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Are Orange County Realtor Fees Worth It?

Orange County Realtor Fees

Are Orange County Realtor fees worth it? Well, it depends on the value and quality of your Orange County Realtor. But as a general rule of thumb in Newport Beach, Laguna Beach, and Corona Del Mar real estate, like in all things, you tend to get what you pay for.

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It’s a new year, and the coastal Orange County real estate market is waking from its seasonal slumber. Dozens of homes, still warm from winter fires, are shedding their decorative holiday coats in favor of neutral staging decor. Neighborhoods soon will swell with eager buyers on the hunt for their dream homes. If you’ve been thinking about selling your Newport Beach, Laguna Beach, or Corona Del Mar home, now is a great time to get down from the fence and find an agent to list it on the market. But which agent should you choose, and how much should you pay them?

Across the country, the standard commission rate that a seller pays their listing broker for helping to sell their home tends to hover between 5 and 6%. According to data from the National Association of Realtors®, the average commission in 2019 was roughly 5.7%. Since real estate commissions are not officially regulated, it’s up to the seller and their agent to settle on a fair fee. Therefore, it’s important for sellers to know what they’re getting in return for the agent’s cut. So what does your commission get you?

Doing the Commission Splits

The first thing to understand about commissions when selling your coastal Orange County home is how that money is divvied up. Say you agree to pay your listing agent 6% of the selling price. That 6% does not go straight into your listing agent’s pocket. In fact, he or she will likely only receive a fraction of that amount, maybe around 25 to 40%. That’s because, as the seller, you are actually paying both the listing agent and the buyer’s agent. But wait, there’s more! Let’s explore how a standard real estate commission breaks down.

First off, your 6% commission goes to the listing agent’s side. Per your listing agreement, the listing agent denotes what amount of that 6% they will pay to the buyer’s agent for making the deal happen, usually around 2.5 to 3%. Of course, the buyer has their own costs to worry about, from appraisals to inspections to insurance and more. However, they don’t directly pay their agent to help find them a home. Instead, the buyer agent gets about half of that 6% from the listing agent when the transaction is closed.

What’s more, agents on both sides of the transaction pay a substantial portion of their earnings to their parent brokerage. From the 3% portions designated for the listing agent and the buyer’s agent, up to half of that may end up going to their brokers. So, instead of 6%, or even 3%, the agents might walk away with 1.5% apiece from the total sale price. While that’s not necessarily a meager sum, as homes routinely sell for hundreds of thousands or millions of dollars, it’s a far cry from the glaring 6% that turns the stomach of many prospective coastal Orange County home sellers.

Services Rendered

So your listing agent doesn’t necessarily get a big 6% payday out of your closing price. Even so, if you receive poor, inattentive service from your agent, then any amount will feel like too much. What should your agent do to earn their pay? And what expenses does a listing agent accrue in the process of selling your home? Most marketing practices involved in listing an Orange County home for sale do incur costs out of the listing agent’s pocket.

Successfully selling coastal Orange County real estate in this digital age requires a keen eye for web-based marketing. By 2017, up to 95% of buyers were using online search to find a home, and it’s only increasing. That means that professional media including photos, videos, social media and email marketing now play a critical role in improving your home’s visibility to the prospective buyers. Your listing agent should provide marketing multimedia which portrays your home in its best light, and your commission helps to pay for those professional services.

Of course, the “new school” of marketing hasn’t replaced the “old school.” Your coastal Orange County real estate agent should include print and mail marketing in their plan. Postcards, flyers and brochures all remain relevant marketing tactics to let the neighborhood know that your home is for sale. And each of those methods costs money for printing, postage, design, and so on.

Most of all, your agent’s commission pays for their time and expertise. Hosting open houses, managing marketing campaigns, coordinating vendors like staging and inspections—if done right, each of these aspects of selling a home takes considerable time and effort. A good agent will also spend the time to field your questions, devise a strategy for success, negotiate on your behalf, and ensure that you are comfortable and informed at every step.

You Get What You Pay For

As with any profession, there are good and bad apples among coastal Orange County Realtors. Just because John Q. Agent charges 6% doesn’t necessarily mean he’ll do a good job of selling your coastal Orange County home. However, from a purely mathematical perspective, an agent who provides a “discount” service is simply unable to provide the personal care and professional marketing required to make your sale a resounding success.

Choosing an agent based on a low fee, or choosing to sell on your own (known as FSBO, or “For Sale By Owner”), is much more likely to backfire than it is to save you any money. In 2017, FSBO sales accounted for 7% of homes sold nationwide. The average FSBO sale price was $200,000, compared to $265,500 for homes listed with an agent. While it’s not a perfect apples-to-apples comparison, the difference of over 32% is still quite jarring.

So here’s the big takeaway: when you’re thinking about selling your coastal Orange County home, there’s a number of criteria you should look for. “Lowest commission,” frankly, shouldn’t be that high on your list. You should choose your agent based on their competence and experience. Their honesty and reliability. Their track record. By how well their personality and schedule fit with your own.

