Archive for the 'Real Estate Nuts and Bolts' Category

Distressed Sales vs. Regular Sales in Grass Valley, California

said on May 14th, 2012 filed under: Grass Valley, Market Trends, Real Estate Nuts and Bolts

Do foreclosure and short sale homes (distressed) sell for less than regular homes? 

Of course they do.

How much less?  Let’s examine the “sold homes” market in Grass Valley, California for two different periods:

Dec 22, 2010 through May 13, 2011 with the period of Dec 22, 2011 through May 13, 2012.

I selected houses between 1000 and 1500 square feet sitting on parcels less than 1 acre that sold during these two periods.

                                                     12/22/10 thru 5/13/11           12/22/11 thru 5/22/12        

Number of distressed sales                           22                                                    26

Number of regular sales                                 13                                                   15

Highest distressed sold                             $225,000                                      $220,000

Highest regular sold                                  $320,000                                      $300,000

Lowest distressed sold                                 $45,000                                        $55,850

Lowest regular sold                                    $147,000                                      $122,000

Average distressed sold                              $140,140                                      $132,478

Average regular sold                                   $213,223                                      $185,450

Median distressed sold                               $157,500                                      $137,250

Median regular sold                                    $200,000                                     $169,000

Average distressed list price                       $147,770                                      $135,292

Average regular list price                            $221,569                                     $196,213

%sold price/list price distressed                    95%                                               98%

%sold price/list price regular                         96%                                                95%

Price/square foot listed distressed               $118                                              $108

Price/square foot listed regular                    $166                                              $154

Price/square foot sold distressed                  $112                                               $106

Price/square foot sold regular                       $160                                              $145

Average days on market distressed                 78                                                  60

Average days on market regular                      100                                                80

 

ANALYSIS

No surprises here.  Distressed properties sell quicker and for less money.  How much less?  A lot less.  Distressed markets and regular markets are like two separate realities within the same town.  Using “price/square foot sold” as the basis of comparison, distressed homes sold for 30% less than regular sales in 2010/2011 and for 31% less in 2011/2012.

In my previous blog, we learned that the overall market in Grass Valley, California (based on price/square foot sold) declined from 2010/2011 to 2011/2012 by 7.8%.

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How Are We Doing? An Analysis of Real Estate in Grass Valley, CA.

said on May 13th, 2012 filed under: Grass Valley, Localism, Market Trends, Real Estate Nuts and Bolts

This is the house we bought in Grass Valley, California as an investment on December 22, 2010. We called her “Grizabella.”  She was built in 1887 with 2 bedrooms and 1 bath.  She was 1176 square feet in size and sat on a generous .3 acre city lot near downdown Grass Valley.  How is “Griz” doing as an investment?

But first, let’s look at the Grass Valley real estate market as a whole for properties of this size.  For my study, I compared the period of Dec 22, 2010 through May 13, 2011 with the period of Dec 22, 2011 through May 13, 2012.  I selected houses between 1000 and 1500 square feet sitting on parcels less than 1 acre.

                                                     12/22/10 thru 5/13/11           12/22/11 thru 5/22/12        

Number of homes sold                                  36                                                    41

Highest price sold                                   $320,000                                      $300,000

Lowest price sold                                       $45,000                                         $55,850

Average price sold                                    $169,722                                       $151,858

Median price sold                                      $175,750                                      $144,000

Average list price                                       $177,398                                      $157,580

%sold price/list price                                     96%                                               96%

Price per square foot listed                         $137                                              $125

Price per square foot sold                           $131                                               $121

Average days on the market                          84                                                  67

 

ANALYSIS

You can see that more houses (41 to 36) sold this year, and faster (67 days on the market to 84).  But (and it’s a big but), prices have fallen.

Just comparing price per square foot of sold properties ($131 to $121) you can see that the value of small homes in Grass Valley market has declined about 7.8% in one year.

If you compare median price of homes sold a year ago ($175,750) with the median prices of home sold this year ($144,000) you would think the Grass Valley market has declined about 18%.  Let’s not do that.  Yuck.

