Once again my husband, Cliff, has appointed himself the official "Commish" for March Madness. For years, he's poked fun of my unorthodox choices as I struggle to fill in my bracket -
"What's the school mascot?" I hopefully ask, grasping at straws. (I don't really follow basketball.)
As one grown niece pointed out to her boyfriend who participated in the tournament for the first time this year; "Essentially, my uncle makes up dumb rules as the tournament progresses to manipulate the outcome."
I'm not sure Cliff would agree with Karen's observation, but suffice it to say that he does takes great pleasure in this self-appointed role while the rest of the family plots a dethroning.
As you might imagine, there is all kinds of misbehavior that ensues between the warring families (Gardner North and Gardner East) as the incriminating emails fly back and forth throughout the tournament until a lone and much aligned victor is left standing at the end.
Here in the world of Real Estate, we are experiencing our own "March Madness" of sorts as prices move up, up, UP! It's actually the same pattern we see every year as the Spring Market takes off before it can no longer absorb the escalating appreciation and finally finds its cruising altitude. This year, the unprecedented early results have been amplified by too little inventory and tremendous pent-up Buyer demand - fielded by tremendous cash on hand!
While it may seem as if there are no rules in place regarding this highly heated marketplace; there are:
The most important of them has to do with DISCLOSURE. As many of you know, Cliff and I recently sold our home here in Piedmont and made an offer on a "fixer" in Crocker Highlands. I'm a girl who doesn't mind taking on these less-than-perfect properties, but throughout the transaction, I really struggled with the LACK of disclosure the Listing Agent and the Sellers provided on the other end.
It's one thing to waive inspections on a property that's been thoroughly inspected, but it's quite another to take one on that hasn't. Unless you are buying a foreclosure on the courthouse steps - at a significant discount - 'disclosure' is part and parcel of the process - as it should be! "I encourage you to have a pest, home, and sewer lateral inspection" I routinely tell my Sellers, "and if those inspections identify any red flags, we will investigate further and either correct the issues or quantify them." (It's not enough to identify an old furnace, you need to put a price tag on how much it will cost to replace it, or the Buyer will!)
(I'm just getting started.) "In addition, the law requires a Natural Hazards Disclosure, Seller Transfer Disclosures, a Lead Based Paint Disclosure, Water Conservation Disclosure, etc., etc., etc., AND several boiler plated disclosures, point-of-sale disclosures, and here in Piedmont: a permit history search and a sidewalk inspection as well. In the case of a condominium or townhouse sale, there are also HOA rules, CC&Rs, annual financial statements and at least twelve months of meeting minutes. (Whew!) Ultimately, the stack of disclosure is about the size of a phone book (remember those?) and a time-consuming endeavor on both our parts.
"What's the point of all these seemingly redundant disclosures?"
They provide the Buyer with material facts about your home so that he/she can make an informed decision about the property and its current condition, AND then submit a price based on this relevant information. Having done so, it's much less likely that the Buyer will renegotiate an accepted offer once in escrow.
And while pointing out a home's defects is the last thing many Sellers want to do, it actually protects the Sellers from future lawsuits regarding items that could have, and should have, been disclosed, prior to the sale. (Hiding material facts is behavior a seller should NEVER participate in.)
In the end, Cliff and I ponied up the dollars to do our own investigations and closed the transaction earlier this week. It's money well spent, in my opinion, to better understand - upfront - the property and the responsibilities we have agreed to assume. While admittedly, there is LOTS to tackle there, hopefully, we've mitigated any unwelcome surprises as we progress.
As for March Madness . . . I'm going to fumble along year after year utilizing my own unconventional methods and hoping for the surprising upset along the way. (This tournament may be the only place in which the "surprising upset" is a welcome outcome.)
It could happen. After all, I'm married to the "Commish" so I have friends in high places.
