Author: rachaelsmithrealestate

This current real estate market is (Fill in the Blank). Regardless of how I have ever finished that sentence I still love being a real estate agent. Here are 29 reasons why:

1.  I love waking up in the morning and knowing that whatever I have planned for the day will ultimately go out the window-and I’m okay with that.

2.  Being sick doesn’t mean I don’t make money. Enough of what I do can be worked on from the comfort of my own home.

3. Real Estate, many times, has made me cry. I cry when I see those deserving homeowners not getting what they deserve….In the end I have to remind myself that everything happens for a reason…and I love being in a business that brings out that passion in me.

4.  I love real estate agents. Albeit, some of them are complete imbeciles – but those just make me look good. The good agents make the business fun and keep me learning and on my toes!

5.  I enjoy marketing. Real estate marketing is ever changing and I love learning all the cutting edge tricks and seeing how my marketing plan will fit into that.

6.  Real Estate never dies. I don’t care how the market is doing, real estate will always be traded. Land simply cannot go away and there are always people ready, willing and able to buy and sell it.

7.  I hold a very large chunk of people’s financial life in my hands. Scary as all hell, but it keeps me honest! … and I love being honest.

8.  Real Estate keeps me into the world of blogging and social media.  I enjoy blogging to be able to release my inner thoughts

9.  There will be months that I will make absolutely nothing and there will be months where I make more than some people do in a year.  It keeps me in perspective, thankful and living simply.

10. I create my own schedule and can be there for my first born when she arrives, my friends and family when they need me.

11. The dynamic nature of this business always keeps me on my toes. The shifting of the market flings me from comfortable into a place where I must to be more effective for my clients which encourages- more learning =)

12.  Even though my house doesn’t qualify as one, I love old cabins. The Big Bear Lake real estate market does not have a lot of old homes – however the ones they do are so cool. I never cared about houses until I became an agent.

13.  I like seeing the different types of interior home layouts. Again, I never cared about architecture until I became an agent.

14.  I love solving problems and real estate is an all-you-can-eat-buffet of problems to solve.

 15.  I LOVE teaching. I used to teach Science in Louisville KY before moving to Big Bear Lake and although I LOVED it, it was not where I was meant to be. Now I get to teach my clients about real estate.

16.  Real Estate gives me the opportunity to excel in my business without the fear of being outsourced, downsized or ever being fired.

17.  I love the building businesses from the ground up, and goal setting that real estate brings out in me.

18.  I love that real estate can be a low-cost, high revenue business… If you are smart with your investments.

19.  Real Estate gives me the opportunity to make a great impact on peoples life. I love keeping in contact with those I’ve helped purchase or sell to.  I even enjoy driving by and seeing owners I didn’t work with working on their new investment.

20.  I know more about humanity than I ever would care to want to know. Thanks to real estate, nothing surprises me anymore.

21.  Real Estate is one thing that I can relate anything to.

22.  I love Seller’s-Markets as it challenges me to figure out ways to stand out among the masses.

23.  I love Buyer’s-Markets because it challenges me to figure out ways to stand out among the masses.

24.  Real Estate has given me respect for other professions that are commission-based. It now makes me conscious of purchasing a service or product through the person who helped me make my decision, if that person is paid on commission.

25.  I love Real Estate photography- creepy but true.  It is amazing to see how a home shows up in photos compared to real life.

26.  I was never an organized person. Real Estate has taught me the importance of being organized.  Now I love seeing myself attempt to be organized.

27.  Law. I have never been more up to speed with legal tidbits than I have been since becoming a real estate agent. I have a new respect for the contracts that stipulate what can and cannot happen in real estate.

28. Real Estate gives great income and business growth opportunities to people who are not  scholastically refined. You do not need to go thousands of dollars in educational debt to be a real estate agent. Some of the better agents I have met only have a HS diploma.

29. Choose your own adventure. Real Estate is an endless series of entertaining choices. It is amazing the sort of homes you runs into for showing and furthermore those that you are thinking of listing.  I have already run into a multitude of living spaces that don’t shock me anymore.

 Below are the market statistics Year to Date from 2012 and 2013 and indicators of how our market is shifting.

We’ve gone up 9% in new listings and 13% in closed transactions.

Our Median Sales Price has gone up due to a less amount of inventory in the <$100K price range and the Average sales price has gone up 4%.

The Price per Square Foot has gone up over 12% from 2012- great for sellers, less great for buyers.

Days on Market- down 19%- if you’re a seller looking to list all the more reason to list your home~!

