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April 2008

April 30, 2008

Reno's Property Tax: New Home($5,000) Old Home ($2,000)

Blogmoney Photo by: EricGjerde

Property tax is underrated.

Buyers usually fall in love with the location,curb appeal and landscape.

But make sure you also check the property taxes on the different properties you are looking at. 

New homes tend to be significantly higher than older ones.  The difference could make or break your cash flow (if you plan on having it rented).  It's probably a good idea to double check the difference in taxes before making your final decision. 

A friendly reminder from Reno Home Blog.

April 28, 2008

Can You Time The Market?

BlogclockPhoto by: dictybloke

I won't be surprised if this post gets nipped in the bud.

Whoever said that we can time the market is either a genius or dreaming. 

I am none of the above.   

But I am going to say it anyway:  I don't believe that we cannot time the real estate market.

Human nature rarely changes. History repeats itself.

I may not know when the exact market bottom will be, but history gives us great clues.
We know for example that once the real estate market reaches a bottom, it takes a while before it goes to normal appreciation (6-8%) this happens after a few years of breaking even to 2-5% appreciation. 

This is where I am coming from when I cringe when I hear people say, "Oh, I'll just wait for the market to come back up again before I sell my house" I just hope that they know that it may take a while for market cycles to reverse.

So how do we do it?First, know that the best we can do for now is have an educated guess.  We can never predict the exact time.  But you'll be surprised that that guess does not have to feel like your traversing a dark tunnel.

Take for example this graph of Reno's homes for sale,
How did I  'guess' that this was going to go up come summer months?
As you can see here. Notice that in the first graph that whenever we were in the summer months (the previous two years) inventory shot up.  It's not hard for me to reach the conclusion that the same thing will probably happen this coming summer(and that's whats happening right now).

And the best way to know that the market has bottomed is to wait until it bottoms out.  Make sure that it has, then move forward.  Sure, you didn't hit the exact bottom but by that time people are still unsure of the market that you will still be ahead of 80% of the majority.  Just don't wait too long before you act.

And lastly, I think we can predict the market when we continue to question and learn from the posts in this blog.  I really believe that.  That's my goal.

April 24, 2008

Learn: From house swapping to buying a town for $2.5M

Blogrock  The learning curve
photo by: highlux
Bloglearn
I was surfing around some real estate blogs and this is what I've found so far worth sharing to you:

  • Barbara Corcoran's post about house swapping (I didn't even know you can do that now!)

"..today’s newest trend in the real estate market. Frustrated home sellers can get rid of their properties fast and don’t have to worry about buying their new house before they sell their old one..."

"...Albert, Texas is a 13 acre town just 50 miles north of San Antonio..."

"...It is my observation that Subprime it will not be back like it was during the ‘98-’05 period (ever again).."

"...Remember that the bank actually has as much, if not more to lose than you do. As a result, they may be able to offer options that could help and if you don’t ask you’ll never know...."

April 17, 2008

Reno Home Sellers: Why April & May Are The Best Time To Sell

Blogelephant 'Is it time to sell?'
Photo by: bubblywums

                                                            --------------------------

"Or maybe I am just worn-out, repeatedly seeing sellers lose                          $25,000-$50,000 because of unsound decisions."

                                                            --------------------------

Blogdog 'Humility in the presence of a good idea,' I once read somewhere, 'is the hardest thing to do.'

This has been my dilemma this week.  While sorting through graphs and numbers and the  real estate activity happening in our office, I am convinced that April and May are the best time to sell your house.

And I wanted to let the whole world know.  Perhaps there was something inside me that wanted to be credited on having the 'first word'.  Or maybe I am just worn-out, repeatedly seeing sellers lose $25,000-$50,000 because of unsound decisions. 

The classic case is testing the waters.  Seller tries to price their homes in the range where the market flatly rejects it.  When they do lower their prices the room is already crowded-hard to stand out.  And usually the possible loss is too hard to take that they just wait 'till it gets better.

How did I come up with this conclusion? The market told me so.  And it's not hard to see.

