Tag: Seller Articles

Increase Curb Appeal For Higher Returns

Posted on by Julie Tsai

Love at first sight. Is it real?

A recent study conducted at the University of Groningen in the Netherlands not only confirmed that the phenomenon is real, but also found strangers were more likely to experience love at first sight with physically attractive others.

This is reportedly true in love, and we also know firsthand that it is true when selling your home. First impressions matter—a LOT.

 

Why Do First Impressions Count?

“When buyers see the outside taken care of, they have a better attitude that the inside will be just as nice! First impressions make lasting impressions.” – Suzette Peoples, Owner of Peoples Properties

According to a Michigan State University study, a home with landscaping and effort put into curb appeal can increase perceived home value between 5% and 11%. Curb appeal can also sell a home faster.

Perceived value is very personal and highly subjective. It has nothing to do with numbers or logic. It has everything to do with perception. Emotion is the ruler of perceived value, and people buy on emotions. In fact, according to Harvard Professor Gerald Zaltman, 95% of our purchasing decisions are made by our unconscious mind.

 

How To Get Great Curb Appeal

So, what are the smartest curb-appeal projects?

Based on the 2019 report from Remodeling magazine and the 2019 Remodeling Impact Report from the National Association of REALTORS®, these are the projects with the highest emotional appeal and return on investment:

Wash your home’s face. Cleaning up the home’s exterior with a thorough power-washing can add $10,000 to $15,000 to the sales price.

 

Freshen the paint job. The most commonly offered curb appeal advice from real estate pros and appraisers is to give the exterior of your home a tasteful new color scheme. Selecting an attractive palette may be tough, but Julie and her team know the colors that are most popular with current buyers, so we can give you savvy advice on choosing the right colors. Buyers will instantly notice a new paint job, and appraisers will value it.

 

Mind the roof. The condition of your roof is one of the first things buyers notice and appraisers assess. A new roof has a return on investment as high as 109%. For more roof tips, click here.

 

Neaten the yard. The Associated Landscape Contractors of America says landscaping can add as much as 14% to the resale value of a home and speed up its sale significantly.

 

Add attractive colors. Color attracts and pleases the eye of would-be buyers. If you’re planning to sell your house in spring, add colorful flowering plants to your front yard so they’ll be in full bloom at the time of showing. If you have a front porch, consider adding a couple of brightly colored chairs or a bench. If you’re feeling a little daring, paint the front door, too. For more tips, click here.

 

Glam-up your mailbox. If you have a standing mailbox, digging a flowerbed by it and adding pretty flowers like pansies or primroses will amp up curb appeal. A chic mailbox, elegant house numbers, or address plaques can also help make your house stand out.

 

Fence it up. A picket fence with a garden gate to frame your yard is an attractive feature. It adds visual punch to your property and extra value during the appraisal. If you already have a fence, make sure it’s clean and in good condition. For more tips, click here.

 

Little details matter. Nothing looks worse from the curb – and sets off subconscious alarms – like hanging gutters, cracked or missing bricks from the front steps, or peeling paint. They can make potential buyers immediately think the entire property has suffered from deferred maintenance. They can also decrease the value of your house by as much as 10%.

 

Can We Help?

Attractive curb appeal is a smart move, one which will make potential buyers fall in love with your home at first sight.

For more home-selling tips, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

How An ADU Can Boost The Value Of Your Home

Posted on by Julie Tsai

SELLERS: HOW AN ADU CAN BOOST THE VALUE OF YOUR HOME

 

Most of us would like to live close to our loved ones. We’d love our children to raise their own families nearby. We also would prefer to spend our golden years in the place we call “home.” But the continued rise in the cost of living, particularly in California, makes that a tough dream to achieve.

In 2018, more people left the Golden State than entered – the second year in a row for this negative trend, according to the US census. A recent survey found 53% of residents and 63% of young adults were considering leaving because of the high cost of living.

Bay Area rents continue their strong upward trend. In May 2019, the median rent for a 1-bedroom unit reached $1,975. Two-bedroom units average $2,800 per month.

Now consider the cost of nursing home care, which now averages $86,000 per year across the state and a staggering $125,000 in San Francisco.

 

How ADUs Can Help

All these factors present a unique opportunity for Bay Area homeowners in the form of auxiliary dwelling units, or ADUs. For reference, read our article “New ADU Housing Bills Could Add Significant Value to Your Home”.

