When to Cave: How Long Should You Wait Before Lowering Your Asking Price?

There it is: your home! Just sitting on the market. It’s been like that for some time now, and it’s starting to look a little … desperate. Last-guy-at-the-bar desperate. You consider reducing the price, but then you might be robbing yourself of thousands of dollars. But if you don’t, you could end up missing out on eager buyers with a slightly lower price point.

So when exactly should you cry “uncle” and lower that asking price? We asked some experts for advice.

Keep tabs on—and listen to—house hunters

Are your open houses turning into a letdown? Are buyers visiting but walking away?

“If 35 to 40 buyers have passed through your home and not a single one has placed an offer, it’s time to seriously consider a price improvement,” says New York City real estate agent Brad Malow. Translation: a reduction.

As a seller, you should be asking buyers and their brokers for feedback after private viewings.

Pay close attention and see if there are any common positives or negatives in their responses, so if a current theme is “It’s a bit expensive,” then you’ll know it’s time to start a price drop.

How long has it been?

The thing that can cost you the most money is having your home stagnate on the market. So unlike dating, you shouldn’t wait for the perfect suitor to come along. Perfect is a high bar.

Houses set at the right price will start getting offers “within the first few weeks,” Malow says.

Are comparable houses selling left and right, but you haven’t received an offer? If so, you may want to do more than just lower the price—you might want to delist it for a short while.

“Once you’ve been on the market for five weeks or so, you’re chasing the market,” says Mike King, an agent with the Partners Trust Realty in Brentwood, CA.

If you haven’t seen any action in a while, it might be time to take your house off the market, do some touch-ups, and relist.

King says he sold a house that had languished for six months on the market by removing the listing, having the sellers pull up the shag carpet—something their original seller’s agent didn’t make them do—and staging the place much better. It was relisted and sold within a couple of weeks at asking price.

‘It’s almost impossible to underprice’ a home

Here’s something you should consider when debating the great price chop: The market will probably decide it for you anyway.

“It’s almost impossible to underprice, because the market will bring it back up,” King says.

Think of it like eBay. You list an item for $1, but you know it’s worth somewhere in the $250 range. Eventually people start bidding, and some people might want that item so much they end up paying $275 for it. It’s actually a better move to slightly underprice your home than it is to overprice it, because you’ll have more offers to work with—and you can work the competition into a frenzy.

“It’s called leveraging power,” King says. “If I’m a [motivated] buyer and I know there’s only three offers, I’m going be less aggressive than if you had 10 offers.”

The golden rule: Know thy market

Above all else, you need to consider your market. There’s no universal timeline that will tell you when to reduce your price. But Malow says to consider these three key points:

• How are comparable properties faring in the market? Are they selling quickly or lingering on the market? If they’ve closed, what was their closing price?
• What is the average time a home stays on the market in your neighborhood? If you haven’t reached that point, don’t reduce it just yet. Likewise, if you’re well past your hood’s “sell-by date,” it’s time to start cutting prices and maybe even delisting your home.
• How many homes had a price reduction in your neighborhood, and how long did it take for the price cut? Did it help them sell? Again, what was the sale price?

In other words, do your homework and work with the market—don’t fight it.

Source: Realtor.com, Craig Donofrio
http://www.realtor.com/advice/sell/how-long-should-you-wait-before-lowering-your-asking-price/

Resolve to Give Up These 8 Money-Wasters for a Down Payment Before 2017

The all important down payment. Most home purchase won't happen without it. For those of you having trouble saving up for a down payment, below is some advice you might find helpful.


The presents are unwrapped, the holiday decorations are packed up (or not, we won’t tell), and the ball has dropped on the end of 2015. It’s time to make some New Year’s resolutions—homeowner-style.

You can make 2016 the year of the down payment. Really.

By cutting a few things from your budget this year, you can speed up your progress toward having a down payment by the time those holiday decorations come back out of the closet. You probably knew these were splurges eating up your discretionary income, but did you know just how much? Don’t worry—we’ll do the painful math for you so you know what to kick to the curb in 2016.


1. Skip the latte

Annual savings: $876 (plus taxes!)

A medium latte at Starbucks costs $3.65. If you stop by every day before work, that adds up So, suffer through the free coffee at work and think instead of the new kitchen where you can create your own coffee bar.