Inventory- If the market were to not take on any new homes today we would run out with our current conversion rate in 5.16 Months- meaning? we have moved into a sellers market.

	2012	2013
New Listings	966	1056
Closed Listings	614	695
Median Sales Price	$159,000.00	$172,000.00
Average Sales Price	$228,084.00	$238,035.00
Price Per Square Foot	$138.39	$154.38
Percent of Original List Price	95.00%	97.00%
Days on Market	126	102
Inventory of Homes for Sale		5.16 Months

Here is a list to get you started on what you should be looking for.

When it comes to callers looking for a vacation the high demand things they ask for are:

1. Location
2. Occupancy
3. Amenities

 Location

Just like the old saying goes Location…Location…Location.  Depending on the season, guests would like to be near what the favorable sport is at that time of year.  If its the winter they ask for Moonridge.  If its the summer they want to be near Big Bear Lake.  One thing I always recommend is staying in a central location in Big Bear Lake if you can.  Reason being during the summer the lake and surrounding areas fill up.  During the winter Moonridge is the popular area however when that fills up the lake and surrounding areas are second.  Moonridge isn’t as popular in the summertime with the exception of Long Term Rentals (1-3 months for those vacationing from the desert).  Not to say that it won’t rent up there- with the right Vacation Rental Management company and the right marketing they can fill up and create occupancy up there- it just doesn’t happen as naturally as being by the lake.

Occupancy

Obviously the amount of people that the home can sleep helps in how much it rents.  With our local code enforcement Vacation Rental Homes are only allowed to sleep 1 person to 200 square feet in the home.  Example:  If a home is advertised as 1000 square feet we can only truly advertise it as sleeping 5.  With a 900 square foot home you are limited to sleeping 4.  Also anything that isn’t included in the title isn’t counted in occupancy calculations-so be careful when shopping and making these sort of decisions.  Also with occupancy the majority of our callers are looking for something that sleeps 4-6 people, which would translate into a 2-3 bedroom with 800-1200 square feet.

Amenities

Anytime you are going on vacation you yourself are looking for the most you can do in the surrounding areas.  Just like you the guest wants the most to do not only in Big Bear but in your home.  The more things like spa/jacuzzi, pool table, Foosball, sledding hills, board games, movies etc you can put in your home the better.  Generally on the investment side of things you can charge more per night because of these amenities too.   Not limiting yourself to these amenities you can add your own or purchase a unique home that stands out in the large pool of vacation rental homes.  Examples could include a dome home, a sauna, a wet bar etc.

Hope this helps in your search for an income producing home in Big Bear!

I don’t know about you but one thing that severely stresses me out is when I am asked a question…and I don’t know the answer.  It becomes a challenge to me to find the answer to that question and relay the answer confidently and with understanding.  My worst nightmare could be a list of questions that I can’t answer.  Anyways…this happened to me the other day.  I’m in a multiple offer situation and the sellers agent needed our highest and best offer.  In order to come to that conclusion my buyer wanted to know an estimate of what her closing costs may be….and you guessed it…I was speechless.

The great thing about these situations and the way I look at them is this…. I will know the answer in a little while when I educate myself on it….but then…I will know it forever.  In this certain situation I called everyone I knew that may know the answer to this question and I got everywhere from “I don’t know myself, to 4% of the purchase price…so I was looking at somewhere between $0-$6,000 and that’s a large range.  Finally I got an answer that I was confident would fly till the next morning when I could sit down with an escrow officer and make sure I understood this question.  That being said, I’m now relaying what I’ve learned.

Closing costs consist of 3 different types:
1. Escrow Closing Costs
2. Title Closing Costs
3. Lender Closing Costs

Escrow Closing Fees – Courtesy of the wonderful Judy Jackson at Resorts West Escrow

Sale Escrow Fee- $250 Base + $2.50 per $1,000 per side (Minimum of $450 per side).
(I.e If your house is closing at $150,000, you do (150 x $2.50) + $250 =$625 which both buyer and seller pay this amount).  If you are purchasing a regular resale this is part of your closing costs.

Short Sale & REO Escrow Fee- $350 Base + $3.50 per $1,000 per side (Minimum of $600 per side).
(I.e If your house is closing at $150,000, you do (150 x $3.50) + $350 =$875 which both buyer and seller pay this amount). This is what you pay if you are purchasing a Foreclosure or Short Sale property.  The reason it is more is it covers the fees that the seller and the bank both won’t and can’t pay for.