ADUs — also referred to as in-law units or granny flats — are additional living quarters on single-family lots that are independent of the primary dwelling unit. The separate living spaces are equipped with kitchen and bathroom facilities and can be either attached or detached from the main residence.

Some of the most common uses for ADUs are:

  • Housing older parents or grandparents independently
  • Low-cost housing for adult children
  • Long- or short-term rental income

 

Multigenerational Living Options For ADUs

ELDERLY CARE

Worrying about the health and safety of an aging parent living far away is a major stressor for everyone involved. Having mom or dad just a few steps out the back door provides convenience and alleviates anxiety. ADUs allow elderly individuals to maintain their independence and offer families the privilege to care for them while saving money otherwise spent on nursing home care. 

HELPING THE KIDS

In high-cost regions like the Bay Area, many people are building ADUs to give their children the opportunity to stay in the place in which they grew up, raise their own families, and/or save money for college or for an eventual down payment on their own home. In some cases, as parents age, they will move into the ADU and make the primary residence available to their grown children.

AGING IN PLACE

In his 2013 book How to Retire the Cheapskate Way, Jeff Yeager tells of a couple in Washington state who are planning to age in place by raising their single-story house to accommodate a new apartment beneath it. Yeager recounts how the couple loves their charming, village-like community and would like to stay there indefinitely. As they age in place, they will have several options: to live in the new ground-floor apartment and rent out the rest of their house, or live in the house and rent out the new apartment below.

This mentality is shared by many who are looking for cost-effective alternatives to leaving their increasingly more expensive neighborhoods.

RENTAL POTENTIAL

What does it cost to build an ADU and what is its rental potential?

A leading ADU builder in Northern California ran a detailed financial projection on building, financing, and renting out a 1-bedroom, 1-bath, 400-square-foot unit in San Jose.

The all-in cost to build this (fully loaded) ADU is projected at $161,358. Financed at 90% loan to cost, this creates a monthly payment of $560 over a 30-year period.

The projected rent for the unit is $1,554/month.

After the projected monthly loan payment, increase in property taxes and insurance, plus a few other expenses, the anticipated net return can be $900/month.

 

Can We Help?

Whether you are looking to care for your aging parents, help your grown children save money and afford living close to home, increase the value of your property, or generate extra income, an ADU is the perfect vehicle.

 

For more about how an ADU may benefit you, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

 

Trade Your Space For Better Living

Posted on by Julie Tsai

DOWNSIZERS: TRADE YOUR SPACE FOR BETTER LIVING

 

In a previous article (Downsizers: How And Why You Should Think About Downsizing), we talked about the subjective benefits of downsizing.

The advantages are many, and include the freedom and serenity afforded by an uncluttered life, the opportunity to create deeper meaning through simplification, and the time gained by stripping away the nonessentials to focus on the things that matter.

Plus, the many health benefits a less encumbered and more connected way of life offers us, and the chance to finally pay attention and fulfill the personal dreams we’ve had to postpone while raising a family, provide an immeasurable degree of quality of life that could not be fully enjoyed before.

But downsizing has many financial benefits, too—perhaps none richer and more rewarding than to finally cash out on the enormous appreciation in value experienced by the Bay Area housing market for just the past ten years. With annual percentage gains in the double digits, it has been a fabulous decade for homeowners. 

When Is The Right Time To Downsize?

“Is now the right time to make a move?” clients are asking us with greater frequency.

Savvy and successful investors question this every day and share a common secret: they know when to cash out. 

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

 – Warren Buffet, CEO of Berkshire Hathaway and fourth wealthiest person in the world

While we are not suggesting a dip in home prices is in the near horizon, if you are approaching retirement or are already an empty-nester, we believe the moment is ripe to consider a smart move. Appreciation in many of communities of the Bay Area is at record highs. Julie and her team can run a comparable market analysis on properties around your home and let you know what kind of return you can expect if you listed your home on the market.

How Can Downsizing Help You Financially?

Downsizing will not only allow you to reap significant gains in home equity, but will free up cash thanks to lower mortgage payments, property taxes, and maintenance and insurance costs. With your treasure chest thus filled, the possibilities are endless. 

