"Try and keep your dog quiet," the vet kindly told me. "He's got a good deal of arthritis in his joints that's caused some swelling and is making him very uncomfortable." (Gee, join the group.)
Buck had started to limp badly after a hearty afternoon at Crissy Field splashing in the wavers, and two days later his symptoms hadn't much improved. In fact, he seemed worse off. Then she delivered the kicker. "See if you can get him to 'meander' when you resume your walks together."
Okay, was she kidding?
Our dog, Buck, is a 'Field Lab;' bred to run and retrieve a felled duck or pheasant once it had been shot out of the sky. Since neither Cliff or I hunt, Buck's prey over the years, has been limited to tennis balls and the occasional pine cone which he chases with great vigor and glee. He's not just enthusiastic about fetching, he's downright obsessive-compulsive! In short, "meandering" isn't exactly his forte. (Frankly, it isn't mine either.) Which is why I always find it difficult when clients want to "take their time,' given that such a strategy is clearly counterproductive to their intended goals. In a marketplace that is rapidly rising, the old adage that "time is money" has never been more true.
In fact, according to industry experts, last year saw the biggest single leap in home values ever. Our local real estate didn't come back slowly and gradually, it snapped back like a tightly strung rubber band, with the result being that prices are now up by 20-30%! Or put another way, the dream home you could have obtained with relative ease in 2012 for approximately $1,000,000, will likely cost you $1,250,000 - $1,300,000 in 2013 (and quite possibly more).
Moreover, inventory is so low that Buyers are lined up in double-digits to purchase. A charming, but modest two+ bedroom home in Glenview had 23 offers last week. (Say what?) With reports that 46% of all transactions are now "ALL-CASH" purchases, the race to secure a home has heated up beyond all of our expectations. That's great news if you're a Seller, but tough to process on the 'buy' side.
Sellers, are you listening?
Last week, a well-meaning but poorly informed, out-of-area Agent, phoned me about one of my listings to seek advice:
"My clients love the property and are on the fence. They are prepared to offer all cash but wonder if they should take a loan out instead and offer more?"
"They should do both," was my succinct response. "Cash purchases in Piedmont do not imply a discount; they only improve your terms!" (Footnote, their offer was under by more than $300,000.)
While every purchase is essentially "ALL CASH" once the lender funds the loan, the ALL-CASH Buyer has the distinct advantage of waiving the appraisal and loan conditions and what's more, can often close in mere days, instead of weeks. Remember your offer is judged on BOTH price and terms, and who doesn't prefer better odds? (Practically no one.) With each hurdle a Buyer successfully removes, the happier the Seller becomes, and the greater your chances of securing the home.
So while I appreciate the need to "take one's time," while "meandering" through the process, unless you have a very good reason for doing so (like you're waiting for a substantial end-of-the-year bonus or an inheritance) you are probably working against your own best interest. In other words, if you are slow to move because you have become emotionally arthritic, you are likely to be as crippled as my dog, Buck.
On the other hand, if you are ready to fully engage, it's time to lace up those running shoes, write numbers that actually put you in the game, and set yourself up to participate in the race. (Do understand, that an aggressive offer will likely be accepted, so don't write if you have ANY reservations).
The finish line is just up ahead. Let's get there together!
Ready, set, go!
Last week marked Valentine's Day - a Hallmark Holiday if there ever was one. In spite of that, I can't help but appreciate the concept of 'love' in all its many forms.
With respect to my own Valentine's Day (and my own long-suffering Valentine) my husband and I have enjoyed an 'inside joke' for the last several years that comes in the form of a extra large case of stone wheat crackers (yes, crackers) that Cliff proudly presents to me with a tidy bow come February 14 - an annual gift from a client of HIS each January.
Really? A re-gift? Honey, this might work better if your client owned the Shane Company or 1-800- FLOWERS. (I'm just saying . . .)
"Your special Valentine crackers have arrived," Cliff jokingly proclaims as he hands me a BIG box that he believes contains the key to my heart. (It doesn't, but it does make me laugh.) While love and laughter go hand-in-hand in our marriage, I think it's safe to assume that not everybody feels the same where matters of the heart are concerned. Some people actually have expectations.
