Saturday, November 22, 2014

15 Questions You Should Ask Your Real Estate Agent Before Working With Them

Not all real estate agents can help you get the home you want. When it comes to finding a good agent, you need to ask the right questions upfront to save yourself the trouble later. Real estate brokerage Redfin recommends that you ask every potential agent the 15 questions below before committing yourself to an agent.

1. Is real estate your full-time job? How many clients have you had in the past year?

Okay, that's two questions, but they're actually the same. An active, full-time agent is much more likely to be up to date on the market and the local real estate laws than a part-time agent.

2. How many homes have you sold in my target neighborhoods? 

Don't expect every agent to have an in-depth knowledge of the places you want to live. You want someone who knows those precise markets, with a few recent deals in your target neighborhoods to ensure their expertise.

3. When clients are dissatisfied with your service, what went wrong?

There's not a single agent out there that hasn't dealt with an unhappy customer, but knowing why others were dissatisfied can help you anticipate and prepare for the bumps ahead, or whether or not they'll be a good fit for you.

4. Has a client ever filed a complaint against you?

If you're not comfortable asking this, you can always check with your state's licensing board. Some state boards will even list disciplinary actions and education credits associated with the agent.

5. What's your fee?

While you pay no fee at all as the buyer, the fee is built into the price of the home. When the house is sold, the seller pays the agent their fee using the money you paid for the house, typically 2 to 3 percent of the sales price. Since the commission amount is set by the seller and can vary from home to home, you should inquire what their share would be. After all, you don't want an agent who may pressure you into a home just because they'll land a bigger commission.

6. What are all the services you're willing to provide me?

Negotiations, escrow, paperwork and contingencies are the minimum additional services an agent can provide, though some are willing to go the extra mile. Make a list of what you'll be paying for so there are no surprises later.

7. When am I committed to working with you?

Buyer beware: If you start touring homes the agent sends you, this may obligate you to work with them despite not having signed a contract.

8. How many foreclosure or short-sale transactions have you handled in the past?

While you can buy distressed properties at a great price, the paperwork is complicated, and your liability is greater. If you choose to go down this road, you'll want an agent with experience closing deals with banks.

9. Who else will be working with me?

A real estate agent agent is often supported by a team, but the person you hire should being doing most of the work.

10. Am I obligated to work with the lender, inspector or other service providers you recommend?

If they answer "yes" here, it's a big red flag. Good agents may have solid recommendations for lenders or inspectors and other service providers, but you should never feel pressured to use their recommendations. In fact, it's illegal for an agent to force you to use their recommended providers.

11. How quickly can you get me into a home?

 Hot homes move fast, so how does your agent compete? Ask the agent how they handle tours on short notice.

12. Do you represent buyers and sellers on the same house?

This is not a good thing for a buyer. When one agent represents both the buyer and seller, this is known as dual agency. If the agent is trying to get the most money for the seller's home, how can he also be trying to get the best deal for the buyer? Redfin recommends to just avoid dual agency altogether.

13. What sets you apart from other agents?

Listen to how they answer this question. You're looking for expertise, not just enthusiasm. You want an agent who's experienced in your favorite neighborhoods, with a proven track record, and in-depth knowledge of any special requirements that you want in your next home.

14. What if I'm unhappy with your service?

If you have any complaints after you've purchased your new home, it may be too late to do anything about it. Most agents don't get paid until you buy a house, so there's incentive for them to close the deal even if you still have doubts. You want an agent that will guarantee your satisfaction, so ask about what recourse you'll have if you have a bad experience.

15. Can I see reviews of your past deals?

A good real estate agent should have nothing to hide; that's why Redfin posts reviews for all agents after every deal. While an agent may provide you their hand-picked endorsements of those clients they kept happy, you want to get the full list of reviews, especially those from the dissatisfied customers. A few success stories does not necessarily define a good agent, but only those who consistently deliver excellent service. Not every real estate agency will provide this list, but you can use sites like to see what feedback others had to give.

Monday, October 20, 2014

Bay Area Home Sales See More Upside in 2015

California overall

  • Year-over-year sales of new and existing houses and condos increased year-over-year for the FIRST time in a year.
  • This year delivered the strongest September in 5 years.
  • September delivered the 31st straight month of a year-over-year increase in the median sales price. This is still 19.6% below the all-time peak in 2007.
  • Indicators of distress continue to decline: "Foreclosure activity remains well below year-ago and peak levels reached in the last five years." A report released three days later declared: "Lending institutions initiated formal foreclosure proceedings last quarter on the lowest number of California homes in more than eight years."

