Vol. 237 - Swing for the Fences!
I have literally watched hundreds of baseball games over the years, having produced two boys who both took to the game as soon as they could swing a bat at a T (clearly they took after their father, neither of them wanted to be dancers - go figure). Our elder son, Case, no longer plays having moved onto college, but our younger son, Tristan, spent the spring on his high school team and is now currently involved in a very active summer league as well. Baseball - and the love of baseball - are part of our family's traditions, as much as Thanksgiving and Passover. Baseball is in our blood, and in our bones.
Admittedly, I don't know all the nuances of the game the way my husband and boys do. A devoted Yankees fan since childhood, Cliff seems to remember the stats on every player who's ever graced the field and can recall specific games and innings with accurate detail (he's Rain Man). He knows who holds what records (Highest life time batting average, Ty Cobb's - .367) in what years they were made (1941: the last season anyone batted over .400 was Ted Williams with .406) and when they were broken (1961: Roger Maris broke Babe Ruth's 1927 single season home run record of 60 with 61 home runs in a 162-game season. Ruth set his record in 154 games. ("And this is important Juls, Maris received the only asterisk in the record books for this distinction.") He follows "on base percentages," "earned runs" and "batting averages" the way many astute Buyers and Sellers follow our local Real Estate marketplace.
Me? I'm not so interested in statistics. Content to sit in the bleachers with the other parents and dutifully cheer as our sons make contact with the pitch or successfully field an out, I am delighted for the boys when their team wins and comfortable with their losses, for I know that statistics rarely ever inform the moment. Statistics only tell us about what happened - in the past!
But that's hindsight; it's wisdom earned through experience. I can also attest to the fact that as a parent, it's always easier to watch your kids powerfully tee off on a ball, than it is to watch them strike out and walk back to the dugout in utter despair (the same is true for one's clients). Watching these courageous boys, I am once again reminded that it takes real resiliency and true heart to stand alone in a batter's box knowing that you are more likely to get an out, than you are to get a hit (Really!). Statistically, baseball is a game of failure. The BEST players in the world are only successful one out of every three attempts.
Not surprisingly, resiliency and heart are important components of Real Estate as well - as are the concepts of "teeing off," "swinging for the fences," and "hitting a home run." They're also realistic metaphors for what's become a very competitive marketplace, as of late. After what can best be described as a "batting slump," during the last several years, the market has definitely rebounded with tremendous velocity and surprising force. The disconnect for many, comes with just how quickly things have changed, how dramatically prices have shifted, and whether or not the new found optimism is here to stay . . . (That's impossible to call. We can only advise you with respect to the market that is here today).
"We love the house and want to write what's fair," one well-intentioned Buyer said to me recently when crunching numbers to craft an acceptable offer, "but we need to be realistic . . ." To which I could only reply, "If 'fair' were all it took, you'd definitely be in contention, but buying a house in today's marketplace has nothing do with 'fair' and everything to do with how compelling your offer is."
The reality is that 'emotionally compelling' homes require 'emotionally compelling' offers. "Fair" doesn't factor into a winning bid AT ALL. (Sorry.)
Moreover, for those who are analytical in nature (and there are many of you) it pains me to say this, but the statistically driven Buyer is always going to be at a disadvantage against the Buyer who is willing to play with his or her heart. Those who buy emotionally recognize that while they may in fact, be paying a premium for the home, at the end of the day, it's not about the stats, it's about obtaining a successful outcome.
As you might imagine, that's news that's not exactly met with great fanfare. No one likes to be told that their offer which is already WELL ABOVE asking, is still well below where it will ultimately trade. (Huh?) For some, it takes far more work than they might have imagined and more than a few "at bats" to successfully get on base. (Think of it as Spring Training.)
What's more, it's likely that the successful Buyers will have waived their appraisal contingency, as the "market" value and the "appraised" value may not actually align. (Take note, you can only take this risk IF you have a BIG down payment OR enough cash reserves to make up the spread.) With homes selling 20-30% above asking in many cases, there may not yet be enough recorded sales to support the quickly escalating figures.
That's not only NOT fair, it can be downright disheartening as Buyers try to catch up to the new reality. Remember, lenders will only fund up to 80% LTV (loan to value) on a property - not on what you, as the Buyer, may be willing to pay. In other words, "intrinsic value" doesn't equal "appraised value," especially in today's more conservative lending environment which no longer gives much weight to the actual market demand. (Appraisers don't factor into the equation the 13 other Buyers who wanted the home as well and were ultimately responsible for driving the sales price waaay UP!)
This is where resiliency comes in. You may have to actually lose a few homes before acquiring the necessary technique, adjusting your swing, and aiming for the open field, before scoring a "hit.". (You're not alone, it's a process almost everybody goes through.) Hang in there, like baseball, there are many innings to play, new opportunities to be met, and happily, the outcome can turn on a dime. And at the risk of being uber philosophical about the home buying process, the near misses, prepare us for the wins.
