Revitalizing a home in Belmont (with background music)

Many of you saw this home on our web page and at the open house. Several homes in the Hallmark area of Belmont have languished on the market for months without selling and everyone has been asking us how we sold our listing so fast. Well, here’s the answer in video form. Obviously we had to price the home attractively but we also had to add value. Preparing a home for sale takes a lot more than staging. Thanks to a cooperative seller, we transformed this home in only a few weeks and the transition was phenomenal–then we listed and sold the home in a week. Take a quick peek at this short video where we show you before and after results–then call us to transform your home for sale.





Download Revitalized Belmont Home

Real Estate Bidding–Are you a Bidder’s Fool?

As part of our Real Estate REVEALED series we answer another Frequently Unasked Question Unasked3 in our latest Podcast—how do you know when a home is priced right? In addition to this latest Podcast, we’ve added a web page that makes finding the entire series of archive issues in one place.

 

Podcasts

Drew & Christine Morgan

"Helping People Make Good Decisions"sm

(650) 508-1441

Click the mic for the web version of this page.
Thanks for visiting our Podcasts. Each week we offer a housing market update podcast on our blog at BeautifulMountainBlog.org as well as our series titled "Frequently Unasked Questions" where we tackle questions buyers and sellers should be asking but frequently aren't, and "Real Estate Revealed" where we discuss industry insider information. Enjoy and don't forget you can subscribe to our podcast stream to be automatically updated with any new releases by clicking on the orange RSS icon.

Pitfalls of Dual Agency

The Big Broker Myth

Staging your home for sale

(opens in a Media Player)

Note: For detailed market discussion visit our blog at:

BeautifulMountainBlog.org

Drew and Christine Morgan

(650) 508-1441

dmorgan@morganhomes.com

"Helping People Make Good Decisions"sm

Download Overbid

Median Price Methodology–What’s Your Home Really Worth?

Unasked3 As a frequently unasked question and part of our real estate REVEALED series, we delve into how the median price is determined and reported for your city.

Listen right here or subscribe to our Podcast by clicking on the upper left RSS icon.

This graph illustrates the appreciation for homes which sold in the second quarter of 2008 and had previously sold within the last ten years.

Clearly the best way of determining what appreciation is for a particular home is to watch the home trade hands in an arm’s length transaction several times over many years without any major improvements (other than maintenance).

The Case-Shiller Home Price Indices Methodology comes closest to achieving this on a macro level. However there are inherent limitations in the methodology they employ. We’re not here to find fault with their method of data collection and interpretation—clearly it is as good as it gets on a macro-level—but for interpreting micro or niche markets it uses too broad a brush to paint an accurate picture of a particular area’s housing landscape. Here’s why:

·         It lumps many micro and niche markets into one large metropolitan area and cannot effectively differentiate smaller market areas since it relies on huge volumes of data in order to arrive at meaningful results.

·         It uses an algorithm to exclude all old sale pairs to support their assumption that older home sale pairs must have been remodeled. This has the unwanted effect of throwing the baby out with the bathwater, and discards very valuable information on repeat sales pairs which have not been updated over long periods of time.

We have overcome these limitations by being able to use the "sales pair" methodology and exclude homes that have been remodeled based on our personal experience in seeing virtually every home that has sold. In fact some of the home sales used are homes we’ve personally sold in the course of our 17 years in business.

However, due to the relatively small market sample our data will be more vulnerable to isolated sale anomalies but to a certain degree that is mitigated in that 100% of our data is usable—and local.

  • We can also go back to homes that sold recently which have not traded hands in the last 30 years and still included them in our study so long as we can verify they have not been remodeled.
  • We can also distill this information down by neighborhood.

Essentially we have watched the same sales pairs sell and can analyze the empirical and statistical data to offer a sound assessment of a particular areas value trends.

Here are some interesting facts–for 2nd quarter 2008 sales:

·         58 homes sold during this period

·         22 had not sold within past nine years and were excluded

·         11 were remodeled and excluded

·         25 were not remodeled and were used for our study

·         Only homes sold that were purchased after 2005 have sold for less than what they were purchased for.

Of those seven sales after 2005:

                1 was a foreclosure

                1 was a short sale

                1 was an REO (bank owned sale)

                2 non distressed properties showed an average of 11% appreciation

                1 non distressed property lost 15%

                1 non distressed property lost 20%

               

The homes that were selected had sold in prior years and had no extensive remodeling performed. Each sale pair represents the best analysis presently available for tracking the same home exchanging hands over time. Several recent distressed sales have perhaps skewed the numbers in that they were foreclosures selling at what was owed, not what it might have been worth. Nevertheless the data is for the most part reliable and illustrates that only people who overpaid for homes from 2005-2007 may now own a home worth less than what they paid for it as a result of the downturn.