The first calculation, price per square foot, is the more accurate, and less scary, “but it is what it is,” as we say in this crazy game.  The market continues to drift downward.

So, how did Grizabella do?

We bought her for $92.69 per square foot.  She was a bargain at 71% cost of the other homes sold,  based on price per square foot.  So, we were already ahead of the game.  But by the time we fixed her up, we had brought her cost up to $161 per square foot.  Now we cost more than the other homes sold during the first five months of this year, almost 19% more than the comparables.

Did we overspend, or more precisely, overimprove?

No.

There are numerous variables in play (depreciation, tax advantages, and the real value added by remodeling or improving property), but the most important variable is this:  after property management expenses and maintenance, we are netting $1250 a month in rent.  That’s $15,000 a year.  That’s about 8% return on investment.

Of course, Uncle sam wants a piece of that, but doesn’t he always?

 

In an upcoming blog, we’re going to get even more sophisticated.  We’ll look at the same Grass Valley market for the same two periods of time, but we”ll compare conventional sales with homes sold as foreclosures and short sales.  Do you think we will see a marked difference?  Do you think there are really two different real estate worlds out there?  Let the truth be told.  Next time.

 

 

 

 

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5 Best Things to Do For Less Than $5,000 to Get Your Home Ready for Sale

said on May 11th, 2012 filed under: Real Estate Nuts and Bolts

Want some more seller tips?

In my previous blog, I discussed 5 things to do for less than $1,000 to get your home ready for sale:  (1) professional cleaning and window washing, (2) getting a pest inspection, (3) renting a storage locker, (4) sprucing up the curb appeal, and (5) making the front door sparkle.

In this follow-up blog, I’m going to raise the ante and ask you to spend up to $5,000.  Will you get it back?  Almost certainly, but even more importantly, these five things will help your home sell faster and with fewer obstacles.

And just for you, at the end, I’m going to add three secret (shhh!) bonus tips.

Here we go:

1.     Paint 

Absolutely the best bang for your buck.  You don’t have to paint everything, but anything will benefit from fresh paint.  Maybe you can paint only the exterior, or maybe only the interior, or maybe just the kitchen, or the grubby kids’ bedrooms.  What I mean is that you should have these areas painted–by professional painters.  I hope I don’t hurt your feelings, and maybe I’m off base here, but you probably don’t have the skills to paint a room yourself–even if you think you do.  Professional painters have spent years perfecting their craft.  They know a lot of stuff.  I can walk into any house and tell if it has been professionally painted, or painted by someone with professional skills–or painted by amateurs.   Hire a pro to paint.

2.  Remove Wallpaper

Wallpaper is out of date in the current market.  There are some exceptions, of course–very, very expensive designer wallpaper–but even wallpaper of that quality is extremely specific, to a certain taste, love it or loathe it.  Most modern buyers do not like wallpaper in general, and if they do, they want to put their own paper on the wall.  Get rid of it if possible.

Here’s the rub.  Some wallpaper comes off easily, and some is a royal pain in the butt to remove.  Easily removed paper may be feasible for you to take down.  For the harder stuff, you need to hire a professional.  Once you get the paper off, your walls will look like, well, a total catastrophe.  You may need to re-texture the walls.  Then you have to sand.  Then you have to prime.  Then you have to paint.  Five steps:  peel, texture, sand, prime, paint.

Yes, it can be a lot of work, but there is a great up-side to this project.  Nothing makes a house look younger than freshly textured walls.  A facelift for the interior.

3.  Remove Popcorn Ceilings

If modern buyers dislike wallpaper, they really detest popcorn ceilings.  They’re also afraid of popcorn.  “Could be asbestos, you know.”  Well, probably not, but that’s what they’ve heard.  Popcorn ceilings are a total buyer turn-off.

How much does it cost to get rid of it?  Maybe not as much as you think.  It’s significantly cheaper if you move all of the furniture out of the room before the contractor arrives.  He (or she, I guess) comes into an empty room, throws down a plastic drop, scapes the popcorn off the ceiling, letting it fall on the floor, rolls up the plastic, and hauls it away.  Presto!  All gone.   Cost?  Between $1 and $2 per square foot in our area of the Sierra foothills.

