Pacific Real Estate

A Fully Licensed Broker / Realtor Serving All of San Diego County

HOW MUCH OF A COMMISSION SHOULD YOU PAY YOUR SAN DIEGO REAL ESTATE BROKER?

A good broker’s job is to sell your house for as much money as possible and as quickly as possible. San Diego real estate brokers are not in the business of listing homes and sitting on them. When you find a good broker, hang on to that broker. A winner is worth the commission you pay. What should that commission be? The Scott Hamill Rule Number One here is, all commissions are negotiable. Sure, a common one is 5 or 6 percent of the sale price, but it is not carved in stone. If you are in a seller’s market, you can request a smaller commission. If the broker says this is not so, show him or her this paragraph. There is always another broker waiting in the wings, anxious for your business at a lower commission. How high a commission should you pay a well-recommended San Diego real estate broker? It depends on the broker’s services. Some brokers put together a tremendous promotional package and deserve as high as 6 percent. Others will sell your house for a flat fee, or a smaller percentage. Reduced-fee brokers can be every bit as aggressive and successful as full-fee ones. Here and there, a broker may counter your suggestion of a reduced commission with a reduction in advertising. Don ‘t compromise on advertising!

Be a thorough comparison-shopper. What is a full-commission broker offering you, compared to a reduced-fee broker? Make a decision based on the services rendered, not the fee charged. You might be talking about substantial sums, so talk dollars, not percentages. If you want $400,000 or more for your house, a certain percent commission runs $20,000 or more. When you speak to a broker in terms of dollars, you will find the broker more amenable to discussing a discount. This trend is becoming more prevalent and will continue.

YES, EVEN MORE COSTS ON MAJOR FIXER-UPPER SAN DIEGO REAL ESTATE!

1. 7. Bad plumbing. Before World War II, corrosion-resistant copper and bronze plumbing was not available. Most San Diego real estate built before 1940, therefore, will have choked-up pipes. Over the years rust and corrosion tend to clog the pipes, just as cholesterol builds up and chokes off the blood flow in human arteries. Some San Diego homes built after World War II also have iron or steel plumbing pipes. Since you cannot see most of the plumbing behind the walls, get a magnet and run it along the walls in the kitchen, and on pipes underneath the sink and in bathrooms. If the magnet grips the wall or the pipes, it means the pipes are not copper, bronze or plastic; the magnet will be drawn only to iron and steel. If water is trickling out of faucets, you know you have a problem. Turn all the faucets in the house on at the same time. Then flush the toilet. If the water slows down to a trickle, it indicates a problem. New plumbing can run anywhere from $3,000 to $10,000, depending on the extent and the size of the house. But do not jump to conclusions: sometimes low water pressure is caused by insufficient pressure from the street. In that case, the water supply line to the house needs to be replaced. That remedy costs less – from $300 to $1,200, depending on how much digging is needed.
2. 8. Floor sag. Most of the time you can see this problem with the naked eye. However, a carpenter’s level can tell you if your eyes are deceiving you. Check windows and doors to make sure they are lining up squarely with each other and the frame. Make sure windows and doors open and close easily, without binding. If a carpenter or contractor has to replace supporting posts, this can be done. If a house is going to require work on the foundation, be sure to get an estimate. This work can run into the thousands of dollars.

MAJOR FIXER-UPPER SAN DIEGO, CA HOMES AND HOW MUCH THEY COST

Whether you should buy a CA home depends, in large measure, on the renovation cost. The biggies in terms of repairs are:

1. 1. Heating and cooling systems. Heating systems in older San Diego, CA homes were not built to last longer than 10 or 15 years. If you need a new one, the best would be a forced warm-air heating system, in which a blower sends heated air through ducts to various rooms. The cost of a system for a 1,500-square-foot house with ducts already installed ranges from $2,500 to $5,500, depending on the length of the warranty. It is always better to get a furnace with a 10-year warranty that has a pulley-driven blower. You can tell if the current furnace is pulley-driven by taking off the front panel and checking if the blower is driven by the motor from a rubber pulley just like the fan belt in your car. If you have to remove walls and drop ceilings to install ducts in your fixer-upper, figure on spending anywhere from $2,000 to $10,000, depending on the extent of the duct work. Even if you do not need to replace the heating and cooling systems, there is the energy trap. Most of us have forgotten about those $500-per- month heating and air-conditioning bills that jumped up during the energy crisis, but they could reappear. Older houses almost always have higher fuel bills; heating and air-conditioning bills can wind up costing more per month than your monthly mortgage payments. I always insist on seeing at least one year’s electric and fuel bills before purchasing the house. These bills will tell you if this home has a real heating and air-conditioning problem.
2. 2. Replacing the roof on older San Diego, CA homes, this can run anywhere from $1000 to $40,000 (that’s right-forty thousand dollars!), depending on S1ZE. You can check the roof visually. Maximum roof life is 15 to 20 years. So be on the alert if your house still has its original roof. Look for worn-out rain gutters, as well as broken, cracked or missing shingles. One of the first places a home starts to leak is the flashing, which is the material around the chimney. If there are any spaces between the chimney and the material around it, there usually is a leak. If the California home has been roofed since the present owners have been there, have them show you a copy of the bill. See how old it is. Top-grade roofing for an old home runs approximately 6000 per 100 square feet of roof area. New gutters are a must when replacing the roof. Add approximately $1,000 to $3,500 for new gutters.

