Like many of us in the Bay Area, I've just returned from a brief respite in Tahoe and while the lake was unquestionably low, it's still an incredibly beautiful spot to visit. Frankly, Lake Tahoe is tough to beat when it offers so much in the way of awe-inspiring vistas and activities.
"Let's rent some bikes and clock some miles," my husband Cliff suggested as he excitedly unpacked the tennis rackets and other assorted sports paraphernalia. (Cliff is not a sit-on-the-beach and read-a-novel kind of guy.) The two of us have signed up for a Bay Area Backroads bike tour coming up in a few weeks and I'm a little worried that I won't be able to keep up (not that you're really required to) so Tahoe presented the perfect opportunity for some much-needed practice. Regrettably, it's been too many years since I spent any real time in the saddle and boy, did my body feel it. By day three, I wasn't exactly a happy camper. I could barely sit, let alone peddle that bike. Normandy? Brittany? I gotta say that the van is looking exceedingly more inviting to me than the bicycle right now. (What's with those hard seats anyway?)
Still, the old adage, "it's like riding a bicycle" wasn't just a metaphor in this case, it was my reality as I quickly relearned how to manipulate the gears and navigate the ups and downs. (Hint, it helps to change the gear BEFORE you hit the incline.) I'd grown up in the era of the 10-speed and later did my fair share of mountain biking as a young adult so I'm happy to report that it's true; one never forgets how to ride a bicycle. If I take my time and several breaks along the route, I'm certain I'll manage just fine and really, who can complain about a bike trip on the coast of France? (Not me.)
In analogous 'Piedmont Perspective' fashion, I'd like to say that selling or buying a house is much the same; that we quickly get up to speed and back in gear, but it isn't. The truth is that most people only enter the marketplace once every ten years or so which makes for an uphill ride. Many of you may be out of the market for DECADES and rightfully so; that's the nature of the beast, or as one prospective client exclaimed just this week: "We've never sold a house before . . . so we don't know what to do!" (That's where I come in.)
From new disclosures to swinging market trends, to stricter lender requirements, to changes in Buyer and Seller psychology, unfortunately, Real Estate isn't as easy as learning to ride a bike. In fact, it's far more nuanced and multi-faceted. If you react and change gears while going uphill, it's often too late. Moreover, just because you've traveled that road once or twice before, doesn't necessarily make the journey any easier this time around.
"What went wrong with that listing?" Sellers have been known to inquire, while watching a neighbor's property go sideways and sit far too long without any offers. Sometimes nothing. More often than not, a lot . . . From overpricing, to poor preparation, to poor timing, even today's go, go, GO (!) marketplace can be extremely punitive for those who misstep along the way. (Greed is rarely rewarded in ANY market. )
By way of illustration, I stopped at a FISBO in the Temescal last Sunday (For Sale by Owner) and was reminded of just how easy mistakes can be made and how much CAN indeed go wrong. A tattered "Open Home" sign out on the street was the only obvious marketing, a crabby Seller who seemed less than happy to greet me, a very worn house, a shabby flyer, and then the piece de resistance - an unrealistic listing price to boot! (Wow.) Let me count the ways . . .
"My neighbor's house sold for more than a million dollars," the Seller defensively said, as he handed me the Zillow estimate he'd copied off the Internet. (I hadn't said a word, but my look of amazement must have given me away and btw - while I'm a fan of Zillow, the "Zestimates" are rarely accurate.) This guy was certifiable if he thought the two houses compared in the least. (They didn't.)
"Good for your neighbor," I thought. I'm certain the list price didn't start there. I'm also sure that the house was beautifully staged, clean, well marketed, professionally photographed, available to the public, thoroughly investigated, AND represented by a licensed REALTOR.
As I often point out to my own Sellers when meeting for the first time, great results don't come about by accident, but through careful orchestration and strategic planning. Teamwork, hard work, and thoughtful preparation really shouldn't be underestimated, nor should attractive pricing or an emotionally engaging presentation. (It's ALL about the "value proposition!")
Does that mean we get to control the outcome?
Hardly. . . and any agent that tells you so, would be lying. But it does mean we have a much better shot at procuring a result that reflects the true market value of your lovely home and isn't that the result you are hoping to achieve? Sure, you could get lucky, but I wouldn't count on it. Our Bay Area homes are far too large an investment and the transfer of property is typically, too emotionally charged as well. I wouldn't leave such an important transaction up to chance, nor should you. While buying or selling a home isn't necessarily as easy as hopping on a bike, as with riding a bicycle, Real Estate takes good balance - there are a lot of moving parts and miles and miles to traverse.
How can I help you?
We're officially into our summer market, but just because inventory has diminished, it doesn't necessarily follow that interest has . . . or that prices will. . .
Still, July and August can be great months to step in and purchase a home while others are away on vacation or distracted with swim lessons, tennis camps, family outings or travel abroad. In truth, fewer Buyers at the table should equate into less pressure on the final sales price, so personally, I've always been a fan of the summer opportunities, even while appreciating the need to get away and relax.
By the way, it's not just some Buyers that have strayed, but many of their Agents as well, as they too, seek time away from the unyielding hustle and bustle the Spring Market invariably brings. (Not that I'm complaining, mind you - productivity equals private college tuition.)
But who can blame the public for tuning out and taking some much needed "down time" once summer beckons? (Not me.) As everyone quickly learns, buying or selling a home can quickly move into a full-time job AND a heavy Internet addiction, especially here in the Bay Area. For many who've faced rejection a time OR two, OR three, OR FOUR . . . August often provides a bit of a breather and a welcome respite. (You're not alone.) Go ahead and enjoy some time off - you've undoubtedly earned it.