Which is why I thought it important to set our son, Tristan, on a different course of action now that he's 16 and in a steady relationship for the first time (before he develops some very questionable habits, courtesy of his father).
"Tristan," I said, "Have you given any thought to what you might give Claire for Valentine's Day?"
"Don't worry mom, I've got a 'plan'," he quickly responded, brushing away my motherly inquiry while punching numbers on the remote control in search of a "Heroes" episode. (Not everything is so easily controlled.)
"Just so long as it doesn't involve CRACKERS!" I politely warned.
"Damn, there went that plan!" (Humor evidently lies on the Y chromosome in our family.)
What's that John Steinbeck said about "the best laid plans of mice and men?" (My plan was to marry a man who enjoyed giving diamonds!) No matter how well we coordinate, organize, and execute what we believe to be the "perfect plan," chances are we still won't be able to completely control the outcome - or how others respond to it. In short, life can be incredibly unpredictable (and that's both good and bad).
So too, can markets. As such, it's important to understand that everything might not go exactly according to plan. Certainly, there are stand-out properties we expect to secure many offers or garner higher-than-average returns, BUT the ones that surprise, are the properties that should attract good attention, but return less than desirable results, OR the listings that mysteriously get more attention than they legitimately deserve .
Welcome to the uneven, but exciting world of Real Estate. Which is why I'm often forced to raise my shoulders when prospective Sellers ask "How much is my house worth?" OR, "Should I sell it this year or wait until next? "
The answers: "Value is a moving target," and "Yes, you should sell it now" (demand has never been greater.) Still,when speaking to numbers and to "value," we can only ever guide you based on today's current marketplace (not tomorrow's) and even then, "market value" is an educated guess at best. Which isn't to say that as an industry, Realtors don't, "steer" the market, "drive" the market, and "shape" the market to the best of our abilities (we certainly do) BUT, that we don't control it in the end (although we sincerely wish we did!)
Still, I'm not above a little retraining and control with respect to my own sweet, fledgling offspring, which is why Tristan very smartly sprang for the Piedmont High School Troubadours to make a surprise visit to his girlfriend's classroom on Valentine's Day, rose in hand (nicely done, son).
Clearly the BRAINS of this operation reside on the X chromosome. (You're welcome Claire.)
Isn't it nice to know that someone benefited on Valentine's Day by way of my years of experience? (Anyone who doles out crackers on V-Day better at least cover them in chocolate!)
While setting up my "Sunday Open" signs last weekend, I noticed a smart couple in an SUV driving slowly beside their two young kids on bikes. I used to see a version of this every once in awhile while jogging through the Presidio in San Francisco, only then, it was invariably a dog owner, exercising their dog. (Hey whatever works for you.)
"We're teaching them to safely cross the street," the mom shouted as she stuck her head out the window and waved, letting me know that they weren't just stalking their children, but actually on an important mission.
No explanation necessary; I totally get it. Cliff and I did a version of this same exercise when we moved to Piedmont, only on our bicycles. We've all been there. It's every parent's duty to make sure their kids can cross the street safely and get home in one piece - a responsibility we repeat as our kids learn how to drive later on. (Oh vey!)
But whether it's navigating the mean streets of Piedmont, learning to take the wheel on the highway, heading off to out-of-state college , or moving into the GREAT WIDE WORLD beyond, I suppose there are versions of "crossing the street" that we face with our children throughout our entire lives (and theirs).
I face them with my clients as well . . .
And like any good crossing guard, I need to inform you that "crossing the street" is part-and-parcel of your journey to owning a home. In other words, you can't get to the other side without putting one foot in front of the other.
Not surprisingly, some of you are more prepared to step off the curb, while others tentatively hold back waiting for a break in the traffic. With news that the high-end market is up 29%, that 43% of home purchases are trading as ALL-CASH transactions, that inventory is significantly down while at the same time, buyer demand is way, WAY UP (!) waiting on the sidewalk for the light to change your way, may be an unfortunate misstep.
With a much more competitive field now in play, you may be asking yourself if it's worth crossing the street at all?
It is and here are five reasons why (taken from the KCM Blog) you should step off the curb . . .