2. Cut the gym membership

Annual savings: $696

The average monthly cost of a gym membership is $58 a month, or $696 a year, and that’s assuming you’re already a member and not paying sign-up fees as well. Not to mention that most of our good intentions taper off sometime in February and we end up paying for something we’re not even using.

We’re not telling you to stop exercising. But try getting creative with your routine instead. Enjoy the great outdoors! Walk on your lunch break! Ride your bike! You’ll bag a surprising amount of cash toward your down payment.amy schumer gym


3. Cancel the cable

Annual savings: $1,189

Cable gets more expensive every year. In 2015, cable customers paid an average of $99.10 a month, or $1,189.20 for the year, according to the Leichtman Research Group. If you drop the cable in favor of, say, Netflix at $7.99 per month, you’ll save $91.11 per month—or $1,093.32 for the year—and get commercial-free original shows. liz-lemon-12


4. While you’re at it, drop a streaming service

Annual savings: Nearly $100

You don’t really need to subscribe to all the streaming channels at once. If you have Netfix, Hulu and Amazon Prime, you’re paying roughly $25 a month. If you drop Amazon Prime, you could save $99 a year. If you drop Hulu or Netflix, you could save $95.88 a year. Tip: Hulu allows you to put your subscription on hold. So if you find yourself having less time for binge-watching, try suspending your Hulu account until you have more time for it and save yourself that dough.


5. Lower your mega smartphone plan

Annual savings: Up to $300 per year

Did you get one of those unlimited everything plans when you bought your phone and never changed it—even after you realized you don’t talk on the phone that much and Candy Crush Saga doesn’t use much data? If you switch to a lower plan—or at least drop a couple gigs of data—you could save $10 to $25 a month.


6. Pack a lunch instead of buying it

Annual savings: $1,714

Taking a sack lunch to work might make you feel like you’re back in elementary school, but let’s do the math on how much it saves on your lunch costs. The average daily cost for the American worker who bought lunch from a restaurant in 2015 was $11.14, according to Statista. That amount adds up to about $56 a week, or $2,674 a year. If you can make a sack lunch for $4 a day, you will spend about $20 a week, $80 a month, or $960 a year — an annual savings of about $1,714.


7. Quit drinking

Annual savings: $3,168

If you’re an avid social drinker, you may not realize how much those $10 cocktails are adding up.

Say you go out three times a week, ordering at least two cocktails at $10 each plus the standard $1 tip per drink. That adds up to $66 a week, $264 a month, and—wait for it—a whopping $3,168 a year.


8. Go to the cleaners much less

Annual savings: $1,354

Are you still taking most of your clothes to the cleaners? Costs of dry cleaning or laundering items can vary a lot. A survey by Consumers’ Checkbook determined the average price of laundering a men’s dress shirt was $1.87, laundering men’s khaki slacks was $5.57, and dry-cleaning a two-piece suit was $11.13. If you take in two pairs of slacks ($11.14), five shirts ($9.35) and a suit every week, you’ll pay about $31.63 a week before taxes, which can add up to about $1,645 a year. Based on those numbers, if you wash your own slacks and shirts and reduce by half the number of times you have your suit dry cleaned, you could save up to $1,354 a year.

Best of all, you won’t miss the things you cut (OK, maybe some), but you’ll rack up a truckload of money in 12 short months. In fact, drop everything from this list and you could bank nearly $9,400 by the end of the year. Take that, down payment!

Source: Realtor.com, Angela Colley
http://www.realtor.com/advice/finance/resolve-to-give-up-these-8-money-wasters-for-a-down-payment-before-2017/?iid=rdc_news_hp_carousel_theLatest

What Does a REALTOR® Do To Earn Their Commission?

Happy Monday and Happy New Year everyone! 2016 will be an exciting year for the Silicon Valley and an exciting year for real estate in general. 

Anyhow, I work hard and so do many of my fellow Realtors, but there are those who think we Realtors don't do much and don't appreciate what we do. I found a great graphic that pretty much sums up what us agents do during the course of typical transaction.


Source: The Lighter Side Of Real Estate, Andrew Fortune
http://lightersideofrealestate.com/community/cafe/what-does-a-realtor-do-to-earn-their-commission

Should I Co-sign My Brother’s Mortgage?

Q. My credit has always been good, and my brother’s credit stinks. He just got married and they want to buy a house. I’m thinking of co-signing the mortgage. What do I need to consider? — Brother

A. It’s very kind of you to want to help your brother, but before you do, you need to understand that you’d be taking a pretty hefty risk.

