Last Thanksgiving I wrote a piece that received an overwhelming response about my 17-year-old son's seemingly indifference to the college hunt. I wouldn't be exaggerating much to say that almost from conception, I had quite literally been dreaming about my first born's college experience (Harvard, Yale, Cal . . . the unfair expectations we place on our children).
I wondered what it would take to spark an interest, much less light a fire under my son with respect to higher education (and many of you responded in kind).
So imagine my shock when, last week, Case handed his father and me two large white envelopes with college admission addresses plainly printed on the front! Inside were his printed application forms, his most recent SAT scores and three neatly organized essays (and no, I hadn't helped him at all; not one word - not even a punctuation mark)!
Moreover, he's already organized a trip to and scheduled a tour of Chico State with a few senior classmates and most surprisingly, earned the money for the hotel reservation! Catch me, I think I may be having a heart attack!
When exactly did Aliens abduct my child and where is he now?
Clearly this is not the same boy who suggested just last year, that all schools were the same and that he didn't care where or even if he went to college as I determinedly dragged him from campus to campus.
What a difference a YEAR makes!
This is true in our own backyard as well.
It was just last September when, as a nation, we collectively experienced the worst financial meltdown since the Great Depression sending both Buyers and Sellers into an uncertain tailspin. Frankly, we all took the hit in very personal and costly ways - from our stock portfolios, to our 401k's, to our kids' college funds, to our home values ("Say it ain't so Joe " - not our precious home appreciation!) almost everyone felt the shock on a very profound level.
This hadn't hit just a select group of dot.com millionaires and billionaires, but everyone we knew. The financial loss included our parents, our neighbors, our husbands and wives, our siblings, our employers, our local vendors and shop owners, etc. - everybody was humbled a bit (uh hum, more than a "bit").
And while we are by no means out of the woods, I think it's fair to say that the worst may be behind us - at least here in Piedmont. (Remember that I work on a "micro" level and don't pretend to report the economy on a greater global plain). And at the risk of going out on a limb, I see great evidence that buyers are once again "engaged" in the process, which represents a huge step forward. If we are more cautious, more frugal and more thoughtful as we proceed, that's to be expected (and was probably overdue). As it turns out, premeditated action is not such a bad way to purchase a home.
Moreover, once in contract, buyers are looking to "perfect" the sale and negotiation after inspections is becoming the norm. Expect to credit back the buyer some percentage of the purchase price, depending on what follow-up investigations show. New discovery has always been subject to renegotiations but buyers are taking that to heart in today's more prudent marketplace - and why shouldn't they? It's fair and reasonable to expect some give and take. To quote one savvy buyer's analogy, "I bought the car, I'd like the seller to throw in the mats!" (For some very tough buyers, they're not only expecting the mats, they want the CD player and the fancy rims too!) Sellers, stay flexible and you will get through whatever negotiation is required.
Yes, it has been an interesting year and while the market may still experience some ups and downs, a firmer, more moderate middle ground seems to be emerging. Like many of you, I am encouraged to see movement, reason and value returning to the marketplace.
I am also incredibly excited to see my son's new found determination. I guess when he told me to "Stop worrying, it'll be fine," he had a better sense of his timing and his capabilities than did I. Good job, son. I think there's a valuable lesson for me in there . . .
I was out in the garden yesterday evening mulching the beds, pruning bushes and generally just decompressing from the day. The air had cooled a bit and the pine needles were landing all around me - a sure sign that change is in the air. It's getting darker earlier, the kids are back at school and the celebrations are definitely more seasonal. We're a year beyond the worse financial setback in decades and things are slowly beginning to improve.
The legacy of the recession is a common sense approach and a return to middle-class values by and large. Let's not forget that purchasing a home is typically driven by family values, but strong emotions are part-and-parcel of almost every home purchase as well. The desire to secure a "deal" combined with the need for "home" and all that title entails, has created a yin and yang of sorts for the majority of home buyers with whom I work each day.
From cautious pessimism, to cautious optimism, buyers are definitely more plentiful than they've been in quite some time and it's palpable. It's also tangible! Several recent sales have had multiple offers as a result of increased interest, coupled with incredibly attractive interest rates and some homes have received offers well above their asking price!
I'm not sure what creates this emotional "tipping point" for buyers, but I am sure that "perception" has a great deal to do with it and that "perception" often has to do with what the mainstream media tells us to believe.
So how does one judge "real value" when it's subject to seasonal changes and media hype? That's a good question.
I'm often asked, "How much is the house really worth?" and the short answer is "What is it worth to you?"
I am happy to provide clarity in the form of nearby comparable sales, market patterns and specific interest on a given property, but at the end of the day, I can't tell you a home's intrinsic or emotional value - only you can decide that. I can predict a home's probable selling price, based on facts, figures and experience, but I can't tell you with certainty where it will ultimately trade. It's divination on a professional level, but as always, the market determines "market value"- not the agents, nor the sellers.
Sometimes a home is so special that a buyer fearlessly jumps in with full abandon. He/she comes to the table bearing "the gift" - an offer so powerful that it clearly leaves the rest behind and often, makes little sense (or cents) to the rest of us from an economic perspective. In that case, there's little to be done with respect to your common sense approach. Purchases based on "emotional value" will always trump those based on "market statistics." In short, value is relative and you'll have to discover your own truth with respect to value and perception.
Here's a quick and favorite story of mine about "perception." Many years ago when my husband Cliff was at law school, he and his good friend and law school classmate Greg we're nervously anticipating their final grades on an important test. (Before the advent of computers, scores were posted on the door by social security number and a student's grade was based entirely on the semester final.)
Scanning the test scores, my studious husband shook his head in disappointment while his more carefree law school buddy breathed a sigh of relief and gave a hearty cheer. "
What'd you get?" my husband asked Greg.
