"I think there's a view in my future," my colleague, Jane proclaimed while touring properties last week. We'd just seen a number of new listings in the Berkeley Hills and each had offered incredibly captivating views. Even when the homes were less than memorable, the vistas of the sparkling bay, the Golden Gate Bridge, and the unmistakable San Francisco skyline could not be denied. (We're so lucky to live where we do.) No wonder Jane was smitten; that's a dream many of us covet.
As dreams go, I think there's a BIG front porch in mine - outfitted with a bench swing, freshly painted Adirondack chairs, and a ready pitcher of cool lemonade for neighbors passing by. Of course, there would be a garden in full bloom and a renovated kitchen with thick Carrara marble counter tops, LOTS of open shelving, and a big farmhouse sink . . .
Homes conjure up all kinds of images (and memories), from seaside cottages, to slick modern edifices; from classic Brown Shingles, to sunny courtyard Mediterraneans; from Cape Cod Traditionals, to sexy Mid-Centuries; whatever your dream home, there's a viable option for you here in the Bay Area, where almost every house is unique and separate from the next.
That's both good and bad from a Realtor's point of view, as no two houses will present the same, nor follow the same course of action with respect to marketing, preparation, investigation, or value. Moreover, such breadth and diversity often makes defining one's ideal, a very difficult task indeed as we move from house to house in search of the perfect "dream" home.
The plain truth is, as much as we might crave perfection, I have yet to find it (or deliver it) - no matter the price point. So while it is incredibly important to dream, it's just as important to temper our vision with a dose of reality and a good understanding of where we are in our lives and what we really need in the here and now. If you will be running down the hill for a gallon of milk every few days for the baby, perhaps, like Jane, you'll want to delay your move to the ridge until your little ones have flown the coop. (That's a very steep climb to push a baby carriage.)
The list of "needs and wants" changes dramatically as or families grow and evolve, as children arrive, and then depart (and then move back home again). Some of you are looking to expand your living space, while others are downsizing accordingly. A few years ago, I helped empty-nesters secure a beautiful turn-key townhome in Hiller Highlands. Their goal was to travel six-months of the year and happily, they achieved it. Such a property requires little more than locking the door and asking your neighbor to collect the mail in your absence. Now that defines "easy living."
If it's a view you desire, it's likely your home will be more vertical than horizontal.
Is there an urban farm in your future? Get ready to spend a good deal of time planting, pruning and maintaining it.
Center of town location? Absolutely, but you'll give up privacy in return.
Jack London Loft? Certainly, but you will inherit a Home Owner's Association in the mix.
And so it goes - with every property, there will undoubtedly be trade-offs, just as there are with each phase of our lives . . .
My point is there are pluses and minuses to each situation and we should not only expect these compromises, but happily anticipate them (these are gold-plated problems for sure). Outline your wish list and then decide on your "non-negotiables" with the understanding that if the house is a seven or eight on a scale of ten, it is probably worth pursuing. (The Buyers who hold out for a perfect ten will never find it.) Sign the papers and make whatever changes you need once you own the home in order to move closer to your idea of perfection.
Nothing is quite as frustrating as overhearing a Buyer who walks through a Sunday Open and rejects it based on the color of the walls or the lack of a lawn. Really? These are fairly easy fixes.
There is a caveat here, which is to say that some defects are fairly correctable, while others are clearly NOT (!) That's an important distinction when deciding on a home. While you may reject a built-in swimming pool, that's a drawback that can be filled in and covered (for a price). On the other hand, a busy street, will be forever thus, and an awkward floor plan may be too expensive to adequately address on a budget. Gather your facts and listen to your heart, but don't let it carry you away.
The decision to buy a home should fulfill your dreams, but it should also serve the way you live your life now, and for years to come, on a very pragmatic level.
Now go live your dreams!
I sat in the corner, a veritable wallflower nursing a diet coke, remembering why people drink the hard stuff. I had accompanied my husband to his 40th high school reunion on Long Island (I'm obviously much younger) and not surprisingly, the group was transformed back to a time well before I was part of the landscape. As expected, the goal of the evening was to reestablish old relationships, not to make new ones - which is why I typically stay behind and wish Cliff bon voyage whenever these special "reunion" opportunities arise.