Some homeowners have turned the tables on downsizing by utilizing the extraordinary profits made possible by rising Bay Area home prices. In turn, they can purchase larger and more luxurious homes in more inexpensive areas out of state, or afford a grander lifestyle—on a reduced scale—in their own community or in more affordable neighborhoods nearby.

Does Downsizing Mean You Should Give Up Homeownership?

Just because you’re downsizing doesn’t mean you have to surrender homeownership forever. Many downsizing sellers have reinvested their proceeds into other homes. Some have downsized to purchase a second home overseas, or back home, as in the case of immigrants who long to renew their connection with their places of birth and with the family members and friends who stayed behind. Helping children with a down payment for their own home has been another factor motivating families to downsize. 

In previous cycles, savvy investors have also cashed out near the peak, then downsized (or moved temporarily into a rental) to wait for a price correction. They entered the housing market a second time once certain a new upswing was underway.

Can We Help?

Whatever your circumstances, investment strategies, or long-term goals, let our experienced team help you capture the many upsides of downsizing and to guide your next move toward a richer and brighter future. 

For more information on how we can help with your downsizing needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

 

What Are Disclosures? How Do You Prepare For Them?

Posted on by Julie Tsai

After signing the listing agreement with your agent, filling out your home’s disclosures is one of the next steps in the home-selling process. 

So what are disclosures, and how open should you be about them?

 

What Are They?

 

Disclosure laws are meant to protect both sides. Disclosing any issues about major home components, systems, and conditions puts your buyer on notice and prevents you, the seller, from being held liable for future problems.

 

Providing disclosures doesn’t mean you’re giving a buyer guarantees about your home. You must, however, give truthful information about defects you know about or should have known about, but were perhaps ignoring. In most states, it’s illegal for a home seller to knowingly conceal major defects from buyers (click here for disclosure obligations in California).

After your home is under contract and before the sale is finalized, the buyer will typically hire a property inspector. The better prepared you are for the results of this inspection, the better the outcome. 

How To Prepare 

To put yourself in the best position before disclosures and the ensuing buyer inspection, you should have at least a basic understanding of the most probable defects that a home inspector is likely to find. 

According to the National Association of Certified Home Inspectors, these defects include:

  • foundation drainage trouble
  • electrical defects
  • roof problems (drainage, leaks, or rot)
  • heating combustion problems
  • improperly done repairs
  • structural damage
  • plumbing problems
  • infiltration by water or air
  • inadequate ventilation of attic or crawlspace
  • construction flaws.

Knowing what issues to look for and how to quickly and effectively resolve them is half the battle. To ensure a smooth inspection, take these steps before the inspector arrives:

  • If your home is vacant, make sure the power is on.
  • Make sure all light bulbs are working.
  • Pare down the clothes in your closets so the inspector can see inside them.
  • Remove items away from basement walls so they can be inspected for cracks and water penetration.
  • If there is access to the attic in a closet, make sure it’s accessible.
  • Change the filters to your furnace and leave any service tags so the inspector can see them.
  • Do not try to conceal any defects you know are present in the home. Trying to cover up problems will throw up a major red flag.
  • Ask your real estate agent to be present during the inspection.

The Benefits Of A Pre-Inspection

The buyer’s inspection will most likely uncover defects, and you will be expected to repair them if you want to get full asking price for your home. However, you will only have until closing to get the repairs done. This is why we always recommend our clients to conduct an inspection before listing to get ahead of any issues. Typically, an inspection costs between $200 and $500, but the advantages far outweigh the cost:

  • You’ll find out what condition your home is in. 
  • Pricing the home accurately is much easier. Even the best real estate agent will struggle with effective pricing if the state of your home is unclear.
  • Minimized stress. You’ll be putting your home on the market with confidence you’ve corrected any large problems.
  • You’ll be in full control of the scope, timing, and price of the repairs.
  • Less likelihood of extreme negotiations.
  • You’ll improve the buyer’s confidence.

The buyer, of course, will still conduct their own inspection. But if you have a pre-inspection, you can proactively resolve major issues which would otherwise make a sale fall apart. As your real estate agent, we want you to make sure you are as prepared as possible. 

Can We Help?

Trust Julie and her team to guide you through the disclosures and inspection stages. Their goal is to eliminate stress while helping you achieve the results you want.

