8 Things You Need To Know About Buying A New Home

I see new construction going up all over the place here in the Silicon Valley and in the bay area in general. Just about all the homes I have sold were resale homes - non new homes. But for some buyers, buying a new home my just the option that is right for them. If you're one of these buyers, the below article is for you.




Buying a new home can be a truly exciting experience. Choosing your lot and floorplan, picking out all your fixtures, watching the progress from foundation to framing to finishes. Makes me want to run out and tour a model home right now!

Through all the excitement, though, there are a few realities that may be surprising for those buying new for the first time.

1. You probably won't be able to negotiate the price

New homes are not like resale, where there is the expectation of price negotiations back and forth. The price set by the builder is most likely the price you're going to pay. The exceptions are when there are just a few homes left and when there is standing inventory that needs to be sold.

"Look for builder inventory homes that have been on the market for 45 days or more," said Inman. "These are the homes in which a buyer might be able to get a good deal."

2. But you may be able get some upgrades at no cost

More typical in a new-home community is getting some upgrades thrown in—things like window coverings or nicer flooring. Negotiating a few must-haves into your deal can help offset your costs. Some builders may also help with closing costs as an incentive to buy.

3. There might also be incentives to using the builder's in-house lender

Many builders have an in-house or preferred lender they work with to provide financing for buyers. There may be advantages to using this lender—better terms or a rate that's bought down. By law, the builder can't make you use their lender, so if you feel pressured, be sure to discuss with your real estate agent.

4. Use a REALTOR®

Speaking of Realtors…you can use your agent to buy a new home, and, in fact, you should.

"In general, builders' model homes are staffed by agents who work directly for and represent the builder. A buyer also needs to have a real estate agent who represents them and looks after their best interests," said Inman. "Keep in mind that most builders will require that the real estate agent accompany and register the buyer on their first visit to the builder's model home or community."

5. Your home will not look like the model

When you tour a model home, it's decked out with pretty walls and floors and lighting and countertops. The furniture is to scale and the fabrics are custom and the pictures are hung perfectly. It's pretty seductive. But the empty shell you buy won't look like this if you go with all the standard configurations and finishes. Be realistic about what you want, what you need, what you can afford, and how that translates to what you are seeing. The salesperson can point out which of the items you love in the model come standard and which are pricey upgrades.

6. The price of the home as advertised is not what you'll pay

Typically, it will take many tens of thousands of dollars in upgrades and options to get the home you buy to look like the model. This can be a rude awakening for buyers who are trying to stick to a strict budget. The good news is rolling some of those upgrades into the mortgage can make good financial sense, according to Money Crashers.

"Upgrading during the initial construction phase is generally cheaper than updating your home later on. For example, if you choose to upgrade from laminate flooring to hardwood, you'll pay the difference in material costs—but you won't necessarily have to pay extra for the installation itself, since your builder needs to install floors in the first place. The same goes for things like windows and bathroom features."

7. You'll be dealing with construction noise and traffic. For a while.

The peaceful life you envision can be a reality, but probably not from the get-go. Depending on the community, it may take time to complete construction. Which means dealing with congestion and hassle for the time being. Amenities like pools, sport courts, and trails may also not be built out by the time you move in. Asking ahead of time about the construction schedule can help you manage expectations.

8. Not everything will work perfectly

In any house, there are bound to be issues. New homes are no different. Builder warranties will help.

"Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made," said the FCC. "The duration of coverage varies depending on the component of the house. Most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for "major structural defects."

Source: RealtyTimes, Jaymi Naciri
https://www.blogger.com/blogger.g?blogID=2960093120680893838#editor/target=post;postID=6913392641697043568

San Jose #1 with Highest Share of Equity!

I hope everyone is having a great Monday, and for those of you living in the Bay Area, particularly the Silicon Valley, your Monday may even be better. 

A new report from RealtyTrac shows the top cities in the country with the greatest equity growth, and the top two of those are right here in the bay area - San Jose at #1 and San Francisco at #2. If you're a homeowner in one of these two cities, you could be potentially sitting on a fortune! Depending on your situation and needs, it may be a great time to sell so you can take advantage of all that money you're sitting on because who knows what tomorrow may bring because next year the or the year after the market could take a hit and all that equity could possibly get wiped out - though not likely in my opinion.