A great coastal Orange County real estate agent is worth every penny. Lucky for you, we happen to know some of the best. We have dozens of happy client reviews, years of experience in your neighborhood, and a veteran team of dedicated admin and marketing staff. If you’re thinking about selling or buying a home in coastal Orange County, or if you just want to discuss the current coastal Orange County real estate market, get in touch to start a no-pressure conversation. We’re always happy to hear from you.

Hidden Costs of Luxury Real Estate

Orange County Luxury Real Estate

Luxury real estate in Newport Beach, Laguna Beach, Corona Del Mar, and greater Orange County is impressive, extravagant, and, of course, expensive. That should come as no surprise; it’s right there in the name! Luxury is defined as “conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity.” But even if you’ve got the cash to buy a sprawling, lavish estate, there is more than the listing price to keep in mind. In this article, we’ll cover some of the hidden costs of owning a luxury home.

While you may have the resources to buy a luxury home, it’s important to be aware of externalities. Much like starting a family, it’s only prudent to be prepared before shouldering a new bundle of responsibilities. As your trusted real estate advisers, a crucial part of our job is to ensure that you’re as informed as possible. So let’s explore some examples of the expenses that come with buying a luxury home.

More Than You Can Chew: A Case Study in Luxury Homes

Sixteen years ago, rap artist and former beverage mogul Curtis James Jackson III, aka 50 Cent (Fiddy), purchased a grand Connecticut estate. Nestled 80 miles north of the wealthy town of Greenwich near NYC, the residence at 50 Poplar Hill Drive boasts 52 rooms across 50,000 square feet. Some of the property’s opulent features include a nightclub, two private pools, both indoor and outdoor basketball courts, and a recording studio (naturally). The home is larger than others in the area, which didn’t help when it was later listed for sale.

Fiddy bought the estate in 2003 from another famous face, one Mike Tyson of boxing fame. The sale price then was $4.1 million. After a few years of owning the property, Fiddy listed the home for sale at $18.5 in 2007. At such a dramatically increased price, the listing did not sell and was taken off the market. By 2015, Fiddy again listed the home for sale. This time, the price was $4.995 million, but again the home did not garner the asking price. Finally, he sold the property in 2019 for $2.9 million to Florida businessman, Casey Askar. That’s an 84% price drop from his 2007 asking price of $18.5 million.

Such a drastic decrease begs the question: Why did Fiddy sell? The answer is in the hidden costs. Reportedly upwards of $70,000 each month, the upkeep and maintenance costs of the lavish estate were simply too much for Fiddy to handle. From the 50,000 sq ft of 52 rooms, to the lawns and the pools, the estate at 50 Poplar Hill Drive required constant effort from groundskeepers and staff. Not to mention utility bills to keep the residence warm throughout the winter, or cool in the summer. In just five years, that monthly cost would add up to the total that Fiddy paid for the original sale, and he could no longer justify the expense.

A Luxury Home Takes a Village

If you’ve watched the popular period drama Downton Abbey, then you are one step ahead of ol’ 50 Cent in knowing that running a palatial estate is a team affair. There’s the estate manager, the household manager, the butler, the chef, the cooks, the gardener, the gameskeeper, the stewardess, the chauffeur, the parlormaid, the chambermaid, housemaid, laundrymaid—the list goes on. But while the costs are steep, they do come with perks: keep your house in order and you may even be graced by a visit from the Queen!

In all seriousness, your home need not be a sprawling estate to be considered “luxury.” In the simplest sense, a luxury home is one that is valued well above the average in a given market. In many US cities and metro areas, a price of $1 million is often considered the starting point for luxury homes. In markets like San Francisco and New York, where prices are substantially higher than the national average, luxury is said to start around $4 million.

On the bright side, you do get more for the higher price tag. Luxury homes, whether a charming San Francisco Victorian or a giant midwest mansion, tend to come with more square footage and fancier features than the average home. But of course, there’s a hidden cost there, too. For a large luxury property, simple tasks like cleaning your gutters or mowing the lawn become a considerable expense. Want to upgrade to smart devices and appliances? It’ll cost a pretty penny to do so across your whole home. While you may have the money to cover these additional expenses, it’s important to be aware of them when planning your home purchase.

Luxury Mortgage and Tax and Insurance, Oh My!

Let’s take a look at another famously fancy luxury home with hidden costs. When Yuri Millner, a Russian-born tech investor, bought his Silicon Valley home in 2011, the sale price of $100 million broke records in California and Santa Clara County. The Bay Area estate sits on 11 acres with structures of roughly 25,000 square feet, and includes a ballroom, a theater, a spa and a gym.

Interestingly, the taxable assessed value of the home has marked around $50 million by the Santa Clara County Assessor, just half as much as Milner paid. Yet that still means Yuri is on the hook to pay over $600,000 each year in property taxes. If Yuri has a mortgage, his payments will be whoppers as well. If he financed the home using a standard 30-year fixed conventional loan with 20% down and $80,000,000 in principal, his monthly payments would total nearly $400,000.