And if you're thinking of taking the summer off to regroup because you've frankly, been benched one too many times by the Spring Market -DON'T! Summer is typically when many players leave and the competition thins considerably. If you are in a slump and aren't successful this time around, you'll certainly be better prepared to firmly strike the next time up. (Heck, my son went 3 for 4 the other night after a rather dismal spring showing. He stuck it out and it's paying off in his rather stellar summer performance.) Even if you don't hit a home run as the ALL CASH Buyer is frequently in position to do, there is still a good chance that with multiple attempts, you will eventually get "on base." But to do so, you've actually got to get up, swing the bat, and take your chances (don't get caught looking).
"Hey batter, batter - SWING!"
It's no surprise to anyone who reads this column on a regular basis, or visits me at any given Sunday Open, that I bake cookies. In fact I'm fairly well known for this highly practiced skill. On most Sunday mornings, I can be found in my kitchen working on several dozen to be shared with family, friends, and prospective Buyers (look out Mrs. Fields). To be sure, after hundreds of batches, I've definitely got the "cookie" thing down. This morning while bagging up a fresh batch to drop off to friends that have just moved into their new home, I found two cookies hidden at the bottom of the stack, each with a single bite out of them. Really?
Hmmm, this could only be the mischievous mark of my husband, Cliff. Our teenage son Tristan, wouldn't stop at a bite; he'd grab a BIG handful and a tall glass of milk. Not Cliff, he's far more dubious (once, he even set up the dog, but that's another story for another column).
Did he really think no one would notice? Did he really think it wouldn't count? As Real Estate Agents, we are trained to notice ALL manner of flaws and imperfections. In fact, on our long list of agent duties, is what's known as an "AVID," that's an "Agent's Visual Inspection Disclosure," and it's exactly what it sounds like - it's a visual inspection of the property. When taking a listing from Sellers, or once in contract with Buyers, Realtors must walk through the property and create a thorough visual inspection.
Mind you, Real Estate Agents aren't certified home inspectors, roofing contractors, or trained engineers for that matter, but nonetheless, we are expected to document what can reasonably be observed or might have been known about the home (imputed knowledge) and quite possibly, the surrounding neighborhood as well. If the street is about to be torn up for sewer replacement or underground wiring, a good agent ought to know it, AND if the teen across the street plays drums on a daily basis, a smart agent will state it in plain English on their AVID.
For the most part, we are usually noting the most obvious, minor imperfections: "There are scuff marks on the paint, scratches in the wood floor, a broken pane of glass," etc., etc. But frankly, it's more important that we list the less obvious infractions as well: "a bus line runs on the street, the neighbor's dog barks, finished basement may be unpermitted . . ." As you might imagine, home owners can get very testy, if not downright defensive, about these unsolicited observations, regardless of whether they are legitimate or not. It's one thing to fill out the Seller Transfer Disclosure Statement as required, but quite another to be saddled with agents' opinions that catalogue a property's perceived shortcomings. (Don't shoot the messenger, it's the law!) Please understand that our intention is to protect you from future litigation on undisclosed facts that may surface later on; it's NOT to emphasize subjective issues we have noticed about your (nearly perfect) home. I get it, you're hoping no one will notice that the street gets very busy during commuter hours, or that there are water marks on the foundation walls (efflorescence) AND you'd just as soon I wouldn't mention it either (unfortunately, it's my duty). Moreover, you've lived with asbestos wrapped ducts or a leaning Redwood tree for many years without incident, so what's the problem? Like my oh so clever husband, you are hoping it won't count. Here's the thing, once the Buyers move in and discover how difficult it is to back out of their driveway in the morning, or when the first heavy rain floods the bonus room downstairs, you ARE going to hear about it one way or another - and it won't be particularly friendly at that point when you do. Moreover I wouldn't be protecting you to the best of my ability by sticking my head in the sand and pretending material facts don't exist, IF in fact, they do. If there is an imperfection with your home, your property, or your location, better for YOU to call it out (or for me) than to ignore it entirely and hope it will go away. It's a BIG mistake to assume these inconveniences aren't important, that they somehow won't get noticed, or that they don't really count. (They do.) So any information you can honestly provide to offset and disclose these property defects upfront is highly recommended and more importantly, a proactive step towards avoiding avoidable litigation down the road. (It's tough to argue about the school bell across the street, if it was fully disclosed prior to the Buyers' purchase.) BTW- physical components aren't the only items up for disclosure. If you have an unresolved easement, a title claim, a construction lien, an outstanding lawsuit, or some other important material information that is relevant to the purchase, PLEASE DISCLOSE IT! These "forgotten" facts have an unfortunate habit of making their way to the surface and exploding once they hit the light of day. KABOOM! Or as our mothers taught us, "honesty is the best policy." (It turns out our mothers were actually right.) Let the Buyers decide what is and what isn't acceptable moving forward and let them construct their purchase offer with good understanding in hand. Take it from me, a fully informed Buyer is much less likely to deduct from the purchase offer once inspections have been completed, or to walk away should something come up unexpectedly. It's when material facts are hidden that the trouble begins in earnest. Speaking of hidden . . . Cliff, wouldn't it just have been easier to eat the WHOLE cookie - Cookie? Time for another batch . . . (PS, if you want my recipe, write me back. Nothing against Famous Amos, but mine are better!)
