San Diego Condos, Homes and Real Estate News

WHY DON'T SOME CONDOS SELL?

Many of San Diego's sellers often ask me why their homes don't sell. With over 27 years of experience and more than 5,000 closed sales in my career I have noted the following reasons homes don't sell.

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LOCATION

Unfortunately, one of the main reasons Downtown San Diego homes don't sell is often their location. Especially in a buyer's market a poorly located home will not sell. If it is too close to the freeway, impacted by railroad tracks or even located on a busy street it becomes more difficult to attract a buyer. The only thing that can be done to overcome a poor Downtown San Diego location is to attempt to compensate for the location by pricing it aggressively.

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FLOOR PLAN

Somehow in San Diego's Downtown Condominiums the developers seem to always have some challengingly designed floor plans in every building. These floor plans probably sold sight unseen when the San Diego real estate boom was in full swing, but now that the cycle has cooled these plans become more difficult to sell. The fault may be one of many reasons why floorplans are undesirable;

• poor view
• small secondary bedrooms
• too few assigned parking spaces

Again the only solution is to price the San Diego Condo low enough to overcome the design flaws.

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THE ASKING PRICE IS TOO HIGH

There is an old axiom in real estate about "location, location, location". Frankly as we discussed in the first section location is important, but the location and all other issues can be overcome by the real real estate axiom "price, price, price". There are many negative things that can occur from over-pricing.

• A property sits on the market too long gives buyers the impression that something is wrong with the property. 
• You lose buyers that should be looking at your home, but pass since they or their Realtor® don't find it because it is not located in the price range they are targeting.
• The longer a property languishes on the market the more apt the San Diego seller is to receive a "low-ball" offer, if any offer at all.  Also the more likely the seller is to sell it at a price lower than it is worth. Many sellers want to be able to "come down" when they get an offer, but you have to generate the offer before you can even come down.

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SAN DIEGO CONDO CONDITION

The majority of San Diego buyers want to purchase a condominium and not have to do any work at all. They want to turn the key and move in their belongings. Having a property listed that is in need of fixing greatly limits the number of buyers that are willing to purchase or look at the listing. Probably ten (10%) percent of buyers are looking for "fixer uppers" and those buyers anticipate buying your home at such a discount that they can fix it up and still make money themselves. Builders make model homes, car dealers wash and wax every car on the lot and so intelligent sellers also need to create a good first impression by staging the home, removing clutter and excess furniture, replacing soiled carpet and painting dingy walls.

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SELLING "AS-IS"

Most buyers regard "AS-IS" homes as too challenging to deal with. The seller may only mean that it needs carpet and paint and that the seller does not want to undertake those repairs, but to a buyer it screams out "cracked slab, damaged goods". These properties may often be a good deal for the right buyer, but advertising "AS-IS" is generally not a smart choice.

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THE LISTING AGENT SELECTED

Many Downtown San Diego real estate agents in the industry are known to other agents as "difficult agents". This often means that they do not return calls or they are slow to respond to offers or they keep a larger share of the commission and offer to the cooperating broker less than the customary three (3%) percent.

The best listing agents use numerous and aggressive marketing techniques. This is especially critical in a "down market". Websites such as www.realtor.com; www.zillow.com; and www.trulia.com are frequently visited by home buyers long before they ever contact an agent for assistance. Mailing to surrounding properties is often a great technique since many people have friends looking to move into the same condominium or neighborhood. Make sure your agent's company is connected to a relocation company with out-of-town buyers. Lastly do not  ever overlook that old standby the open house.

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THE REAL ESTATE MARKET

Knowing the market you are in is critical to the success of selling your home.

• If you are in a seller's market, like San Diego experienced from 1998 until late 2005 you can be more aggressive since there is low inventory and more buyers which, in turn drives up prices.
• A buyer's market, such as we are experiencing in the San Diego Downtown Condominium marketplace, is just the opposite with more homes than buyers and lots of downward pressure on prices.
• Lastly a stable market, the most rare of all markets, is where there are an equal number of buyers and sellers and prices are generally stable.

