Housing Inventory Continues to be a Challenge

Housing Inventory Continues to be a Challenge

In any given market, inventories fluctuate based on supply and demand considering area and price range. The National Association of REALTORS considers a balanced market to be a six-month supply of homes.47945268-250.jpg

If it takes longer than six months to sell, it is thought to be a buyer’s market and less than six months, a seller’s market. Most buyers and sellers probably feel a balanced inventory is more like three months’ supply of homes.

The inventory of existing homes has been reduced to approximately 1.5 million houses which is 10.3% lower than a year ago. According to the Federal Reserve Bank of St. Louis there are 5.7 months’ supply of new homes currently on the market in the U.S.

Inventory has a direct impact on price. When demand is constant, but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.

As easy as it is to recognize the signs of spring, one should be able to spot the direction prices will be moving. When prices and mortgage rates are increasing, buyers are affected by not being able to afford the same price or size of homes.

If you would like a detailed list of listings in Ukiah, Willits, Cloverdale or anywhere else in Mendocino County, Sonoma County or Lake County, just ask. There’s no cost or obligation, just the information you want when you want it. Click Here to Sign Up!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

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For Sale by Owner Leads to Lower Sales Price

It’s no secret that home sellers want to sell their property for the highest possible price, while homebuyers want to buy for the lowest possible price. One of the ways people try to save money is to avoid paying the commission typically charged by Realtors by choosing to sell the property themselves. This is called a For Sale By Owner (FSBO). Unfortunately for those sellers, studies show that residential sales that involve Realtors often sell for higher prices than those sold by owners directly.

Here’s why: Realtors know what they’re doing. You wouldn’t hop on an operating room table and say, “Hand me that scalpel. I got this.” While I admit that real estate isn’t a life or death situation, real estate law is complex and one wrong move can haunt a seller for years.

Most buyers seem to understand this. They find a Realtor to represent them, to save them time by identifying all the properties that match their criteria, to make sure appropriate disclosures are completed, and to negotiate on their behalf. The only reason a buyer would look at a FSBO is to save money. And while a buyer’s Realtor will certainly be fair and honest with the seller, that Realtor’s job is to look out for their client’s (the buyer’s) interests.

As a FSBO seller, you must do all the work you’d pay a Realtor to do. You must figure out a sales price that attracts buyers but doesn’t leave too much on the table. You must look at your house with an objective eye and make only those improvements that are likely to influence a sale. Once the house is ready, you must figure out how much to spend on what type of advertising. You must go to the online housing search engines that accept FSBOs and enter your information there. You must try to figure out who would like to buy a house like yours and how to entice them to look at your house.

You must also be available to show the property to any and all comers (without the benefit of a Realtor’s screening). An unscreened prospect may or may not be a looky-loo who is just curious and has time to kill, or a sketchy person casing your home to rob it.

And there are some things you simply cannot do without a real estate license, like uploading your property information to the Multiple Listing Service, which feeds third-party online databases used by real estate offices across the country.

Speaking of third party, one of the most important services Realtors provide is assistance in negotiations. As a FSBO seller, you need to follow up with potential buyers to see if they are interested, thereby tipping your hand as to how eager you are to sell. Realtors who follow up are simply doing their job.

Let’s say everything went your way: you found a buyer and are ready to sit down and sign a contract. Here’s where things can really get challenging. Do you know which inspections to get and who should pay for them? Do you know how to write contingencies into the sales agreement? When I began in real estate more than 40 years ago, a transaction file had about 30 pages, 28 of which came from the escrow company. Now, the Mendocino County Disclosure form alone is 11 pages long. And the ramifications of not making the required disclosures, whether standard forms or disclosures to address a specific issue, can be financially devastating.

Not surprisingly, many FSBO sellers eventually decide to list with a Realtor. Sadly, by that time, the listing is old news rather than an exciting new prospect, so it can be harder to sell. However, a good Realtor can often highlight the property’s best features and find buyers who are just the right fit.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.


Your Tax Refund Could be the Difference

Your Tax Refund Could be the Difference

One of the silver linings to filing your income tax return is finding out that you are going to receive a refund. If you happen to be one of these fortunate taxpayers, your next decision is what to do with it. With the average tax refund around $3,000, it could be the difference that makes a home a reality sooner rather than later.

Many would-be buyers think it takes 10% or more down payment to purchase a home, but actually, it can be much less. There are VA and USDA mortgages that have no down payment for qualified buyers. FHA has a 3.5% down payment program and FNMA has 3% down payment mortgages for qualified creditors.

Closing costs for originating new mortgages can easily range from two to three percent of the purchase price but most lenders will allow the seller to pay part or all of them based on the agreement in the sales contract.

While the average tax refund might not cover the down payment on the median price home, it certainly helps. Your refund could make it as simple as 1-2-3 to get into a home.

  1. Get the hard, cold facts for the homes and mortgages in your area and price range.
  2. Get pre-approved with a trusted mortgage professional.
  3. Start looking at homes.

