Is Real Estate Market Changing at California?

Recently, I had a conversation with a seller, “A for sale by owner” seller. I explained to him since all real estate agents are using the same data, same source and same MLS, we present you with the same price with 1%-2% variation. By the way,  you can see all this information in Vylla, Zillow, Redfin, and all other sites offering for free. You can guess or know the value of your home.

What makes the agents apart is their marketing, experience, and negotiation skill. Since, now, we are in a very different, slower market, selling your home for a maximum dollar amount possible, I offer my sellers three strategies. The seller will choose which one suits him or her because a seller’s reason to sell is different, so their marketing plans must be changed.

Stratgy#1: Go for a higher price and see if we can find a buyer who falls in love with your house willing to pay more for your home. "not recommended in this current market."

Strategy #2: List it at what Comparable Market Analysis “CMA” suggests and market it to the prospective buyers and agents.

Startegy#3: Lets listed slightly lower than fair market value and lets the bidding war started. I grantee we end up to sell your property over your asking price.

Here is my step by step marketing plan to tailor for each strategy:

MARKET ANALYSIS
Thoroughly inspect your home and outline all the essential features and upgrades
Determine the Fair Market Value of your property by doing a detailed written market analysis
Provide an estimate of the selling expenses to show your net proceeds
Execute a listing agreement authorizing us to market your property
Provide you with helpful information to make your property as marketable as possible
Recommend repairs and improvements to sell your property for the highest price
Schedule and supervise the home enhancement program, with your approval
Suggest additional enhancement and fixes based on buyer feedback

HOME MARKETING PLAN
Prepare and submit accurate information to the Multiple Listing Service (MLS) and other web-based marketing websites
Schedule a professional photographer to take “perfect” digital photos and virtual tour of your property for the MLS and Internet web sites
Color correct and enhance photographs of your property to maximize the impact of images on the internet and in print media
Install a high-security, computerized lock box to facilitate showings and track showings at your property
Display your home to our sales staff and other agents before listing for the most exposure
Immediately upon the listing, market, and display your home to hundreds of websites and buyer prospects
Promote your property by networking with Top Network Companies, salespeople, and active agents from other companies
Deliver your property information to top local and national agents the moment it hits the multiple listing service.
Promote your listing to over 2000 buyers that are actively searching on our customized buyer web platforms.
Install “For Sale” sign with personalized web page information specific to your property
Distribute a custom flyer outlining the key property features (optional)
Mail just listed letters to your neighbors
Reach more than 40 million potential buyers online monthly through property listing syndication, Search Engine Optimization, and Search Engine Marketing. Your listing will be showcased on thousands of consumer real estate websites. The following are just a few examples: Vylla.com, Homeseekers.com, Yahoo.com, Google.com, Trulia.com, Realtor.com, Zillow.com, and many others
Submit property listing for “Featured Home” position on Realtor.com – the #1 consumer real estate website with 7 million unique monthly visitors
Create and host a video of your property to be featured on Facebook, Utube
Advertise and host consumer Open Houses at the property (at seller’s convenience, optional)
Create buyer specific marketing in a specialized format

COMMUNICATION
Send you a printed copy and a link to the MLS presentation for your approval
E-mail you links to all the Internet presentations for your consent
E-mail you direct feedback from other agents on all showings
Call or meet with you weekly or bi-weekly to report on the activity and review market conditions
Provide regular updated written market reports showing the latest market activity
Continually review our marketing strategy and adjust as needed to get your home sold
Carefully review and present all offers for your consideration
Use unique and specialized sales approach in negotiations to optimize the overall outcome of your sale
Qualify the prospective buyers to be sure they can purchase your property.
Qualify potential buyers (if they are working with our office or team) before any written offer
Prepare a strong response or acceptance to create a reliable transaction that will close on time with no surprises

