The San Diego Real Estate Blog

Appraisal: Seller's Moment of Truth

So lets say I'm your hero and I bring you an offer for a bazillion dollars for your listing. Your listing isn't worth a bazillion dollars but you, as a seller, think it is. So here's the kicker.

The appraisal is the seller's moment of truth. The seller may feel that their property is worth above market value but once the appraiser (for the buyer's lender) sets the appraisal price, you may have a problem if it appraises below the sale price. Reason being, the lender will require the buyer come up with the difference between the sale price and the appraised price. This is why, in this situation, most buyers will either want to pay the appraised price or back out of the deal. Is there any buyer out there that wants to pay over market value for the price of any house? I doubt it.

The appraisal has now set the market value on your home. So now what? The appraisal report has become a disclosure item and must be shown to the next buyer (if you choose to seek one). So you're stuck. You could get the buyer to agree to having another appraisal done but if the new one is lower you're really in trouble. Big risk. If it's higher the buyer is now tainted and he won't want to pay more. You could ask for the first appraiser to "re-appraise" but if that comes in higher the buyer is still tainted by the first appraisal price.

Best bet is to cut your losses and allow the buyer to purchase at the appraised price unless they agree to come up with extra cash for the difference......or stay there and wait out the market for a few years or make it a rental property.

So when you get an offer and it's over market value don't hold your breath if the buyer is getting a loan. Reality is, the buyer's loan is based on the property appraising and if it doesn't then you'll have to go to plan "B." So sellers, unfortunate as it is, be aware your moment of truth is coming when the appraiser arrives.

Using the Comps to Your Advantage

There are many aspects to buying Encinitas real estate or selling an existing home, but price is at the top of everyone’s minds. If you’re buying how will you know you’re getting a good deal? If you’re selling, what price is high enough to get the most money and low enough to be competitive? It’s the comps, or comparable values, that set the market trends. It’s a sales history of sorts that buyers and sellers use to price or make offers on homes. If you understand how comps work for you or against you, you’ll have more confidence about your home purchase or sale.

Everything that sells in your neighborhood is a comp. Whether it sells low or high, the next buyer or seller is going to be using that statistic to determine value. If your neighbor gets foreclosed upon and his home sells low at auction it affects everyone’s values in the neighborhood. If you use an agent unfamiliar with the neighborhood to sell you home and he doesn’t know about the history of each sale, he may recommend your home be priced to low or to high. If it’s priced to low it hurts everyone in the neighborhood because buyers will use those comps against the next seller. It hurts you because you made less money. That’s why it pays to at least talk to and consider using the agent that farms (mails to) you and your neighbors. It’s more likely that person can turn vulture like buyers into a buyer who understands neighborhood value because a foreclosure situation can be explained.

Comps are also used by appraisers. I get calls from them all the time asking about concessions or credits that were issued by the sellers or received by the buyers. They want to know how the deal really stacked up. Comps show up in the MLS or tax records as a single sale price. What does that price mean though if a home sold for $650,000 with a $30,000 roof credit? It means that the house really sold for $620,000 and the records don’t reflect that. This is why it’s so important to have a professional advocate working in your corner who is local and knowledgeable of an area’s sales history. At the very least, you need someone who is interested enough in doing the research to find out what the data really means.

Lastly, comps mean a lot to buyers because that’s what tells them how things are selling. It’s a gauge that let’s them know if buying a fixer is really a good deal. If a fixer house sells for $550,000 and the buyer needs to put $75,000 into it to bring it up to livable condition, how would he know he was doing the right thing by doing those improvements? That’s right, it’s the comps. If the same house down the street recently sold for $675,000 and it was all fixed up with similar improvements, the buyer of the fixer would now be $50,000 ahead. Make sense?

It never hurts to keep track of sales prices in your area or to visit a few open houses. Best bet is to talk to a real estate professional who studies comps in your neighborhood every day. In the long run you’ll feel more confident about your home purchase or sale decisions by having someone who can help you understand how comps affect a home’s value.

Home Shopping Tips You Can't Be Without

When you're shopping for homes, how do you know when it's a good time to make an offer? Here's a couple of tips and steps you can keep in mind as you house shop.

