Best Place Real Estate

The Internet has made curb appeal even more important than in the past. Today when you list your home, literally the whole world can see the front of your house.

Curb appeal has always been important. If buyers drive by and don’t like the front of the house, it is unlikely that they will want to see the interior. A messy front yard is a good indication of what the rest of the house is like. You know what they say, “first impressions are lasting impressions” and “you don’t get a second chance to make a good first impression”.

The Internet has added a new dimension to this because now most buyer’s “first impression” comes from an online listing of the house. Today buyers do a lot of homework online before they actually go out to look at homes. And when they are ready to go out looking, they often ask their agent to show them homes they have found on their Internet search.

When searching online, buyers particularly look at the photos of the listings. It’s “a  picutre is worth a 1000 words” type thing. But consider this. The first photo of each listing is usually of the front exterior of the house. There are often several more photos of the interior and backyard, but if the front is not appealing, a buyer may not click to view the rest of the pictures.

If you are preparing your home for sale, seriously study the front of your home and determine what needs to be done to improve its curb appeal. When you are ready to put it on the market, ask your agent to take several photos of the front and together pick the one that is the most appealing and likely to encourage a potential buyer to click for more. Make sure you have curb appeal and Internet appeal!

Please note: If the Internet listing of your home does not have photos you may as well not have your house on the market because buyers usually just skip over those listings!!!

In a recent Orange County Register article, “O.C.’s Expert Observers Tell What’s Scary“, REALTOR, Steve Thomas comments on “herd mentality”.  This is similar to what Donald Trump refers to as “group think” in his audio book, Why We Want You To Be Rich, co-authored with Robert Kiyosaki.  Herd mentality or group think is when people do things because everyone else is doing it. Trump encourages people to “think for themselves” rather than just following the herd.

A few years ago when the market was rapidly appreciating, it seemed like some people were buying just because everyone else was.  Many didn’t do their homework and just assumed the market would continue to appreciate indefinitely.  They just figured it was the right thing to do because the rest of the herd was doing it.

But, the real estate market is cyclical. It has its ups and downs, just like most everything else.  Now that we are in a down market, I think that much of the herd of buyers think that prices are going to continue to go down indefinitely. After all, that is all you hear about in the media. Now it seems that a lot of buyers are actually waiting for the prices to start going up before they are comfortable buying. In my article, “Should I Buy Now Or Wait for Prices to Go Down More?“, I discuss trying to time the exact bottom of the market.

However, some people, particularly investors, are taking advantage of our current market.  Those who have strayed from the herd and who can “think for themselves” understand real estate cycles. They know that this down market will not last forever and that we are now somewhere near the bottom.

When the market turns around and starts to appreciate again, people who buy early will eventually make money.  But the buyers who strayed from the herd and bought when others were afraid to buy will be the ones who profit the most.

The steep decline in housing prices has brought investors to the market in full force. Many are buying in the bottom price range of the market. In Orange County that consists of primarily of low to mid-priced condominiums. These homes were hit really hard by the demise of the real estate market. Now we are seeing tons of short sale and bank-owned condominium listings and investors are scooping them up as fast as they can. While many buyers and real estate agents do not want to bother with short sales, bank-owned listings are receiving multiple offers and many of the offers are cash offers. Remember, this is Orange County and despite what you read in the papers about all the job losses and foreclosures, there are still a lot of people here with a lot of money.

The opportunity we have now is that the decline in prices combined with very low interest rates has made single family detached homes possible for many investors who otherwise could only purchase condos. When I make an investment decision, I like to look at the long term and I think that in the long run, a single family home is a better investment than a condo.  Therefore, I believe that the current market is not only an opportunity for investors, it is also an opportunity to make a really good long term investment. Consider these points:

