Hemet Real Estate

Is Now a Good Time To Buy?

2006-12-25T18:47:00.000-08:00

I received an email this Christmas evening which every potential buyer must be asking themselves right now..."Is this a Good Time to BUY?"

Well, here is the actual email I received and the return answer I provided...

Comments:
i'm moving into the area and am indecisive whether to jump into a full fledged mortgage. can you tell me whether it's a good time to buy? thanks, aaron

My Answer:
Aaron,

You sure have asked a loaded question...one that has so many variables...most of which depend on you and your own personal situation.

I can say over time, you will always be better off building your own equity in your own home as opposed to helping a landlord feed his investments.

There is speculation that interest rates are back on their way up - no one can say for certain, but it is my gut feeling supported by many so called 'experts'.

It is certainly a 'buyers market' which translates into a lot of inventory to choose from and the ability to control the transaction better than in the past.

The question that looms is the price of homes going to go down. If I only had a crystal ball...

My thought is that it will not go down as bad as it did in the early 90's. 2 Important economic indicators will prevent that. 1) we still have historically low interest rates; as in the 90'2 they were close to historically high; and 2) we have very low unemployment so I cannot see a class of homeowners being wiped out.

Real Estate is like any other commodity, governed by the principle of 'Supply & Demand'. In California, we will always have people moving here - both from outside our borders as well as across the nation.

I personally believe that now is a good time to buy. The worse case scenario is you may take a 3-6% hit in value over the next year, maybe 2 before we see a rebound, for the reasons stated. When you consider the tax advantages and other benefits you receive by being a home owner the reward far outweighs the risk.

I hope you can accept this as an unbiased opinion. Yes, I have a vested interest in the industry, but this does not change my opinion.

If you would like to discuss over the phone, please send me your number and the best time to contact you. Of course, if I can assist you in any way, I am at your service.

Sincerely,

JOHN OCCHI, HEMET REALTOR

PS: Check out my blog at HemetRealEstateBlog.Com for some articles that I have written that you may find interesting.

Holiday Shopping Scam

2006-12-05T10:09:00.000-08:00

Holiday Shopping Scam at a Supermarket Near You!
by John Occhi, Hemet REALTOR

It seems every holiday there are new products for sale - things that we would have never thought possible just ten years ago. I remember I was on the cutting edge of e-commerce in 1999 - 2001 when I was promoting custom gift cards for small businesses as well as e-commerce enabled websites. It's amazing how skeptical people were.

Is there a reason to be skeptical of new technologies. I suppose. My theory has always been to embrace the new and replace the old. Unfortunately, with the new, it feeds the element of human nature that preys on others, to create new innovative ways of doing this.

Fast Forward - Christmas 2006. Every supermarket I have been to in the last several months have a kiosk with gift cards for 20, 30, 40 or even 50 or more different retail stores. No longer do you have to go to Best-Buy, to buy a Best-Buy gift card. Today, you can do all of your holiday shopping, while getting ready to cook the holiday meal.

Now how easy is that?

So here is the scam. The low-life's copy down the card information while they are being displayed on the rack. This includes a card number and the toll free customer service phone number. In some cases, there is even a website.

So now the con artist waits a few days (checking back as often as needed) until the card has been "activated" and their is a balance on the card.

BINGO! It's time to go shopping on line.

An Ounce of Prevention...Worth a Pound of Cure

So, the best way to avoid this scam altogether is to ONLY purchase your gift cards from a customer service rep, where the cards have been safely stored behind the counter and not accessible to the public.

Please be careful. Pass this on to your friends and loved ones.

Wells Fargo Hopes to Cash in on Risky Borrowers

2006-12-05T09:44:00.000-08:00

REALTOR Magazine Online
Wells Fargo Hopes to Cash in on Risky Borrowers
Daily Real Estate News December 5, 2006
Source: Los Angeles Times, E. Scott Reckard

Here is another greal little article from the REALTOR Magazine Online, that I receive daily. In this article, Wells Fargo announces a new program that will help educate high risk borrowers, known as "Sub-Prime" in the industry. This can be very good for the Hemet Real Estate market if more borrowers are aware of what they are getting themselves into and how to manage theier affairs, once they have bought a new Hemet home.
- John Occhi, Hemet Realtor

Despite the trend toward rising delinquencies, Wells Fargo & Co. is increasing its lending to risky borrowers in the hopes of making money on additional services like checking accounts and credit cards.

In a strategy it plans to announce today, the banking giant says it will automatically enroll these borrowers in a financial education program that will include free consultations in English or Spanish with specialists who can help them create financial plans and try to clean up their credit. This program will encourage auto-pay, which requires having a checking account.

The program, dubbed Steps to Success, will help address advocacy groups' previous allegations of predatory lending at Wells' sub-prime lending subsidiary, Wells Fargo Financial.

It's the most comprehensive program of its type ever offered to borrowers in the sub-prime market, says Stephanie Christie, a senior vice president at Wells Fargo Home Mortgage.

How to Get a Fair Deal on Title Insurance

2006-12-04T09:31:00.000-08:00

Daily Real Estate News December 4, 2006
How to Get a Fair Deal on Title Insurance
St. Louis Post-Dispatch, Michael Sorkin

Here is a short article that I found in the 'REALTOR Magazine - Daily News' this morning. I thought it was helpful for consumers in the Hemet Real Estate market to help answer questions about Title Insurance - since it is one of the most expensive line items, when it comes to closing costs - for both the buyer and seller.
- John Occhi, Hemet REALTOR

Title insurance businesses have been criticized recently for overcharging customers. Here are some suggestions for making sure that you and your clients get a fair deal.

Purchase title insurance from a title insurance agent or company. Don’t let a banker of builder mandate a company – that’s illegal.

Make sure the title company is properly licensed with the state.

Ask to see the rates the agency files with the state to make sure you are paying the appropriate premium for the risk involved.

Identify the underwriter that will insure the title.

Demand and review the results of the title search and the cost of title insurance and fees before the closing date.

Ask for itemized charges. The cost for the insurance itself can’t be negotiated, but the fees can be.

Check for any exceptions to the coverage, for things such as mechanics' liens, by reviewing Schedule B before closing.

Ask if your title agency's underwriter will provide a "closing protection letter." It protects you from title defects arising from negligence or dishonesty of the agent.
File any complaint promptly with your state insurance regulatory agency.Source:

More Expired Listings Than Sales

2006-12-03T12:28:00.000-08:00

More Expired Listings Than Sales
By John Occhi, REALTOR®

This is a very early observation. I spent some time this weekend crunching the numbers that are available to me through the Hemet MLS.

I have been looking at numbers over a 3 month period – from September 1 through November 30, 2006.

Perhaps the most startling observation to me is that over half of the properties that came off the market, came off because they expired!

That’s right, during the specified time period there were 281 Residential listings that EXPIRED and only 280 that SOLD!

Please keep your eye on this BLOG for more details as I dive deeper into the numbers and try to make some sense of our current Hemet Real Estate market.

Good News For Hemet Investers

2006-11-29T19:02:00.000-08:00

Study Pinpoints Best U.S. Markets to Invest
— By Camilla McLaughlin for REALTOR® Magazine Online

Here is some good news for Hemet Real Estate and Real Estate throughout the Inland Empire region. This is an article that appeared in yesterdays Realtors Online Magazine, an official National Realtor Association (NAR) publication. the article specifically mentions Los Angeles, but as we all know, what happens in Los Angeles happens in the Inland Empire - only a bit more sanely. So read this short post and rejoice there is light and the 'bubble' may not be all it's cracked up to be.
- John Occhi, REALTOR

The top U.S. markets for real estate investment prospects next year are global gateway metros such as New York, Washington, D.C., Los Angeles, Seattle, and San Francisco, says the Urban Land Institute and Pricewaterhouse Coopers in Emerging Trends in Real Estate 2007,an annual outlook for U.S. real estate investment and development trends.

In spite of real estate’s unusually long run up in prices and sales, interest from investors hasn’t waned.

"Real estate is still viewed favorably as an asset class and there’s still a lot of money — especially from private funds and institutional investors — looking for the right opportunity," says William Croteau, U.S. real estate practice leader for Pricewaterhouse Coopers. "Although we don't expect any major downturn in the marketplace, it's likely that real estate's overall performance will be more modest in 2007."

Location Still Rules

Most promising? The report says it’s “investment Meccas on both coasts,” noting that “location becomes even more important in real estate investing as the transforming global economy increasingly determines where companies and people need and want to be.”

In addition to being located along “global pathways” with international airports and harbor ports, top markets are characterized by:

24-hour features
Attractive settings in reasonably comfortable climates
Geographic barriers limiting sprawl
Brainpower jobs attracting an affluent, highly educated workforce

Although a number of cities in the South and Southwest, including Atlanta, Dallas, Houston, and Phoenix, are described as “development magnets,” because of the amount of current new construction, the report says “their tendency toward oversupply compromises their standing with investors."

Sunbelt development havens consistently fall behind global gateways for investment prospects, even as their economies continue to grow, the report says. They remain relatively affordable, but these areas lack strong 24-hour cores and mass transit systems. In addition, their locations away from coasts "make them secondary destinations for international business.”

San Bernardino Woman Arrested in Theft of House from Boyfriend

2006-11-29T18:34:00.000-08:00

San Bernardino Woman Arrested in Theft of House from Boyfriend
Reported by MortgageFraudBlog.Com

This is not exactly Hemet Real Estate related, but geographically it is very close - so what happens in San Bernardino could very well happen in Hemet. I share this article, becasue I want you to be careful - sometimes when you least expect it...
- John Occhi

Ana Morales, 35, San Bernardino, California was arrested by the San Bernardino County District Attorney’s Office-Real Estate Fraud Prosecution Unit and charged with two counts of forgery and two counts of offering a false/forged document (Grant deeds) for recording at the County of San Bernardino, California, Recorder’s Office.

According to authorities, Morales told Antonio Ramirez, her boyfriend at the time, that he and his brother needed to sign some documents for income taxes purposes and for a house improvement loan. Both Antonio Ramirez and his brother Arturo signed the documents. One of the documents signed was a blank grant deed, which was filled out later by Morales. This removed Antonio and Arturo Ramirez from the deed to his home and placed the property into Antonio Ramirez and Morales’ name. The investigation also disclosed that Antonio Ramirez had unknowingly signed another grant deed that granted the property to Morales as the sole owner.

Morales subsequently recorded the false grant deed and applied for a debt consolidation mortgage loan in the amount of $117,500. Morales acquired the equity out of the home and used it to pay off more that $30,959.54 of her own debt, in addition to obtaining a cashier’s check for the remaining sum of $11,431.18 from the escrow company. It was during a 2005 income tax appointment that Antonio Ramirez learned that he and his brother had been removed from the title and Morales was the sole owner of the property.