First thing to do is sit down with a nice cup of coffee and ask yourself why you really want to move. Are you motivated? Do you have something to sell first and what is the cost of selling that property? Will your economic, social or life position improve as a result of your move ie. get closer to work, be in a neighborhood with people like you for example. Depending on the type of person you are, if you draw two columns on a piece of paper and label it plus and minus you may begin to see the clearer picture.

Ok, so looks like you answered "yes" so read on.

Get the formalities out of the way. Get prequalified by a mortgage professional so you don't waste your time looking at things you can't afford. Do it online or talk to someone in person. Then, go to some open houses in neighborhoods you like and meet some realtors. It's likely since they're local that they'll know the neighborhoods well. Realtors have previewed lots of homes and probably know floor plans that match your needs. Try to find an agent that's not pushy and provides lots of information. Ultimately you want someone that will guide you, not convince you to buy a home. Suplement your open house tours and look on line at CaMoves so you can target price ranges of neighborhoods or go to the open house section of CaMoves, Open House.com or SignOnSanDiego.com.

Once you've identified some towns or neighborhoods you like, set yourself up or have an agent set you up on an "automatic" email search targeting only the parameters of properties you're interested in. Our MLS here in North County San Diego can target over 900 different search fields so if it's out there you'll see it within 24 hours of a new home coming on the market or having changed it's price. Identify some homes you'd like to see and call your agent to go see them. It's important to keep your logic and emotions in check through this process.

There's no such thing as a perfect house. Every parameter your looking for isn't likely to appear in the same house and you should be aware that you may have to compromise on some issues. Pull out that paper again and write down your priorities so you can look at it as you walk through properties. Believe me, I've worked with enough buyers to know that many times those priorites go right out the window because their emotions can take over easily.

There are many different personalitiy types and that's why it's important to have an agent who can help you keep yourself in check by acting as a sounding board. Things like whether or not the home may be easily resold later because the floor plan is friendly to the most buyers is important. Comparables (what similar homes have sold for) in a neighborhood play into the equasion too. There's no rules other than to shop smart, get lots of information and find an agent you trust. Need some other tips or have a question about the process? Email me or leave a post and I'll be happy to help you as best I can.

Seller's Physical Law

Sellers who are difficult from the start of a transaction will be able to push a buyer only so far before that buyer turns the difficulty back into the face of the seller.  When you’re selling your house remember that physical law. Negativity and lack of cooperation begets negativity and lack of cooperation in return. This has held true every time I’ve been involved in selling a home here in San Diego and I’ve seen it experienced often with my peers. As a seller you have to put yourself in the place of the buyer and try to understand how you’d feel if it was you buying the house.

Consider the case of the seller who was trying to take the cheapest route toward correcting his “section 1” termite work. In California, correcting issues with termite infestation or wood destroying organisms is typically the responsibility of the seller. In this case, the corrective work involved some extruded beams and some deck work that could have been patched, cut off or replaced depending on the extent of the damage. Although the contract allowed for some interpretation of how the work could be done in a normal and typical fashion, the seller chose to do it the cheapest way possible that wasn’t necessarily aesthetically pleasing. The buyer objected to how the repair was being done and expressed his displeasure because it didn’t resemble the original construction and it didn’t look neat.  So here’s what happened.

Back at the beginning of the transaction, the seller refused to negotiate in a timely fashion, wouldn’t fax or email and forced the buyer to overnight all his paperwork for signatures including several rounds of counter offers. The buyer took that to be a control issue by the seller. The recent difficulty with the termite repairs coupled with the buyer’s first exposure to the seller’s lack of cooperation and control maneuvering escalated into a level of non-cooperation on both sides. The seller demanded the buyer not communicate with the contractor doing the repairs, canceled a scheduled repair the buyer wanted to have done without giving him notice and asked the escrow company to cancel the sales contract. The seller had no legal right to cancel the contract but nonetheless it was just another obstacle the buyer now had to jump over. Had the seller been “reasonable” in the beginning, negotiated in a timely fashion by “normal communication means” and had done the repairs in a way that any normal buyer would have have deemed acceptable, this might not have happened in the first place.

The lesson to be learned is if you’re difficult as a seller, plan on the buyer taking the ball and running with it if there are any screw ups on your side of the transaction.  If you’re a fair seller on the other hand, there are signs you can look for that might indicate you’re dealing with a fair or unruly buyer (more on this later). Be careful what you become during a transaction because without fairness and communication you may create a situation that can only be resolved through mediation, arbitration or court action.

