Gone are the days when homeowners pondered how much their home would be worth next year or next month.

I can’t even remember when I last had a buyer ask me how much I thought a home would appreciate over the next few years.

Boise home buyers are now making their home buying decisions based upon today’s substantially-lower prices, ridiculously cheap interest rates, and quality of life for them and their family.

They are assuming very little, or no, appreciation in home values for years to come.

And, they are basing their decisions on conservative estimates of their future finances.

In other words, today’s Boise home buyer is buying a home for the right reason ~ to live in it and enjoy it.

You could have your choice of a dozen, two dozen, or several dozen homes in some of our major subdivisions.

As I recall, Paramount, Bridgetower, Lochsa Falls, and Two Rivers all had 60+ homes for sale back then.

Now, it has become difficult to find a clean, sharp, well-maintained, closable (non short sale) home in some segments of the Boise real estate market.

Here are three recent buyer scenarios I have recently experienced with buyers.

Buyer # 1′s Want List

• Eagle
• Newer
• Quality construction
• About 3,000 sq. ft.
• 4BR with in-law quarters
• Single level
• 1+ acre
• $350k – $500k all cash

Results: Nothing matching my buyer’s criteria

Buyer #2′s Want List

• Newer
• 2,400 sq. ft. minimum
• 4BR
• 1+ acre
• 30-minute commute to downtown Boise
• To $350k pre-approved financing

Results: 6 homes matching my buyer’s criteria.

Buyer #3′s Want List

• Newer
• Meridian/Eagle
• Meridian schools (specific schools)
• 2,400 sq. ft. minimum
• 4BR
• 3-car garage
• Large lot
• To $350k all cash

Results: 4 matching my buyer’s criteria/accepted offer.

In Ada County, we currently have about 2,600 single-family homes on lot/acreage available.

That works out to roughly five  months’ supply of listing inventory.

When you break that listing inventory down to a buyer’s specific criteria, it is often difficult to find the right home.

That becomes even more difficult in the lower price ranges.

Conclusion: When you find the right home, it’s a good idea to pull the trigger.

Note: Months’ supply calculated by dividing the average sales per month over the past twelve months into the number of available listings.

The Best Way To Find The Right Home

The easy way to find the right home is to connect with an experienced, competent, full-time agent who knows the market and will work in partnership with you.

You want an advisor; not a salesperson focused on “closing the sale”.

Discuss your needs, wants, likes, and dislikes in detail with that agent.

Commit to work exclusively with that agent so you will get their full attention.  Successful, experienced agents know better than to work a buyer who’s working with several agents.  Further, it’s pointless to work with several agents because all agents have the same MLS listing inventory to show you.

Let your agent research listings and insist that they preview listings before showing them to you.  There’s little point in wasting your time looking at properties that are in poor condition, overpriced, and not what you want.

Here’s How I Work With Buyers

My usual practice is to have a detailed conversation with you so I can clearly understand your situation.  This can be accomplished either in person or on the phone.

I can’t find the right home for you if I don’t clearly understand your situation.

The next step is obtain pre-approval for your financing so you know and understand the details of your financing before we look at specific properties.

Then, I get into the MLS data and thoroughly research all potential solutions.

Finally, I preview all of the properties that make it through my initial “filter”.  By the time I’m done, I usually end up with a very short list of homes matching your criteria.

As you can imagine, this approach is a lot of work for me ~ that’s why very few agents are willing to preview for their buyers.

But, it makes the buying process easier for you by allowing you to see the “best of the best” instead of being dragged through 30 properties that aren’t what you want.

Is this any way to run a real estate business?

Check out “What Phil’s Clients Say” on the right side of this page and see for yourself!

(Part II of a three-part post)

Reason #4

You can’t determine the condition or surroundings of a property by looking at pictures.

• Has it had water damage?
• Is it in a flood zone?
• Has it been remediated for mold?
• Is it under the airport flight pattern?
• Is it next to high-tension electrical lines?
• Is it next door to land planned for an industrial park?

Reason #5

Most MLS listings are embellished to varying degrees because no listing agent wants to mention a negative in their listing.

Think about it ~ when have you ever seen a listing that mentions the fragrant cat pee in the carpets or includes a photo of the neighbor’s truck sitting on concrete blocks under a blue plastic tarp?

Reason #6

You can’t get a “feel” for the property without knowing the facts of the neighborhood.

• How many rentals are there?
• Is the area plagued with distress sales?
• How well are neighboring properties maintained?
• Does the HOA have ample cash reserves?

Reason #7

Most importantly, you can’t see what I can see in MLS when you’re looking at homes on the internet because agent remarks are not visible to the public.

Those agent remarks often reveal details that help me determine if a specific property might be appropriate for you.

(continued tomorrow)

The internet is a very useful tool for home buyers.