10 Questions to Ask the Condo Board

2006-11-29T01:53:00.000-08:00

10 Questions to Ask the Condo Board

This report is provided by the National Association of Realtors, as a consumer handout. I thought it was particularly valuable to the Hemet Real Estate market, not so much because of all the condos we have, but rather because of the number of Mobile Homes and other communities with Home Owners Associations. The same questions are all relevant. So, if you are looking to buy any type of home in any area that is governed by a HOA or has any common areas, do yourself a favor and check out this valuable resource...
- John Occhi, REALTOR

Before you buy, contact the condo board with the following questions. In the process, you’ll learn how responsive — and organized — its members are.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve? How is that money being invested?

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn’t the assessment cover—common area maintenance, recreational facilities, trash collection, snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building?

8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com

Another Interesting Statistic…

2006-11-20T18:48:00.000-08:00

Another Interesting Statistic…
Or More Listings Equals More Expireds!
By John Occhi

I was doing some work looking at some of the statistics for the Hemet Real Estate market and determined what ‘I knew to be true” is in reality a fact, that can be backed up with cold hard facts.

I have been looking at the Expired listings in Hemet, on the MLS. Expireds are properties that have been under contract and listed in the MLS with a REALTOR®. For a specific period of time – typically somewhere between 90 and 180 days, and the contract has expired without the property being sold.

Just to show you the significance of the numbers, for the sake of this article, I am comparing all 30 days of November 2005 to the first 20 days of November this year. I can guarantee that the numbers will shift more, highlighting the significance of the difference a year can make.

The first number I looked at was for all of Hemet. I looked at all 3 Hemet zip codes, 92543, 92544 & 02545. I also looked at all of the different classifications of property as a whole. These numbers not only include single family residences, but mobile homes, vacant land, commercial property and business opportunities are all included.

Last year, there were a total of 74 listings that expired during the month of November. In the first 20 days of November this year there have already been 123 properties that have expired from the MLS. – a 40% increase!

Next, I narrowed the search down to just the single family homes – in all 3 zip codes. Last November there were only 36 listings that expired compared to the 84 so far this year – that’s more than double!

So, now, let’s break it down by zip code:

Zip Code: 92543 Last Year: 8 This Year: 18
Zip Code: 92544 Last Year: 19 This Year: 34
Zip Code: 92545 Last Year: 9 This Year: 32

What this information means is that it is a Great Time to shop for a home!

Can You Really Tell when the Best Offer Price is Coming?

2006-11-20T09:47:00.000-08:00

Can You Really Tell when the Best Offer Price is Coming?

by John Occhi

Here it is the week before Thanksgiving and the Hemet Real Estate market has not shown any signs of improving. Not only do we have all of the homes for sale that would normally be for sale, due to traditional reasons like job transfer, divorce, death, etc. but we also have every investor attempting to dump their real estate investments on the market so they can maximize their return.

Well, sellers are not happy, nor should they be if they stop and consider how much more they could have made, had they sold a year earlier. Not only is it a question if they could have gotten more, but how much easier it would have been in a much quicker sellers market.

NEWSFLASH: The coveted ‘sellers’ market is officially over and it is now a ‘buyers’ market. So deal with it.

So, let’s talk about offers and why the first one is generally the best.

It must happen everyday. A seller puts their home on the market, fairly priced. Anticipating they will generate a buyer frenzy and they should generate multiple offers, driving up the price of their Hemet Real Estate.

So the house gets listed for a fair price. The Hemet Realtor holds an ‘Open House’ or two and a full price offer comes in. The seller knows his home is worth more than that, after all, ‘it is the best one in the neighborhood’ and counters for a higher price which the buyer then rejects and buys another home.

In a panic, the seller raises the price to what he feels the palace is worth. The home now sits on the market for weeks with no activity at all. Tension starts to show between the Realtor and the Seller. Finally, the seller concedes and lowers the price once again to the original asking price.

By this time the home has been on the market for about 2 months and is considered ‘tired’. Everyone wants to know why the house had not sold yet, looking for a flaw that probably does not exist.

Once the Hemet home for sale has been lowered back to its original price, two more offers come in – almost simultaneously. Both for less than full asking price. The seller accepts the best of the two offers, with his tail stuck between his legs and the Realtor is feeling vindicated.

Granted, this probably would not have happened a year ago. The lower price would have certainly seen buyers competing for the Hemet home for sale. Had it gone on the market at an over priced point, it would not have been long for the market to catch up to the asking prices and generated interested buyers. But not today.

Today there is not the limited supply of homes there once was. Today, every seller has to carefully consider the merits of every offer, even if they think the actual price is lower than where it should be. Remember, price is NOT the only consideration in accepting an offer.

The big problem most sellers have is accepting a less than perfect offer shortly after the home comes on the market. They justify that if we can get this much now, then with a little more exposure, certainly there is a better offer right around the corner.

Of course, this is possible.

What most sellers don’t take into consideration is that the offer was generated by a serious home buyer who is very familiar with the local market and recognized Hemet home for what it is – a new listing on the market. They are probably very familiar with the local markets and have undoubtedly been in every other home for sale that meets their criteria, on paper. When the right property comes along, they are ready to move on it.

When evaluating any offer, make sure you understand the market, on the day your offer comes in. Ask your Hemet Realtor for some facts and figures to justify the price. Find out how many homes similar to your are for sale then. What is their price range? How many have sold in the last couple of weeks? How did the other homes form your neighborhood, that recently sold, compare to your? Do you know how competitive the buyers were?

When you are selling your home you have to be objective and not personal. Of course, there is a personal attachment to the home, especially if you have been there for many years – but start to think of it as a piece of dirt with sticks on it. It is nothing more than a house. The sooner you can separate yourself the sooner you will be able to objectively consider an offer when it comes in.

Do yourself a favor and have your Realtor take you on a tour of similar homes and other homes in the same price range. Then you can ask yourself if you had so many dollars to spend, what really is the best home on the market, today?

Buying or Selling a Hemet Home During the Holiday? Please consider these points . . .

2006-11-17T23:17:00.000-08:00

Buying of Selling a Hemet Home During the Holiday?
Please consider these points . . .
By John Occhi

There is no doubt about it, the number of homes that sell during the holiday season takes a dramatic dive over any other time of year.

Does this mean you should not try and sell your home? Absolutely not, read my article about why this is such a great time to sell your home!

Does this mean you should put off buying a home until after the holidays? NO…NO. . .NO! This is the absolute BEST time of year to be a buyer.

The real question is do you have the ‘right stuff’ to buy or sell a Hemet home during the traditional holiday period, which begins some where around Thanksgiving and extends into the new year. After all, the holidays are traditionally a very stressful time, regardless if you enjoy them or not (believe it or not, not everyone looks forward to this time of year).

So, if you want to SELL your HEMET home during the holidays, what should you consider? How about…

1) Don’t think that everyone believes as you do. What may be appropriate and traditional in your home during this time of year may actually be offensive to some. So as you decorate, please consider scaling back on the religious artifacts. Don’t skip them, just scale back to moderation – but do please remember the ‘reason for the season’.

2) Decorations in general should be scaled back. Tastefully decorated rooms often only employ minimum touches to bring the flavor of the holidays into a home. Please don’t do a “Griswalds” (if you don’t know who I am talking about, rent the Christmas classic – “Christmas Vacation” with Chevy Chase).

3) Don’t get an oversized Christmas tree this year. Now is not the time to get a tree that reaches to the ceiling and occupies valuable space or landscape that will now appear to be much smaller than what it actually is.

4) Don’t be the first with the decorations – up or down. Traditionally Christmas decorations start to go up the day after Thanksgiving and don’t come down until New Years Day. You’ll do yourself major justice if you can wait and put them up no more than two weeks before Christmas and no more than2 weeks after (but New Years is even better).

5) If you are planning on having guests stay with you for any period during the holidays, please inform your REALTOR and have him restrict showings until after the guests are long gone and their space fully restored to it’s original condition.

6) Remember to showcase the home highlighting the great features of the home year round. If you have photos from the spring and summer, please display them – this is a great way to showcase your garden in full color.

7) Keep up with seasonal chores. In Hemet, we do not have to worry about shoveling snow, but we do have the Santa Ana’s come through and blow up a mess. So please keep the yard raked and the sidewalks swept and free of all debris.

Take this advise into consideration and you should have a great chance of showing your Hemet home for sale as long as it is properly priced, because we all know the buyers who are shopping now, are motivated.

So if you want to BUY a HEMET home during the winter holiday season you will find yourself in a position of power.

Not only is the current market a true buyers market, with approximately a 6 month inventory of homes for sale in most market segments in Hemet, but there a lot less buyers spending their holiday time shopping for a home, when the mall is open.

So, as a buyer of a Hemet home during the 2006 Christmas holiday season there are a few pointers I would like you to consider maximizing the time you will spend, making sure you find the absolute best Hemet Home for sale.

1) Yes there are some real bargains right now, and as a buyer you are definitely in control. Please don’t get too cocky though. Do your homework to present any offer. Make sure you look only at the comps in the neighborhood you are considering and be selective in the comps, only considering the homes that have sold in the same neighborhood in the last 3 months. Anything older really is not relevant to today’s market.

2) Now is a great time to negotiate. Price is not the only negotiable in many cases but many times other valuable concessions can also be had for the asking. You might ask for the appliances or even certain items of furniture that just ‘go’ with the home. Other common concessions include having the seller pay all or a portion of closing costs such as pro-rated property and transfer taxes; escrow and title fees, inspection costs or anything else that you would like to negotiate. One last thought is asking the seller to pay load costs.

3) Often times in the winter certain systems of the home are shut down and not operable. Well, when you are inspecting your home, make sure everything is working the way it should. If we had snow in Hemet, you might be able to ask for an extension to inspect a roof perhaps – but we don’t have those problems – so do it right the first time. However, if we get into0 a wet spell, put off your inspection until the rains stop. It is very important to check the home thoroughly and you don’t want anyone taking any shortcuts because they might get wet.

4) Please be patient. At this time everyone is very busy. Presumably you have your own holiday schedule to adhere to and so does the seller and so do the real estate agents on both sides of the transaction. Sometimes it may take an extra day or two to view a particular property or schedule an inspection. Remember, ‘the reason for the season” and don’t stress anymore than you already are.

So, you see there are many things we can all do to improve our chances at a successful offer and escrow during the holidays, if we just all take a deep breath and do what has to be done.

I’d like to leave you with this parting thought, believing you will find yourself celebrating the holidays knowing you have a moving date set. Plan f0r the close. Make sure your Hemet Real Estate Agent is going to be around when escrow closes and that your Escrow officer will too. Although delegation of responsibilities is common, you really don’t want to be in a position where someone from the office is ‘covering’ for your agent while they are off having a good time. Your agent should be on top of the situation, like any other escrow at any other time of the year. Your agent should KNOW that both escrow and title have all of their documents and that the lender is on top of the situation.