TRANSACTION MANAGEMENT

Manage all the details of your real estate transaction
Open escrow and review the escrow instructions
Arrange for the property, termite and other inspections
Supervise any agreed-upon home repairs.
Assist with all disclosures, including the seller’s TDS, supplemental

disclosures, smoke detector, water heater, and environmental hazard disclosures
Oversee the loan approval process to be sure your transaction closes on time
Coordinate and supervise the appraisal process to ensure the proper value.
Order the preliminary title report and review the condition of title
Order the HOA documents including the CC and Rs, budgets, by-laws and minutes of board meetings
Provide updated initial closing statements for your review
Stay on top of all other matters to be sure your real estate transaction closes on time and is hassle-free

SERVICE AFTER THE SALE
Arrange for your net proceeds to be wired into your bank account, (if you prefer)
Review the final closing statement for accuracy

What Is a California Transfer Disclosure Statement?

Please note, all forms in real-estate are important, but this one you may end up to defend it in court. My advice to you the seller is three things: Disclose, Disclose and Disclose. Experience shows, better to disclose even a minor thing then not to disclose. 

A three-page form is often used as supporting evidence in court when a buyer decides to sue a seller for non-disclosure. That's why it's very important that sellers fill it out correctly and disclose pertinent information, which may affect the buyer's decision to move forward with the purchase.

This form is self-explanatory, but there are a few tricky areas that some real estate agents do not fully understand. First, this form must be completed by the seller. An agent cannot complete this form for a seller under any circumstance. If you are unable to fill it out, ask a close relative to do it for you, but do not ask your agent.

Important Disclosures items

(see a blank copy of TDS here)

Date of the Disclosure: This is the date on which sellers complete the disclosure. If something changes between the date the TDS is completed and the property sells, prudent sellers will update the transfer disclosure statement.

Additional Disclosures: Sellers may want to make the buyer's future home inspection part of this disclosure by checking the appropriate box, in addition to including pest reports or any other type of inspection.

Occupancy: Sellers should indicate whether they are presently living in the property.

Section A- Systems, Appliances, and Other Items: The main thing you need to know about the transfer disclosure statement is that sellers are not warranting the condition of the home; sellers are simply disclosing its condition.

Section A is read across, not down, because some items to the right are associated with boxes to the left.

Sellers should check only the items that pertain to the home. For example, if your home does not have a sump pump or a gazebo, you would not check those boxes.

This section asks whether the home has a range, dishwasher, smoke detectors, rain gutters, pool, among other items. It also asks whether water is supplied by the city, a well, private utility, or another source. Check each box that applies. If you disclose that the home has window screens, for example, and there are no screens, the buyer might demand that you buy all new screens.

Moreover, if you do not know the age of your roof, do not make up a number. Also, do not say the home has 220-volt wiring if you are uncertain. If a buyer cannot connect a dryer because there is no 220 wiring, guess what the buyer may demand from you?

Remember to initial the first page.

Section B- Defects or Malfunctions: If you check "yes" to the question that asks if you are aware of any significant defects or malfunctions in any of the following items in Section B, you will need to describe them. Even if you do not think the defect is significant, you should probably disclose it anyway, especially if you have knowledge about it. Section B also puts the parties on notice that the home might not comply with government-mandated requirements.

Section C- Material facts and Special Questions: These 16 questions ask for a lot of information. Therefore, you should read each question carefully and think before answering.

For example, question 2 asks if there are features of the property that are shared in common. For instance, a fence is most likely a shared feature between you and your neighbor. If the fence was the subject of prior boundary disputes with your neighbors, you may also want to consider checking question 3 as "yes."

Question 8 asks about flooding or drainage. If rainwater puddles near your home, you should disclose that fact.

If you live on a busy street or your neighbor's dog barks, consider answering "yes" to question 11.

Buyers aren't likely to walk away from purchasing your home if they read that a dog barks or early morning trash collection trucks cause an occasional disturbance; they get upset, though, if those nuisances have not been disclosed.

Remember to initial and sign page 2 of the transfer disclosure statement.

Section D- Certification: From the seller, this certifies that smoke detectors are installed in accordance with regulations and that the water heater complies with applicable law.

Agent's Inspection Disclosure: If you are represented by a real estate agent, your listing agent will complete the agent's inspection disclosure. A buyer's agent will complete a separate section. Under no circumstance should an agent ever check the box that says there are no items for disclosure. There are always items to disclose.

