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“Pricing a home to sell is NOT an exact science!”

“Pricing a home to sell is NOT an exact science!”

“Pricing a home to sell is NOT and exact science”, were the words uttered by a frustrated home seller in the luxury market. I don’t understand it. This week I met with a frustrated seller in south Orange County CA. He has been through two agents, one on the low end “do nothing” but MLS and the other on the high end with “all the bells and whistles”.  NO SALE so far. He could not understand why his home had not sold and could not figure out what the right price was. I was interviewed by him a year ago and I gave him a price and some suggestions. He chose to list his home 700K over what I advised with a different company. By careful evaluation of the high end market I was able to inform the home owner that the supply of homes in his price bracket was equal to over a year and a half. In other words, if NO other listings came on the market (which is unlikely) it would take a year and a half to sell all of the existing homes in his price range. Pricing correctly is quite complicated for many reasons. What most people do not realize is that there IS A REAL MARKET VALUE which we call fair market value. The closer a homeowner prices his home to this fair market value the faster the sale will occur. The higher you price ABOVE the market value, the longer the sale time and the lower the final price will be. The real market value of your home can be improved or...

2015 Proxio Global Real Estate Outlook

2015 Proxio Global Real Estate Outlook       Interest rates are almost certain to rise in 2015. What will drive interest rates higher? The Fed is signaling that the third round of quantitative easing is coming to a close and that a short-term fund rate hike is inevitable. Chief Economist for N.A.R., Mr. Lawrence Yun believes interest rates for 30-year fixed mortgages will increase to 5%, possibly as early as the spring. He also thinks interest rates will rise another 1% by the end of 2016 to a 6% level. Both Freddie Mac and the Mortgage Banker’s Association forecast the 30-year fixed rate to reach 5% by the end of 2015. Dr. Bill Conerly, a well-known economist, sees interest rates climbing even further, to perhaps as much as 6% by the end of 2015. U.S. Home prices level off as more inventory hits the market. Price gains are expected to moderate in 2015 as more inventory hits the market. This should create a more normalized environment between buyers and sellers. With the buying frenzy fading, most forecasts call for a 4 to 6% gain in home prices in 2015. . Residential resale units are expected to increase by 7%, but new development sales are expected to increase by 30%. The resale market will continue to plug along, but new development sales are expected to be very strong in 2015. There is a pent-up demand for new housing, following the precipitous decline of new construction during the housing recession. Builders are coming back strong, but the McMansion style of new homes built in the late 1990’s and early 2000’s...

The Real Estate CMA Acronim

The Real Estate CMA Acronym. All industries have their own slang or acronyms. The “CMA” acronym is used by Realtors all the time and not always recognized by the public. It stands for “Comparative Market Analysis”. It is almost the same as an appraisal. Appraisers are looking at past history for the last three to six months of home sales. The Realtor CMA is looking  at past sales, current pending sales, expired listings (which did not sell) and similar active listings which we call “the competition”. In addition a seasoned Realtor is making an educated guess at where the market is going in the next 30 to 60 days. That is the hard part. The RPA is an acronym we use in California. RPA stands for the “Residential Purchase Agreement” or real estate contract form. By the way ALL forms used by Realtors are standardized and written by the lawyers at the CA Bureau of Real Estate. The full name of the contract is actually the Residential Purchase Contract AND Escrow Instructions. When you are sent “escrow instructions” you will notice that the title is “addendum to escrow instruction” because the contract included basic escrow instructions. What is the difference between “IN CONTRACT” and ” IN ESCROW”.  When an offer is accepted by a seller, whether it is the first offer or one of many counters, the last signature shows that there is an agreement. Then the agent who accepts the last offer must return it to the other party which constitutes an acknowledgement. The next CALENDAR DAY is the first day of the contract. The current real estate contract...