Three ways to invest in a home and not get hurt

Buy low, sell high. That's the investor's maxim that never fails. The trick is in knowing when to buy and when to sell. Investing in a home is never as easy or as quick to deliver returns as you may wish. We all want to ride the boom and avoid the crash. Here are three ways to buy a home safely.

Don't try to time the market

Some homebuyers believe that waiting for prices or interest rates to go lower is the way to buy a home. But there are two things wrong with that approach.

First, what is the market going to do? Unless you have a crystal ball, it's hard to know. Between 2006 and 2011, home prices fell an annualized 7.7% a year, or 27%, according to Fiserv Case/Shiller. Since 2011 and 2014, they've gained back that much and more on an annual basis.

Mortgage interest rates follow the U.S. Treasury yields. A quarter point rise in interest rates will cost you roughly $25 more per month. Lock in an interest rate with your lender and don't second-guess yourself. You'll have more peace of mind as well as a stronger negotiating position with the seller.

Buy within your means

Irresponsible lending led to one of the biggest recessions in modern history. Many homeowners lost their homes. You don't want to join them by buying a home that's bigger, more luxurious or pricier than you can reasonably afford.

Lenders are facing heavy government penalties for lending to unqualified borrowers, so they're insisting that lending standards return to historically safe and sustainable parameters.

That means you won't be able to pay half your income toward housing which was common during the housing boom. Today, you'll pay approximately no more than a quarter to a third of your gross monthly income for a home.

As your income improves, your home becomes even more affordable, allowing you to meet other life goals, such as adding new members to your family or starting a business of your own.

Buy long term

The longer you own your home, the more equity you build. Equity is the percent of ownership you have in the home. Think of equity as money you'll get back when it's time to sell.

To protect your equity, reinvest in your home to keep it in top condition. Then when it's time to sell, your home will be more appealing to buyers and sell for more money than similar homes that aren't as updated or attractive.

If you buy a new home every few years, you'll throw away thousands in moving and closing costs. It's far better to hold on to your first home for as long as you can. At some point, you can turn it into a rental property that produces income for you.

Choose the best home you can for the money and it will return the favor.


Source: RealtyTimes, Blanche Evans
http://realtytimes.com/consumeradvice/buyersadvice1/item/35078-20150521-three-ways-to-invest-in-a-home-and-not-get-hurt

Happy Memorial Day from The Mimi Wang Team

HAPPY MEMORIAL DAY EVERYONE!

MIMI WANG

Realtor® GRI, SRES, CDPE, HAFA, REO, CCRM,  CalBRE #: 01775814

Century 21 M&M and Associates

10420 S. DeAnza Blvd.

Cupertino, CA. 95014 

Cell: (408) 569-3808

mimi@mimihomes.com www.mimihomes.com 

2014 President Women’s Council of Realtors 

Santa Clara Valley Chapter

Fluent in English, Mandarin, Cantonese and Vietnamese

Tired Of Rending? It's Time To Buy A Home!

Your landlord is raising the rent. The neighbors are yelling at each other through paper-thin walls. You're a trembling jealous wreck because your best friends just bought a new home and it's awesome. Renting just isn't doing it for you anymore. Is it time to buy your next home?

The primary reason to buy a home is simply because you're ready. Homes are more affordable than they were 10 years ago, and you may be financially able as well as psychologically ready.

Perhaps you've taken a new job, married, or have a child on the way. You want more room for your family, or to live in a certain neighborhood close to work and other activities. To make your decision, you must weigh the pros and cons of renting VS owning so that you can achieve the lifestyle you want.

You know the typical arguments -- you have more freedom of movement as a renter but you build more personal wealth as a homeowner.

You can pick up and move when your lease is up, but the landlord won't let you have a pet and you can't choose the paint and carpet you prefer. As a property owner, your down payment and closing costs are significant, but it's yours to remodel or live in as you see fit.

When something breaks down, like the dishwasher, the landlord bears the repair or replacement costs. If you were in your own place, you'd choose whether to buy all new appliances so breakdowns won't be an issue for a few years.