Agents are often advised not to diagnose the problem or deficiency but should state it in simple terms. For example, if there are black spots in a shower, the agent does not know for certain if it is mold; therefore, it should be disclosed as black spots.

Note that real estate agents should disclose only what they observe. Agents are required by law to walk the property and note everything they see, even if it's a crack in the sidewalk.

Sellers sign page 3. Listing and buyer agents sign page 3. Buyers initial and sign the receipt.

Agents often try to submit additional disclosures near closing that are not required. The most common are the Water Heater and Smoke Detector Statement of Compliance and the Carbon Monoxide Detector Notice, which are included in the TDS on page 2 and are, therefore, redundant.

Call me anytime with your questions. 

562-715-8622

What’s in a Comparative Market Analysis?

Photo by Amir Zee, Antigua Guatemala

A comparative market analysis is a report, usually compiled by a real estate professional right before your house goes on the market. A CMA gives you information (sometimes referred to as “comps”) about houses similar to yours (in size, amenities, and location) that are either on the market, have sold, or were listed but expired (usually, because they were priced too high, and no one bought) within a reasonably recent time period. It's ideal to have your CMA look back no more than three months when the market is in transition and no more than six months in a more stable market.

A good CMA can tell you:

1. what homes like yours are selling for

2. how long it’s taking for them to sell, and

3. what their sale prices were in relation to their list prices (the difference between what people got for their house and what they asked for).

It’s especially important to pay attention to the prices of pending, rather than closed, sales, for the primary reason that they’re the most recent.

Moreover, if you have the opportunity (on your own or with your real estate agent), visit some comparables yourself to see how houses on the market compare to yours regarding price and other features.

Setting the right price from the start is among the most critical steps toward successfully selling your home. This requires taking a close look at what other houses are selling for to judge the relative value of your home. No matter how priceless your remodeled kitchen or finished basement is, the market sets a value, the price a buyer is willing to pay.

If you need a CMA, please let me know, I will be glad to prepare one for you. I am continuously looking for ways in which to improve the quality of my services offered to my clients; I would like to know what you think by commenting on this post.  

Legislature Passes Bill to Provide Equal Tax Break to Registered Domestic Partners

Assembly Bill 2663, carried by Assemblymember Laura Friedman (D–Glendale) and sponsored by Los Angeles County Assessor Jeff Prang, San Francisco Assessor Carmen Chu, and Equality California, has passed both chambers of the California State Legislature with overwhelming, bipartisan support, and has been sent to the Governor for signature.

AB 2663 would close a loophole that caused property owned by couples who had previously registered as domestic partners with cities and counties, but not with the State to be reassessed when the property transferred from one domestic partner to the other. This would otherwise have been excluded from reassessment. Previous legislation had extended this benefit to those who registered as domestic partners with the State. The Bill, if signed, will provide prospective tax relief to those who were reassessed between 2000 and 2015. Those eligible would still need to file with the County Assessor for the benefit to be applied and will have until June 30, 2022, to do so.

If it becomes law, AB 2663 will bring greater equity to the property tax system, help ensure that all have the same access to available benefits, and correct an unintentional loophole resulting from the piecemeal progress towards marriage equality.

What is Days on market" (DOM)?

Days on market" (DOM) is the number of days a listing is active in multiple listing services MLS before it enters into pending status. The chart above showing Long Beach, Belmont height area DOM VS entire MLS. As you see in 2018 homes stay in the market 20-40 days at 90803 zip code.

In general, Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.

As always, your comments and suggestion are appreciated. Let me know if I can provide you with any information you may need. 

Why Is a 1031 Exchange Important?

photo by Amir Zee, Long Beach, CA

Since 1921, U.S. tax law has recognized that the exchange of one investment or business-use property for another of like-kind results in no change in the economic position of the taxpayer, and therefore, should not result in the immediate imposition of income tax. The exchange rules permit the deferral of taxes, so long as the taxpayer satisfies numerous requirements and consummates both a sale and purchase within 180 days. Real estate investors and commercial real estate practitioners place a very high priority on retaining the current like-kind exchange rules.