As someone with good credit, you’ll improve your brother’s chances of getting a loan at favorable rates, and you’ll likely help him improve his credit, said Jeff Rossi, a certified financial planner with Peak Wealth Advisors in Holmdel, NJ.

But here are the pitfalls.

If your brother’s credit is bad, he has obviously had some credit missteps in the past, Rossi says.

“As a co-signer, you’re hoping and trusting that he has no further missteps for the next 30 years, assuming a 30-year mortgage,” Rossi says. “That’s a long time, and the only way you can get off of it is if he refinances or pays off the balance.”

As a co-signer, the mortgage will impact your credit, and as a financial planner, Rossi says he recommends people protect their credit scores at all costs.

“A degraded credit score can cost you future frustration and money,” he says. “My recommendation is to never co-sign something that you don’t have a vested interest in.”

He said the ultimate decision is always a personal one, but sometimes blood is thicker than water, so he understands why you would want to be a co-signer. Still, he cautions against it.

Co-signing a loan will make you equally responsible for the payment of the mortgage, and it will cause an immediate impact to your ability to obtain credit, Rossi says.

He said the immediate impact comes in the form of a higher debt-to-income ratio, which is calculated by dividing your reoccurring monthly debt payment by your gross monthly income.

He offered this example: If your monthly reoccurring debt from your mortgage, student loans and car payments adds up to $1,800, and you earn $6,000 per month, your DTI is 0.30 or 30% (1,800/6,000). Add your brother’s $1,000 mortgage payment, and your DTI is now 46% (2,800/6,000).

“That can impact your ability to take on debt in the future,” Rossi says. “Most car loans look for a DTI of 36% or lower when considering loan applications, so expect an immediate impact if you’re planning to get a car loan in the future, and even more of an impact if you need a mortgage.”

Rossi says there are programs out there that may help your brother get a mortgage on his own. For example, there are Federal Housing Administration loans are sold through FHA-approved lenders, which are insured by the federal government to reduce their risk of loss if a borrower defaults on their mortgage payments.

“The rates are generally a bit higher and come with some additional fees, but they’re more tolerant of borrowers with lower credit scores,” Rossi says. “Your best next step would be to have your brother speak to a mortgage broker with access to a variety of programs to see what type of loans he could secure on his own.”

Source: Realtor.com, from credit.com

http://www.realtor.com/advice/finance/should-i-co-sign-my-brothers-mortgage/?iid=rdc_news_hp_carousel_theLatest

IS 2016 THE YEAR MILLENNIALS WILL START BUYING?

Millennials. They're the ever-frustrating group that's been making the real estate industry quiver for years. Where are they? Why aren't they buying homes? What's going to happen to the market if they don't step up? What is going on here?!

Every blip, bump, and bounce has been microstudied, overanalyzed, turned into an infographic and used to define an entire generation whose buying habits don't seem to behave.

"The lack of buying among first-time buyers in the wake of the economic crisis has had the industry biting its nails wondering if young adults would ever give up renting or move out of their parent's basement," said CNN Money.

But that might be changing. CNN Money's article identified "the top 10 markets where millennials represented a large share of new mortgages," according to Realtor.com, and a few of them may surprise you. The list includes:

• Des Moines, Iowa
• Provo, Utah
• Baton Rouge, Louisiana
• Pittsburgh, Pennsylvania
• Lafayette, Louisiana
• Grand Rapids, Michigan
• Madison, Wisconsin
• Clarksville, Tennessee
• New Orleans, Louisiana
• Shreveport, Louisiana

The new home trend

Maybe millennials were just waiting for the right thing to buy. A recent article by Prashant Gopal on Bloomberg Business took a look at a new phenomena they called "The return of the affordable starter home." In particular, the trend is being seen in brand-new homes from builders like D.R. Horton, TriPointe, Taylor Morrison, and Meritage Homes. The one thing the communities have in common: they're being designed for first-time buyers.

While other builders were continuing "to chase larger profit margins by catering to move-up and luxury buyers," said Bloomberg, D.R. Horton was keying in on an underserved market and weaving their new, more affordable Express brand into an array of product offerings across the country. In San Antonio's Mission del Lago community, Express homes give new buyers a more affordable option in an established and desirable masterplan.