As a renter, you just need to leave the place in the same condition as when you rented. As a homeowner, you're responsible for fixing, even if you've never picked up a wrench in your life. Or you'll have to hire a professional.

When you rent, you build equity for the landlord, not for yourself. When you own, your monthly mortgage payments go to reduce interest, which is income tax deductible. A portion of the payment goes to reduce the principal of your loan, allowing you to build equity ownership.



You may have to stay put for a while before you can sell your home at break-even or a profit, but you could also make enough to have a lot to put down on a bigger, better home down the road.

Renting was probably a good option while home prices were eroding during the recession, but affordability conditions favor buying now. In January 2015, rents rose 6.5 percent year-over-year, as much as home values increased for all of 2014.

While the population has continued to grow, housing units have not. New home building is two-thirds where it should be. With more new jobs added in April, competition for homes is heating up as renters are more able to afford to buy. Affordability has also been improved by near record-low mortgage interest rates for the last five years, and prime borrowing rates are still under four percent.

Yet many people are still afraid to buy, preferring the "security" of renting over the volatility of the housing market. If you're one of those, don't worry about short-term fluctuations and so-called corrections. Look at long-term trends -- that housing prices typically beat inflation, and that the tax advantages will more than allow you to profit from owning a home. And most important, that the home you buy will help you provide the surroundings you want for your household.


Source: Realtytimes, Blanche Evans
http://realtytimes.com/consumeradvice/buyersadvice1/item/35005-20150515-tired-of-renting-its-time-to-buy-a-home

Saturday Stats

Happy Memorial Day Weekend Folks! Great market information report from MLSListings Inc.


MLSListings Real Estate and Housing Update
(Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz Counties)

Silicon Valley Inventory Gains, in Time for the Busy Summer Season
April 2015: Inventory Grows, Prices Maintain

A boost to the Silicon Valley summer buying and selling season with a reported growth in inventory. The MLSListings real estate update for April 2015 shows continued growth in one of the country’s most watched markets.

This is the second consecutive month pointing to a more competitive selling season. All reported counties showed gains in April for single-family inventory from March, except for San Mateo which only reported a 3% dip. However, San Mateo saw a 34% jump in inventory when compared year-over-year in April, and Santa Clara shows a 44% increase over that same time period. Huge jumps in an area that has been struggling recently with low inventory.

This jump in inventory could be leading to another new trend in the market, leveling median home prices. When compared year-over-year we again see sold gains in median price for all counties, but the entire market has seen great improvement in median price since a year ago. When compared month-over-month, median prices flattened out for the second month in a row with Santa Clara County having a 3% increase, the highest of all reported counties. But this shouldn’t slow down Silicon Valley’s growth as the market saw increased closed sales, more total dollars sold, and shorter days on market in April.





Source: MLS Listings, Inc.
http://www.mlslistings.com/media-center/resources/-market-data-reports/udt_931_param_detail/177

PDF Printable Version

Ready, Set, Sell: 3 Strategies for Getting Your Home Off the Market Fast

It’s possible to expedite your home’s sale … if you’re prepared to face the risks involved.

Most sellers have a specific goal when it comes to their transaction: a quick sale and top dollar. But sometimes fast action doesn’t align with achieving the highest and best value.

There are multiple schools of thought on this subject, and the perspective varies not only with where you are in the country, but also by price point, neighborhood and even down to the block. When it comes to pricing and the search for a quick sale, it’s always best to get help from a local agent.

Here are some strategies you can use to get offers fast.

The theory of under-pricing

Under-pricing means that you go to market with a list price that is just below what the comparable sales in your area support.

You can’t pinpoint the exact market value of a home until it sells. But before you list, there’s always a range. If you price your house at or below the bottom of the value range, you are under-pricing the home.

In many West Coast markets this strategy will work effectively. Take this San Francisco home, for example: priced at $1.1 million, it received 10 offers and sold for $1.425 million in less than a week.

