Is that a listing in your pocket?

Understanding Pocket Listings – As the California real estate market changes, so does the vocabulary of real estate. Once common phrases from the real estate recession such as distressed property, short sale, and shadow inventory are fast being replaced as the real estate market improves by new phrases, such as equity sale, multiple offers, and “off-MLS” or “pocket” listings.

While not a new concept, pocket listings are growing in number; as many as 10-15 percent of homes offered for sale today are “off-MLS” listings, according to one Multiple Listing Service (MLS).

Simply stated, a pocket listing is a property that is marketed without the benefit of being listed for sale on the MLS (i.e., “hidden” in an agent’s pocket). A property that is listed on the MLS has the advantage of being actively marketed to every real estate agent who belongs to that MLS and, through those agents, to their vast network of potential buyers looking to make an offer to purchase the property. Active marketing on the MLS usually includes open houses, broker tours and inclusion of seller’s property in the MLS’s download to various real estate Internet sites commonly used to search for properties.

On the other hand, as the term implies, a pocket listing generally is marketed by a single agent to one or a select few potential buyers. The marketing pool can be so small that in some cases, other agents within the same brokerage or brokerage office may not even be aware that a fellow agent has a pocket listing.

Pocket listings are not illegal if the listing agent fully discloses the pros and cons to the home seller and follows rules that are designed to protect consumers. Nevertheless, many real estate professionals believe that off-MLS listings may not be in the best interest of the seller – particularly if a client does not know about the benefits of marketing his or her property through the MLS. To keep a listing off the MLS, a listing agent who is a participant of an MLS is required, under the rules of most California MLSs, to obtain a signed certification from the seller that he or she does not wish to sell the property via the MLS.

If a property is exposed to fewer potential buyers with a pocket listing, why would a home seller agree to one? Pocket listings sometimes are requested by celebrities, judges, prosecutors, or others who wish to maintain their privacy.

The downsides to pocket listings may outweigh the advantages of pocket listings though. Primarily, the pool of agents and potential home buyers who will know the property is for sale and make an offer to purchase may be limited. That could significantly reduce the potential for multiple offers above the asking price, which is a frequent occurrence in today’s competitive market. With fewer offers, sellers may not be getting the best possible price for their home.

How can consumers protect their interests if their listing agent suggests an off-MLS listing?

• Home sellers should ask their agent about the pros and cons of selling their home off-MLS. The pros are that the listing remains private if sellers wish to maintain privacy. The cons are that their home is unlikely to be exposed to the full population of potential buyers, which likely may decrease the chance a seller will obtain the highest and best price for his or her property.

• A listing agent may ask his or her seller to sign a standard seller exclusion form (Seller Instruction to Exclude Listing from the MLS or C.A.R.’s SEL form). Sellers should be sure they fully understand what they are signing and the possible adverse consequences outlined in the form of not listing their property on the MLS.

• Sellers should ask their agent to show their home and present all offers from both inside and outside his or her network. That may increase the chances of obtaining a more accurate selling price and could help avoid any potential for violations of fair housing laws.

Finally, working with a knowledgeable REALTOR® is always a good idea anytime you are considering buying or selling a home. So is being an informed real estate consumer.

Time for a Summer Tune Up

With Memorial Day behind us, we’re moving right on into summer. Warmer weather gives way to romanticized notions of lazy days lounging in the hammock, sipping lemonade and catching up on the latest best seller and while summer always starts out that way, eventually, the mercury rises, and rises, and rises and all we want to do is hide out inside with the blinds drawn tight and the air conditioner humming away at full speed. But, what if when that day arrives, you find out that your air conditioner isn’t working? Not only would that translate to discomfort, but it could also translate to costly repairs.

The good news is that this scenario never has to play out, if you’re conscientious and plan a summer tune up for your air conditioning system. You can do a number of things on your own, from changing the filters to checking your vents, but in order to ensure that your system is working at peak efficiency and that you won’t be faced with big repair bills down the road, it’s a good idea to call a professional.

Hiring a certified air conditioning service to tune up and maintain your air conditioner is a great investment, not only in your comfort, but in protecting costly equipment from a short life span. Just like it’s important to change the oil in your car, your air conditioner needs to have refrigerant levels checked by an HVAC technician. Additionally, the technician will check the coolant levels and pressure, inspect the wiring and connections, lubricate the motor and the fan blades, check the compressor and amps and calibrate the thermostat.

