Stephen Redondo - Gold Rush Realty - Happy Client Video

Is it time to talk "Bubble"?

After a read of the opinions and analysis of Leslie Appleton-Young, Chief Economist for California Association of Realtors, you may feel more like buying or selling that home you've put off.  No, she concludes, the triggers of a bubble-burst are not imminent, yet, the typical underlying reasons for a market slide are a possibility.

We Realtors do get asked this question often, though I think many haven't been through a business version of the economy collapse and may not really have opinions; but I certainly do.  I am in agreement with Leslie.  Increased interest rates were one of the straws that broke the camel's back in 2006, and I know that any jump in rates will cool our market.  Even now, agents across the country (based on my own cross-sampling with a large network I interact with) are lamenting the slowed market activity that has been our 2018 market so far.

Of course, Appleton-Young does a beautiful job of presenting historical data running through the past couple of decades of market cycles, and the analysis is readily digestible.  She does--as I and other Realtors do--acknowledge the rising home costs and she notes that, adjusted for cost of housing, Californians' typical home payment cost on a median-priced home is only at 55%; slightly above its usual average percentage of 50%, and substantially lower than the 90% Californians were paying of their household income in 2006.

She comments on the relative FICO scores that are related to loans obtained (a vague reference to the loan oversight that is in place now, versus that in the early 2000's, I inferred).

If you'd like to read the entire report, I have it in PDF format and would love to share it with anybody interested,  Simply email me at Nikki@GoldRushGroup.net.  Or, if you prefer, hit me up by text and let me know where you'd like the report sent.  You can also visit our web site to view and search listings or read about our team.

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A Cautionary Tale About Love, Scorn, And Real Estate

This story isn’t new, but it’s epic. Although its origin and authenticity can’t be verified, its message shouldn’t be ignored. So that you don’t miss it, here are the three main takeaways:

1. Men: Don’t cheat on your wives.
2. Women: Don’t get mad; get even.
3. Everybody: If you’re buying or selling a home, and it mysteriously smells like dead fish, you'll now know the likely source of the stench.

After 37 years of marriage, Jake dumped his wife Edith for his young secretary. His new girlfriend demanded they live in Jake and Edith’s multi-million dollar home. Since Jake had better lawyers, he prevailed. He gave Edith, his now ex-wife, just 3 days to move out. She spent the 1st day packing her belongings into boxes and crates. On the 2nd day, she had two movers come and collect her things. On the 3rd day, she sat down for the last time at their beautiful dining room table by candlelight, put on some soft background music, and feasted on a pound of shrimp, a jar of caviar and a bottle of Chardonnay. When she finished, she went into each and every room and stuffed half-eaten shrimp shells into the hollow of all the curtain rods. She then cleaned up the kitchen and left. When Jake returned with his new girlfriend, all was bliss for the first few days. Then slowly, the house began to smell. They tried everything -- cleaning, mopping, and airing the place out. Vents were checked for dead rodents and carpets were cleaned. Air fresheners were hung everywhere. Exterminators were brought in to set off gas canisters during which they had to move out for a few days and in the end they even replaced the expensive wool carpeting. Nothing worked. People stopped coming over to visit. Repairmen refused to work in the house. The maid quit. Finally, they could not take the stench any longer and decided to move. A month later, even though they had cut their price in half, they couldn’t find a buyer for their stinky house. Word got out and eventually even the local Realtors refused to return their calls. Finally they had to borrow a huge sum of money from the bank to purchase a new place. Edith called Jake and asked how things were going. He told her the saga of the rotting house. She listened politely and said that she missed her old home terribly and would be willing to reduce her divorce settlement in exchange for getting the house back. Knowing his ex-wife had no idea how bad the smell was, he agreed on a price that was about 1/10th of what the house had been worth, but only if she were the sign the papers that very day. She agreed and within the hour, his lawyers delivered the paperwork. A week later, Jake and his girlfriend stood smiling as they watched the moving company pack everything to take to their new home... including the curtain rods.