Have a wonderful time and Merry Christmas to you and yours…

Real Estate Mortgage Fraud - Bonnie & Clyde Behind Bars

2006-11-17T10:08:00.000-08:00

The "Bonie & Clyde" of Real Estate Fraud
Caught andBehind Bars
by John Occhi

I was reading through my morning industry newsletters when I got a special alert on a story that I have been following. On the surface, it might be a strange story for a Hemet real estate agent to follow, but what can I say…I have the same law and order fascination that the rest of the country has. After all, why else would there be 3 different CSI programs and 3 different Law & Order shows eating up our television airwaves night after night.

This story is about a modern day ‘Bonnie & Clyde’, as they have been called by both the media and law enforcement. Call it coincidence if you want, but I find the humor in the fact that the day ‘Bonnie’ is sentenced to a mere 6 years for her part in the multi million dollar scam, Clyde gets picked up in Nashville, TN. While Bonnie got off with a light sentence for her cooperation Clyde is on the hot seat facing charges that carry a potential 400 year sentence for his mastermind work in the real estate fraud crime ring.

If you want to learn more about the activities of this particular criminal, then you might want to check out the archives at RealEstateFrauBlog.Com.

If you would like to educate yourself and learn about three types of mortgage fraud, please read this article, published at the Money website.

How to Sell Your Home in Today’s Buyer Market

2006-11-15T09:39:00.000-08:00

How to Sell Your Home in Today’s Buyer Market
by John Occhi

It should be pretty obvious to anyone who has any interest in the real estate market. You should know by now that the ‘sellers’ market we had in Hemet during the first half of this decade has all but evaporated and transformed itself into a bona fide ‘buyers’ market. What this means is that Hemet, like the rest of Southern California and most of the rest of the country has more homes for sale in the MLS than there are qualified buyers in the market looking for a home.

There are a couple of ways to determine that the market has shifted, if you have access to statistical data. If you know haw many days’ homes are sitting on the market, this is a good indicator. An average of 60 days or more tip the scales in favor of buyers. If you look at the article I published earlier this month, I examined statistics for the market at the east end of Hemet, in zip code 92455 and found that the average home that was listed in the MLS in October 2006 was listed for sale for an average of 84.67 days – definitely a good sign for buyers!

Determining the available ‘inventory’ is also very effective. Inventory is simply determining how many homes sold in a month into the number of available homes. Read my article, “Active, Sold & Expired A closer look for October, 2006 of the Hemet Real Estate Market” Last month, there were 40 sales in the 92544 zip code with 291 available homes for sale. Do the math and you’ll figure out that November started with at 7.275 month supply of homes for sale. This will definitely put the buyer in the driver’s seat.

Clean-Up: The First Step in Preparing for a Successful Hemet Home Sale

If you want to sell your home and you are serious, then you need to make your home model ready. I’m not talking about ‘testing’ the market to see what might happen. Testing will only frustrate you and eat up valuable exposure time.

No, if you even think you are a serious seller, then commit to the process and that means work. Now is the time to do ALL of the deferred maintenance. That “honey-do” list we all have needs to get done now. Literally, the most profitable steps a Hemet seller can make is with a cleaning brush, a paint brush or a hammer.

Go ahead and modernize your home with stylish new light and plumbing fixtures. Don’t be wasteful with your money, but if you need new flooring or wallpaper there is never a better time to install them. Don’t go overboard with major renovations that you won’t have the time to enjoy and your buyers may not appreciate – but do brings things up to date.

Perhaps the toughest obstacle I face with sellers is ‘de-junking’ their homes. Yes, I know one mans junk is another mans treasure but now is not the time to show off your collections. I always say, if you are going to list your home, start packing. If you do not have adequate space in your garage to store packed boxes, then rent a self-storage unit, off your property. This will make moving so much easier and your home will look less cluttered and easier for the buyer to imagine taking possession of the space without all of your personal belongings.

One more comment on this theme – de-personalize your space. Eliminate religious artifacts, eliminate any ethnic pride and even family photos. Live without as much as you can. Remember, you are moving and this is no longer your ‘home’, but the house you called home.

Team-Work: Who You Hire Can Make or Break Your Sale

There are a lot of Hemet Real Estate Agents who would love to list your home on the MLS and you have to pick the one that is best for you.

Do you want a discount broker? Maybe, if how much you spend is more important than how much you will net at the end of the sale. Remember, a discount broker can afford to list you home for a low commission because she wants her phone to ring with potential buyer clients. So, the longer her sign is in your yard, the more calls she stands on receiving. If she sold your home in a week, she would lose money.

Do you want a hybrid – mortgage/real estate agent? I don’t know why. It may seem convenient to have one individual do the roll of several professionals. Is that what you want? Or do you want a professional handling each aspect of your real estate transaction – working in harmony with one another. Then I would select a Hemet Realtor who has a strong working relationship with a reputable lender to help pre-qualify your offers when they come in.

Do you want a Hemet Real Estate Agent who will promise you the highest price for your home? Only if you like to hear sweet little nothings in your ear as you are being raked across the coals. Don’t ever listen to an agent who promises more than what your house is worth. Especially in today’s market. You are being set up for a prompt price reduction. Guaranteed!

Do you want a Full Time Hemet Real Estate Agent? I hope so, unless you think you will get better exposure while your part time agent is passing out business cards while working at Sears, or whatever they still call their ‘day’ job, that they have not yet been able to quit, for one reason or another. Work with an individual that has made a full time commitment to their chosen profession and not a part time wanna-be.

Are you really concerned with how much commission you will pay or how much you will walk away with at the end of the sale? If your thoughts lead you to believe that you can save money by working with an agent who will cut their commissions, chances are you are working with an agent that cannot successfully negotiate on their own behalf, so why would you rely on them to negotiate the sale of your most prized and valuable possession – your Hemet home for sale! You must realize that a 3% commissions is a 17% difference in earnings for a Realtor over a 2 ½% commission. Does it not make sense that more REALTORS would be motivated with a 3% or better commission than a 2 ½% or less commission? Yes, you may save a few dollars off of the line item of commissions paid out, but how much longer did it take you to receive a closing statement and for how much less than if it sold quickly when it was first listed.

Does your Hemet Real Estate Agent have a written documented marketing plan that holds him accountable? If not, you may be working with a magician for an agent – someone always ready to pull the next trick out of their sleeve to impress you when you need impressing. You will find that the professionals all have a plan they customize to your unique home and circumstances and then stick with the plan, holding them accountable for each step and each given task on a daily basis.

Does your Hemet Realtor offer any type or realistic guarantee? Will your Hemet real estate agent offer you an easy exit strategy from your listing, if you are not pleased for any reason? Will your Realtor offer to reduce their commission if they do not sell your home with in a specified time period – say 60 days in today’s market?

Consider these questions and others you may have when selecting the right Realtor to sell your Hemet home.

Third Party Inspections: The Key to Setting Yourself Apart from the Pack

Every bona-fide real estate transaction in California is required to have disclosures completed and inspections of the property integrated into the terms and conditions of the purchase agreement. Some of these are state laws while many are lender requirements. It really doesn’t matter who says to do it, if it needs to be done, it needs to be done.

A disclosure is simply letting the buyer know what you know about the property. There are more law suits filed for non-disclosure issues. More often than not, they are innocent oversights, forgetting about the little inconveniences and nuances of our Hemet home. Typically, we all learn to live with something and never give it a second thought once we become accustomed to it. Please spend the necessary time considering every aspect of your home and read through the questionnaires on the disclosure forms very carefully.

A very powerful tool when selling a Hemet home is to have the inspections done prior to placing it on the market. This may cost you several hundred dollars up front, but promises to comeback to you many times over at the close of the sale.

At a minimum, your home should be inspected by a member of the “American Society of Home Inspectors” (ASHI). Your Hemet Realtor undoubtedly has several choices of local professionals that works well with your Realtor. This inspection will avoid surprises when it comes time to close escrow. By having a trained professional put his reputation on the line, a prospective buyer will feel much more comfortable placing an offer on the table, knowing the condition of the home for sale. Coming from an independent 3rd party, some buyers will accept this report at face value, while others will want to go ahead and hire their own inspector. Either way, you have identified each potential problem and how you choose to handle it is your business.

Small repairs are often completed, prior to marketing the home, while others are merely disclosed to the buyer and allowing the buyer to make the repairs.

Another common inspection made prior to the actual marketing of the Hemet home for sale is the termite or pest control inspection. This will eliminate any question about the soundness of the structure of your home and identify any potential termite problems. Again, if there are issues, you have the opportunity to get it right before the buyers ever come to your home or wait and fix it before the close of escrow. Typically, a lender will never fund a loan until the property has been certified by a pest control inspector.

It is also recommended that you have the home appraised prior to marketing. Not only will this solidify your asking price, in your own mind but in the mind of every REALTOR who previews the property and shows it to their buyer clients.

Both the Home Inspection and Appraisal are costs that the buyer typically pays. By completing these in advance, it helps the buyer with closing costs that they don’t have to pay.

Other inspections that may or may not be relevant to your Hemet property could be a well certification, a septic tank certification, a roof certification or anything else that relates to unique characteristics of your property. Remember, the more that is disclosed to the potential buyer about the condition and soundness of your property the more questions are being eliminated and thus the value increases.

ASKING PRICE: Be Real – Remember, this is a Buyers Market

This is such an important topic that I just recently wrote a whole article with extensive discussion to the many principals of pricing a home so it will sell. Please read my article here, so that you will have a clear understanding of the concept.

NEGOTIATE – Never Be the Party to Reject an Offer, Always Counter-Offer

You’d be surprised how many times an offer comes in that may appear to be ridiculous to every one involved, including the buyer’s agent. Please don’t be insulted and don’t say something like, “I’m not playing that game”.

Every offer is an opportunity to negotiate. You now have the opportunity to counter-offer and negotiate on all of the terms of the contract. Remember, money is not the only issue on the table. Perhaps, you lower the price in exchange for additional time at the close of escrow, if it’s needed. Maybe, in exchange for a price concession, the buyer will waive a contingency or two.

Of course price is critical to the process. Negotiations can last w\for a week or two between the parties. With each counter offer, the other side will typically have 3 days to respond; so each full round can take up to 6 days. Remember, every time you counter an offer, you are rejecting the offer on the table and if it is not responded to in a reasonable time frame (3 days) the entire process typically breaks down. My advice is to always counter offer while you continue to look for a new buyer. An open house in the midst of negotiating is a great way to gauge a buyer’s true interest.