Download Median.mp3

August 2008 Housing in Review–San Mateo County

The big news in August was the Government take-over of Freddie Mac and Fannie Mae which has had the desired effect of bolstering mortgage backed securities and lowering interest rates. What it ends up costing us all is yet to be determined but suffice to say it’ll probably be worse than if we suffered through a protracted catastrophic collapse of the United States’ financial markets.

Listen here to the audio version.

Looking at San Mateo County’s housing activity for August you get a glimpse at the impact the housing downturn has had and where it may be headed.

This graph shows the correlation between the number of homes for sale and the median price:

  • Median Price is down a statistically insignificant amount–$5K from July to $795,000. Down 16.3% from August 2007
  • Belmont and San Carlos down around 4% year over year
  • Menlo Park posts a ½ percent increase in the median price.
  • Closed sales down from July’s 428 to 376 in August–last August there were 366 sales
  • Inventory declines again–third month in a row from 1886 in July to 1773 in August. Up 14% over August 2007 at 15544
  • Month’s supply of home rises only slightly to 4.7 from 4.4

Download August.mp3

Making Your Home “Market Ready” For Sale

You’ve no doubt heard the term “staging” a home but there’s a lot more to getting your home ready for sale than just bringing in plants and re-arranging furniture.

The terms “staging” typically implies a professional designer has been retained to make a house look like a model home, yet there’s a lot more that goes in to staging a home. Often times, a home will need a complete facelift, as is often the case with trustee sales. Vacant homes always show better professionally staged, and even homes with modern amenities can use some detailing.

We break down staging into two categories. 1) Vacant homes for whole house staging and 2) Occupied homes for staging augmentation. Professional designers are akin to artists and often prefer a vacant home to an occupied one since they are beginning with a blank canvas, or palate if you will.

But getting a home ready for the final touches of furniture, plants and pictures often requires weeks of renovation. We coordinate with our design consultant to first identify our market segment–the buyer who will likely purchase the home. Then we take instructions as to what color scheme to employ and begin the process of renovation or upgrades. Some of the typical enhancements include:

·         Fresh Paint

·         Refinished hardwood flooring

·         New carpeting

·         New bathroom or kitchen tile, granite or other contemporary materials

·         Kitchen cabinet re-facing or replacement

·         Bathroom fixture replacement

·         Hall and entry lighting enhancement

·         Landscaping and fresh lawns

There’s no need to be anxious about the renovation process. As your “project manager”, we coordinate all enhancements with our professional team of property enhancement experts; from tile people to painters, handyman, hardwood floor experts and carpet installers.

The video you are about to see highlights several homes we’ve staged for sale and shows before and after images. If ever the saying “A picture is worth a thousand words” rings true it’s in this short video, enjoy.

 

Podcast-Making Your Home Market Ready for Sale

PODCAST SERIES-VIDEO

You’ve no doubt heard the term “staging” a home but there’s a lot more to getting your home ready for sale than just bringing in plants and re-arranging furniture. Rssjpg_2

The terms “staging” typically implies a professional designer has been retained to make a house look like a model home, yet there’s a lot more that goes in to “staging” your home for sale. Often times, a home will need a complete facelift as is often the case with trustee sales. Vacant homes always show better professionally staged, and even homes with modern amenities can use some detailing.

We break down staging into two categories. 1) Vacant homes for whole house staging and 2) Occupied homes for staging augmentation. Professional designers are akin to artists and often prefer a vacant home to an occupied one since they are beginning with a blank canvas or palate if you will.

But getting a home ready for the final touches of furniture, plants and pictures often requires weeks of renovation. We coordinate with our design consultant to first identify our market segment—the buyer who will likely purchase the home. Then we take instructions as to what color scheme to employ and begin the process of renovation. Some of the typical enhancements include:

·         Fresh Paint

·         Refinished hardwood flooring

·         New carpeting

·         New bathroom or kitchen tile, granite or other contemporary materials

·         Kitchen cabinet re-facing or replacement

·         Bathroom fixture replacement

·         Hall and entry lighting enhancement

·         Landscaping and fresh lawns

There’s no need to be anxious about the process of these renovation. We coordinate all enhancements with our professional team of property enhancement experts from tile people to painters, handyman, hardwood floor experts and carpet installers.

The video Podcast you are about to see highlights several homes we’ve staged for sale and shows before and after slides. If ever the saying “A picture is worth a thousand words” rings true it’s in this video—enjoy.

                              

Download market_ready.m4v

You’ve no doubt heard the term “staging” a home but there’s a lot more to getting your home ready for sale than just bringing in plants and re-arranging furniture. Podcast

Listen your our Video Podcast to see and hear more…

Download market_ready.m4v

Frequently UNASKED Questions–Dual Agency REVEALED!

We begin our series—Frequently UNASKED Questions in a real estate transaction starting with one of the most misunderstood aspects—dual agency. Unasked3

Many web sites offer a link to their frequently asked questions and usually they’re pretty helpful since chances are your questions will be in the top ten. But what about the questions you don’t know to ask?