As for me? I'll be heading to Tahoe this week for a little R&R and hoping there's still some water left in the lake. (Please tell me there is.) I'll still be writing offers and reading disclosures, but I'll be doing it in shorts and flip-flops and that's at least something.
Speaking of which, according to a good friend and fellow agent, prices in Tahoe have plummeted a whopping 53% on the heels of a four-year drought and an absence of snow! (Aren't you grateful you bought here?) Ouch! That can certainly sting if you're selling a lakeside home right now. If you're not, don't lose a moment's sleep. The value of any home is ONLY ever relevant come time to sell.
Unfortunately, for some in the Tahoe region, that time is now.
"We took a bath on our cabin in Northstar," Caroline shared (too bad, I liked that house a lot and I'm sorry to see it go.) "So Uncle Sam received NO capital gains from us . . . we sure showed him a thing or two," she laughed. (Caroline has a great sense of humor and a positive point of view.)
As she should. Not only is Caroline extremely gifted at her craft, she's spent the majority of her adult life selling real estate in and around San Francisco, and has experienced the variables first hand. As such, she's watched the market go up and down and has navigated both ends of the spectrum with a steady hand and uncompromising integrity. As good timing would have it, she's seen more UP markets, than down, so she's come out far ahead on the deal, and she'd be the first to tell you so.
But here's the basic premise that harkens back to economics 101: ("Beuller? Beuller? Beuller?") markets aren't static instruments - they have a propensity to move!!! When and how much, is how fortunes are won and lost, I suppose, but over TIME, home values have climbed and home ownership (aside from being a lovely place to hang one's hat) has generally been well rewarded. According to the California Association of Realtors CAR), one in four Americans (27%) believe that Real Estate is the single best investment, far outpacing the stock market (17%) for the first time in many years.
Even so, none of us wants to pay TOP DOLLAR for our homes.
"Has the market peaked?" (It's unclear.)
"So how much is this house going to sell for?" (That remains to be seen.)
"How much will I need to offer?" (How much do you really want the home?)
"Will we be overpaying for the house in this market? (That depends on how long you plan to hold the property.)
"I don't suppose you'll know what other parties are offering?" (No, I won't.)
"Will we know what the other offers were after the fact? ("No, you will not - nor would you want to.)
And so the questions continue . . .
(Gee, I wish I had more definitive answers for you.)
The truth is, that regardless of the number of years one has writing offers and putting homes into escrow, the process in a Sellers' Market is largely a blind auction. The list price merely sets the starting point in a multiple bidding situation and while not every house is procuring multiple offers, the vast majority of them are. Where exactly a home will ultimately trade, is largely an educated guess and a clear understanding (on your part) of how much you want the home OR how willing you are to walk away (or not!).
Oh, that's not much fun. (No, it isn't.) I understand your frustration and to add to the confusion, the market won't always stay this way.
But here's another truth - the price you pay in today's world is largely irrelevant in tomorrow's . . . (as long as you plan to hold the house for 10 years or more).
By way of example, yesterday I met a darling, elderly couple in front of their home, who had bought their house at a probate auction 40 years ago for $90,000; a bargain by today's standards - and then some . . .
"I was furious with her," the husband confided to me. "I wanted to back out of the deal; it was soooo much money for us at the time. Good thing she didn't listen to me," he said with a wink and a nod, pointing at his better half. His wife simply smiled.
That's the ending we're all hoping for. No, not the part where we don't listen to our husbands, but where we made a wise decision!
Now go hit the beach (there's plenty of it).
How can I help you?
Shhh, don't tell anyone, but I've got another birthday coming up.
I'm old enough now that such news isn't met with immense pleasure. (Who really likes getting older once you're past the age of 35?) As too often happens, the fifties bring their fair share of unexpected loss in the form of friends or family members who just yesterday, were walking beside you, and sadly, no longer are. (Sigh.)
So, in spite of the wrinkles and crow's feet, I'm going to try and embrace 55 with grace and gratitude, and with the recognition that getting older beats the alternative of not getting older. Here's where I'm luckier than most; I share the day with my twin sister, Jill. She's my birthday gift and in honor of the occasion, we're headed to Los Angeles to visit her two daughters, where the four of us plan to hit the "Magic Kingdom" for the day. After all, it's "the happiest place on earth" (or so the tag line tell us).
Whether true or not, the famous moniker is beside the point. Disneyland is merely the backdrop for the opportunity to pass some time with the girls reliving our youth and catching up. I've learned that time together is a rare gift, especially as our children grow up and move on (sniff, sniff). So if reuniting requires a trip to Disneyland, I'm all in - bring on "the gift."
Recognizing "the gift" is a concept that isn't generally wasted on Realtors but unfortunately, often gets away from our clients who don't always understand the nuances of the deal, or the market openings, especially as the market becomes tougher and tougher to comprehend.
The plain truth is, that one must respond and react to the market as it is - not as we wish it to be - which requires some objectivity that can be incredibly difficult to find 'in the moment.' (Truth be told, Buyers and Sellers haven't much practice as they only enter the market once every decade or so.)
But in its simplest terms, "the gift" is the offer that exceeds expectations. (Wow!)
In the multiple-offer scenario, it's not unusual to receive an offer that stands head and shoulders above the rest. (Congratulations.) Typically, such offers are proffered by the Buyer who either recognizes the value of the property and is willing to step up and pay for it, or by the Buyer who's lost several bids and has now mastered the learning curve. In both cases, the offer is intended to definitively "win" the house - not head back for a second round.
But "the gift" may also be in identifying the house in the first place, that, for whatever reason, has been passed on by the herd, due to unfortunate timing or other unexpected conditions that may have caused it to be overlooked. Opportunity knocks!