Once the deal has been negotiated and the ink on the contracts is dry does not mean the sale is over. Up to now, everything has been fun. It’s all been about sales and marketing and if your Realtor does not find these two activities fun, then find one who does.

Now we have to close escrow. We have to keep an eye on the buyer and make sure they don’t suffer from ‘buyer’s remorse’. Your Hemet agent has to keep on top of the situation and make sure that all of the money is put into escrow as soon as the contract calls. You want to see the buyer conducting inspections and getting involved in the buying process. The buyer will have to perform certain tasks by certain dates and it is your Realtors responsibility to track these events and coordinate with the buyer’s real estate agent and make sure they happen, as agreed so the sale will successfully close escrow on schedule

A Comment fro an Industry News Leader

2006-11-13T09:24:00.000-08:00

Inman News Blog - Here is a short article I found that reveals how many sellers DO NOT understand how their agent is paid

The ABC’s of why You Should use a REALTOR

2006-11-12T18:36:00.000-08:00

The ABC’s of why You Should use a REALTOR
by John Occhi, REALTOR

I came across this generic marketing piece on my computer about why a Hemet home seller should want to choose to sell with the assistance of a REALTOR instead of on their own as a FSBO (For Sale By Owner).

Typically the single most common reason quoted for a FSBO trying to sell their home themselves is because they want to save the commission even though the National Association of REALTORS (NAR) reports that homes sold with a REALTOR typically sell for 17% more that FSBO’s. This is the subject for a future discussion, for now, let’s examine why91% of all FSBO’s eventually end up listing their home with a REALTOR. . .
I have taken the poetic license that comes with being your own blog publisher and made a few revisions.

In any event, please enjoy…

A is for Advertising - It is the Hemet Real Estate Agent that foots all of the bill of advertising the home – until it sells.

B is for Bargain – Published research shows that 77% of all sellers feel as if their commission dollars were well spent.

C is for Contract - A Hemet REALTOR supplies standard California Association of REALTORS (CAR) contracts that are constantly being reviewed and revised up to twice a year by top Real Estate attorneys in the state – protecting the seller – unlike the version sold at the office supply store.

D is for Details – There are so many details that a REALTOR takes care of that most FSBO’s never even think about in selling their home. A good REALTOR has a check list to make sure everything is done, as it should be – Attention to Details!

E is for both Experience and Expertise – Experience comes from selling more than one home every several years and Expertise is developed in marketing, financing, negotiations and so many more areas of importance to a smooth transaction.

F is for Financial Know How – As a Hemet Realtor, I know of many different financial options to assist buyers purchase their dream home. More importantly I have a network of trained professionals to step in where my expertise ends.

G is for Glossary – There are so many terms that you may think have a common meaning but actually can mean something completely different when it comes to Real Estate, such as ‘Close’. Then there are all of the unique industry terms that you have no business even wanting to know what they mean, until they affect you – and your Realtor knows what they are and how they apply to your situation.

H is for Homework – Much preparation must go into the research of pricing a home and keeping it priced properly. Homework is don on keeping up with the latest marketing trends and techniques. A professional REALTOR is always studying and improving their professional skills.

I is for Information - When you have a question about Real Estate – ask your REALTOR. He either knows or knows where to get that answer for you!

J is for Juggling Act – Selling a home is often a juggling act. Your Hemet Real Estate Agent will juggle and handle all of the showings and inspections.

K is for Keeping Your Back Covered – Your Hemet REALTOR has a fiduciary responsibility and an ethical obligation to look out for your best interests throughout the entire transaction.

L is for the Law – Professionals from all fields must keep up with the laws and changes to the law, as they affect their occupation and a Professional Hemet REALTOR is no different than all of the other professionals you come in contact with.

M is for MLS – MLS or Multiple Listing Service is the most effective marketing tool to expose your property to buyers across the country.

N is for Negotiations – A REALTOR handles price and term negotiations without being emotionally involved or attached to the outcome.

O is for Open House – Your Hemet Realtor will not only hold your home open for a weekend, but arrange a special open hose for all of the local Real Estate Agents who may have a buyer for your home.

P is for Prospect – Every successful Hemet Real Estate Agent has his own network of contacts that can produce potential buyers for your Hemet home for sale.

Q is for Qualified Buyers – A Hemet Real Estate Agent does not bring unqualified buyers through you home.

S is for Security – You never have to worry about loved ones being home alone with a total stranger that wants to preview your home.

T is for Time – The time it takes to sell your Hemet home can be very consuming and one of the best reasons to use a resource like a REALTOR – Time is their business.

U is for Unbiased – A Hemet REALTOR will have an unbiased opinion, being removed from the emotional outcome.

V is for the VIP Treatment – when You have a Hemet Real Estate Agent working for you, you will be treated like a VIP throughout the entire grueling process.

W is for Wisdom – A knowledgeable Hemet Realtor can offer the wisdom that comes with experience.

X Marks the Spot – A Hemet Realtor is right there through the signing of the final documents.

Y is for Yard Signs – A REALTOR will provide custom professional signage to market your home and promote Open Houses.

Z is for Zero Hour – Selling a Hemet home is more often than not a very emotional and stressful experience that can take it’s toll on the strongest of individuals and families. Your REALTOR is there to help and be there for you when you need him.

Other Real Estate Blogs

2006-11-12T10:42:00.000-08:00

Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.

The Loan Process

2006-11-12T10:16:00.000-08:00

The Loan Process
by John Occhi, REALTOR

As a Hemet, CA Realtor, I thought I would write today about a topic that I am not an expert in nor do I ever want to be referred to as an expert. It is the real estate loan process. The reason I am spending some time on this topic is because it is so critical to buying real estate, and what I am an expert in is helping buyers buy Hemet real estate.

So, let’s take a look at the process, from the eyes of a Realtor.

First, let me get this out of the way and make some people VERY MAD at me. I can not say that everyone who falls into this category is the same, but I can tell you from my personal experience that this is a universal truth. Yes, I know there are good guys and gals out there, I just have never been fortunate to do business with one, though.

I am talking about the Hybrid – The individual who does both Real Estate and loans. In theory, it sounds great, an opportunity to pick up a 2nd commission on a transaction. Seems like there is nothing wrong with that!

My problem is that both the Real Estate and Mortgage industry are so complex and so specialized that I find it nearly impossible to comprehend how someone can do both jobs well. I guess I think too highly of myself as a Realtor and the professionalism that I spend my time perfecting my skills that I could never imagine taking on so much more work and responsibility and expect that I could continue to do as good a job as I do and hold myself to the same high standards. I know a mortgage professional’s job is complex and very specialized.

It seems that every transaction I have had significant problems with there has been a hybrid on the other side of the deal.

So, let’s talk about the loan process.

When a buyer comes tome first, after asking some preliminary questions to figure out if I can help or not, I need to know how much home they can afford. This breaks down to how much down payment do they have and how much money can they borrow.

Yes, I know how to go through the steps to come up with some preliminary information on my own, but the buyer needs to know there are other professionals involved, so the sooner I can get someone else doing their job, the les responsibility (liability) I have to assume.

As a Hemet Real Estate agent, I find it important to have an association with a lender that I can pick up the phone at any reasonable time and have him speak with my buyer. I believe by developing a good working relationship with a lender then I will know and trust the information he gives me, each and every time. Unlike some in my field, I do not want to have a lot of smoke blown at me, from a lender who will try some sort of kinky deal. (Kinky in this case is not sexual; it is off beat – bizarre, different, a stretch or sometimes called ‘creative financing’.) There is a time and place for creative financing – but in today’s market of higher interest rates and an over supply of houses, I believe it is asking for trouble and best to be avoided by novices in real estate.

I might as well make a plug here, I have such a go to guy. Joey Aszterbaum of Altura Credit Union/Patrion Mortgage is the mortgage lender that I count on. He is a straight shooter and tells it like it is. If anything, Joey will err on the conservative side, not over-extending someone which more often than not puts a kink in a deal and builds up false hope. Joey has a great website, http://www.joeyloans.com/ and he can be reached at 951.571.5751.

A common fallacy in the market today is that working with more than one lender will negatively affect your credit. This is not true. Although I do not have the specific details at my fingertips right now, I can tell you that the law was changed in the last few years. The new change protects the consumer when shopping for a car loan and a mortgage. Consumers could not properly shop for a loan if every time their credit was run, they lost points off of their credit score. So, it was agreed that the consumer could have as many inquiries as they want from as many car dealers in a certain time period (I think it is 45 days) and it only counts as one inquiry. The same rule applies to mortgage loans.

Now that I have given an endorsement, let me also say that I believe when you are shopping for money that you should do just that – shop. Like the TV commercial recommends, let lenders compete for your business (please don’t ever go to a website and start the process – talk to your rep long before you give up one bit of personal information). So, even if a Hemet Real Estate buyer comes to me with a pre-approved loan, I always highly recommend that they let Joey see what kind of magic he can perform.

Pre-Qualified vs. Pre-Approved

Pre-Qualified is the simple process of the mortgage broker spending about 10 to20 minutes (typically over the phone) and based on the information that the Hemet Real Estate buyer provides, the lender will make a decision to move forward, or not.

If the lender feels the buyer has been honest and forthcoming, the lender will generate a “Pre-Qual” letter which is really not worth much more than the paper it is written on. Typically the lender has not even run a credit report. F I get the information from a lender that I trust and work with on a regular basis, (Joey) than I feel comfortable in pursuing the house hunting process.

If the letter is to vague, or goes against my ‘gut feeling’ I will often defer working with the buyer until either my lender has a shot at the process or they become ‘pre-approved’.

Pre-approval is not done by the commissioned loan broker but by the underwriter. The underwriter is the one responsible for ensuring that all of the criteria of or the loan are met and applied to the deal. The under writer verifies all of the information submitted, such as employment, bank accounts, etc.

When a buyer goes through this process, there is typically no question about them being able to get the money they need as they have been pre-approved. This is like the lender telling the home buyer to go pick out a house for XXX,XXX dollars and the lender will fill in the numbers and sign the check when it is needed.

Buy a House

Now, it is time to go shop for a house in Hemet, You and your Realtor both know how much you can afford and how to structure a deal, taking into account the closing costs, down payment and monthly loan payments.

By arming your Realtor with a strong commitment form a lender, the Realtor will not waste your time or his looking at homes that you may want, but are not qualified to buy.

Once you have shopped and found the Hemet Home for sale that you want to buy, your Realtor will draw up the offer and present it to the seller. The seller may either accept your offer, reject it or may counter-offer with something between what you originally offered and what they had asked in the MLS. Counter offers can go back and forth for several rounds until an agreement is made.

Beware though, sometimes the agreement is that we disagree and negotiations can stop abruptly with any offer that is rejected and then countered. Don’t put yourself in a position of stepping over a dime to pick up a penny.

