During the past seven years everyone, or at least almost everyone, in America has experienced a real estate market that only a few years earlier was unimaginable.
Homes were selling in 2005 at record levels. On average, a home that was purchased for $250,000 in California in 2002 saw its value shoot up to more than $600,000 as 2005 drew to a close.
By 2009, that same home had plummeted to $220,000. By 2010, fully 85 percent of the homes for sale in Solano County were distressed properties, either foreclosures or short sales.
But, oh, how things have changed in a year.
As recently as 2012, more than 30 percent of all homes in California were worth less than the owner owed on them. Almost a third of which were at least 50 percent underwater. As of the beginning of 2014, only 13.3 percent of homes were underwater with a majority being within 20 percent of appraised value.
Realtors report that the average time on the market for a property that is not distressed is anywhere from a week to six weeks, depending mostly on the home’s price range. The less-expensive homes typically sell relatively quickly.
So now’s a good time to quickly review how to begin the “normal” California real estate sales and purchase process, something we haven’t experienced for a long, long time.
If you’ve been fortunate enough to be able to ride out the housing bust in your own home, you may be thinking it’s finally time to sell, perhaps to move up while the prices for higher end homes are still relatively low.
Even if you just want to explore your options but aren’t ready to commit, having a relationship with a Realtor is absolutely your best bet.
The real estate business is usually a mystery to the average homeowner. That makes perfect sense considering most people won’t use the expertise of a Realtor more than a few times in this life.
Many homeowners are slow to call a Realtor just to explore their options. They may feel they’d be getting the agent’s time and energy without paying them. Something just seems morally wrong about that.
Others aren’t quite honest about their uncertainty, afraid the Realtor won’t give them his full attention if the homeowner is just shopping.
Neither is correct.
Realtors, or at least the best Realtors, make their careers out of developing relationships. Providing “free” counseling has always been a part of what Realtors do. The agent knows that even if the advice she provides leads you to not sell your home, her professionalism might lead to you telling your friends.
That’s how her business grows.
So if you are thinking about selling, now or in the future, get referrals from friends if possible to Realtors they’ve been happy with. If you can’t do that, call several different agents and ask them for an interview. But please, be honest about where you’re at in the decision-making process. You’ll figure out pretty quickly who you’re comfortable working with.
If you’ve been thinking that now may be the time to finally buy that first house, or maybe you lost your home several years ago and your credit has recovered, it’s time to take the first steps.
You, too, will need a Realtor. You’ll also need a lender.
The choice is yours whether you want to shop for a lender first to see if you’re qualified and what the upper limit of your price range is. Or you can first find the Realtor you’d like to work with. All Realtors can help you find a lender.
If you decide to find a lender first, you still can’t beat personal referrals from people whom you respect.
Checking out the programs available through the bank or credit union you do business with is also a good place to start. Finally, independent mortgage companies offer a wide range of loan programs from many different lenders. They can often qualify a buyer with a program that’s not available to a bank’s loan officer.
The bottom line is you need to shop around. Don’t take the first “no” you get as gospel.
Finding your Realtor is pretty much the same as it is for sellers. The important thing is to find someone with whom you feel comfortable.
Buyers, particularly buyers who are very new to the real estate game, need a Realtor who they can call on a Saturday night because they’re losing sleep with worry over some new issue that’s cropped up.
At the end of the day for both sellers and buyers, Realtors, much like attorneys, are counselors. They earn their pay by giving valuable advice and direction to their clients.
Tim Jones of a real estate attorney based in Fairfield. Reach him at 425-1963 or Tim@TJones-Law.com.