The "gift" also comes for those who quickly discover their 'perfect' home and act upon it with good speed. A few weeks back, I sold a home to Buyers who had come over to the East Bay to purchase a painting and ended up detouring to an Open House. True to form, the selling agent was taking offers two days later. Rather than talking themselves out of the deal, they phoned me instead and by Tuesday night, they were in contract.
(Note to Buyers: quick decision makers will always trump those who are more conservative by nature; however, "the gift" in this case, may have been mine. It's truly a blessing when everything goes according to plan.)
"The gift," also comes in the form of acceptance, as in "Thank you for your lovely offer, the Sellers have signed the purchase contract and I'm pleased to inform you that your Buyers got the house." Having your offer accepted and not second guessing this windfall, is indeed, a "gift." Take it and call the movers - quick! This isn't the time to start looking for an exit strategy.
Sometimes, "the gift" comes by way of a "preemptive offer." "Preemptive offers" are those that arrive as soon as a house hits the market, OR in some cases, even before a house has been formally introduced. Typically, a preemptive offer comes from a highly-motivated Buyer who also often brings the BEST offer to the table - at any point in time. Because the house hasn't yet been "market- tested," these early offers are as equally tough to dismiss as they are to accept which, understandably, can leave the Sellers at an impasse (who can blame them?) but also, at a loss should the market fail to deliver more. . . (Only time will tell.)
My point is that "the gift" comes in many forms, but we have to recognize them as such, be open to the possibilities, engage in the process, and work the opportunities that come our way.
Because we're human (ergo imperfect) and we live in a culture that often rewards "one upmanship," it may be our natural inclination to counter back and question the outcome. (Believe me, you have more to lose than to win.)
"But do you think they'll give us more?"
They might, but please understand the risk, which is considerable! When Buyers have offered in the neighborhood of 25 %, 40% or 60% (!!!) MORE than the list price, chances are, they've come to the table with their best and final offer. Moreover, they may be easily offended by such demands and walk away altogether. More often than not, the next offer in line, represents a significant drop in price and yes, that actually happens when greed overtakes common sense.
Keep in mind that buying a home isn't a business transaction - it's an emotional one - and therefore, far trickier to successfully navigate. Remember, the end goal is to sell or buy the home, not beat the opponent. If you avoid turning the purchase into an adversarial process, you'll be far better served, because a happy ending for everyone is ultimately a real "gift!"
Speaking of which, I've got cookies to make for the potlucks tomorrow so I better get baking. Maybe the "happiest place on earth" is no further away than the red, white and blue celebration on Highland Avenue in Piedmont. Hope to see you on the parade route.
Happy Birthday America! (And happy birthday, Jill. I'm ready for our road trip.)
The Fourth of July is right around the corner and in Piedmont that means the smell of barbecues, well-attended block parties and the annual, much-loved Fourth of July Parade.
For the uninitiated, although the parade doesn't officially kick off until 11 am (after the pancake breakfast), the lawn chairs will begin to show up days beforehand - several days beforehand! Like weeds, they'll pop up all over the route, with ribbons strewn down the line, saving their favorite spots for those who plan to arrive the morning of, decked out in red, white and blue. Those in the know, will grab the shady spots first, and casually stroll in a few minutes before the official start time with drinks in hand, while those who wait too long will find themselves standing two to three rows deep, elbowing for a section of cement. No matter, there's room for everyone.
Me? I like to wander from front yard party to yard party the day of the parade, so I have willingly given up any claim to some small piece of the sidewalk. Still, this demand to claim our space makes me realize that commanding "real estate" is a universal desire, whether it's a blanket on the grass, a lawn chair on the parade route, or a chaise lounge at the pool (you know who you are.) It's the rare individual who doesn't want to own "a piece of the rock."
For many, that's easier said than done. With housing prices shooting up faster than fireworks, strategic planning and aggressive play have never been more important. You'll need to not only get preapproved for a mortgage prior to beginning your hunt, but you will also want to stay totally on top of the newest introductions and then make your move quickly and forcefully and that will require the help of a knowledgeable, local Real Estate Agent. Our current marketplace doesn't favor those who hang back. And if you are lucky enough to have well-heeled parents to help with those hefty down payments, treat them kindly. (They're your best friends.)
For those of us who don't sit in such rareified air; whose ancestors may not have found their way to "the land of opportunity" by way of the Mayflower, or didn't land at a start-up straight out of college, the summer may offer an opening you didn't have before. While others are on vacation, you may find fewer competing buyers in the market allowing you to make your move with less competition to contend with. (Wouldn't that be nice? Yes, it would.)
On the flip side, there may also be fewer homes to see as inventory begins to diminish. August presents especially lean before the market revs up again once Labor Day has passed and vacationers have returned home. This is the typical cycle of the summer market so use it to your advantage should opportunity knock. Here's the key component, you'll actually need to recognize such an opening instead of wondering where the crowd went? (They've gone to the beach. Give them a towel and happily send them on their way!)
With suggestions that the interest rates will finally rise come the fall, (they are already beginning to inch up) if you can find and secure a home this summer, you may avoid this costly correction when and IF this prediction comes to pass. Remember it's not so much about the sales price of a home, but about your carrying costs on a monthly basis that decide how "affordable" home ownership is for an individual. A single percentage jump in the interest rates will transfer to approximately $100,000 less in purchasing power! (Ouch.) So be ready to jump.
In the meantime, there's a parade to attend, bunting to hang, potlucks to cook for, and friends to bump into. Last year, I must have run into at least a dozen families during the parade whom I had helped secure homes in and around Piedmont, which was incredibly satisfying and heartwarming to say the least. Sure, the parade is fun, but watching my families expand and grow up is a whole other kind of kick. (I do love my job!)
