A Home You Can Afford is a Home You Can Love

Small Living SpaceYou don’t have to spend a million dollars to find happiness in a home here in Orange County. There are many affordable alternatives in nice locations that would make good investments and great homes. Let’s face it; if you dread that monthly house payment, there is less room for enjoyment in your day to day living. If you find you can’t afford the home you really really want right now, try to count all the good things in a home you can afford.

A small home or condo will seem more attractive in a location you love. It may not have as many bedrooms you want or the upgrades you desire, but if it is in otherwise good shape and in the good location, it is still a good investment. If it does not make sense for you to wait until you can buy the size home you want or with the upgrades or space you need, then try to buy the best you can in the best location. While you are living there, its value will most likely increase, and you may be able to afford to move to a larger home in the future.

Small Orange County HomeIn the meantime, love that little home. After all, it is yours and working for you to help you build wealth and keep a roof over your head. If it needs some updating, try to do so in stages to increase its value when/if you decide to sell. Smaller, more affordable homes will always be in demand as first or starter homes, and an upgraded home will always be more attractive than one on original or dated shape.

So take care of that little home and it will take care of you. It will be affordable, livable, it will help you grow some money and make some memories. Who knows; you may not want to move to a larger home after living there for a while!

Home Price Appreciation

orange county home price appreciationOne of the reasons we buy real estate is to realize some kind of home price appreciation. If you purchase here in Orange County, you can pretty much assume your home value will increase year over year. Yearly appreciation varies, and sometimes values go down, but in the long run prices do go UP.

My parents bought their small three bedroom home in Westminster in 1962 for about $19,000. I have a client who purchased their three bedroom home in Irvine for $75,000 in 1972 (he sold it for $816,000 in 2013!). I bought my first three bedroom home in 1983 for $157,000 and sold it in 1989 for $250,000. My current home was purchased in 2002 for $395,000, and one similar to it sold in 2014 for $695,000. Between 2002 and now (2015) we experienced a rising and falling and rising again market. However, my home’s value never fell below the amount I purchased it for (though some homeowners did not have a similar experience). This illustrates the wisdom in purchasing a home and trying to hang on to it for a while rather than trying to time the market.

Home Prices Going UpMy father advised me to try and purchase a home at the limit of my budget. He wanted me to buy as much as home as I could afford. The reason being so I could realize the greatest appreciation in value. This advice won’t work for everyone, but it has served me well. My mother showed me the value of holding on to a home and staying put for as long as possible. Again, not practical for everyone, but it worked for her. And it is working for me and plenty of other long-time owners. The longer I stay in a home, making a fixed payment, the more affordable the home becomes, thus increasing my wealth. Thanks for the advice, mom and dad!

In a world of so much change, it is good to know that you can count on the fact that home values will continue to go up in the long term here in Orange County. Demand to own a home here will most likely continue to grow for the foreseeable future and thus be a wonderful place to invest your hard-earned money. Buying a home here is an investment in your future, your security and stability and for some, your family and their future.

Let’s Make a Deal

Orange County HomeOver-priced listings. Whether you are a home buyer or an agent, I am sure you have seen them. As an agent, you do all you can to promote the listing and get offers for your seller. As a buyer, you may dismiss the listing out of hand or it may not even come up in your home search since it is out of your price range! In general, there is usually some room for negotiation in listing price, but if a home is priced 8, 9 and 10% and more above market value, an agent and a buyer will wonder if the seller really wants to sell their home.

Unfortunately for the seller who prices their home like this, they cut down the buyer pool to about 0 and may be wasting their time trying to sell their home. If a buyer is looking for a 2 bedroom condo, and the market price for one is about $400,000, and the buyer sets their home search parameters for a home up to about $420,000, the over-priced listing at $450,000 will not even appear on the buyer’s radar. An agent may be aware of the home, but will most likely dismiss it and not point it out to their buyer. They may think to themselves that the seller won’t consider a fair offer or they may tell themselves to wait and see if the price gets reduced before showing it to their client. Real estate is about numbers; the more showings and eyes on the home, the more likely an offer will be presented. This demonstrates why an over-priced home will sit and sit: no eyes equals no showings equals no offers equals no sale.

couple making an offerHowever, a savvy buyer or agent should not necessarily dismiss the over-priced listing in all cases. If the home meets all the buyer criteria, and the agent and buyer think it may be a good fit (other than price), it may make sense to write an offer even if the likelihood of acceptance is not very high. In my opinion and in my experience, it is not always a waste of time to do so.

A seller like this will probably have had their home sit on the market for months. Time is not on their side. They may be motivated but just don’t want to reduce their list price. A smart agent will have a conversation with the other agent to get some insight on the listing. They will present a fair offer and show recent salesĀ  data to help back up their offer to the seller. They may have to be patient, persistent and professional, but it could work; I have made it work for my buyer.

You may not get your offer accepted, but it is definitely worth the time and effort. You most likely will have no competing offers (super in a seller’s market for a nice home) and you may be writing the offer at just the right time when the seller is willing to listen. If you are a buyer, don’t hesitate to ask your agent to write the offer and insist they do so even if they argue against it. As an agent who has a buyer who can not find a home, consider the over-priced listing as shadow inventory that no one else has access to.

Good luck!

Get Your Home Sold at Right Price

Home Buying and Selling Stress

Yes, buying and selling your home can be very stressful, especially if it is your first time doing so. There are so many factors to consider and so much paperwork! But the benefits are ultimately worth it otherwise no one would be doing it. There are many things you can do to reduce or mitigate the stress, but I don’t think it can be eliminated entirely.

Firstly, you need to get prepared. You need to do some homework, do some research and get in touch with ME (949.525.5905). You will need to figure out what your goals and needs are and what your resources are to achieve them. Educating yourself and talking to an experienced agent who is on your side will go a long way to reduce the stress of buying and selling.

Good communication with your agent is also key. You are the boss, and so don’t be afraid of speaking your mind and asking questions. This will help you to feel more in control of the process and therefore more in control and ultimately happy with the outcome.

Trust your gut. When in doubt, it is often good to check in with your own gut instincts about something. if something seems amiss or if something seems like the right thing to do, then explore that option, ask questions and/or ultimately act on that instinct. Again, this puts you more in control and playing a bigger part of the process.

Do some work, physical and mental. Crunch numbers, make repairs to a home, get pre-approved for a loan, drive through neighborhoods, talk to trusted professionals, etc. Be proactive.

Definitely take a time out from the process. Try not to stress each moment about every detail. Walk away from the endeavor and then come back to it refreshed and hopefully more confident and with a better perspective. You may also need to walk away from people who are negative or who are giving you advice that you know is wrong.

Try to find enjoyment in the process. Shopping for a home can be fun. Listen to the positive feedback you get from buyers looking at your home for sale. Take pride in the equity you have built up. Look forward to a new dream home or a better life in a new home. Consider all you have learned from buying and selling and how far you have come to get to this point in your life.

So take a deep breath and give me a call. I can help reduce the stress of buying and selling, or at the very least be a sounding board for you as you stress out. I am here for you!