Oakland Real Estate News

Buying a home in a Seller's Market can generally be challenging. Buying a home in a Seller's Market in closer proximity to tech boom cities in which your desired city is in top demand can...... well let's just say you must stay confident, creative, and willing to sacrifice. Selling a home in a Seller's Market should be easy, but can be complicated as well if the proper expectations aren't set and greed sets in. 

The Oakland real estate market has always had desired pockets scattered between undesirable areas. This has evolved, and now some comparable homes in the same neighborhoods are selling at up to $200k differences in price (approximately the highest I've seen). In measuring the differences most times, the edge of the higher priced "sold" home may just be nice upgrades/originals and a spectacular stage job. These "sold" price differences can make it frustrating for realtors when looking for comparable homes for a client's Comparable Market Analysis. Some buyers are so frustrated with writing offers just to get out bid that they want to go for it with a very high offer over asking price. The problem that can stem from writing an offer too high however is the appraisal will come back short of the offer price, which will require the buyer to make up the difference. The same frustration sets in for the seller most times when they are excited by the high offer only to get a call from their agent about the buyer wanting to renegotiate down to the actual appraised value. In those cases sometimes seller greed sets in and the property sits on the market only for the listing to expire.

The truth is, some homes (sold price) probably just shouldn't be used as comparables when it comes to creating a CMA (at least in the Bay Area). There are exceptions to this, some that I use each time I create an analysis. For instance, when I create these reports I most times always do two:

One of them being an analysis that includes homes on a top tier (well staged and very nicely upgraded with close comparables such as rooms, baths, and square footage), a mid tier (not so upgraded but originals and comparable features), and a lower tier (tenants, fixer-ish, older looking, and not great condition). If I am unable to find these within a close radius I spread out a bit and sometimes increase room amounts and square footage until I get what I need. The most important thing in this case is letting your clients know not to use the value of the analysis given by the software. Using the method above will have your final numbers somewhat inaccurate but to a certain advantage. This allows your client to see an analysis of a few kinds of properties (condition varying) with similar features. Seems elementary, especially to experienced realtors, but in Oakland this is almost a must.

For the buyer this will help them strategize their buying in being able to be creative with directional ideas to stay in budget with a mid tier or fixer-ish purchase, or consider spending a little extra for a finely renovated home that already shines.

For the seller this will enable them to equally strategize their sale with a possible 203k/similar renovation loan or out of pocket spending to deliver a polished/upgraded home to the market that would sell for more, or sell as is at an acceptable price still with a usually quick turn around.

The other analysis is what I refer to as my Quick and Dirty Comps. With this analysis I basically search out homes with the closest comparison to the subject property condition wise, square footage and sold for square footage, bedrooms and baths etc. Without the use of condition tiers like above this one gives a better perspective of value and should give the buyer/seller a more precise idea of what the subject property is worth. 

Individually, most everyone has their own ways of comparing homes as realtors, appraisers and even sellers and buyers. There can be good and bad comparisons sometimes done by realtors and even appraisers, some traveling from a surrounding city that are not familiar with the local real estate market. If they bring their area specific method from the real estate market in their city 20 miles away, you might get an inaccurate valuation. This can drive any side in the transaction CRAZY if it is from the appraiser, so don't be afraid to dispute an appraisal with your own information. 

The truth still lies in the fact that the fair market value is usually determined by what the market is willing to pay. In the case of the Bay Area there are many residents with higher and growing incomes willing to pay amounts way over appraised value. With that being said evolution of different areas is occurring and we are experiencing extensive change. If you will be buying or selling in today's Bay Area market be sure to do your homework on the trends. 

TRENDING NOW!


THE NEW CALIFORNIA GOLD RUSH
"UPGRADE! UPGRADE! UPGRADE! and create a jewel among others!"





Posted by Harold Thomas Jr. on April 9th, 2016 1:54 PM
I can remember when I was younger and used to ask my mother for some information about something, and if she didn't have an answer she would direct me to the Yellow Pages to find a phone number for someone that may. Bless her heart, but in all honesty I used to kick myself for even asking her and would always find an easier way through friends and/or networking. 

There is no difference in the minds of people today, and big businesses know it, and in many cases are able to capitalize on the easy way out by charging a luxury fee of some kind that the majority of people would not pay.