Heck, maybe I'll even dig out a camping chair for my 89-year-old mother-in-law on Monday. This will be her first Piedmont Parade now that's she's come to live with us. There's no way she can stand for two hours and besides, there's something quaint and familiar about those darn lawn chairs; a reminder of what awaits I suppose and the willingness to be silly and unabashedly patriotic, if only for one day a year.
So bring it on. Summer has officially arrived. The days have grown long and we've all got more time to enjoy the sunshine, to hit the beach, and to spend time with friends. Let's celebrate our remarkable little town.
BTW- this year marks the 50th anniversary of the parade, so there's bound to be additional entries and special activities. Bring a few extra dollars for the Boy Scouts commemorative caps they'll be selling to mark the occasion before, during and after!
"Which color sample do you like?" I asked my husband as we gazed at a color chart and the larger boards our contractor, PJ, had kindly produced. (Who knew stucco had so many options?)
"I like the medium grey sample third from the left and the smoother finish," Cliff opined.
"Me too," I agreed.
(Although between you and me, that smoother finish costs A LOT more money. Of course it does.)
"Not that it matters much," Cliff said, "I know this was just your way of making me feel like I get a vote." (OR what we laughingly refer to in our marriage (for better or worse) as the "Empty Magnanimous Gesture." For short, the "EMG!")
It's the disingenuous offer, offer.
Okay, maybe I'm guilty as charged, but after 25 years of marriage, this semi-transparent social tool has come in handy for us both on more than one occasion.
"Honey, we should invite your mother to join us for dinner."
"She can't, she's got that thing with my brother's family tonight, remember?" (Ah yes.)
"How 'bout we both sneak away from work at noon for a movie?" I"ll text my husband, knowing I really don't have the time, but neither does he.
"That won't work, I've got a mock court commitment in the city today. I told you about it the other day." (Oh right, I forgot, wink, wink.)
And so it goes . . .
Not that Cliff walks higher ground. (He doesn't.) In fact, Cliff considers himself the inventor of the "Empty Magnanimous Gesture," (along with the much-loved "Preliminary Dessert") if not by deed, than by name. (Cliff amuses himself to no end.)
"I can cancel tennis and go to the flea market with you this Sunday if you want me to," he'll kindly offer.
"That's sweet, but you know I'm meeting up with girlffriends this weekend and we are leaving VERY early."
"Oh right, have fun, " Cliff responds, knowing he escaped a bullet as he grabs his racket and heads for the door.
What can I say, the "Empty Magnanimous Gesture" has kept our marriage alive for nearly three decades. It extends a courtesy without having to do anything but extol one's good intentions. Hey, you are welcome to give it a try - my good advice comes at no cost to you.
Still, you'll want to tread lightly when utilizing this ace in the hole. The "Empty Magnanimous Gesture" isn't intended for every occasion and most especially isn't appropriate at the workplace, especially as it pertains to the world of REAL ESTATE.
When it come to Real Estate transactions, Buyers and Sellers should say what they mean and mean what they say, especially in a market that demands much and leaves both sides feeling a little used and abused, to say the very least. Despite the rapid pace (or more precisely, because of it) and precedent-setting results, instability and chaos of any kind tend to breed insecurity and fear . . . which, not surprisingly, can lead to second guessing and less-than-stellar behavior.
Did we sell too quickly? Should we have taken the first offer? Did we pay too much? Where will the market be next year? He wants what? YOU TELL HIM I SAID . . . !!!
In fact, I'd suggest that Buyers and Sellers should bend over backwards for one another to meet the reasonable requests of the other party. Forget common decency and politeness, OR the terms spelled out in the contract, OR the letter of the law, OR what your agent is pleading with you to do(!), Being fair and reasonable to one another just makes practical sense (and cents) when millions of dollars are on the line.
But even if we weren't speaking to six-figure results, the transfer of ownership flows much more smoothly when we extend ourselves to one another. While each party is typically (and ideally) represented by their own REALTOR, buying or selling a home should never be an adversarial process, or you're very likely to see the deal come crashing down around you and NO ONE wants that.
I'll never forget the Buyer who early on in my career, walked away from a purchase because the "vibe was bad" and she didn't want to live in a home with "negative energy." The house had been a difficult sell and once we were in contract, we certainly knew why.
OR the Buyer who walked away when his lovely offer was finally responded to . . . two days later. The Sellers had wanted more and the Buyer might have given it had they simply countered on time. (Folks, there's a reason we put an expiration time and date in an offer. Please pay close attention. )
On the flip side, I've known Sellers who had so endeared themselves to the new Buyers, that when a giant redwood tree needed to be removed almost immediately after moving in (to the tune of several thousand dollars!) the Buyers didn't blink at the unexpected costs, but took on the responsibility as the new stewards for the home. Certainly, this could have resulted in a law suit for "lack of disclosure," but didn't. No one even considered it.
Why not? Because when we behave kindly and respectfully towards one another, no one ever need feel defensive, taken advantage of, or worst of all, 'RIGHT' at any point along the way which makes the hurdles (and there are ALWAYS hurdles) that much easier to jump. When we work together, as opposed to against one another, lovely things can happen - and often do. Cliff honey, I can meet you tonight for that movie. Oh that's right, you're off to see the Yankees play the A's. Ah well, maybe tomorrow.
How can I help you?
"Congratulations, you have been accepted into the Oakland Speaker Series," the email stated, "please send us an updated credit card."
