DOJ & changes in the real estate business Aug 2024

 I'm sure most have heard at least something about the recent changes in the real estate business.  Our government decided that commissions that were negotiated in the listing agreement isn't the best way to go about things and so now the selling agents commission is to be negotiated by the buyer.  There is some logic here; however, it can easily be argued that things are less transparent now.  

Now all buyers will need to sign a BBA, (buyer broker agreement) and that commission is and has been negotiable.  Most sellers I talk to are happy to pay the industry standard 2.5% to the selling agent.  The selling agents commission will need to be in the contract as a seller credit to the buyer.  We'll see more changes as we work thru this. I assume buyers might be able to finance the commission in their loan in the future.  Most first time buyers don't have an extra 2.5% on hand to pay that fee.  The buyers might already be looking for a seller credit for their closing costs and depending on the loan they cap how much a seller can credit the buyer.

At the end of the day, it's more paperwork and slight changes in the commission structure.  As a broker who mostly handles listings, I can tell you I will no longer be giving any percentages as to what my sellers are willing to pay.  That opens the door for a potential lawsuit!  I will simply let folks know if my seller is willing to cooperate or not.  Like the listing price, commission... oh I'm sorry, compensation is negotiable.

To switch gears, I wanted to touch on the market.  Inventory is still low.  Houses in Roseville if priced right are selling fast.  Pricing a house right in Placer and Sacramento County is essential.  If you look at the statistics, houses are selling 99% of asking price.  That means that buyers are waiting for a Roseville home for sale to come down where it needs to be before writing an offer.  I deal with the seller mentality all the time to price it high and they can negotiate down.   It's normal, we all want and think our house is special and worth more than it is.  You need a good experience Roseville real estate agent such as myself to give it to you straight.  I hope what I tell you is music to your ears, but that's not my goal.  I've been going beyond lately and helping people get their house in the best condition for sale.  Sometimes its difficult to get reliable help out there.  From handymen, painters to trash out guys... I had to step up this week and make a dump run, install a garage door opener, and finish nailing in some baseboards.  All in a days work.

I realize that last paragraph has way too much going on with no structure.  Word salad, I'm tired... Just got a new listing on the market today.  Half Plex in Lincoln, 365 R. St.  Great investment, rental.  It will cash flow, I was thinking of buying it.  I have another listing I'm taking in South land park tomorrow.  1227 Noonan Dr.  $525,000.  A house in Orangevale coming next weekend 8172 Woodlake Hills Dr. at $550,000.  Next week, a commercial property in Roseville at 9450 Atkinson dr.  2 acres zoned M2 priced at $950,000

Chad Phillips

Remax Gold

Partition Referee Northern California

 7/1/24

I have expanded my work with other attorney firms in California doing more court work as a referee on partitions.  If you don't know, partitions occur when there are multiple owners of a property and one forces the sale.  Typically this would be siblings that inherit a property and one or more want to sell and one doesn't.  When this happens, every party has the right to buy out the others portion; however, usually the are looking to sell the property and take their proceeds from the sale.  It's usually the one living in the house for free that doesn't want to sell.  Shocker!  

There are other situations where a boyfriend/girlfriend buy a house then break up.  Both on the loan and tied to the property and not able to afford another property.  It can also be business partners where they went into a property together then one side is looking to dissolve the relationship.

I've been assigned over 20+ referee roles in partitions.  The one thing that's slightly unique is that I'm also the listing broker when it comes time to sell these properties.  This is not the norm but there are advantages to this.  As the referee, I have the court authority to take control of the property.  Often times I might need to evict an owner, change the locks and put utilities in my name.  Similar to a foreclosure but I have power of attorney.  I say that loosely, but it's similar.  I set the price to sell the property, sign the contract and the deed to close escrow.

Partition sales are not that common but there's enough of them going on where this has become a niche that I am happy to be involved with.  Most brokers and real estate agents have no clue these even exist.  I have to explain this on a daily basis.  As a referee in Sacramento I bring confidence and experience to the table that councilors are looking for.  