SF Bay Area

  • This year also delivered the highest sales of new and existing houses and condos for a September since 2009.
  • The median price was up 14% year-over-year, 9.2% below the all-time peak in 2007.
  • Absentee buyers and all-cash buyers - most likely investors - had a smaller share of sales from last September, 2013 levels. From 20.9% and 23.% respectively in September, 2013 to 19.1% and 20.9% this past September.
Even the amount spent on housing in California terms remains favorable compared to historic norms. In California: "Adjusted for inflation, last month's [average mortgage] payment was 36.0 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 48.1 percent below the current cycle's peak in June 2006. It was 60.5 percent above the January 2012 bottom of the current cycle."

Ditto for the SF Bay Area: "Adjusted for inflation, last month's payment was 19.4 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 39.1 percent below the current cycle's peak in July 2007. It was 82.4 percent above the February 2012 bottom of the current cycle."

Even with the encouraging numbers, California has a ways to go before reaching anything close to normal levels of sales. For example, September's "sales were 15.5 percent below the average of 42,996 sales for all the months of September since 1988…California sales haven't been above average for any particular month in more than eight years." So, there remains plenty of upside potential as the market continues to normalize. 

Tuesday, October 7, 2014

2015: Good News for Home Buyers in California

It may get easier to find the home of your dreams. A 2015 California housing market forecast out Tuesday points to more homes on sale and fewer investors competing with families. It also has some good news regarding home prices, at least for those looking to purchase.

“Next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase,” said Kevin Brown, president of the California Assn. of Realtors, which released the forecast.

The report follows a continued trend in the California housing market. After robust price gains in 2012 and 2013, prices increases tapered off this year. Even though more homes came on the market, sales dropped as would-be buyers struggled to afford a house.

But next year an improving economy and still-low interest rates will make affordability less of a problem, said Leslie Appleton-Young, chief economist for the Realtors group. The trade organization predicts sales of previously owned single-family homes will rise 5.8% next year after an 8.2% projected decline in 2014.

 The state median home price will rise 5.2% next year to $478,700, the Realtors group projects. That would be the smallest increase in four years and would follow an estimated 11.8% increase for 2014.

Sunday, September 28, 2014

2015: Continued Upward Projections Seen for California Real Estate

The harder they fall, the higher they bounce. Local real estate markets in California were among those hit hardest by the national housing crisis and recession. Entire neighborhoods were emptied by foreclosure. House values dropped like a rock. Would-be home buyers retreated back to renting, sending the entire real estate market to a screeching halt.

But that was then, and this is now. In 2015, California housing markets could experience some of the biggest price gains in the country. This is according to an analysis and forecast by the economists at Zillow.

Earlier this year, the real estate information service Zillow published home-value predictions for hundreds of cities and metro areas across the U.S. It was meant to show where home prices “are headed over the next 12 months, from May 2014 through May 2015.”

The projections came in the form of an interactive (and highly addictive) tool that allows you to scale the projections up and down. In other words, you can “zoom in” to see which housing markets are predicted to appreciate the most in 2015. And guess what? They’re all in California and Nevada.

Sunday, September 7, 2014

Mortgage Rates Hover At Their Lowest Levels Of The Year

Mortgage rates hovered at their lowest levels of the year for the third straight week this week, according to a survey published Thursday by Freddie Mac FMCC +1.14%.

The average 30-year fixed-rate mortgage stood at 4.1% for the week ending Wednesday, according to Freddie’s survey. To get that rate, borrowers had to pay fees equal to around 0.5% of the loan amount.

Mortgage rates have drifted down in recent weeks as bond yields on 10-year Treasury notes have fallen. Investors have bought government debt amid rising concerns over geopolitical instability.
Few expected rates would be this low at the beginning of the year. Indeed, one of the biggest surprises of 2013 came in the spring, when mortgage rates jumped suddenly as anxious investors sold off Treasury securities amid signs that the Federal Reserve was thinking about slowing down its bond-buying program.

By contrast, one of the bigger surprises of 2014 may be that mortgage rates might end the year lower than they began, at around 4.5%, even as the Federal Reserve has gradually pared back its purchases of mortgage-backed securities.

Tuesday, August 19, 2014

Home Price Appreciation is Slowing

Home-price appreciation is slowing, a welcome trend for potential buyers but a troubling one for homeowners still looking for relief from underwater mortgages.