FINALLY! I've been trying to get tickets for the last five years and have been politely rejected each time due to the long waiting list and the process of seniority (of which I have none). Thus, I'd nearly given up all hope at ever securing these highly-coveted seats and consequently, was nicely surprised when I received notification last week that at long last, I had made the cut. Isn't it nice to know that perseverance pays off in the end? (Yes, it is.)
For those of you who've never had the good fortune to attend The Oakland Speaker Series, it's a forum for the nation's most relevant and engaging speakers: former white house staff, retired presidents, world leaders, captains of industry, tech geniuses, policy makers, and your not-so-average newsworthy movers and shakers! Thanks to friends who have graciously invited me when a spare ticket presents, I've rarely ever left an event without feeling that my IQ had just been elevated a point or two.
Man, it's hard work being intellectual . . .
The fact is, that in a market that's increasingly difficult to navigate, being smart about the choices we make, can be a difficult line to walk. Don't tell my broker, but I'm just as often trying to talk my clients OUT of a house, as into one.
At a recent escrow closing, my darling Buyers joked that they were signing the papers, in spite of my frequent protestations (guilty as charged).
In my defense, I know it's your money, your risk, and your decision, but because I've had enough experience to watch the market swing in both directions, I not only need to encourage you to be brave, to give you permission to buy, and to bid aggressively, but to be smart about the choices you make and to consider them carefully. (In the end, these buyers followed their heart, which was really the most persuasive factor.)
I'm not suggesting that now is the time to pull back and get conservative (it isn't IF owning a home is the intended goal) but when you consider a home purchase, you need to look at this investment not only as a Buyer, but as a Seller as well. Thus if you end up paying a premium in a hot, hot, HOT marketplace (and you most likely will) you' wil be far better served IF the home you buy in today's world, has comparable value down the line for the next prospective owner to come.
(Footnote, if you plan on staying in the house 10-20 years, what you pay in today's world is almost irrelevant, BUT if you think it is very likely you will move again in less than five, the price you pay TODAY is HIGLY important.)
Even so, buy high or buy low, you still want to make a smart decision, no matter the purchase. As I explained to one hopeful builder looking for the "bargain buy" - "$10,000 for an unbuildable lot is just expensive dirt."
Or to another: "I know this fixer property seems like a good deal by comparison," my email began, "but beyond a fair amount of space, it's lacking natural light, a good floorplan, a usable yard, and a desirable location. I just don't think there are enough check marks in the plus column to make the savings worthwhile." (Happily, they walked away.)
Which isn't to say that I don't love and encourage a "fixer" purchase - I do (I'm the queen of fixers; renovationriptide.com) but that smart Buyers select the TLC home with clarity and care and at the very least, a "fixer" home should start with good bones because renovation is exceedingly expensive under the best of circumstances (take it from one who knows) AND rarely pencils out unless you're a professional flipper by trade.
Conversely and under much different circumstances, I have no problem fighting for a house and challenging my Buyers as to their concept of "value" when appropriate, and have often done so!Given that I have tracked the market for years on end - not weeks - it's a fair bet that I have a better sense of where a home will ultimately trade and where the current market value lies.
"I'm going to encourage you to bid more as I believe this home is well worth it and here's why. . ."
However, whether a "fixer" or a "turn-key" opportunity, the old adage, "location, location, location" has never been more true, but with one interesting, new caveat - upcoming and transitioning neighborhoods may in fact, provide the greatest value in upside potential and future returns. As an example, The Temescal neighborhood in Oakland is enjoying an unprecedented boom in property values that only a few short years ago would have been unimaginable. "Walk-to," commuter neighborhoods such as these are highly, HIGHLY desirable and in much demand.
So how do I know what's worth pursuing and what isn't?
The "value proposition" of any home is ultimately up to you (not me). For some it's a bay view, for others it's public transportation and for still others, it's good public schools; the value and worth of one's home are as varied as the properties themselves, but this does brings us to the discussion of 'inherent' vs. 'correctable' flaws that I am asking you to carefully consider . . .
Starting with the premise that NO home is perfect, let's acknowledge that a home that sits on the BART line is ever thus (inherent flaw), but a home that is short a master bathroom might reasonably rectify that shortcoming with relative ease (correctable flaw).
Ugly paint colors and old carpet? That's a no brainer and a relatively cheap fix. (Correctable!)
Lack of light? Skylights, windows, and tree trimming might be your answers. (Correctable.)
A wonky floorplan? A good architect is a powerful ally as long as you have space to work with. (Correctable.)
No yard? That may be tougher. If the lot drops away, you may be limited to decks, but if there's land to be grabbed, think front or side courtyards, moving a fence, or building strategic retaining walls. Yes, creating a yard by moving the earth is doable, but it's a sizable investment to be sure. (Maybe correctable, maybe not.)
Fifty stairs to the front door? Sorry, you'll need strong thighs and a hearty soul. Short of an elevator, that's nearly an impossible fix. (Inherent.)
"But Julie, we're going to live in our home forever."
Okay then, problem solved.
Listen, all homes - no matter their flaws - sell under the right circumstances and gratefully, nearly everything is trading with multiple offers in today's marketplace. But just because you've lost a home, or two, or three, OR four . . . avoid the temptation to get seduced into a purchase that's going to be expensive or difficult to either "fix" or sell down the road should the market shift.
When it comes to your home purchase - with patience, diligence and perseverance, we are going to find the right "fit." I'm certain of it. While it may be difficult to believe so after losing a house you had your heart set upon, there will absolutely be another option soon and more often than not, it proves the better choice. Let's play it smart!
How can I help you?
"Wow," was my first thought. Who are the flowers for?
"They're for you," our receptionist, Mario, said; a big smile across his face.