Once both parties have agreed on the price and terms of the agreement it is known as a “Ratified Contract”. It is based on this ratified contract that the lender will lend the money. A new rule in real estate, starting in 2006 is that the appraiser must now receive a copy of the ratified contract so that the value of the terms can be included in the appraisal.

Select Your Type of Mortgage

This is one of the reasons why it is important for Realtors to do Real estate and lenders to do loans. There are literally hundreds of different loan programs available today. How can someone know all of those loans and know all of the properties in Hemet at the same time. My brain is not that big.

So, discuss your options with your lender. Run the numbers. Know what it will cost in out of pocket funds. How much of the costs will or can be added to the loan? Know if there are pre-payment options. Find out if interest can be paid down by prepaying points. There is a lot of stuff to know here. This article can’t ask every question, what I am trying to do here is explain the process and how it affects everything.

Select a Lender

Now, if you have been working with two (or more) lenders in the preliminary shopping stage, now is the time to call Joey and make your decision. OK, even if it’s not Joey, let who you are working with know they have made the grade. Also please call the one that you are not going to work with and let them know of your decision.

Time to Apply for a Mortgage

Now that you have done all of your due diligence, it is time to put the hard work to the test and apply for the perfect loan for your new Hemet Real Estate.

Depending on the loan you have chosen, you will be generating lots of paperwork. Tax returns, pay stubs, bank statements, letters from employers, and so much more. It seems like every time you meet their requirements, your documents have opened up a new can of worms, raising new questions that must be answered with documents to prove beyond all reasonable doubt that the answer you are providing is true and accurate.

Let me through in a word of caution here. Don’t lie and Don’t cheat. Just about every loan is connected in some way to the federal Government and if your loan ever defaults because you bought more than you were truly qualified for and they find that one altered document, you leave yourself wide open to federal prison time for mortgage fraud. I read industry newsletters in my email everyday where there is always an article or two about someone going to prison for something they did wrong in obtaining a mortgage. You can check out http://www.mortgagefraudblog.com/ for yourself.

Once you have submitted your application and all of the supporting documentation you will participate in a loan interview with the underwriter or their assistant. This is typically done over the phone or in the lenders office.

Once the loan package is complete, you will receive a ‘good faith estimate’ which will spell out all of the terms of the loan. This is typically over night delivered (FedEx) to your residence. Familiarize yourself now and avoid problems at signing. You want to make sure you understand all of the terms and conditions and how they affect you. Now is the time to ask questions.

In addition to the good faith estimate, there is a “Truth in Lending Disclosure”, which again summarizes your loan and gives you all of the legalese about the loan and your rights as an American consumer.

While you are reading through these documents, your loan is being submitted for a final review. Now, this may sound silly, and believe me, I do not want to insinuate that you are stupid, but I have got to tell you people do stupid things about now. Whatever is happening in your life – let it be until your loan closes. Do not go out and buy a new car. Don’t decide that now is the time to quit your job to start your new business. Do not file for divorce. Don’t do anything different from what you represented you were doing when you completed the loan paperwork. Just don’t.

Time to Close

The process of buying a home ends with what is commonly referred to a ‘the close of escrow’. In Hemet, California the close is pretty much a non-ceremonious event unlike other parts of the country where ‘the close’ is at the’ closing table and both parties are present, with their attorneys and real estate agents, and money exchanges hands for the keys.

In Hemet, like the rest of Southern California, the close is waiting for a phone call that the loan and deed have ‘recorded’ with the Riverside County Recorder.

Once escrow determines that all of the pieces are complete and ready to go, escrow contacts the lender and “orders doc’s”. these are the actual loan documents and disclosures that the buyer will sign in front of a notary. Typically, once the lender gets this request, they do their final verification of the material facts – employment is verified and credit is often re-ran. Then the lender prepares the actual documents and emails them to escrow. Escrow then prints out enough copies for each party and an appointment is made with the notary to sign the docs. Once signed, escrow will have to ‘package’ the loan papers and return them to the lender.

Now, the lender has to ‘fund’ the loan. This process can take 2 or 3 days typically – sometimes longer, depending on work load and cash flow. Sometimes the lender is using the signed documents to raise the capital to loan, which can take even longer. This is a very tense time for all parties. Both the buyer and seller are looking to move. The seller and the real estate agents are looking to get paid and there are often other parties looking for a payout from escrow. Sometimes bills are paid and other times money is transferred into yet another escrow for the purchase of another piece of property, which in turn creates a domino effect with tensions running high with all of the parties of each domino escrow. I have seen as many as 5 escrows deep stacked up – all depending on one transaction and have heard tales of many more than that.

In the mean time, while everyone is walking on egg shells, there is still more to do. The buyer must conduct a final walk-thru to determine that the home is in basically the same condition as when they purchased it and that any agreed upon repairs have been made. Now is NOT the time to start further negotiations.

Once the loan funds, money is wired into the escrow holders trust account. Then escrow will direct the Title Company to record the deed. Once Escrow has confirmation that the deed has recorded, escrow will disperse funds – typically the next business day.

If all goes well, an escrow will close on time – typically 30 days from the date the purchase contract is ratified. There are times when everything falls into place and an escrow can close early – this is especially true if a buyer has become ‘pre approved’- early in the process and not just ‘pre-qualified’. Often a seller will need the full 30 days and may even require an additional time to get things moved, once they have their money. 3 days is typically granted as a courtesy to the seller, if required – any more time than that and the seller is expected to pay rent based on the buyers costs of a mortgage, insurance, taxes and utilities.

With the right preparation and a calm attitude purchasing your home can be a very enjoyable experience. Just know that there has never been a loan that has gone from beginning to end without at least a minimal amount of stress – so prepare yourself to deal with it. When someone needs something form you – deliver it now, because every day you delay early in the process can have a ripple effect at the close – oftentimes compounding the time – a day delay in producing a document can cause a week delay in the close – don’t ask me why, it just happens and is completely out of my control as your Hemet Real Estate professional.

Now maybe you can see why I leave the loans to the loan professionals and I stick with finding my buyer clients with the best house for their family that they can afford.

What Happens to the Hemet Real Estate Market at This Time of Year

2006-11-02T17:55:00.000-08:00

Today I kick started a new marketing campaign. I have been contemplating for some time what my next move would be in Real Estate finally decided to focus on the “EXPIRED” market.

These are the Hemet homes that have previously been listed for sale with another REALTOR, belonging to my MLS. I should clarify this, not all real estate agents who do business in Hemet belong to the local Hemet-San Jacinto Board of Realtors. If an agent from outside this area gets a listing, for whatever reason, they can still list it in our MLS – this is called a ‘Reciprocal Listing’ in Realtor lingo.

The problem with employing an agent from outside the market area is 1) they are not as familiar with the local market and conditions as a local; and 2) They do not have a network of local Realtors to tell about their listing and entice to preview and show the property.

In any event, before I get too sidetracked, let’s bring the discussion back to the current condition of the Hemet Market. We can all agree that times are slow and many are thinking that November and December are traditionally the slow times of the year anyway, so why bother listing a home now, why not just wait until Spring, when everything is fresh and new again…and of course the market will be ready to take off then, right?

Well, every year I publish a short piece on why the holiday season is a great time to list and sell your home. I thought I would add it here, providing for a fun and informative read…but I must disclose that the following is not an original writing of mine and to be honest, I have no idea where it comes from to give the credit to.

So, please consider…12 Reasons to List During the Holidays

1) There's less competition for buyers

2) Winter prospects are more serious during the holidays

3) Your home looks better during the holidays

4) One of the highest percentages of "Listings Sold" to "ListingsTaken" occurs during this time of year

5) You may receive more money for your home now because you have less competition

6) Throughout the holiday season you may restrict showings during your personal family events

7) Buyers have more time to look at homes during holidays, especially during vacations

8) January is traditionally the biggest transfer month - and you must be on the market to capture that

9) By selling now you can have a delayed closing or extended occupancy until the beginning of the following year, if you want it.

10) When you sell during the winter you have an opportunity to buy during the spring, when many homes are on the market

11) You may have fewer actual showings, but more qualified and motivated prospects look for homes during the winter

12) Corporate transferees, who need to buy a home now, can't/won'twait until spring

How to Price Your Hemet Home so it will Sell

2006-11-01T16:22:00.000-08:00

With all of the discussion about the Real Estate market, I feel that many people are being foolish when it comes time to consider if they should sell their home or not. Let’s assume for this discussion that we can all agree that the market has turned flat and in some isolated areas, values have started to slip. So the question remains, “Do I get out now?” or “Do I ride the storm out and see what happens in the next couple of years?”

Of course, there will always be sellers who have to sell now, regardless of market conditions. Several examples of these sellers are those who are being transferred out of the area; those who have gone (or are going through) a traumatic life change, i.e. divorce, death, illness, and even the kids going off to college; and then there are those that are financially strapped – perhaps they got into their existing home with some exotic mortgage that did not live up to its expectations.

In any event, this article is not written for the above individuals specifically, although every thing I will discuss here is sound advice and should be considered by everyone who is even remotely thinking of selling their home.

If you read my article from yesterday, you’ll see that I identified a large number of homes for sale in the East Hemet zip code of 92544 – 291 to be precise. When you consider that only 40 homes closed escrow in all of October 2006 it becomes obvious that there is an existing inventory that will take more than7 months to sell, if no new home came on the market.

QUESTIONS TO ASK BEFORE YOU SELL

So, if you want (or need) to sell your Hemet Real Estate, lets first start with some questions to ask yourself. They may include:

What condition is the real estate market in my neighborhood? How many homes sold this year compared to last year? What is the current inventory? Are prices going up, staying the same or going down?

Do I need a Real Estate Agent, or should I do it myself?

Am I selecting a Real Estate Agent based on the services he (or she) will provide, or am I shopping on price for a Realtor? (see yesterdays post that shows the difference between how many homes sell, are listed and expire – broken down by commission)

Is my opinion of my homes value based on good solid comps from my neighborhood or am I on a diet of pie in the sky?

How many different homes would I be competing with in my neighborhood? What condition is mine in, compared to the competition? Am I lacking amenities? Have I over-improved my property for the neighborhood?

Since I bought my home, which improvements that I have made have actually increased the value of my home? Which improvements did I do for my own pleasure and not for the increased value?

Am I being motivated by my personal financial needs, or is my decision a sound one based on the real facts?

Does it matter what I paid for my Hemet home? Is the original purchase price going to influence my pricing strategy?

Do I have what it takes to price my home right for today’s market, and stand firm on the price?

If I sell my current Hemet property then I will have to buy a new home. Do I know how the current market will influence me when I am ready to buy? (sell first and then buy – but that’s another article)

How important are the benefits of moving now if I have to sell my home at the current market price.

Who Is the Best Hemet Realtor?

