yards landscaping consume 57% of water resources. There is something wonderful about vast expanses of bright lawn. However, lawns require the most amount of water of any feature in our yards. As a Real Estate professional on the California Central Coast I would not tell you to remove all your lawn, since most buyers want and desire a lawn area, but I would recommend that you reduce the size, use water retaining fertilizers, increase mower height to reduce evaporation, follow a reduced water schedule, and make sure any runoff is minimal. The second place to focus your water-saving efforts is to install drip irrigation in your flower beds. Watering with drip emitters, micro spray heads or weep hoses delivers water efficiently and economically. Why water weeds?…focus on giving each plant exactly what it needs to prosper. Using drip is very beneficial to your landscaping. My third suggestion is to use a mulch in your flower beds to reduce evaporation and help to keep weeds down. There are many other suggestions on where to save water in your daily life such as turning off your faucet when brushing your teeth could save as much as 10 gallons a day or cutting your shower back to 5 minutes vs. 10 minutes could save 12.5 gallons a day. Continue…
The normal response to that question from a buyer or seller is typically “my agent.” The real answer is more convoluted than that and Real Estate Agency really should be better understood by the public. When you sign a listing agreement or an agency agreement with “the agent” you are actually hiring the Broker of Record.
The first item to understand is that the Broker of the company is whom you are hiring. The agent who you meet is typically an independent contractor hired by the firm and in most cases represents the broker. In the first few pages of documents you should see an agency agreement where it is clearly (or should be) explained how you as a buyer or seller are being represented. There can be a buyers’ representative, a sellers’ representative or a dual representation where the agent or broker provides services to both parties. Continue…