I have spoken to a handful of general contractors in the South Bay since the beginning of the year, and it seems like business is picking up. They all have jobs lined up over the next several weeks for major remodels. Some clients have gutted recently purchased property. Others are staying put in their current residences and giving their homes a face lift.
If you are thinking of updating your home to prepare to sell, remember that you won’t get a 100% return on your remodeling costs. Exterior renovations still seem to go the furthest. Curb appeal and first impressions are crucial when selling your home.
Congress just passed, and the President signed, legislation that extended the loan limits for Fannie, Freddie, and FHA. Conforming loan limits will remain at $729,750 through September 30, 2011.
I’ll be holding 421 26th Street in Manhattan Beach open this Sunday, October 10th from 2 -5 pm. This single family has 3 bedrooms and 2.5 baths. It’s just blocks to the beach.
When people ask me how the market is doing, I can honestly answer that it’s not bad. Let me clarify, markets are local. There are definitely some bad markets out there. But if I’m speaking specifically about my local markets, i.e. Hermosa Beach, Manhattan Beach, Redondo Beach, and other South Bay cities, the market really isn’t that bad. There are plenty of buyers out there. There have been multiple offers on some properties. Qualified buyers do get financing. Interest rates are phenomenally low. But one of the biggest differences I do see is a buyer’s attitude toward real estate. What I mean by that is when the real estate market was exploding and everyone was rushing to get into the game, buyers were somewhat careless about what they bought. They overlooked negative features. If the house was located on a busy intersection, they thought that the noise wasn’t that bad (once the TV was on, the windows were shut and they spoke really loud). If the 4th bedroom was more reminiscent of a modest walk-in closet, they called it an office and threw their old sleeper sofa in there. If the home inspection report provided a laundry list of problems, buyers refrained from asking the seller to do any repairs for fear that they would lose out on another property to another buyer who was a lot less concerned about dry rot, electrical problems, plumbing issues or any other number of red flags. But today, in this current market, buyers have changed their tune. Their threshold for problems or quirks is much lower. They won’t settle for a house just for the sake of becoming a homeowner. They will look and they will move on if they don’t feel the house will properly meet their needs. It’s definitely a buyer’s market and the buyers can afford to be selective.
What is the significance of the good faith deposit?
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When does a buyer risk losing his good faith deposit?
When you make an offer, it’s not always just about the sales price. There are plenty of terms that the seller will take into consideration when selecting a buyer. Here are some terms that can make or break a deal. First, the size of the down payment needs to be considered. Is this buyer going to have a hard time getting a loan? The ideal buyer is an all cash buyer. The seller does not have to worry about the bank giving loan approval. If there is a loan, the smaller it is the better. Conventional financing is much easier to secure than a jumbo loan. Second, is the buyer well qualified? This goes hand in hand with the down payment. If the buyer has substantial assets, and a low debt to income ratio, then there is a better chance to secure the necessary financing. Or if there is a hitch in the loan, it may be possible for the buyer to come up with more money. Third, the buyer’s contingencies and the length of the contingency period are crucial items to consider in an offer. The more contingencies in the contract, the more opportunities the buyer has to cancel. So a more attractive offer is one that does not have as many contingencies or the contingency period has been shortened. Fourth, if the buyer asks for any seller concessions, it weakens the offer. The more the buyer asks for, the less likely the seller will want to accept the offer. And if the concessions have a dollar sign in front of them, it will only serve to reduce the offer price in the eyes of the seller. Last, how long is the escrow period? Each seller will have a preference for a long or short escrow, but normally the shorter the escrow the better. Again, a long escrow just leaves more opportunity for the deal to fall through.Of course, markets are not created equal. Depending if we are in a buyer’s or seller’s market will help determine how negotiable a seller will be. But when a seller is comparing one offer to another, these are definitely some of the points of comparison.I’ve heard some buyers complain that they offered a sales price that was ultimately higher than the final price at which the property sold. Keep in mind that a lot of things go on during an escrow period. It’s always possible that a buyer made a highly competitive offer, but then negotiated the price down based on the home inspection or the appraisal. Or the winning offer may have had other terms that the seller found attractive and just as important as price.