1. Prices Are on the Rise!The latest Case Shiller Home Price Index revealed that home prices have appreciated 5.5% over the last year. This is occurring across the nation as increases were reported in 19 of 20 metropolitan areas, with expectations for continued appreciation over the next five years by leading economists and housing strategists.
2. Mortgage Interest Rates Are Expected to Increase!The Mortgage Bankers Association has predicted that, after reaching record lows in 2012, mortgage rates will creep up slowly in 2013 to 4.4%. (Rates have already increased by 2/10 of a point (3.32 to 3.53) in the last two months.)
3. Rents Are Continuing to Skyrocket! Recently, Zillow reported that rents in the U.S. increased by 4.2% over the last year. Increases were 5% or more in many major metropolitan areas including Chicago, Boston, San Francisco, Detroit, Baltimore, Denver, San Jose and Charlotte.
4. New Mortgage Regulations Will Be Announced Later This Year (and they won't be easier)!Six regulators, including the Department of Housing and Urban Development, the Office of the Comptroller of the Currency and the Securities and Exchange Commission, are currently drafting the new Qualified Residential Mortgage (QRM) rule. Expectations are that they will decide on two major requirements for buyers looking to qualify for a mortgage: minimum down payment and minimum FICO scores. Many experts believe the new rules will be MORE stringent than current requirements.
5. Timelines Will Be Shorter!The dramatic increase in transactions caused many challenges to the process of buying or selling a home in 2012. We waited for inspections, dealt with last minute appraisals, and prayed that the bank wouldn't ask for "just one more piece of paper" before issuing a commitment on the mortgage. There are fewer transactions this time of year. That means that timetables on each component of the home buying process will be friendlier for those involved in transactions over the next 90 days. (These are national predictions. In the Bay Area, that 90-day timeline suggestion is far less.)
With that said, it's time to cross the street. But don't worry, I'll be there to hold your hand.
"One, little two, little three little Indians, four little five, little six little Indians, seven, little eight, little nine little Indians, ten little Indian boys . . ." At the risk of being totally unPC, I wouldn't be exaggerating in the slightest to say that our early spring market is shaping up just like that old nursery school rhyme (before songs - and people - were culturally sensitive).
As an example, last week, I represented the world's most-deserving couple on a starter home here in Oakland. They were well qualified, incredibly informed, and totally committed to the purchasing process. In short, they came to play! What's more, we had also taken the extra effort to meet with an engineer and a roofer at the home, so that they could comfortably waive their inspection contingency, making them that much more competitive in the end. (Remember, it's not just price a Seller considers, but the TERMS as well.)
"How many offers do you expect?" I asked the listing Agent (information that's vital prior to constructing an appropriately priced offer).
"Looks like three have confirmed," he said, pleased to have some healthy interest in the house, "although I should tell you that there are 19 disclosures out," he added as a footnote. (Ugh.)
"Great," I said, sarcasm dripping from my voice, "I'll let my Buyers know." "You can expect five or six," I confidently told my clients that afternoon. There are always a few latecomers who prefer not to declare their intentions, so let's prepare for more. I'm certain they'll show."
By 8 pm, four Buyers had emerged. By the next morning we stood at five. And ten minutes before I presented at 3:30 that afternoon, the listing gAent adjusted the head count to NINE! (Thank goodness for Docusign.) Whoa, that's a bit crazy (although no longer unusual in this rapidly accelerating marketplace)!
We quickly rewrote the first page of the purchase offer and I went into the conference room to make my personal pitch. (Game on.)"This is a love story . . ." I began, and indeed it was. Here's the happy ending, (drum roll please . . . ) my clients are now successfully in contract!
With nine offers from which to choose, three were virtually identical in price at the finish and all had aggressive terms. While I'd like to think I was smarter and more persuasive than the other Agents at the table, the truth is the selection process probably had more to do with my Buyers' story, than with mine (although, at the risk of bragging, I did tap dance quite a bit, as did our stellar mortgage lender from Wells Fargo.)