That’s why 94% of all home buyers use it when they begin looking for a home.

It’s packed full of information about available properties and you can review listings in the comfort of your own home.

The internet is a great starting point for finding a home, but it has limited value when it comes to finding the right home.

Here’s why:

Reason #1

Any home can be made to look good on the internet, but you must physically visit that home to see what it’s really like.

Photos can be cropped, enhanced, and altered to make them look better than the real thing.

Reason #2

If you don’t live here, or haven’t spent time here, you lack the local knowledge and insights necessary to interpret what you’re seeing on the internet.

Reason #3

Listings on websites often contain inaccurate data, including undisclosed short sales, short sales that already have multiple offers, sold or pending properties shown as available, and sometimes even photos of the wrong property or another similar home.

(continued tomorrow)

This is their second or third attempt at this and I haven’t been a big fan of their previous efforts that delayed closings and confused borrowers, lenders, escrow officers, and Realtors^® alike.

But, I think they may be onto something this time.

Check out this  CNN Money article for more info.

Take a look at the two versions and vote for the one you think is best.

Which version do you like?

More times than I can count, especially lately with roughly one-third of our sales being cash deals.

There’s a mystique about all cash offers that’s sometimes overrated.

Why?

Because every transaction, unless the seller is carrying back the paper, is a cash deal.

The only difference is where the cash comes from.

It either comes from the buyer or the buyer borrows it from a mortgage lender.

The main advantage of an all cash offer is convenience because there’s less paperwork and you can close sooner sooner if both buyer and seller want to.

Her buyers chose their own lender; not realizing the differences between lenders.

After 32 days in escrow, with my seller and myself having relied upon the lender’s upfront loan commitment letter, the lender told us they would need another two weeks to close.

In amazement, I asked “Why?”

Turns out that the lender’s underwriter (located in Wisconsin, of all places!) didn’t like an item on the buyers’ credit report and was insisting that it be “fixed” as a condition of loan approval.

That begged the obvious question “Why are we having this discussion three days before closing when you ran credit upfront and issued a loan commitment letter?”

My sellers, believing we had a solid deal, had already moved out and entered into a contract for a build job that required substantial non-refundable earnest money.

I supported my sellers’ refusal to extend closing without explanations and a firm closing date.

So, we applied substantial pressure, including the threat of moving the loan to another lender, and the lender somehow miraculously figured out that they really could close on time.

All in all, not much fun for any of us in the transaction.

Here’s how to avoid what we endured in this transaction:

• Understand that mortgage money varies little from lender to lender because recently-enacted lending regulations have essentially leveled the mortgage playing field.

• What you’re really looking for with a mortgage lender is service.  You need a lender who returns phone calls and e-mails, tells the truth, and delivers what they promise.

• Perhaps most important is using a lender who has the capability to handle every aspect of the loan in-house.  That means local staff handling your application, issuing an upfront loan commitment, processing your loan, underwriting your loan, preparing your loan documents, and funding your loan at closing.

Whatever you do, don’t use a lender whose underwriters are in Wisconsin!

As you might expect, there are trade-offs, including:

• Your interest rate will usually be lower with a 15-year mortgage.
• But, your payment will be higher for a 15-year mortgage because you are paying off your loan in half the time.

Let’s compare, using a $200,000 loan with current interest rates as an example.

30-Year Mortgage

• 4.75% interest rate.
• $1,043.29 monthly payment (principal & interest).
• $375,584.40 total payments over the 30-year life of the loan.

15-Year Mortgage

• 3.875% interest rate.
• $1,466.88 monthly payment (principal & interest).
• $264,038.40 total payments over the 15-year life of the loan.

Analysis

• With the 15-year mortgage, your payment is $423.59/month more.
• You save $111,546.00 over the life of the loan with the 15-year mortgage.

Most home inspections in the Boise real estate market are done at the buyer’s expense after negotiating the sale and opening escrow.

If the sellers have their home pre-inspected, it’s possible that their buyer may question the objectivity of the seller’s inspector and still want to have the home inspected by their own inspector.

In that situation, the sellers are paying for an inspection that normally would be done at the buyer’s expense.

The advantages of a pre-inspection, however, include advance discovery of deal-threatening issues and being able to correct those issues before they become a concern to a prospective buyer.

There’s also a time advantage because pre-inspecting makes it possible to correct discovered issues before marketing the property vs. after the sale when everyone wants to get to the closing table quickly.

A pre-inspection can also provide peace of mind and confidence to the buyer, and in some cases, may result in more successful price negotiations for the seller.

I am planning to suggest pre-inspections to more of my sellers in the future because I think it’s a good idea to know upfront if there are any major problems.

I have had to deal with  moisture in the crawlspace with three recent sales, including one with mold.

It would have been nice to have full disclosure of those issues before wasting valuable time negotiating those sales and getting into escrow.