Picture Souce: Washington Post


9 Markets With the Highest Share of Equity

As home prices rise, more home owners in some parts of the country are seeing gains in equity.

Read more: Many Owners May Underestimate Their Equity

Nearly 20 percent of all properties with a mortgage are considered "equity rich," according to RealtyTrac's second quarter U.S. Home Equity & Underwater Report. The number of equity-rich home owners with a mortgage has risen by 1 million compared to a year ago.

"Some are leveraging that equity into a higher LTV refinance or a move-up purchase, some may be downsizing into an all-cash purchase and some may be cashing out of home ownership altogether," says Daren Blomquist, RealtyTrac's vice president.

Not surprisingly, the highest equity places tend to be in areas that have seen the largest increases in home prices. RealtyTrac reported the following major metro areas had the highest percentage of equity-rich properties:

1.San Jose, Calif.: 43.8%
2.San Francisco, Calif.: 38.3%
3.Honolulu, Hawaii: 36.7%
4.Los Angeles, Calif.: 32%
5.New York: 30.7%
6.Pittsburgh, Pa.: 29.4%
7.Poughkeepsie, N.Y.: 28%
8.Oxnard, Calif.: 27.5%
9.San Diego, Calif.: 26.9%

Source: RealtyTrac & RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/08/10/9-markets-highest-share-equity?om_rid=AAFmZk&om_mid=_BVyPS5B9EV6E3L&om_ntype=RMODaily

5 Tips for Hiring Home Service Pros

Great information from Zillow.



5 Tips for Hiring Home Service Pros

A little legwork upfront can save you from headaches down the road.

Finding the right person to install your garage door opener, patch your roof or landscape your yard takes time – but it’s time well spent.

The Better Business Bureau last year recorded 24,900 complaints from U.S. homeowners about general contractors, remodeling and repair specialists, roofing contractors, painters and plumbers. The Bureau received an additional 12,500 complaints associated with landscape professionals, pest control businesses, appliance repair companies, air-conditioning contractors and pool service companies. Grievances ranged from quality of work provided to contract issues, and inferior repairs to unfinished work.

Invest the time and energy upfront by checking a service pro’s credentials and insisting on a written contract. These five tips may help you avoid problems:

1. Do your due diligence

Ask potential service providers for copies of their license, insurance and bonding capacity, then make sure the information is current. Ensure the company is licensed to perform the type of work you need and that it meets the bonding requirements of your town, county and state. Ask for references — and call them. Search online for news articles, customer reviews and reports of violations related to the company.

2. Be wary of bargain bids

Bids that come in substantially lower than the competition aren’t necessarily the best deal. There may be an explanation for the bargain-basement pricing; perhaps the low bid doesn’t account for the same installation, materials and features. Or, it could be that the low bid is a sign that you’re going to receive a lower level of service. Conversely, don’t be fooled into thinking a very high bid indicates higher standards of service. You may simply be working with a contractor who is so busy he’s not looking for more work. Any time you receive a bid that’s significantly higher or lower than all the others, ask the service provider if there’s a reason for the difference.

3. Communication is key  

You’re trusting your service pro with the most expensive thing you own – your home. That’s why it’s so important that you hire someone with whom you feel comfortable talking. Do the companies you’re considering respond to your questions in a timely and effective manner? If they don’t respond when they’re trying to land your business, do you think that will change once you’re in the middle of a remodel? If the contractor doesn’t ask pertinent questions how can he know what you expect from him? Once you verbally agree on the work that needs to be done, ask for a contract and read it. Make sure the contract includes the start date and expected completion date.

4. Minimize upfront payments

Be careful if your installer, landscaper or repair person wants to be paid in full upfront. In some cases, a contractor may need a down payment to cover materials, but the bulk of the money should not be due until the work is completed and you are satisfied with the results.

5. Say ‘no’ to door-knockers

Not every roofer, contractor or landscaper who comes to your front door looking for work is a scam artist, but they could be. Be leery of the drop-by contractor who offers a “free roof inspection” or who can “discount” your fence painting because he has supplies left over from a project around the corner. These gimmicks and promotions could signal a con. If you have a good feeling about a door-knocking service provider, ask for a business card and check the company out online or with the Better Business Bureau.