As much as I wish I could tell you I am, there really is no clear cut answer. The real question is who the best real estate agent for you is. Today’s market place has become very diverse. Not long ago, your choices were all the same, just different brands. The big national franchises dominated the real estate industry and other than a few small boutique offices all of the competition was between the mega-brokers.

With the internet and all of the tools available today, the entire process is evolving, yet it really remains the same (again another topic for another article).

My suggestion is to find a Hemet Realtor that 1) you feel comfortable working with and 2) you feel confident in their abilities. Do a gut check and run with your instincts.

The one criteria you should NEVER use for the selection process of a Realtor is what the real estate agent tells you they can sell the home for. A real estate agent NEVER has control over the market conditions. Many Realtors will ‘pitch’ their services based on an over-inflated price so they can get the ‘listing’, knowing full well they will be back in several weeks for a price reductions. A professional Realtor will always give you the facts along with candid feedback so that you can price your home to sell, within the current market.

Comparative Market Analysis

Any Hemet Real Estate agent worth their salt will prepare a 'Comprehensive Market Analysis' (CMA) that will provide you with the tools necessary to make a sound decision on setting the price of your home. Remember, the decision is all yours.

At a minimum, the CMA will look at different types of listings on the MLS. I believe the local Hemet MLS actually has 10 different classifications of listings. They all boil down to one of 3 different general classifications that need to be considered when pricing your Hemet house for sale.

EXPIREDS

Expired listings are listings that have been on the market, ran the course of the contract period and the contract has expired. These are homes that the market has rejected – typically because of price.

Lets look at the overall numbers from yesterdays article:

Overall Market - EXPIRED
Number of Listings: 41
Average Price: $427,807
Medium Price: $385,000
Total Inventory: $17,540,090
Days On Market: 134.73

Overall Market - SOLD
Number of Listings: 40
Average Price: $346,325
Medium Price: $264,500
Total Inventory: $13,853,000
Days On Market: 87.55

Big difference! These are real numbers from the Hemet MLS for single family residences, covering the period of October 2006, for zip code 92544 in East Hemet.

Notice, just about as many listings expired as sold last month (40/41) – but check out the other numbers. The difference between the Average Price is $81,412. The medium price is even more extreme - $120,500. (Read yesterday’s article for discussion on the difference between the Average Price vs. the Medium Price.)

The sad news is that the Expired listings sat on the market for over a month and a half longer (48+ days), with the seller cleaning their home every day for showings that typically did not happen – dashing their hopes of moving some time soon.

Other MLS categories that can be considered with a similar bearing on the MLS are those that have been ‘Cancelled’ and ‘Withdrawn’.

ACTIVE

Active listings make up the greatest number of listings, as these are the homes that are currently for sale. These properties are considered to be ‘Inventory’ for all Realtors belonging to any MLS. By listing a home in the MLS, the listing agent is contractually bound to pay the selling agent a commission, as it is posted in the MLS. This is perhaps the biggest advantage to listing your home with a Realtor, because through the MLS, your Hemet real estate agent can market your home across town, across the state, across the country and even around the world. The MLS is that powerful. (Remember, buyers use a Realtor for free to help them buy their home, so the Realtors have the buyers.)

Pricing in the Active category can be misleading. It has often been referred to as a fantasy value – it is what the buyer wants to sell for and in many cases it is an over inflated value a real estate agents suggested to get the listing.

One of the best criteria you can use for examining a MLS listing is the ‘Days on Market’ (DOM). The DOM will tell you if the home has been on the market for a long time. Once the DOM exceeds the average DOM, you know without certainty there is a price or other issue.

The current single family residences stats for the Hemet MLS, for the East Hemet zip code of 92544, for looks like this:

Overall Market - ACTIVE
Number of Listings: 291
Average Price: $391,904
Medium Price: $339,900
Total Inventory: $114,044,131
Days On Market: 84.67

Compare these numbers to the SOLD summary above and you will see there is $45,579 difference, representing an approximate 13% difference in price. Even between the Medium value, there is a $75,400 disparity.

Other MLS sub-categories that will include homes that may still be sold are the ‘Back-Up’, ‘First Right of Refusal’, and ‘Hold – Do Not Show’.

SOLDS

Sold listings tell us the real value of the current market. Looking at the numbers tell us what price point is selling, how much inventory is available, what commission points are selling, and most important what price specific homes in specific neighborhoods are selling for.

These are the actual sales price which offers the best evidence to base the decision of where to price your home. Remember, you want to find homes as similar to yours and as close to yours as possible. This is often very easy to do in established tract home neighborhoods. However in areas like east Hemet where we have so many custom and semi-custom homes we are often left with the task of making numerous adjustments.

For example, when I prepare a CMA, some of the standard adjustments I will use to make the homes appear more similar are:

Square Footage $100 per sq foot
Lot Square Footage $2 per sq ft
Bedroom $10,000 per bedroom
Bathroom $2,500 per bathroom
Age of Home $2,000 per year difference
Pool (in ground – gunite) $20,000
Spa (in ground – gunite) $2,500
View $2,500

There is nothing concrete about these numbers. It really depends on the price range of the home and a number of different factors. The key is to be consistent when comparing the subject property (your home) to the comps.

Of course, the numbers have to be either added or subtracted, depending which side of the equation the difference is on. For example if your home is 2,000 sq ft and the comp is 2,100 sq feet then the 100 sq ft difference would be multiplied by the $100 per sq ft for a $10,000 adjustment that would have to be deducted from the comp in order to make the homes more similar.

Again, I cannot strongly emphasis enough how subjective these numbers are and how open to interpretation they are. As a Realtor, I use my professional opinion. An appraiser goes through a very similar process, but an appraiser is licensed for this specific task and lenders rely on their network of licensed and certified appraisers. Never substitute or confuse a Realtor (or self) prepared CMA with a professional appraisal.

Trends in Value in the Market

In a ‘Hot Market’, like we saw in the earlier part of this decade it was not uncommon for a Hemet home to go on the market priced above the current market value. This overpricing actually helped drive the market.

If a home were realistically valued at $340,000 in a hot market, the seller may decide they have the time for the market to catch the price, so they list it at $350,000. In theory they got top market price for their home as soon as they sold it for the higher price. It may have stayed on the market a little bit longer, but in essence what it did was help establish the higher value in the neighborhood.

Again, this is an effective technique when we are seeing double digit appreciation of our real estate, but into days market it is not recommended at all. If you were to price your home at $10,000 over the market value, it will likely sit on the MLS until it either expires or you do a reality check and lower the price. However, if you let it sit on the market at a higher price and then drop the listing price on the MLS, you will have lost valuable exposure that you may never get back again. I’ll discuss this concept in more detail shortly.

Real Estate Evaluation Principals

There are several principals that must be understood and considered when pricing your Hemet Home to sell in today’s uncertain market.

COST

– You must know the amount you actually paid for a property. Be sure to include and significant improvements you have made since the time you purchased the Hemet home. Do Not Include equity you have pulled out of the home in a refinance o\r a 2nd mortgage. The loan amount is not relevant at all. Only include the amount you actually used to upgrade your home with a capital improvement. (This does not include maintenance –a new roof is maintenance. Any buyer expects a home to have a solid roof – so the $30,000 you spent on a new roof does not add any value.)

PRICE

– This is the amount you will accept for your property. Typically it is expressed in dollars, but there have been transactions that have included other assets as well. In this case, the value has to be converted into dollars for tax and government reporting purposes.

VALUE

- Depending on the specific circumstances, Value is the amount a buyer is willing to pay for a specific property.

MARKET VALUE

– Assuming an ‘Arms Length Transaction’ between two entities (people) who have no relation with one another and where one does not have an advantage over the other in negotiations, an arms length transaction represents the market value of a piece of real estate. It is a value based on what similar properties have sold for and what a willing buyer will pay a willing seller.

REGRESSION & PROGRESSION

– These are the principals that tell you it is better to have the smallest house in a neighborhood of big houses than to have the biggest house in a neighborhood of small houses. This principal addresses the effect that surrounding homes sizes have on your property. Regression will de3crease your value when you are overbuilt for a neighborhood and Progression will increase your value when you are surrounded by larger more expensive homes.

SUBSTITUTION

– This is the principal that addresses specific amenities. It is similar to the adjustments we made on a CMA, and often amenity adjustments are also made on a CMA. For example, two identical homes with the exception for a kitchen remodel. Same age, same square footage, and the same lot size. One house has a Formica floor and Formica counter tops. The second home has 18” ceramic tile in the kitchen and granite counter tops at a cost of $25,000. I’m not swaying because the second homeowner spent $25,000 in upgrades that the second home is worth $25,000 more. I’m sure we can all agree though, the second home is worth more than the first (again all other things, including maintenance are equal).

There are some improvements that will return dollar for dollar when the home is sold, but most will not. Yes they will typically increase the value of a home but not necessarily dollar for dollar on the amount spent on the improvement.

An important consideration is that the value is not determined by the amount invested in the amenity but rather by the value derived from it.

Let’s look at a different example. Let’s look at two of our rural home sites. Both are on an acre, on a paved road, both built the same year with the same square footage of living space and on the surface both properties appear to be worth exactly the same. Thy only difference is the well.
The first homeowner has to drill 100 feet to find drinking water at a cost of $10,000. Unfortunately for his neighbor, the second property has to go 250 feet to find an adequate water supply, at a cost of $50,000.

So, is the second property now worth $40,000 more because he had to pay that much more for his well? No, both properties are equal in value. However, had this information been available to both homeowners before they purchased and developed the land, the second vacant lot would have been worth less than the first because of the expense of the drilling to obtain a suitable drinking resource. Now that they have been developed and have like amenities, there is no adjustment for the cost of the amenity.

What Happens When a Hemet Home is Overpriced?

It is critical to price a home properly when it is first listed on the market. If a seller takes the attitude that they can put it on the market for a higher price and then reduce the price if it doesn’t sell right away is much more detrimental than any other pricing strategy.

More often than not, by the time an overpriced listing is reduced to the actual market value it will have become aged. Unlike a fine wine, aging is not good when you are trying to sell your Hemet home for top dollar.

Remember, the shopper who is looking at your home is just like you, and that’s a good thing. But stop for a moment and remember what it is like to shop for a home. Do you remember ever asking the question of how long a home has been on the market? Did you make your own conclusions when you were given a long time period? Maybe you thought you could do a little negotiating at that point… or…

Some sellers will take the attitude that ‘they don’t have to sell right now’ and that ‘they have time’. This is a disaster in the works.

In an escalating market, it may be O.K. to price a home just over the market value, knowing that the market will catch up soon and you will receive top dollar for your home (assuming it’s in top condition and you don’t mind keeping it in showing condition until the market does catch up. This strategy is a good one if you want to make absolutely certain that you squeezed every possible dime out of your property. Remember though, it only works in an escalating market – not the pre-holiday market of November 2006.