• In many areas, like Lake Forest, Mission Viejo, and Laguna Hills, you can now buy a single family house for about the same price as some of the condos a few years ago. These are generally small entry level homes, but ones that would make excellent rentals.
• While single family detached homes lost value in the market down-turn, they weren’t hit quite as hard as a lot of condos and therefore I think they will recover more quickly.
• When real estate is in an upward cycle, detached houses typically appreciate at a little higher rate than condos. So this is something to look forward to.
• Interest rates. What an opportunity, low prices and low interest rates! You must be able to qualify for the loan and provide documentation supporting your income and assets, but it should have been that way all along.
• Again, looking into the long term, when the market does turn around, we will probably reach a point where first time buyers will again be priced out of the market. (History has a way of repeating itself.) This will keep the rental market strong and I think single family houses will be more appealing to families than condos.
• As I mentioned above, investors are all over the bank-owned condos, particularly in the lower priced complexes. This could be a potential problem down the line. Lenders do not like to make loans in complexes that have a high percentage of absentee owners. Therefore, units in these complexes may be harder to sell in a few years because it may be difficult for buyers to get financing.

Please note that I am not suggesting that condos are a bad investment. They can actually be very lucrative. What I am suggesting is that the current market has given us other opportunities to consider.  As with any investment, you need to do the research and do the math, and I suggest doing it for both the short term and the long term.

The condition of your windows is really important because they affect both the interior and exterior appearance of your home.  So definitely put them on your “To Do List” when you are preparing your home for sale.

Preparing your windows is usually very inexpensive:

• Wash all your windows inside and out and make sure they open and close properly.
• Also wash all the screens and check to be sure the screens are in good repair.
• Window coverings and blinds should be clean and in good condition.  If you decide to change any window treatments, think light weight and neutral.
• If shrubs and bushes have grown very tall in front of a window, consider trimming the bush so it looks well manicured from both the outside and the inside.
• When showing your home, it is best to have all the curtains and blinds open so your house is as light and bright as possible.

Staging tip:  Sometimes the house is so close to the property line that a room may have a window that looks out at a fence or block wall and this is often not a pretty site.  Change a negative into a positive.  Get some large outdoor pots and place them outside the window.  Buy some ornamental trees or bushes for the pots.  Or, a nice looking potted vine with a pretty trellis may do the trick.  You may need to purchase 5 gallon plants so they are big enough.  Add a cute bird-house or wind-chime.  Another idea is large bakers rack with lots of colorful potted plants.  With just a little creativity you can keep the blinds open and have a nice view too.  Just remember to water the plants!

Although a lot of people are taking advantage of this buyers’ market, others are unsure about buying a house as they are concerned that prices may still be declining.  It almost seems as if some people are waiting for prices to go up before they will feel good about buying.  However, when prices do go up, some people who are qualified to buy now will be priced out of the market.

If we all had a crystal ball we would know exactly when to buy and when to sell.  But we don’t and it is nearly impossible to perfectly time the market, whether it is the stock market, the real estate market, or really, anything.

Rather, you are probably better off buying when we are some where near the bottom.  Imagine real estate prices as being represented by a “V” or a “U”.  It would be really nice to buy at exactly at the bottom of the “V”.  The only thing is that we usually don’t know exactly when we are there.  There is no bell ringer who rings a bell announcing we have hit the very bottom.  But, buying when we are near the bottom of the “U” puts you in a much better position.  Yes, prices may go down a little, but they will more than likely start going up again soon.

Also take the interest rates into consideration.  Prices may go down a little more, but if interest rates go up, it may be more difficult to qualify for a loan.  Even though the price of the home may be less, the monthly payment for the loan could be higher because of a higher interest rate.  So again, some people who are qualified to buy now, may be priced out of the market by higher interest rates.

Real estate is a long term investment.  Most people stay in a home for at least 5 to 7 years.  Rather than concentrating only on prices and trying to buy at the bottom of the “V”, I believe it is better to consider all parts of the formula for a successful investment.  That formula not only includes price, but also includes loan rates and terms, tax advantages, length of the investment, and resale value.  For rental property, the formula also includes rental income and the increase in the income over the years.

“Lake Forest Rocks on the 4th“.  That’s the theme of this year’s 4th of July Parade put on by the City of Lake Forest.  The Parade is the City’s biggest annual event and it gets better every year.  I volunteer on the Parade Committee and I think The Parade will be extra fun this year.  The Parade begins at the intersection of Toledo and Ridge Route and then goes up Lake Forest Drive to Serrano Road.  It starts at 10AM, but it is best to get there early.  Enjoy the Parade and then have a fun and safe 4th of July!