Often times the estate has no money, other than the proceeds of the sale.  I'm willing to come out of pocket to pay for trash outs, repairs and inspections if it's deemed necessary.  I do get reimbursed at closing for those expenses of course, but often times expenses are needed to get the property sold.

I'm working with 7 different law firms that regularly come across partitions.  I have my resume updated for them to submit to the court with my recommendation.  There are times I have to report to the judge or appear.  There is a process that the referee needs to.  Attorneys are representing their clients and as a referee I'm involved in the accounting process.  Every partition is different!  The circumstances can be convoluted.    The referee needs to assist in the division of proceeds upon the sale.  The accounting phase is done when proceeds are sent to a broker trust acct and we're finalizing the disbursement of funds.  I'm working one now where I thought we had a solid agreement in place and one attorney is in disagreement with my decision.  I'm running it by our in house council here at Re/Max Gold per the request of said attorney in disagreement.  Again, they are all different!  The one factor that seems to be consistent is the defendant not being cooperative.  This is the part of the job that can be tricky!  Often times these are emotional situations and logic doesn't work.  I try my best to work with folks with in reason.  It's only been a couple times where I needed to get the sheriff involved.

If you have questions about the process or are looking for a referee that has been doing these for 10+ years, give me a call.

Chad Phillips

Remax Gold

916-390-1476

Top Producer Magazine March 2024 Sacramento / Roseville Real Estate

 Spring is upon us, and we're starting to see more home come available.  It's typical for the market to pick up this time of year.  I'm getting several properties ready for sale right now myself.  New construction is in overdrive, they are cranking out houses as fast as they can.  In 2023 new home sale accounted for 25% of the houses sold in the Sacramento / Placer / El Dorado Hills counties.  This is a substantial amount of sales occurring.  There's a shortage of resale homes and it's having an effect on those of us in the business.  There's simply not enough homes to keep everyone afloat in real estate.  

Prices are on the rise too.  I was working on several properties to get ready for sale and now we're revisiting the valuation.  There's a house I'm putting on the market next week in Serrano and we elected in the end of 2023 to list at $850,000.  Now I'm thinking we'll get upwards of $900,000 for it.  It will be the lowest priced house in Serrano.

I don't think I've mentioned this before but 3 years ago I bought a property in Roseville.  2.5 acres on Main st.  It's raw land that I entitled and broke into 10 lots.  It took perseverance and money to get the tentative map and brought all the way to final map.  I got multiple offers on my project and it's currently in escrow.   It was a great project, I learned a lot in the process and I stand to make a good profit too.

I mention the Top Producer Magazine as I was featured broker as a top selling Roseville real estate agent.  I've been in the business for 20 years now and I've built relationships with business professionals and past clients.  I've gained the experience and trust of clients and peers which makes things even easier in this tough and competitive business.  We're always learning and doing new things.  I specialize in partition sales and that's something I didn't even know about until 10 years in the business.  There's lots of different aspects to real estate.

Looking forward to spring 2024.  If you have any real estate questions, reach out to me.

Chad Phillips

Re/Max Gold

916-390-1476

Looking for a fixer in Sacramento CA?

There are ton of investors out there currently looking for fixers right now.  I get hit up daily from buyers that are all cash looking for a good house to fix and flip in Sacramento.  We're seeing it become difficult with the low inventory and the margins are minimal.  Some investors are buying a paycheck.  They will make money on the deal but it's mostly from their labor that they are putting into the property.  I'm no stranger to doing home improvements and I know what things cost.  Everything from materials to labor has increased dramatically since Covid.  

I reciently went to look at a property in Sacramento that was inherited by my client and he wanted me to take a look at it to see what he should do.  It's a 2 bedroom 2 bath, 1400 sqft on 1/3 of an acre built in 1944.  It comps at $400,000; however, it's going to be well over $100,000 to rehab the property.  There's a ton of dry rot, electrical isn't grounded (2 prog), the kitchen and bathrooms need a full gut.  It can become a rabbit hole and end up costing $150,000.  For this to pencil, I would be comfortable around $225,000.  The crazy thing is, I could sell it today for $275,000 no problem.  My advise was to sell it "AS IS"!  Don't put money into it.  He's not a contractor and it makes more sense to walk away from it.  Take the money and run I said.  I also told him I wasn't interested in buying it as it needs too much work.