MODERNIZING OLDER SAN DIEGO REAL ESTATE

Just about every fixer-upper I have seen requires some remodeling. The price tag can be high if you prefer Sub-Zero refrigerators or bathtubs with Jacuzzi water jets. Nevertheless, these are jobs you need to price, in order to figure how much your San Diego real estate ultimately costs you. First, a disclaimer on remodeling costs: prices vary greatly from market to market. The figures quoted here are based on average figures nationwide.

1. 1. Modernization of an old-fashioned or obsolete kitchen: from $7,500 to $30,000, depending upon how many goodies you wish to have.
2. 2. A new half bathroom: from $3,000 to $8,000, depending on how fancy the fixtures are.
3. 3. Remodeling of a full, old bathroom: from $4,000 to $9,000, de- pending on luxury.
4. 4. Thermal insulation, including insulating window glass: you need proper exposure to the sun and new highly efficient heating equipment that can cut winter heating bills 40 to 50 percent. Local gas and electric companies will do a survey of the cost of caulking windows and other insulation measures to eliminate those drafts that make you cold even when your thermostat is set at 75 degrees. Cost: from $2,000 to $7,000, depending on how far you want to go. If you have a choice between gas and oil to heat San Diego real estate, always choose gas. It is cheaper to buy, operate and install, it is cleaner and simpler, and it requires less service and maintenance.
5. 5. New windows: If you have to replace one window, you can bet that sooner or later the rest of the windows will have to be replaced as well. If one window replacement costs $500, and there are 20 windows, figure you will ultimately be spending $10,000 on windows.

LOCATING A RELIABLE SAN DIEGO REAL ESTATE INSPECTOR

How do you find a home inspector? On what basis do you select one over another? What does a home inspector do? Let us say I am moving into a new town. The real estate agent says, “Charlie’s brother down the street looks at homes.” How do I know that person really knows what he is doing? You have to be careful. Ask questions. Does Charlie have a company that offers a warranty to back up its inspections? How many years has it been in business? How many locations does it have?

Never to buy a “two-story” house. “That’s a house where you get one story before you buy the house and another story after you move in.” There are some San Diego real estate agents who are uptight about the idea of inspections. They may not grasp the fact that a professional inspection protects them as well as the buyer. One realtor I talk to frequently puts it another way: “I’m not a plumber, I’m not an electrician, I’m not an engineer. I can’t go up and inspect the roof. I’m in a small community. When I sell a house, my buyer becomes my neighbor. Not only do I want my buyer to bring an engineer, I want him or her to bring an engineer before they sign the formal contract.”

Some buyers feel they do not have a need for an inspection. You are spending $300,000 and up on a home. Why balk at the $275 to $350 that a professional home inspector charges for an average home? An inspection usually takes no more than three hours. It covers all the systems in the house – heating, cooling, plumbing, electrical. It includes the structure of the house – foundation, walls, ceilings, floors. And of course, an inspector checks the roof and its gutters and downspouts.

If it is a condo or co-op you are buying, a standard inspection does not cover the common elements of the building or development, But it will check the windows, doors, the appliances, the plumbing, the electrical system in the unit.

ADDITIONAL STRATEGIES WHEN SELLING SAN DIEGO HOMES

Next, put a classified ad in your local paper. Describe your home properly; for example: “Turn-of-the-century colonial; totally renovated, three bedrooms, two baths; huge yard, swimming pool . . .” Include the price, and your phone number. For safety reasons, do not give your exact street address. Your phone may start ringing off the hook. Surprised? Not when you hear who is on the line. Nearly half the calls undoubtedly will be from real estate agents. That is how they get listings. Make it clear that you do not want to sign an exclusive-right-to-sell agreement, but that if they want to look at your place it is fine. Owners of San Diego homes occasionally have trouble selling their property, despite ads placed in the local paper. Typically, it can be a matter of devising a better marketing campaign. Instead of the ad headline “Home for Sale,” I suggest: “Owner must move! The first week you place a good ad, this is what could happen: Ace Realty calls. “I have a buyer who is in town for only four days,” the broker tells you. “This person is perfect for your house. I can get you your price, or pretty close, plus my commission.” If you say “all right” without any paperwork, if you tell the agent to bring the client to see your house, you will be required to pay that commission, under the open-listing laws. Although you have not signed a listing agreement, once you allow agents to show your house you are liable for the commission. To protect yourself, have your attorney prepare a memo for brokers to sign before they step over your threshold with a client in tow. The memo should say that you are giving permission to the named broker to show the house for this day only. You understand that the broker will deliver the price you name in the memo. This piece of paper limits the “open listing” to the day specified when showing San Diego homes for sale.