Here’s the rub.  If you thought your walls looked like garbage when you first removed the wallpaper, wait til you see those popcorn-less naked ceilings.  Every nail and screw, every taped seam, every stain you thought you had painted over with Kilz.  Right there for all to see.  What to do?  That’s right, texture, sand, prime, and paint.

Here’s the upside.  The room is empty.  Throw down a new drop cloth.  Texture, sand, prime, paint quickly.  The contractor who removed the popcorn is probably good at re-texturing.  He (or she, I guess) may have included the re-texturing in his (or her) bid.  Be sure to ask.

4.  Replace grubby stained carpets

It is almost as cheap to replace carpets with laminate flooring as with rental-grade carpeting.  Think about that.  New vinyl flooring for old vinyl bathroom floors is also cheap. One of the worst decisions any homeowner every made was to put carpet in the bathroom, even in the vanity area of the bathroom.  It’s just wrong. Imagine how much moisture, mold, and mist o’ piss saturates that carpet.  Get rid of it, please, I beg you.

5.  Correct the wood destroying pest damage you discovered when you received the pest inspector’s report (see previous blog)

With great pride, confidence, and a higher price, you will be able to advertise that your home is pest free, and pest damage free.  This is money in the bank.

 

THREE BONUS TIPS!

New Fixtures

Dress up your kitchen and bathroom cabinets with new drawer handles and knobs.  Replace scratched up faucets and other plumbing fixtres with shiny new ones.  Replace tacky lighting fixtures.  Folks, if you are planning to take Aunt Martha’s dining room chandelier with you, take it down and replace it before the first buyer ever walks through the door.

Crown Molding

Crown molding is surprisingly cheap if you know a carpenter who needs work and who knows the trick for measuring and making clean corners.  I know a guy who can install  crown molding in a standard bedroom in less than an hour –for $25 an hour.  The most time-consuming part is filling the nail holes, sanding, priming, and painting.  Total cost?  Including materials and painting, about $250 per bedroom.  My, oh, my does that crown look handsome!  Who should do the painting?  Altogether now . . . PROFESSIONAL PAINTERS!

High Wattage Light Bulbs

Spare me your sermon about wasting electricity.  After you sell your home, you can live in the dark for a month to make up, but while your home is on the market, put 100 watt bulbs everywhere, but especially in halls, foyers, closets and other places that tend to be a little dim and dreary.  Let it shine, let it shine, let it shine!

 

 

 

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5 Best Things to Do to Get Your Home Ready For Sale for Less Than $1,000

said on May 10th, 2012 filed under: Real Estate Nuts and Bolts

Getting ready to sell?  Want some tips?

Here are the 5 best things you can do for less than $1,000.

 

1.     Hire a professional house cleaner and window washer.

A recent national study revealed that the single biggest “turn off” to prospective home buyers was . . . dirt.  Simply . . . dirt.

2.     Commission a wood destroying pest inspection.

You don’t have to correct everything that shows up in the report, but just knowing what the issues are–and how much it is going to cost to fix them–is going to save you money down the line.  Why?  When the buyers discover the pest damage–and they will–they will try to adjust the price or get a concession from you at the highest possible level.  Wouldn’t you?  If you were the buyer?  Wouldn’t you try to protect yourself by making sure the concession was more than enough to cover all possible costs of repair?  Seller, you need to demonstrate how much it’s really going to cost so that you can negotiate from the strength of knowledge.

3.    Improve the curb appeal of your home.

Get a truckload of tan bark and a bunch of flowers (preferably yellow flowers says CJ, Mistress of Feng Shui).  Prune and trim those shrubs.  Rake and mow.

4.     Spruce up the area immediately around your front door.

Picture this:  the buyers’ agent is on the front porch fiddling with the lockbox, then trying to make the key work in the deadbolt.  This episode takes, maybe, 30 seconds or 60 seconds.  What are the buyers doing?  Standing there, waiting, looking around, looking around very closely, absorbing that critical first impression.  Please, buy a new welcome mat, new house numbers, maybe a new door latch, sweep the porch, eliminate the cobwebs and dirt dobber nest, clean up the porch light.  Make this area sparkle!  Get some healthy plants out there!  Some “stagers” suggest you paint the front door.  Me?  I think that’s a bit of a cliche’, but if the front door is really shabby, a coat of gloss may be your quickest, cheapest fix-up.