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When interviewing for an agent find out what the average market time is for homes that are selling and when you reach that point revisit with your agent what they are doing to overcome any of the challenges and if they turn out to be the challenge make a change. 

Saving for the Down Payment For Your San Diego Homes

Saving funds for a down payment on your San Diego homes should be part of an overall program to get your finances in order prior to shopping for San Diego homes. This includes rounding up financial records, examining your spending habits, and setting a budget you can live with. Remember, too, that the down payment is not the only up-front expense. An allowance for closing costs should also be included in your savings budget.

How much is required?
The down payment is usually expressed as a percentage of the overall purchase price of the home, and varies depending on the lender, the type of financing and amount of money being lent. In the past, the typical down payment was 20%, but in recent years lenders have been willing to offer conventional financing with as little as 3% down. U.S. Government financing programs, such as those offered by the Dept. of Veterans Affairs (VA) or the Federal Housing Administration (FHA), also require minimal down payments.

Private mortgage insurance
Typically, if your down payment is less than 20% of the purchase price, lenders will require you to carry PMI, or private mortgage insurance. This insurance protects the lender in case of loan default, and usually involves an up-front payment at closing, as well as a monthly premium. However, once you have paid off 20% of the loan, you can request the policy be canceled. Some lenders cancel the premium automatically, while others require you to make a request in writing.

Gifts
If you are having trouble saving enough money, many lenders will allow you to use gift funds for the down payment-as well as for related closing costs. The gift may come from family, friends or other sources, but remember that lenders usually require a "gift letter" stating the gift doesn't have to be repaid. In addition, some lenders will also require you to pay at least a portion of the down payment with your own cash. Thus, if you plan to use gift money to purchase your house, ask your lender about their policies regarding gifts.

Earnest money
Buyers are usually required to deposit earnest money with the seller when they make an offer. If the offer is accepted, the earnest money is then credited towards the down payment. The amount varies widely depending on the seller and local custom, but be prepared from the outset to have funds earmarked for this purpose.

Don't forget closing costs
In addition to the down payment, you will also need to save for additional fees associated with the loan. Known as closing costs, these charges cover items such as title insurance, documentary stamps, loan origination fees, the survey, attorney's fees, etc. When you submit your loan application, lenders are required to supply you with a good faith estimate of your closing costs.

Some buyers are surprised by the amount of the closing costs, which can easily run into the thousands of dollars. Remember, though, that closing costs can be negotiated with the seller. For example, you may agree to pay the full asking price in exchange for the seller paying all the allowable closing costs.

-Year, 30-Year, or a Biweekly Mortgage For Your San Diego Homes?

In the past, the 30-year, fixed-rate mortgage was the standard choice for most buyers      of San Diego homes. Today, however, lenders offer a wide array of loan types in varying lengths-including 15, 20, 30 and even 40-year mortgages.

Deciding what length is best for you should be based on several factors including: your purchasing power, your anticipated future income and how disciplined you want to be about paying off the San Diego homes mortgage.

• What are the benefits of a shorter loan term?

Some homeowners choose fixed-rate loans that are less than 30 years in order to save money by paying less interest over the life of the loan. For example, a $100,000 loan at 8 percent interest comes with a monthly payment of around $734 (excluding taxes and homeowner's insurance). Over 30 years, this adds up to $264,240. In other words, over the life of the loan you would pay a whopping $164,240 just in interest.

With a 15-year loan, however, the monthly payments on the same loan would be approximately $956-for a total of $172,080. The monthly payments are more than $200 more than they would be for a 30-year mortgage, but over the life of the loan you would save more than $92,000.

• What are the advantages to a 30-year loan?

