Your Real Estate Expert for Berkeley and Beyond
“Marilyn is exceptional. Her knowledge base, enthusiasm for her job, professional ethics, organization, sensitivity to our aesthetic requirements, loyalty and gentle perseverance set her apart.”
-- Bill and Carol Seidel
Marilyn Garcia, PhD
Broker Associate, Realtor®
DRE# 02014153
District Homes
1758 Solano Ave.
Berkeley, CA 94707
Direct:
(510) 390-5406
REAL ESTATE ANSWERS: What’s changing in the real estate world?
What’s changing in the real estate world? There was a big lawsuit filed in Missouri in 2019, that focused on the way buyers’ agents are paid. A settlement agreement was reached last month, and it has been all over the news recently. What’s it all about? Sellers have long negotiated a total commission with their agents, and that commission has been shared between the listing (seller’s) agent and the agent representing the buyer of the property. This is all spelled out clearly in the listing agreement we use in California – it has a field for the total commission to [...]
REAL ESTATE ANSWERS: What counts as a bedroom in real estate, and do more bedrooms add value?
What counts as a bedroom in real estate, and do more bedrooms add value? A bedroom in general is just a room where people sleep. For a room to count as a bedroom for real estate purposes, there are several requirements: (1) FLOOR SIZE. According to the standards used by appraisers, a habitable room must have a floor of at least 70 square feet in area and be at least 7 feet in any direction. So a 7’x10’ room is okay, but a 6’x12’ space, even though it’s 72 square feet, wouldn’t be counted as a room (or a bedroom) [...]
REAL ESTATE ANSWERS: How do actions by “the Fed” affect interest rates on home loans?
How do actions by “the Fed” affect interest rates on home loans? The Federal Reserve System (“the Fed”) uses monetary policy to keep the U.S. inflation rate low, and keep the economy operating at full employment. These are competing goals, so their work is a major balancing act. The Fed’s primary policy tool is changes in the federal funds rate, which is the rate at which commercial banks loan extra reserve funds overnight to each other (so it’s a very short-term interest rate). The Fed raises rates to combat inflation, and reduces them if they are trying to fight high [...]
REAL ESTATE ANSWERS: What’s going on in the home insurance market, and how does it affect current homeowners?
What’s going on in the home insurance market, and how does it affect current homeowners? In late May, State Farm, which is the largest issuer of homeowners’ policies in California, announced that it would not sell any new home insurance policies in California. In addition, Farmer's Insurance just announced that they will limit the number of new policies they sell here. Allstate also stopped issuing new policies in California last fall, so this is a significant trend. Why are these big insurers pulling away from California at this time? Major wildfires in recent years have resulted in surges in claims, [...]
REAL ESTATE ANSWERS: How has the negotiating environment changed as the market has shifted?
How has the negotiating environment changed as the market has shifted? When the real estate market is at its strongest, there is not a vast amount of negotiation between buyers and sellers. Buyers make strong offers in competition, often waiving the inspection contingency, and many sellers choose to accept the best offer, rather than negotiate and risk de-stabilizing the transaction. When the market is more balanced, there are fewer offers on properties, and buyers may not feel that they have to make their best offer at the start. An accepted offer might also have an inspection contingency, so there may [...]
REAL ESTATE ANSWERS: How much difference do higher interest rates make for home sales in our area?
How much difference do higher interest rates make for home sales in our area? Over the spring, the Federal Reserve announced a plan for multiple interest rate hikes this year to try to get inflation under control, and we’ve seen three rate increases already this year. As I write this, interest rates on home loans are approaching 6%, up from about 3% at the start of the year. Interest rates are at their highest level in 10 years, and there may be additional increases to come. Increasing rates make a lot of difference in the purchasing power of individual buyers. [...]
REAL ESTATE ANSWERS: Why are most sellers in our area no longer accepting “love letters” from buyers?
Why are most sellers in our area no longer accepting “love letters” from buyers? In our market, where buying a home is a super-competitive process, it used to be the case that buyers would include a “love letter” with their offer in hopes that it would influence the seller in their favor. The letter would tell the seller about the buyers, their qualifications, and why this property would be the perfect home for them. It also often included a photo of the buyers. The idea was that, because many (even most) sellers have some emotional attachment to the property they’re [...]
REAL ESTATE ANSWERS: Should I be careful not to over-disclose when I’m selling my home?