BILLBOARD YOUR SALE
Now that you have gotten your feet wet by placing your first ad, is your professionally painted sign ready? Both sides of the sign should list your phone number and additional descriptions, such as “swimming pool, 3 bedrooms, 2 baths, owner financing.” The sign should say “By Appointment Only,” except on those days you are holding an open house. Post the sign close to the curb in your front yard. Why all this detail about a sign? People driving by and stopping because of a sign are the best prospects you could possibly want. They have already searched the neighborhood and they are genuine buyers. Like a good scout, though, be prepared. Your doorbell could ring at almost any time. If you have not made an appointment, you are putting yourself and your family’s safety at risk by leading an unannounced stranger through your property. Reject people who want to make impromptu visits.

A SEASON TO BUY, A SEASON TO SELL SAN DIEGO HOMES

What is the best time of year to buy a home? Or the worst time to sell a home? In the southern part of the U.S., the best time to buy is summer. In the north, the best time to buy is winter. In other words, the best time for a deal is out of season, when people are not buying homes.

How do you determine the appreciation factor on a house? You have to look at the marketplace, at housing supply and demand and at the local business climate. If appreciation is 10 to 15 percent a year, and builders come in and overbuild, then the appreciation will drop until the new San Diego homes have been absorbed – purchased by new people moving in. There is a myth in the real estate world that real estate appreciation is driven by inflation. Let us not be misguided by this myth. Inflation is only one of the factors that drives up the market value of homes. The major factor in appreciation is the demand for housing in that specific geographic area.

As a professional, I look at real estate industry figures to get a handle on supply and demand. Among the national figures, I look at those from the U.S. Department of Commerce, which you too can obtain free of charge, as well as those of the National Association of Realtors and the National Association of Homebuilders. Ask local real estate brokers and local chambers of commerce for information. What new industry, new plants or new employment opportunities are available in the area that will supply growth? As for new homes, the local building department can tell you the number of housing permits that have been issued for new San Diego homes.

GO WITH THE DOCTOR TO THE CHECKUP

Why not accompany the professional home inspector who is examining the house? Wear old clothes. Crawl around with the inspector in the crawlspace. You can learn about the condition of the house, as well as how to maintain it in good repair. Do not expect the home inspector to give you a flat “don’t buy it.” That decision still rests with you. The defects that turn up may give you a leg up in negotiating a better price.

WHAT IF THE HOUSE HAS A VIRUS?
Let us say you buy a house with a clause in the purchase agreement that says “subject to inspection by a professional home inspector.” The inspector reports back that the house has a foundation problem. Evidence indicates the home is sinking, perhaps because it is on unstable ground. The inspector does not even know if the house can be stabilized by such methods as shooting a special plastic/cement liquid piling underneath. (The material then hardens to form a solid base.) Whose responsibility is it to stop the sinking? In this case, with such a major defect, probably the seller’s. For lesser defects – air-conditioning problems, a few thousand dollars’ worth of rooting – many times the seller and buyer work out a compromise.

Of course, if you had not had the house inspected as part of the sale, you as the buyer would wind up paying 100 percent for roof repairs after the first rainstorm at your new address. Although an inspection is critical in evaluating a resale house, many people do not think it is needed on a brand-new San Diego homes. You never can tell. New modular homes built by quality firms receive high ratings from professional inspectors. But critics of more common custom-built new housing contend that new houses cannot hold a candle to older ones in terms of solid craftsmanship.

SAN DIEGO HOME INSPECTIONS

“Check it before you buy it.” That is a phrase no home buyer should forget. Why? You buy a new house. You move in. The furnace breaks down. The refrigerator does not work. The door falls off. The air-conditioning makes the place feel like Death Valley in July. The roof leaks. Sound familiar? Well, it happens. To avoid these all-too-common discoveries, you need to hire a professional home inspector to look at your prospective home and give you an analysis.

A San Diego home inspection is more valuable than an appraisal if you are buying a house. It is the most under used, and most needed part of the preliminary steps to be taken before a purchase. Over the past two decades the pre-purchase inspection of a home has become a fact of life for San Diego home buyers. It is a logical extension of the consumer protection movement into the housing market. It is not to be confused with an appraisal. An appraisal tells you how much the house is worth in dollars. An inspection tells you if it is sound.

The professional home inspection has gained near-unanimous acceptance as the best means for protecting the interests of all parties involved in a sale. Many smart lawyers and mortgage officers now require it as an integral part of the purchase procedure. The courts have ruled that brokers have to disclose not only what they know, but also what they should know, about the condition of a house when they sell it. Still, only an estimated 25 to 30 percent of home buyers actually get professional inspections before they make a deal. My feeling is that you do not buy a home unless you put in the contract that it is subject to your approval of a professional inspection. The same goes for a condo or co-op.

MATERIALS AND EFFICIENCY OF MODULAR SAN DIEGO HOMES

Modular can be found made of wood, metal, even brick or stucco. Just as you would customize traditional San Diego homes, you can choose sliding glass doors rather than standard windows, as well as built-in book-shelves, extra closets and so on. Depending on the modular home company you deal with, you can order such amenities as wood siding, vinyl siding, pitched roofs, shingled roofs, Roman tubs, Jacuzzis, fireplaces, sun rooms and laundry rooms for modular homes for less money than the same feature would cost in custom San Diego homes. You can also add rooms after you move in.