Linking Posts

House Keeping Prep for Home Sale

One of the first major steps you, as a seller, must take before putting your homes on the market is to clean each room from floor to ceiling. Windows must sparkle, lighting fixtures must shine, and tabletops must be clutter free. Depending on how long you have lived in the home, this step could be one of the hardest tasks to tackle. To get started, try checking out The House Keeping Channel for time-saving tips on cleaning, de-cluttering, organizing, and time management. You'll find advice for virtually every area of the home, including the exterior. Here's some highlights from the site:

Kitchens. Potential buyers will pay special attention to the kitchen, so it has to look its best. This section of the site houses articles and checklists related to keeping the kitchen clean. Sellers with limited time will learn about The 10-Minute ‘New’ Look, a quick way to clean the most visible areas of the kitchen and other high-traffic areas of the home. You can get their granite countertops sparkling with tips from Stone Care Made Easy, an article about cleaning natural stone surfaces. And to really speed up the cleaning process, you can Form a Family Cleaning Team.

• Tools. When you need the right tool to get their home clean, they can learn about the latest and greatest products here. From Organizing tools to Furniture & Dusting products, you'll find a little bit of everything.

• Garages, Patios & Home Exteriors. With all of the focus on sprucing up the inside of the home, it’s easy to forget about the other important areas. Consider putting these Garage Organizing Tips to use and to do some Exterior House Cleaning before prospective buyers arrive. If getting rid of the junk that’s filling up the garage and patio is a problem, you can learn about The Virtual Garage Sale as a way to get rid of their extra stuff.

• Windows. Natural sunlight does wonders for the appearance of a home, so give your windows a good cleaning. Here's a helpful strategy used by professionals for Painless Window Cleaning. Make sure you don’t forget to Clean Screens, too. It’s also important that any window coverings are free of dust and dirt, so share these Inside Tricks to Cleaning Window Shades and Blinds.

• HC-Pedia. If you clearly don’t have a clue about cleaning, you may need to consult this dictionary of cleaning terms. Each term includes a brief definition, but a more detailed explanation — including suggested uses for cleaning products, safety tips, and advice for cleaning various surfaces — appears when you click on a term. For example, under the entry for Acoustical Tile Ceiling, you’ll learn that dirt can be removed by using a dry sponge. Or clean a Rust Stain by rubbing it with a sponge dampened in lemon juice or plain white vinegar.

If a buyer is impressed by your imaculate clean home, they'll think it was well maintained and cared for and will want it all that much more. They'll think their "fix up process" will be less work and easier to move in ready to go!

Linking Posts

4 Tips for Avoiding a Mortgage Mistake

By Debbi Nyberg, Mortgage & Lending Specialist Mike Dunn & Associates

I met with a new client recently who showed me some paperwork that was presented to him by another lender. It’s always upsetting to see how some mortgage representatives and companies try to take advantage of borrowers (and it’s even more troubling when I see that they succeed).

Let me tell you his story: First of all, his existing loan had a prepayment penalty that was scheduled to go away a year after he was being encouraged to refinance. The prepayment penalty was approximately $10,000. The new lender was proposing a loan origination fee of three points on a new loan amount of $500,000, meaning that the lender would receive $15,000 for the creation of the new loan. Also, the terms on the new loan were only marginally better than his existing loan, and certainly not good enough to warrant paying over $25,000 in fees to obtain the new loan.

Fortunately for my client, he asked for some advice before he closed this transaction, and became further educated as to what an expensive mistake this would have been. Despite being pressured by the representative and his manager, my client decided not to move forward with this costly proposal.

There are a few lessons that I hope you take from this client’s situation that will empower you as you research your mortgage choices and with whom you choose to work.

First, get a strong recommended action form your lender and mortgage representative. Ask how long they have been doing home loans. If they have only begun in the last few years, right when the mortgage market became very attractive, you may want to proceed with caution. There have been a lot of profiteers that have just started in order to make quick money, and do not have a career in mind. Additionally, they often do not know the product they are selling you. This means that they are not able to discuss with you all of the features and benefits of competing mortgage products so that you can make an informed decision as to the loan being suitable for you.