You can help out by maintaining the unit on the outside by making sure that you clear away any debris from around the unit, and that includes trimming any overgrown vines or aggressive plants.

It may seem a bit overwhelming to have your air conditioner serviced, but it would be a lot more overwhelming—and overheating—if you wait until something goes wrong before calling a service technician.

Another Positive Development

Just a few years ago, when the the home appraiser showed up to appraise a seller’s home, many sellers and realtors alike were more than just a little nervous. With banks tightening lending requirements and a flood of foreclosures and short sales on the market, many home appraisers were writing up appraisals that were under the selling price of the home.

Many realtors had to get creative and be proactive when dealing with the appraiser. One realtor in Seattle removed the key from the lockbox, forcing the home appraiser to call him in order to gain access to the property. When the realtor met the appraiser, he came armed with a handful of comps so that he could personally show the appraiser the value of the property with factual evidence that the appraiser may not have had access to on his own.

Well, now, appraisers are valuing properties at a higher dollar amount. Many experts think this is one of the strongest signs that the market is moving forward and gaining momentum.

If you’re thinking about selling your home, you still have to be proactive in showing it in the most positive light. Appraisers are human and even though they need to approach their work from an objective perspective, they are prone to making subconscious judgements, just like the rest of us. Prepare for your home appraisal by making sure that your house is clean, the clutter is removed and that you touch up paint, fix what needs to be fixed and do whatever else you need to do to make your house look its best.

Don’t Overlook the Details

A shocking 41% of homeowners think that if they discover mold in their home, their homeowner’s policy will cover it. Most often, coverage for mold abatement is handled as a separate rider on your insurance policy. Not knowing this and making the assumption that you’re covered when you really aren’t can cost you tens of thousands of dollars in out of pocket expenses. The same is true for flood insurance and earthquake insurance and as we’ve seen multiple times following a major disaster, many people who felt secure thinking they were covered, actually weren’t and had to make costly home repairs on their own.

Consequently, your homeowner’s policy may cover things that you never even thought about. For instance, if your car is broken into and something is stolen, your homeowner’s policy may pay for the reimbursement costs of your loss. That’s pretty strange when you think about it, especially since if your car window is broken, it would be your auto insurance policy that would pay, not your homeowners.

The moral of the story is to be sure to carefully look over the details of your insurance policies to make sure that you have adequate coverage in case of a worst case scenario. Don’t make the assumption that you’re covered, because if you’re not, it could cost you everything.

To read more about this topic, click here

Getting Pretty

If you’re selling your house and you want to get the highest possible price—who wouldn’t?—then it pays to go for the ‘pretty’ factor. Psychologists said it for years and now the science has become common knowledge: We are visual creatures who respond best to attractiveness. While it’s true that beauty is indeed in the eyes of the beholder, it’s also true that we all respond to color, symmetry, organization and cleanliness.

Spring arrived and now, we’re marching right on to summer. If you read the last post, then you already know how important it is to get your house in the best shape possible so that buyers want to buy your property. We’ve already talked about touching up the paint and stucco, pruning overgrown shrubbery and trimming unsightly branches, now it’s time to talk about getting your house pretty and giving your property buyer’s appeal.

Here are some ideas that you could finish over the course of a weekend:

1. Power Things Up You already know how a good deep-cleaning can make your house sparkle, and the same is true of your home’s exterior and hardscaping. Rent, or borrow, a power washer and give your home a thorough cleaning. While you can probably already envision how much more the exterior will sparkle, wait until you see what it can do for your driveway, walkway and front sidewalk—your home will really stand out from the crowd.

2. Get in the Beds You probably have some nice flower beds already edged out and populated with a few, or even a lot, of plants, but to really make those beds stand out and give your home the pretty factor, you need to climb in and weed, prune and tidy things up. Manicured yards are a big draw and they really do appeal to our visual sense. Make sure to pick up a few flats of bedding plants to add to the mix for a pop of color; you can mix your colors, or for a more formal and expensive look, stay with one color. Remember, too, that as the weather heats up, spring plants will struggle with the rising temperature. Choose plants that will maintain their good looks, even on the hottest days.