Should I be careful not to over-disclose when I’m selling my home? Completing seller disclosure forms in California can be a daunting task. A seller is legally obligated to disclose all known material information about the property to the buyer, and can be sued for hiding defects or problems. A material fact is any piece of information that would affect the buyer’s decision to purchase the property. To meet this obligation, sellers complete a series of detailed questionnaires about the current condition of the property, ongoing maintenance, past repairs and upgrades, and a whole array of other topics. Some of [...]
REAL ESTATE ANSWERS: What is the right pricing strategy for my home?
What is the right pricing strategy for my home? In Berkeley and in the surrounding areas, it has long been the case that many properties are listed below what they’ll likely sell for. I’ll call this “low pricing.” Low pricing is a strategy intended to attract the attention of a wide range of buyers and to generate multiple offers. Most properties around here follow this strategy, but it’s not the only possibility. “Transparent” pricing is a newer term for the classic pricing strategy followed in most other areas. It refers to choosing a list price that is at a value [...]
REAL ESTATE ANSWERS: What is home fire hardening, and do I need to do it?
What is home fire hardening, and do I need to do it? “We’ve learned from recent fires. Hardening your home and keeping the 5 feet closest to your house clear of flammable materials (including patio furniture and décor) greatly improves its chance of surviving a fire.” CALIFORNIA FIRE SAFE COUNCIL Fire hardening is making changes to an existing home to make it more resistant to wildfire. According to the Fire Safe Council, your home can catch fire in 3 main ways: from ember storms, where small pieces of burning material are blown in front of a fire (embers can apparently [...]
REAL ESTATE ANSWERS: How are property tax assessment transfer rules changing due to Prop. 19?
How are property tax assessment transfer rules changing due to Proposition 19? If you are one of the many people in California who at some point considered moving but decided not to because your property taxes would increase sharply, you could be in luck now. Proposition 19, which passed in the last election and goes into effect April 1, 2021, allows a homeowner who is 55 or older, severely disabled, or whose home was substantially damaged by wildfire or natural disaster to transfer their property tax assessment to a new replacement home with fewer restrictions than is currently the case. [...]
REAL ESTATE ANSWERS: Why (and how) do so many local sellers spend so much money getting their homes ready for sale?
Why (and how) do so many local sellers spend so much money getting their homes ready for sale? Sellers in our area routinely spend tens of thousands of dollars on work and staging in preparation for putting their home on the market. (The amount obviously depends on the size and condition of the home, but $50,000 is pretty common these days). Why spend so much, when there are so many buyers out there? The first part of the answer is that yes, there are lots of buyers, but there are also other homes for sale, so it’s important that your [...]
REAL ESTATE ANSWERS: Why should you pull a permit for work done on your home?
Why should you consider pulling a permit for work done on your home? The #1 reason you should get a permit if you’re having work done on your home that requires it is the obvious one: it’s required by law, and you can have problems with the City if they discover you don’t have a permit, either as the work is being done, or after the fact. That said, it’s definitely the case that many homes in our area have work that was done without permits. Homeowners choose to skip permits for a variety of reasons, including the cost of [...]
REAL ESTATE ANSWERS: I’m considering selling my home next year. What should I start doing now to get ready?
I’m considering selling my home next year. What should I start doing now to get ready? It’s a well-known fact that right now is not the optimal time to sell a home in our area. It is, however, the right time to start getting things in place if you’re thinking of selling next year, so that you’re ready for the very busy selling season. Here are the first things to do to get ready. (1) Think about where you’ll be when your home is on the market. Do you already have your next home set? Are you renting or buying [...]
How sold price per square foot varies with property size
I've mentioned in past newsletters that, in general, smaller properties sell for higher prices per square foot. This chart compares the average sold price per square foot for properties of different sizes. The data is from the area indicated, January 1, 2019 through October 31, 2019.
REAL ESTATE ANSWERS: Why do list prices sometimes increase after a property has been on market for a while?
Why do list prices sometimes increase after a property has been on the market for a while? In most parts of the country, properties come on the market, and if they don’t sell after a period of time, motivated sellers will reduce the list price to attract buyers. Around here, if a property is not getting the interest the seller hoped for, sometimes the seller will reduce the list price, but other times the list price will increase. What’s going on? The answer lies in the strategy that was followed in choosing the original list price. In other areas, the [...]