Zoning was once of greater concern to the modular home owner than it is now. Laws have changed in the past five years. Local governments are beginning to understand that in the next decade more homes will be built in factories than will be custom-built on lots across the nation. Therefore, in most states, local zoning codes allow modular housing in single-family stick-built home neighborhoods. The same codes for wiring, construction and plumbing apply to homes built in a factory. The major modular home companies guarantee buyers that the r homes they deliver conform to state codes. While some areas prohibit mobile homes, they do not ban modular homes except in unusual circumstances.

FORGET DRAFTS OR HOT SPOTS
The energy efficiency of a modular home is generally better than that of regular stick-built San Diego homes, because controls and tolerances are closely monitored in the factory. The spaces between the floor and the wall and between the ceiling and the wall are much smaller in modular homes, preventing air from escaping or seeping in. I repeat, your ears practically pop when you close a door in one of these houses. They are this airtight because they must be strong enough to be lifted by a crane for transport to a site without falling apart. The best modular home builders are proud of the energy savings. One large company offers a package that includes double-wall construction with seven inches of Owens-Corning Fiberglas insulation, a controlled attic ventilation system, a three-foot-wide roof overhang to screen out high summer sun but let in low winter sun, double-paned windows, a foam-core insulated front door with magnetic weather stripping and adjustable threshold, as well as other items. Since these homes meet the performance standards set by Owens-Corning, the builder can actually estimate each home’s annual heating and cooling costs before you buy it. The builder gives you an energy rating, similar to the miles-per-gallon estimate you would get for a car.

ARE YOU PAYING TOO MUCH FOR YOUR SAN DIEGO HOME?

There are ways to determine if the price of a San Diego home is fair. First, there are appraisals. Second, there are inspections. An appraisal is an informed opinion of the market value of the house, the home inspection is an accounting of what is wrong with a house and how much it will cost to get it fixed.

WHAT AN APPRAISAL IS . . . AND IS NOT An appraiser gives you an educated opinion on the value of your house. It takes time. Checking public records, the appraiser looks for sales of comparable San Diego homes, inspects a previously sold house to make the best comparison between it and the current house, conducts a detailed inspection of the house about to be bought, and writes a report.

A lending organization usually orders the appraisal. If you want your own, rather than the bank’s, consult a few appraisers and request in writing an estimate of the time and cost of the job, as you would any other professional service. The cost of a full-fledged appraisal of a three-bedroom, two-bath house in a neighborhood without unusual problems should be somewhere between $375 and $900.

MORE COSTS ON MAJOR FIXER-UPPER SAN DIEGO, CALIFORNIA HOMES

3. Septic tank problems. If the waste matter in your California home does not empty into a sewer line, that means you are working with a septic tank, sometimes known as a cesspool. Septic tank problems are extremely expensive. Minor repairs can run $500 to $1,000; replacement, $5,000 to $15,000. If sewers are coming to your area, be sure to check on how much it will cost to hook up to that system. This does not include the cost of the line in front of your home, which will be assessed to the property. There are health hazards if you do not take care of septic tank problems – sewage backing up into the home, for example. It is difficult to determine if a septic tank is in bad condition. A good soil engineer or civil engineer can do spot-checking (“percolation” tests) on the type of soil that surrounds your septic tank. You can check with neighbors to find out if they have septic tank problems. When an area becomes overbuilt and septic tanks are in use, you can usually expect to replace drain fields – the pipes that lead from the septic tank into the soil for absorption. You can definitely figure on having your septic tank pumped out at least three times a year, at a cost of usually $50 to $200 per visit.

4. Insufficient well. If you are looking at San Diego, California homes with wells, have the water checked to see if it is potable (safe for human consumption). This will also tell you if the well is deep or shallow. The local health department will test a sample of the water free of charge to see if it has any contaminants. You can also talk with a local well driller to learn at what level the water in your well is. Ask neighbors if they have any trouble with drinking water. Finally, smell and drink some water from the tap.

QUESTIONS ON THE ESCROW CLOSING OF SAN DIEGO, CALIFORNIA HOMES

• Have you used the RESPA settlement form to calculate how much the closing will cost you?
• In advance of the closing, have you contacted the seller, the bank, real estate brokers and your attorney to make sure everyone has the same closing date?
• Have you received your good-faith estimate of closing costs, due 3 business days after the written loan application, according to federal law?
• Have you notified the seller’s security agency (or, in the case of a co-op or condo, the name of the security person at the building) that you are the new owner as of the closing date, so you can gain entrance to the property and change the code on a house security system?
• Have you notified the utility companies (electric, water, gas, telephone) of the change of ownership?
• Have you instructed the post office to forward mail, and have you filled out a change-of-address form?
• Did you receive the federally mandated (RESPA) copy of the final settlement costs at least 1 day before the closing?
• On closing day, has your attorney or title company checked court records for last-minute liens?
• Has the electric or gas meter been read for final charges?
• Has the water meter been read?
• Have you made your closing-day inspection of the new home?
• Do you have your certified check for closing costs?
• Is there additional money in your checking account for last-minute expenses?
• Do you have a copy of the loan commitment letter in the folder you bring to the closing table?
• Do you have a copy of your contract to purchase?
• Have you received a copy of your new home insurance policy or a statement of ownership change from the seller’s insurance agency?
• Has the seller or a real estate person been reminded to bring the keys to your new residence?