This strategy will never work if the home is dramatically over priced. No reasonable amount of time will generate a buyer for a home that is 25% overpriced. Even if an offer comes in from a buyer who falls in ‘love’ and ‘must have’ your perfect dream home, remember that there is not a lender in the world who will make that type of risky loan. Every home has to be sold twice, first to the buyer and then to his lender.

So, Why are Homes Overpriced

I am hoping that you will agree that most of what I have shared with you is very basic principals of real estate and life in general. Now that you have thought about the concept a bit, I am hoping it is as obvious to you as the nose on your face.

Let’s examine some of the reasons why sellers still overprice their home…

OVER IMPROVEMENT

– This is a case of putting much more into a house than the neighborhood will ever bear. A classic example of the principal of Regression that I discussed earlier. I just sold a home that was worth around $450,000 for the house alone. However, the seller is a contractor that does custom rock work. He built am oversized rock pool and put in a plush tropical landscape complete with a wrap around deck, fire pit, BBQ, waterslide and so much more. We had an estimate of $500,000 to duplicate it from another contractor – so the house was a steal at $695,000 right? Unfortunately for my seller, it’s still only a $450,000 neighborhood and the best we could do after a year on the market was $520,000

NEED

– Often an owner will have a need or desire to raise cash and the only way they can do it is through the sale of their home. Repeat after me, “So What!” As we discussed under ‘Market Value’ a home is only worth what someone is willing to pay for it, not what you need. This often surfaces after a seller has stripped all of the equity out of the property through refinancing and then as the market flattens they try to bail, thinking the buyer and real estate agents should pay the closing costs and commissions.

BUYING A MORE EXPENSIVE HOME

– One of the elements that make Hemet so desirable is that our housing is so affordable compared to the rest of Southern California. However, when you move from Hemet to a more expensive area, do not allow the price you will pay for your new home influence the price you will ask for the Hemet home. Value is location specific

PAID TOO MUCH WHEN THEY BOUGHT

– This is a tough one. Chancesare when youboughtyourhomeit was’Market Value’, otherwise it would have been hard to get a loan. However the market does change. Imagine you are buying you home right now, at fair market value and the next year sees the bottom fall-out of the market and it takes a 10% decline in value. If you were going to sell next year, would you be able to sell for your purchase price or the fair market value?

THEY LACK THE FACTS

– Pricing a home should never be a gut reaction but should be based on recent documented sales.

THEY NEED ROOM TO NEGOTIATE

– Being the melting pot we are in the United States, we have many cultures represented that negotiate as a way of doing business. However, please consider it is much easier to negotiate from a fair market value then it is from an over-inflated price. At least with fair market value pricing, you will have more of a chance to start the process then if you are in left field.

DON’T HAVE TO MOVE

– My least likeable seller. They often have a very blasé attitude and unless everything is perfect for them, and remains perfect throughout the entire escrow, they will often kill a transaction. Even if the move is not urgent, it is very important that your home should be priced correctly in order to preserve your options and marketing opportunities if and when the move becomes more urgent.

LET’S GIVE IT A SHOT…

Many times I have heard from a seller who has an over inflated number in their minds that “we should give it a shot for a couple of weeks, and let’s see what happens”.

It is very important to properly price your home for sale right from the beginning. The biggest reason is that most showing activity takes place it the first two weeks of being listed on the MLS.
The reason for this is most Realtors maintain an inventory of buyers that are cultivated over time. These re buyers who come to the real estate agent through any different channels of marketing, including the internet, open house, advertising , referrals and from the Realtors personal sphere of influence.

When a home is first listed, agents look at it the hardest. In the not so distant past, Realtors would make arrangements so see houses of interest up close and personal. This was good for the seller to see, because the seller knew that agents were coming through. Today with the internet, many times a home is reviewed online and never actually previewed until a buyer has expressed a specific interest in this home or type of home.

However, the point remains the same, most of the activity is in the first two weeks. Realtors are spending time studying the changes in the market and letting all of their interested buyers know about the property. Once the first couple of weeks of activity diminish, the only activity is typically when a new buyer enters the market.

Because of the initial influx of activity, it is critical that the home is in it’s top condition and priced to sell right from the very beginning.

PRICING & the MLS

Another important aspect of pricing the home to sell from the beginning is how searches are made in the MLS. In its very simplest form, the MLS is nothing more than a big database of homes for sale, with many search variables.

Buyers on the Internet and Realtors have access to basically the same information. The data the Realtors access is more complete than what is available on the Internet.

When a search is made, the normal variables are the city, the number of bedrooms, square foot of the home and lot, perhaps what school the kids will go to and so on. Many of these are range searches, meaning they may look for homes with 4 to 6 bedrooms, when a 5 bedroom is ideal.

Price of course is a major criteria to search for in a home. Unlike the square footage of the lot or the number of bathrooms, price often cannot be adjusted past its limit. Unlike the difference between 5 bedrooms and 6, a home buyer can only afford what they have been approved for. If a buyer is qualified for a $400,000 home with a 15% down payment, it does them absolutely no good to look at homes priced at $405,000 with the hopes they will be able to negotiate down. Especially when there are so many homes available in their approved price range.

If your home is valued at $400,000 and you increase the list price by just 5% - that’s $20,000 above what the home is worth. No one who is approved at the $400,000 level will be looking at your $420,000 listing – even though it may be the perfect home for this buyer. Your prized possession simply will not show up in the searches made. Remember, no one wants to waste a lot of time house hunting.

BUYING UP IN A DOWN MARKET

This is the beautiful part about a down market, even if it is often misunderstood – buying up!

Let’s say you bought your home 5 years ago, or longer and you have not already taken out your equity. Let’s say you paid $250,000 way back when. Last year your neighbor sold his home, which is not as good as yours for $550,000; so you thought yours was worth at lest $600,000 then.

For sake of discussion, we’ll assume we have taken a 10% decrease in value over the past year, when your home peaked at $600,000, this means your home today would be worth $540,000 ($290,000 in equity before costs).

Now let’s assume that you found a real gem of a home last year for $1,000,000 that would have made your entire family very happy. This is a $40,000 gift for you. Let me explain…

Yes, when you sell your home, you will receive $60,000 less than if you sold it last year. But now, because the market has dropped 10% across the board your million dollar dream home is only $900,000. Had you sold your home at the peak of the market, you would have been buying at the peak of the market.

Now, with the difference in the $60,000 hit you took on your home it equates to a tax free $40,000 windfall offset by the $100,000 hit the seller of the new home took in selling it to you for only $900,000. As an added bonus, your new property taxes will be 10% less every year, had you bought at the peak of the market.

PROPER PRICING HAS ITS ADVANTAGES

To wrap things up, let’s review the benefits of pricing your home to sell…

IT WILL SELL FASTER

– A home that is priced right will sell quicker which reduces the carrying costs you have to pay every month in the form of mortgage, insurance, maintenance and other costs of ownership.

IT’S LESS INCONVENIENT

– It is so much easier to sell your home quicker. Save the energy of keeping your home in a model ready state of showing. Having a home listed for sale changes your lifestyle.

YOUR HOME WILL BE EXPOSED TO MORE BUYERS

– There are more people who can afford the market value of your home and you will be showing them instead of the buyers who are comparing your home to the one with amore legitimist higher market value.

MORE REALTOR ACTIVITY

– Remember, the Realtors control the buyers and the more excited you can make a Realtor about a listing the more activity you will generate.

BETTER ADVERTISING RESPONSE

– When price is not an issue, your real estate agent will get more calls from the advertising which will mean more showings

HIGHER OFFERS

– Buyers are much more likely to offer a full fair price offer then a home is priced right because they don’t want to insult the seller or lose the home to a better offer.

MORE MONEY TO THE SELLER

– The market will produce a higher sales price if the home is priced correctly. This means you will Net more dollars and you will have less carrying costs.

For more information please don't hesitate to contact me and allow me to help you gather the data to price your Hemet home to sell.

John Occhi, Realtor

951.443.6259

Active, Sold & Expired A closer look for October, 2006 of the Hemet Real Estate Market

2006-10-31T16:50:00.000-08:00

Today I thought I would take a closer snapshot of the real estate market on the East end of Hemet. For this report, I am focusing strictly on zip code 92544, which most of falls in the unincorporated area of Riverside county. This area is also known as both East Hemet and Valle Vista, although there are distinct differences once you become more familiar with the area.

First I check the Hemet MLS to see just how many properties are actively being marketed on the MLS and come up with 291. The first thing I realize is how inexpensive property can still be bought for in Valle Vista. (MLS #P528638) is a 2 bedroom condo on a small side street off of Acacia & Dartmouth.

So we know there are 291 properties currently for sale in the Hemet zip code, with a starting price of $135,000 going all the way up to a 20 acre ranch (MLS #P544383) for a mere $1,499,900. The ‘Medium’ price for a home in the area, currently for sale today, is $339,900 which means that 146 of the homes are priced less than that and 146 are priced higher than that.

The ‘Medium’ price should not be confused with the ‘Average’ price, which is $513,813. This number is calculated by adding the listing price of all 291 homes on the market (a total of $63,199,0389) and dividing by the 291 homes used for this calculation. In this case, if there was an ‘Average’ home on the market, it would be the 244th most expensive home in East Hemet.

An important aspect of the data, which is often over looked, is the commission. Now, trust me, I don’t want to come across as a greedy Realtor, but the truth be told, commission helps sell homes. I will post another article to this blog in the near future to further explain the importance of commission when it comes to selling a home, but for now, let’s look at the data and you can make your own conclusions.

First well examine the ACTIVE Listings on the Hemet MLS.

Overall Market - ACTIVE
Number of Listings: 291
Average Price: $391,904
Medium Price: $339,900
Total Inventory: $114,044,131
Days On Market: 84.67

2% Commission
Number of Listings: 13
Average Price: $306,508
Medium Price: $298,000
Total Inventory: $3,984,599
Days On Market: 48.54

2.5% Commission
Number of Listings: 109
Average Price: $428,270
Medium Price: $349,900
Total Inventory: $46,681,394
Days On Market: 87.25

3% Commission
Number of Listings: 154
Average Price: $369,707
Medium Price: $335,000
Total Inventory: $56,934,949
Days On Market: 87.24

3.5% Commission
Number of Listings: 4
Average Price: $369,700
Medium Price: $366,900
Total Inventory: $1,478,800
Days On Market; 34

4% Commission
Number of Listings: 8
Average Price: $520,910
Medium Price: $510,000
Total Inventory: $4,167,279
Days On Market; 71.28

5% Commission
Number of Listings: 2
Average Price: $290,000
Medium Price: $290,000
Total Inventory: $580,000
Days On Market; 66

Whenever you look at home statistics, the active price is often over-inflated. Sellers are hopeful that their home will bring top dollar and are often priced higher than actual market value. Many times, real estate agents will inflate the value for a listing presentation, hoping it will give them the edge when it comes to getting the listing, over the competition. (Again, this is a topic for another post) This price does not reflect reductions that will be taken as the listing ages nor does it take into account that the seller will typically accept an offer of less than what they had hoped to get.