D.R. Horton, the largest homebuilder in the nation for the last 14 years, was the industry guinea pig with this product type. "When D.R. Horton first announced that it was going to go after the entry level portion of the market, a lot of other builders wanted to wait and see how it turned out," Brad Hunter, chief economist for housing-research firm Metrostudy, told Bloomberg. "Now that they've seen the concept proven, they're figuring out their own way to provide a home that's more affordable."

That "proven concept" translates to a whopping 14 percent of revenue for D.R Horton since Express homes began last year, helping the builder to a 26 percent increase in net sales orders for the 2015 fiscal year. D.R. Horton is set to expand the Express brand "in 2016 to most of its 79 markets," while "Tri Pointe plans to increase its share of first-time buyer properties to 40 percent from about 35 percent now."

Streamlined offerings

One way builders are lowering price points to attract millennial buyers - especially in light of rising land costs - is by streamlining offerings. Or, rather, stripping away some of the bells and whistles.

"Meritage has been expanding a segment it calls ‘entry-level-plus,' which starts in the low $200,000s in the Houston area," said Bloomberg. "The entry-level-plus homes are $50,000 to $100,000 cheaper than the company's typical homes in the Houston market because they're smaller," and also because they're being designed without features like fireplaces and mud rooms, and without all the architectural detail that might be found on more expensive homes.

"At Tri Pointe Group Inc.'s Terrain, a new Castle Rock, Colorado, community... the home has press-board kitchen counters and a (small) yard. It's almost 30 percent cheaper than the average for a new house in the area."

Those tradeoffs seem to be worth it for a market segment that had been wary (at best) of dipping into the real estate market - especially since rents continue to rise to uncomfortable heights. In many areas across the country, renting is more expensive than buying.

"Americans in their 20s and early 30s are getting a nudge toward homeownership a decade after sales peaked during the housing bubble. It's not their nagging parents. It's rents. They've risen so much that buying is making more sense," said Bloomberg."

Continuing economic growth is another strong driver. And then there's the good-ole American dream, whose future has been teetering on the grasp of this complicated group.

Will 2016 be the year millennials embrace homeownership? Weigh in with your opinion in the comments.

Source: RealtyTimes, Jaymi Naciri
http://realtytimes.com/consumeradvice/buyersadvice1/item/41243-20151231-is-2016t-the-year-millennials-will-start-buying

REALTORS®' Top Concerns Heading into 2016

REALTORS®' Top Concerns Heading into 2016

An improving job market, still-low interest rates, and recent measures to make credit more accessible are all offering help to the housing market’s recovery, but several challenges prompting closing delays remain.

The latest REALTORS® Confidence Index conducted in November reveals some of the top concerns on real estate professionals' minds. The survey is based on more than 2,500 responses from members about local market conditions.

Here are some of the most common concerns that REALTORS® raised in the latest survey:

1. New mortgage disclosure rules: The implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations on Oct. 3 has been delaying closings and having an impact on sales, according to members. About 47 percent of respondents reported longer closing times compared to a year ago, up from 37 percent in the October 2015 survey.  It typically took another 40 days to close a sale, up from 35 days in July 2015.

2. Condo financing: REALTORS® continued to report difficulty in obtaining financing for condominium unit purchases because many condominiums are not FHA or GSE eligible. Read more.

3. Tight inventories: A smaller number of homes for sale across the country are limiting choices for buyers and pushing prices up, decreasing housing affordability. REALTORS® particularly reported low inventory of properties in the lower price range and for those that are move-in ready.

4. Tight credit: Stringent credit standards continue to affect sales, particularly for first-time home buyers who are still struggling to qualify for financing, according to the REALTORS® surveyed. “Credit profiles that fail to meet tighter underwriting standards are conditions that continue to work against first-time home buyers,” according to the report.

5. Appraisal issues: “Late” and “low” appraisal valuations was also cited by REALTORS® as being problematic in transactions.

Source: National Association of REALTORS
http://www.realtor.org/reports/realtors-confidence-index

Happy New Year From The Mimi Wang Team!

On behalf of The Mimi Wang Team, we sincerely thank you supporting our 

business throughout the year.

We send our heartfelt wishes for a 

wonderful holiday season to 

you and your family. 

May the New Year bring you 

success, happiness and prosperity. 

MIMI WANG

REALTOR®, GRI, CIPS, SPRES, 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

2015 & 2014 President - Women’s Council of Realtors Santa Clara Valley Network

Fluent in English, Mandarin, Cantonese and Vietnamese