Second, make sure that the representative takes the time to answer your questions, and that there is some depth to those answers. They should be able to explain why they are making a particular recon emendation and why it would make sense for you to consider that program.

You should look for someone who makes the process as transparent as you want it to be. Your costs should be competitive, fair and clearly explained. I find that my clients cover the full range of personality types, from those who want as much detail as possible to those who don’t want any detail, but want to feel confident that they are being treated fairly and not being taken advantage of.

Third, do enough research so that you know what the current interest rate market and what competitive fee structures looks like. You should know what range of rates and fees you expect to be quoted when you start to narrow the choices of who to work with. This will give you an excellent basis for knowing if you are getting quotes that are outrageously high or uncommonly low.

Obviously, if the quotes are high you will know that someone is trying to unfairly profit at your expense. If the quotes seem low, also known as “too good to be true”, be very cautious. Unfortunately, in the mortgage business there are some unscrupulous lenders who will offer a very at¬tractive quote at the beginning to induce you to start the process with them. They will take you right up to the very end of your escrow period and then deliver the real terms, which are invariably higher, when you don’t have an opportunity to make other arrangements.

This “bait and switch” approach victimizes many borrowers and it is always disappointing to see that these lenders are rewarded with the business. Those of us who give an accurate quote at the beginning of the transaction will make a point of asking you enough pertinent questions about your credit score, loan amount, value or purchase price of your home, and whether it would be likely that we could fully document your income for the lender. Getting a loan quote without exploring those areas is virtually meaningless, and will contribute to your loan terms being changed at a future date.

Those changes will almost never be in your favor.

Finally, if you are not getting a good feeling about who you are working with, or if there are too many questions that are not being addressed directly and to your satisfaction, give yourself some room to make a change.

Don’t put all your eggs in a basket that looks unstable. On the other hand, once you find a representative that is honest, forthright, transparent, and the pricing of the loan is fair, be loyal to them. Although money is important, you will remember the quality of the transaction long after minor costs differences are forgotten.

Important Buyer Mistakes to Avoid

Initially, when buying a home, it’s important to pay attention to your gut feeling and then step back for a moment and defer your gut to some rules of logic. For most people it’s an emotional reaction. Your nerve endings tingle with excitement, for example, when you find a floor plan that is naturally comfortable to you. When you walk through the front door, somehow, it just plain flat feels right.

Ok, hold that feeling of excitement in your mind for a moment. Now fast forward a few years into the future and imagine you’re getting ready to sell your home. What I want you to do is take a deep breath and lower the curtain between your emotional self and your logical self. Put your emotions in a box and close the lid so only the logical you is left for now. Think about resale value, competing inventory, appreciation and what a discriminating buyer might be looking for. Look ahead and think about things buyers might object to when buying your house. The value of your home is directly related to its marketability. If it is sought after by other buyers, you will be able to resell your home at the highest price possible for the market.

Here’s the logic that will help you be able to market your home to the greatest number of buyers possible, creating a competitive atmosphere that will bring you the most money for the sale.

Site Difficulties

Lack of Yard
Does the selected property meet the needs of the typical buyer for the neighborhood in terms of lot size? Buyers tend to pass on homes that have significantly less usable yard than other homes in the neighborhood.

Unusual Easements or Restrictions
Unusual easements, deed restrictions, or an unexpected lot configuration discovered during the closing process should be cause for re-consideration, with an eye toward future marketability. Does the lot contain an access easement to another property? Is there an encroachment on the property? Are there regional pipelines underground? Are the lot boundary lines what you expected? Is flood insurance required?

Commercial View
Homes in suburban areas that view office buildings or retail centers are less attractive to buyers. Buyers choose suburban neighborhoods for their concentration of single family homes, separated from commercial areas. Of course, this would not apply to urban areas.

Flag Lot
In a subdivision of properties with similar road frontage, buyers will avoid this type of lot. These lots have very little street frontage, and there may be a building in front of the home. An acreage flag lot in a country setting may be an exception.

Likely Objections

High Tension Wires
The general reaction by buyers to high tension wires crossing near the lot is to simply eliminate the choice.
Steep Driveway
Many buyers will pass on homes with excessively steep driveways. If they cannot comfortably park the car, they won't get out of it to view the home.