Of course, a Russian oligarch or any other billionaire likely is not concerned with middling expenses in the mere hundreds of thousands. But the fact remains that, as a home price grows, so too do its associated costs. Getting insurance for a $100 million home is nigh impossible, but insurance on a $5 or 10 million home is just plain expensive. From the tax man to your loan officer, you’ll be paying the pipers by the truckload.

Your Orange County Luxury Experts

Home ownership always comes with additional costs. But despite the increased expenses, buying a luxury property in Newport Beach, Laguna Beach, or Corona Del Mar can be incredibly rewarding. The stunning views, the lavish spaces, the fixtures and finishes each provide a magnificent setting for your modern lifestyle. We love matching our clients with the perfect home to fit their tastes and their budget. If you’re looking to buy or sell a luxury property, get in touch to start the no-pressure conversation and explore your options.

The Dangers of Overpricing Your Orange County Home

Whether you’re in Newport Beach, Laguna Beach, Corona del Mar, or elsewhere, the dangers of overpricing your home are the same: It just won’t sell. Simple enough, no? Well, if you’re still curious, then read on to explore the reasons that pricing your home too high for the coastal Orange County market is perhaps the worst thing you can do when trying to sell.

Say you love the old tile smattered over your split-level floor plan. You feel the pool you installed for six figures was an excellent investment. Your afternoon naps simply wouldn’t be the same without those blaring trains. You love everything about your home, so it must be worth a little extra, right? Not necessarily.

An all-too common mistake by those selling a home in coastal Orange County (and literally everywhere else) is that they overvalue their property. Maybe they want to recoup their investment on costly improvements. Maybe their personal taste doesn’t match with market trends. Maybe they did some misguided research, or maybe they’re just going with their gut. Whatever the reason for an unrealistic sense of their home’s value, they can all be deadly to a listing’s chances.

Inevitably, a portion of sellers will heed poor advice from agents who will say anything to sign a listing. Others may scorn the advice of a good agent. But what really happens when a home is overpriced?

More is Less

Ironically, if your listing is overpriced, it’s more likely to sell for less than if you had priced correctly at the outset. Buyers are often reluctant to offer a “lowball” price to an overpriced listing, for fear of wasting their own time or possibly offending the sellers. Sure, some bold buyers might decide (or be convinced by their agent) to bid low, but many more of them won’t even bother.

When a listing is priced too high, buyers will move on to spend their time and energy on the reasonably priced listings in the area. They don’t want to waste their effort. That leads to decreased competition for the overpriced listing, and in the end a lower sales price. Good agents can spot an overpriced listing from a mile away. When they spot one, they will know that their clients needn’t worry about getting stuck in a bidding war. A seller who has overpriced should expect to see lower bids and fewer of them.

Losing Steam

Your first days and weeks on the market are the most crucial. When your listing goes live on the MLS, it triggers a cascade of events meant to help drum up interest in your property. Notifications are sent to buyers and agents through automated MLS alerts and search websites like Zillow, when a home that meets their criteria hits the market. If your listing is overpriced, those alerts won’t get a second look. In fact, if your pricing is way off, those alerts won’t even go to the “right” subset of buyers at all. Either way, you’ve wasted an opportunity.

As soon as your listing goes live, open houses and broker tours will populate on search sites, and your agent’s marketing plan should be in full swing. Snail mail, email, social media, agent networking—everything is full-speed ahead to supercharge your entry into the market. But, if you’ve priced too high, then you’ve stymied that effort from the get-go. Overpricing is an exercise in self-sabotage.

Going Stale

Once the initial marketing period is over, an overpriced listing will continue to linger on the market. And linger. And linger. And linger… you get the point. “Going stale,” in industry lingo, means being confronted with two options. First, you can simply wait. Perhaps you have the time to wait for conditions to improve. You’re not in a rush, and at the very least inflation will catch up to your unrealistic expectations eventually, right? Some sellers choose to pull their home off the market, but many don’t have that kind of time to spare, or they don’t want to live in listing limbo.

Your second option is a price drop. Sometimes, a price drop is a perfectly reasonable course of action; if it’s spurred because of a shift in market conditions, then you’re at least somewhat insulated by the fact that everyone else is floating in the same ebbing tide. However, if you must drop your price due to your own initial mistake, then you’ll turn into easy prey. Much like the lion that hunts the sickly gazelle, buyers will identify your listing as fundamentally weak. Offers will come in low, and buyers who see multiple price drops will just wait around for the next one.

Hitting the Sweet Spot

The dangers of overpricing highlight the importance of finding an agent who you trust. You deserve a real and honest discussion. At the Stavros Group, we apply our experience in Newport Beach, Laguna Beach, Corona del Mar and beyond to fit your needs, and we offer guidance based on the realities of the market—good or bad, up or down. We are your trusted advisor in selling or buying a home in coastal Orange County. If you’re considering making a change, reach out to start the no pressure conversation and we’ll discuss all your options.