I'm not complaining, mind you; Cliff and I had just enjoyed three nights in Manhattan, two musical plays, a Tenement Museum tour, matzoh ball soup at Canter's Deli, a trip to the Columbia University campus, and several romantic strolls through Central Park. As an added bonus, we had reunited with his long-lost friend from high school, who after 38 years overseas, had now returned stateside, along with his lovely wife. In short, the brief getaway was all a girl could ask for and then some, but on Saturday night, I probably should have made alternative plans; I might as well have been on Mars.
Instead, I put on a new dress and politely soldiered through the evening as I sat quietly with the couple of other husbands and wives who had foolishly tagged along as well. If it were up to me, these invites would make it official: "spouses need not attend" (really). Suffice it to say that I was ready for the evening to end early, while Cliff, in uncharacteristic fashion, was just getting started.
Everyone had a story to tell of their adventures since graduating, family photos to share, and memories to recount - and NONE of it related to Bay Area Real Estate in the least. (Can you imagine?) By 10 pm, I'd had my fill and hitched a ride back to the less-than-glamorous Tides Motor Lodge (which has seen better days, but that's a story for another column) leaving my husband to reminisce to his heart's content. Now we were both happy. (Sort of.)
This kind of division works well with respect to reunions, but certainly backfires when speaking to real estate, where parties must absolutely align their goals in order to meet the defined objectives.
You would think this simple idea would be obvious to most couples, given the nature and the size of a home purchase or sale, but it isn't. Too often, I have witnessed the struggle unfold, which in every single instance, made the journey far more stressful than it already was. (Sigh.) Perhaps what makes defining one's goals so difficult is that we often don't know what to expect in a market that's ever changing, OR we make the assumption that as partners, we want the same things. (Funnily enough, we do this in marriage as well, marching down the aisle blissfully ignorant.) It's a dance that too often takes place in order to avoid discussing the really important aspects of life - like money, kids, or religion, just to name a few. (Oy vey!)
At the risk of introducing conflict, in a world where even a starting home is likely to cost Buyers a half a million dollars (in Piedmont, you can easily double that figure), define upfront what you are willing and able to pay. DO have a reasonable (albeit flexible) game plan going in to any offer situation and establish a fixed point at which you are willing to comfortably walk away. (This number may change from house to house, depending on location and condition.) And DON'T make assumptions about what the other party wants or needs; spell out the unknown in no uncertain terms.
For Sellers, DO understand at what point, you would be satisfied with the selling price; in other words, what would you be willing to accept? In the heat of the moment and often, with several offers from which to choose, Sellers have a tendency to push Buyers beyond what feels comfortable, or worse yet, to a point where a Buyer feels "played." In fact, in a Sellers' Market, Sellers often risk offending Buyers altogether by going back and asking for FAR MORE - even when the Buyer has already bid well ABOVE the asking price. (Warning Will Robinson, tread carefully!) You may, in fact, get a little more by countering, but in all likelihood, those same Buyers will find something during the course of inspections on which to push back. In the worst-case scenarios, they may walk away and fail to return. (Ouch.)
Let's understand that even when a home is "strategically" priced (priced to obtain multiple bids) the market has a very keen sense of "value;" thus, the offers in front of you, are typically, what your home is actually worth in terms of "market value." This is where you want to ask yourself if the highest offer at the table were the one and only offer, would you be satisfied? If the answer is "yes," sign it and move on. Don't risk losing your best and highest offer with the expectation of getting more, either in the moment, or down the road - that's a high-stakes gamble you could easily lose.
Stories are great to tell, but they are a whole lot happier when the ending is fulfilling (no one wants to be the 'cautionary tale'). Being open and willing to accept whatever comes to pass, makes the journey much easier, as does defining your expectations upfront, getting on the same page, and playing fair. (That's not just a good lesson for Real Estate, it's a good lesson for life.)