Busy Street
The noise related to a busy street is a turn-off to many buyers, especially if the busy street is in front of the house.

Too Exposed
If the building behind the home looks down onto the backyard or into the family room, this will be a sales objection to many buyers. Most buyers want a certain degree of privacy in the back yard. This may be able to be mitigated by trees or screening.

Neighborhood Concerns

Declining Values
Does the neighborhood show pride in ownership? If you see tear downs and new construction, an older neighborhood may be going through a renewal period, and may be a good risk. However, if your market data indicates that values are declining, this should be cautionary information for the buyer.

Safety or Security Problems
If you see or hear of security problems—drug dealing, frequent burglaries, or safety concerns, ask your buyers to check the facts and data on these issues before buying. If these kinds of problems are on the rise, your clients could have serious resale issues.

Market Matters

Seasonal or Limited Market
Some homes have a limited market—a vacation area, a primarily student market, or an age restricted subdivision. This may suit your needs, but keep in mind that the re-sale will be limited to more limited set of buyers making it harder to sell.

Remote Location
In most cities, areas that are closer to a business district tend to have a larger buyer pool than homes located in remote areas. Regardless, you may choose the privacy and setting of a country home over resale potential.

No Comparable Sales
It is important to understand the underlying reason for few or no comparable sales. The home may be very unusual compared to homes around it, or the market may be slow. This could indicate a possible future re-sale problem.

Extended Marketing Time
Has the selected home been on the market a long time? Was the price simply set too high? Has the market been slow? Or, is there a problem with the house that an incoming buyer will need to correct like a room addition that wasn’t constructed right or without permits.

Oversupply of Homes
The possibility of an increasing supply of homes in the selected neighborhood may be a concern for some buyers, in particular those who will be in the home for less that two years. A common source of excess supply is overbuilding by homebuilders in the area, or it may be caused by a decline in the economy of the area.

Non-conforming Styles

Lacks a Typical Amenity
In an area where nearly all homes are on the golf course, or have a pool, or include a garage, buyers will tend to pass on homes that lack these features. In an area of mostly senior buyers, a home with the master upstairs may have trouble selling. Look carefully at what is generally offered in a given area to the majority of buyers.

A-typical Style
Homes that do not seem to belong in the neighborhood may have trouble selling. For example, an urban loft style home may be popular in older, eclectic areas, but would be hard to sell in a uniform suburban neighborhood. That goes for architectural deviations from the neighborhood norm as well. A home that looks much larger or different from others may give you difficulty in recouping your construction or remodeling costs.

Inspection Issues

Water Drainage Problems
Poor water drainage is a serious and costly remediation problem. Talk with experts about improving the drainage, and evaluate any damage caused by flooding or standing water. If the incoming buyer doesn’t have an improvement plan ready before proceeding that may be an indication he will as you (the seller) to pay for it.

Structural Defects
Structural defects have an underlying cause. They may be due to loose fill on the lot, clay soil, drainage issues, or poor construction. It is crucial that you understand the source of the problem, and the cost to repair, before taking on a house with structural problems.

Inspection Flaws
Excessive repairs noted on inspection reports indicate that the house was not maintained or was poorly constructed. You may need to be prepared for some serious work on the house. An incorrect application of stucco or other siding may have water damage or mold behind it. A mold infestation is expensive to remove. If you buy that home, document your repairs with pictures, receipts and notes in order to show a future buyer that these problems have been solved.

Insurance Claims
If a previous insurance claim was the result of fire or flooding, you should have full disclosure from the seller. Large insurance claims are a red flag, and may result in difficulty in obtaining insurance on the home. Insist the seller give the facts about previous insurance claims. In California the SPQ (Seller’s Property Questionnaire) is a document that helps address these issues. Many homes that have had repairs, such as hail damage; covered by insurance, likely will not be a re-sale problem.

Improvement Obstacles

Costly Improvements
If the sales price includes a number of costly upgrades, you (as the seller) may not be able to recoup their cost. For example, imported fixtures, unusual craftsmanship, exotic woods, high maintenance gardens, or artistically decorated walls may not have a market value equal to their cost. After home ages, these finishes may drop substantially in value. In Southern California, swimming pools and tennis courts do not contribute the full amount of their cost in the value of the home typically.