Vol. 235 - Game, Set Match!
Last week I was enthusiastically encouraged to join the Piedmont Educational Foundation's first annual "Raise A Racquet" tennis challenge by my pal, Ellen Wilson, a dedicated athlete, a first-rate friend, and a tireless advocate and fund raiser for our schools (Thank you Ellen, Suzanne, Mary, Doug and the rest of the organizers for a very successful and fun event!)
This Round Robin Tournament required each participant to play several eight-set matches, each with a new partner, against different opponents throughout the morning. In short, we played A LOT of tennis in a limited amount of time and also did quite a bit of mixing as well. (I think that was the point, right?)
After three hours of play and more than a few sore muscles, I can tell you that some of these women definitely GOT game! They have beautiful ground strokes that skim the lines, instinctive court positioning, quick hands, and graceful overheads that definitively finish the points -" forty, love!"
Me? I got a inconsistent forehand, a passable backhand, a rusty serve, and a well-intentioned net game; meaning I volley often, but it's anybody's guess where that ball may land. (Oops, sorry.) That's what comes from putting down the racquet for a year to heal a strained Achilles tendon. While my technique may not have been pretty, it still somehow got the job done. (Anyway, this was all for charity, right?)
Fortunately for me, I ended the play on a high note when I pulled Teresa Gilliland as my doubles partner in the last round. (Ringer!!!) Teresa moved to Piedmont last August with her family and not only "Raised A Racquet," she raised the BAR. (Teresa's definitely got game!) Clearly, this wasn't her first time in competition, as she easily COMMANDED the court, and what's more, she was TONS of fun to play with. In fact, Teresa was so good, she won the overall high point for our group (a feat I was quick to take credit for having been her final partner of the day).
In reality, while she was finishing off our opponents, I was mostly saying "I'm sorry," or "my bad," to which she would cheerfully reply, "Don't ever apologize to me, that's my favorite shot!" Booya! (Teresa is my new BFF.)
Luckily for my clients, I'm a much more skilled Realtor, than I am a tennis player. My "game" with respect to Real Estate is incredibly well-honed, as it comes through years of fine-tuning and practice (nothing beats experience). At this point, I've become a "Grand Slam" player. At the very least, here at The GRUBB Co., I am in a league among the very best, and that's as it should be. Don't fool yourself, as with any "partnering," the company you keep is vital to your overall success.
And when it comes to success, my "favorite shot" is the one in which I am representing the only buyer at the table. With no one to compete against, I can easily analyze the recent comparable sales, collect the appropriate documentation, read and sign off on ALL disclosures, and write a persuasive offer that's sure to bring you the desired result: home ownership. It's like getting that high short return that hangs just above the net . . . one clean swipe and - winner, winner, chicken dinner! These opportunities don't come often, but when they do, they sure are sweeeet!
Unfortunately, much has changed between last year's Spring Market and this one, where a Buyer is rarely EVER alone come the offer date. There are so many more well-qualified Buyers on every good listing in 2012, what with interest rates remaining at historical lows and substantially increased optimism within the marketplace. Home ownership once again feels like an opportunity (!) and that's the good news. The much tougher news to deliver is that you buyers are in stiff competition and unlike the round robin I just described above, the stakes aren't nearly so friendly. In fact, they can be downright tough to negotiate. "Serve it up!"
Under such circumstances, it's impossible to deliver a "win" in every case. I'm simply not in a position to control where the value lies for other interested parties, what they can spend, how much cash they have to bring to the equation, or how quickly they can close. In truth, I can only control our side of the transaction and in so doing, will encourage you to put your best foot forward or in tennis parlance, pay attention to your footwork. If experience has taught me anything, it's that you may only get one shot. Make it your best!
With respect to last week's tennis, I was fortunate enough to have several opportunities to put some points on the board and land squarely in the middle of the pack (I'll count that as a victory). Frankly, putting on a tennis skirt may have been the biggest victory of the day when it comes to tennis and where I stand at this stage of the game. (They really should make those outfits longer. Nike, are you listening?)
Even with that challenge, what a great event, I had such a good time. Ladies, sign me up for next year - I promise I'll practice!
Game, Set, Match!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.