To Sell or Convert Your Home as a Rental Property

What an interesting question to consider. I speak with hundreds of potential sellers every week as a part of my prospecting ventures. Too many people who are pondering to purchase an upgrade home, are giving more decision-weight to renting out their current home, and this decision is mostly because of the emotional attachment of having to forfeit thousands of dollars of their equity due to the decline in the local Real Estate market. And hey, before I go forward, let me say that I am most empathetic to this dilemna.
While I am a Certified Public Accountant, there is a strong desire for me to want to offer financial advice. However, I always make it clear that my services are offered in the capacity of a Real Estate transaction, and the client should seek out the council of a trusted financial advisor. And furthermore, since every person or family’s financial and tax situation is different from the next person, blanket advice does not always apply equally.
First though, the glamour and excitement of becoming a “Real Estate investor” seems appealing to many. However, to be successful, it has to be operated as a business, and not so much with the casual approach of a hobby. Becoming a landlord imposes additional burdens and responsibilities that sometimes go beyond the part-time intended involvement.  Second, many home owners today seem to be of majority opinion that waiting for the market to rebound will enable them to recovery their equity losses, and yet, most also agree that the market will not regain for several more years.
So … back to the question, to sell or convert your home as a rental property. Oh, but wait – what about a few general considerations. According to one source that I found to be reliable, the home values in San Diego county have declined an average aggregate of 31% over the last five years since 2005. Everyone you speak to these days has their own speculations about when and by how much the Real Estate market will recover. Let’s face it, and at the same time consider your views on the following statement. The recovery of Real Estate is also directly linked to the availability of, and interest rates of money, jobs recovery, supply and demand of housing, and consumer confidence. But, nonetheless, is the Real Estate market likely to rise by 45% from this point? – that is about what will be required to return to the valuation point prior to the stated 31% loss. Most buyers who I speak to, tell me that they are still waiting to see the bottom in the market before they make their purchasing decision. So, now what do we have? We have a serious gap between the minds and thoughts of the seller and the buyer (otherwise known as the marketplace). Mr. and Ms. Seller - panic buying of yesteryear may not return for many more years to come. The Real Estate market is more likely to “normalize” and become more consistent and predictable before it will “go vertical”.
The next point is one that requires great personal integrity – and that is, we have to be honest with ourselves. Sit down with a pen, paper, and calculator. List down all of the expenses associated with the liability of your home, such as monthly mortgage payment on the loan(s), property taxes and insurances, and any HOA or other maintenance fees. Then, after some due diligent research of rental rates in your community, compare the rental income expected (cash in) against the expenses to carry the investment of the home (cash out), and determine any shortfall or excess. If your situation is like the majority of people, you will notice that the monthly dollars cash out exceeds the monthly dollars cash in, or in other words, you are losing more, and more, and more money. If the Real Estate market remains flat for example, and you are losing say $1,000 per month because of your net cash outlay – what does that tell you about your decision to convert your home into rental property (let’s avoid any discussion of depreciation and future cost basis adjustment for tax purposes). Oh yeah, and by-the-way, you may want to consider that in reality, your home may remain vacant for several weeks or even months while you search for a tenant, and then thereafter while you perform repairs during the turn-over period in between lease agreements.
So often what we encounter is the battle between logic, and emotion. The logic and facts generally bear witness in support of selling the house and walking away, and yet the emotional side causes us to clutch on to the shadow of a hope that some miracle or wonder will appear from nowhere and provide us with relief.
Take the time to think it over. When you decide to sell your house, and your motivation to do so is high, contact me, and I will discuss my action plan to list your home and help you to move onward.   

Our goal is to help and guide people to buy and sell San Diego Homes:  Contact us soon - and let us apply for the job of being your Real Estate agent.

Charles M. Schevker (CPA)
DRE # 01875556         
Broker Associate
Prudential California Realty