3. Add a Layer Mulch your flower beds, around trees and shrubs and anywhere else that mulch would benefit your plants. Mulch is important for two reasons: first, it keeps moisture in the soil, which will help keep your plants thriving in the heat; secondly, mulch adds a visual layer to your property which gives it more appeal. Think of those famous landscape paintings and how the artists use both the foreground and the background to visually set the images; our brains like layers.

4. Think in the Box Or, in the urn, the basket or the ceramic pot. Planting a few containers not only adds another layer of color and depth, but you can use container plantings to balance and ground your home, making it more appealing for the buyer. Go out and buy two matching urns or ceramic pots and plant them with something tall and then surround the tall plant with trailing or low growing plants. Put one on each side of your door and you’ll be impressed by the instant ‘WOW’ factor.

All of these ideas are sure-fire ways to increase the prettiness of your property and added curb appeal often means added money to your pocket. Give it a shot and see how a little effort can go a long way.

It’s Spring Makeover Time!

It’s hard not to get excited about freshening things up after a long winter. Spring is the time to get your house in order: switch out the curtains, repaint a room, give your house a deep cleaning and brighten up your curb appeal by heading to the garden store and scooping up a few flats of flowers and spring vegetables. But, while all the surface attention you give your house has a big payoff in making your space feel better, and you, too, it’s important to pay attention to the bones of your house.

While it’s not very glamorous or fun to talk about such things as furnaces and windows, weather stripping or gutters–unless you’re into those sorts of topics–the truth is that taking care of the underpinnings of your home is the best way to retain your home’s value and to keep your longterm repair costs at a minimum.

Here are 5 things that you should take a look at this spring:

1. Windows: Do your windows need replacing? If so, spring is a good time to replace them. Replacing drafty windows will cut down on your cost of cooling your home this summer when the mercury rises. While replacing windows can be a costly undertaking, if it’s not in your budget, you can still do the basics: caulking any drafts and adding weather stripping are cost effective ways of maintaining your property.

2. Install New Heating Systems: If your furnace was showing the signs of age this past winter, replacing it this spring is a good idea. I know–with the weather warming up, the last thing you want to think about is sinking money into is your heating system, but you also don’t want to wait until that first cold snap hits to find out that your system is a goner. Plus, with the warmer weather, you’ll have a clear shot at getting the job done promptly, after all, the furnace repair man will have his calendar wide open.

3. Mulch: Even if gardening isn’t at the top of your list, making sure that your trees and plants are sufficiently mulched means that you will cut down on your water usage. Consequently, if you are a gardener then you know the value of mulching your plants.

4. Pruning Trees: Pruning trees in the spring allows you to remove any branches that were loosened during winter storms. However, don’t just grab a saw and head to the tree– randomly cutting off limbs can be detrimental to the survival of a tree. I know it’s tempting to burn off some energy with a chainsaw, but save yourself some trouble and possible longterm expenses buy calling a certified arborist for a consultation.

5. Paint: Painting your entire house is a job best left to a professional, but maintaining the exterior of your house is an easy and cost-effective solution to keeping and adding value to your property. Make it a seasonal ritual to touch up any exterior paint, caulk any cracks and patch up any stucco. These are all easy chores that take less than a few hours to complete and if done regularly can add to the length of time between the big paint jobs.

To read more about other things you can do this spring to maintain your home, click here.

The Future Looks Bright for Gains in Equity

The steady uptick in the housing market is beginning to show a major improvement for the majority of homeowners–rising equity values. Fannie Mae’s Economic and Strategic Research (ESR) has been collecting and sifting through the data on how the turn in the housing market is affecting the average homeowner and what they’ve found is good news for all of us.

In 2012, 1.7 million borrowers went from being underwater on their mortgages to seeing an increase in the equity of their homes. Consequently, ESR’s predictions for 2013 are that another 1.8 million homeowners will see their properties go from being underwater to being back in the ‘normal’ range. This is a strong predictor that could have a long range positive effect for buyers: homeowners who were sitting out of the market, waiting to list their homes until prices rose, could very well find market conditions conducive to listing their homes, thus increasing supply.

The ESR predicts that the median appreciation for homes in 2013 will be 4.8% and that all but 10% of the homes that are underwater will gain equity. The top five markets with the highest concentration of homes with underwater mortgages are: Nevada, Florida, Arizona, Georgia and Michigan.