Point 1:

March 2008 experienced a 32.16% increase from the month prior. Feb of the same year also saw a similar increase. Buyers are going out this time of the year. And this is nothing new; historically, this has been happening for years.

See: Reno Real Estate's Demand

Point 2:

As other would-be sellers notice the uptrend in buyers, they would eventually join the party. Hence, if you wait until June or July, statistics show that you are guaranteed to have more competition.

See: Reno Real Estate: Supply

By showing these facts it is not my intention to tell you what to do.  What I'm asking you to do is give it some thought,challenge the idea and try to incorporate it to your specific situation. 

Every seller is different; there is no one-size-fit-all solution.   So use these facts to get a bird's eye view.  And maybe just maybe I have helped you save a few thousand dollars and two pounds of heartache.

April 04, 2008

It's not just about rate. It is about a great rate with a great plan.

Aaron_dehart_2 Guest post by Aaron DeHart

Aaron shares this radical thought: "low interest rates by itself is not KING, 'We all have low rates.' "

     "Low Mortgage Rates" Is Not A Selling Feature, It's A Planning Standard

When mortgage rates fell in early-January, it breathed life
into a huge swath of loan officers that were getting ready to
leave the business.

It's a terrible turn of events for homeowners and homebuyers. 
With everyone focused on rate, rate, rate, the
lowest-of-the-low loan officers are in their natural habitat.

Having a low rate carries tangible benefits in the form of a
low (relative) payments.  But, as a point of comparison,
having a low mortgage rate combined with the right
mortgage product is far more important to homeowners.

I won't dispute that low mortgage rates are very attractive
but -- no matter how you slice it -- low mortgage rates do
not create wealth for people without an outside influence.

Turning "low rates" into "long-lasting wealth" requires a
well-planned mortgage strategy and solid execution. 

Unfortunately, homeowners don't get that sort of approach
from the low-rate guy that does not focus on the proper
questions to create a plan   that works for that particular client.

Plus, here's a little secret about the mortgage industry:
We all have low rates.

But ordinary people don't understand the mortgage rate part
of the mortgage industry and get blinded by the promises of
"low rates" .  Low rates are a business standard not a feature.

Not having a well-formed plan leads to irrational mortgage
management including:

1.  Paying fees to buy down a mortgage rate when you believe
mortgage rates will fall in the future

2.  Converting from an ARM to a fixed when you know that you
will be moving in a handful of years

3.  Walking away from a scheduled closing because somebody
offered you a mortgage rate that's 0.250% lower and this is why
falling mortgage rates can be bad for homeowners.  It shifts
attention away from the short- and long-term planning process and
pushes it into instant gratification mode.

These kind of things can be a nightmare for Financial Planners: 
Homeowners can undue years of retirement planning with just one
ill-fitted mortgage at a "great rate"

To properly prepare a client for the right mortgage product, a
loan officer needs to be asking the clients the right questions.

For example:

1.  How long is the client planning on staying in the home.
(This is where ARM's and interest only products come in
to the picture folks.)

2.  Their perceived employment path, changing jobs, pay raises,
possible relocation.

3.  Their investment strategies, aggressive etc. When do they
want to retire?

4.  Children, believe it or not this plays a major role.
(College and how are you going to pay for it?)

5.  How much funds are available to invest in the transaction.

6.  What payment are they comfortable with?

7.  What is their current debt structure?

These are just a few and I tend to even go deeper with the client.

Aaron M. DeHart
VanDyk Mortgage
985 Damonte Ranch Pkwy #120
Reno NV. 89521
775-284-7827
775-284-7828 Fax

April 02, 2008

"Customer Service" is it just Lip Service?

Courtesy
Photo by: MBK (old skool)
 

Next time you ask me "how are you?" mean it and actually hear that I said "not too good" so you won't say "well that's great!".

Common Courtesy is Customer Service, I think that sums it all up for me. But is it really easier said than done these days? or am I just too sensitive? Please do tell.