Despite the interest savings of a 15-year loan, they're not for everyone. For one thing, the higher monthly payment might not allow some homeowners to qualify for a house they could otherwise afford with the lower payments of a 30-year mortgage. The lower monthly payment can also provide a greater sense of security in the event your future earning power might decrease.

Furthermore, with a little bit of financial discipline, there are a variety of methods that can help you pay off a 30-year loan faster with only a moderately higher monthly payment. One such choice is the biweekly mortgage payment plan, which is now offered by many lenders for both new and existing loans.

• Biweekly mortgages

As the name implies, biweekly mortgage payments are made every two weeks instead of once a month-which over a year works out to the equivalent of making one extra monthly payment (compared to a traditional payment plan). One extra payment a year may not sound like much, but it can really add up over time. In fact, switching from a traditional payment plan to a biweekly mortgage can actually shorten the term of a 30-year loan by several years and save you thousands in interest.

If you're interested in a biweekly payment plan, make sure to check with your lender. In many cases, lenders also offer direct payment services that automatically withdraw funds from your bank account, saving you the trouble of having to write and mail a check every two weeks.

• Making extra payments yourself-do it early!

Another way to pay off your loan more quickly is to simply include extra funds with your monthly payment. Most lenders will allow you to make extra payments towards the principal balance of your loan without penalty. This is especially attractive to homebuyers who are concerned about their future earning power, but still want to be aggressive about paying off their loan.

For example, if you had a 30-year loan, you might decide to send the equivalent of one or two extra payments a year (which could shorten the overall length of the loan by many years). But if your financial situation suddenly took a turn for the worse, you could always fall back on the regular monthly payment.

One important note, though, is that if you do decide to send extra funds, make sure to do it EARLY in the life of the loan. This is because most home loans are calculated in such a way that the first few years of payments are almost entirely interest, while the last few years are mostly applied towards the principal balance. Thus, you can get the most bang for your buck by making the extra payments early in the life of the loan.

Here are some tips to finding a qualified home inspector to inspect your downtown San Diego condos. Like with most professions, you will find qualified and unqualified individuals calling themselves  a professional, and offering to perform all types of services at your downtown San Diego condos. Home inspectors are no different. In some ways, it's even more difficult to differentiate the good home inspectors from the bad home inspectors, primarily because few states regulate or license home inspectors. Before you have your downtown San Diego condos inspected, read these helpful tips.

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Downtown San Diego Condos Are a Safe Investment

Downtown San Diego condos seem to be nestled in one of few safe zones when it comes to foreclosure. Owners of downtown San Diego condos are thankful for this, but remain concerned for the economy as a whole. Here's the scoop on what the Feds are trying to do to salvage the mortgage crisis.The most recent data indicates that, yes, foreclosures rose again in the 4th quarter of 2007. A number of government agencies are trying to help reverse this trend. There are several policies proposed and some already being implemented to address rising foreclosures. But nearly all are attempting to alleviate the problem from the "bottom up," rather than from the "top down." The bottom-up approaches involve a work-out plan of current problematic loans. Let's look at several of them.

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It's Tax Season for You and Your Downtown San Diego Condos

Many people don't even think about their taxes until March, or how your Downtown San Diego Condos will impact your return. But there are good reasons not to wait until the deadline looms in the near future. As the end of the year approaches, there might be some things you can do to reduce the burden you will have when you file your taxes. Here are a few ideas that will help you and your Downtown San Diego Condos at tax time:

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Cocktails and power tools don't mix in downtown San Diego condos. But they sure do mingle.

As the housing market heats up, owners of downtown San Diego East Village condos looking to save money on renovations are hosting parties where they invite friends over for an evening of ripping out walls and laying floors, in hopes of bringing a greater profit when they sell their downtown San Diego East Village condos. But when novices who've had a few drinks get a hold of crowbars, drills and Sawzalls, the results are sometimes less than satisfactory. Read this and think twice before hosting a home wrecker party.

