The Slippery Slope of Dual Agency

Many buyers deliberate seek out the agent selling the home to represent them. They believe they have a better chance of getting their offer accepted at a better price and terms. Some first time home buyers don't understand that they don't pay for their representation, the seller normally pays the commission. But is it a wise decision? While many agents can do dual agency fairly, it is often like being the divorce lawyer for both parties.

Representing both sides is legal in California, and the California Association of Realtors tries to educate buyer and sellers with the Agency Disclosure that defines the agencies. However, Dual Agency can be a slippery slope and not always in the best interest of both parties. In comparison to separate representation, dual agency involves a higher number of law suits.

Conflict of Interest. While it is legal, the Agent's interest may be the priority. Normally the listing agent splits the commission with the buyer's agent. In the case of dual agency, all of the commission goes to the listing agent. Some sellers will try to negate this by negotiating a lower commission for a dual agency situation, but it is worth the risk of stepping over the regulated agency boundaries.

In most cases, the transaction is also easier for the agent.  They spend less time calling and emailing, communicating and negotiating with another agent, who is busy and can never be reached. Also, the agent spends less time faxing or scanning forms to be signed by the other party.

Confidentiality. Since the agent is representing both sides and knows everything about both parties, confidentiality can be hard to maintain. For example, I had buyers once who found out they were expecting and reconsidering their decision to buy a two bedroom, when their adolescent would have to sharing a room with the baby. At the same time, the excited sellers were prematurely heading to another state to search for a new home.

Less Satisfied. Often both parties feel like the other party got a better deal. Even though the agent strives to please both parties, some little nagging devil sits on their shoulder whispering that the agent favored the other party and "they got a better deal."

So having your agent represent both sides, may not always be in your best interest.

Virginia Hall
ABR®, CRS®, e-Pro, GRI®, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585
DRE#01409760

Can't Eat Your House: Buying After a Short Sale

With the economy the way it is today, a lot of people are getting in the mindset of why try to pay the mortgage when you are losing the house anyways. For some people this may be true. You can't eat your house.

However, for those who are able to keep up your house payments and undergo a short sale, your credit will not suffer as much and you will be able to buy another house sooner.

While the average short sale seller has to wait 2-3 years to buy another home, there are some home loans out there for certain sellers, who can buy immediately based on the criteria below:

• have not missed a house payment
• can prove steady employment for the last 2 years
• have a credit score at least 640

When I looked at these criteria, I wondered who might qualify since most banks require the short sale sellers to have legitimate financial hardship to qualify for a short sale. Financial hardships normally include job loss, divorce, unaffordable rising interest rates, job relocations, health problems, etc..

However, there may be circumstances where some people who are still making their house payments such as in the case of a job relocation or going through a separation or divorce, where financial hardship is imminent, but they still manage to squeak by.

For those who fall under the criteria above, there is now an alternative home loan program to consider after rolling over one those bumps in life. For more information contact me.

--Virginia Hall
ABR, CRS, GRI, SFR, e-Pro
Coldwell Banker Residential Brokerage
www.VirginiaHall.com
Virginia@VirginiaHall.com
Direct: (619)258-8585

Five Tips to Buying a Short Sale Home

Buyers are throwing up their hands in frustration. "Don't show me any more short sales!" Buying a short sale home is not for the faint of heart.

When short sales first started, people would ask if a short sale was short in time. No, actually if you have ever heard the word Oxymoron and wondered what it means, Short Sales are the perfect example of it (combined words that are contradictory).

However, with realistic expectations patient buyers are getting homes up to 10% lower than the comparable homes. Keys to successful short sales include:

1. Realistic Expectations. Expect lengthy escrows 3-6 months on average. Once the buyers and sellers agree on a price and terms, then the home should either be placed in the "Contingent" or "Pending" status on the multiple listings. This will signify that there is an accepted offer awaiting the bank's approval. The bank must approve the short sale as well as all the terms of the offer. If the seller refuses to choose one offer, and sends all offers to the bank, then it is best to continue to shop because someone else may outbid you. Remember, while most of the time, the banks will approve the short sales, there is no guarantee.

2. Short Sales in Progress. Seek out homes that have already started the process. In the past, if the home had been on the market a long time, everyone always wondered what was wrong with it. However, while short sales wait a long time for the bank to approve the offer, this question goes out the window. Those homes that have been on the market a long time may be just what the buyer is looking for. If a previous buyer changes his mind and the approval has been started, a new buyer may be able to slip into their place, shortening their approval times to 2-3 months.