For more information on how we can help with your selling needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

Finding The Best Time To Sell Your Home

Posted on by Julie Tsai

If we all waited for the perfect moment, we would never marry, have children, switch careers, retire, or move. 

Leave perfect timing to Swiss watches and trains. In real estate, optimal timing is the target.

Time To Move?

Selling your home and moving, especially if you’ve lived in it for a long time, is an emotionally charged decision. After all, home is not just a living space, but a storehouse of fond memories; your children’s cradle and launchpad; the cozy, nurturing womb of friendship and camaraderie; your safe harbor. Just thinking about what will be left behind and the inconvenience of moving fills many people with anxiety and dread.

But an inconvenience, said British author G.K. Chesterton, can become an adventure if rightly considered—which is the same as saying we should think about what we stand to gain instead of what we stand to lose.

Getting rid of stuff, for instance, can seem daunting, until we imagine ourselves and our lives more unencumbered. Goodbye worrying about the three sets of dishes that have never been used! Decluttering our lives is good for the mind and soul. Shedding allows us to travel light. We lose stuff but gain freedom and peace of mind.

Downsizing can feel stifling until we picture ourselves in closer quarters and proximity to our loved ones, or when we imagine all the wonderful experiences and new memories a lower mortgage payment will afford us. 

A new neighborhood, town, or city may just be the fertile soil we need to reinvent ourselves in midlife. Change is energizing!

Separating ourselves from the familiar—our old friends, community, or favorite haunts and hikes—allows us to see everything anew. Distance, they say, makes the heart grow fonder.

If rightly considered, selling your home and moving someplace new will always be an adventure, and with Julie Tsai Law, we stand ready to chart the course with you.

Perfect Timing

Attempting to perfectly time the market is one of the great traps into which many people fall.

If someone as knowledgeable as Fed Chairman Alan Greenspan couldn’t see the 2008 market crash coming, it is hard to comprehend how we can predict the highest wave in a market cycle—especially in a real estate market as nuanced as the San Francisco Bay Area.

“A decade of results throws cold water on the notion that strategists exhibit any special ability to time the markets.” – The Wall Street Journal

Regardless of market turbulence, over the years Julie and her team have helped our clients focus on obtaining the highest possible price while selling at the time that suits each client’s needs. Our clients have been amply rewarded by our conservative, yet savvy advice. After all, we have been around long enough to know how to tailor the timing of your selling experience to be both easy and financially rewarding. We also know if a window of time simply won’t give you the results you expect, and we feel it is our duty to inform you and let you make the final decision.

Our team of experts has a constant finger on the pulse of the market, tracking Fed policy, interest rates, supply and demand, economic growth, demographic shifts, and regional development plans that may impact your property value. This allows us to provide a comprehensive outlook to our clients and recommend the optimal time to sell your home for the value and terms you desire.

Can We Help?

Julie understands the idea of selling your home may seem overwhelming. This is why we have created a system that makes home-selling as easy and effective as possible.

For more information on how we can help with your home-selling needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

Helping Aging Parents Downsize While Building Wealth

Posted on by Julie Tsai

HELPING AGING PARENTS DOWNSIZE WHILE BUILDING WEALTH

 

America is getting older. 

By 2040, about one in five Americans—or eighty million people—will be 65 or older, up from about one in eight in 2000. The number of adults age 85 and older (the group most often needing help with basic personal care) will have quadrupled by 2040. And while overall longevity rates are declining, affluent and well-educated individuals are still expected to live past their eighties.

An aging population is expected to strain government budgets because younger people are much more likely than older people to work and pay taxes that fund Social Security, Medicare, Medicaid, and other public-sector services. The latest Social Security Administration projections indicate that, by 2040, there will be 2.1 workers per Social Security beneficiary, down from 3.7 in 1970.

Meanwhile, the cost of long-term care keeps going up and most Americans keep believing—incorrectly—that the government will cover most, or all of it.

“Our population is aging, living longer, and not prepared.”

 – David O’Leary, president and CEO of Genworth’s US Life division

Preparing A Place For Your Aging Parents

Caring for our aging loved ones in their later years is becoming a costly challenge.