Loan Tie-In Fee- $300.    If you are requiring a loan this will be part of your closing costs.  This is the fee you’re paying to have the escrow officer work with your lender.  Only the buyer sees this cost.

Document Preparation Fee- $100 per document (Grant Deed, Affidavits, Inter-spousal Deeds, etc).  At the beginning it is 50/50 split.  The buyer pays $50, the seller pays $50 for the grant deed to be prepared.  From there any additional document and fee that comes with it is paid by the party requesting the document.

Demand Fee-$75 per loan payoff (including HOA and Beneficiary Statements) This is normally a seller closing cost if the seller has a loan to pay off or an HOA.

Messenger Fee-$50 per side – For the escrow office I normally work with they have the Title Companies from off the mountain that come up 2x a day.  They pick up and drop off documents for recording purposes…if you see this fee you know you are close to closing…it’s a good thing.

Wire Fee- $25.  This is for escrow to send or receive any wires.

Overnight Fee- $25.  This is only seen if Fed Ex brings up loan documents then the fee is passed along to you.  Again, a great fee to see since things are moving along.

Notary Fee- $10 per signature during hours and $150 for after hours signing.  There are no charges for grant fees. You can opt for the Document Signers to come to you at $250 if it is inconvenient to make a trip to Big Bear.  They go anywhere in all 50 states.

1099 and FTB Processing Fees- $45 per person.  Sellers fee if there is a 1099 or state withholding.

Loan Escrow Within an Escrow- $250.  If the seller is carrying the loan the buyer may see this as a closing cost.

Exchange fee- $75.  Usually on the seller side if they are doing a 1031 exchange for the documents and paperwork to be prepared.

NSF Fee-$25. This is generally from whomever sides this happens to and is just passed along to you.

Title Closing Fees

Owner Title Policy- Protects the buyer when purchasing the home that there are no problems with the home’s title and the seller really owns the property.  Click here to get a quote, varies depending on price.
Lender Policy-Lender may require this therefore would be seen on the buyer closing costs.  Click here to get a quote, varies depending on price.
County Transfer Tax- $1.10 per $1,000 of the purchase price.  Generally a seller fee.
Recording Fees- $100.  Generally a buyer fee.

Lender Closing Fees

Every lender is different and with each lender you’ll see some combination of these fees.

Report Running Fees
Loan origination fee, which lenders charge for processing the loan paperwork for you.
Attorney’s fees.
Discount points, which are fees you pay in exchange for a lower interest rate
Appraisal fee
Survey fee, which covers the cost of verifying property lines
Underwriting fee, which covers the cost of evaluating a mortgage loan application.

Lenders are required within 3 days to give you a good faith estimate of what closing costs could be.  So with you having that number and the other two being easy to calculate we can determine quickly what the closing costs may be.

Lastly, it appears that closing costs vary anywhere from 2-5% of the purchase price depending on which of these fees you end up racking up.  In a recent study they quote that buyers have paid an average of $3,700.  Facts that I won’t forget when I am asked next time.

We’ve been shopping for weeks and weeks and weeks…We’ve found the
perfect home…We’re ready to make an offer…then we find out a
bazillion other people are interested in the same property and we now
have some competition…yes…you guessed it…Multiple Offers….We’re
now being asked to submit our highest and best offer.

-What price should I go to?
-What contingencies should I still put within the offer?
-What if I pay too much?
-What if I lose?
-Are there really other offers?

Let’s start at the beginning:

Law
of Attraction states that “like attracts like”.  I can’t tell you how
much this shows up in Big Bear Real Estate market.  Once you LIKE
something…Everyone else has to LIKE it as well.  This has happened to
me twice in the last 3 months and I figured I need to learn how to win
these, that’s my competitive side speaking….First lets start with how
we can try to avoid them.

Avoiding Multiple Offers (If possible)

Time
When
you find the home you like, make the offer.  There is an old saying
that “The home you saw TODAY and want to think about TONIGHT…Will sell
today to the people that saw it YESTERDAY and thought about it LAST
NIGHT”.  When you’re ready to make an offer, make an offer.  The Big
Bear Lake Real Estate Market is heading towards becoming a sellers
market with low inventory.  Don’t let this be what happens to you, lets
try to avoid it when we can.

Communication
The
more communication I can have, as your Realtor, with the listing agent
can only help see this coming.  We can find things out such as have
there been any other showings, has there been any interest in the
property, is there a possibility someone else could be writing an
offer?  With this information we are better equipped at writing our
offer, what it should be and what contingencies can be placed on it.