If you have a question for the City of Lake Forest or need to report a problem, go to GovPopulous.  This system has proven to be very effective because our City Manager not only reads all inputs but also holds his staff accountable for responding to all of them.

Periodically the City conducts a Resident and Business Satisfaction survey.  The last one was done in 2006.  Overall, the rate of satisfaction by residents for City services was 91% and for quality of life was 95%.  For businesses, the overall rate of satisfaction for City services was 86% and 79% of the businesses rated the business climate in Lake Forest as excellent or good.  And the City is constantly working to be even better.  GovPopulous is another way the City keeps in touch with the needs of its residents and businesses.  To use GovPopulous, go to: www.city-lakeforest.com/govpopulous.

Most buyers form an opinion of your house before they even walk through the front door.  You know the old saying about first impressions.  The front entry is a key part of that first impression.

The buyer often is standing on the front porch for several minutes while their agent is locating the lockbox, retrieving the key, and opening the front door.  Spending time fixing up the front porch is time well spent.

For a great looking porch:

• Keep the porch well swept as well as the walkway leading up to it.
• Remove dirt and cobwebs from the porch light.
• Repaint the front door if it shows wear.
• Make sure the door knob is clean and working properly.
• Put out a nice new doormat.
• Keep the porch clear of shoes, toys, and other clutter.

Staging Tip:  Adding potted plants with bright colorful flowers makes your entrance warm and inviting.  If you have a really large porch, a couple of chairs or a bistro table/chair set adds ambiance.  Just make sure the area does not look cluttered.

Yes, we have them.  They are in Heritage Hill Historical Park on the corner of Lake Forest and Serrano.  Along with the Serrano Adobe (1863) and the Harvey Bennett Ranch House (1908) is El Toro’s first church, St. George’s Episcopal Mission (1891), and the first schoolhouse, the El Toro Grammar School (1890).

Come celebrate our local history at Rancho Days Fiesta at Heritage Hill this Saturday, May 17.  It is fun for the whole family and an opportunity to visit Lake Forest’s old historical homes.

Imagine that you are selling your home at the mall, let’s say in the “house store”.  You would do what all the other stores do.

Clothes stores have mannequins in the window featuring the latest fashions.  The mannequin is wearing the whole outfit - dress, jewelry, shoes, purse, and maybe even a hat.  The same dress on the rack may look rather plain, but in the window, with the jewelry and all, it is the start of a really outstanding outfit.  The window display gives a shopper an idea of how well the dress may fit in her wardrobe.

Now let’s go to the furniture store.  You might walk through rows of couches and tables and find nothing that jumps out at you.  But, when you see a couch and tables displayed in a room setting with lamps, candles, and potted plants, you stop and think how great that couch might look in your home.  The store might even have the same couch in two different room settings, suggesting to the shopper that the couch works well in both formal and informal decor.

So now to the “house store” where your home is listed for sale.  You want your house featured in the store window.  You want your house displayed so as to give shoppers an idea of how your home may fit into their lifestyle.  This is staging.  Staging sets your house apart from the houses on the rack or the rows of houses.

Just for clarification.  Staging is not decorating.  Staging is not preparing your home for sale by making repairs and doing inspections.  Staging is marketing your home.

We live in our homes differently than we sell them.  Most people are at least a little emotional about their homes.  But when we sell it, we need to put those emotions aside.  When we put our home on the market, we really need to appeal to the buyer’s emotions.  This is where staging comes in.

Even the most beautifully decorated and upgraded home may need to be staged.  Decorating is a personal thing.  Staging de-personalizes it.

Staging doesn’t necessarily cost a lot.  Often it is only changing or rearranging a few things in a house.  In fact, the cheapest thing that has the most impact is getting rid of clutter.  On the other hand, I feel it is well worth the money to stage a vacant home with furniture and accessories.  The staging will probably pay for itself and then some in the sales price.

Regardless of whether we are in a slow real estate market or a rapidly appreciating one, staged homes usually sell more quickly and often for more money.