5.     Rent a storage locker.

I bet you didn’t see this one coming.  Look, you are going to have to pack anyway, aren’t you?  Now, before you go on the market, is the best time.  You need to de-clutter your home, simplify it, give it cleaner lines, neutralize and de-personalize it.  All those knicknacks?  Into the locker!  Three hundred family photos on the walls, on the buffet, on the dresser?  Into the locker.  Velvet Elvis from your trip to Vegas?  Into the locker!  Imelda’s nine thousand pairs of  shoes?  Into the locker!

Let me say this one more time, so you really hear it:

You need to de-clutter your home.

All of these items together should cost about $1,000.

In a coming blog, I will discuss the sensitive topic of de-personalizing your home as you prepare it for sale.  See you then.

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Granny Units in Auburn, California

said on May 7th, 2012 filed under: Real Estate Nuts and Bolts, Water Wells, Septic Systems, Sewers, Electric Power

Put Granny in a pumpkin shell

And there you keep her, very well

Here, in bullet form, are the main rules for building a “granny” unit (or house, or flat) in Auburn, California, in fact, throughout Placer County, California.

Officially these units are known as  “secondary dwellings” and the rules are found in Placer County bulletin 17.56.200

The maximum floor area of the granny is based on the size of the lot:

less than 1 acre

  • 640 square feet

1 acre to 2.29 acres

  • 840 square feet

2.3 to 4.59 acres

  • 1,000 square feet

4.6 acres or more

  • 1,200 square feet

You can see that the maximum size for a granny is 1,200 square feet.  Period.  You can  put a granny unit  on a parcel smaller than 1 acre, but it must be attached to the primary unit or integrated within a detached accessory building, typically a garage.

The granny may be attached to garage as long as the granny has its own separate entrance.

You can add an additional 25% to the granny as a covered porch open on at least two sides.

The granny must be architecturally compatible with the primary residence.

Most grannies require two off-street parking spaces.

Either the primary property or the granny must be occupied by the owner of the property.  (Yeah, and how does anyone enforce this after the property has changed hands?  Deed restrictions, I guess, but probably not noticed unless a neighbor complains because both dwellings have been rented to “undesirables.”)

What is the main obstacle to adding a granny to an existing residence?  Poop.  That’s right, I said poop, or more specifically, getting rid of poop and other sewage which includes everything that you wash or flush down your drains.

If the property is already hooked up to a sewer line, you may find the permit process pretty easy.  Just tap into the existing line . . . and, of course, pay the county some more money, up front and on-going.

If the property is on it’s own septic system (septic tank, leach field and all that) you may have real problems.  In fact, you may be denied a permit.  Most of the time, homes are built with just enough septic capacity for the necessary original permit.  Such and such size septic tank, and such and so linear feet of leach line, plus enough approved space for a “repair field.”

Repair field?  This is suitable undeveloped space large enough to install another entire leach field if the original leach field fails.

If you add a granny, you are going to have to increase the capacity of the existing septic system, or (hold your breath) install an additional new septic system with it’s own tank, leach field and repair field.  This will require new percolation and mantle tests, a new septic system design, and installation.   Thousands of dollars.  How many thousands?  If you are very lucky, $10,000 to $12,000, but you better be ready to pay more.

Here’s the main point: 

If you are buying a home with the intent of adding a cozy little nest for granny, the very first thing you need to learn is whether you will be allowed to  obtain a septic/sewer permit for the second dwelling . . .  and how much that is going to cost you.  Learn this most vital fact before you close the transaction.

Capiche?

Capiche!

