Chic vs. Geek: COVID-19

How is the coronavirus outbreak impacting the real estate market?

CHIC (PEARL)

According to the National Association of Realtors, only 3% of their 1.4 million members have reported listings removed from the market due to the coronavirus pandemic. The crisis is putting a strain on everyone and adding short-term uncertainty to the market, and there’s still a lot that we don’t know about what the next few months will bring. But uncertainty is the name of the game in real estate, and savvy investors know how to stick to a game plan. Now is a great time to take advantage of low interest rates and timid bidders who may not be ready to commit to a property.

GEEK (KEVIN)

I have an important message for sellers: Do not panic. Keep calm, stay informed, and use your best judgment. If you have property on the market and a deadline to sell that doesn’t pause for viral pandemics, you can still get the word out through alternative methods like virtual open houses, interactive floor plans, and video tours. If you decide to host an open house, make sure you follow best practices, bring a lot of hand sanitizer, and keep some masks at the ready. And instead of paper handouts, share them in the mobile cloud. Drop us a line for more tips on marketing in a time of social distancing.

Chic vs. Geek: Relative Bidding

What is a relative bid, and what do you think about this approach?

CHIC (PEARL)

I was asked this question just the other day by one of my friends who is in the market for a home. By making a relative bid, the buyer essentially tells the seller that they will commit to paying a certain amount above the highest offer the seller receives. Typically, the buyer sets a ceiling on this price at a level they can afford. While there is a lot of risk involved (see the Geek’s answer), in a hot market with limited inventory, a relative bid could be the best option to ensure that you get the house. But there’s also risk involved. If the seller has not received an offer as high as the cap on the relative bid, they could simply counter at that maximum price or use it as leverage to get more offers.

GEEK (KEVIN)

This is one of those areas where the Chic and I happen to agree. In multiple offer situations, sometimes the highest offer comes with the worst terms. If most of the offers on a property are bunched together, the highest bid could end up being a dog with a lot of fleas that the seller never would have taken in the first place. For example, a buyer could come in with a high dollar offer and terrible terms just to make sure they get the property. If another buyer made a relative bid on the same property, they could be on the hook for a higher purchase price than the seller would have accepted under normal circumstances. Remember: Bidding is never just about price. It's also about the rules of engagement.

Chic vs. Geek: Home Tech

The 2020 Consumer Electronics Show introduced new and improved technology that will make living in a home much easier and efficient. What’s your take on home tech-onomics?

CHIC (PEARL)

The future of smart homes is exciting! There will be around 31 billion devices connected to the internet by 2020, and that number is supposed to grow to 75.4 billion by 2025. One of my favorite devices is a floor cleaner that performs basic home surveillance at the same time!

GEEK (KEVIN)

The idea of a smart home sounds very attractive. But it’s also smart – and in my opinion necessary – to understand the basics of what you’re getting into, and prepare for any risk involved. What risk? Well, if hackers can break into Equifax, they can crack your home network!

Chic vs. Geek: House Flipping

We found a flipped home at a great price. What should we know before deciding to buy?

CHIC (PEARL)

A home that looks shiny and new can capture a buyer’s gaze, and in this competitive market, offers can easily become impulse decisions. That’s why it’s important to slow down and do your diligence! Request a list of recent renovations from the seller and check the permits. Find out who did the work and check their references. Read the seller’s inspection report closely and ask questions when you have them. Check the title report for any liens. And if you need more, have a look here and here.

GEEK (KEVIN)

When it comes to renovated properties, the level of experience, professionalism, craftsmanship, and attention to detail can vary greatly. When I’m in a home being sold by a flipper, I pay close attention to the details, like the edging on a paint job around the baseboards. It’s not hard to notice when a seller has cut corners to put “lipstick on a pig.” Just don’t get distracted by the color of the lipstick. Like Pearl says, ask a lot of questions and make sure you don’t end up in a money pit.

Chic vs. Geek: HOA Fees

How can we avoid paying too much – or paying at all?

CHIC (PEARL)

You typically run into HOAs when buying a condo, townhouse, or single family home in a PUD (Planned Unit Development). HOAs are governed by Covenants, Conditions, and Restrictions (CC&Rs), which define the requirements and limitations of what you can do with your property based on standards agreed upon by the homeowners in the development. The goal of CC&Rs is to protect, preserve, and enhance property values in the PUD. Homeowners pay HOA fees to have a say in the rules and for collective maintenance of the community.

GEEK (KEVIN)

Ironically, HOA dues can go up if the HOA itself is poorly managed, especially in a self-governed community. As a buyer, you should look carefully at the governance of any HOAs you encounter in your search. For a quick stress test, check to see if they have a reserve fund or other contingency plans. It’s also common for self-governed HOAs to misforecast or underestimate future costs for maintenance, security, and other neighborhood concerns. All of this can lead to higher fees and more headaches. Here’s some more helpful info.