9 Ways Home Flipping Shows Mislead Viewers

We all know the premise of home-flipping shows: An investor buys a veritable dump and then, with the help of a team of ready-and-willing contractors and landscapers, transforms it into the best-looking home on the block. Next, that intrepid buyer turns around and sells it for a hefty profit. Sounds like a straightforward formula for financial success, right? Well, not quite. What makes for entertaining television doesn't always translate into a win beyond the high definition flat screen. The following are nine ways home-flipping shows mislead viewers. So, if you're considering turning this into your next career or even a side gig, you may want to separate fact from fiction first.

1. Tight turnarounds aren't always realistic

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In order to realize as large a profit as possible, it's important to flip the property as quickly as you can, otherwise paying the mortgage, taxes, and insurance quickly chips away at your bottom line. While sales tend to happen quickly on TV, the reality is that even if you have a willing buyer, getting pre-approved and securing the financing doesn't happen overnight. For anxious sellers, that ticking clock is a constant reminder that every passing day means a little less money in their pockets.

2. Finding a dedicated team isn't easy

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As far too many homeowners know, not all contractors are created equal. For the most part, the artisans who make their way onto home-flipping shows are trustworthy, knowledgeable and willing to work nearly round-the-clock to get the job done. In reality, contractors may be working on multiple projects simultaneously and may disappear for days at a time. And as we all know, time is money.

3. DIY doesn't work for everyone

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Part of the appeal of these home-flipping programs is the ease with which the whole property comes together. But it's more than just the time-lapse photography that makes it seem like anyone with a tool belt can renovate like a pro. While you might be tempted to take a DIY approach to keep expenses low, remember, these people know what they're doing, whereas most homeowners are experts at other things. Sometimes tackling a task yourself will end up costing you more than if you'd hired the right person for the job.

4. When trouble strikes, it's not so easy to resolve

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Even with a careful home inspection, surprises (not the good kind!) pop up when you least expect them. Yet, if a sink hole opens and threatens to swallow a sunporch, home-flipping show teams are ready to fix that issue like it's no big deal. When it happens to non-TV-star homeowners, it's not always easy to find the right subcontractor -- especially when you're under time constraints. And, once you do, can you even afford to deal with whatever unpleasant shocker has come your way? If you have to go back to the bank for more money, that will impact your timeframe and ultimately your profit. (See number 1.) Home-flippers on TV seem to have bottomless bank accounts. Must be nice, right?

5. Materials don't arrive simultaneously

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When home-flippers begin a project, all the requisite materials are on-site and ready to go. If only this were the norm! Anyone who's ever fallen in love with a special order item knows that it's almost impossible to find everything you like in stock and ready for delivery. Some contractors are reluctant to start a renovation until all the supplies are in, which, again, can hurt your timeline and your profit.

6. The back-and-forth is all done behind-the-scenes

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Never mind the fact that homes showcased on these programs never seem to lack for buyers, in many instances there doesn't seem to be any haggling to speak of when it comes to the asking price. Leaving out the art of negotiation does viewers a disservice as it makes it appear that buyers can't wait to pay full price -- or above it.

7. The math is fuzzy

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In order to reap the biggest profit, you need to buy below market value, sell above it, and not put more money into the renovation than you'll get back. As if that equation weren't complicated enough, on television, you don't always hear about the costs of buying or selling, inspection and appraisals fees, and other expenses that go into both sides of the transactions. Leaving out some numbers conveniently inflates the profit.

8. Costs vary by area

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Renovating a bathroom in rural Tennessee is going to cost much less than it would in, say, Manhattan. Not only will the labor be less expensive, but the materials and delivery charges will also skew lower in non-metropolitan areas. Of course, none of that is addressed in the show and most often estimates on TV are far lower than those you'd gather in real life.