 

 

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Auburn Real Estate, First Quarter Comparisons, 2011 to 2012

said on May 5th, 2012 filed under: Auburn, Localism, Negotiating, Neighborhood Profiles, Real Estate Nuts and Bolts

Here is the analysis of Auburn, California real estate comparing the first quarter of 2011 with the first quarter of 2012.  For this study I have used only residential homes (one or two dwellings per parcel) and excluded raw land, commercial property, condominiums, and multi-units (duplexes, apartments, etc.).  I selected Auburn, Southwest of Auburn, Meadow Vista, and Christian Valley as the geographic areas for the comparison. I excluded the non-incorporated areas of Auburn that are north of the Bear River in Nevada County, thereby eliminating “South County” and Lake of the Pines.  The data was obtained from the Metrolist Multiple Listing Service.

FIRST QUARTER 2011

Here is the lowest priced house sold in the first quarter of 2011.

This property near downtown Auburn on Electric Street was listed for $79,900 and sold for $69,900 after being on the market for 85 days.  It s0ld for 87% of the asking price.  At 665 square feet it sold for $105 per square foot.

Here is the highest priced house sold in the first quarter of 2011.

For the past couple of years, the priciest homes in the Auburn area have been located in the Winchester Country Club near Meadow Vista.  This home was put on the market at $1,387,500 then reduced to $1,245,000 and sold for $1,165,000.  It was on the market for 59 days and sold for 94% of the listing price.  At 4142 square feet it sold for $281 per square foot.

FIRST QUARTER 2012

Here is the lowest priced house sold in the first quarter of 2012.

This property out on Mount Vernon Road  was listed for $59,900 and sold for $65,000 after being on the market for 25 days.  It s0ld for $5,100 above asking price.  At 1104 square feet it sold for $59 per square foot.

Here is the highest priced home sold in the first quarter of 2012.

 

As in the previous year, the priciest home in the Auburn area was located in the Winchester Country Club near Meadow Vista.  This home was put on the market at $899,900 and sold in 3 days for $900,000, a whopping $100 above asking price.  At 5288 square feet it sold for $170 per square foot

 

YEAR-TO-YEAR COMPARISONS FOR THE FIRST QUARTER

2011 number of houses sold     123

2012 number of houses sold     137

2011 average days on market     121

2012 average days on market     82

2011 average price per quare foot     $143

2012 average price per quare foot     $144

2011 %selling price/listing price     96.49%

2012 %selling price/listing price     97.18%

2011 average original price     $340,326

2012 average original price     $320,755

2011 average listing price     $309,455

2012 average listing price     $3o6,871

2011 average sale price     $298,610

2012 average sale price     $298,212

2011 median sale price     $259,500

2012 median sale price     $263,000

 

ANALYSIS

Houses sold a bit quicker in 2012 than in 2011, and a few more houses sold first quarter of this year than in 2011, but the cost of home buying was virtually unchanged.  You would have trouble finding a “flatter” market.  Inventory remains low, and lower-end houses priced at market value are snapped up quickly by first-time homebuyers and investors.  Interest rates have fallen even lower which makes houses more affordable, but lending requirements have tightened, knocking some marginally qualified buyers out of the market.

 

 

 

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How to Buy Your First Home in 18 Steps

said on May 4th, 2012 filed under: Real Estate Nuts and Bolts

If you have never bought a home, or if your purchase was a long time ago,  it would help you to look at the typical sequence of events.  I have devised this simple “bullet” list of 18 actions in the order that they usually occur in California:

Buyer Process

Meet with Your Agent to Set Goals and Strategy

Meet with Your Lender  to Get Pre-Approval Letter

Search for Homes

Make an Offer to Purchase

Negotiate the Terms

Accept the offer to Purchase

Deposit the Earnest Money (minimum 1% of Purchase Price)

Order the Appraisal (typically your lender does this on your behalf)

Conduct Inspections

Review all Disclosures from Seller and 3rd Party Agents

Request Repairs if appropriate

Obtain Insurance Commitment

Obtain Mortgage Commitment

Remove Contingencies

Review and Approve Settlement Calculations

Close on Property

Take Possession of Your New Home

Live Happily Ever After

In some states title insurance and escrow are handled in a different manner, in fact, in Southern California, title and escrow are different companies.  In some states lawyers handle matters relating to the transfer of title.  But, the list above is a logical and typical sequence for almost anywhere you buy a home.