Silly me, it hadn't registered AT ALL that my husband, Cliff, had actually ordered and sent this abundant bouquet (although it should have) to honor our 25th wedding anniversary. It's such a rare romantic gesture on his part that honestly, I'm more likely to get flowers from a satisfied client than from my spouse on any given day. We're both too guilty of taking one another for granted (especially after 25 years).
That's clearly been a mistake.
"A rose for every year," the card read.
Okay, I was shooting for diamonds (I've definitely earned them) but that's a lovely sentiment and I'll happily accept this beautiful bouquet with great gratitude. Hey, who knew Cliff could be so sentimental when the mood struck? Thank you, honey, I'm deeply touched that you went out of your way to acknowledge this very special day. I've truly been "lucky in love."
I have to say that twenty-five years has literally flown by, and I, for one, am looking forward to the next 25, especially now that you've learned to do the laundry and shop for groceries. (Can I say, that you've never been more attractive to me?) As it turns out, you can teach an old dog, new tricks.
When I look back, I'm proud of the things we've accomplished together (house, kids, dogs . . .) AND I'm excited about what's to come (house, GRAND KIDS, dogs . . .) but whatever the journey, I know we're in this together and that there's bound to be a lot of laughter along the way. (Just for the record boys, we're not in a hurry for those grandchildren anytime soon.)
How's this all relate to real estate, you're asking yourself? Isn't this about where Julie segues into some pithy comparison or literary metaphor ("A rose by any other name . . .")?
It doesn't really, but I wanted to gush just a little. However, if I were to draw upon my own experience as a homeowner and serial renovator these pass 25 years, there are a few lessons that stand out with respect to the world of home ownership that I will happily pass along . . .
1) Buying a home is an emotional journey - not a pragmatic one.
2) Although buying a home may seem like a "forever" purchase, it isn't. The average homeowner moves every 5-7 years and the average individual will move 11.7 times in their lifetime. (I'm clearly ahead of the curve.)
3) Besides our children, nothing is truly permanent - not even our homes. Feel free to change the paint, hang wallpaper, remodel the kitchen, and open walls if you see fit. It's your house; make it so. You've earned the right and it's one of the best things about home ownership, as opposed to renting. YOU get to decide!
4) No matter the price point, you are going to want to change something about the house. This is AS true for the $500,000 condominium as it is for the $5,000,000 estate. Stop expecting perfection (no matter the price); it doesn't exist. Homes evolve as lives evolve, and so they should. Make yours a reflection of you.
5) For the majority of us, our homes are our single largest investment, but even if it that isn't true for you (lucky dog), DO take care of this valuable asset. There's simply too much at stake to allow your home to deteriorate over time and remember - "an ounce of prevention is worth a pound of cure."
6) Truth? Not everyone is meant to own a home. If you don't like the responsibilities that go along with owning and caring for a property, paying taxes, and updating as needed - RENT. It's perfectly acceptable to enjoy traveling more than mowing a lawn. (Most of us do!) If we're truly fortunate, we get to do both.
7) The rest of the world aspires to home ownership. Aren't you fortunate to live in a country that not only honors this concept, but gives you a tax deduction for it? (Yes, you are.) Take advantage of this enticing government-subsidized bonus; it's the only one we receive courtesy of Uncle Sam.
8) Buy high or buy low, in the end it matters very little over
T I M E ! Worry less about what it costs to buy and more about what it costs to carry. (Remember, you're working with leveraged money as opposed to your own valuable dollars.) Today's interest rates are at historical lows.
9) The ONLY time to worry about the value of your home is when you go to sell it! The rest of the time, it matters NOT AT ALL! While markets go up and down, correct and rebound, wax and wane, homes are tangible assets.
10) Love your home, but don't treat it like a museum. The loveliest of domiciles aren't worth much if friends don't gather together to break bread, to celebrate, to share a moment, to make a memory and to dance and sing. No, homes aren't worry free. Like a good marriage, they require time and attention and a fair amount of TLC and sure, there may be a few thorns along the way, but how else can you get a rose? (Ahhh, you knew I'd get there.)
How can I help you?
It's been a BIG week for my son, Tristan, who not only hit a solid triple in yesterday's baseball game (that's him, running safely to third), but committed to Colgate University in upstate New York and most importantly, secured a lovely date for the Senior Ball! (She's darling.) Ah, to be happy, joyous and free again (young would be optimal too).
Of course, the months leading up to these victories have been less than happy and joyous, as Tris anxiously waited for news of his college acceptances and, for the first real time in his rather charmed life, dealt with a fair number of rejections before receiving the nod from several colleges on his list.
Cliff and I aren't new to this game; we've been down this road before with our elder son and knew that the right "fit" would present, but it seemed tougher this time around as the competition for schools becomes ever more global and difficult to navigate with each passing year. (I'm glad I don't have a third waiting in the wings.) Admittedly, Tristan's "stretch" list was far more ambitious than Case's, so that added a hefty amount of pressure that we didn't contend with the last go-round. Even so, in both instances, getting into college wasn't just about the number of applicants, the pedigree of the institution, or the expenses involved (yikes!), it was also a highly emotional journey fraught with anxiety and fear. (I'm still talking about the kids here; the parents are a whole other subset of crazy!)
Hmmm, that sounds a lot like buying Real Estate, especially these days when rejection is often the name of the game and deciding on a price to offer is often based more on gut, than on intrinsic value alone. (I agree, that's a tough road to hoe.) Wouldn't it be nice if the columns all neatly added up and it made sense? (Yes it would.)