PLAN FOR HEAVY TRAFFIC AND PLENTY OF PAPERWORK WHEN SELLING SAN DIEGO HOMES

Schedule individual appointments twenty minutes apart throughout the day. You gain a tremendous psychological advantage when the doorbell rings with the next “customer” on the threshold. I have seen San Diego homes sold at this point; a buyer, upon hearing the bell, turns to the owner and says, “Don’t show it; we will buy it.”

It is time for more homework because you will soon be negotiating a deal with someone. Consult a banker or mortgage broker about financing. What kinds of mortgages are they offering? How many points are they charging? What down payment is required? How quickly can one be arranged? Many banks have the material prepared in a brochure. You can grease the sale wheels by showing financing information to prospective buyers after a tour. Doing so makes you seem almost as professional as a real estate agent. A few days have passed following your open house and two days of private showings. One potential buyer calls to make an offer over the phone. No matter what the offer is, you should give the following answer: “Thank you. Why don’t you come to the house for a cup of coffee so we can talk further?” Telephone negotiating does not work. When you are sitting around the kitchen table sipping coffee, what you want the buyer to disclose is not what he or she is offering you, but what the buyer really will pay. It is thus inappropriate to say, “I’m insulted by your low offer.” As a smart seller, handle the first offer by explaining how you arrived at your price, display your appraisal, and pull out the market listings for your area that you have collected from local real estate agencies. Always have your bottom-line price in the back of your mind, but do not announce that price immediately. A little bargaining at a time goes a long way.

Your trump card is the fact that you are selling without a broker, so instead of paying a commission you are passing thousands of dollars in savings along to the lucky buyer. A clever buyer will ask you immediately to take 6 percent (the standard commission) off your asking price. Anticipate this from the start. Show the house at 6 percent above what you wish to sell it for. Then you can gradually bring down your asking price, if necessary. In fact, in the course of negotiations, you may lower your price only 1 or 2 percent from the price of similar San Diego homes sold.

INSPECTING SAN DIEGO REAL ESTATE – QUESTIONS TO ASK YOURSELF

• Have I inspected the house I am thinking of buying in the company of a professional inspector?
• What is the condition of the exterior structure-roof, siding, foundation?
• What is the condition of the appliances being sold with the house?
• Are warranties still in effect on appliances such as washer/dryer, garbage compactor, refrigerator, water heater?
• What will it cost to repair elements of the house that are in unsatisfactory condition?
• Is the wiring capacity adequate-at least 100 amps, plus spares and circuits for future electric appliances?
• Is the septic tank at least 900 gallons in capacity, with adequate drain fields, or leaching fields?
• Has a percolation test been done to show the septic system is working in the ground?
• Is the plumbing supply line from the street at least three-fourths of an inch in diameter to avoid backup?
• Have I looked closely at the bathroom fixtures and accessories? Am I going to have to replace them?
• Does the kitchen have a good, solid countertop? Will it have to be replaced? Are there ample lighting and good ventilation?
• Does the insulation conform to the minimum R factor (insulation value standard)?
• Is the heating system guaranteed to maintain the house at 70 degrees even when the temperature is zero outside? In other words, is the heating system large enough for the house?
• Do the heating and air-conditioning work quickly and quietly? (Turn them on.)
• Are large window areas shaded and insulated to keep down air-conditioning bills in summer?
• If the house does not have central air-conditioning, are heating ducts already installed through the furnace blower system to allow installation of a central air-conditioning system?
• Is the door hardware made of solid brass, solid bronze, solid aluminum with deadbolt lock mechanisms on the exterior doors?
• Is the roofing material of high quality and of adequate weight, with sealed-down roof shingles?

TIMING – BUYING SAN DIEGO REAL ESTATE NOW OR LATER?

When is the right time to invest in San Diego real estate? The easy answer is, when you have the money to make the monthly mortgage payments. For a majority of buyers, the tax and investment advantages of home ownership are the keys to a family’s decision about when to buy a home, according to a survey by the National Association of Realtors.

Once you reach the decision that the time is right in your life for home ownership, you cannot just jump into the pool. You need to wait until the weather is right. Smart consumers buy property while the economic sky is still clouded but sunshine is in the forecast. In market terms, they buy in a bear San Diego real estate market that is about to become a bull market. “Okay, wise guy,” you are saying to yourself. “I’m neither a weather- man nor an economist. How can I figure out that timing?” The same way I do: by analyzing news and key government statistics issued regularly to the public. There is no hocus-pocus involved. Your first tool for analysis is the classified real estate advertising section of a local newspaper. This is a tremendous source of intelligence data.

If you know you are going to move to an area in three to five months, order the Sunday paper from the region each week prior to moving. Look at the real estate classified ads, and see how the market shapes up. How many offerings are there? Do the same places show up week after week? For general real estate news, there are the financial pages of your local paper, plus “The Ground Floor” section of Barron ‘s and the real estate columns in each Wednesday’s Wall Street Journal. Economic indicators are your most important forecasting tools. Indicators such as the money supply in the U.S., the movement of foreign capital into the U.S. and the actions of the Federal Reserve Board are covered daily in the business pages of your local paper as well as in The WallStreet Journal, Barron’s and other business publications. The trick is to know which indicators predict real estate trends, versus those that simply announce what already has taken place. You do not need a master’s degree in economics to anticipate trends. All you need in order to time a home purchase is a good “thermometer.”