9. You can over-renovate

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Once you're in the home improvement groove, you may be tempted to splurge and really go all out, but you have to resist the temptation to overdo it and put in more money than you'll ever get back. In the quest to make your flip as fabulous as possible, you never want to lose sight of the the reason you started this project: to make money. Consider the return on investment for each improvement you make.

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Dont forget to grab your copy of our Bi-Weekly Real Estate Newspaper!

If you haven't yet grabbed your own copy of our wonderful bi-weekly real estate newspaper, Auburn's Real Estate Star, don't wait!  This easy and interesting reading paper is out in local breakfast spots, coffee shops, and several car dealerships and repair shops about every two weeks.

In it, you will find info and advice about real estate questions, loans, and property ownership, as well as a list of recent sales in and around Auburn.  If you would prefer having a copy personally mailed to you by us, just drop us an email at our editor's address, and let us know!

Here is the address to send to:

AnnieInAuburn@gmail.com 

FSBO sellers leave a lot on the table

As you may already know, FSBO is common lingo for home-owners who decide to sell without the  help of a real estate agent. It comes from the abbreviation For Sale By Owner.  Since a lot of our clients have been disillusioned FSBOs, we’ve gathered a little insight as to why any seller would want to go it alone, without the help of a tested professional. 

Primarily they hope to save an agent’s commission, usually about 6% of the closing price.  They may also think that the process will be simpler by handling it themselves.  But what they’re missing out on is a chance to appear in the Multiple Listing Service, some solid advice on pricing, a chance to reach niche markets and out-of-the area buyers, great negotiating skills, and informed recommendations for specialists in every phase of the sale.  This includes licensed repair gurus, and advice or professional help in staging great open houses.  FSBO’s rarely generate as much buyer interest as homes marketed by professional agents. And those that do sell bring in a lot less money at closing time. 


The National Association of Realtors found that FSBO’s net out at an average of $40,100 less than homes marketed by realtors.  Whenever FSBOs show up at our offices, these are the services we enthusiastically put to work for them, but we never mention how wasted time has cost in mortgage payments, maintenance and utilitie, or how rising interest rates may have affected their pool of potential buyers.


by Annie Holmes

Why isn’t everyone going solar?

Everybody’s heard about solar power for homes, everyone knows it’s probably a good thing—but relatively few are enjoying the benefits. Why is that?

To start with, there’s an urban myth floating around that you’ve got to have full sun to collect solar energy. If you live in the shade, the saying goes, you’re not a candidate. In addition, many homeowners think a solar installation is radically expensive. Others regard the sight of those rooftop collector panels as a jarring contrast to the carefully planned architecture of the house they adore.
You could have said the same things about us once—until runaway energy bills drove us to look for alternatives.


The problem arose with our vacation rental. It’s a house on the river, so it’s most in demand during the hot beach and rafting months. And while it’s nice to have a tenant waiting list, the cost of air conditioning threatened to put us in the hole.


For us, solar was the perfect solution. Our monthly $400-to-$600 electric bill dropped by about 60%, and we were able to have the job done with a no-interest loan. In addition, we garnered other benefits, including rebates, government grants, and tax incentives. The federal solar Investment Tax Credit is a 30 percent tax credit for residential and commercial properties that convert to solar energy by the end of 2016.


In researching the options for going solar—and there are many—our biggest decision was whether to buy or lease. The enticement to lease is that this choice requires less out-of pocket expense. It usually comes with the same zero- or low-interest loan, and the rental company handles all necessary maintenance and repairs. But because they’re still the owners, they’re the ones who get all the financial incentives except for lower utility bills.


And leasing does present one more negative. Solar converts who opt for renting versus buying usually base their decision on attractive, no-money-down loan terms. They’re going to save so much money on utility bills, they figure, that paying off the loan later will be no problem.
But a loan is still a loan, and real estate analysts have begun to issue warnings about home sales that fall through because some buyers can’t qualify to assume that one additional loan to the solar company.


Homes with their own solar set-up, however, have jumped in value, and are sure to keep on rising.