Remember that a well-designed website and a glossy business card aren’t proof that a contractor does quality work. Regardless of the size of the job you need completed, it’s crucial to invest the time to find the professional who best suits your needs, timeline and budget.

Source: Zillow Blog, Mary Boone
http://www.zillow.com/blog/hiring-home-service-pros-180435/

Saturday Stats - Santa Clara County Real Estate Market Facts & Trends

Facts and Trends Published August 2015* Location:   SANTA CLARA COUNTY Price Range:   $0 - No Limit SQFT Range:   0 - No Limit Property Types:   SINGLE FAMILY HOME Bedrooms:   0 - No Limit Full Baths:   0 - No Limit Half Baths:   0 - No Limit Year Built:   0 - No Limit

Number of Homes For Sale vs. Sold vs. Pended (May. 2014 - Jul. 2015)

Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago Jul. 15 Jun. 15 % Change Jul. 15 Jul. 14 % Change May. 15 to Jul. 15 May. 14 to Jul. 14 % Change For Sale 1256 1188 5.7%  1256 1415 -11.2%  1194 1332 -10.4%  Sold 1094 1157 -5.4%  1094 1077 1.6%  1110 1063 4.4%  Pended 1157 1088 6.3%  1157 940 23.1%  1132 1047 8.1%

Months of Inventory Based on Closed Sales (May. 2014 - Jul. 2015)

Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago Jul. 15 Jun. 15 % Change Jul. 15 Jul. 14 % Change May. 15 to Jul. 15 May. 14 to Jul. 14 % Change Months of Inventory (Closed Sales) 1.1 1 9.7%  1.1 1.3 -15.2%  1.1 1.3 -16%

Date 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1/15 2/15 3/15 4/15 5/15 6/15 7/15 For Sale 1254 1328 1415 1349 1383 1162 829 514 654 765 904 1042 1138 1188 1256 New Listing 1450 1281 1288 1100 1163 976 589 384 753 1008 1357 1400 1387 1319 1394 Sold 1066 1046 1077 939 912 958 745 742 502 560 859 1122 1078 1157 1094 Pended 1161 1041 940 971 852 971 694 517 549 793 1086 1121 1151 1088 1157 Months of Inventory (Closed Sales) 1.2 1.3 1.3 1.4 1.5 1.2 1.1 0.7 1.3 1.4 1.1 0.9 1.1 1 1.1 Months of Inventory (Pended Sales) 1.1 1.3 1.5 1.4 1.6 1.2 1.2 1 1.2 1 0.8 0.9 1 1.1 1.1 Absorption Rate (Closed Sales) % 85 78.8 76.1 69.6 65.9 82.4 89.9 144.4 76.8 73.2 95 107.7 94.7 97.4 87.1 Absorption Rate (Pended Sales) % 92.6 78.4 66.4 72 61.6 83.6 83.7 100.6 83.9 103.7 120.1 107.6 101.1 91.6 92.1 Avg. Active Price 1575 1515 1454 1456 1450 1536 1627 1760 1731 1735 1772 1790 1707 1646 1659 Avg. Sold Price 1163 1228 1117 1155 1103 1166 1101 1079 1126 1270 1283 1256 1294 1315 1235 Avg. Sq. Ft. Price 588 611 574 571 582 592 567 555 576 627 651 633 658 660 630 Sold/List Diff. % 106 104 104 103 104 104 103 102 101 105 107 107 107 106 105 Sold/Orig LP Diff. % 105 104 103 102 102 102 102 100 100 104 107 107 107 105 104 Days on Market 21 19 22 25 28 27 29 34 38 31 22 20 18 19 21 Avg CDOM 23 20 24 29 30 34 34 37 44 35 23 23 20 21 23 Median 875 901 860 860 850 870 848 841 812 910 930 955 984 995 968

Professional photos to sell the house

Taking great photos makes a huge difference in the mind of buyers. I go the extra mile for my clients by hiring the best photographer in the business to sell my clients property.