The next set of numbers is referred to as the SOLD listings. These are the listings that closed escrow during the specific time period being reviewed, in this case the month of October, 2006 for the Hemet MLS in the same zip code 92544 as we looked at the earlier numbers.

Overall Market - SOLD
Number of Listings: 40
Average Price: $346,325
Medium Price: $264,500
Total Inventory: $13,853,000
Days On Market: 87.55

2% Commission
Number of Listings: 2
Average Price: $594,950
Medium Price: $594,950
Total Inventory: $1,189,900
Days On Market: 192.5

2.5% Commission
Number of Listings: 14
Average Price: $346,850
Medium Price: $282,450
Total Inventory: $4,855,900
Days On Market: 102.14

3% Commission
Number of Listings: 22
Average Price: $325,555
Medium Price: $ 299,500
Total Inventory: $7,162,200
Days On Market: 67.54

4% Commission
Number of Listings: 2
Average Price: $322,500
Medium Price: $322,500
Total Inventory: $645,000
Days On Market: 100.5

The last set of numbers that I will discuss today is the EXPIRED Listings. These are the listings that were listed with a real estate agent for a very specific period of time. 3 and 6 months are very typical listing periods, but they can be anything for a specific day to a year or more, especially when the property is unique and the seller is looking for that one special buyer.

Expired listings are the listings that the market has rejected. There can be a number of reasons. Being overpriced is always a top contender for the reason why a listing failed to sell. Other reasons may be the condition of the property; it may be cluttered and not staged properly; and believe it or not but there are times when a seller really does not want to sell and they will sabotage their own listing.

Let’s look at the expired listings in zip code 92544 for the month of October, 2006:

Overall Market - EXPIRED
Number of Listings: 41
Average Price: $427,807
Medium Price: $385,000
Total Inventory: $17,540,090
Days On Market: 134.73

2% Commission
Number of Listings: 3
Average Price: $401,833
Medium Price: $405,500
Total Inventory: $1,205,500
Days On Market: 163.67

2.25% Commission
Number of Listings: 2
Average Price: $660,450
Medium Price: $660,450
Total Inventory: $1,320,900
Days On Market: 91.5

2.5% Commission
Number of Listings: 17
Average Price: $479,812
Medium Price: $ 389,000
Total Inventory: $8,156,800
Days On Market: 129.17

3% Commission
Number of Listings: 18
Average Price: $382,272
Medium Price: $367,450
Total Inventory: $6,880,900
Days On Market: 142.61

3.5% Commission
Number of Listings: 1
Average Price: $299,900
Medium Price: $299,900
Total Inventory: $299,900
Days On Market: 87

Well, there you have it. A real hard look at real numbers and how they apply to the Hemet real estate market – specifically East Hemet in the 92544 zip code. These are not numbers that I can just push a button and have the computer generate this report. This was a time consuming research project that took several hours of crunching to bring it all together, so I won’t be generating similar reports for every neighborhood for every time period, but from time to time you can count on me looking deep into the actual numbers of the MLS and figuring out what they mean to me as a Realtor and you as a consumer.

Please come back and visit this blog often, as I will be writing several articles in the very near future using the data that I’ve gathered here today, and embellishing it with more statistical research into the current trend and condition of the Hemet Real Estate market.

If you have any questions, please do not hesitate to contact me directly at 951.443.6259. Just remember one thing as you look at numbers – something a mentor taught me 30 some years ago, something I’ll never forget,

“Figures don’t lie…Liars figure!”

Technorati - Take a Look at me Now

2006-10-31T08:18:00.000-08:00

Today, Real Estate is like so many aspects of our life - ruled by technology, even Real Estate in Hemet CA. So for a California Ral Estate agent of the 21st century to be successful he (or she) must grasp new technologies on a regular basis - determining which ones are relevant today and which ones will have an impact on the real estate industry and their personal real estate business tomorrow.

One such technology is the newly evolved BLOG, which you are reading now. Just read anything about Search Engine Optimization (SEO) and you will find one of the most important tools today is having a BLOG.

So, once you have a BLOG, you still have to get peopel to find it in order to read it, right? Of course. And that is where a web based service like Technorati comes in. They are "THE" search engine of blogs.

The entire purpose of this post is let Technorati know that the Hemet Real Estate Blog is a live and well and should be searched by it's spiders (thats search engine talk for the process of searching and indexing websites - blogs in this case)

Technorati Profile

The Condition of the Hemet Real Estate Market

2006-10-30T08:48:00.000-08:00

Good Morning, I have decided to spend more quality time with my blog and bring you up to speed with some of the data that is available to me.

I thought I would start this morning with a snapshot look at the available inventory of homes for sale.

To determine a monthly figure of the current available inventory, I have to conduct several searches of the Hemet – San Jacinto MLS. I look to see how many actual homes are for sale with a mailing address of HEMET I find there are currently 716 homes for sale.

Let me clarify a little bit about this data. It includes homes that are both in the City of Hemet as well as unincorporated county areas, like Valle Vista. The key is they all use Hemet as a mailing address.

For the most part these homes are what we call “Stick Built” – meaning they are a traditional construction homebuilt on site. Now there are rules that say a manufactured home on a permanent foundation can be classified as a house and not a manufactured home. Even though the MLS has a very specific section of its database for mobile and manufactured homes, many Realtors who list manufactured home on a permanent foundation will list it in the MLS as a ‘regular’ home.

I have not taken the time to weed through this list of 716, to see how many manufactured homes there are, but I am certain there are a few. I can say the lowest priced home currently listed in the MLS is a $125,000 senior condo on Palm (MLS #H730456) and the most expensive piece of property is a wonderful estate at the end of Esplanade, being offered for $2,200,000 (MLS#103905).

I can tell you what is not included and that is a good percentage if not most of the homes listed with agents from outside our valley. The reason is all MLS’s charge a fee to put list a home for non-member agents. So, let’s say an agent from Temecula takes a Hemet listing, chances are they will only list their listing in the Temecula MLS and not the Hemet MLS. This is not only a disservice to the seller of the home, but the buying public as well, since local Realtors typically do not spend the time nor do they typically have ready access to other MLS systems. I’ll discuss this at a later time.

So, back to my analysis of the current inventory level of homes in Hemet. We now know there are 716 homes for sale in Hemet. Next, I check to see how many homes have sold in the last 2 months. Between 8/30/2006 and today, 10/30/2006 I find a total of 189 homes have closed escrow. The least expensive (MLS #H729505) is another senior condo, this time on Santa Fe and it sold for $115,000. The most expensive home that sold in the last 2 months (MLS #H725950) is in the east end of the valley on Rim Road and sold for $799,900.

So, the next part of the equation is to divide the number of homes sold (189) into the existing inventory (716) and I get 3.788. Since my numbers represent a2 month supply of sales, I need to multiply the 3.788 by 2 in order to realize we currently have a 7.576 inventory of homes for sale in Hemet.

So, what does this mean to you? It means that if you are going to list your home with the intentions of selling it soon, you have to price it to sell. You cannot just put your home on the MLS and a sign in the yard and expect a pack of buyers to find their way to escrow – it just is not going to happen that way anytime soon.

If you would like information about the specifics of your home and how it fits into the inventory scheme of the current market, please give me a call and I’ll be more than happy to run the numbers for you – no hassle.

John Occhi, Realtor
951.443.6259

So, is there a Housing Bubble, or what is all the chatter?

2006-10-29T12:18:00.000-08:00

There has been a great deal of chatter through the different media outlets over the past 6 months about this doom & gloom of the California Real Estate market. Well, being in the trenches everday, doing the things that Realtors do...I cannot report that I have been hit on the head with a piece of the sky falling.

Are things tougher then they were a year ago? Sure, mostly becasues of the chatter coming from the talking heads-the supposed experts. For every expert with a cup of alaphabet soup after their name that predicts one outcome, there is another just as credible explaining why nothing bad is going to happen to our real estate.

My opinion, is that yes, we are seeing some tough times in Real Estate, but we all knew the ride would not last forever - it would have been impossible to continue with 20-30% appriciation every year.

I believe there are two major economic indicators that were in place in the early 1990's, that just don't exsist today.

First, even if interest rates are higher this year than they were last, they are still historically low. This means the cost of money is still cheep. I remember in 1980 when I was in the service and rotated back stateside after 6 years service in Europe and I wanted to buy a home in Colorado Springs, just outside of Ft.Carson. I entered escrow at 18% for a new home. In those days they did not lock in rates. By the time the construction was completed, interest rates had skyrocketed up to 21%.

The Second economic factor that is not in place today is high unemployment. Again, the numbers today may not be the very best they have ever been, but anyone who has been around more than a couple of decades knows that what we have today is exstremely low and thereby good for society as a whole.

When I am asked these days about the market question, "What should I do?". I say do what you need to.

If you are a buyer, this is a great time to make lowball offers on homes, many of them are now being accepted when the sellers see there is a 8 or 9 month inventory of homes on the market. I tell those interested in selling, sell now as long as you are prepared to hear what the market is saying. After all, most sellers today are taking advantage of huge increases in equity. Yes, they may get a bit less today then when the market actually peaked, but does anyone really have any idea what will happen in the Spring of 2007, the traditional time for Real Estate to rebound after a winter of slow sales.

Shopping Center Giant SOLD

2006-07-11T00:55:00.000-07:00

Kimco Realty, the largest owner of shopping centers in the US, has announced a $4bn deal to buy Pan Pacific Retail Properties, the on the largest owner of shopping center properties on the west coast with 138 properties that are mostly anchored by a large department store or supermarket.

Pan Pacific boasted 139 properties in their 2005 annual report - representing over 22.6 million square feet. They refer to their niche as Neighborhood Centers for Everyday Essentials. 2005 was their 12th consecutive year with an occupancy rate in excess of 95% - closing out at 97.1% boasting leases with over 3400 unique clients, creating a steady and yet diverse income stream.

The Road to Success

2006-07-10T15:50:00.000-07:00

Philippians 4:13 --- I can do all things through Christ who strengthens me.

The road to success is not straight. There is a curve called Failure, a loop called Confusion, speed bumps called Friends, red lights called Enemies, caution lights called Family. You will have flats called Jobs. But, if you have a spare called Determination, an engine called Perseverance, insurance called Faith, a driver called Jesus, you will make it to a place called Success.