New Lending Guidelines to Dodd-Frank

Today I want to talk about a topic that gets everybody listening: Money, Money, Money.

As we go into 2014, many will be asking themselves: what's going to happen in the marketplace, and what will be the drivers?

It's commonplace in today’s market for the government to factor heavily into that equation, and that's exactly what I want to talk about today. A new law called the Dodd-Frank Wall Street Reform and Consumer Act is kicking in at the beginning of next year that will change the lending guidelines for all of the country. This law will have the most effect on those in lower income brackets, because it directly effects borrowing power. Under the new guidelines, borrowing power based on monthly income will decrease by 7% from 50% to 43%.

This will cause house prices to soften as sellers adjust the limitations in borrowing put on the potential buyers.

Will this 7% decrease in borrowing power create a catastrophe in the housing market? Not likely, but what we will see is increased pressure on lenders. And pressure on lenders, coupled with a decrease in borrowing power, means that in addition to housing prices going up, interest rates will increase as well.

If you have any questions relating to your property or the future of the housing market, don't hesitate to call me at (650) 766 - 5300.

Thanks, and have a great day.

Properly Pricing Your Home

Welcome back to my video blog. We have had a phenomenal 2013. Both buyers and sellers have had great opportunities to take advantage of the market. As the New Year draws nearer, a lot of people have asked me how our market is.

We still have a fantastic market, but I have noticed a trend of dropping prices. So what does this mean? Is the market really slowing down or are sellers not listening to their agents and overpricing their home?

If I had to guess, I believe most sellers aren’t listening to their agents. Pricing your home properly is one of the most important elements of selling your home quickly and for the good price.

While we do have a strong market, that doesn’t mean you can price your home at whatever price you choose. I frequently get asked by sellers if they can start out high and adjust the price if it doesn’t sell.  Well, you could, but chances are you will end up selling your home for less than if you had just priced properly in the first place.

Why? If you price your home too high, buyers look at you as a greedy seller and most of the time they completely shun your home. In order to reenergize the market toward your home, you have to significantly drop the price of your home.

Don’t overprice. Listen to your realtor. If you need help determining what the best price for your home is, please give me a call.

Thanks for watching!

3 Tips to Make a Good Offer

Welcome back to my video blog! Today, I wanted to touch on the subject of making offers. I’ve heard some buyers say they’ve made almost 20 offers, but haven’t got a home yet.

Why is this? When you make an offer there are a lot of things to consider.
The first thing is to have an aggressive realtor. When I construct an offer, I find out when the sellers are looking at offers and whether they would take a preemptive offer. Sometimes sellers will take an early offer if the terms are good.

The second thing to do is check out the market. Look at how many homes have sold in the area recently and how many offers did they have. Let’s also look at the sales versus list ratio.

The final thing to consider is the other terms of an offer. How big of a down payment are you making? What is the length of escrow? Sometimes allowing a seller to remain in their home for an extra 30 days is all they need to accept your offer.

Keep these three things in mind when you find a home you like. If you have any questions about strategy for you home, please give me a call; I’d love to help!