Over Improved
Homes that are overbuilt, or have excess acreage for the area often have a difficult time recouping the additional cost. Most people feel safer buying at the mid level of value in the neighborhood.
Non Functional Floor Plan
Floor plans that make living in the home difficult will turn away future buyers. Homes with excessive level changes, poorly proportioned rooms, awkward access to the outdoors, low ceilings, or few windows may sell, but at reduced prices. This may be an opportunity to take down walls and make creative changes to improve the marketability of the home. You as a buyer will need design skill, reliable contractors and an appropriate budget to solve those problems.

Out Dated Finishes
Many resale problems are simply due to outdated finishes. Buyers with decorating skill and a sense of style can transform these homes. Remodeling adds a level of risk and difficulty to the home purchase, but possibly, a higher level of satisfaction and monetary reward for you the buyer. Your real estate agent may have seen the model of home you’re looking at and be able to make suggestions based on other remodels he’s seen. With help, you may be able to create a gem for you to resell sometime in the future.

Avoid Re-Sale Problems on Your Home

In order to receive the maximum appreciation for your home that’s typical in any market, it’s important when remodeling or upgrading to appeal to the largest cross section of buyers possible. The value of your home as an investment is directly related to its marketability. If it is sought after by other buyers, you will be able to resell your home at the highest price possible for the market.

Since I work with many buyers each week and sometimes show the same home to people, I often hear objections to specific remodeling items several times. The obvious is not to paint your home some unusual color that no one in the neighborhood has like purple. The not so obvious is your choice of carpet types or colors or counter top surface materials and colors. Blue countertops, for example, aren’t something that the average buyer would find attractive. Neutral colored floor tile is. I invite you to call or email me any time and use my experiences as your sounding board. I’m always available to talk about what’s going to be a potential re-sale problem. Here’s some improvement ideas to consider whether you’re buying or selling a home.

Finishes & Improvements - Imported fixtures, unusual craftsmanship, exotic woods, high maintenance gardens, or artistically decorated walls may not have a market value equal to their cost. After a home ages, these finishes may drop substantially in value. Many buyer credits are given to compensate for outdated finishes. Removing exterior feaux rock, smoothing popcorn ceilings or adding granite countertops can add substantial value to your home. Careful on this. I saw a homeowner combine granite with painted outdated cabinetry. That’s an oposite end of the remodeling spectrum that may raise a buyer objection.

Adding On - Floor plans that make living in the home difficult will turn away future buyers. Be sure to consult a knowledgeable contractor or an architect when adding on. Homes with excessive level changes, poorly proportioned rooms, awkward access to the outdoors, low ceilings, or few windows may sell, but at reduced prices. Flooring thresholds transitioning from carpet to laminate floor that are uneven aren’t desirable.

Landscaping Issues - Buyers tend to “pass” on homes that have significantly less usable yard than other homes in the neighborhood. If your yard is smaller than others, consider making adjustments to landscaping or modifying your back slope to make it look bigger. Power lines can be blocked by planting tall trees that grow over time. Plan ahead by planting now. Before you sell your home, have the gas and electric company take measurements for electro magnetic fields. I’ve had experience with this and you may find EMF is higher next to your microwave than it is in the back yard near the lines.  A buyer will want to know about this to feel more comfortable.

Busy Street - The noise related to a busy street may be a turn-off to many buyers. Acoustic sound absorbing clear plexi glass walls can keep the view and cut down noise. Consider some type of earthen barrier as well.

To Much Amenity or Not Enough  - In a neighborhood where many homes have swimming pools, adding a pool is a safe bet. If there are few pools, adding one may give you enjoyment but not reap resale value. Consider a pool carefully since many buyers don’t want a pool because of the maintaince and cost associated with it.

A-typical Style  - Homes that do not seem to belong in the neighborhood may have trouble selling. If you’re redoing the outside front of your home, try to stay close to the architectural style of the neighborhood. If the neighborhood is primarily wood siding, adding stucco may be a value risk. Changing the shape or geometry of your home or adding xerascape when everyone else has grass can be a value risk as well.