No Green Thumb? No Problem: 7 Easy Houseplants to Liven Your Living Space

If you’re buying Newport Beach real estate, staging your Laguna Beach home to sell, or if gloomy fall weather starts getting you down, then you could stand to benefit from some bright and lively houseplants!

Houseplant History

For thousands of years, people have been bringing a little piece of the outdoors into their homes. According to the legend, King Nebuchadnezzar II of Babylon commissioned the fabled Hanging Gardens for his wife, Queen Amytis, way back in 600 BC. The Greek scribe Berossus noted that the queen was not native to Babylon, so the Hanging Gardens were filled with familiar foliage to help her feel at home in a foreign land.

Historical findings have also documented houseplants in ancient Egypt, Greece, Rome, and among eastern civilizations. Roses and violets in marble or terracotta pots could be seen bestrewn about the homes of wealthy Roman citizens, eager to display the tallest and brightest flowers. Miniature potted plants such as the Japanese Bonsai and Chinese Penjing first appeared around 200-500 CE.

Throughout the Middle Ages after the fall of Rome, houseplants largely fell out of practice, surviving mainly in monasteries by monks who grew practical plants like herbs and vegetables. When the Renaissance came around, interest in houseplants was revitalized, and wealthy individuals paid handsomely for exotic specimens procured by explorers such as Christopher Columbus. Suffice it to say that humanity has long known the value of the humble houseplant!

Green Living

Aside from simply looking nice, houseplants have some great additional benefits. First and foremost, plants purify the air around us. The hungry buggers gobble up our exhaled carbon dioxide, and they release fresh and clean oxygen for us to breathe in—all at the low cost of a little water and sunshine. Plants also clean volatile organic compounds (VOCs) from the air in our homes, although at such a small scale that it doesn’t make much difference.

Additionally, houseplants have shown various health benefits in clinical trials. In one example from the Department of Horticulture, researchers found that hospital patients recovering from surgery in the presence of houseplants had lower blood pressure and less anxiety, pain and fatigue. Patients reported that the plants “brightened up the room environment, reduced stress, and also conveyed positive impressions of hospital employees caring for patients.”

These effects can be realized in the home or workplace by adding plants of your own! If you have a home office or even occasionally work from home, consider adding a plant or two in view. A study by researchers at Washington State University found that workers with a potted plant in their line of sight saw increases in productivity of up to twelve percent.

Houseplants Made Simple

You may be interested in houseplants to liven up your home’s decor or to reap the health and other benefits covered above. If you’re new to taking care of plants, however, you’re likely wary of making a purchase just to see it die in the weeks or months that follow. But fear not, as there are plenty of options for those less floriculturally-inclined.

Here are just a few plants that DON’T require a green thumb to keep alive and well:

Aloe Vera

This hardy succulent only needs to be watered every couple of weeks. Allow soil to dry completely between waterings. As an added benefit, you can cut a piece and apply the latex it secretes to ease sunburns and minor cuts.

Snake Plant

Another plant which doesn’t need frequent watering, this succulent’s thick and waxy leaves store plenty of moisture. No need to stress while you’re away on a two-week vacation!

Spider Plant

This popular houseplant is perfect for newbies. A mainstay of homes around the country, and for good reason, the spider plant can withstand plenty of neglect. Just keep them watered and in indirect sunlight.

Pothos

Although tropical in origin, this viney plant’s heart-shaped leaves thrive even in cooler and drier climates. They don’t mind lower light or humidity levels, making them an easy and beautiful option for any home around the country.

Cactus

A symbol of the dry desert, cacti are the quintessential low-maintenance plant. Allow soil to dry between waterings; roughly a week if your pot has drainage holes, longer if not. As you might have guessed, these do require lots of sunlight, so place them in a brightly-lit space.

Cast Iron Plant

This lush evergreen is as resilient as its namesake. It is known to survive drastic shifts in temperature, and it doesn’t need a whole lot of sunlight or water to thrive.

Tillandsia (Air Plants)

As their name suggests, these beauties don’t even require soil to grow! As “epiphytes,” plants which extract nutrients directly from the air around them, you can hang tillandsia from the wall or ceiling as an attractive decorative piece. Just place them in bright sunlight and mist them occasionally to prevent drying, with frequency depending on the season.

Boost Your Quality of Life

As local real estate experts, we aim to show your listing in the best possible light. Just like a fresh coat of paint, a few well-placed plants can revitalize a room, so we love to use them when staging a home! The truth is that you don’t need a green thumb to enjoy the mood and health benefits of indoor plants. Give some of these houseplants a shot, and let us know how you fare! We’re always happy to hear from you.

Spooktober Special: On Haunted Homes

Hear ye, hear ye, guys and ghouls: Spooktober is upon us, and with it come the costumes, the parties, the candy, and of course the haunted houses. Right up there with graveyards, real estate has long been the setting for scary stories of things that go “bump” in the night.

Haunted House Hunters

To the true believers, living in a haunted house sounds like a recipe for many sleepless nights. Research from YouGov shows that about 45% of Americans do indeed believe in hauntings and ghosts. Those folks will likely shy away from visiting, much less purchasing, a haunted home.