Sattelite Office:(858) 437-8400 ext. 248

Home Office: (858) 750-2578

Mobile: (858) 449-8250

1299 Prospect St.
La Jolla, CA. 92037 

Cschevker@san.rr.com

http://www.San-Diego-Cal-Homes.com

http://www.linkedin.com/in/charlesschevker

http://www.Sandiegojewishrealtor.com

Traditional Home Selling Techniques Cost You Time and Money

Consider the following question. It is now the time, that you have to, or you want to sell or buy a home. How will you go about selecting the right Real Estate agent to help you accomplish your goals?
Your challenge is to find a qualified Real Estate agent who has integrity, credibility, and who understands which selling techniques work most effectively in today’s Real Estate market.  So many Real Estate agents who are in practice today, come from diverse backgrounds that do not prepare them for Real Estate, and / or there are the veteran agents whose traditional techniques simply do not work well. Traditional selling techniques typically involve passive approaches such as placing advertisements into local newspapers, placing photos and a description of your house on the Multiple Listing Service, and nowadays by placing a blurb on social media sites and inadequate websites. Is this what you really want to sell your home quickly and at the best price in the market? I don’t think so!
My suggestion to you, before signing a listing contract with those top named Real Estate agents, is to do your homework. Set aside their name recognition, and then research their current listings portfolio. While many of the top named agents can display an impressive number of listings, take a look to see the aging status of those listings – you may be surprised to learn that many are older than 120 days on the market. How long can you afford to have your house sit exposed to the market without offers? In addition, when you review the pre-listing packages of these top named agents in your interview process, ask yourself, just how many of their 16 or 20 advertising and marketing ideas are action-oriented and aggressive to “sell” your house, versus those ideas that are passive, and lend themselves more to just “waiting” for buyers to throw themselves at your negotiating table. Before you read any further, think about whose hands do you want to place your home, and, your valued investment?
My business partner and myself have made the conscious decision to invest the time, energy, and money to first build a solid foundation to our business so that we are positioned to offer our services in a bold, aggressive, and results-oriented style, thus bringing value to, and by benefiting our clients. I am a Certified Public Accountant who has 30 years of practical business experience formerly working in executive capacities at Fortune 500 companies. I bring to our clients, a strong reputation of trust, credibility and integrity, coupled with the experience of making deals and protecting equity. My first Real Estate license is from the State of Maryland in 1988. My business partner, Natasha, is a former resident and business owner from Russia, and as well, a former teacher of mathematics and physics in the United States. We both bring our strong character traits from our former professional development into our Real Estate business so that we can offer a level of service several notches above the rest. In addition, we continuously spend thousands of dollars monthly on professional coaching and training, to supplement our capabilities with more powerful selling techniques that will convert into a return on investment for our clients.   
Yes, of course, everyone likes to brag that they have the best doctor, lawyer, accountant or REALTOR®. But the question is … is yours really the best for you

Contact us soon - and let us apply for the job of being your Real Estate agent.

Charles M. Schevker (CPA)
DRE # 01875556         
Broker Associate
Prudential California Realty

(858) 750-2578

(858) 449-8250
1299 Prospect St.
La Jolla, CA. 92037 

Cschevker@san.rr.com

http://www.San-Diego-Cal-Homes.com

http://www.linkedin.com/in/charlesschevker

http://www.Sandiegojewishrealtor.com

Pricing Strategies for Home Sellers

So … the time has come when you either want to, or you have to sell your home. The biggest problem that you, the homeowner faces when placing your home on the market for sale – is the price.
First, let us be blunt, and admit that all homeowners believe that their houses are worth much more than anyone else’s house. Come on – be honest - it seems we all have an over-inflated view of the value of our house.
Second, here are a few important, if not critical ideas to keep in mind when considering a listing price for your home. Your focus needs to be redirected to understand how potential buyers will determine the value of your home in their eyes. To do this effectively, consider those times when you are the consumer, and you go out into the marketplace to purchase an item. Chances are high, that if the price of the item is above a few hundred dollars, you will engage in the act of comparison shopping. Well, guess what! Buyers do exactly the same when searching for a new home – so think about how you would view your home, if you were the buyer.
Once we can remove our egos and the emotional drama from the process, it is easier to see that there are only two key elements that determine value of your home – and they are, price, and the offerings, otherwise known as the features and benefits. Now, before you go off searching the attic for receipts in proof for all of the upgrades and repairs made to your home, let us not forget that the home buyer will be comparing these two key elements of your home against those same for your neighbors. Meaning that if your home offers the same features and benefits as your neighbor, and yet yours is offered at a higher price, well then … your house will sit on the market for a little while longer. On the other hand, if the price of your home and your neighbors’ are equally the same, however, your neighbor’s home offers more features and benefits, well then … again your house will sit longer on the market.
So, unless you are going to add more features and benefits, which by-the-way is not a good idea, price becomes the key swing factor. Besides, most buyers would much rather not pay a premium for your personal taste in decorating. Also, do not get confused – roof and carpet replacements, painting, and other repairs are not improvements or upgrades – they are simply expenses to bring your house up to selling standards.
The key to selling your home quickly and to have the advantage to decide from multiple offers, is to list your home at the right price. If within the first 2 to 3 weeks of the listing, or if after about 5 to 10 showings of your house, you are not receiving offers, then your home is overpriced. This market would be more strongly characterized as a buyer’s advantage, and as such, it would be prudent to not expect that you will find the lone, uninformed buyer, willing to overpay. 
Although the listing price of property is the decision of the homeowner, most Real Estate agents will be able to suggest a selling price for you. Be cautious of any Real Estate agent who cannot provide you with a detailed comparative market analysis, or one who has not taken the time to make value adjustments for comparative properties. Average prices per square foot are a good indicator for pricing, only if they are based on competent valuations, and are not just simply a 3 minute exercise in arithmetic. I spend several hours in research and calculations by using 3 different valuation methods to feel comfortable and confident that the result is credible and supportable. It is also important to know that the Real Estate agent is not responsible for the price of your home – the market is.
We often deal with homes priced between $800,000 and $8,000,000. In many situations it is well worth the cost range of between $350 to $500, to order a professional appraisal before listing the property.      

