Danville Home Sellers

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Did you notice that after Memorial Day our CRAZY local real estate market shifted dramatically and now houses are, once again, sitting? Not multiple offers, not going crazy over asking price – sitting. I don’t think this is happening in The City, or in the Silicon Valley – but it’s happening here in our Tri-Valley area (OK, you’re right – there are some exceptions like Mossy Oak in Danville and Las Quebradas in Alamo). Why? I could speculate that it has something to do with school getting out, or summer starting – who knows, all I know is that the buyers are getting very picky again. So sellers, get your game on – we have to address the following issues – ALWAYS!!

Image credit: Tara-Nicholle Nelson

Image credit: Tara-Nicholle Nelson

Buyer Hate #1 ODORS
DUH!! Comes to mind, but you’d be surprised. Viewing a home is first, and foremost about the Visual, but when a prospective buyer comes to see a home, their other senses don’t just shut down. And there is nothing that can, and will, turn a buyer off faster than a bad odor. Smoke and Pet odor come to mind first, but other things like musty moisture smell, dirty laundry or wet carpet (which smells amazingly like wet dog) are pretty bad too. And just because YOU can’t smell it, DOES NOT mean it doesn’t exist – the human sense of smell very quickly gets used to smells that it lives with everyday. I always have all my listings professionally cleaned (we don’t see our own dirt either!) – if there is still an odor after a good professional cleaning – bigger, more expensive steps like replacing carpet may need to be made.

Buyer Hate #2 GLARINGLY EXTREME OVERPRICING
When a home is glaringly over priced, it becomes a chuckle for buyers and their agents. While all may comment on how overpriced the home is, they are less likely to actually come out and SEE the property. This only causes frustration for the seller, massive price reductions and the perceptions by buyers that there is something wrong with the property. “Why has that home been on the market for six months when everything else is selling so quickly?” Don’t go there Mr. and Mrs. Seller – it’s not worth it!

Buyer Hate #3 DIRT AND MESSES
Possibly the single largest source of buyer complaints are about dirt, messes, piles of personal belongs and dirt!! Obviously homes that are filthy from floor to ceiling are probably Bank Owned or distressed in some other way – but even relatively clean homes that just have a few outstanding messes (like dog poo in the yard!) can be a turn off. Again, that’s why I ALWAYS pay to have my listings professionally cleaned. A home needs to sparkle for those first impressions. A dirty or messy home indicates the seller doesn’t, or can’t take care of their home – so other maintenance issues have probably suffered too.

Buyer Hate #4 LOTS OF LITTLE MALFUNCTIONS
You may have installed granite and stainless steel appliances and the bathrooms may be gorgeous, and those improvements will speak for themselves. But the buyer won’t be running the furnace or dishwasher while deciding to write the offer. They won’t check the condition of the roof until the inspections and if all these seemingly little things, demonstrate a pattern of lack of regular maintenance – you may have a Cancellation of Contract coming your way. I know how hard it is to spend money on routine maintenance, when the daily emergencies continue to pop up – but it’s really important to show Maintenance records on your “used home” just the way you would for your used car you’re selling in front of the High School on Saturdays!

I know in our very sophisticated Residential Real Estate market this all seems a little obvious, but you’d be surprised at how many dirty, unmaintained, stinky, over priced houses we see every week!

These create house hunting haters, and you DON’T want that for your home when we go to sell it! I will hold your hand, and do all we need to do to make your home sparkle from top to bottom – and get you the best price in the shortest amount of time. It’s what a good agent does for her clients!

Have a great week!!

The Clash

If I go it could be trouble, if I stay it could be double!! Remember those lyrics from The Clash? Wow – that has NEVER been more true regarding selling your home now – or not. If you are anywhere near being “short” (your home value is equal to or less than your loan amounts) get ready to sell NOW!! Here’s why . . .

California just passed CCP 580e (more on that in a second), and who knows, it could be repealed at any time. So if you need to sell short or just sell, DO IT NOW! It’s estimated that as many as 50% of the homes in California are now worth less than their loan amount. While our little world is probably closer to 20-30%, it’s still a huge number and something we should all be thinking about because the laws are changing and what could be a simple short sale now, could be a big financial mess in a few short months.

What is CCP 580e? Let me try to explain (a lawyer nor accountant am I)  . . .When one buys a home – the first loan is called a “purchase money loan”. There is no recourse on a purchase money loan by the bank. In other words, if you default or sell below the loan amount, if the loan is your first (purchase money) loan, the banks can’t come after you for the deficiency. But if you EVER refinanced – 1st, 2nd or wrapped – that is a recourse loan that the bank can come after you for the deficiency. They rarely did, but they COULD, and that possibility prompted CCP 580e.

The California legislature decided to protect the borrower and make second loans non-recourse too, by passing and implementing CCP 580e. So for now, if you sell your home for less than the loan amount owed, whether it’s a first, second or whatever kind of loan – it is now a non-deficiency loan. The bank can’t come back after you to repay the difference between what you owe and what you sell your home for.

Banks giving us the finger?How long do you think the banks are going to let that happen? Who knows, but better safe than sorry. If you know your home is worth less than the loan amount and you think there is any chance you won’t be in it “until death do you part” – it’s worth having a conversation with an attorney or accountant – or both. I can get you started, but I can’t answer legal questions. I just know things are changing – and fast – and there is a window right now for individuals to sell if they think they may need to do so in the next few years.

And here’s the other reason – the tax situation around these short sales is going to change too. As of now, the state and federal governments are not coming after borrowers to pay income taxes on the money they pulled out of their home. So if you got a $200,000 equity loan, and spent that money – on anything from home improvements, to college tuition to that new Porsche in the driveway, as of today you won’t pay income tax on that $200,000. But come December of 2012 – that is changing and both the IRS and state governments are expected to let that tax law expire so they can collect all the income tax on all that money that Americans pulled out of their homes.

As we all know, it’s virtually impossible to get a Home Equity loan these days – so there will be very little “new” money exposed to this expired tax law, but any money borrowed against a home could then be subject to a deficiency judgment (you may need to pay it back), but it could also be taxed as income. OUCH!!

Hmmmm – are we surprised that big banks and the government are aggressively seeking new avenues of income for their strapped divisions and agencies? I get it, and I even get that there is personal responsibility for those who over borrowed on their houses – but let’s not be naïve or ignorant and sit back and not be strategic and smart on how this entire financial meltdown could affect us.

So if you find yourself in a questionable circumstance – talk with someone who can properly advise you on your income, tax and liability surrounding your mortgage. I have several very specialized attorneys I work with who can coach you through your options.

There are also big credit rating ramifications on short sale v. foreclosure v. deed in lieu of etc. It’s all gotten sooooooo complicated, and I am far from the expert – but I know enough to know now is the time to be considering your options because while the freefall in pricing may have stopped, home values are not going back up any time soon, and the laws surrounding how that could affect YOU and your family and your family’s future are changing fast.

Information OverloadI know that was a lot of information to digest, so let’s reduce it to the bottom line. However much you may be emotionally attached to your home, you need to think strategically about your financial future for the long run. If you are not sure where you stand regarding your mortgage, home value and how the changing laws may affect you, pick up the phone and get some professional advise right now, rather than later.

If you need somewhere to start, start by calling me and I’ll send you in the right direction. You are important to me and I want you to know that I am always here to help.

IMPORTANT NOTICE: I am not an attorney or tax expert. Any comments I make in regards to tax/legal issues are of a general nature and should not be relied upon. Please seek expert counsel in these areas for specifics to your situation.

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