Nationwide, a private room in a nursing home now costs more than $8,000 per month, or $97,455 per year, according to a report by Genworth Financial. That’s an increase of nearly 50% since 2004. A semi-private room is less expensive, but still carries a hefty price tag: $85,775 per year. As it is, 87% of adults over the age of 65 want to age in place, according to an AARP survey, and nearly three-quarters of those will eventually need some kind of long-term care, reports Genworth.

Given the staggering rise in nursing home costs and the uncertain long-term financial viability of Medicare and Medicaid, a growing number of families are seeking to add a “senior-friendly flat” to their aging relatives’ properties. This can be rented out until the time comes when Mom and Dad are ready to move-in. In the meantime, the rental income is held in escrow to help cover future in-home healthcare costs. Once the seniors move into the smaller flat, the main residence is rented out to outsiders, or used by the younger generation who wish to stay close to their parents and save money on in-home healthcare services (which can run as high as $47,000 per year, for homemaker services, and $49,000 annually for an in-home health aide).

How An ADU Can Help

Adding a “granny flat” or auxiliary dwelling unit (ADU) to an existing property is not only a creative solution to allow seniors to age in place and save money. It also boosts the property’s resale value. According to Remodeling Magazine, real estate professionals in high-tech areas of the West Coast (Silicon Valley, San Francisco, North Bay, etc.) report that most of the homes sold in recent years that included a recently constructed ADU more than recouped the ADU project cost in the resale—well beyond, in most cases.

To help alleviate the housing crisis, the California legislature recently passed a series of bills ( “Homesellers, New ADU Housing Bills Could Add Significant Value To Your Home) aimed at facilitating the addition, or new construction, of auxiliary dwelling units. This easing of restrictions, coupled with the potential for rental income and higher property values gained by the addition of an ADU, are allowing families to build wealth. But more importantly, it gives loved ones the chance to age in place and save money on senior care in the process.

Rental income, higher property resale values, costs savings—what’s not to like?

Can We Help?

For more information on how we can help with your downsizing and life adjustments needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

    

Downsizers: Use Your Existing Home To Finance Your Next Move

Posted on by Julie Tsai

DOWNSIZERS: USE YOUR EXISTING HOME TO FINANCE YOUR NEXT MOVE

 

With some of the highest rental rates in the country, many Bay Area homeowners who are near retirement or are recent empty-nesters are using their existing homes as a creative source of income. This option allows them to downsize and relocate in-state, out-of-state, abroad—or even stay right on their properties.

Opportunity In Disparity

It’s no secret that high local housing costs have been part of a recent exodus from California to places with much lower housing costs. For example, close to 700,000 people left California in 2018. Texas was their first choice, followed by Arizona, Washington, Nevada, and Oregon. No doubt many were lured by the relative affordability of single-family homes in those areas: Texas at $209,000, Arizona at $272,000, Washington at $419,000, Nevada at $303,000, and Oregon at $366,000 (according to data provided by Zillow through January 2020).

With an average cost of $313,000 across these five states, the monthly mortgage payment for a new home would amount to roughly $1,400, if financed at 100% loan-to-value at current interest rates.

Conversely, with rental rates in San Jose, for example, at $3,200 per month for a two-bedroom unit, or San Francisco at $4,520 (according to Rent Jungle), Bay Area homeowners are uniquely positioned to convert their primary home into a rental property to finance a move to a smaller home.

Even if you’re thinking of downsizing but not planning to vacate entirely, you may even consider consolidating your belongings and living arrangements and renting out a bedroom or portion of your home to create supplemental income.

Ease Of Property Management

In the past, homeowners were reluctant to rent out their properties because of the hassles involved in being a landlord. However, a growing number of professional property management companies is now making it possible to outsource the hassle at a very competitive price, usually averaging 8% of the monthly rent. If you’re considering renting out your property, Julie and our team can help you find the property management team that best suits the intentions for your property.

New Legislation

Recent rental legislation in California allows landlords to raise rents by 5% annually. This is in addition to the regional cost-of-living increase, or a maximum of 10%. Based on current inflation rates, Bay Area landlords could raise rents by an estimated 7.7% per year, which could translate to a healthy, regular profit that downsizers can put towards a smaller, less expensive home.

Accessory Dwelling Units

Another option being considered by a growing number of aging couples is building an accessory dwelling unit (ADU) on their existing property. When ready, they can move into this ADU while concurrently renting out their primary residence to outsiders or younger family members. Recent housing legislation now gives homeowners greater flexibility to consider this option. Click here (“Homesellers, New ADU Housing Bills Could Add Value To Your Home”) for more information.  