Deferred Maintainance - Next time it rains heavily, check your drainage and see if you have pooling of water in the yard. It may be time to clear the drains, add new ones or rebuild the system all together. Standing water near the house can cause mold on the inside walls. Repeated water damage issues need to be dealt with. Structural issues that haven’t been dealt with can pop up later as well. I saw one home owner that added an upstairs room himself but didn’t consult an engineer. A critical beam was removed that caused problems in the inspection phase of escrow.

Over Improved - Homes that are overbuilt, or have pushed the lot size to square footage ratios for the area, often have a difficult time recouping the construction costs. Most people feel safer buying at the mid level of value in the neighborhood.

How to Choose a Kitchen/Bath Contractor

Kitchen remodeling has the highest average return on investment when selling your home, followed by bathroom remodeling. So it is essential to choose a qualified contractor with extensive experience and a good track record. It stands to reason that the contractor himself has everything to do with how the project will turn out. If you fail to check references or look at the contractor's previous work, your expectations may not be met, so be careful. Here are a few tips on how to choose.

When interviewing a contractor be sure to establish credibility. Is he licensed, bonded and have worker's compensation insurance? The length of time the contractor has had his license may be an indicator of credibility. To be sure, check out the information with the California State Contractors License Board.

• Get a detailed written estimate for your project with details of all work to be completed.
• Ask for a list of references and call three of them.
• Ask the clients if the contractor was on-site to supervise the work.
• Was the work completed in a timely manner?
• Was the quality of the work up to their expectations and would they work with him again?
• If at all possible ask to see pictures of the referenced project or better yet, see it in person.

Some times you may find a contractor who not only installs and builds, but designs as well. It's not often you'll find that combination, but when the two exist in harmony you'll likely streamline the process. A specialist who has design abilities and can execute the design himself tends to be more efficient. Walter Busuttil of Walter Busuttil Design and Construction is just such a person. "I'm really passionate about designing projects that exceed my client's expectations," Mr. Busuttil says. "Having had the experience of physically working with many material types allows me insight into how the design translates into reality," he adds. Designing on a computer is important as well so different ideas can be tried out before beginning construction.

Lastly, make sure you choose someone with knowledge of quality products so youUll get the most for your money. With the abundance of brands and styles, it is hard to know what to choose, so rely on a kitchen/bath specialist to provide ideas. They can guide you through every phase of your project including decorating, design, construction, plumbing and electrical systems. They can answer questions about design, products and colors, as well as anticipate and prevent problems that you may not have considered. Creating a design that reflects your individual personality through color, style and product selection is the key to making your project turn out right.

Buyer & Seller Tips in a Correcting Market

In the San Diego real estate market during the last three years, sellers have wielded more power than buyers. The pendulum seems to be favoring buyers these days and their behaviors reflect that swing. Buyers are choosier and there are fewer of them. Homes are staying on the market longer and prices aren’t rising as quickly as they once did. This is what we call a normal market. Getting buyers to notice your home is the key to selling quickly for top dollar.

When selling, it’s important to prepare yourself mentally for the concept that the market just is the way it is. Being creative, aggressive and efficient will allow you to make the most of it. If you’re not getting showings the agents may think it’s overpriced. If you’re not getting offers the buyers think it’s overpriced. If it’s priced realistically to begin it will sell.

Prepare yourself to be flexible in ways other than price. If you can adjust your move in date, for example, that may be a buyer hot button. Sweetening the pot withsomething that isn’t hard for you to give may help make a deal.

Get an education about your neighborhood market. Study the comps with your agent and learn what similar homes of size and quality are selling for. You can adjust your values from there once you have some examples of sold homes.

The proper marketing and advertising program can be a make or break scenario for building audience share for your home. You may pay less commission on the seller’s side with a limited service broker but you get very little advertising usually resulting in a lower selling price. The majority of money you spend should go toward a comprehensive and thorough advertising program that’s designed to increase your audience share of buyers. The more people (quantity and quality) who look at your home the better chance you have of getting top dollar.

A full service company like Coldwell Banker lists your home on all the major websites and has just spent $50 million dollars to own the keyword system for all the best search engines. You can bet the 87% of all buyers who spend their first 3 weeks looking on line for a home are going to see yours if they’re looking in your zip code. Ask what traditional forms of advertising utilizing the major papers with full page full color ads rotated on a regular basis is done by the agents you interview. The adage "you get what you pay for" applies.