Live Lake Forest

Pssst – want to know how to get a better deal in any market???? Learn to use your imagination!

When I show homes to buyers, the most common objection that I hear is “it needs too much work!” The majority of buyers notariously have no imagination – that’s why resale homes get staged, or builders’ models are upgraded, furnished and exquisitely decorated! Too many times, buyers are strongly attracted to (and hyponitized by) the beautiful furniture, hand picked accessories and themed color schemes presented in a house. They end up paying more, because they allow their emotions to influence their judgement.

In my area of mostly “cookie-cutter” tract homes, I have seen many examples of the same floorplan, with equally desireable location, sell for substantially less than it should, just because it is shown with finger-printed walls, stained carpets, busy wall-paper, over-grown landscaping, ugly furniture, bad window coverings, dated light fixtures & faucets, etc. These flaws are relatively CHEAP to fix, but you need to use your imagination to picture how the finished product will look in the end!

Have you ever watched “Sell this House” or “Designed to Sell”? These and many other HGTV-type shows take an ordinary (usually cluttered and dated) home and spend about $2000 to fix it up. They end the show with an “Open House” where everyone coming through raves about how lovely it is, and then one of the “lucky” buyers pays full price (or higher) to become the next owner. And everyone lives happily ever after…..

Buyers – take a lesson from this. If you want to buy right, and have some quick equity buildup, buy the house that fits your needs for size, configuration and neighborhood – then look at the condition. More often than not, a house that needs $10,000 in upgrades and modernization will sell for $25,000 to $35,000 less than one that is fixed up.

Get to know your costs to improve by visiting home improvement stores such as Home Depot, Lowe’s, Great Indoors & Expo. Check out the costs of the appliances, light fixtures, bath fixtures, flooring, granite counters, replacement windows, window blinds, shutters, etc. Most of these stores also offer installation, so don’t forget to inquire about that expense. Once you know what these items really cost, you will feel much more comfortable considering homes that need these features. In addition to knowing you saved money on your purchase, when it is all done, you will have the bonus of living in a home that is decorated to your own personal taste!

I found this today on another blog.  Seems that homebuilders had a hard time marketing their homes in the past!  (Video about the housing bust in the 1930s.)

http://www.youtube.com/watch?v=KlkOPAa4Mao

Q.  How many papers does it take to buy a house in Southern California?  (This isn’t a joke, but it starts out sounding like one, right?) 

A.  Today in California, the following documents are almost always included in a “normal” purchase of a home :

• Purchase Offer – 8 pages
• Buyer’s Advisory to have Inspection – 2 pages
• Counter Offer – 1 page
• Agency Disclosure – 1 page
• Market Conditions Advisory – 1 page
• Notice of Supplemental Property Tax Bill – 1 page
• Transfer Disclosure Statement – 3 pages
• Water Heater & Smoke Detector Statement – 1 page
• Lead Paint Addendum* – 2 pages
• Repair Request – 1 pages
• Removal of Contingencies – 1 page
• Statewide Buyer and Seller Advisory – 10 pages
• Supplemental Statutory Disclosures – 1 page
• Wood Destroying Pest Inspection – 1 pages
• Verification of Property Condition – 1 page
• Seller Property Questionaire – 3 pages
• Contingency of Sale Addendum* – 1 page
• Notice to Seller to Perform* – 1 page
• Purchase Agreement Addendum* – 1 page

* Not always required, but often used.

In addition to the above contract forms, there are additional escrow instructions, inspection reports, natural hazard disclosure reports, local area disclosures, escrow amendments, Preliminary Title Report, HOA disclosures, CC&Rs, Bylaws & Budgets, home warranty contracts, and probably more that are being invented while I write this! 

By the time you get around to signing the loan documents, most buyers are totally exhausted and numb to the process and willing to sign almost anything without reading it.  Don’t!  For almost everything you sign, you are agreeing to live with the consequences!  One of the biggest problems with all the bad loans that buyers used in the last few years is that the buyers didn’t fully understand, or take the time to read the terms that they were agreeing to!  My friend, Morgan Brown, a mortgage professional in Irvine, has written a good blog about this.  Read his article here.

With all the talk about the sub-prime melt down and the increase in foreclosures and short sales, it’s easy to think that nobody should buy any home right now.  That thought process neglects to consider the fact that each property is unique.  If the exact house that you have been wanting becomes available, don’t allow the “market conditions” to keep you from buying it.  It may not be available again!

There will always be valid reasons for sellers to sell and buyers to buy, without the panic caused by poor market conditions. 

If you are planning to buy a home to live in; where you will create memories, be sheltered from the elements, feel proud to entertain your friends and associates in, to feel secure in, and proud of, the individual house and lot are much more important long-term than the knowledge that you purchased it at a “rock-bottom price.”

The current market offers a buyer many choices of good homes that will sell for a more reasonable price without the “froth” of too many buyers competing.  Be careful with your selection and negotiations, but don’t be afraid to commit to the home of your dreams! 

To view homes for sale in the MLS, please go to my website and click on the blue button labeled “SoCalMLS”.  No registration required!