Call me at (707) 467-3693 or Clint@YourMendoRealty.com to get started.

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Mendocino County Construction Corps

As long as there have been schools, there have been students who knew sitting in a classroom all day wasn’t for them. This feeling doesn’t necessarily go away when it comes to the workplace; not everyone is meant to sit behind a desk. But because kids often hear that they have to go to college to amount to anything, they don’t consider other avenues.

Well, I’m here to present another avenue: getting into the trades. In Mendocino County, many tradespeople are approaching retirement age and they cannot find enough people to replace them. I just attended a meeting of the Mendocino County Construction Corps (MCCC) program, a pilot program that encourages high school seniors to pursue a career in construction, and I enthusiastically support it.

MCCC is made up of tradespeople and business people, educators, and community benefit organizations. It’s a great example of community members recognizing a need and working together to address it.

As a real estate broker, my business depends on having enough housing for the people who live in our valley. Right now, we have a shortage—one that just got worse because of last October’s fires. I love the idea of local people supporting themselves financially by becoming carpenters, plumbers, electricians and general contractors. I also love the idea of having enough plumbers in town so if my washing machine breaks and water is flowing all over my house, there’s someone I can call who can help me immediately.

In recent years, there’s been more school funding for what they call “career technical education” (CTE), programs that help students get the skills they need to pursue careers that do not necessarily include going to a four-year university. CTE programs remind students that there are plenty of people who make a good living fixing cars, growing food, and building houses, among other pursuits.

While there is some money for CTE programs, it’s limited, so when Ukiah Unified School District CTE Coordinator Eric Crawford was inspired to start the MCCC, he knew he’d have to figure out how to fund it with grants and donations. He pulled together a steering committee and since then, he has been able to raise more than 75 percent of the funding needed to provide 14 weeks of education for the 21 students who were chosen through a rigorous selection process.

The program includes weekly evening classes and four all-day Saturday classes on subjects like power tools, reading blueprints, construction safety, first aid/CPR, framing, roofing, solar, plumbing, concrete, electrical, construction math and more. Students also learn to drive a forklift and other heavy machinery.

Once they complete the coursework, which is mostly hands-on practice, the students participate in a two-week boot camp where they help build houses for Rural Communities Housing Development Corporation and the Hope Crisis Response Network. At the end of all this, they’ll receive a $750 stipend for their work and a tool belt with tools to get them started.

Local tradespeople who believe in the importance of supporting our community and who like the idea of creating a pool of well-trained people have volunteered to teach the classes. John Boies of Granite Construction said Granite encourages employees to give back to the community, which made it easy for those who like to teach to sign up.

In addition to teaching, several local businesses signed up to be major donors (donating $1,000 or more) include Christensen Construction, Friedman’s Home Improvement, the General Contractors Association, Granite Construction, Guillon Inc. Construction, John McCowen, the Mendocino County Office of Education, Mendo Mill, Menton Builders, Jim and Arlene Moorehead, Realty World Selzer Realty, and the Ted and Wilma Westman Fund of the Community Foundation of Mendocino County.

After the boot camp, local contractors will have the opportunity to hire MCCC graduates. If you’re interested in learning more about this program, visit https://sites.google.com/uusd.net/mcccwebsite.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.


Home Ownership Tax Benefit – Fair Skies on Horizon

Home Ownership Tax Benefit – Fair Skies on Horizon

Buyers who have been concerned about what might happen to the tax laws affecting home ownership should feel more comfortable about moving forward with their decision to purchase. The 2017 Tax Cut and Jobs Act passed by Congress and signed by the President continues to treat real estate as a favored investment.31496145-250.jpg

Whether it is for a home to live in as your principal residence or to use as rental property, the tax laws are in place but other dynamics to be concerned with are not; mortgage rates are expected to rise as well as prices.

Reasons to buy now:

  1. The mortgage interest deduction is intact for most taxpayers.
  2. The capital gain exclusion for principal residences up to $500,000 remains in place.
  3. Taxpayers can elect annually to take newly increased standard deduction or itemize deductions whichever will benefit them the most.
  4. The house payment with taxes and insurance is most likely cheaper than the rent.
  5. Rents will continue to rise making the difference even greater in the future.
  6. Lock-in the principal & interest payment with a fixed-rate mortgage.
  7. 30-year mortgage terms are available to most borrowers.
  8. Prices will likely increase due to lower inventories and several years of low housing starts.
  9. Section 1031 exchanges, capital gains and depreciation remain the same for rental properties.

For a summary of specific real estate provisions in the 2017 Tax Cut and Jobs Act, click here.

If you would like a detailed list of listings in Ukiah, Willits, Cloverdale or anywhere else in Mendocino County, Sonoma County or Lake County, just ask. There’s no cost or obligation, just the information you want when you want it. Click Here to Sign Up!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

The post Home Ownership Tax Benefit – Fair Skies on Horizon appeared first on Clint Hanks, 707-467-3693.