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Mortgage Interest Deductions

Downtown San Diego condo ownership is a superb tax shelter and our tax rates favor downtown San Diego condo owners. As long as your mortgage balance is smaller than the price of your downtown San Diego condo, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

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Downtown San Diego condo investors know that before they look for solutions they need to ask the right questions. Successful downtown San Diego condo investors never stop asking questions. Well-formed questions are essential to understanding and solving problems, and improving results. They can also mean survival in a down market cycle. This essay lists the questions downtown San Diego condo investors need to ask in the areas of leasing, property management, and asset management.

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Leaving Your Downtown San Diego Condos Unoccupied Could Be Risky

Whether you are out of town often for business, are a seasonal traveler or simply have a San Diego condo that is not currently lived in, there is always the question of "What If" when leaving your San Diego condo unoccupied. 

As your San Diego condo sits unoccupied, many things that could happen like water leaks and mold.  Here are some ways you can prepare your home while it is unoccupied. 

* Regulate the Temperature with the Thermostat

Keep your home warm enough to keep pipes from freezing, and if in a warm area, cool enough to prevent mold and mildew in your home. 

* Plan For Weather

If you live in a snowy area, empty your water pipes to prevent freezing. If your area is subject to high winds and storms, trim trees and shrubs to prevent damage to your San Diego condo.

* Regular Maintenance

Cleaning gutters, caulk around windows, seal cracks and flush your water heater.  This will also reduce costs while your home is unoccupied.

* Add Security Measures

Have your home look like it's lived in.  This can greatly reduce your chances of vandalism and burglary.  Put outside lights on timers and ask neighbors to keep an eye on your condo.

Use these tips to keep your San Diego condo in optimal condition until your return. 

Protect Your Possessions With A Downtown San Diego Condo Inventory

We have prepared these Frequently Asked Questions to help answer your questions about new downtown San Diego condo insurance and the process of preparing a downtown San Diego condo inventory. A condo inventory is nothing more than a record of your possessions. It helps protect your possessions in the event of theft, accident, or catastrophe. It's the first thing you will need to make an insurance claim. And it speeds up the claims process so that, in the event of a loss, life can return to normal as quickly as possible.

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How To Find A Cleaning Service For Your Downtown San Diego Condos

Keeping our downtown San Diego condos clean and tidy can be a never-ending chore that consumes much of our free time. If your life seems to revolve around mopping floors, vacuuming, dusting and changing bed linens, hiring a cleaning service may be the solution to keeping your downtown San Diego condos in pristine condition.

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Get Matched to Prescreened Contractors

Improving your downtown San Diego condos is a great financial investment, either in the money you put into it or the money you hope to get out of it. I am always saddened when owners of downtown San Diego condos tell me stories about the misfortune and disappointment that they experienced while dealing with an unscrupulous contractor. Unfortunately, these homeowners were either too busy to do thorough research, or allowed a fast talking contractor to fill them with false confidence. When this type of situation occurs, the outcome is often devastating to the owners of downtown San Diego condos. Don't let this happen to you! Below, you will find a link to a contractor matching system that will help you find a prescreened contractor.

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What should I do? Buy, sell or hold?

It's the perennial question for owners of downtown San Diego condos and potential buyers of downtown San Diego condos. This question has no hard-and-fast answer. Nobody really knows what is going to happen in the real estate market. And nobody, other than you, fully understands your unique circumstances. So how do you decide when to make a move when it comes to downtown San Diego condos?

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Are Dirty Carpets Preventing Your Downtown San Diego Condos From Selling?

The industry recommended time to have carpets cleaned is every 12-18 months, yet the average downtown San Diego condo owner has her carpets cleaned every 7 years. "If it vacuums up, then it ain't dirty," as the old saying goes. The reason for the discrepancy between the time recommended and the span before they are actually cleaned results from the public not knowing how often this should be done, not to mention some misconception about costs. This article works towards solving these issues and a few others as well. Overall, these tips will become most valuable when the time comes to sell your downtown San Diego condos.

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