Are We Heading for a Crash?

Mortgage rates are always closely tied to the 10-year bond rate.
Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Are interest rates going up?

First, think about what causes interest rates to go up. As I've always said, real estate is all about timing. Those who make money in real estate are the ones who have timed it well. Other factors like location and condition matter, but timing is what people make or lose money on.

There has been a lot of talk lately about the Federal Reserve potentially raising rates soon. Some people are under the impression that mortgage rates will go up if the Federal Reserve raises rates. However, the last time the Federal Reserve raised rates, mortgage rates actually dropped even lower.

Mortgage rates always closely fluctuate with the bond market. Looking at the bond market will probably give you a better idea of what is going on with interest rates. Bonds are at one of their highest historical prices, and the higher the bond prices, the lower the yield.

" Mortgage rates are
always closely tied to the 1-year bond rate."

The lower the yield, the lower mortgage rates will be for you and I. You can look at 10-year bonds and their interest rate to determine mortgage rates, usually, because most lenders base their rates on the 10-year bond.

Today's price for a 30-year bond is one of the highest it has ever been. As a result, it has a lower yield than it has in the last 30 years. In fact, it is the first time in 30 years that the 30-year bond yield is lower than the rate of inflation.

This is because other countries with negative interest rates are rushing their money to the United States to take advantage of the positive interest rate, even as low as it is.

Many on Wall Street believe that the next bubble is a bond bubble. If this bond bubble really bursts, bond prices will go down, yields will go up, and as a result, our interest rates will go up. 

Additionally, interest rates have fueled home prices to go higher. Any changes in the interest rate will have the same effect, but in reverse. Affordability will drop and so will prices.

So when asking if interest rates will go up or not, look to the bond market. The bond market's rates are as high as they've been in 30 years, and most people think they need a correction. I don't think anybody can say whether it will be a correction or a bubble.

If you have any more questions about mortgage rates and the factors that affect them, give me a call or send me an email. I'd be happy to help you.

How to Pick the Right Home

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

How do you know that you’re buying the right home? If you are looking for a home and you find one in the neighborhood that you want with the right number of bedrooms and bathrooms and in your price range, that could be the right home.

However, as many of you know, these are not the only factors to consider. Things like lighting, upgrades, layout, and the condition of the home make a big difference. These factors make you feel a certain way about the home and help you figure out if you like it enough to make an offer.

Still, what happens if there are four or five homes in the same area that meet your wants and needs? Which one do you pick? As a general rule, if a home meets 80% of your wants and needs list, that should be the right home. It is very rare to come up with a home that meets 100% of your wants and needs.

" Stay firm with your need list
and be flexible with your wish list. "

When you evaluate the homes to select which one is right, make sure you are in the location that you want and that the home is orientated the way you want. You should also evaluate the price of the home. Look at comparable properties with your Realtor to determine whether or not the home is overpriced. Don’t rely on sites like Zillow for home value; Zillow’s estimates are often way over the actual value of the property.

As I mentioned, one factor you should pay attention to is the layout. The home should have the layout you want or be easily modified. Cosmetic issues are important but, again, it’s very rare that a home has 100% of the cosmetics and upgrades you want. If everything else is right about the house, don’t let cosmetics be the deciding factor.

Ultimately, keep in mind that you need to stay firm with your needs list and be flexible with your wish list. If you have any questions, give me a call or send me an email. I would be happy to help you!

How Buyers Can Successfully Compete in Multiple Offer Situations

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Welcome back to the second part of our series on how to handle multiple offers in the surrounding Irvine area. As a buyer, how can you compete and increase the likelihood of getting your offer accepted in a bidding war?

"Reduce the contingency
period at all costs."

Of course, sellers will the take the price into account first. However, it’s not the only thing they look for. Although sellers are looking for the highest bidder, they also want to make sure the buyer can close in a timely fashion. As a buyer, it’s your job to assure the seller you are that buyer they can rely on. Here are six useful tips to remember when submitting an offer.