Days on the Market
When
a home comes on the market that you are interested in and you think its
a great deal, I’m sure there are many others out there feeling the same
way.  We do not want that home to sit thru another weekend of shoppers
looking at it.  If it is Tuesday at 3pm..come up here when you get off
work.  Do your best to get here as soon as you can to view the property
as sometimes that’s what it takes to get it off the market and in your
possession quickly.  

Winning Multiple Offers

First
things first, I can never guarantee you a win on a multiple offer
unless I have a crystal ball (which I need) or I can see all the cards
being played by other realtors and their clients, and that, simply won’t
happen. 

That being said here are the things that we can do:

3% Earnest Money Deposit…or more….
Show
the seller you are a dedicated buyer and are willing to go in with a
healthy Earnest Money Deposit.  It is a portion of the down payment that
you are willing to make on your home if you win the bid.   Feel free to
go higher than the 3% if you love the home and have to have it. This is
just one way of showing the seller you are in it for the long haul.

Pre-Qualification Letter or Proof of Funds
Whether
you’re getting a loan or paying all cash the seller, warranted, likes
to see that you have what you say you have.  This is becoming normal
practice to even turn in with an offer so have it ready.  This too will
show the buyer that you are ready to move in.

Escrow Period
Generally
the Big Bear Lake Real Estate Market is second home owners, not needing
time to move out.  From my experience they are all looking to close 30
days or sooner.  By knowing this ahead of time do whatever it takes to
be ready to do this or close sooner, still allowing ourselves the
inspection period that we need to do.

Contingencies
Limit
them or negate them completely.  If you know you are in multiple offers
there’s limited amounts of requests to the seller to pay for closing
costs, inspections, work, etc that we should be asking for.  Remember
the easier we make if for the seller to let us take over their house
combined with the price that we are willing to pay makes us look more
attractive.

Price
Probably the most important
thing in the offer is the price. What you want to do is set the price at
what you feel most comfortable
with and feel that you wouldn’t go a dime above if someone else did.
I.e.
Say your Highest and Best Offer was at $150,000 on a $149,000
property.  I always ask yourself to imagine that someone won the home
with an offer of $150,500.  Would you be upset?  Would you have paid
that price?  If the answer is yes, keep doing that until you get
yourself saying no- That’s our offer.
 
3 Most Important Things About Multiple Offers

1. Be open minded to going over asking price.  Of the recent Multiple Offer situations I’ve been in the winning bid has been over the asking price
in every single case. Be prepared for this if you really want the
property.  By pulling comparative market analysis we can justify paying
that price. 

2. Remember there are no second chances and no negotiations in a
Multiple Offer Situation.  All agents and their clients turn in the best
they are willing to do and the seller chooses whom they are going
with.

3. I hate losing….and I despise telling anyone
that we lost.  Let’s not allow that to happen when we come across this
bridge by doing the recommended things above.

After my last incident…I don’t fly so well.

It’s true.  I act like a pill on a plane.

Flight 1 heading to Vegas from Louisville proves just that…The take off freaks me out.  I’m sitting on the left hand aisle seat with the middle seat open and an older gentleman ‘Dad type’ at the window seat.  On my right was a son mid-30’s with his mother. 

I tried sleeping but I could tell it just wasn’t going to happen.  I wasn’t really alarmed since the flight attendants were friendly – but then I saw them congregate in the back-together like they were planning something- and my thoughts turned against them.

My thought process went something like this.

As my thought process has clearly gone off the deep end I realize that while I’m having these thoughts I’m scanning the plane front to back and back to front.. I’ve started to  notice that the two men beside me have noticed I am a strange individual and that I may have something wrong with me.

Also while I’m thinking and scanning, scanning and thinking I have started to hear random electronic beeping noises near me.  This opens up a new can of worms…

So…this brings me to our landing…nothing has happened…and we’re about to land…no bombs…no stewardess/terrorists abandoning the plane…  They’re all still ‘acting’ normal…

The weird flight attendant that was attending the back of the plane gets on the PA system.  He begins talking about Vegas and Kenny Rodgers? 

While we’re taxi-ing to the gate, he begins singing…The Gambler…

“

You got to know when to hold’em, know when to fold’em. Know when to walk away, know when to run. You never count your money when you’re sittin’ at the table, There’ll be time enough for countin’ when the dealin’s done.

”

This…must have been their plan all along…singers…not terrorists…