I expected my husband to have a great time and he did. In this case, that was more than enough. By my count, I have ten years before his next class reunion. Maybe I'll send Cliff on his own next time, or better yet, I'll stay in town and see another Broadway show.
There's so much to love about the Big Apple and reunions - as long as they are your own!
While I'm loathe to admit it, I've recently been suffering with symptoms associated with growing older. Without warning or provocation (or exercise) the heat is ON (!) and I am suddenly grabbing a fan, opening a window, stripping off my sweater, or kicking off the sheets at night in VERY dramatic fashion (Sorry Cliff). This new found "heat" comes courtesy of my fifties and what seems to be a broken internal thermostat.
"Would you like to consider hormone replacement therapy?" my good doctor asked? Really? Has it come to that?
Yes, it has. Last week, I actually stuck my head out of the car window like my dog, Buck, just to feel the breeze . . . ahhh. It seems there's no end to what I will do in order to cool off just a little. In short, my radiator is OVERHEATING - AHHHHH!
"Overheated" may be the word used by many anxious Buyers (and their agents) to describe our current marketplace as each successive sale trumps the one that came before, but in point of fact, we may just be getting started . . . It's not just that multiple offers are back in play on the majority of homes we represent, it's that the level of play has jumped so dramatically from where it stood one short year ago, and more surprisingly, that CASH has played such a major role in this acceleration (48% of transactions have traded in "all-cash" offers according to current statistics).
As a result, getting Buyers into the homes they desire, has been challenging at best. At worst, the rapid growth has priced many Buyers out of the home-buying market altogether. But for everyone involved - consumers, agents, mortgage lenders, appraisers, and escrow officers (just to name a few) - the Spring Market has shaped up to be the most competitive marketplace to emerge in years.
In truth, sales have been so robust that any past formulas we used to position our clients for success, no longer applies. While it's no surprise that "value" is a moving target (heck, it's always been a moving target), the speed of acceleration has caught many people off guard.
Frankly speaking, it should no longer surprise us to hear about sales that came in 25%-40% over asking (!) but it does. The result being that there's often a HUGE CHASM between the list and the sales price - and a troubling disconnect.
Unfortunately for Buyers (fortunately for Sellers) this upward trend is now the new norm. As such, adjustments are required if we are to compete in a meaningful way. Therefore, I encourage you to "flow with the river" IF home ownership is the intended goal. And try this on for size: Even though the market seems more expensive, it's actually more affordable to buy.
"Can you send us some comps?" I'm often asked by earnest Buyers as we begin to formulate an offer price.
Why yes I can, but they'll be of little real value.
"How much should we offer?
In reality, last week's ceiling, is this week's floor, AND if I could tell you exactly where each property will trade, I'd be the most sought after woman in real estate (no joke).
By way of illustration, I'll share a story with you that I was told by a friend who bought a decade and a half ago when the market also had tremendous velocity and "heat." Like most Buyers, the question they needed answered was: "How much should we pay?" and without missing a beat, their astute Realtor said, "As much as you can." They did and the home they thought they "overpaid" for then, is now worth far more today. That's a repeating theme for many of us, in any decade. (my neighbor paid $60,000 for her home and often tells me what a 'stretch' it was at the time.)
"I refuse to play that game," one Buyer recently told me in no uncertain terms. "We're too pragmatic to get caught up in a bidding war."
I completely understand and I say this with all due respect - this is not the market for you. Step out and step off. Like all cyclical investments, this too will adjust. We just don't know when.
Which is often the very next question I'm asked: "So when will the market slow down?"
I wish I knew. I can only ever speak to the market in which we are in or put another way, "hindsight is 20/20." It could be weeks, months or years before we see a change or correction. Much of it depends on "supply and demand" and the economy at large, not just nationally, but internationally as well. If it's any consolation, we do appear to be cooling off just a bit now that more inventory has hit the market and summer is just around the corner. With families focused on graduation, this weekend might prove to be just the quiet breath you were looking for - or not. Only time will tell.
Speaking of breath, I need to catch mine. All this fanning is a real work out. I'm getting hot - again What's a woman to do?
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.