You owe it to yourself to hire the right Real Estate agent for the job of selling your house. Give me a call, or send me an email so that I can provide you with the action plan needed to sell your home, at a price that will attract offers, and on a schedule to meet your goals. We also preview new listings every week to sharpen our knowledge of the inventory and pricing.

Contact us soon - and let us apply for the job of being your Real Estate agent.

Charles M. Schevker (CPA)
DRE # 01875556        
Broker Associate
Prudential California Realty
(858) 449-8250
1299 Prospect St.
La Jolla, CA. 92037

http://www.San-Diego-Cal-Homes.com

http://www.linkedin.com/in/charlesschevker

http://www.sandiegocalhomesdotcom.wordpress.com/

http://sandiegojewishrealtor.com/

It is a Good Idea to Know Your (Housing Market) Statistics

The next time you have an opportunity to meet with, or to socialize with your friendly Real Estate professional, ask them to give you some statistics about the current inventory of houses in San Diego County. Not only will the opportunity test their knowledge, it will also provide you with valuable information about our local market, and as well, will help you to filter the cascade of media news.
As of December 2010, the inventory of attached and detached single family homes for the area of San Diego County covered by the Sandicor MLS* (Multiple Listing Service), is 15,753, or approximately a 6.1 months supply (without consideration for pent up foreclosures). This is not a significant change from the beginning of the year inventory level of 15,147. Interestingly, 53,356 homes were added to inventory as new listings for sale during the first 11 months of the year. Correspondingly, the inventory was reduced by nearly the same number of new listings (52,750 homes), although, and unfortunately 23,493 of which, were taken off of the market by expired, cancelled, or withdrawn contracts. A thought to keep in mind at this point is that, most contracts expire because the house was overpriced to the market conditions, and the sellers had no, or few, offers to consider. The net result is that 29,257 homes were sold during this period, or a 3 month rolling average monthly sales volume of 2,584. So, in spite of the negative news commentary, there is activity in home sales.
Home sales prices averaged at about 95.5% of their original listing price, which is approximately 1.3% points improvement from nearly a year ago. This may either suggest that sellers are being more realistic with their listing prices, or perhaps, it signals a shift in the strength of home prices.
A few more interesting statistics to provide you in case you need conversation starters at some upcoming social parties… here are some average selling prices per square foot in different areas of the county. Please consider that the use of averages bear certain risks, because they are very dependent upon the volume of homes used in the calculations, and the price mix of homes in very high or very low ranges. La Jolla = $804, Rancho Santa Fe = $594, Carmel Valley & Del Mar = $489, UTC & Sorrento Valley = $339, and Rancho Bernardo / Rancho Penasquitos / Scripps = $287.   
If you would like more information regarding market statistics, or you would be interested to learn more about the pricing of homes suitable to your interests, simple give us a call so we, can help you, to get what you want, in the time you want … wont that be great.
*  All numbers have been rounded

Contact us soon - and let us apply for the job to be your Real Estate agent.
Charles M. Schevker (CPA)
DRE # 01875556        
Broker Associate
Prudential California Realty
(858) 449-8250
1299 Prospect St.
La Jolla, CA. 92037
http://www.San-Diego-Cal-Homes.com
http://www.linkedin.com/in/charlesschevker

