It happened again.  A seller in Morgan Hill had their home on the market.  One cold morning they went to turn up the heat and found their furnace had gone out.  The cost of the installed new furnace: $1,800!  While they were warm again their net proceeds from the sale just dropped by a cold, $1,800.

Water heaters, microwave ovens, compactors, ovens, disposals…they all have a functional life and then give up the ghost – without warning.  Those repair bills are aggravating and, unnecessary.

A Cool Solution: Home warranty policies are available for sellers as well as buyers.  For roughly $.73 a day you can cover all of your major appliances during your listing period.  Should something go out you only have to pay a set fee, usually around $55, and the warranty company will repair or replace your appliance for no additional cost.  Click here for more information.

The payment for this warranty can be from your net proceeds in escrow.  Additionally, if your home doesn’t sell some of the warranty companies won’t charge you anything.  So you just can’t lose.

Selling your home can be an anxious time but this little tip will keep your equity in your pocket and provide some peace of mind.

After looking at several Hollister homes I heard the frustrated buyer sigh:  ”I think we’re just going to wait to buy a home“.  I tried to reason with him regarding rising prices and the likely increase in home loan rates.  He was just too disappointed to hear anything right then.  So, this post is my therapy for today’s weary home buyers. 

Home loan rates WILL go up.  It’s only a matter of when will they start.  All of the attempts to stave off a sick economy cost money and will begin to push rates higher.  As they rise, ‘purchasing power’ drops:                      

Let’s say my buyer waits 6 months and the rates then are up .5%.  His $300,000 loan will cost $92 MORE each month than he could get today.  To qualify then he will have to earn $225 MORE per month for the same loan he could get now.  If his income hasn’t changed his purchasing power will drop by $17,150!

If the rates go up by 1.0% the payment will jump up by $192 per month for the same $300,000 loan he could have gotten today.  $192 PER MONTH!  Yikes!   His income will need to be $460 more per month to qualify for the same loan he could have gotten today.  With no change in income, his  purchasing power will drop by $32,800!

Postponing the purchase of your home doesn’t make cents.  Get a good night’s sleep and go back at it tomorrow.  Afterall, somebody is buying these homes.  Why not you?

     The question: “How much of a commission do you charge”? 

     The answer: “If your competing homes for sale are offering 2.5 or 3.0% to the selling office you should offer at least 3.0%.  The first sale you need to make is the Selling Agent’s interest in showing your home.  You want to do everything possible to encourage those agents to enthusiastically promote your home.  If you instruct me to collect a lower commission, half of which goes to the Selling Agent, they will see that lower commission when searching for homes to show their buyers.  We want to ENCOURAGE them to show your home.  A lower commission being offered by you while competing homes are offering more will be discouraging to them.

     “The home will sell itself – once the agent and their prospective buyers actually tour your home.  We just need to do all we can to make your home appealing to the prospective buyers AND their agent”.

This answer seems to resonate as a new thought with most sellers and typically the issue is settled.  Now!  If we could just find a buyer for this nice, upper-end home!  Anyone want a producing vineyard and nice home in the Spring Grove Area of Hollister?