To the skeptical, real estate with a haunted past might sound like a good way to snag a deal on a property. But, in most cases, a home will sell for roughly the price that it’s worth based solely on its location and material value—haunted or not.

However, there are some examples of homes garnering significantly less buyer interest due to their spooky reputation. For instance, this Victorian mansion in Massachusetts, once a Freemason hall and then a brothel, was listed shockingly cheap at just over $300,000.

If the House Has Ghosts, Must You Disclose?

Something you may not know: depending on where you live, some states require real estate agents to disclose in a listing whether there was a death in the home, or even whether the house is considered haunted by some. For a fee, you can find out about deaths in a home from services like DiedInHouse.

In California, an agent must disclose whether there has been a death in the home in the past 3 years, including natural deaths. In Hawaii, however, any occurrence that had no material effect on the physical structure of the house does not need to be disclosed.

Other states, like Georgia, don’t require anything to be disclosed up front, but they do require any questions to be answered truthfully. A majority of states do not require deaths or reports of the paranormal to be disclosed, in order to protect sellers from undue stigmatization.

A Selection of Spookings

In the spirit of the season, we thought we’d share a few of the spookiest homes in America. How would you like to live in one of these?

The Los Feliz Murder House

Source: Realtor.com

Early in the morning of December 6th, 1959, Dr. Harold Perelson murdered his sleeping wife with a hammer and attempted to do the same to his daughter, Judye. The teen girl managed to escape and rouse her neighbors who called the police. Dr. Perelson proceeded to ingest dozens of pills and died before an ambulance arrived.

Rumor has it that this Spanish-style mansion in the upscale LA neighborhood of Los Feliz was briefly rented out to a family in the early 1960s, after which it remained empty for decades. Christmas decorations were visible inside the home, likely left by those renters as the Perelson family was Jewish. Neighbors reported paranormal activity, and the house became an attraction for thrill-seeking tourists. Decades later in 2016, the home was sold.

The Winchester Mystery House

Source: Pixabay

Once the residence of Sarah Winchester, widow of firearm magnate William Wirt Winchester, this Queen Anne Victorian mansion in San Jose, CA, is well known for its puzzling design and its frequent paranormal sightings.

The home has been featured in media such as Ghost Hunters, and it was the set location for the Winchester film starring Helen Mirren as Sarah Winchester.

The Amityville House

Source: Wikimedia Commons

In 1974, six members of the DeFeo family family were found murdered at this house in Amityville, New York, 30 minutes outside of New York City. Roughly one year later, the Lutz family bought the home at a huge discount. They lasted 28 days in the home before leaving due to sightings of paranormal activity.

The Lutz family’s short time in the home was memorialized in 1977 in a novel by Jason Anson, The Amityville Horror, which has since been made into multiple feature films.

The Whaley House

Source: Wikimedia Commons

This haunted house in San Diego’s Old Town district is said to have been the site of hangings before it was built in 1857. The owner’s daughter, Violet, killed herself at the house in 1885. Stories say that a number of spirits roam the house to this day.

Now a California Historical Landmark and a museum, you can take a tour of the Whaley House for yourself during a trip to Old Town… if you dare!

Tis the Season for Spooking

These are just a few of our nation’s many reportedly haunted homes. As a Halloween attraction, the haunted house industry brings in over $300 million each year. Do you plan on visiting a haunted house with your friends or family this year?

The Art and Science of a Listing Price

Selling real estate is a unique career. Agents come in all shapes and sizes, with diverse backgrounds ranging from business management to entertainment to homemaking to everything else under the sun. Given these vast differences in abilities and past experience, your process working with a real estate agent can vary dramatically from one to the next. And yet among every single agent, there’s one skill that matters more than all the others. One skill which can make or break your sale. One skill which is truly the heart and soul of an agent’s work.

“So, what is it?” you say. “Spit it out! What’s the most important skill that every agent needs?”

Well, since you asked so nicely: It’s setting the listing price.

Buy Low, Sell High

We all know that negotiations are the name of the game when buying or selling a home. You want an agent who will apply force to every lever of a deal, fighting at every opportunity to save you money or boost your closing price. What you may not know is that a properly priced listing can earn you more money right from the outset. Conversely, an agent who can spot an improperly priced home might just snag you a deal.

In nautical terms, setting your listing price means choosing where to drop anchor. Once you’ve settled on a location, you throw out your bait to see what house-hunting fish swim in for a nibble. Yet no matter how tasty the bait or how shiny your lure, if you price too high, you simply won’t get any bites.

This metaphor is particularly apt when you consider broader business strategies. An “anchor price” is a widely used tactic that companies use to establish a psychological baseline for their products. If the shoe store says some boots are worth $200, then you’re getting a great deal when they’re on sale for just $100, right? (Even if they cost the store just $5.) While it’s exceedingly rare to see a home listing’s price drop anywhere near 50%, real estate is still affected by this psychology—with very real effects.