How big data is transforming real estate

How big data is transforming real estate


Photo source: Inman News

Assessing a storm's damage to a house; responding to a prospective buyer's concerns about a property; designing offices that suit the needs of its tenants—all are key tasks of the real estate business that are rapidly being made faster and less expensive as the industry adopts lessons from technology, lessons that have already dramatically changed industries such as finance and health care.

In other words, big data is transforming real estate.

"Big data is making the commercial real estate industry more transparent," said Ely Razin, CEO of CrediFi, a big data platform for the commercial real estate finance market. "It becomes a partner to the players to the community, whether they're brokers, lenders, investors or owners."

Transforming real estate finance

In commercial real estate finance, number crunching from public and private data sources is already helping potential investors make better decisions.

CrediFi's Razin said the company's platform uses credit risk algorithms to analyze huge amounts of data from public and licensed sources, which then produce risk scores for regional real estate.
For example, prospective investors analyze how sound a physical structure is, when it was last renovated or if the prospective owner is financially reliable—all important factors that impact their decision.

Companies can also assess a building's finance, like the details of a prospective building's loans and investment platform.

Changing the business of property sales

Real estate start-up VTS (stands for "View the Space") is a smartphone app hoping to transform real estate sales by enabling owners to better assess the reactions of prospective buyers, said Ryan Masiello, co-founder and chief revenue officer of VTS.
The platform aims to speed up the process of getting feedback from prospective tenants to owners, and to help the negotiating process. It recently raised $21 million.

"If 80 percent of prospective tenants aren't moving forward and giving you a proposal because they feel the space is priced too high, or the image of the space is wrong for them, like issues with the height of a ceiling or the size of a room, we capture that information directly," said Masiello

Improving building management

Big data is also changing how buildings are managed. David Kollmorgen, international director and head of business intelligence at Jones Lang LaSalle, said the emerging "the Internet of things" is making certain management tasks easier.

"We've put sensors on the equipment in a building, for example, and every 15 seconds we get a read on the air temperature, if the fan is on or off. Then we can feed data into algorithms, like if this fan is working, then it shouldn't generate a work order to fix it. We can also figure out, is weather data correlating to x, y or z."
That can reduce expenses and the wait time in fixing problems in a building, said Kollmorgen.

But the costs of implementing sensor systems takes a lot of money and planning.

"If you look at the Manhattan skyline at night, you see lots and lots of lights on even in downtown buildings, where most of the offices are closed. Just because people have the ability to improve, by retrofitting their actual electrical systems, it would be very expensive," said Keith Outlaw, licensed real estate agent at Highline Residential in New York.
Despite the initial challenge of such a large investment, making buildings "smarter" would greatly reduce waste and spending, said Outlaw.

Source: CNBC, Marguerite Ward
http://www.cnbc.com/2015/08/04/how-big-data-is-transforming-real-estate.html

9 Common Real Estate Myths That Plague Buyers and Sellers

Great article from US News & World Report. The second one, "You can get a better deal as a buyer if you don't use a real estate agent," is the one that slays me. I can say I've seen many buyers that are under this false belief that they'll get a better deal if they go directly to the listing agent and I try to warn them that they often don't save any money, it is a HUGE conflict of interest and listing agent simple will tell that buyer whatever they want to hear so they can get two commissions. I can think of a number of agents whose whole business model is to find these gullible buyers so they "double end" the deal. For any agents reading this, sorry if this offends you, but you know who you are.


9 Common Real Estate Myths That Plague Buyers and Sellers

Even though most people are rarely part of a real estate transaction, everyone believes they are an expert.



Buying or selling a house is not something most of us do every day. You may do it once a decade, or even once in a lifetime. Despite the fact that most of us enter the world of real estate only rarely, we all think we know how it works, based on the experiences of friends and family members, stories we have heard and things we have read.

But for everything we believe we know about the industry, there are a number of myths that circulate about how real estate actually works. Buying into those can hurt your chances of buying or selling the right home at the right price.

In recent years, technology has radically changed the way homes are bought and sold, and yet some aspects of real estate are the same as they were when your parents bought their last home. If a long time has passed since your last transaction, you may be surprised at how much has changed.

The Internet has made much more information available to consumers, but not all the information is equal, or even accurate.