I have several fixers coming on the market soon.  2-3 houses in Sacramento, 2 in Roseville, 1 in Orangevale...  Many of the fixers I get are court ordered partition sales.  They are properties that are owned my multiple owners and one if forcing the sale.  These typically have differed maintenance.   As I'm a remax agent in Roseville, I'm also a court appointed referee on these properties.  I'm not allowed to represent the buyers in these transactions; however, I can put you in touch with a broker.

January 2024 roseville real estate agent

 We’re off to a strong start in 2024. Inventory is starting to pick up and rates are holding steady. Personally, I have a half dozen listings I’m working on to sell soon. I have a Listing in Serrano, El Dorado Hills, two Partition sales come in in Sacramento, I’m selling 42 1 acre lots and El Dorado Hills off Green Valley Road, I have a townhome coming for sale in Natomas 2200 ft.² four bedroom three bath Priced at 540,000. I also have a subdivision for sale in Roseville located at 1028 Main St.  This is a 10 lot project, quarter acre lots. Several conditions left before final map is approved. This project is priced at 1.2 million.  

I can tell you we’ve already seen a decrease in them out of agents and lenders in the business. 2023 was a difficult year with minimal amount of home sales and placer Sacramento and El Dorado counties.  For example, our office typically has around 90 to 100 agents, we’re down to 60.  Much of what the Roseville real estate market is experiencing is sales that are life events. What I mean by that is either a forced sale like a partition, or marriage divorce…  People are holding off on buying up and this is keeping inventory tight. 

We have 14 different builders in Roseville California right now and they are all building as quick as they can. Financing incentives and they’re able to sell new construction rather quickly.  

Having been in real estate for 20 years, I’ve seen many changes in the market.  I just came across my BPO last week since 2011.  I reached out to accompany. I used to do foreclosures with to get an idea of what the market might look like this year. They told me they had 80 houses in the foreclosure process in the Roseville area.  It seems we’re gonna have an uptick of short sales and foreclosures and Sacramento placer County starting this year.  The cost-of-living in California has gone up substantially, and a lot of people are relying on credit cards to bridge the gap.  Folks might be looking to sell as they have equity. However, they’re not able to keep up with the payments.  

If you find yourself in a tight situation and looking for a solution, you should reach out to Roseville real estate agent, Chad Phillips.  If it’s through me or other business professionals, I can help guide you and offer the best solutions for your situation.

  2024 real estate projection in Placer, Sacramento and El Dorado Hills real estate market

There's a general conscientious that the real estate market as a whole will improve in the coming year.  We're expecting interested rates to tick down further which will help overall affordability for home buyers.  On top of interest rates expected to come down we're estimating that prices will remain stagnate with more likelihood of coming down slightly.  Zillow and other online real estate companies are suggesting a decline in Roseville home prices around 1.4% in 2024.  This is a small percentage, I'm sure the over under percentage of error in the estimate is higher than the prediction.  I can tell you that we've seen new home construction cranking out houses in 2023.  New homes accounted for 25% of all home sales in Placer, Sacramento and El Dorado counties in 2023.  They will continue to build new homes as home builders have projects lined up.  Some of the larger projects like Folsom Ranch is going to be under construction for 3-4 more years.  Foslom ranch is going to be beautiful when it's all done and built out.  Some of the features I've seen with the commercial and shopping centers there will be amazing.  Personally I think they need to address the traffic there at E. Bidwell.  It can be crazy around 5-7pm.  Those new homes in Folsom are on small lots and going for big money, around 1 million.  I've already sold a house in there, it was a resale 3600 sqft for 950K, and that was almost 2 years ago.  I think we'll continue to see people say put with there sub 5% interest rates and the market will be mostly folks moving for work and life changes; such as, divorce, marriage, death...  Plenty of people are wanting to move up but I think the numbers have to make more sense before people want to take on more debt.  

