David Verbera's Blog

It’s amazing how the real estate market in the bay area has turned on a dime and currently is a sellers market.  Since February of this year our real estate market has gone wild!  Homes are selling within day and with 10+ offers and selling over asking price.  What caused this?  Well, with rates being at all time

SALE (Photo credit: Gerard Stolk (vers l'Ascension))

lows of the past 50 years many buyers sitting on the fence have decided to jump in and make the move to home ownership.  Aonther reason is our inventory has diminishe to about 50% of where we were a year ago.  Another factor is our local employment is stronger than most of the country giving confidence to consumers in the S.F. bay area.  We may have the hottest real estate market in the country right now.

But where there is good news for sellers, best in the past four years, there is not so good news for buyers.  Why so?   Here is why;  with most homes, including short sales and Reo’s, there are multiple offers due to the lack of inventory which means that if on average there are 10 offers on a home, 9 buyers have to go compete for another home.  Buyers are getting frustrated that they may keep getting beat out of buying thier dream home.  So buyers here are some tips to give you an edge if you are not an all cash offer when having your Realtor submit your offer:

1) May sure you have a full application into your lender and the file has been approved and not  just a quick pre-approval and get it in writing.

2) Provid proof of funds available to close so there is not doubt in the seller’s mind that you have your money ready to go.

3) Make your best offer so the seller has less to think about.  Strong price backed with comparables to show seller the home should appraise, quick close of escrow, and short contingency periods if this is all possible.

4) Make sure you include a personal letter to the seller as to why you love thier home, about you, annd your family if applicable, and how come your offer is the one to go with.  If you can include a photo of yourslef  in your letter so the seller feels they are dealing with a real person and not just paper in front of them.

All this may not gaurantee an acceptance but will deffintely raise your percentage of an acceptance.  Don’t get discouraged and make sure you and your Realtor are on the same page of the extra time and work needed to present the beat offer to that seller.  Happy house hunting and you will find the perfect home for you!

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As we settle into the summer the real estate market in the south bay has been heating up.  There are pockets in Santa Clara County that have been seeing multiple offers coming through.  Why you ask; schools are the number one reason so areas such as Saratoga, Cupertino, Los Gatos with homes that are below the $1.5 mil. range are hot buys.  Other parts include city of Campbell, suburbs of San Jose such as Cambrian, Evergreen Foothills, Willow Glen, Naglee Park and north San Jose.  In those areas homes below the $700,000 range are the hot commodity if  within the desired school boundries. 

Multiple offers are more common than buyers may want to believe and for those buyers that are coached well by their Realtor on how to approach multiple offer situations are the ones winning the biding.  Sellers are wise to make a move now that they have been waiting on.

Yes, it is a tough market to have to sell in but depending on location & price homes are selling.  For more information on your local market contact your  Realtor to get the facts and see if it is the right time for you to sell.

As prices have dropped it has created an opportunity for real estate investors to gobble up great buyers with all cash offers.  This often makes it difficult for many home buyers, not investors, to compete.  So the question is ” if investors are buying up homes in neighborhoods with high inventory of homes for sale will it change the neighborhood”.

Well, in many cases the answer is yes.  Most neighborhoods go through changing cycles as the markets change and as the demographics change.  Some neighborhoods will change as investors come in and buy up homes for sale at low prices and convert them form owner occupied homes to rentals.  This is the business of the investors and many will do the minimum to keep the home up and not be too concerned of keeping up with the consistency of the neighborhood as the bottom line is the cash flow in not out.  Renting to renter that don’t care about the neighborhood and just want a place to rent and feel that they really aren’t a part of that neighborhood begins the decay of the neighborhood and when the market changes the value of the homes in those areas don’t keep up with other near by neighborhoods.

There is hope though and that is for the neighborhood to be involved.  Let the investor know the neighbors care and will be vigilant as to how the rentals are being cared for and reporting trouble right away.  Talk to your local Realtors selling in your neighborhood and share with them your concerns as many of them end up being the manager for those investors.  Meet the new renter and make them feel welcomed into the neighborhood so they have a sense of belonging and will be more apt to treating their place as a home and not a rental unit they just live in.

Yes, all neighborhoods go through the different cycles but that only means we just have to keep a positive attitude, care for your neighborhood and stay involved.

The other day I was holding an open house for sale and welcoming the guests.  As I have done for many years I always like to ask a series of questions to find out first if it is a serious buyer or seller and second to see if they understand the process of  how a realtor helps and if they are currently working with a realtor.

Most buyers answer that they are working with a realtor, great news.  What is surprising is that most don’t understand the process and that is the lack of our industry sitting down and educating the client as to what the protocal is for having a realtor represent a buyer and assist them in the proocess.  The is an edicate in the real estate industry that needs to be communicated at the first meeting with the buyer.  So for all you buyers that this information has not been passed on here is some basics.