Bigger Might Not Be Better

Those effects are most clear in an overpriced listing. If you list too high, you’ll be subject to lowball bids, upturned noses, and open houses as empty as a ghost town. New listings tend to see the most activity and buyer interest within their first few weeks on the market. When your listing is overpriced, you’ve essentially wasted the most crucial days of your home’s marketing period.

After a few lonely weeks with too few or too poor of offers, you’ll likely consider a price reduction. Mind you that price reductions are a completely valid tactic in many cases, as markets can shift during the listing period for a myriad of reasons which may be impossible to foresee. However, it’s not a fun thing to do, if the lack of interest stems from simply pricing too high for the current market at the time of listing.

Ultimately, an overpriced listing is one of the great tragedies of real estate. The reverse, however, is not so dire. Let’s look at underpriced listings next.

How Low Can You Go?

An under-priced listing is not nearly the same catastrophe as an overpriced listing. In fact, setting your home’s listing price below its current market value can be a compelling strategy. Like a Black Friday sale, a low listing price can draw folks out of the woodwork to take a look at your home. Remember that the first few weeks of a new listing are the most important—a low listing price can pack those weeks with open house visitors, agent showing requests, and “saves” on sites like Zillow and Trulia.

That’s not to say that pricing low doesn’t come with risks. If your home still garners less than the critical mass of interest needed to boost offers and counters above market value, you’ll wind up in another sad state of affairs. In a worst case scenario, the market may shift under your listing and (like current interest rates) you’ll have little room to maneuver the lows any lower amidst an economic downturn.

The safest bet for most sellers and agents, especially those with less experience under their belts, remains to price a listing right around market value.

Finding the Sweet Spot

So how does an agent find exactly the right price to drum up the most interest and highest offers on a listing? The best tools at an agent’s disposal are the recent sales around your home.

When you first meet with an agent, they’ll likely provide you with a CMA, or Comparative Market Analysis, detailing the price and statistics of recent listings in your area. Much like an official appraisal, CMAs compare the sold homes in your area, their features, amenities, and the dates they sold, against your own. They’ll also compare the homes that are active and pending right now, more indicators of your current local market conditions.

By comparing and contrasting your home with other listings in your neighborhood, your agent can triangulate a ballpark figure for your home’s value. That’s the science of setting a listing price. Popular home search tools like Zillow have grown that science into complex algorithms which claim to output estimates within a few percentage points of error.

Then there’s the art of pricing a home. Like painting a masterpiece, it takes years of experience and a profound professional insight to obtain an organic sense for pricing. Through dozens of transactions and persistent study of the local market, consumer tastes, national trends and lender criteria, a seasoned agent has the acumen to see beyond the comparables. Even in a subdivision with identical floor plans, every home is unique. To assess every variable and produce a strategic, targeted price is a talent which not every agent possesses.

Your Local Experts

At Stavros Group, we’ve been working in your neighborhood for years. We know what works, what sells and how much it sells for. If you’re thinking of buying or selling a home in Newport Beach, Laguna Beach, and greater Orange County, let us know. We’d be happy to discuss your options during a free, no-pressure consultation. Real estate is our passion. We’re excited to share that passion with you, to match you with the great results that you deserve!

The Importance of Interest or: How I Learned to Love the Fed

The year is 1984, and despite Orwellian predictions to the contrary, nothing seems to be going poorly at all as you amble down your tree-lined street. A neighbor cheerfully hollers across the road, but with Purple Rain cranking through your Walkman, you can’t quite make out what he said. Nudging the headset off one ear, you hear him repeat, “Howdy neighbor!” Well, howdy, yourself!

You’ve rented here for quite a while. It’s a sleepy little suburb with friendly folks and good schools. For years, you’ve saved diligently with the goal of making an offer on one of the charming homes for sale that you see every day on your walks. Browsing the Yellow Pages and consulting with friends, you finally found a real estate agent who you can trust. Now all that’s left is to get approved for a mortgage! Considering your outstanding credit, the lender is willing to make a deal—thirty years fixed at a low rate of just fourteen percent!

Today’s Rates are Hard to Beat

It may seem crazy to young homeowners and aspiring buyers, but throughout the 1980s the national average mortgage interest rate was well into the double digits. Recession and inflation starting in the late 70s prompted drastic measures from the Federal Reserve who cranked up interest rates to even as high as twenty percent. Since then, and especially after the financial crisis of 2008, the average rate has seen a precipitous decline. After years of wavering around four percent, the notion of a thirteen or fourteen percent mortgage is unthinkable to most new and would-be homeowners.

Let’s compare an average 30-year fixed-rate mortgage in August 1984 with August 2019:

Loan of $200,000, 30-yr fixed
- August 1984 avg rate: 14.47%
  - Total cost over lifetime of mortgage: $879,962
- August 2019 avg rate: 3.62%
  - Total cost over lifetime of mortgage: $328,154

In 1984, your mortgage would cost over four times the amount borrowed over the course of the loan. Whether you’re bearish or bullish on the economy as a whole, with a little perspective it’s abundantly clear that home buyers have it very, very good these days. As an extreme example, the stark contrast illuminates how important interest rates are in a home purchase.

