Below you will find informative Real Estate related articles that have been written by other market experts:
Palisadian Post
Thursday, November 2, 2006
Pacific Palisades, CA.
Article Title: “Insulated,” Though Not “Isolated”
“I have two concerns. We plan to sell our home when I retire in two years, but are afraid of losing a huge amount of equity because of all the news about prices expected to fall. Ironically, our daughter is afraid that if she and her family don’t buy a home soon, higher interest rates may prevent them from purchasing. What are your views about these issues in the Palisades?” - A long-time homeowner
I think this may be a great opportunity for both of you! Although prices are softer now, you could still sell very close to the all-time high point and perhaps lease a place for two years. Your daughter’s family could negotiate an excellent purchase now, have the more affordable monthly payments, and enjoy a place of their own as well as tax benefits much sooner.
A continuing slow-down in buyer demand and increase in home inventories for sale has made it more challenging for homeowners wanting to sell. In many other areas there are now 30-60% more homes available than there were in the Fall 2005, and the sales rates are 20-50% lower. But Pacific Palisades, Brentwood, and much of Santa Monica are experiencing much less of an impact from the over-all drop-off in buyer demand. Although house hunters are much far more selective, and often adopt a ‘wait-and-see’ attitude, sellers who are realistic in their price expectations are still able to attract buyers successfully.
The law of supply and demand ultimately results in price changes. While local sales rates are off by about 18% from last year at this time, there are still about 23 homes sold each month in the Palisades alone. Also, the inventory level has only increased here by 11% since last year.
Because our area is a “destination neighborhood,” it is relatively more attractive to a larger proportion of prospective buyers. More than 20% of the local sales are to people who already live in the Palisades, and more than 30% are to Santa Monica residents. This factor of high desirability is insulating the Palisades to a fair extent from the market forces that have begun to affect the housing markets in most areas.
We have a wonderful village atmosphere, moderate climate, highly-regarded schools, casual lifestyle and natural beauty with several recreational areas. And for the same reasons there are not as many owners who would want to leave such a desirable community, so the inventory growth has been more gradual than in most other areas that experienced rapid appreciation over the last several years.
Your daughter may find this a good time to buy, before probate interest rates increases next year offset the likely small price declines. They will be deferring their enjoyment of the new home for a long while if they decide to continue to wait. They have a lot to gain and nothing to lose by at least making an offer when an ideal home has been found!
Homeowners who really do want to sell today will have the greatest success by carefully interviewing before hiring an agent. In this cooling-off market, a home must be priced competitively and marketed effectively. When an offer is received, flexibility and willingness to make compromises may make all the difference.
If historical patterns repeat, prices in this area may dip 4-8% over the next year. Beyond that time it is difficult to guess where the market might trend. However, the Palisades usually out-performs other areas due to its unique blend of positive attributes.
“Working with an out-of-area agent”
Oakland, CA.
September 7, 2006
By Diane Hymer
Maybe you've been looking at open houses for months, but you haven't hooked up with an agent yet because you're not sure you're really going to follow through and buy a home.
Then one Sunday afternoon you find a home that changes your motivational level-it has everything you'd hoped to find in a home. But, you're not alone. The open house is buzzing with activity. You're sure the listing will sell fast.
You call a friend who's a real estate agent and ask him to represent you. There's just one hitch. He's a real estate broker from another part of the state. Although it's perfectly legal for your friend to represent you, is it a good idea?
Recently, a couple tried to buy a home in Oakland, California. Their brother, a broker in Southern California, represented them in a multiple offer competition. They didn't get the property; their offer wasn't competitive with the other five offers.
The out-of-area agent couldn't counsel his clients about what price to offer because he knew nothing about local property values. The agent also didn't know local custom regarding closing costs.
The City of Oakland imposes a transfer tax of 1.5 percent of the purchase price. Normally, this is split 50-50 between the buyer and seller. The out-of-area agent's offer asked the seller to pay the entire tax. This amounted to thousands of dollars.
In Southern California, sellers usually pay for the title insurance and escrow fees. The Southern California agent wrote his clients' offer according to local custom in his area. In Oakland, however, the buyers usually pay these fees, which also amount to thousands of dollars.
Sellers are obviously looking for the best price. But, aside from price, there's another issue with an offer that's written contrary to local custom. It causes the sellers and their agent to wonder what else the out-of-area doesn't know about local real estate that might adversely effect the transaction.
Also, buyers can gain a competitive edge by having their agent present their offer in person to the listing agent and/or the sellers. An out-of-area agent usually faxes the offer to the listing office.
FIRST-TIME TIP: You might wonder why a buyer would be so foolish as to allow an out-of-area agent represent him or her--particularly if it diminishes the chances of successfully negotiating a purchase. Sometimes, buyers do it because their agent friend promises to kick back part of the commission to them.
It's natural to want to save money. But, it becomes foolhardy if it jeopardizes the purchase, or results in a shoddy real estate deal. If your agent isn't local, you must hope that the seller and the seller's agent are especially diligent.
Who is going to look out for your best interests? Who'll tell you about local soils conditions, slide areas or toxic waste dumps? State laws differ on how much sellers are required to disclose. Regardless of what the law requires, to be protected, you'll need to do research to make sure you discover all the conditions that might effect your decision to buy the home.
Good agents have a wealth of information about local conditions and property values. They also know the best inspectors, title and escrow officers, loan brokers, insurance agents, and contractors who can give estimates. An out-of-area agent isn't likely to have this type of information.
THE CLOSING: Rather than work with an out-of-area agent, have that agent find out who would be the best local agent for you, and refer you to him or her.