"I got an 83," was his happy reply. "What'd you get?"
"I got an 83," responded Cliff with an ironic laugh.
Perception! (BTW, an 83 was the top 10% of their class.)
We each carry our own truths; our own perceptions about life and where value lies. Is there a baby in your future? Are the kids off to college? Are you changing jobs? Changing lifestyles? What's your own personal truth? What do YOU value most?
Find it and let the rest fall where it may. It's your home. It's your life. You decide. I'll be here and ready to help when you do! P.S. - You can always reach me right away by emailing me at email@example.com or calling me at (510) 326-0840. I look forward to hearing from you!
I had lunch with a respected colleague (and favorite friend) of mine last week and was bemoaning the loss of a coveted listing due to a competitor having promised a substantially higher outcome (in real estate parlance, we refer to this as "buying the listing"). Maureen and I meet several times a month to commiserate, support one another and trade helpful advice. With her permission, I am sharing some of our conclusions from that timely sandwich.
Every real estate agent I know has run into this from time to time and lost an important listing to another agent, so I'm certainly not alone, but it seems more prevalent now, given that home values have softened considerably over the past few years, making sellers especially vulnerable to this ungainly tactic.
Don't get me wrong, pricing a home is never easy, given the subjectivity of defining a home's true value. As I have often written, there are two values to any given property: "intrinsic value" and "market value" and unfortunately, they are rarely the same. As has always been true (and always will be) your home's market value is worth what a willing and able buyer will pay for it, at any given time.
Moreover, homes - especially here in Piedmont, Rockridge and Berkeley - are unique entities so while smart agents will utilize the most recent sale on the block as their basis of comparison, it isn't an exact science by any means.
However, the market analysis by competing agents should still be within spitting distance of one another, given the fact that any well-versed and finely-attuned agent should be drawing upon the same data points (which aren't subjective) and coming up with very similar conclusions!
That being said, there is always the unexpected, intrinsically emotional house that brings in a price WELL above its neighborhood value and can carry the sales price as much as 10-20% higher than expected! Recent neighborhood sales, square footage of the house, lot size, upgrades and amenities, and location, location, location are still the best indicators of a home's real "market value" and what an experienced appraiser will be basing his/her assessment upon - not on what you think your home is worth or what you want (that's called "intrinsic value!").
Remember that anyone can tell you what you want to hear, but your home still has to appraise for the offer price in order for the bank to underwrite the loan.
If you have invited two agents into your home to give you a listing presentation and their recommended listing price differs dramatically, you should be suspicious. Someone hasn't done his/her homework properly and I'm betting it's the agent who has come in with a much higher listing price! In this instance, it may behoove you to invite a third party to the table to decipher the truth before making a decision.
Then make a decision that is informed - not one based on smoke and mirrors - or on hope alone.
Can an agent be wrong when we suggest a lower price than you had in mind? Absolutely, we can and we have been. But better to price a home on the low side and have the market bid it UP than to list it too high and have to chase the market down with typically, disastrous results! Homes don't "undersell" (they don't) but I've seen many sell for far less than they should have, had a different pricing strategy been employed from the beginning.
So that's my opinion, with some help from my good friend and colleague, Maureen. Lunch is on me next time around!
I am about to make you all a little jealous so I'll apologize up front for gloating. Last Friday, good friends of mine gave me four premier tickets and a parking pass to the San Francisco Giant's baseball game. They were field level seats about five rows back at the first base line with a perfect and intimate view of the action. (These types of gifts make it hard to go back to general seating once you've been spoiled!)
Even better, San Francisco was experiencing record-breaking temperatures that made for an incredibly balmy evening at the park - the kind that begs for a plate of nachos and an ice-cold drink (I wore shorts and sandals)! And it didn't hurt that the Giants won the game against the Colorado Rockies in brisk fashion. (Two hours and twenty-three minutes - that's my kind of ballgame.)
During the seventh inning, the Giant's mascot, Lou Seal (Luigi Francisco Seal) joined the party. Having danced a couple of seasons in a Bugs Bunny costume for Great America (it's true!) I get as excited as a kid when I see a fun-loving mascot doing his thing and Lou's among the best in my humble opinion. He was leading us in a crowd-pleasing rendition of Take Me Out to the Ball Game, but failed to notice my waving arms and enthusiastic singing as he rewarded fans with free bags of Cracker Jacks. Hmmm?!? With all due respect to Tim Lincecum and his fantastic pitching, keep your foul balls, what's a gal gotta do to get a FREE box of Cracker Jacks? I LOVE that mammal. Couldn't he tell? Didn't I deserve some love back?
No sooner had that thought popped into my mind when the spectator to my right turned to me and said, "We're taking off soon and I packed extra snacks. Would you like some?" and handed me an unopened box of Cracker Jacks (I kid you not)! "The only condition is that if there's a tattoo inside, you have to wear it." Done! Now how's that for asking the universe to deliver? So without sounding too space age - I am a strong believer in the concept that we have a way of creating our own reality. This isn't a touchy, feely kind of philosophy - it's the understanding that we unconsciously move toward out dominate thought or to put it in other words - ask and ye shall receive!
So why not ask for the house of your dreams and I am betting you'll begin to find it - even if the house isn't perfect (remember perfection doesn't exist). All kinds of opportunities will begin to present themselves and instead of finding objections, you'll begin to see the possibilities!
See what a warm summer evening and a simple box of Cracker Jacks can do? (Although my husband says I set my sights too low and should have asked for a winning lottery ticket instead.) And thanks to the San Francisco Giants, their mascot, Lou Seal, and the unexpected but welcome generosity of my friends for a spectacular evening!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.