CMA - The best way to affordably know the value of your home

Want to know what your home is worth, but don’t trust Estimates or automated valuations?  You’ve come to the right place.  I’m Sean Engmann, a Realtor with Coldwell Banker. I have an MBA and am a certified real estate negotiation expert with nearly 2 decades of executive level business experience. There are several ways to find out the market value of your home.  You can have it appraised, but that will likely take several weeks and cost you $500 - $1000.  Generally, you should only have the home appraised as part of a home purchase or refinance.  In an extreme up market, appraisals may also lag behind the current market value by a few weeks, as that’s how long it takes homes to close escrow. Another way to determine value is to request an instant cash offer, but these values are typically, considerably below market value as they’re made by investors hoping to make a profit on the home.  They can be useful, though, for establishing the floor value of the home. The best and most affordable way to get an accurate understanding of your home’s value is to get a comparative market analysis, or CMA done by a Realtor.  A CMA is a report which shows all of the similar homes in the immediate area of your home that have recently sold, that are currently on the market or, are currently under contract.  It also shows any homes that may have been listed but were withdrawn from the market.  The Realtor then looks at the data and provides an estimated value of the home. Realtors do CMAs based upon market data and/or discussions with homeowners.  While those CMAs are more useful than automated valuations because they provide context, they are nowhere near as accurate as CMAs where the Realtor actually visits the home and walks through it.  There are so many nuances about a home that you just don’t get without being there in person.  I can’t tell you the number of times I drove to a home with a value in mind, and then that value changed once I walked into the home. If you’re interested in having a CMA done on your home, just click below and enter your address and contact info.  I will provide a range of automated values.  Then, I’ll give you the option for me to send over a CMA or for you to schedule one with me in-person. Thanks and I look forward to helping you find the value of your home! Sean Engmamm Sean.Engmann@CBRealty.com  

6 Biggest Mistakes New Home Buyers Make in a Seller’s Market

  Buying your first home in one of the hottest seller’s markets ever is tough enough, but the reason why many buyers fail is because they make rookie mistakes.  Period.  Lots of people are buying homes in this market.  The biggest misconception right now is that inventory in the Bay Area is low.  Even though there is a shortage, lots of people are buying homes right now.  Want proof?  The rolling 12 month volume of new listings in San Mateo County is at its highest level since 2012.  In San Francisco, it’s at its highest level since 2006.  Buyers are winning in this market, but many more are losing, and chances are they’re losing because they’re making one or most of these mistakes. Mistake 1:  Saving to Buy Later.  Many, many people who can afford to buy now and who should buy now, are sitting on the sidelines saving for their down payment.  A good number of them have the misconception that they need 20% down in order to afford a house.  Newsflash.  You don’t. There are tons of loan programs out there which allow you to be approved for a loan with much less than 20% down.  You might need to be creative and talk to several lenders, but the programs exist.  The biggest problem with waiting, though, is that in a seller’s market, home prices are rapidly appreciating.  With it, your purchasing power is decreasing.  This creates a moving goalpost that continually puts the home that you want out of reach.  If a $1.2M house appreciates 10% in six months while you wait, your 20% down payment just increased another $24K and the home you can afford at that price point is not the same as what you can afford now.  Interest rates are another concern.  On that same $1.2M home, if your rate goes up just half a point, your monthly payment increases by nearly $300/month.  Many prospective buyers remain prospective buyers as the market outpaces their savings. Mistake 2:  Not Getting Pre-Approved Before Searching.  Because of the dynamic nature of this market, most properties are on the market for less than two weeks and attract considerable interest.  Because of multiple offers, any offer that doesn’t have a pre-approval letter is not taken seriously by the seller and due to the time it takes to find a lender and get pre-approved, there’s not enough time to get pre-approved and write an offer.  Another problem with not being pre-approved before looking is that you could be looking at homes outside the price range that you can afford, which can lead to discouragement and disappointment.  With a pre-approval letter in hand, you become a serious buyer. Mistake 3:  Trusting the List Price.  This one is simple.  A popular pricing strategy in strong seller’s markets is to price the home below the market to create a bidding war.  This strategy is extremely popular with agents because it artificially inflates their sale-to-list ratio statistics, and it also attracts lots of unrepresented buyers who are writing offers at list price to become future clients.  You’d be surprised how many buyers look at list price and offer list and lose time, after time, after time. Mistake 4:  Conducting the home search on their own.  With the prevalence of Zillow, Realtor.com and all kinds of other sites it’s easier than ever to search for listings.  The problem is, if you’re like most buyers, that you don’t know the market and you fall into trusting the list price.  You’re also, more often than not, late to the party.  I’m a premier agent on Zillow, and I can’t tell you how many times people want to see a property right on the offer date or, after it’s gone under contract.  This is a huge time drain and, it doesn’t get you any closer to winning.  Plus, you miss out on off-market or pre-market opportunities that buyers working with an agent have.  Your agent will know the market well and will be able to select homes to show you that meet your criteria on which you have a good chance to make a successful offer.  Good agents know which homes are priced transparently, and which ones are priced for a bidding war.  Any agent can just write an offer, and most lazy agents would love to do nothing more than just write an offer.  By working with an agent early in the process, you put that agent’s market knowledge and connections to work for you to streamline your search and help you succeed. Mistake 5:  Using the listing agent to write an offer.  The United States is a unique real estate market in that buyers have their own independent representation.  Almost all the time, the buyer’s agent’s fee is paid by the seller, so most buyers have the ability to have an agent with a fiduciary obligation to them protecting their interest.  Why in the world would you go directly to the listing agent who is obliged to represent the seller’s interest also represent you?  Yet many buyers do, conducting their search on their own and contacting the listing agent to make an offer.  While some agents can effectively represent both sides in a transaction, doing so is extremely challenging and double ending a transaction creates loyalty to the transaction more than the parties involved.  This increases the chances of a lawsuit if things don’t go smoothly and, it’s just something that is easy to avoid for buyers, so they should avoid it. Finally, Mistake 6: Writing bad offers.  In a seller’s market, contingent offers are at a significant disadvantage to non-contingent offers.  This is because contingencies can force a home to go back on the market, stigmatizing it, and costing the sellers money.  So non-contingent offers are always much stronger, but many buyers will write offers with contingencies that significantly reduce the chances of success.  Some of these are property condition contingencies when there is a detailed inspection report available.  Other contingencies include loan and appraisal contingencies which make the offer weaker.  On appraisals in particular, that’s when it’s really valuable to have an agent with a great understanding of the market, because the agent can advise whether a property is likely to appraise and steer clients to the right homes.  Poorly written offers get rejected or countered unnecessarily, which can shut buyers out of the market completely, or lead them to pay more than necessary for a home. These are the six biggest rookie mistakes for buyers.  If you watch and liked the video above, please like, comment or subscribe.  If you live in the Bay Area and would like me to help you buy a home, click on the link in the description to learn more and set up a time to talk.  Best of luck to you in your search!    

Things to Avoid Doing When Buying a House

  Prospective homebuyers should keep their debt to income ratio in mind as they work on the pre-approval process and through the purchase process.  That means avoiding large credit purchases, such as buying a new car or opening up a new credit card account as these can impact both credit score and the debt to income ratio.  It’s really important to note that a pre-approval does not guarantee the loan.  Once the home is in contract the loan will go through the process of underwriting which is a very detailed process for verifying all of the information provided by the buyer, and things can change during underwriting, especially if large purchases were made after pre-approval, or information is discovered that was not previously disclosed.  One of the biggest mistakes homebuyers make is increasing their debt after pre-approval which could derail the entire purchase.