So why is a 1031 exchange important? It allows real estate investors to defer paying capital gains and potentially build wealth through real estate investing.

Think about it this way. If you buy a piece of real estate for $100,000 and then sell it for $500,000, you are subject to paying capital gains taxes on your $400,000 profit. From that $400,000, you would lose, say, $120,000 to capital gains taxes. With a 1031 exchange, you might be able to use the full $500,000 to purchase one or more new properties and pay no capital gains taxes at the time of sale. The sale’s proceeds fund new investment properties, which in turn may generate cash flow and appreciate.

A primary and second home or a vacation home held strictly for personal use with no rental activity at all does not qualify for the tax deferral benefits of a Section 1031 exchange. While you’ll eventually have to pay taxes when you sell these new properties, you may be able to make your money go further using a 1031 exchange. These exchanges matter because they can help real estate investors create more wealth. Investors may use 1031 exchanges throughout their careers to buy bigger or better properties and potentially reap the rewards.

Please be sure to subscribe and visit for the future topic. Your questions and comments are welcome. I try to respond weekly.

First-Time Homebuyers Check List

First, let me apologize for a bit longer post today, but I think you will agree, the information eaxplained is helpful. 

Are you gearing up to buy your first place? A first home can seem stressful and overwhelming, and it isn't without its share of potential pitfalls. If you're aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence. For many people, a home is the most significant purchase they will ever make, but it need not be the most difficult.

You Must Know What You Can Afford
As we've all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford (or are comfortable with paying) are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on.

Don't forget significant expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay, and you'll know how much you can spend on your new home each month. When calculating this figure, use a mortgage calculator to research current interest rates. This will give you an estimate of what your total mortgage payments will be.
Next, tailor your house-hunting to properties in your financial neighborhood. If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses or increasing your income before you even start looking. (Read "Six Months to a Better Budget" and "Get Your Budget in Fighting Shape" to learn more.)

Complete Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. (Get the details in "Pre-Qualified Versus Pre-Approved – What's the Difference?") If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need, or that it's only willing to give you terms that you find unacceptable.
Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to die, you may have to forfeit any deposit or earnest money you put up when you entered into the contract. (To learn more about your options, see "Financing for First-Time Homebuyers.")

Estimated Additional Expenses
Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike your renter days, you'll be responsible for paying property taxes, ensuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).
If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing, because you'll be part of a homeowner's association, which collects a couple of hundred dollars a month from the owners of each unit in the building in the form of condominium fees. (For more information, see "Does Condo Life Suit You?")

Not To Be Too Picky
Go ahead and put everything you can think of on your new home wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated décor, make some repairs to the home, or forgo that extra bedroom.
Of course, you can always choose to continue renting until you can afford everything on your list – you'll have to decide how important it is for you to become a homeowner now rather than in a couple of years. (For related reading, read "To Rent or Buy? The Financial Issues - Part 1" and "To Rent or Buy? There's More to It Than Money - Part 2.")

Expand Your Vision

Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs concerning the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away.
Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you. (For more information on renovating, read our related article "Fix It and Flip It: The Value of Remodeling.")

Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or spend several thousand dollars on staging. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always seek a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

The Important Things
Don't get a two-bedroom home when you know you're planning to have kids and will want three bedrooms. Don't buy a condo just because it's cheaper than a house – if one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't create an understanding that will be a significant strain.

Do the Inspection
It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast – before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a grave financial mistake.

Choose your Agent
Once you're seriously shopping for a home, don't walk into an open house without having a real estate agent or broker (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can see how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

Consider the Future
It's impossible to predict the future of your chosen neighborhood correctly, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Ask Questions:

What kind of development plans are in the works for your neighborhood in the future?

Is your street likely to become a major street or a favorite rush-hour shortcut?

Is there talk of a bridge or a highway to be built in your backyard in five years?

What are the zoning laws in your area?

I offer an hour free consultation in Long Beach for the first-time buyer, Please request your free and no obligation consultation meeting now.

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