Hiring Your Close Friends and Family to Buy or Sell Your Home

Think about this for a minute. The population in the State of California for 2010 is estimated at 37,206,000. The California Department of Real Estate currently claims that there are 475,714 licensed Real Estate agents and brokers. So … on average, 1 in 78 persons living in California is a licensed Real Estate professional.
YIKES!!! This means that there is a very high likelihood that you, and everyone else in California, personally knows a Real Estate Agent. Perhaps, the good news is that, when you need a Real Estate Agent to help you to buy or sell a home, you likely have a friend or family member who is available to take the money from your wallet.
While you contemplate the above statistics and at the same time, think about that friend or family member, consider that not all of the licensed Real Estate Agents are active in the business, nor are many actually good sales people. Also consider that The State of California does not require any training what-so-ever in selling, to qualify for the Real Estate Sales Agent exam. I would estimate that at least 70% of the currently licensed agents, work full-time in some other job as a primary source of their income, and only work Real Estate as a part time endeavor – I would guess that they make their part-time Real Estate commissions waiting for people like you.
My business partner and myself have made a personal and financial commitment to dedicate the time, energy, and money to seek professional sales training and coaching. We are investing tens of thousands of dollars in our continuing professional development so that we can improve our selling skills, and to learn new techniques for selling houses – your house. Every month, we travel to the offices of a well-respected coaching firm known widely throughout the Real Estate industry, and spend several days, so we can improve upon our skills. We have also chosen to invest a significant amount of money in hardware and software to upgrade our telecommunications system that allows us to prospect for potential buyers and sellers directly, and as a result, build up a large network in the market.
So … consider a few of the following questions as it regards your friend or family member. (1) Do you absolutely have to sell your home, or are you just looking to do them a favor. (2) Do you prefer to have someone selling your home who is an objective third party, and one who has a high regard to protect your equity and interests. (3) As for buyers, do you want a trained Real Estate Agent to represent you in the negotiation process, or will you be satisfied at the possibility to overpay. (4) Does your friend or family member truly have the devotion and drive that you need for pursuing your interests, and will they tell you the truth. (5) Will you be prepared for the heartache of a distanced or severed relationship in the event that your friend or family member causes you to lose money, (6) Has your friend or family member upgraded their professional training and skills in such a way as to earn their commission.
So ... before singing that contract with your close friend or family member, consider the longer-term impact. Hopefully they will understand, and value your relationship above that of a commission check.
Contact us soon - and let us help you to sell or buy your home, and to move onward with your goals.
Charles M. Schevker (CPA)
DRE # 01875556        
Broker Associate
Prudential California Realty                                                                                                             (858) 449-8250
1299 Prospect St.
La Jolla, CA. 92037
http://www.San-Diego-Cal-Homes.com
http://www.linkedin.com/in/charlesschevker

Do it Yourselfers - What's Up With That? (Part 2)

If you have the time, please read my previous blog about buyers who feel compelled to search for their own homes, and eliminate the services of a qualified real estate agent.

As for sellers (FSBO – For Sale By Owner)

Oh, ok, so you want to save the typical 6% commission that is charged by real estate brokers who market and sell your home. Ok, I understand that.! Oh but wait – you say that most real estate agents simply take a listing, hammer a “for-sale” sign on your front lawn, and then stop back 2 months later at the close of escrow to pick up their fat commission check. Ok, I understand that!  

Instead, you take things into your own hands. You sign up for some internet website, search for recent home sales in your neighborhood, and then the click the button that says “calculate your home’s value”. Dang, that was easy – and now you are definitely convinced that you do not need a real estate professional? Mazel tov to you!

Now … what is your next step in this brilliant action plan of yours? Well ... maybe you go to Home Depot to get a “for sale” sign and hammer it into your front lawn. You might also take a few bad photos, put them along with a puffy description of your home, place ads in the local newspapers, and upload same to a website specifically designed for you - the FSBO. And then what Mr. / Ms. Genius – you wait, and wait, and wait. This is called passive selling.

You see … the problem at this point is that, you are only appealing to 2% of the buying population, and even at that, these people are typically not the type of buyers you want to attract. This means that potential buyers who, for valid reasons of their own, do not want to buy homes through the conventional process in the structured marketplace, and now, they are answering your ads. They are looking to prey upon those FSBO’s (YOU). These buyers, typically have some financial insufficiency, and they will be expecting you, the FSBO, to help make up for their deficiencies. For those of you whom have tried to sell by yourselves, how many offers have you received? Ok, so what! Now of those offers, how many were qualified offers? Were any from buyers who needed your financing assistance via seller-financing agreements? Were any of your offers from investors (experienced and inexperienced) who are only interested to find properties that hold future potential (for them) - homes that they can purchase at a price significantly lower than market, and then fix-up to rent or flip, and then generate a profit margin, at your expense.