Ultimately, it was their very compelling journey, along with some very creative eleventh-hour negotiations that allowed us to win a photo finish. This is an instance when the backstory mattered a great deal and while that's not always the case, it often can make a difference when it is a very close call, as it was this time around. (If it isn't neck and neck, no matter how "compelling" the story, it won't persuade the Sellers. Would you turn down another $50,000 just to play favorites? I don't think so.)
But it never hurts to try . . .
A few years ago and with my Buyers' permission, I once shared that their desire to quickly secure a home was driven by their daughter's health. A tiny little thing of not more than three or four at the time, she was facing a serious operation at a hospital nearby, thus we were preemptively making an offer ("Preemptive offers" are presented prior to the offer date and typically, are VERY aggressive in nature and price.)
As it turned out, the elderly Seller had suffered from the same medical condition as a child. Long story short, the house was theirs and the Sunday Open was promptly cancelled. (And yes, the daughter did have her surgery shortly thereafter and is picture-perfect today.) I run into this darling mother and daughter duo at Mulberry's not infrequently and it's always incredibly rewarding to know that I shared a tiny piece of their journey and helped smooth their transition along the way.
So tell the story . . . and let the Sellers know how much you appreciate their home and the care they have taken with it. (DON'T share how you plan to tear everything out and repaint it from top to bottom - even if you do.) And don't be afraid to be a bit vulnerable. It's those slice-of-life moments in your pitch letter that often turn the tide and makes you very human - and not just a number.
So get out those pens and write! And if you're struggling, I'll help you. I like to think I have a bit of experience in telling the story . . .
After writing about the "perfect" Buyer and Seller, last week, I asked readers to send in their thoughts about the "perfect" Realtor and as expected, received several responses to my inquiry (thank you). Topping the list of attributes was: "A good listener." For many people (including Realtors) that can be a very tough skill to master, but obviously,"listening" is the starting point for any and every successful transaction. (Um, Cliff, are you listening?) If we don't listen carefully to what our Buyers and Sellers really need and want, we are likely to waste everybody's time with little success and mounting frustration along the way (Hmmm, that explains a lot about my 22-year marriage and why my husband's clothes still can't find their way to a hanger??) When that happens, one can burn through months (even years) with little change in the status quo.
"Our Realtor kept sending us to houses that didn't make any sense for us . . ." a new client recently shared.OR "Our Realtor barely sends us anything, WE usually find the houses we're interested in on the Internet ourselves." OR "We told our Realtor we needed X in order to sell, and then our house sat on the market for months!"
I hear you (I do) and I share your frustration. The truth is, we need to listen to one another and work in syncopation in order to get the best results - whether that's on the buy or sell side of the equation. Which means your Agent need to really know and understand the marketplace in order to have frank and honest discussions about whether or not your expectations align with reality - or do not . . .
For starters, this means you should always work locally. Real estate, probably more than any other profession, requires insider knowledge. Which isn't to say that your "out-of-area" Agent doesn't stand a chance in this highly competitive Sellers' market, but that over the course of time, you will very likely be missing a certain segment of the market that is traded outside of the MLS (the off-market sale).
Without local representation, you simply won't have the inside track for these stealth opportunities. And trust me, it's much easier to listen to your clients' needs, if you actually know the inventory and the agents involved and can respond in kind.
Still, whether or not your Agent finds you the house, or your own due diligence does, it is less important than your Agent's ability to secure the deal once you are in the hunt. A good Realtor needs strong negotiation skills, uncanny intuition about the other side's intentions and movements, and fantastic working relationships with the other parties in the industry, from title officers, to lenders, to inspectors, to handymen. Think of buying or selling a home as a high-stakes game of chess in which he/she needs to be aware of the board at all times. Which is why "negotiating the contract, being available, and meeting contractors," were repeating themes as well.
And can I add: your Realtor should also be able to: anticipate your needs, expand your thinking, keep all parties calm, quickly adjust as the market demands, inform, educate, stay in touch throughout the process, and place your needs above their own - even if that means referring you to an area specialist. It's not enough to simply have your license - you need to know your community inside and out. Now that's how one earns your faith and your trust; that's how one earns your business.
Give me a call, I'm listening . . .
Julie Gardner, has been writing The Perspective for 15 years and has published more than 500 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.