If you are new to buying or selling a home you may not know the most important questions to ask. We’ve started a series called Frequently Unasked questions to help shed some light on questions which should be asked, but frequently aren’t.

Download the complete Podcast (Download dual_agency.mp3) or subscribe to our feed. We discuss the intricacies of dual agency in a real estate transaction including the potential pitfalls and limitations.

If you’re considering having an agent represent you in a transaction you should stipulate up front how to handle dual agency if it crops up. Most are aware that dual agency happens when an agent represents the seller and a buyer in a transaction but few know that two different agents can still create a dual agency relationship.

What to expect in this Podcast:

·         Explaining dual agency.

·         How one elects or creates dual agency.

·         How to know if you are in a dual agency transaction.

·         How it works—what to watch out for.

·         To whom your agent has a fiduciary duty.

We begin our series—Frequently UNASKED Questions in a real estate transaction starting with one of the most misunderstood aspects—dual agency.

The information contained in this blog and Podcast is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Housing Reform Bill Ramifications

Housing reform and what it could mean for you. In our three part series on the housing reform bill we discuss three major changes that could impact your decision to buy, sell or refinance your home. Congress

Part 1

Listen to this short introduction in the player or subscribe to the full Podcast Download housing_reform.mp3

If you can imagine a ball of Silly Putty rolling down the aisles of the senate floor and how much unwanted stuff would stick to it, you can imagine what happened to the housing reform bill as it made its way through congress. Some of what was tacked onto the bill had nothing to do with the current lending issues at all.

At over 700 pages long, it will take awhile to discern what the ramifications will be in the housing or financial markets, but suffice to say we’ve found some interesting changes in existing laws that will have an unexpected, and in most cases, unwanted result. We figure the government wanted to find a way to fund some of these reforms so hang-on…

Most important to remember is the deadline—December 31, 2008. That date is important in two scenarios—buying or refinancing or purchasing a rental property. The first scenario we’ll deal with is purchasing a new home or refinancing your current residence. As it stands, the conforming loan cap which was $417,000 has been raised in high cost areas to $729,750 (125% of median home value for a particular area) will drop back down to $625,500 for the foreseeable future after December 31, 2008. Why is it nice to have a conforming loan? Rates are cheaper since these loans fall under Fannie Mae and Freddie Mac guidelines and are easily sold as securities in the secondary market. What if I’m buying a home for more than $729,750? It doesn’t actually work that way. The maximum loan amount for a conforming loan is $729,750. If one were to put down 20% the home value could not exceed $912,187 in order to stay under the cap—that’s hard to do in the Bay Area. But if you’re buying a home that costs over that amount you can still get a first loan (conforming) for $729,750 and a second for the difference—at a higher rate of course, or elect to make up the difference in cash. Another ramification is there may be some impact to the value of homes near the $912,187 threshold. For instance, a seller may choose to lower their price to $910,000 instead of $920,000 to attract more buyers. In this case the seemingly small differential in price is exacerbated when interest is calculated over 30 years at the higher non-conforming rate.

Here’s an example between buying a home that qualifies for a conforming rate vs. one which is just slightly over the limit.

Sale Price             $912,187              $920,000

Loan                      $729,750              $736,000

Rate                       6.625%                  8.250% (30 year fixed rate as of August 14, 2008)

Monthly               $4,672.67             $5,529.32             diff $856.65

Total interest     $952,410.93        $1,254,555.99     diff $302,145

Notice that the seller asking just slightly over the price threshold of $912,187 will cost the buyer $856.65 per month for a grand total over 30 years of $302,000! Which house would you buy? Based on this example, it’s clear to see why sellers may choose to lower the price of their home to get under this price point if they are even remotely close to the $912,187 threshold. Of course buyers are free to make up the difference in cash to keep their loan at conforming levels.

After December 31, 2008, when the conforming cap reverts to the $625,500, the choice becomes to buy a home worth less in order to qualify for a conforming loan–$819,375, or get a second loan at a much higher rate for the difference. Here’s what that would look like assuming rates remain unchanged and the buyer is purchasing the same home for $912,187. As compared to the above example, the monthly payment would go to $4788.35, or $115.68 more per month, and for a total of $41,641.65 more in interest over 30 years.

Clearly, buying before the year runs out has its distinct advantages—all other factors remaining equal.

Check back to read about the second reason December 31st deadline is importnat and read the second of our three part series on Housing Reform Bill HR3221.

MorganHomes.com

Real Estate Fees REVEALED!

Be sure and get our Podcast where we discuss how to negotiate the best listing fee with your agent and how our variable rate fee structure works. Download Fees.mp3


This chart illustrates the correlation between the price a seller receives of their asking price and the days their home is on the market. Note that the optimum time to sell a home is in the first 14 days. Listen to our complete Podcast for a detailed explanation on how pricing your home right can net you more for your home and reduce the fees we charge!