1. Provide detailed documentation on the source of your down payment.
2. Reduce the contingency period at all costs.
3. Get pre-approved with a local, reputable lender and provide the pre-approval letter, including your FICO scores and your assets.
4. Inquire about the seller’s motivation through your agent, such as what they’re looking for or why they’re moving.
5. Get personal and include a family photo with your offer.
6. Be flexible with the closing date.

If you’d like more tips, please reach out. Give me a call or send me an email. I’d be happy to talk! I can answer any and all of your questions as well.

How to Handle Multiple Offers As an Irvine Seller

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

We are in one of the most active real estate markets that we have seen in recent years. Right now, it is very common to be involved in a multiple offer situation when buying or selling. As a seller, there are a few things you need to do to select the best offer.

Obviously, the first thing you should look at as a seller is price. The higher the price, the better your bottom line is. However, price is not the only factor you should consider. You also need to evaluate the terms and conditions in each offer in order to determine which is highest and best.

For instance, one condition you should pay attention to is financing. There are many different types of loans: government loans, conventional loans, and other programs. Pay attention to loan-to-value ratios, down payments, and the buyer’s ability to obtain a loan.

If a buyer is obtaining a loan from a local lender, you can verify the information consistently. It’s more difficult to keep track of the information when a buyer uses an out-of-state, online source.

You also need to evaluate the buyer’s source of funds. Find out if the buyer’s funds are viable and readily available, or if the funds are contingent upon the sale of the buyer’s home. The buyer may even need to transfer funds from another country.

 

"Price is one of the most important factors to consider."

Pay attention to things like inspections, appraisals, and loan contingencies. The buyer will ask for a certain amount of time to satisfy these conditions, meaning they will have a set number of days to order the inspection and the appraisal. As a seller, it is advantageous to you to have a shorter time period in order to reduce your risks.

You should also consider whether the buyer is able to close escrow at a time that is agreeable to you. Maybe you need to close quickly, or maybe you need some time to find your next property.

Finally, figure out if there is a way to add value to the offer. For example, you might need a rent-back. You could also get the buyer to remove some - or all - of the contingencies. That way, you can sell your home without needing to worry about the inspection or appraisal.

Look out for Part Two of our series - we will discuss how to handle multiple offers as a buyer. If you have any questions in the meantime, give me a call or send me an email. I would be happy to help you!

Are Zestimates Accurate for Irvine Homes?

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Recently, I’ve received a lot of questions about the accuracy of Zillow and the reliability of the site’s home value estimates. Today, we’re going to discuss Zestimates in Irvine. Are they accurate and reliable?

Should clients use these numbers to sell their home? In my opinion, Zestimates are not accurate, nor reliable. If you’re looking at a particular Zestimate, Zillow will explain how they arrived at that specific number. For example, Irvine’s Zestimate includes data from Los Angeles, Long Beach, and Anaheim. Through an algorithm, they calculate values in Irvine, but we already know that’s inaccurate.

“

Zestimates are not accurate, nor reliable.

”

For example, let’s say a home is priced according to market value around $750,000, but Zillow shows it’s worth $700,000. A buyer can compare a home’s price to its Zestimate online. Is the home overpriced or is Zillow underpriced? If a seller relied solely on Zillow, they could miss out on earning top dollar if their home is underpriced, oriented around a Zestimate.

If you want to investigate the true value of your home, contact a trusted professional in your area with experience and proven results. I would be more than happy to provide a complimentary home market value report if you’re interested in selling your home. Give me a call or send me an email! I’d be happy to discuss and serve your local real estate needs.

The Best Ways to Increase Your Home’s Value

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Today we’re excited to be talking about how you can get a better price when you’re selling your home. We’ve got four tips for you today that will help you sell for top dollar in Irvine. Here they are:

1. Time it right.

Real estate is all about timing. In any given year, homes sell better in spring and summer than in fall and winter.

2. Price it right.
It’s better to price your home competitively and aggressively. You want buyers to compete for your home, which won’t happen if you overprice it. If you overprice your home, it will stay on the market longer. The longer it stays on the market, the more buyers will want to negotiate on price.