"A lot of people, for some reason, they believe what they read on the Internet," says Gea Elika, principal broker of Elika Real Estate in New York and a regional director of the National Association of Exclusive Buyer Agents. "Read everything you see on the Internet with a grain of salt."

The danger with believing everything you hear or read is real estate myths can cost you money when it's time to buy or sell a home. Here are nine of the most common ones that can trip up buyers and sellers:

Set your home price higher than what you expect to get. Listing your home at too high a price may actually net you a lower price. That's because shoppers and their real estate agents often don't even look at homes that are priced above market value. It's true you can always lower the price if the house doesn't garner any offers in the first few weeks. But that comes with its own set of problems. "Buyers are highly suspicious of houses that have sat on the market for more than three weeks," says Nela Richardson, chief economist for the brokerage Redfin. In areas such as San Francisco where multiple offers are common, sellers will actually price their homes for less than they expect to get, in the hopes of getting multiple offers above asking price. However, if you do this in a declining market, the danger is that all the offers will come in at the asking price or lower.

You can get a better deal as a buyer if you don't use a real estate agent. "That's a completely false premise," Elika says. If the house is listed with a real estate agent, the total sales commission is built into the price. If the buyers don't have an agent, the seller's agent will receive the entire commission.

You can save money selling your home yourself. Some people do successfully sell homes on their own, but they need the skills to get the home listed online, market the home to prospective buyers, negotiate the contract and then deal with any issues that arise during the inspection or loan application phases. It's not impossible to sell a home on your own, but you'll find that buyers expect a substantial discount when you do, so what you save on a real estate commission may end up meaning a lower price. It's not impossible to sell your home on your own for the same price you'd get with an agent, but it's not easy.

The market will only go up. In recent years, homebuyers and sellers have experienced a time of increasing home values, then a sharp decline during the economic downturn and now another period of increasing values. "They think that the market only goes up," Elika says. "They don't think about when a correction will come." The recent recession should have reminded everyone that real estate prices can indeed fall, and fall a lot. Economist Robert Shiller created an inflation-adjusted index for home prices dating to 1890 and found that home prices have fallen a number of times over the years, including in the early 1990s, the early 1980s and the mid-1970s.

You should renovate your kitchen and bathroom before you sell. If your kitchen and baths work, a major remodel could backfire. Prospective buyers may not share your taste, but they don't want to redo something that has just been renovated. "You're better off adjusting your price accordingly," says Kevin Brown Jr., president of Praedium Real Estate Services in Pittsburgh and a regional director of the NAEBA. "Most buyers want to put their own spin on things."

You'll earn back what you spend on renovations. If you fix the heating and air conditioning system or roof, you will sell your house more quickly, but you probably won't recoup what you spent. According to Remodeling magazine's 2015 Cost vs. Value Report, the only renovation that is likely to net you as much as you spent is a new front door. You're likely to recoup only 67.8 percent of what you spent on a major kitchen remodel and 70 percent of what you spent on a bathroom remodel on a mid-range home. "Very few things will bring you great returns," says Sabrina Booth, an agent with Redfin in Seattle. "If you're going to do these projects, it's better to do them for your own enjoyment."

All the properties listed in the multiple listing service show up online. Your agent must choose to let the listings show up online. Most do, but it never hurts to verify that yours will.

Open houses sell properties. Homes rarely sell to buyers who visited them during an open house. Agents like open houses because it enables them to find additional customers who are looking to buy or sell homes. If you or your agent choose not to have an open house, it probably doesn't hurt your sale chances – although holding a broker's open house for other agents may be worthwhile.

The agent who shows you homes or lists your home represents your interests. Maybe and maybe not. In about half the states in the U.S., agents may be "transaction brokers" who don't have a fiduciary duty to either the buyer or seller. In many states, a customer has the option of signing an agreement for the agent to represent him as a listing agent or as a buyer's agent. Before you start working with the agent, ask about your options and do some of your own research. Most brokerages require buyers and sellers to sign a form indicating that they understand whom the agent represents.

Source: U.S. News and World report, Teresa Mears
http://money.usnews.com/money/personal-finance/articles/2015/08/04/9-common-real-estate-myths-that-plague-buyers-and-sellers