Risk alert: If you price your home low, this plan could backfire — big time. If you don’t know your market and this strategy doesn’t work, you’d better be ready to accept that list price.

Staging and market presentation

Well-priced homes that also show well sell quickly. If you want a quick sale, you need to invest some serious time in getting the house ready.

Prepping the home means taking out large pieces of furniture and personal items, painting, replacing carpets, finishing floors and even doing some minor renovations.

Enlist the help of a home stager and take their advice, and you can be assured a quicker sale. The investment of time and money will pay itself back.

Risk alert: If you go overboard on staging or you don’t spend the time and money in the right places, it could be a waste. Don’t make staging decisions in a vacuum. Focus on kitchens and bathrooms, de-cluttering and cleaning. When in doubt, ask for help.

Disclose and inspect upfront

In most of the country, sellers complete real estate transfer disclosures and present them to the buyer, and the buyer simultaneously inspects the home — all once they are in escrow.

What often happens is that buyers discover things they don’t like, or uncover issues. When this happens, they may lose confidence in the home or the deal.

By presenting disclosures upfront, and even providing buyers with a copy of a recent inspection report, you can help them get more comfortable with the home. If you price the home to account for whatever work needs to be completed or for disclosure red flags, buyers will feel more confident, and may make an offer much more quickly.

Risk alert: There is little risk in disclosing and inspecting. If you try to hide something and the buyer discovers it later, you can expect the deal to fall apart — or maybe even face a lawsuit down the road.

Selling your home is a major undertaking. Spend time strategizing and preparing the home for the market. Pricing, staging, presentation and disclosure go hand in hand. If you want a quick sale, price it right, present it in its best possible light, and go out of your way to make buyers feel comfortable with all aspects of the home.


Source: Zillow Blog, Brendon Desimone
http://www.zillow.com/blog/get-your-home-off-the-market-fast-176288/

My branded water bottles

My Mimi Wang branded water bottles are here! I know they'll be a hit at open houses and with my clients.

San Francisco leads the nation in property bidding wars

Great article from HousingWire about the bidding wars going on in many real estate markets across the nation. 

As a nation, bidding wars gained steam heading into the spring home-buying, with 61% of offers written by Redfin agents facing competition from other buyers in March.

While this is up 57% from February, it is down slightly from 63% in March 2014.

Then compare this to two of California’s, and the nation's, hottest housing markets.

Both San Francisco and Ventura County not only fail to follow the trend but also are surging higher.

San Francisco’s bidding wars are nearly at 100%, rising from 88% last year to 94%, with 32% of homes selling over the asking price.

Although, Ventura’s bidding war percentage is one of the lowest in California, it is one of the fastest growing, moving from 33% last year to 54%.

Also, 19% of houses sell for more than the asking price.

Dwight Johnston, chief economist for the California Credit Union League, previously spoke with HousingWire on how the solution for first time homebuyers, while maybe obvious, is to save. The California market is not changing anytime soon, and rather than hope for a change, buyers need to play to the system.

“The Bay area has a vast amount of money that is driving a lot of the competition, and there is no supply in the market at all,” Johnston said about these new numbers. “The more desirable areas are built out, and they are all competing for the same houses at the same time. They have so much money that they don’t have to worry about being rational.”

“In Ventura, except for the fact it is one of the coastal communities, it usually doesn’t get quite that amount of traction. Anything that is coastal or has any special allure to it, you will see some bidding wars. This is what California has become,” he continued.

So what’s fueling the San Francisco’s housing market?

The tech bubble.

Since the tech industry continues to grow, Johnston explained that people can afford the expensive houses there, and as a result, builders will keep constructing nicer homes.

“In the coast areas of California, builders want to get the maximum square reach because it is so expensive to build here,” he said. “And you can’t blame them.”

Johnston explained it’s only if and when the tech bubble starts to stop being inflated that market might cool down.


Source: HousingWire, Brena Swanson
http://www.housingwire.com/articles/33790-san-francisco-leads-the-nation-in-property-bidding-wars