APPRAISAL PRICES OF SAN DIEGO, CA REAL ESTATE VERSUS MLS PRICES

Over 90 percent of the professionals in real estate, believe it or not, accept the first appraisal presented, or the appraisal presented by the bank. Unfortunately, banks tend to use in-house appraisers. In most cases these people may be cheaper but they seldom are certified by a national appraisal organization.

If you really are serious about getting the most for your home, compare the appraisal price with a price that has been called up by a computer tied in with the local Multiple Listing Service. Up-to-date San Diego, CA real estate offices now have computerized sales analyses of comparable houses on the MLS. When a sale is made, that information is retrievable. A report that once took five or six days now can be done in minutes. There are times when a professional appraisal comes in low, or “short,” as the industry refers to it. Your first reaction is disbelief. The worst time for it to happen is after you have made a deal and your buyer has applied for a mortgage. Then the bank appraisal turns up, with a dollar figure that is lower than the amount in the contract. Stop wringing your hands. Errors can be rectified. In my experience, under-priced appraisals happen in just 2 or 3 percent of cases. Most appraisals come in within 2 or 3 percent of each other if the appraiser is doing his job.

HERE ARE THREE STEPS TO BATTLE A SHORT APPRAISAL ON YOUR SAN DIEGO, CA REAL ESTATE

1. Ask to inspect the appraisal if you think it is incorrect. Certain lending institutions refuse to give a seller the actual appraiser’s report on grounds of confidentiality. Case law holds that a bank cannot withhold documents for which you have paid, so call your lawyer if you run up against a brick wall.
2. Go to another appraiser for a second opinion. Of course, you might also check a real estate agency computer as well, since sales in recent weeks could change the appraiser’s facts and figures.
3. Challenge the low appraisal. If you lose a deal based on an incorrect appraisal, you might be in a strong legal position. There have been court cases stating that an appraiser can be sued for the difference in the money that the client lost because the appraisal was incorrect. The courts have held that the client is relying on a professional opinion. If the appraiser blew it, he or she will have to make up the difference.

Keep in mind that an appraisal is always an opinion. Different appraisers may offer widely disparate views.

HOW QUICKLY MUST YOU SELL YOUR SAN DIEGO REAL ESTATE?

I’m not in any of the situations you have described,” you reply. “I am not a retiree. And I am not cut out to be a landlord. After my transfer I will be three thousand miles away. I don’t want to get calls at seven A.M. from my tenant about trouble with the septic tank. I don’t have the mentality for maintaining this investment, no matter how sound it may be.” That is fine. Once you have considered all the reasons not to sell your San Diego real estate, and your conclusion is that you truly must sell it, the next move is to figure out when. The time frame puts you in a position to get the most for your CA home or to sell it quickly and take a lower price. Meanwhile, take a moment to calculate the amount of time you have to ready yourself and your family and to prepare your home to be listed. In a good market, with a well-chosen broker, a listed house should be sold within 30 days. In an average market, 60 to 90 days is good. Get an estimate from your real restate broker of the time frame in which you are dealing. An honest broker will tell you how homes have been selling in your area. That way, you will not get upset if your house is still on the market after a week.

County Assessor of San Diego, Ca real estate

The COUNTY ASSESSOR is the county officer who has the responsibility of determining the assessed valuation of land, improvements and personal property used in business. The county assessor determines the value of both county and city properties.

In general all real estate, except that which is owned by the government, and all tangible personal property, except inventory used in a business, is subject to property tax assessment. Intangible personal property, such as shares of stock, promissory notes, as well as household furnishings and personal effects of individuals, are not assessed or taxed.

County Assessor assesses; County Tax Collector collects; County Board of Supervisors sets tax rate.

The COUNTY TAX COLLECTOR is the county officer who collects the real property taxes. He or she only collects taxes, the county tax collector has nothing to do with determining how much tax is owed. If the real property taxes are not paid, the county tax collector will eventually require that the San Diego, Ca real estate be sold at a tax sale.

OLDER SAN DIEGO HOMES DOES NOT MEAN BETTER

There is a belief by some that they do not build houses the way they used to. That is true. They build the houses today better than they used to, because of new building technology that is available. Most of the items custom-built years ago in San Diego homes that create the biggest problems – such as windows, doors, cabinets – are now built in factories under close supervision on an assembly line. What’s more, you cannot beat central air-conditioning and some of the energy-saving items that are built into newer homes. Over a five-year period, you can save thousands of dollars in fuel alone with an energy-efficient new California home, compared to an old house, not to mention maintenance in replacement of furnaces and air-conditioning units that usually need to be replaced in older San Diego homes. In many cases, a newer house built under recent energy codes will be a better investment if you plan to spend any longer than three years in it.

You cannot judge a book or a fixer-upper by its cover. A brick house is not necessarily better than an old wooden house. The outside material becomes a key factor only if, for example, bricks on a brick house are solid. If the bricks are falling apart, the renovation ends up costing more than fixing up a wood house.