If you go back to the top of the list, you see that the first item is to hire a real estate agent to guide you through this process.  There are lots of different opinions about hiring real estate agents.  “How to Hire a Real Estate Agent for Dummies,”  and so on.  Most agents have impressive presentations with lots of bells and whistles.  Whoo Hoo!  But if I had to zero in on one single quality you should look for when hiring an agent it would be this:

Hire a real estate agent who listens to you, really listens to you, deeply, with complete focus and concentration.

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FREE Real Estate Class: Selling Your Home

said on May 2nd, 2012 filed under: Localism, Real Estate Nuts and Bolts

Bob Jenkins will be presenting a FREE real estate class at Generations Health Club, 22824 Industrial Place, just off West Hacienda near the Lake of the Pines, California main gate.  The class will feature a 40 minute lecture and a 20 minute Q&A session.

May 9, 2012 from 7-8 PM

SELLING YOUR HOME

Thieves welcome!  You will steal our trade secrets for selling your home at top dollar, quickly and with the least hassle.  Your will gain an insiders know-how for pricing your home, getting it ready, staging, marketing, showing it to best advantage, negotiating the price and terms, navigating escrow, and closing the transaction.  Topics will include:

  • How to NOT hire a real estate agent
  • How to NOT sell your house
  • Accurate pricing
  • Top five ways to prepare your home for less than $1,000
  • Top five ways to prepare your home for less than $5,000

Trade secrets to REALLY sell your house

Whether (or not) you are planning to buy or sell real estate very soon, or sometime far down the line, I bet you know someone who needs this valuable information right now.  Perhaps you need to sell and move closer to friends or loved ones?  Perhaps you have friends or loved ones you would like to move closer to you?  Perhaps it is time for you to buy or sell a second home or an investment property?

Contact us today to reserve your spot at 530-906-1023 or 530-906-4715.

 

 

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Cheap Homes in Auburn, California? Gone, Baby, Gone.

said on April 3rd, 2012 filed under: Auburn, Localism, Negotiating, Real Estate Nuts and Bolts

If you were hoping to buy a ticket on the Cheap Home Cruise of Auburn, California, you may be left standing on the dock, because, baby, that ship is putting out to sea.

Four days ago, a “nice enough” little house came on the Auburn real estate market.  It was on the smallish side, about 1300 square feet.  The kitchen had to be redone because you couldn’t open the fridge door without it slamming into the range, nor open the back door without it slamming into the sink.  Totally dysfunctional.  Modest neighborhood, nothing special.  About the best you could say about this house was that it was “kind of cute” and “in pretty good condition.”

By the end of the second day, the listing agent had 28 offers.  TWENTY EIGHT offers.  So overwhelmed, the seller (a bank!) ordered him to put the house in “pending” status just to stop the feeding frenzy.  To the 28 hopeful buyers, the listing agent sent those dreaded words, “highest and best offer by 5PM today.”  No second chance.  Do or die.

My clients came back with an all-cash offer $5,000 above asking price.  We never stood a chance.  The final number won’t be known until escrow closes, but I have been able to learn, through the fine art of real estate espionage, that the winning offer was at least $75,000.  Above asking price.  Yes, you read that right, $75,000 ABOVE ASKING PRICE.

So what did you learn from this fiasco?

The real estate market, at least the market in Auburn, California, is changing rapidly.  No, that’s not quite right, the market has already shifted dramatically.  You are just learning about it now.

 

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Mold Mold Mold Mold Mold Mold

said on March 13th, 2012 filed under: Lake of the Pines, Localism, Real Estate Nuts and Bolts

Mold.   The “M” word.  The four-letter word real estate agents are never to say, because we’re not experts, right?  We don’t really know it’s mold, do we?  There’s so much liability associated with mold, and we need to cover our ass, capiche?

But I’ll tell you about the best $385 I ever spent.  We’ll, my client actually spent it, but I talked him into it.  Here’s the story.

After several months of searching, and two failed offers, we finally found the perfect home for his multi-generational family.  He could afford it, and, most importantly, there was continue reading…

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