Using more recent and normal examples, the current average still beats recent rates including just last year. In August 2018, an average fixed-rate loan of $500,000 would cost you $917,389 over 30 years. One year later in August 2019, you would save nearly $100,000, at $820,386 over 30 years. That’s a huge difference and huge savings after a rate drop of less than one percent (4.55 to 3.62%).

Use Low Interest Rates to Your Advantage

So what does this all mean? First off, it’s clear that buying a home when rates are low is the most effective strategy to ensure that you’re getting a good deal. Both buyers and sellers benefit when rates are low, as buyers can afford to borrow more money for less overall cost. When buyers can afford bigger and better homes, competition is increased across the market, listings garner wider interest, and ultimately sellers receive higher offers and closing prices. All at essentially no extra cost to the buyer, because their money simply went further at a lower interest rate.

This also means that homeowners who purchased recently could be eligible to save big by refinancing an existing mortgage above current rates. According to analytics firm Black Knight, four out of five mortgages originating in 2018 are at least 0.75% higher than today’s rates. Additionally, they found that most mortgages from before 2004 could have rates lowered by about 1.75%, leading to massive savings.

We’re Happy to Help

Inevitably, the Federal Reserve will raise interest rates and the market will retract to some degree. Of course, nothing about the economy happens in a vacuum, and there are always countless extenuating factors. So we’ll skip making bold predictions. Instead, we will simply recommend this sage old advice: “Get while the gettin’s good.” Rates are nearly as low as they can be, and real estate is entering its most active time of year. If you’ve been thinking of buying or selling, now is an excellent time to do so! Give us a call to find out how we can help.

How Does Smart Home Technology Affect the Sale of My Home?

In the 1950’s, homeowners were wowed by dreams of the future, with flying cars, self-baking ovens and automated vacuums. Many of these concepts have come to life with smart home technology, though not necessarily in the way they were once imagined.

Smart homes today revolve around making life easier, letting you adjust everything from temperature to lighting from anywhere in the world. These types of improvements do a lot to attract millennial buyers who have grown up with technology and look forward to its integration into the home.

A Little Does a Lot

Having access to tech in a home office, kitchen and bathroom will set your home apart from other houses without such modern conveniences. Fortunately, unlike completely remodeling major portions of the building, adding value to your Orange County home with smart tech won’t break the bank.

Spending around $1,000 before putting your Newport Beach house for sale, a paltry sum where renovations are concerned, will result in significant gains on the housing market. Though these aren’t always monetary, it can result in a faster sale since these features are very attractive to buyers that would be interested in installing some of the same units themselves.

Doorbells and Detectors

Many tech tools don’t take much of a time investment when it comes to installation but provide a host of benefits that you and future homeowners will inevitably enjoy. Some of the most common items that will help craft the perfect smart home include:

Video Doorbells – Security is always a major concern, and being able to keep an eye on your front door while at work or even in the shower makes a home feel that much safer.

Smart Locks – Another front-door option, these take a little more effort to install but the added security and keyless entry options make it a worthwhile addition.

Smoke Detectors – Knowing anytime when there’s a fire or batteries need changing is a definite boon, and the cost of multiple detectors can be offset by smart devices that listen for the alarms already present in your house.

Thermostat – The first real integrated smart device, this can ensure your home is always at the correct temperature and can even respond to voice commands when you’re relaxing on your couch!

Light Bulbs – Lamps on timers have been a mainstay of vacationers for decades, but smart bulbs will turn on with your phone, and many can even adjust color and brightness on a whim!

Smart Speaker/Hub – Alexa and Echo, Amazon and Google’s smart-home supermodels, are just two examples of units that respond to your voice and tie all of your tech together into a cohesive unit.

These simple upgrades will transform your home, and even though they seem like superficial additions they let possible buyers see your house as more than building. Safety and security are just as important as comfort and convenience, and when it’s all integrated it becomes one irresistible package!

Room to Improve

While all of this technology does wonders for your home, you also need to consider which rooms will benefit most from electronic additions. Every area can be upgraded, but certain tech fits more easily in specific locations.

Living rooms or gathering spaces are definite spots to create a centralized hub for technology. Having your smart hub where everyone congregates makes it much easier to control and monitor the house while entertaining, and hose-shoppers will take notice when the primary living space is set up to be a control room for all of their toys.

Another space that benefits from these upgrades is the kitchen. While a smart refrigerator is more expensive than other options, adding high-tech appliances to the most complex room in the house makes it that much more alluring. Even something as simple as adding receptacles with USB ports by the nightstand can be a deal-maker!

Selling My Home With Savings

It’s not just a fancy screen on a dryer that makes it a big selling point. Making your home smarter also makes it energy efficient. If lights turn off when you aren’t home and thermostats regulate heat and cooling efficiently, homeowners are going to see a drop in their energy bills. High tech security also looks good to insurance companies, so fire alarms and video doorbells are a definite win for you and potential buyers.