So how does one maneuver the rocky landscape? Like the college hunt, buying a home begins with good analysis and a desire to find the right "fit." It also requires some soul searching and a clear understanding of what is within your reach. Make sure you and your mate are on the same page in this regard and you'll save yourself countless hours of research and writing.
Once the picture is clear and a property has been identified, we find reliable comps of nearby sales, determine the number of other interested parties, ask about the Sellers' requirements, preinspect when possible, thoroughly read the disclosures provided, seek out any additional information as needed, write a love-letter accompanied by adorable pictures (yes, this CAN actually be the deciding factor) set up financing WELL ahead of time, and then move in with determination and commitment. Sadly, anything less is really going to leave you at a disadvantage. In truth, home ownership is acquired by those who have a clear understanding of the marketplace, coupled with a strong desire.
So how does this year's market stack up to last year's thus far? In both instances, the market was exuberant and vigorous, but it seems even more heated this year and for good reason. Overall volume is down. As of April 23, 2014 - 60 homes had traded ownership, per the MLS (Multiple Listing Service). As of today, the number of pending and sold properties in Piedmont since January 1, 2015, sits at only 42. (These numbers don't account for any properties sold privately, off-market.)
While it's GREAT to be a Seller under such conditions, being a Buyer can be quite daunting, so for many, it's safer to simply sit it out. With fewer homes to meet the high demand, homes are selling for more money than last year, although not outrageously so (although it might appear that way to the casual observer). In fact, the average price in Piedmont at the end of the first quarter was approximately $664 per square foot, while this year, the price per square foot currently factors out to $681. It's a bump, but a reasonable one in light of the numbers. (It bears saying that now that you have the figures, it's wise to remember that homes don't sell by the square foot!)
What has changed somewhat is the pricing strategy which accounts for the multitude of overbids. Current practice dictates that a Realtor price a property below the anticipated market value in order to attract a bidding war. Unlike other negotiated markets in which a commodity is typically priced above where it will ultimately sell (think cars) our local real estate market sets a price below the anticipated sale and then bets on the market to carry the value UP! (Did you follow that?)
While this strategy may sound ridiculous, it actually works quite well given that the market has a keen sense of where a home ought to ultimately trade and DOES. Better to price a bit below the final selling price than to risk listing too high and losing your market share to the lower-priced home down the street. BTW - if you start too high, the market will NOT automatically carry the price higher; it doesn't work that way. Listen up Sellers: homes perceived as "overpriced" don't sell quickly in ANY market. For the uninitiated, this can seem like a bait-and-switch tactic. It isn't. It's simply supply and demand at work and unfortunately for Buyers, this year, there's less supply and more demand, so adjust your expectations accordingly and get ready to bid aggressively if home ownership is the desired goal.
If it feels too heated to enter the race, take a "Gap Year" and grow into it. That's okay; you may not be ready. Not everybody is. In the end, jumping into the unknown is a bit like heading off to college; both require a leap of faith and the belief that it will all work out in the end. Except that with home ownership, you will know your roommates ahead of time and someone will likely be there to do the laundry. (Sorry Tris, you're on your own from here on out. I'll pay for the education.)
How can I help you?
"Oh my god!" Chad exclaimed as he scrolled through the construction photos on my phone. "At what point do they start putting your house back together?"
That's an excellent question. Looking at the ruins all I can hear is: "Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall . . . " I don't know exactly what I expected given the scope of the project, but you can literally see through the entire house and that includes the roof and attic as well.
In truth, there's almost nothing of the original structure left and what there is, still needs to be replaced due to significant rot and termite damage. Of course, I knew the house was a MAJOR "fixer" when Cliff and I bought it a year ago (I'm not totally soft boiled) and that it would need everything, but I didn't really believe it would need EVERYTHING!
IT DOES (!) and so, having come this far, the only thing to do is to push forward with conviction and faith, BUT I'd be less than honest if I didn't admit that there are moments when I wonder if ALL the king's horses and ALL the king's men CAN indeed put Humpty Dumpty back together again?
Of course, it doesn't help that I keep showing up only to find a single workman or two on the job site when what I'm hoping for is half a dozen strapping young men with power tools in hand. (Heck, give me the whole calendar!)
"Can't we at least clean up a bit around here?" I asked the sole individual in vain, looking for some small semblance of control, before calling my contractor and begging for more progress, more bodies, or at least more order.
"Well, it's a construction site," PJ patiently reminded me in his soft Irish brogue. "We'll definitely get it cleaned up when the drywall goes up, but in the meantime Julie, it's a construction site!"
"Unfortunately, we're in a holding pattern until the windows arrive PJ continud, and they're a month late so there isn't much we can do until they come in." And then the kicker, "Please try not to worry about it."
Uhhh, that's more easily said, than done as I look around at the demolition site that once was a home and a yard. For a gal who craves neat and orderly, this isn't exactly my best and finest hour. Plus, there's still so much to be done . . . Yes, I know there is progress being made (I have HUGE invoices that tell me so) but I wish I could see more of it in real time. You know like those HGTV shows that completely remodel a house in two weeks for practically nothing? What's wrong with that expectation?
Hey folks, this is where acceptance and surrender come into play. I've discovered that in the face of chaos, there's really no better solution for what's appears to be out of our hands than letting go . . . What's more, it's a message I'm often reminding my clients to adapt as they struggle with the pace and speed of the marketplace and the loss of bids that only a year ago would have easily secured them a home.
Here's the good news: the market is incredibly dynamic and while there still isn't enough good inventory to meet the high demand for Bay Area housing, more and more Sellers are starting to see the advantage of bringing their homes to market now to better capitalize on this golden opportunity, which means that we should start to see more balance as we progress through the spring market.