One final factor to take into account: time. Are you in a hurry to move? If so, stay away from the fixer-upper. Contractors are optimists. They will tell you it takes six months to renovate one, starting from the time you make your first visit until the day you are able to move in. I will tell you it inevitably takes from a year to a year and a half.

BRING IN YOUR PRO TEAM

Once you have made your own tour of a fixer-upper, do not stop there. It’s time to bring in the pros. On your return trip, have a professional inspector go through the building. Check the yellow pages under “Home Inspection Services” or “Building Inspection Services.” Some companies have offices nation- wide, such as Universal Home Inspections and Housemasters of America. If you have trouble finding a qualified engineer or home inspector, call your nearest FHA or VA office and ask the chief architect there to recommend one. Ask whom that office uses for termite inspections and septic tank checks (mandatory for government-insured homes). You also might want to check with a local builder or architect or search out a real estate appraiser. These people usually have names of home inspectors. Some of the appraisers are themselves qualified as inspectors too. Be sure to specify that you want a full structural check, not just a surface check. You may have to hire separate people to check separate items. It is worth it. You can expect to pay $300 to $450 for each full structural inspection.

GETTING THE GO-AHEAD FROM THE LOCAL BUILDING DEPARTMENT
When you are looking at a home that is fairly dilapidated, one of the first things you want to do is have your professional inspector go to the local building department. This office can tell you what will be needed to bring the house up to code. You may not be able to live in the house until work is done to bring items like plumbing and electricity up to local standards. So you may not have a choice. You may be forced to make certain repairs simply because you will not get the certificate of occupancy which allows you to live in the San Diego, CA home. What if you do not check beforehand? How will the local board know you are working on the house? Once you bring in contractors to do work, they must obtain permits from the local board. At that point the building inspector comes to visit.

OLDER SAN DIEGO HOMES DOES NOT MEAN BETTER

There is a belief by some that they do not build houses the way they used to. That is true. They build the houses today better than they used to, because of new building technology that is available. Most of the items custom-built years ago in San Diego homes that create the biggest problems – such as windows, doors, cabinets – are now built in factories under close supervision on an assembly line. What’s more, you cannot beat central air-conditioning and some of the energy-saving items that are built into newer homes. Over a five-year period, you can save thousands of dollars in fuel alone with an energy-efficient new California home, compared to an old house, not to mention maintenance in replacement of furnaces and air-conditioning units that usually need to be replaced in older San Diego homes. In many cases, a newer house built under recent energy codes will be a better investment if you plan to spend any longer than three years in it.

You cannot judge a book or a fixer-upper by its cover. A brick house is not necessarily better than an old wooden house. The outside material becomes a key factor only if, for example, bricks on a brick house are solid. If the bricks are falling apart, the renovation ends up costing more than fixing up a wood house.

One final factor to take into account: time. Are you in a hurry to move? If so, stay away from the fixer-upper. Contractors are optimists. They will tell you it takes six months to renovate one, starting from the time you make your first visit until the day you are able to move in. I will tell you it inevitably takes from a year to a year and a half.

BRING IN YOUR PRO TEAM

Once you have made your own tour of a fixer-upper, do not stop there. It’s time to bring in the pros. On your return trip, have a professional inspector go through the building. Check the yellow pages under “Home Inspection Services” or “Building Inspection Services.” Some companies have offices nation- wide, such as Universal Home Inspections and Housemasters of America. If you have trouble finding a qualified engineer or home inspector, call your nearest FHA or VA office and ask the chief architect there to recommend one. Ask whom that office uses for termite inspections and septic tank checks (mandatory for government-insured homes). You also might want to check with a local builder or architect or search out a real estate appraiser. These people usually have names of home inspectors. Some of the appraisers are themselves qualified as inspectors too. Be sure to specify that you want a full structural check, not just a surface check. You may have to hire separate people to check separate items. It is worth it. You can expect to pay $300 to $450 for each full structural inspection.

GETTING THE GO-AHEAD FROM THE LOCAL BUILDING DEPARTMENT
When you are looking at a home that is fairly dilapidated, one of the first things you want to do is have your professional inspector go to the local building department. This office can tell you what will be needed to bring the house up to code. You may not be able to live in the house until work is done to bring items like plumbing and electricity up to local standards. So you may not have a choice. You may be forced to make certain repairs simply because you will not get the certificate of occupancy which allows you to live in the San Diego, CA home. What if you do not check beforehand? How will the local board know you are working on the house? Once you bring in contractors to do work, they must obtain permits from the local board. At that point the building inspector comes to visit.

QUESTIONS ON BUYING FIXER-UPPER SAN DIEGO, CA HOMES

Have you received at least three estimates on the cost of renovating or repairing the following.

• The house’s roof?
• The heating/cooling system?
• The wiring and electrical system?
• The plumbing?
• The waste removal system?
• Any sag?
• The drainage system?
• The water heater?
• The landscaping and other repairs?
• Have you estimated the cost of remodeling and other cosmetic changes in baths, kitchen, additional fixtures, painting, window replacement, floor covering?
• Have you added renovation, repair and remodeling costs to the purchase price of any San Diego, CA homes of interest?
• Have you multiplied this total cost by 1/3 for sweat equity or profit to calculate the market value of the house after renovation?
• How does this market value compare with other in perfect condition in the same neighborhood?
• If your market value will be greater than that of comparable San Diego, CA homes, are you willing to pay a premium for your fixer-upper?