Can We Help?

Of course, the viability of pursuing a strategy like this will obviously depend on your current monthly mortgage payment, property insurance, and ongoing maintenance costs, as well as the carrying costs of the new house. As with any key financial decision, considering turning your primary home into an income property to finance your next move should be done under professional counsel from your financial, tax, and real estate advisors.

For more information on how we can help with your downsizing needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

 

How To Achieve Higher Appraisals

Posted on by Julie Tsai

An appraisal is an unbiased, professional estimate of the value of a property. It is required by the lender before issuing a mortgage, and usually happens after an offer has been made and the home has been inspected.

Appraising a property isn’t an exact science. It is only an opinion of what your home is worth. It doesn’t dictate how much the buyer should pay, or how much you should accept. If your home is appraised lower than the price you and the buyer agreed upon, the lender isn’t going to make up the difference. It’ll be up to you and the buyer to figure out who pays for the shortfall. Both of you can agree to negotiate a new price, or you might consider finding someone willing to offer cash, which doesn’t require an appraisal.

 

Preparing For The Appraisal

  • Comparable listings

 

The first thing a home appraiser does is pull comparable listings (called “comps”) from the nearby area. These are similar properties, usually located within a mile or so, which have sold in the last 90 days. Typically, an appraiser compares the target property with at least three comparable ones. While appraisers have full access to MLS Listings and other programs, some offerings might not appear, so it’s good practice to compile your own and have a printed copy ready to hand to the appraiser as a courtesy. If you are a client of ours, then Julie and her team will already have comps prepared that you can review and share if possible. Click here for resources.

 

  • List of improvements

 

Make an itemized list of all significant repairs, updates, and improvements you’ve made to your home, including dates and total cost. Major structural upgrades, such as replacement of a worn roof or stabilization of a crumbling foundation, are important to an appraisal because, if they are not done, the home’s value suffers. Do not include cosmetic upgrades. Any improvements that are not permanent are usually inconsequential to a home appraisal.

 

  • Neighborhood bragging rights

 

If there have been positive changes to your neighborhood, let the appraiser know.

For example, did a new Starbucks open nearby? Mention it to the appraiser. After all, there was a recent Harvard Business School study that determined the entry of a Starbucks into a ZIP code is associated with a 0.5% increase in housing prices within a year.

What about public schools? How are they ranked? (Check here.) What’s the availability of daycare centers in your area? (Click here.) Mention improvements in public transportation, availability of bike paths, access to nature and hiking trails, etc. Display your neighborhood pride!

  • Deep cleaning

 

“The home appraiser isn’t coming by to judge the cleanliness of your homestead,” says appraiser Adam Wiener, the founder of Aladdin Appraisal in Auburndale, MA. “But it’s still good form to declutter, dust, and mop beforehand to show your home in its best light. Home appraisals won’t typically devalue your home because it’s messy—but a neat, organized home might help you. Even if they’re not consciously aware of it, the appraiser might value a messy home a little lower.”

So, the cleaner you can make your home look before an appraisal, the better!

 

The Physical Appraisal

Imagine your home after you’ve emptied it of your personal items. That’s what the appraiser will focus on. He will assess and record the quality and condition of the “bones” of your home and combine it with the comps to determine the market price of your property.

While unbiased, the appraiser is human, so will likely be influenced by first impressions. Make sure you’ve done everything you can to enhance your property’s curb appeal.

Once inside, the appraiser will conduct a room-by-room assessment to look at the material, quality, and condition of all fixtures, appliances, flooring, plumbing, and anything that will be left behind when you move out, including:

  • Plumbing fixtures (toilets, showers/tubs, faucets)
  • Interior paint quality
  • Flooring
  • Appliances
  • Windows/doors
  • Furnace
  • Air conditioning unit
  • Lighting fixtures
  • Cabinetry
  • Countertops
  • Electrical
  • Basement finish
  • Security system
  • Fireplaces

Appraisers often value houses in $500 increments, so if there’s a repair over $500 that can or should be made, do it. Fix leaky faucets, running toilets, broken windows, and cracked ceilings. Be sure to also touch-up the interior paint.