The Golden State has enjoyed a brighter future over the last several years. California was consistently in the top five of most underwater mortgages until the second quarter of 2011; now, our future looks bright as home prices continue to rise and homeowners enjoy seeing their home in a more positive financial light.

To read more about the findings of the ESR click here.

Low Inventory Drives Up Home Prices

The real estate market continues to gain ground and this season will most likely be hectic as buyers deal with fewer homes on the market and sellers sort though multiple offers and quick moves.

What’s behind all the recent activity? Low inventory is responsible for driving up prices, but it’s also problematic for buyers–there are just fewer properties available on the market and of the available properties, the majority get snapped up quickly. Between March 2012 and March 2013 the number of listings available fell by 31%. Additionally, over the last 25 months, the number of listings on the market has decreased each year.

Circumstances such as these make for a very competitive buyer’s market, that means that as a buyer, you have to come prepared and ready to make an offer; the days of thinking things over for a few days could cost you the opportunity to buy a house that’s a good fit for your family and your lifestyle. Of course, buying a house is a huge investment that shouldn’t be taken lightly, but by doing your homework and due diligence, being familiar with the neighborhoods that your looking at and being prepared financially all make quick decision making a calculated negotiation and not a whimsical, spontaneous buy.

The best advice for this market: be prepared.

To read more about the surge in home prices and low inventory, click here.

NAR Market Report Shows that Prices are Up

The National Association of Realtors just released a report that shows housing prices are on the increase. The averages cost of a single family home was up $11,100–the strongest monthly gain in 8 years–and the average time on the market was 62 days. The report also showed that in March, 30% of all buyers were first-time buyers and that all cash sales accounted for 30% of all sales.

Other noteworthy points include information on foreclosures and short sales. In March, 13% of sales were foreclosures with average price discount of 15% below market value. Short sales made up 13% of sales with an average discount of 8% of market value.

The National Associate of Realtors reports on market conditions nationwide; remember, all markets are different. Here on the Central Coast, we continue to see limited supply and those houses on the market are generally selling quickly.

To read more about the National Association of Realtors findings, click here.

What Sellers Should Do to Prepare for a Home Inspection

You’ve had your house on the market and dealt with all the anxiety that goes along with selling a home. You’ve wondered if you’d get any offers, if you’d sell for the price you asked, and wanted; you’ve cleaned and prepared for open houses and straightened up for a succession of showings. Then, it happens, you’ve got an offer; it’s a good one and you’re more than happy to accept it and get through the selling process.

The next step is the Home Inspection. But, before you give a sigh of relief and think that your work and effort is no longer needed, that things will proceed like clockwork and soon enough the whole selling process will be finished and you’ll be on to your next property, you have more work to do and a number of important details to take care of. The Home Inspection is a major part of the selling process and one on which the buyer’s final decision is riding. You want to make sure that you do everything possible to assure a positive outcome.

By professional standards, Home Inspectors are supposed to be nonjudgmental, but you have to remember that they are human beings and just like all the rest of us, they are influenced, both consciously and subconsciously by how they experience your property. In order to make sure that they see your property in a positive light, there are a number of things that you need to consider.

First off, while you may be tired of doing so, clean your house. Thoroughly. Dust those baseboards and ceiling fans, vacuum under the refrigerator and stove, clean the air conditioner filters; make sure that sinks and tubs and toilets are clean, including the hardware and scrub away any hard water stains or mineral deposits the best you can. Also, make sure that your overhead lights have lightbulbs and that there is adequate lighting in all the areas that the home inspector will need to access.

Next, clear away all the areas that are going to be inspected. This means trimming any bushes or plants that could prevent easy access on the outside of your home, but it’s also as simple as making sure that the inspector will have easy access and mobility in checking the furnace, hot water heater, air conditioning unit and any electrical boxes.

Be sure that you provide keys to any outbuildings and if you’ve recently done any repair work on anything that will be inspected, leave those document for the home inspector. Finally, while home inspectors usually come prepared, in the event that yours doesn’t, make sure to have a ladder on hand so they can inspect the attic, roof and gutters.

Most importantly, the best advice aside from the above is to leave the property. The home inspector needs to be able to inspect the property at his own pace and record his own observations, he/she doesn’t need the homeowner following along and offering commentary. As a seller, take care of the important details; your hard work and attention to detail will pay off in the end.