3. One Loan Homes. Seek out homes with only one lender to get approval from. The more liens a home has on its title, the more complicated and time consuming the process is.

4. Closing Cost Credits. Buyers should ask for the seller to pay up to 3% of their closing costs. In return, the buyers should expect to pay for items that many short sale banks are refusing to pay for including: Termite work, Home Warranties, Repairs, costly second liens and HOA dues in the rear.

5. Vision. When shopping for a home, buyers need to have vision. They need to see the potential in a home. Finding a run-down home in a good neighborhood, can make a lot of sense. There is less competition for the home and the buyer can remodel it to their liking. If the work is more than carpet and paint, a renovation loan can be used to purchase the home. While these loans have a higher interest rate, the lower price can offset that.

So don't give up hope on short sales, they take longer but under the mess is the potential for a beautiful home.


--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585 begin_of_the_skype_highlighting (619)258-8585 end_of_the_skype_highlighting

San Diego Home Affordability Index Improved

When someone says to me, "that house just isn't worth what they are asking for" and the house is well below the comparable home prices, my first question is, where are you from originally? Not meaning this in a bad way, but when I hear that comment I know they are from a different part of the United States.

Yes home prices in San Diego County seem outrageous to people relocating from Michigan, Florida, and even from people as close as El Centro, where the home prices are up to a 1/4th of the price. However, I quickly remind them that the prices in San Francisco and New York are a lot more and it rains twice as much." I also remind them that they are paying for the weather here in Sunny Southern California.

According to the Union Tribune San Diego's housing affordability has actually improved in the third quarter. Data showed that 51.5% percent of households making a median income of $75,500 can now afford to buy a $325,000 median priced home. The affordability index has improved since May, when San Diego ranked 11th with only 46.6% able to buy.

Looking at the history of the National Association of Home Builders Housing Opportunity index in San Diego, we have come a long way from the fourth quarter in 2005, when San Diego ranked 7th with only 3.6% able to afford the $500,000 medium priced home and to the other extreme last year when San Diego ranked 25th with home prices at $270,000.

While San Diego County is now ranked the 12th least affordable market in the United States, we are still considerably more affordable than New York, who ranked the least affordable with only 22.6% able to buy a $435,000 median priced home, and San Francisco ranking second with only 28% able to afford the $600,000 median priced home.

With California having 7 of the top 10 least affordable cities, you are probably wondering where is the most affordable housing. Drum roll please.....Kokomo, Indiana was the most affordable with 96.1% able to afford the median price home $83,000 with a median household income of $61,400. However, remember while San Diego has an average rainfall of 7" compared to Kokomo with an average 40" and not to mention the average snow fall of around 22".

With low interest rates and the risk of prices falling behind us, economist, David Crowe, fears that San Diego may grow less affordable in the future; however, he also sees rising prices ironically representing a sign of a better housing market to come.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

First-time Home Buyer Tips

The following suggestions will help the First-time Home Buyer to make the most of the market:

Find a Real Estate Consultant. The First thing to do is seek out the free advice of a Realtor. You will want to find just one Realtor that can advise you and represent your best interests. You will want a Realtor who is willing to answer questions and educate you on the process. It is not uncommon to sign a Buyer Broker Agreement with an experienced committed Realtor. The agreement outlines the agents' responsibilities, as well as the buyers'. Figure out what is the best way to communicate--be it email, phone, or text.

Discuss Affordability. One of the first people you should talk to is a lender or mortgage broker. They can help you see where you are and where you need to be. How much have you saved for a down payment? How much can you budget to spend each month? Will you need to factor mortgage insurance into their monthly payments? What can you expect to pay in property taxes? Working through questions up front can help you get a better handle on what you can truly afford. Also do not make any large purchases on credit until after the close of escrow to avoid changes in your credit scores.

Discuss Home Ownership Goals. What are your goals and why do you want to buy? How long do you plan on staying in the home? What are your needs in the future? When you first start it is easy to look for your dream home and when you are first entering the market you may need to lower your expectations. Remember that you need to just get on the bus and work your way up as your income improves and you grow your equity.

Match Your Expectations to Your Price Range. Many first-timer home buyers live in small apartments, but when buying will not settle for anything but a house. Understanding that you are at an entry point in the marketplace, and that you are not likely to get all the bells and whistles with your first home in a price range that you can comfortably afford.