Once your home is appraised, it is almost impossible to have the appraiser reconsider his assessment. That’s why it’s crucial for you to present your home in the best light possible and be fully prepared for when the appraiser knocks on your door. 

 

Can We Help?

Don’t worry! Our expert team is ready to assist you in getting the highest appraisal possible. 

For more ways on how you can get the best value for your home, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

Pricing Your Home Just Right

Posted on by Julie Tsai

“How much is my home worth?” is the first question in most sellers’ minds when getting ready to list.

In response, we always start by reminding clients that pricing a home for sale is a business decision, not a personal one. This helps clear the air from all the emotions which tend to get in the way of a successful transaction.

To answer plainly, the value of a home is what buyers are willing to pay for it. No more, no less.

“A lot of sellers feel like there’s that one buyer out there who is going to pay way over market value for their home. But that just doesn’t exist. Even if a buyer falls in love with the home, they’re still going to be looking at [comparable properties]. No buyer wants to overpay.” 

– Michael J. Okun of Sotheby’s International Realty

Why Pricing Is Important

We want to make sure you don’t overprice your home because it will lead to a decline in interest after a few weeks on the market. Of course, dropping the price later is possible, but it might be a little too late.

On the other hand, pricing it low, especially in a seller’s market, shouldn’t worry you. Homes priced below market value will often receive multiple offers—each higher than the other—until reaching or exceeding the market value. 

That said, let’s review the factors that determine price, and the process by which we arrive at a competitive valuation.

Factors For Determining The Best Price

  • Location

 

The value of a particular location is primarily driven by the priorities of the buyer. A young couple about to start a family might place a higher value on a home located in a high-quality school district while an older couple might prefer a quiet neighborhood. Proximity to amenities, public transport, crime incidence, and job opportunities also determine the premium—or discount—buyers use to appraise a location.

  

  • Comparable Properties

 

Comparables, or “comps,” is a real estate appraisal term referring to properties with characteristics similar to yours. Besides location, we’ll want to look for comps that most closely match your property, such as lot size, square footage, year of construction, and number of rooms. The date a home was last sold also plays a role. Ideally, we only want to look at similar homes that have sold in your area within the last three months.

 

  • Condition

 

Your home’s condition has such a major impact on its value that some buyers will pay a premium for a well-maintained home. If it’s not in good shape, your home will likely still sell, but you may have to list it at a lower price than you prefer. We may even need to add an ‘as-is clause’ into your sales contract.

 

  • Upgrades

 

Remodels, renovations, or upgrades—any updates you make to your home prior to selling—will have an impact on its value. However, not all updates are equal. Certain renovations and remodeling projects have a better return on investment than others. Click here for the most current NAR Remodeling Impact Report to see which projects have a better return.

A Peek At Our Pricing Process

To get a better sense of the approximate market value for your home, follow this quick process:

  1. Check active listings. 

Most online valuation tools will display active listings in your area. Check each one and make a list of their features. Make sure, though, to compare apple to apples, i.e., homes:

  • Within a 1/4 mile to a 1/2 mile radius.
  • Of similar square footage, within a 10% variance up or down.
  • Of similar age and construction.
  • Of similar lot size.
  • Of similar condition.

Once you complete your list, we recommend you personally tour each home to get a better sense of the competition. After each visit, record the factors which gave you a favorable impression. When ready to stage your home for sale, your agent should work with you to recreate these positive characteristics.

  1. Ask us to run a Comparable Market Analysis (CMA).

A CMA looks at recent sales of comparable properties, not active listings nor pending sales which don’t carry the same weight as a home that has already sold.

Many homeowners wonder if it’s best to hire an appraiser to establish the value of their home. However, keep in mind that the “appraisal value” isn’t always the same as the “market value.” In any case, when financing the purchase, mortgage lenders will contract their own appraisal and not base their funding decision on the one contracted by the seller. For more on appraisals, click here (“Homesellers, How To Achieve Higher Appraisals”). 

Can We Help?

Julie and our team of experts are ready to help. Our vast experience, direct access to multiple listings, and up-to-date information on sold homes in your area will ensure we price your home just right.

For more information, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.

The Top 5 Things You Need to Know about Selling a House on the Mid-peninsula

Posted on by Julie Tsai

The Top 5 Things You Need to Know about Selling a House on the Mid-peninsula

 

#1 Real estate here is a global market—for all sizes and types of properties.