Single-family housing prices rose 4.4% in the year that ended in the second quarter, the slowest annual pace since 2012, according to a report released Tuesday by National Association of Realtors.

The association found that median prices for existing single-family homes grew year-over-year in 122 of 173 metropolitan areas it tracked, while prices declined in 47 metro areas. Only 19 areas showed double-digit year-over-year price increases, a substantial drop from the 37 cities that showed such increases in the first quarter.

Economists said price appreciation is slowing in part because buyers, including investors, have become more cautious and are pulling back from the market amid the big price gains of the past year. At the same time, those higher prices persuaded more homeowners to put their homes up for sale, adding inventory and reducing the urgency to buy.

Those trends are good news for potential buyers, who have had to deal with heated competition for a relatively small number of homes on the market in many cities as well as a near percentage-point increase in 30-year mortgage rates since May 2013.

However, the trends serve as a warning to some owners who bought their homes near the peak of the market and still owe more on their mortgages than their homes are worth, said NAR chief economist Lawrence Yun. A report from real-estate research firm  CoreLogic  CLGX -0.44%     said that at the end of the first quarter, owners of 6.3 million homes were still underwater, or owed more than their homes were worth.

"With this price deceleration, it could be another three to five years for some people to go above water," Mr. Yun said.

Stan Humphries, chief economist of real-estate-information site  Zillow Inc.,  Z +0.38%     said that home values in many markets are likely to oscillate over the next few years, as the market tries to find stable ground after years of boom, bust and recovery.

"We're definitely at an inflection point. We see moderation [in price gains] continuing," he said, based on Zillow's own data on home values.

Overall, Mr. Yun said that the second quarter showed a significant divergence in price change between metro areas and regions. While the median existing single-family home price between the second quarters of 2013 and 2014 rose 7.3% in the West to $297,400, home prices in the Northeast fell 0.9% to $255,500, the report said.

Some of the most strongly rebounding housing markets, such as Phoenix and Las Vegas, are also showing signs of cooling, Mr. Yun said. The Phoenix area, which had been experiencing double-digit year-over-year price growth, saw prices rise 8.3% in the second quarter from the previous year to $198,600, the report said.

The NAR report said that prices dropped the most sharply in Elmira, N.Y. with a near 30% decline between the second quarters of 2013 and 2014 to $87,800.

To be sure, median home prices can be skewed as the kinds of homes being sold shift between the higher and lower ends of the market, a factor that can have an especially strong influence on statistics from small metropolitan areas.

Cathy Weil, president-elect of the Elmira-Corning Regional Association of Realtors, said that the Elmira median home price was skewed by the mix of homes sold in the second quarter. She said that her area has seen sales pick up significantly and some high-price homes have been receiving multiple offers.

According to the NAR report, the most expensive housing markets in the second quarter were San Jose, Calif., where the median price was $899,500; San Francisco, $769,600; Anaheim-Santa Ana, Calif., $691,900; Honolulu, $678,500; and San Diego, $504,200.

Some home buyers say that they've noticed the market cool somewhat. Trey Denton, a 31-year-old metals broker in Newburgh, Ind., bought an investment property for about $175,000 at the end of June, which he plans to list for sale this Friday. He said that he hopes to sell the home before the winter and that he feels there is an increased sense of urgency to sell so he won't have to wait until the spring home-buying season.

"There's definitely a risk with waiting," Mr. Denton said. "With interest rates looking to creep up next year, the market could fall."

Real-estate agent Kevin Eastridge, who is president of the Indiana Association of Realtors, said that his housing market around Evansville, Ind., "stopped dead" between November and February, and was "excellent" between March and May. In June, activity dropped off a bit, but things heated up again in July, he said.

"We are running into some multiple-offer situations but those are the exception rather than the rule," he said.

Thursday, August 14, 2014

30 Year Mortgage Rates Up Slightly

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Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgages at 4.08 percent, up from 4.03 percent at this same time last week.

The 30-year fixed mortgage rate hovered around 4.10 percent for the majority of the week, peaking at 4.17 percent on Thursday before easing back down to the current rate today.

“Mortgage rates were subdued last week as ongoing geopolitical concerns and economic softness in Europe encouraged investors to buy U.S. mortgage-backed securities as a safe haven,” said Erin Lantz, vice president of mortgages at Zillow. “This week, we expect international headlines, rather than U.S. economic data, to drive any meaningful changes to mortgage rates.”

Additionally, the 15-year fixed mortgage rate this morning was 3.12 percent, and for 5/1 ARMs, the rate was 2.77 percent.