“

Take the time to make your home look right.

”

3. Showcase your home. 

Take the time to make your home look right. You want buyers to fall in love with it. Many buyers decide on a home based on their heart, not their head. They decide based on emotion and the more emotionally appealing a home is, the higher the offer will be.

4. Get aggressive with online marketing.

Get your home out to the masses. We are in a global market, and buyers come from everywhere. They choose their homes based on their first impression, which is the online listing for the home. Make sure you have professional photography for your listing, as this will get you more interested buyers. The more buyers you have, the more offers you get. The more offers you get, the higher your final sale price will be.

If you have any questions for us or want even more tips to get the best price possible for your home, give us a call or send us an email. We would love to hear from you!

How to Buy and Sell Simultaneously

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Today we are going to discuss the options that you have when you want to both buy a home and sell a home at the same time. If you’re planning on balancing these two tasks, we’ve got some good advice for you.

We’ve sold many homes throughout the years and when sellers have to sell their current homes in order to buy a replacement, the thing they have been most concerned with is having to deal with either paying two mortgages at once, or not having a place to stay if they sold their home before they found one to buy. In these types of situations, you have three options.

1. Temporary rental. You could find a place temporarily to move your things into while you’re searching for a more permanent home. You’ll have all the time you need to search, but the danger is that in a strong market like this one, you risk paying a much higher price if you wait too long.

2. Rent-back. With this option, you work an agreement into the contract that states the buyer will rent the home back to you for a certain amount of time so you can find your new home.

3. Contingent sale. This is the only guaranteed way to buy and sell at the same time. You can sell your home contingent on finding a new one to purchase first, and can buy a home with a contingency that you have to sell your current one first. This method protects you, but may cause buyers or sellers to pass on your offer. Sellers specifically like to see few contingencies.

“

The right choice will save you thousands.

”

So, which is the best for you? It will take time to figure out, and will require you to consider market conditions, trends, timing, and your individual circumstances. The right choice could end up saving you thousands. 

If you have any questions or topics on your mind you’d like to ask us about, give us a call or send us an email. We look forward to hearing from you!

When Is the Best Time to Sell?

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

Today we are going to talk about when the best time to sell is if you’re looking to make a move in 2016. I strongly believe now is the best time to sell, and sooner is better than later. Here’s why:

1. Inventory. There are fewer homes on the market now than there were at the same time of year in 2014 and 2015.
2. Market conditions. Right now, we have low inventory. As we get closer and closer to the summer, our inventory will increase, balancing our market out.
3. Interest rates. Interest rates are lower than they have been in a long time, but they are expected to rise soon. Buyers have a sense of urgency because their affordability could go down significantly with any increase in rates.
4. Any possible wild cards. This year we have a few wild cards to consider, including the fact that we are in an election year and the uncertainty of the global market in China and Europe.

Considering these conditions, I strongly believe if you are planning to sell in 2016, sooner is better than later, and now is the best time. Each situation and limitation are different, so we can take that into account when we meet in person. 

If you have any questions for us or any topics you’d like us to discuss in future videos, let us know by phone or email. We look forward to hearing from you!

What Can You Expect from My Video Blog?

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation 

Call me at 949-552-7653 for a FREE home buying or selling consultation

My name is Frank Agahi and I’ve been helping the people of Irvine buy and sell real estate for over 25 years. I’ve seen everything the market has to offer. From double-digit interest rates in the early 80’s, the decline of the 90’s, the real estate boom of 1999 to 2006, and the recent great recession, I’ve seen it all. 

The past 25 years have given me the opportunity to view and assess the market value through a unique lens. My goal is to make these blogs educational and relevant to the current market conditions in order to help everyone in their decision making process to buy or sell.

You can expect 2 educational posts each month. If there are any topics you’d like more information on, or have any questions, give us a call or send us an email. We would love to feature it in a future video. Until next time, I look forward to seeing you soon!