First, I was shocked when I found out that I had to now pay ten cents for my BBQ sauce which I like with my fries from this famous fast food chain. From where I came from I can understand why they would have to charge for that extra sauce, but here?!

It's not that I mind paying an extra ten cents, but I never use to, that's the thing, I began to wonder if they're going to ask me to pay for a refill on my soda just like a small chinese restaurant would, which I understand the chinese restaurant but not this big company.

Second, My wife and I went to have a "Breakfast date" (if you have kids, every time that you are alone without the kids is a date.) and we felt like having a mexican food for the morning. Luckily we know this place close to my office which opens early.

I am guessing we were the first customers because the faces of the people in there seemed like they did not like to be there.  I told myself well maybe it's to early for them. So we chatted and we ate which was maybe about thirty minutes. We left the tip and we were still the only people inside and as we walked towards the door I was expecting a "Thank you very much" or "Come back soon" or something, they said nothing and still looked liked they despised serving us.

Third, Again with my wife but now with my two wonderful kids, my four year old boy and my a one and a half year old girl (so if you have kids of your own you know what I mean with the wonderful given with the ages.).

My boy asked me if we can have sushi for dinner which of course the answer to that is "yes sir".  I live in Sparks and there is that small sushi place not far from my home (instead of doing the drive to Reno we figured to give this one a shot.)

We walked in and there was maybe twelve open chairs by the bar and the waitress asked us if we wanted the bar or the table, we said the bar and as we try to settle in to one of the open chairs she said "no no not there, that's reserved." So we were waiting for her to tell us where we can sit but she said "you have to wait twenty minutes for the bar, but you can be served now if you chose the table." My wife adamantly answered, "we want the bar."
The waitress was true to her word, she made us wait for twenty minutes while the twelve empty chairs that was supposedly reserved was occupied by two people who didn't know that those two chairs were reserved for them.

After twenty minutes and two soy sauce bottles broken (culprit: zozo, I promise to you I did not have anything to do with that, he just has it in him to break things, needed or not.)

The waitress didn't have a choice but to give us four chairs out of the ten that was open (I was just really thankful that she made us sit with our children.). We had our fill and left, I wanted to stick it to them and not tip but my wife was feeling generous so I agreed.

I couldn't help but wonder...

Don't we act the same way sometimes in the real estate business?

I found out the hard way just like my stories.

Is a call back so hard to do for either a feedback or even more, for our transaction? This goes for businesses or personal calls. The longer I do not hear back from another agent it just tells me how much my call was worth to him or her. The longer a friend of mine does not call me back makes me wonder if I ever did offend him or her the last time we spoke, or maybe we're not friends anymore?

I got an inquiry about my listing and this lady wanted to find out everything about the property but not wanting to give me even her first name. Why is that? Is she scared that I might bug her with my calls or mailers? I would need your address first and then your number.

A referring agent from a different state tells me about all her properties that needs to sell right away, I get on the ball and spent a whole day preparing comps, contracts, and then mailing them overnight so I could meet the right away  but to this day I still don't have one back (this was three weeks ago).

The Banks with Short Sale Transactions! Need I say more?

The Escrow officer who constantly mails you materials  but could not return your call when you really need an answer.

The buyer you took out the day after Christmas to see homes at ten in the morning, could not even call you back to let you know that, "hey we decided not to go with you" or "we liked a different house" something.

I am sure that I have been guilty of the same things in my life and career, but I believe that the only true way to learn to be courteous is when you are in the other side,waiting.

So, Make sure we return those calls, better yet pick it up if you can. But never forget to call them back. Good news or not I want that call back from you, same as you want it from me.

Next time you ask me, "how are you doing?" mean it and actually hear that I said "not too good" so you won't say "well that's great!".

Smile. Aside from it being contagious it speaks volumes.

And if I want my four year old to see how sushi is made by having him sit by the bar, let me have it.

Ralph Waldo Emerson says it best (twice):

"Life is short, but there is always time for courtesy."

"We must be as courteous to a man as we are to a picture, which we are willing to give the advantage of a good light."