When it comes to the industry, we're seeing more and more people getting out of the business.  Lenders, real estate agents, title officers and so on are finding themselves in a situation where they are depleting all their cash and need to get a new job.  At the end of the day, there's simply not enough transactions to support the amount of people that got into the business.  This is a cycle and trend and I've seen it before.  When the Roseville real estate market is hot, then people jump on the band wagon, but when things get tough it thins the herd.  I've been at this for 20+ years now so I've been able to work multiple angles to generate business.  Some of my new clients come via google, but most of my business comes from repeat clients and professional referral.  I specialize in partition sales so I've networked with attorneys in the area to assign me as the listing broker in those situations.  I've also focuses on land development thru clients and I'm also doing my own subdivision in Roseville.  It's only 10 lots on Main St. in Roseville; however, it's been a great first hand experience as to the process.

At the end of the day, it's a good time to buy a house in Roseville area.  Make sure you have a good local lender, I can recommend several if you need.  As long as the monthly payment is in your budget, it's likely you'll be able to refi in the near future and get that payment even lower.  If not and rates go up then you'll still be happy with your rate and payment.  Another key is to have a broker like myself who knows most of the other brokers in town to help negotiate on your behalf.  People tend to be more frank and forthcoming with people they know.  

I look forward to another productive and exciting year selling real estate in Roseville 2024!

Sacramento / Placer / El Dorado Hills Real Estate Update Fall 2023

 We're in interesting times.  A time where I'm uncertain what the future holds.  I usually have a better gut feeling about the market as a whole and what to expect for the coming year.  Thus far, we've seen housing prices hold steady with the rise in interest rates.  Currently sitting around 7.75% on a traditional 30 year conventional loan.  The monthly cost of buying a home has shot up immensely and to put things into prospective:  A $500,000 loan at 3% PI is around 2108 a month.  Now with rates near 8% you're looking at a PI cost of 3668.  In just 2 years the same monthly out of pocket cost shot up nearly $1600 a month.  This isn't peanuts folks!  I wonder if prices will come down to balance affordability; however, inflation is having a negative effect on the dollar.  It's not that house values have come down but the dollar has be devalued.  With the current course of actions of those in charge in our government, this problem is only being exacerbated.  They keep printing more money to fix problems.  Many economist are expecting a recession or worse in the near future.  Some would argue it's already here.  Michael Burry who predicted the 2008 crash and bet against the housing market put a big wager in.  1.6 Billion put on the S&P and stock market to drop in the next 6 months.  He's a numbers guy and I hate to think it but he's probably right.  If people start to panic and withdraw we could see a massive collapse and the dollar devalued even more.  A lot of people a looking for ways to hedge against large losses.  Commodities are popular, like gold and silver.  I like the idea of something tangible.  No funny money bit coins for me but that's my opinion.

Are we going to see a wave of foreclosures in the Sacramento region again?  It's not looking so with the date we have.  Yes, we'll have an uptick in foreclosures; however, it will likely stay at an acceptable range.  There's a lot of Americans that are hunkering down and locked in at 2-3% so they can weather the storm.  Nearly 1/3 of Californians have their house free and clear.  This is obviously a good place to be in.  This is not the time to over leverage your position.  With that said I think you can deduct that I'm financially conservative.  I have clients that let it ride and take big risks.  I just don't have the stomach for it and I need to be able to sleep at night.

We're going into an election year with the world unstable in the middle east, Russia and even China with Taiwan.  There's a lot more variables and uncertainty coming 2024.  If Iran gets a nuke, it's plausible that starts WWIII.  I'm not a dooms day person, just looking at the global issues that are effecting us here.  With more continued and heightened conflict we can expect energy pricing to continue to rise.    Energy prices are what hits our pocket book the most.  I'd like to see the US change some policies that would help us but the Biden admin seems to be more concerned with continued control of the county.  

For home buyers in the area, I would want to make sure you are comfortable with the current payment with hopes to refi in the near future.  There are some short term buy down products that might be a good tool to use.  I can recommend several good lenders that will give you as a buyer all your options and make suggestions with your risk tolerance.  

Let me know you're thoughts and if you have any real estate needs.

Re/Max Gold - Chad Phillips

Cell: 916-390-1476