QUESTIONS ON BUYING A CUSTOM-BUILT HOME

Have you determined how much extra money the special features you want will cost?

• How long has the builder been established in business?
• Has the builder always operated under the present company name?
• Do previous customers say the builder does come back to finished homes to fix things that go wrong?
• What does the local bank say about the builder?
• What kind of credit rating does the builder have with a local credit bureau?
• Is the builder willing to show you houses already built?
• Will the builder supply you with the names of at least six buyers of this builder’s homes?
• Do local building-material suppliers and subcontractors give the builder a good rating?
• Does the builder belong to the local chapter of the National Association of Homebuilders?
• What does the Association say about this builder?
• Is the builder a member of the Home Owners Warranty program?
• What do the Better Business Bureau, chamber of commerce and especially the local consumer-protection agency say about the builder?

TRACKING DOWN A RELIABLE APPRAISER FOR YOUR SAN DIEGO REAL ESTATE

Some appraisals are worthless, while others are useful. The honest, licensed appraiser with credentials whom you need is likely to be one with the initials MAI or ASA after his or her name. MAI indicates a member of the Appraisal Institute (the American Institute of Real Estate Appraisers) and ASA a member of the American Society of Appraisers.

A good appraiser charges from $350 to $700 for a full-fledged market-value appraisal of San Diego real estate. Problems crop up because the bank, not the buyer or seller, usually orders the appraisal. However, you can beat the bank to the punch. There is a certain respect a real estate pro will have for a seller who has an appraisal in his or her possession before listing the house. This puts the pro on notice that this is not amateur night. When you clearly are an informed seller, a broker will hesitate playing the price game with you. This game comes in two parts. The first part involves the broker’s telling you that your San Diego real estate is worth a heck of a lot more than it is, in order to get the listing, and then bring you offers that are much lower. The second part of the game takes place when your house is listed way below market value and then sold to someone the broker knows, in order to make a quick profit. Please keep in mind that only a tiny fraction of con artists will attempt to pull this stunt. On the contrary, a good broker, realizing that you are price-sensitive, can be an invaluable member of your team.

WHAT IF SELLERS DON’T WANT TO PLAY BANKER FOR THEIR SAN DIEGO HOMES?

For reasons of temperament, personal financial obligations or a time bind – key elements in your Financial Comfort Zone – you may not share my enthusiasm for seller financing of San Diego homes. However, you can still make your home much more attractive to a buyer, and sell it faster, by lining up information on mortgages before you meet your first prospective purchaser.

Do you have a spare hour for a few phone calls or visits to local banks? That is all the time you need to reap a quicker sale. Explain to your banker that you are getting ready to sell your house. Show the banker the recent appraisal that you obtained from an appraiser approved by the bank. Let us assume that you expect your sales price to be $425,000, and that you currently have a $50,000 mortgage. Ask your banker for a letter stating that the bank will lend up to 80 or 90 percent of the stated value of the house, provided you bring in a qualified buyer. With just a little effort, you have overcome the most frequent objection and the time constraint that buyers are likely to face – acquiring the right financing when purchasing San Diego homes. When the right buyer shows up, you can whip out the bank letter and say, “I have already arranged for financing. All you have to do is go to this bank, and if you have a decent income and credit record, you will have your loan in a flash.” One seller wanted to line up a mortgage in advance, so he could advertise that his home was on sale with good financing. A mortgage broker told him that a good broker could match various mortgage products to the appraised value of the house. This would give the buyer a selection of financial choices instead of just one. Then prospective buyers could be told what kind of financing was open to them. Although interest rates most likely would vary, according to when a mortgage commitment was made, the seller in some cases could lock into a 30 to 60 day rate. That becomes a powerful sales tool.

HOW TO SET THE RIGHT PRICE FOR SAN DIEGO HOMES FOR SALE

A big question at cocktail parties is, “How much do you think your home is worth?” That is not the question that matters. The real issue is, “How shall I price this house so it sells?” People tend to overprice their San Diego homes for sale. They call several realtors and get the asking prices for homes in their neighborhood. The asking price is always higher than the actual selling price, except in a very hot market.

Check with local realtors, certainly, but also get a professional appraisal. In addition, look up courthouse records to see how much homes in your neighborhood have brought in the past six months. If you have a friend who has sold a house like yours recently in your neighborhood, ask the friend about the price negotiations. Explain that you are selling your house. You will find that people like to talk about San Diego real estate and will share that information. On the flip side, nothing is worse than feeling you have sold your house too cheaply. Once you advertise a house for a specific asking price, the worst thing that can happen is that the house does not sell. Perhaps the market is in flux, or your price is simply too high. You always can negotiate the price downward, but if you mistakenly start out with too low a price, it is extremely difficult to raise it.

Suppose you say, “Joan down the street got $450,000 for her house, so I think mine is worth the same.” You are likely to get a skeptical, “wrinkled-forehead” look. However, if you pull out an appraisal from a reputable appraiser who belongs to a nationally recognized organization, it could be the exclamation point that ends the discussion.