It's a discouraging fact of life that the only place from which I seem to be losing 'padding' as I age, is the balls of my feet . . . which is why those ultra-chic high heels that I used to dance the night away in our barely manageable as I painfully sit through dinner and the theater anymore.
Dance the night away?
Heck, I use to actually wait tables five nights a week in platform heels and would hit the clubs for hours afterwards! "Honey, go get the car," I'll plead with my husband, Cliff , as we leave the restaurant, "I can't walk another step!" Regrettably, high heels are becoming less and less comfortable so yesterday, I actually broke down and bought a pair of stylish FLATS on my way back to the office.
"Comfort" is a concept I am bringing up earlier and and earlier with my Buyers these days, as they prepare to do battle in our current, heated marketplace. With the large majority of homes selling far ABOVE their listed price, it's frankly, rather uncomfortable for everyone involved - except for the fortunate Home Sellers who are quite likely, realizing results they never anticipated or reasonably expected.
Congratulations! As Sellers, you are benefiting from fortunate market timing, historically low interest rates, pent-up buyer demand, low inventory, and more CASH than we have ever seen in the marketplace before, which accounts for the many buyers who can comfortably waive their appraisal and loan conditions in competition.
Even so, it's no easy thing to waive contingencies when hard-earned money is on the table and there's no clear formula for picking the "magic number." Moreover, there's NO guarantee that the subsequent appraisal will affirm the market value a 'willing and able' Buyer has set. (It often doesn't. Remember, even if YOU have waived the appraisal contingency, the bank will still require one if a loan is in place as part of the purchase agreement.)
"How do we know what to offer?" is the refrain I hear most often from my well-intentioned buyers. "We don't want to overpay." (That's understandable; nor do I want that for you.)
BUT successfully competing in this marketplace isn't about overpaying; it's about recognizing the "value proposition" at play. In other words, what's really important to you and your family as you take this all important step? Is it four bedrooms up? A large backyard? A bay view? Walk to BART? Near good schools? Close to a park? At the entrance to hiking trails? Does it provide privacy and security? Room to grow? A space for visiting relatives? Natural light? Great bones? Historical integrity? Contemporary living? And so the list goes - it's as varied as you are and what YOU value; AND frankly, no one can define that but you!
Ultimately, what you are willing to offer, largely has to do with your personal preferences, how long you think you will stay in the home, what you can afford to pay, and what the carrying costs will be. (The costs to OWN are actually more relevant than then the cost to BUY, given the current interest rates).
If you plan to stay in the home for at least seven to ten years, today's inflated price may be largely moot as you are very likely not only going to realize whatever "future appreciation" you paid upfront, but will more often than not, see a sizable return on your investment.
Historically, it's important to note, that investing in one's home has been a very sound part of one's portfolio over time . . .
Whatever your short or long-term plan, it's been my experience that when you find the home you aren't willing to lose to another Buyer, you'll step up and compete in a meaningful way.
Hey, I don't just talk the talk, I walk it too. My husband and I are actually involved in a "fixer" purchase right now that very likely won't pencil out in today's world, especially once we factor in the renovation costs. That's okay; it doesn't need to. For our purposes, the house need not 'math out' for at least ten to fifteen years, when we will likely go to sell it. In the here and now, it works for our family, and we believe it is a sound opportunity.
So identify what's important to you and then write an offer that achieves the goal, with the clear understanding that home investments are unlike any other; they provide security on a very different plane than retirement funds or savings bonds do; which is probably why Buyers tend to buy homes emotionally, rather than pragmatically. Admit it, it's hard to fall in love with a 401k plan, no matter how much money is socked away OR how much future security it provides. (It's no less important, but you can't bake cookies or build memories in it.)
Now shoes, that's another matter entirely; those are quite easy to love! (Ouch, my feet hurt.)
Have you heard? Cliff and I are officially in escrow and we close next week. More to the point, our 'home sweet home' sold in only four days and with multiple offers!