Moreover, with news that the Feds WILL finally raise interest rates (potentially by the third quarter) purchasing power will undoubtedly be affected for many, which means that competition may decrease just a wee bit. (Now I'm speaking Irish.) In the meantime, here's what you can control (drum roll please) . . . your intentions and your actions.
That's is? (Yes, that's it.)
In other words, no need getting worked up about the things we can't control (which is everything else). The market is what it is; lenders and service providers are backed up, Realtors are working round the clock, competition is intense, and somewhere, somehow, someone undoubtedly can spend more than you! That's the long and short of it. So get your financing in good order, diligently hit the Sunday Opens, give your Realtor specific and frequent feedback, and when you at long last, identify the home you want, put in a bid that decisively secures you the property. Shopping for a home may not be a fairy tale, but we can certainly strive for a happy ending!
How can I help you?
One Step at a Time! I hesitate to use the word "fanatic," but I'm kind of a Fitbit fan and one of the things that has really become clear to me is how much that little piece of hardware has changed my "perspective" on life.
To set the stage, my job requires a fair amount of paperwork. Since I'm highly detailed, I'm not only producing contracts, disclosures, letters, offer synopses and the like, but I'm printing and copying them for my files on a daily basis. (Yours, I'm usually sending electronically.)
Since you can't see my little piece of carved-out real estate here at the The GRUBB Co., imagine a tiny cubicle in the center of the room upstairs, with a community printer and copy machine on opposite walls. In short, my in-house days are spent racing from my desktop to the printer to the copy machine and then back to my desk - over and over and over again - in something akin to an M-shaped pattern. (Think mouse in a maze and you've essentially got it right, except there's no cheese at the end.)
Here's the great part; what use to annoy me as being a highly inefficient design, now adds up to thousands of steps each day (no kidding). Ditto for the parking lot at Target, the last floor at the cineplex, the three blocks to Witter Field, or any other "walk" I'm forced to take in the name of legal parking. (Ain't life grand?)
Now, I need only receive a little buzz when I hit the 10,000 step mark and I feel as if I've conquered the world. That little black band not only makes me feel productive, it tells me so with a little grahic message and some exclamation marks: WAY TO GO!!! (Clearly, I'm easily motivated by outside stimuli.) Like Yurtle the Turtle I keep rising higher and higher with each passing day. To date, I've conquered the steps in the Empire State Building and well beyond (I'm obviously their target market) so you see, it's ALL about perspective. As you might imagine, "perspective" is vitally important come time to buy or sell a property. In a market that is all but defying explanation, it can be hard to maintain a healthy dose of sanity around the stories one hears . . .
"Can you believe how much that house went for?!?"
"Did you hear that there were more than 27 disclosure packets out?"
"Did you hear they got X number of offers . . ."
Or conversely . . .
"Did you hear they only got one offer?"
Leaving the dejected sellers to feel as if they were the last kid asked to dance at the seventh-grade Cotillion. (Okay, maybe I'm still just a little tender.)
For your own sake, let's put it all in "perspective." Just a few short years ago, the banks had nearly failed, stocks had tumbled, retirement plans had lost BILLIONS, and Real Estate, along with every other investment we held near and dear, had absolutely taken an unexpected hit, leaving many people "short" and forced to sell. In fact, in many parts of the country, real estate values still haven't returned to their pre-2008 values.
Thankfully, that's not true here in the Bay Area, where we've not only rebounded, but surpassed the high market values of 2005 - 2006. If you have successfully sold your home, consider the sale a win. Take note, pat yourself on the back, and give thanks. If you are in a position to buy or sell Real Estate anywhere in the Bay Area, you are truly one of the blessed. Yes, should you sell, you will undoubtedly compete with others on the buy side, but for many of you, your profits will more than make up for the heavy competition. In fact, you'll very likely be the ALL CASH Buyer wielding the HEAVY hammer come time to jump.
What's more, comparatively speaking, Oakland/Piedmont/ Berkeley are all still undervalued when compared to our like-kind neighbors up north, down south, or across the Bay Bridge. Based on the MLS (Multiple Listing Service) the median price for a home in Alameda county factors out to $697,000 - well, WELL below homes in San Francisco ($1,154,000), OR Marin ($1,023,440), OR San Mateo ($1,200,000), OR Santa Clara ($915,000). (Don't you feel better already?) Which isn't to say that these numbers aren't daunting, especially for first-time home buyers, but the East Bay still represents smart value and Oakland, in particular, is only going to get better and better over the next decade. (Evidently, we're the new Brooklyn.) Yes, I know I'm partial when I extol the obvious benefits of East Bay living, but I know from where I speak. Having spent the first 18 years in The City and the last 12 in Piedmont, it's easy to talk the talk, but I've also walked the walk, and there are few communities as diverse and dynamic as ours. Or to quote Mr. Rogers, "Would you be mine? Could you be mine? Won't you be my neighbor?" Hey "neighbor," I've not only worn out a few pairs of shoes getting to know my neighborhood, but I've done the necessary footwork to understand the ins and outs, and the ups and downs of the marketplace (Did I mention I have the Fitbit record to prove it?)and here's what I've learned along the way (clocking all those hard- earned miles) that will hopefully save you countless steps and a tremendous amount of time on your way to home ownership: it makes little difference in the long term, what you pay for your home in today's world. (It's true.) Yesterday was yesterday. Tomorrow will be tomorrow. Today's market IS the only one in which you can work, so make the best of it and try not to fret about the past or the future. It will all work out in the end. How can I help you? (I'll be taking next week off as so many of you will be on vacation. Happy Passover or Easter. Enjoy your down time.)
Julie Gardner, has been writing The Perspective for 14 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.