 

We’ve all heard the sensational stories of wealthy international buyers swooping up luxury properties. (Link to sale of Los Altos property http://blog.sfgate.com/ontheblock/2011/03/31/100-million-dollar-los-altos-home-breaks-record/) But homes at all price levels are being sold to foreign buyers who are interested in getting a foothold in Silicon Valley. Condos, townhomes and modest single-family homes are being sold to buyers from outside of the United States in increasing numbers.

 

If you want to reach the entire market when selling your home, you need an agent who is savvy to the international market. Your agent must know how to reach potential buyers from around the world, how to communicate with them and she must understand their values and business practices.

 

#2 You should probably move out of your home before you list it for sale.

 

In the olden days of real estate, you would be put your house up for sale and begin looking for a house to buy. Once you found your dream house, you would make an offer, contingent upon the sale of your current house, with the idea of coordinating the timing so you could make a smooth transition from one house to the next.

 

Now many sellers, especially of higher-end properties, will move out of their homes, stage them and put them up for sale. This enables the home to be shown in its best light and, because we are in a seller’s market, the home will most likely sell quickly. In the meantime, sellers can take an extended vacation, live in temporary housing or secure a bridge loan that will enable them to buy a new home before selling the current one.

 

#3 If you want to cash in on the equity in your house now, but aren’t ready to move, a solution may be easier than you think.

 

I know, this seems to contradict my previous statement, but let me explain. Even though housing prices have skyrocketed here, there is still a BIG inventory problem. This is in part because, although some homeowners would love to realize the appreciation that they’ve gained on their houses, they aren’t quite ready to move yet.

 

The good news for those homeowners is that there are investors out there who are interested in getting in the market, but who don’t plan to live in the homes. For these investors, it’s an ideal situation to buy a house and then rent it back to the previous owners. They save the expense and trouble of advertising and showing the home for rent, and they can start charging rent as soon as escrow closes.

 

These investors will often be happy to rent the home back to you for a year or longer. In this strong market, even buyers who want to move into the house may be willing to rent it back to you for several weeks or months to enable you to let your kids finish the school year or give you time to find another home.

 

#4 Even though the internet is making real estate more accessible to the average person, it is more important than ever to have an experienced, qualified real estate professional sell your home.

 

A recent study shows for-sale-by-owner (FSBO) sales have actually declined in the past decade, as more sellers realize do-it-yourself selling can save them neither time nor money.

 

According to the 2013 National Association of REALTORS® Profile of Home Buyers and Sellers, the share of “For-Sale-By-Owner” sales has steadily declined over the past decade, from 14 percent in 2003 to 9 percent in 2013. After accounting for sales between acquaintances and sales in which the seller was contacted directly by the buyer, only 6% of recent sellers sold their own homes without the help of a real estate agent.

 

The reason is that selling a home takes more than just planting a sign on front lawn and waiting for the offers to roll in—even in a strong market. To successfully sell your home for the maximum price requires expert marketing and pricing strategy, (link to blog about pricing strategy) local, national and global exposure, experienced  negotiation skills and legal knowledge that only seasoned real estate professionals can provide. The more competitive the market is, the more important it is to have someone who knows the intricacies of the market and can use that knowledge to your advantage.

 

#5 Now is a great time to sell!

 

Right now we are seeing the highest prices ever in almost all cities and neighborhoods on the Midpeninsula. In some cases, buyers are paying crazy high prices. Interest rates are still relatively low, (but inching up). There is still a lot of money in the valley, and supply is still lagging demand.

 

While it may seem like prices just keep going up, up, up, we know from experience that this is never the case. Real estate runs in cycles. It steadily increases, peaks, then drops—sometimes dramatically, 20% or more. Then it levels out and eventually increases again. But the time from the drop to getting back to peak prices can take about five years. Trying to time the market is very risky and could cost you a lot of money if you are wrong. If you are thinking of selling your home any time in the next few years, this could be your best opportunity—NOW!

JULIE TSAI LAW REALTY GROUP

JULIE TSAI LAW

650.799.8888

JULIE@JULIETSAILAW.COM

DRE #01339682

KRISTIN TSAI

408.605.80000

KRISTIN@JULIETSAILAW.COM

DRE #01294153

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