Did I mention that FSBO’s generally sell their homes at 27% less than agent-assisted sales (http://www.realtor.org/library/library/fg006). You do the math, but I would prefer to capture that 27% increment and pay a real estate agent their 6% commission – that’s an additional yield of 21%. Consider that, a For Sale by Owner is much like a “garage sale” or “flea market”, whereas a sale by a real estate agent is like a Macy’s or Nordstrom. Real Estate brokers work hard to bring buyers and sellers together for the purpose of trading real estate in a free market. Consider, you probably cannot make a stock trade without some assistance of a Stock Broker, who, in their own trade, also bring buyers and sellers together.    

Ok! So, I admit that not all real estate agents will work hard to market and sell your home. Many are only interested to get your listing (so beware if your agent agrees to take your listing at a reduced commission rate). This is called lazy selling. They build a weak reputation for themselves by listing as many homes as possible with the hopes that they sell by the grace of god, all-the-while creating a poor public image for otherwise ethical and highly professional agents. Please understand that by marketing your home via a real estate agent, like us, your home can be exposed to a much larger and wider network of qualified buyers - those who can clearly vision the value that your home represents to them, and those who are ready, willing, and capable to buy. Generally speaking, by (1) marketing your home to the network of other real estate agents via what we call “broker caravans”, (2) exposing your home via the professional Multiple Listing Services, (3) holding open houses to the public, and by (4) aggressively prospecting for buyers via door knocking and phone calling, we can expose your home to the 98% of the market.  This is called proactive selling!   By proactively exposing your home to a broader market base, and targeting our efforts to find buyers who are ready, willing, and capable, you are more likely to get a higher price than if sold by yourself, and, the length of time to sell, will likely be shorter.

If you cannot definitively articulate the answers to the following 4 questions, then I urge you to seek a professional real estate agent to help you to sell your home.

1.    What is the value of my home in today’s market?

2.    What is the defined action plan for selling my home?

3.    How long will it take to sell my home?

4.    What is the cost to sell my home?

Contact us soon - and let us help you to sell your home and to move onward with your goals.

Charles M. Schevker (CPA)
DRE # 01875556         
Broker Associate
Prudential California Realty
1299 Prospect St.
La Jolla, CA. 92037 

For Search By Buyers (FSBB)

So … you sit at home looking at the internet or thumbing through your latest electronic gizmo, searching through all of those Real Estate websites in a quest to find a new home for your family. Mazel tov! Why should you use a great real estate agent when YOU … Mr / Ms multi-tasker are convinced, that YOU, can do it better than a professional. And oh by-the-way, you are so proud to think that you do not have to pay a commission as a do-it yourselfer. Well, unless you are an electrician, you probably would not consider installing underwater lighting in your swimming pool, or unless you are a mechanical engineer you probably would not consider installing a solar panel system on your roof. So, why are you taking a huge risk by trying to find and buy a house on your own.

Here are a few more things to consider. (1) The internet websites mostly obtain their information from the professional Real Estate Multiple Listing Services, so, their information is often filtered, less accurate, and less timely. (2) A Real Estate agent is likely to do a much better job at calculating a CMA (comparative market analysis) by adjusting the comparative property features to those of the subject property, versus an internet site that will calculate a simple mathematical price per square foot. (3) In today’s complex world of contracts and disclosures, it is comforting to have a real estate agent who can represent your interests from the beginning to the end of closing. (4) And, gee I almost forgot … in most cases, the selling agent’s commission is paid via the listing broker and from the seller’s proceeds of sale – not from the buyer.

But hey! Who am I to convince YOU not to waste your time and money. Why not just sit on the internet, click and “add to cart”, add appropriate taxes, shipping and handling costs, and wait for UPS 7 day ground to deliver. Good luck with that!

Don’t you just hate to waste time? How many hours of frustration are you willing to endure before you will trust a REALTOR® to help you to search for, and to buy a home. The process is so simple… why do you resist – (1) let’s have a discussion so that I clearly understand your motivation and your housing preferences, (2) let us sign the necessary disclosure and buyer-broker agreements, (3) let me recommend a lender for you to meet and receive financing pre-qualification, (4) let me search and select only the top 3 homes that meet your pre-qualification range and those that match the most of your “must-have” needs, (5) let me preview the homes for you in advance, (6) let’s schedule appointments for us to view the selected homes, (7) let’s sign a contract, and negotiate the deal if needed, (8) pack up your boxes and move to your new dream home.

Contact us soon - and let us help you to sell or buy your home, and to move onward with your goals.

Charles M. Schevker (CPA)
DRE # 01875556         
Broker Associate
Prudential California Realty    

(858) 449-8250
1299 Prospect St.
La Jolla, CA. 92037 

http://www.San-Diego-Cal-Homes.com

http://www.linkedin.com/in/charlesschevker