“My neighbors just listed their home and I know they got several offers the first week. Do you think that means they should have asked a higher price?”

Answer:
Not necessarily.

Yes, homes that are priced too low usually attract multiple offers.

However, you can also get multiple offers if your home is priced right.

That’s because there are many potential buyers who’ve already seen the “existing inventory” of homes for sale and are now mainly looking at homes newly hitting the market. So a San Diego home that’s priced correctly from the start will garner a lot of interest and possibly multiple offers.

“I’m thinking of selling my La Jolla home and buying a bigger one. And I’m concerned about asking the right price. Everyone talks about list price, sales price, CMA, appraised value, etc. But what is a home really worth?”

Answer:
Great question.

Recently a young man told me his condo had just appraised at $460,000. But the only sale of his model (virtually identical) in his complex this year was at $420,000. And other near-identical ones are currently LISTED at $420,000 and below and haven’t sold. Appraised at $460,000, but valued at $415,000 or less. Properties are certainly NOT always worth what they appraise for.

Let’s try taking a look at Fannie Mae’s (Federal National Mortgage Association) definition of market value per their residential appraisal form…

“DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.”

Eccch. I don’t know about you, but that makes my brain hurt. Here’s a definition I like, and it doesn’t take 5 minutes to read:

“The price a willing buyer and willing seller agree on in an arms-length transaction after full exposure to the market.”

But here’s the Catch-22.

If you want to find out “what a willing buyer and willing seller would agree on in an arms-length transaction after full exposure to the market” before putting your property on the market, you need professional to help you determine the value.

If you’re thinking of selling and you’d like a pretty darn accurate estimate of your home or property’s value, call me at (858)457-KENT.

“We’re ready for a bigger house, but I don’t know how to go about this. I don’t want to sell mine until I’ve got another one, but I have to sell to get the money to buy the next one. How do people do this?”

Answer:
I hear this question all the time. I see you with 5 options:
1. Buy non-contingent
2. Buy contingent, then sell
3. Sell contingent, then buy
4. Sell non-contingent with rentback, then buy
5. Sell non-contingent, move out, then buy

OPTION #1: Buy Non-Contingent
Buy a home, then sell yours. You can do this if:
A. You already have down payment money for a new home
B. You can find the money, possibly as a gift from family
C. You borrow against your home for the down payment

OPTION #2: Buy Contingent, Then Sell (*Worst Option*)
Do the fun part first. Househunt and find a home, offer contingent on your home selling, get it accepted, then sell your home. Downside: Sellers hate contingent offers! So you pay a premium to get a seller interested, then you rush to sell your home, probably for less money.

OPTION #3: Sell Contingent, Then Buy
“Scout” the housing market. Like what you see? Then list your home contingent on buying a home. Once you have a buyer, find the home you want and offer contingent on your home sale closing. Then close both transactions.

OPTION #4: Sell Non-contingent With Rentback, Then Buy
Sell your home with a rentback period, then buy contingent on your closing. The rentback gives you some time to close on your new home. But you may have to move out & rent if it takes too long complete a purchase.

OPTION #5: Sell Non-contingent, Move Out, Then Buy
Don’t mind a double move? Sell your home non-contingent, then buy. If you’re lucky, once your home is in escrow you’ll find a home and close both at the same time and avoid a double-move.

All these options have risks if not handled 100% correctly. A family I know did #3, but their agent messed things up. They were forced to sell and move out even without having a San Diego home to move to. They ended up renting for 7 years! Also, the standard contracts contain dangerous language for Options #2 & #3.

If you’d like to sit down and discuss your needs, determine your best option, and how to make it happen, call me at (858)457-KENT.

“My wife and I want to buy a home in the next year or two, but my credit score is below 600. Do you know how to increase it?”

Answer:
I’m not a credit expert, but “Mr. Credit” Derrick Evens recently stated his Top 3 Credit Tips. This is from a email he sent me:

1. Secured Cards are HUGE. Everybody should have at least one. Smart people will have 3 and Credit-Freaks like me will have dozens as “Credit Insurance”.

2. Auto Loans are great for a Credit Score. If your score is low and you don’t have an auto loan, get a small one and watch your score RISE.

3. Never pay a Collection that’s already on your credit report and expect your credit score to go higher. It won’t. In fact, it will probably go MUCH lower.