Familiarize Yourself with Starter Home Inventory. Begin looking at your market with a fresh eye toward affordable entry-level homes, including properties that may not have been considered before. Falling prices have opened up some areas that have been out of reach to first-time buyers for years. Knowing the inventory inside out will help your expectations as to the type and condition of homes that fit your price range. Once you have a good feel for the homes in your price range, then you are ready to buy.

These are the keys to a successful First Time Home Buyer purchase.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

To Remodel? Or Not to Remodel? That is the Question

I am often asked "What should I do to prepare my home?"

1. Clean & Declutter. While most people have cluttered closets and dishes in the sink, now is the time to show the home at its best. The number one thing that I tell people is to thoroughly clean and declutter your home. Everything should shine. This is the cheapest most effective way to prepare your home.

If you are uncertain at what level to thin out your belongings, you can visit some open houses to get an idea. All counter tops should be cleared and closets should be organized.

If your rooms are crowded, you may want to remove over-sized furniture,opening up the room giving it a more open feel. Some people rent storage containers or storage units that they can move many of the items that you are not ready to part with.

Clean out the closets. When people look in your closets, they will be looking for space. If you are squeezing in your clothes, like most of us, it is time for thinning out the closets and making a run to the Salvation Army.

Don't forget to clean the carpet, windows, and the blinds. Buyers get distracted by personal photos, so best to pack them up.

2. Curb Appeal. While you are decluttering the inside, look at the outside and see if there isn't a bush that needs some pruning. Pull up the weeds and throw down some decorative bark in between bushes to give the yard a fresh look.

Right before the For Sale sign goes up. Add some color near the front door. Plant a hardy colorful plant that will make it through the next couple of months.

3. Got Pets? This can be a challenge. You will want to have all dogs outside, if possible or take them for a walk while the home is being shown. If your house has a pet or a cigarette odor, and you do not have the money to replace the carpet, then you will want to keep windows open and try a plug in deodorizer. I found some spray deodorizers that can help including Smell Be gone (http://www.smellsbegone.com/) and Fabreeze. Also if you have litter boxes, they must be cleaned out daily.

4. Paint. If it has been a few years since you have painted, it may be time for a fresh coat of paint or touch up. Definitely, patch up any holes and go with a neutral color. For those of you have been watching HGTV, beware of bold colors. When you prepare a home to sell, you should be thinking gentle colors with your furnishings and decor being the contrast.

5. Remodeling. Many people talk about remodeling their kitchens and bathrooms before listing. If you are not planning to move for a couple of years, this is fine. However, if you are doing in hopes of getting more money for the home, you may be disappointed. While remodeling kitchens and bathrooms definitely helps a home to sell faster, you may not recoup the money you put into it. According to most Cost to Value Reports, the average return on the investment for a minor kitchen remodel(average $25,000) is 83 percent and for an average bathroom remodel (average cost $18,000)is 78.1 percent. A lot of hassle and money to invest, when you may not recoup the full cost.

So when preparing to sell your home, it is best to keep it simple with these tips.

--Virginia Hall
Coldwell Banker Residential Brokerage
DRE #01409760

Relocation Costs

Considering a move to a new city? Before you pack your bags and hire a moving company, be sure to research the potential price tag of relocating. It may cost more than you think.

Cost of living can vary greatly from town to town, so be sure to do some research before taking the plunge. Better Homes and Gardens recommends browsing the local newspaper for grocery promotions, ads, and other local news to track costs so you can put those figures into a worksheet and determine the income you might need. While several cost-of-living calculators are available on the Internet, they provide only general figures and don’t take into account specific housing needs.

Be sure to ask a Certified Residential Specialist in your target area about “hidden” homeownership costs, such as recreation fees, trash collection and community services. Try to obtain a one-year sampling of utility bills for the type of home you’re considering. What can you expect to pay for telephone, cable TV and Internet services? Will you have your own septic tank and water pump, or will the community provide water service?

There are a host of other expenses to consider. What taxes will you pay? Higher taxes may mean better schools, libraries, trash collection and other community services, while lower taxes could mean higher expenses for these services. But it pays to have all the facts before you make a move.

Likewise, transportation and parking costs often are higher in larger cities, while a small-town commute can mean a short walk or bike ride. Also, gas prices can be more costly in some areas than in others.

Leisure time costs can add up as well. How much more will you have to pay for tennis or health club memberships, adult education classes and golf course fees?

Moving away from family and friends can mean more frequent phone calls and trips back home, so be sure to allow for those additional costs as well.

Provided by CRS--Your Home June 2010