I have come to believe that in real estate it is almost the exact opposite. There is technology today, that doesn't cost extra money, that buyers and sellers both can take advantage of and save tons of time. Most good real estate brokerages offer it right on their websites. There is so much information out there, and it can be overwhelming. But combined with experience good realtors are able to position the tools and information necessary on their site so it flows for the average reader and doesn't put the cart before the horse. Realtors are happy to offer information online and are honored when it is seen and read by others. Now with smart phones and social media people are able to share their own plethora's of knowledge. When I used to watch my father work as a realtor when I was younger I remember my first introductions to a computer, floppy disks, DOS and some of the first mobile phones. I thought all of it was cool, but would have never imagined it would have come as far as it has. You can literally handle just about every aspect of your real estate transaction from your cell phone or tablet today. From searching for your home to signing your contract and even more, clients with the cutting edge in technology are able to simplify their lives in ways that can actually make home buying easy. Ironically it's not just millennials that are taking advantage. With the universal input methods of iProducts and Android devices as well as there evolving ease of use, people are doing much of what we thought could only be done on the home computer or even in person, right from their iPhones or Galaxys. 

Social media plays right into the equation and is a true producer of answers, tips and tricks, how to videos etc. all while enjoying yourself at the same time. Revolutionary sites like Facebook, YouTube, LinkedIn, Craigslist and Pinterest just to name a few have literally changed the world. You can get step by step instructions on just about anything these days right online, without having to read a complete college textbook. Instant gratification with a laugh or two along the way. Social media used to be something that businessmen and the more sophisticated would look down upon as a waste of time and a dead end to a productive work day. I must admit I was even a skeptic at one point. But now it is used in such a fashion that work isn't as dull as it used to be and in some cases more productive. The old way of sending mailers in hopes of reaching a couple thousand people (who many times trash them anyway) has become obsolete when you can now spend way less and reach double or even triple that online with rich content such as video and other presentation methods way more captivating to your fine tuned audience. With the use of back links to your website, free adwords accounts and other SEO (Search Engine Optimization) you can even get your ads on the first page of Google and other search engine searches. The possibilities are almost endless and can get expensive. But there are so many free ways of getting the word out now that you can literally cut your marketing budget in half or more. 

Online marketing and social media should be a Realtors, let alone a prospective buyer or seller's playground. Play around with Facebook or Linked In. Start a YouTube and Google+ page. You will be surprised at some of the things you can do if you are not already aware. Back to my mom. She got her first iPhone (something she absolutely refused initially like text messaging) 2 years ago and she can text with her eyes closed. She's a pro now and is already up to an iPad.

Check out some of our links here:

https://www.facebook.com/Thomas-Chambers-Company-Inc-149545198556036/
https://www.pinterest.com/hcthomasjr/
https://www.linkedin.com/profile/view?id=251762287&trk=nav_responsive_tab_profile
https://twitter.com/TCCORealty

Posted by Harold Thomas Jr. on December 9th, 2015 10:50 AM

In my more recent transactions I've had buyer clients react to the non-staging of homes very negatively. Yet when the home is sold it still sells over the asking price but for considerably less than one that was beautifully staged. When you see the home after the new owner takes possession (if it is owner occupied) it turns out beautiful + worth more money (in California's bay area market anyway). Many times homes have been rented out for a long duration of time with absentee owners, most instances outside of the city or state, that could care less about fixing the place up let alone staging it. That sometimes can spell out an opportunity to get a deal, update the home and build instant equity.  In today's market any little bit of help for our buyers is good. Turning the conversation from "This horrible paint and floor job sucks!" to "This home seeks your creative potential" has helped a few of my clients get diamonds in the rough. 

Now from the other end of the spectrum as a sellers agent selling a home worth more than $300,000 (sometimes less) I would most times always recommend staging. Staging works to the benefit of the seller in many ways. One of the biggest in my opinion would be the effect it has on the wealthy buyers with the mindset that there will be a bid war. There are several other benefits of a professional stage job, and normally if one is implemented in today's market it spells out a happy seller in the end accepting an offer well over asking price. I've seen professionally staged homes in somewhat undesirable neighborhoods sell for over $200k over the asking price!

Be also weary as a buyer of the staging jobs when looking at homes and try to figure out what holes are being covered up with a nice painting or throw rug. You'll never know what kind of things you may have missed once you become the homeowner and the staging has been removed  if you don't do your due diligence and ask questions. 


Posted by Harold Thomas Jr. on November 18th, 2015 2:14 PM

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