Your realtor should be your exclusive agent to help you in locating homes, previewing homes if market time allows, and set up all showings appointments as well as accompany you at all times when seeing homes.  Too often I hear ” I don’t want to bother my realtor so that is why I am looking on my own”.  Guess what, that is why the realtor gets paid the big bucks-to show you homes based on what you have told your realtor of your needs.  If your realtor has given you the impression that you are bothering  them then you may want to find a realtor that has time to invest in one of  life’s biggest investments, buying a home.  Besides, a busy realtor has a team to help with the other details of our job so that the realtor can focus on the client’s real estate needs and showing them homes.  Can you imagine if a realtor just sat at the office and buyers just showed up on the day they want to make an offer and got paid .  I think the real estate industry would be flooded with people wanting an easy dollar.  Don’t get the wrong impession, realtors do earn thier keep.

Next is the phrase I hear quite often and that is, “I’m working with my relator but I want you to show me homes”.  I then follow up with the qualifing question of  “If I show you this home  and you want to buy it will you allow me to represent you and write up the offer?”  9 out of 10 buyers say they would have thier own agent write it up.  Proper real estate edicate is that if you are interested in seeing a home  call your realtor, isn’t that why you hired them.  You have to remember that realtor’s  time is valuable and they can better serve thier clients than someone who they just met and know nothing about thier needs.  Build your real estate relationship with your realtor by using them and asking questions along the process.

  Your realtor has to care and have the desire to help reach your real estate needs and you have to be respectful and loyal to your realtor for all the time and work they are spending and doing for you before they ever see a dollar.  Realtors need to explain the procedures to thier clients.  The more your realtor talks with you and shows you home, the more they will understand your true needs and be able to show you what you really want and can afford.  Save yourself time and heartache and call your realtor, they are there to take care of your real estate needs once you commit to eachother.  Make sure you understand the process as this will help with realtors better representing thier clients and not stepping on fellow realtor toes. You will get the most out of the home buying experience.  Happy buying!

Finally, spring is hear and the sun is shining on the spring real estate market!  The Santa Clara Valley is in the best time of the year for sellers thinking of selling to get off thier seats and have thier local Realtor put thier home on the market.

Image via Wikipedia

Why now?  Well, first many people get that feeling of a new beginning as spring settles in and the trees and flowers are blooming and popping out the new leaves.  We seem to get an itch to make a change and break out of the same routine we have been in all winter.  Tax time is here and many people will get the tax advise to get into a home and take advantage of the benefits  home-ownership provides.  Buyers come out of the woodwork and begin their hunt for their new beginnings and with the longer and warmer days we couldn’t ask for a better time to market homes for sale.  Statistics show that in a flat market the best time of the year to have the best probability of a solid price in a short amount of time will be in April, May and June.  Once school is out for summer vacations the focus becomes more on vacations and how to keep busy and most homeowners enjoy already being settled in their home so they can have those summertime parties and gatherings.

So if you are one of those sellers thinking about selling, call your local Realtor TODAY.

Wow, what a year we have had. It really has been a roller coaster ride for real estate. We began the year with a very slow sellers market. Prices were dropping and homes just sitting on the market and buyers were getting amazing home buys. By the time June came around we saw multiple offers and all cash began to be the norm in some of our markets. We also saw interest rates drop to a 50 year low down in the low 4% range. By November we saw inventory of homes available for sale drop below average, an increase in the number of sales and more motivated and happy sellers. Bank owned properties in the high end market began to appear and short sales began to actually close and with quicker turn around times than we had seen in the previous two years.  By the end of December we saw rates begin to slowly climb in order to keep inflation in check and the market becoming a more stable environment.

The good news is that we have all found a way to survive this ride and we should see a payoff of this emotional trek we have been on  in 2010. Happy New Year’s and hope 2010 will be one filled with peace and prosperity!

If you would like more specific information please feel free to email or call me and I will be more than happy to provide that to you.

RISMEDIA, November 6, 2009—President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

For more information, visit www.nahb.org.

Below is the latest information regarding the first-time home buyers tax credit:

“WASHINGTON (AP) — Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.”

Please feel free to comment on the above article. I’d love to hear what first buyers or soon to be buyers are thingkng about the credit.

Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past.  Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs.  Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage.   However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.

 As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.

Today’s question is focused on your needs.  Too often Realtor just focus on what they think thier client wants or needs instead of listing to thier client.  Today’s question gives you the opportunity to really state what it is that you want from a Realtor.  Don’t be shy.  You need to be heard so I invite you to please comment on today’s question of the week.