Getting your house ready for the Orange County real estate market is never easy, but make sure you keep smart home technology in mind as you prepare to put your Newport Beach house for sale. The added value comes in a variety of ways, and if spending around a thousand dollars helps you make the sale more quickly, it’s an investment any homeowner can get behind!

If you find it time to buy or sell your home in Orange County, I hope you’ll think of me!

The Best Newport Beach Neighborhoods: A Look at West Newport

You’ve decided to make the move to Orange County and you’ve even started browsing some houses for sale in Newport Beach. If you’re new to the area, the next step in your house hunting journey you may be thinking, “What is the best neighborhood for me?” We’re here to help!

Welcome to the next edition of our Neighborhood Spotlight Series, where we provide a little insight into some of the best neighborhoods Newport Beach, Laguna Beach and Corona del Mar have to offer, so you can feel more comfortable in the purchase of your new home in Orange County.

This month we will be featuring West Newport, a neighborhood in Newport Beach that boasts over two miles of coastline and some of the best beaches in Newport. West Newport is ideally located where the coastline splits into the mainland and Balboa Peninsula, giving it a ‘beach city’ culture. This means West Newport residents enjoy the best of both worlds, with the convenience of quick access to the rest of Newport Beach, as well as the restaurants, shopping, and attractions that the peninsula offers.

We have created an infographic to provide a quick glimpse into some of the housing and residential statistics that a potential homebuyer may be interested in. We hope you find this information helpful!

We happen to have a beautiful property currently on the market, that’s located on the edge of West Newport, but in a prime oceanfront location. This spacious multi-unit property at 2212 W. Oceanfront totals approximately 3,200 square feet and includes a 2-bed double-master unit with 3 baths upstairs, as well as a 3-bed, 2-bath unit downstairs. Both the upper and lower units feature a chic updated interior and stellar ocean views. The prime waterfront location provides convenient access to hip shops, restaurants and bars. Wake up with a stroll along the shore and an espresso at Urban Cup, pop in for lunch at local favorite Dory Deli, or enjoy a night out at newly-opened Fable & Spirit nearby. Whether you choose to rent both units or keep one for yourself, one thing is for certain: your residents will love waking up to the beach right outside their door.

We know that trying to settle on the right Newport Beach neighborhood as you’re looking at homes for sale in Orange County can be tricky, but here at The Stavros Group we’re here to provide a helping hand and make the process of buying the Newport Beach home of your dreams as easy as possible. Please do not hesitate to give us a call!

Newport Beach Luxury Homes for Sale and Recent Updates

Summer is already starting to draw to a close, but temperatures are just beginning to pick up….as is the market!

We have a unique selection of Newport Beach Luxury homes for sale available at the moment — from a gorgeous luxury farmhouse to an ocean view duplex on Balboa Peninsula to a custom Santa-Barbara influenced home within walking distance to the beach. Whether you’re looking for some additional income or the perfect property for yourself, we strive to offer some of the best possibilities Orange County has to offer. And it has some stunners!

In other news, REAL Trends just released their 2019 America’s Best Real Estate Professionals list, and we are so honored to have been added to this list!

According to Steve Murray, the president of REAL Trends, “Those individual agents and teams who make up the 2019 America’s Best Real Estate Professionals represent less than 1.5 percent of all Realtors® in the country yet account for over 12 percent of the closed transactions and more than 22 percent of all the sales volume closed last year.”

What an amazing statistic to be a part of — our goal is to keep this momentum going and continue to perform our best for the best clients. I once read the following quote and it seems fitting:

“Don’t work for recognition, but rather do work worthy of recognition.”

This is what we strive to accomplish every day we come into work! Numbers are great, but a satisfied client is lasting.

We’ve had a few new spectacular properties come on the market recently that I must share with you!

Looking for an investment opportunity in Newport Beach, or just need a multi-unit property for you and your family? We’ve got a great one for you.

This ocean view dual complex home at 216 21st St. is a great income-producing property. This property comes fully furnished, and you can immediately enjoy rental income from existing short term rental bookings. The upper owner’s unit features 3 bedrooms and 2 baths, a large master, vaulted ceilings and open floor plan. The downstairs unit features 2 bedrooms and 2 bathrooms with a rear private patio. Both units completely remodeled with new cabinets, travertine floors, granite countertops, recessed and cable lighting, tankless water heaters and stainless steel appliances. Exterior and interior freshly painted. Newer windows and doors. Located close to Newport Beach Pier, restaurants, shopping and night-life. All utilities have been separated, making this the ideal income property.

And we can’t get over this gorgeous luxury farmhouse-style home at 2101 Leeward Ln. that was just reduced by $220,000! Completed in 2019, this exceptionally appointed home in Newport Beach’s Dover Shores community showcases on-trend style and state-of-the-art smart-home technology. Curb appeal is off the charts, with Modern Farmhouse architecture complementing a soft-contemporary interior with 6 bedrooms, 4 baths and a bonus room in approximately 4,226 sq.ft.

As always, do not hesitate to reach out with any real estate questions or needs! We hope to hear from you!