"Wow, I feel so lucky," I told my sister, Jill, "the perfect Buyers came along at exactly the right moment and totally 'got' our home . . ."
"Except that it wasn't luck," Jill reminded me. "You worked really hard on your home and your property is stunning." (Thank you, we did and I'm glad it shows.) "I think you need to acknowledge that your amazing result didn't come about by accident." (I appreciate that.)
It certainly didn't hurt that our listing coincided with a break in the weather, a fantastic team of dedicated professionals, excellent market timing, TECH DOLLARS, an exceedingly motivated Buyer, a value proposition, and very gifted Realtors on both sides! (Well done.)
Or as one colleague remarked, "Your home is the perfect example of when 'Preparation meets Opportunity'."
In fact, Cliff and I haven't just been busting our humps for the last few months preparing our property for market (although we ramped it up considerably and by "we," I mean "me") our house has been a work-in-progress for the last decade.
Ten years ago my husband and I essentially fell in love with a garden and a gazebo and knew that with time and vision (and money!!) "potential" lay in the mix as well. Regrettably and in a market not unlike today's, we had spent MUCH more than we anticipated with the firm understanding that any home improvements were at least five years away. And so we waited . . . and waited . . . and WAITED. (For those of you who know me personally, you know that 'waiting;' isn't exactly my forte.)
Having finally put our hearts and souls - and a sizable investment - into this exceptional home, I now leave it in the appreciative hands of the next stewards with the knowledge that we have loved it well and that they will very likely make it their own - as they should. It's my deepest wish that the new owners will find all the joy and happiness; all the love and laughter; AND all the tennis balls Buck left behind. Enjoy!
And as if that weren't news enough (drum roll please . . . ) Cliff and I are now in contract on the next "fixer" with "potential." Yes, folks, we finalized the contract yesterday and call us crazy, but we will be renovating yet another home with "great bones." It's absolutely everything I SAID I wasn't going to buy this time around, but here we go again . . . (there isn't a 12-step program for this addiction, but maybe there ought to be).
So, I'm proof that like most buyers, we tend to gravitate towards the same style over and over. (This will be our sixth project together, NOT counting the boys - a 'project' like no other). I suppose that when it comes down to it, Cliff and I like the 'promise' these less-than-perfect homes offer, and after nearly 25 years of projects, we've gotten quite use to the process as well.
Happily, this is the first time that we won't have to live in the construction site while the work is underway. (Hey, I need a rental now! Who's got a lead?)
For the record, the last few weeks have been a whirlwind of activity - both personally and professionally. I've probably never been more in tune with the current marketplace and with the emotions that my Buyers and Sellers must navigate to be successful in competition. So here's my lesson for the week, having been in the THICK of both ends of the buying and selling process in what may be the most heated real estate market the Bay Area has ever experienced to date.
(Listen up for what it's worth . . . ) I started this journey with the majority of my friends asking "Where will you be going?" and the plain truth is, we didn't know. Unexpectedly, circumstances had thrown a curve ball in our plans, and the fortunate market timing seemed a golden opportunity to adjust, but that didn't mean we weren't incredibly conflicted about selling and letting go. Like anyone who sells a home they truly love, saying goodbye is never easy.
"WHERE are you going?"
"I'm taking a 'LEAP OF FAITH'" I told one curious friend after another until it practically became a mantra (leap of faith, leap of faith, leap of faith . . .).
I said it, but I wasn't quite sure I meant it. "I find," my friend and colleague, Christian, wisely said, "that when I become willing to leap . . . a NET appears." And so we leapt . . . and so it did.
Maybe life is nothing more than "potential" and what we make of it along the way. . . (A heartfelt "thank you" to everyone for their encouragement and support; AND understanding, and empathy and patience, and . . .)
None of us achieves success alone. I guess it really does take a village - (and a net)!
The high school baseball season is underway,so once again, everything is right with the world. Between two boys -respectively now 22 and 17 years of age - I've been watching baseball games since Case and Tris were old enough to swing a bat off a T, which makes for a LOT of years of shouting in the bleachers and driving carpools.
With the exception of a few painful moments (watching your kids strike out OR worse yet - sit out - is never easy) I've cherished the years cheering them on. Blue skies, a verdant field, the stare down of a pitcher, the crack of a bat . . . baseball hasn't earned the title of "The Great American Pastime" for no reason. It's not only the world's most beautiful game; a microcosm of life, of love, of working through slumps and overcoming challenges, of great saves and extraordinary leaps, of singular courage and team play . . . it's full of drama, last minute wins, and walk-off home runs. Baseball, has it all.
As equally rewarding as what takes place over the course of nine innings (seven in high school) is the friendships I've made along the way and the camaraderie among the team parents come the spring. Admittedly, after a winter off, I'm often enjoying my time in the stands, almost as much as the action on the field.
As anyone knows who's every been to a game - professional or club - there's a lot of down time between the plays, which leaves plenty of time to catch up! Which is why my husband and I RARELY sit together at a sporting event. I'm too talkative, too animated, too social for his liking. Cliff is a man who knows his sports and enjoys them with laser-like focus. He hasn't come to talk, he's come to watch.
In an effort to focus my wandering attention on the field (I prefer to think of it as 'muti-tasking') my husband, bought me a score book this year (what a romantic) and last Saturday, Cliff patiently taught me how to actually score the game. I'll admit it - for the first time in 15 years, someone asked me the count, and I KNEW IT! "2-2," I smugly answered, "top of the fifth." (I hate to admit it, but I kinda love keeping score.)
"That's an F-9," Cliff said. "It's a fly to the right fielder and the first out. Put a #1 in the box and circle it."
"That's a sacrifice bunt . . . you score it like this . . ."
"That double play is scored as a 6-4-3 and it ends the inning!" (Okay, that much I knew.)
And so the lesson went, through several innings until Cliff could wander off to his preferred spot behind the backstop leaving me with my new book.
I believe our relationship has reached a whole new level of intimacy!
It occurs to me that "keeping score" is just as important in the world of Real Estate. Like the game of baseball, the buying and selling of real estate is full of statistics. There are winners and losers and often, we go extra innings. But perhaps the most important lesson to be learned is that you've got to swing the bat in order to get on base! And remember, even the BEST players in the world only get a hit one out of every three times.
But in case you were keeping sore in what appears to not only be a fast-paced market, but a skyrocketing one, here are a few stats that might be of interest to those of you who follow Real Estate as closely as Cliff follows the box scores in the newspapers and helps explain why the housing market hasn't just stabilized, but rebounded in force! (Please note, this is a small sample size and doesn't reflect our nation as a whole, but is specific to the Bay Area. What's happening in Kansas isn't relative.)
While Piedmont, Berkeley and Rockridge weren't exactly the epicenter for "distressed" sales; nevertheless, this under water, state-wide inventory affected every communities sales statistics and median prices significantly and more importantly, the underwriting practices of Fannie and Freddie Mac and lending intuitions nationwide, making it much more difficult to qualify for loans and tougher to appraise the pending homes once in escrow. Those days seem to be well behind us . . .
So what's happening closer to home?
Per the MLS (Multiple Listing Service) home sales are considerably down in our fair hamlet. (No, this isn't just your imagination, there really is very little inventory.) Last year, as of March 2013, 16 homes had transferred ownership in Piedmont. This year, it's eight!
Not surprisingly, the average price per square foot has increased from $591 to $635; the average sales price, from $1,692,777 to $1,863,827; and the median from $1,380,555 to $1,545,000. Days on market were reduced from 28 to just 11!
So not only do you have to swing when the opportunity comes along, you'll need to out play your opponents, be swift on your feet, get on base, and then slide into home.
Gosh, I hope you like baseball. Buyers will be playing a lot of it this spring!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.