Pacita's Quick Bytes of Real Estate: May 2008

My mouth dropped in disbelief when I heard about this.

I had shown my listing to buyers. Upon probing on my part, I gathered that they were interested in waterfront properties. So I arranged to show them other properties. I had originally asked them if they had a realtor, and they said they are just looking.

After several showings, they decided to go for a condo that wasn't listed yet but that I knew about. As we were writing the offer, another agent saw them in my office. Apparently, he also showed them his and another agent's listings.  My client was courteous enough to leave the room to talk to the other agent to let him know that she is writing an offer on a property I had shown her, and that she is using my service.  She declined to tell me who met her first because as far as she was concerned, that was irrelevant, especially since there was no written agreement between them.

Unbeknownst to me, and I didn't know this until we were well into the escrow, the agent called her one hour after she left my office, and pretty much gave her the third degree. My client was aghast and too surprised to comment. Her significant other was incensed. In our small town, word gets around. Fortunately, I have been taking very good care of them, so my company's reputation is not harmed in their eyes. But if they were to mention this agent's action to their associates, they would think not specifically of him, but of my company and how badly they were treated.

I realize we show properties to many prospective clients, many of whom may use someone else....but for gosh sakes, this has to rank high on the list of no-no's!

Doom and gloom news are always sensationalized. So from time to time, it helps to have a reality check.

Kudos to First American Title Company who shares with us the Market Watch newsletter by a dynamo of a woman, Carole Rodoni. Carole is a sought-after speaker (and the much-revered ray of hope for the battered northern California market). We share this info with our clients, and everyone appreciates it!

She points out the following:

• There may be close to 2 million homes going into foreclosure, but there are 110 million homes in this county. And 46% of those homes are owned free and clear.
• Sales, compared to last year, were still down 14.2%, and median prices are still declining, down 26.4% to $530K.
• GOOD NEWS: Sales in the San Francisco area show an increase in Aparil 2008 over March 2008. Sales were actually up 33.3%. This is the first increase we have seen in 6 months for the area.

She writes: "There are two sides to every transaction --- one selling, one buying. And right now, the market favors the buying side. So while many will avoid the market, sme will realize the timing is right. Why? Get in; get all the tax benefits; give it time to appreciate (at 3-5 years) and you'll do fine. Others will look bacn and say, 'If only we had bought back then.' "

Thanks, First American Title, for giving us Carole!

Here's the situation.

Tenants are living in investment property that has just received the Notice of Default, and is nearing a Trustee Sale.

They want to buy the house and engaged a REALTOR to write up the offer.

The Seller is adamant that he doesn't want to use a REALTOR because he says the Lender will tack on the sales commission paid to the 1099 that will be issued after the sale, which, if that is true, will increase his tax obligation. This is going to be a short sale, but because it is not the seller's primary property, this will not qualify under the Mortgage Debt Forgiveness Act of 2007.

So...those of you have have run into this situation --- will the 1099 reflect the commissions paid to the REALTOR?

In Alameda, we have street fairs. During one of these fairs where I was a volunteer wine-pourer at a wine booth, I struck up a conversation with a realtor from another company, who was hanging around the next booth where his wife was also a volunteer.

The usual questions...."How's business?" "What's the latest?" "Do you have any new listings coming up?"

He said he just got a call from a probate attorney who wanted him to list a condo for a client. I perked up because I have clients who want to buy a beach front/bay view condo. Turns out this condo is just that.

He agreed to let me show the property before he does any work to it (repaint, recarpet) and before he puts it on the MLS. When I asked him if we can write a preemptive offer, he said we could. My clients liked it, and we wrote a strong offer.

Isn't it wonderful how things work?

Every day, there seems to be something new to learn. And in this sea of short sales, trustee sale and REOS, there are so many new or different rules, practices.

There is an REO property that was on the market only two days before it was posted as pending. An agent in the same office as the listing agent submitted an offer the day it was activated on the MLS; the bank countered the next day, and poof! It was accepted on the third day.

Unfortunately, my client and I couldn't see it until the fourth day on market. I called the listing agent to see if I can submit an offer for a back up position. He said that the bank is not accepting a back up offer, and that his instructions are if the current escrow fails, that he is put the property back on the MLS for 3 days (only 3 days?).

Hence, he told me not to submit an offer, but to keep an eye on this property.

Is this a typical bank policy not to look at, much less accept possible back up offers? Seems odd and unwise.

I'm incensed!

Twice today, I was nearly rebuffed by two agents whom I called when I tried to submit my offers.

The first one was an REO. She said she already received an offer last night, and another one this morning --- as if two was enough. She tried to discourage me from submitting an offer since she thought the ones she had were good enough. I insisted that she present my offer since there isn't an accepted offer at this time. To make sure she submitted my offer, I asked that the bank acknowledge receipt.

The second was a listing already scheduled for a trustee sale next month. The agent did everything he could to discourage me, saying the seller has already received six offers and that they were forwarded to the lender. I stood my ground that if my offer turns out to be best of the bunch, that the lender would want to know. Turns out that the agent thinks he'll have a hard time getting hold of the seller and getting him to review my offer. So it's all about HIM! I reminded him that as long as there is no accepted offer, that it is his responsibility to submit/present all offers.

But geez.....why do I even have to nearly beg to submit my offers?

I know that several REOs are getting multiple offers. But it still shouldn't be the agent who decides when to stop presenting offers. Or am I wrong?

Recently received an offer from buyer who wants to fund purchase via FHA, and the Nehemiah Program.

In case you have not yet encountered the provisions of this program, take a look at this website http://www.getdownpayment.com/agents/

Essentially, a "gift" of up to 6% will be applied towards the down payment. But note that this "gift" is actually paid for as part of the processing fee by the Seller. So if buyer is making offer using this program, you may want to factor in that "gift" into the accepted offer price to be clear about what the sellers' sales proceeds really will be after this "gift".

Has anyone closed a deal using this program and what do you think about it?

Folks who haven't yet discovered Alameda may want to come to one of the most fun events in the island -- the monthly Antiques Faire by the Bay http://www.antiquesbythebay.net/. It's billed as Northern California's largest antiques and collectibles show with over 800 dealers. According to theri website, everything sold at the show must be at least 20 years old, and no reproductions are allowed.

Whether you're a serious shopper or just want to hang out, this is a good place to be, especially with the City of San Francisco and the Bay as the backdrop, and with the wonderful climate. It's also a good excuse for people to get on their bikes and ride to Alameda Point (some folks from San Franciscos bring their bikes aboard the ferry for this event).

Here's what San Francisco Chronicle said about this faire: "Come early, Antiques Faiare is a buyer's market"

It's a bargain shopper's, home stagers' dream...all these wonderful stuff in one place!

Alameda, in spite of being a small island, has its share of restaurants that tickle the palate. Whenever we want to go out and get something to eat, we fight the urge to go off the island because there are so many to choose from. When I meet new clients who don't know much about Alameda, I take them to different restaurants so that they will see and taste for themselves what Alameda has to offer.

Here are the three newest restaurants in town. Life is good!

ITALIAN - Acquacotta

The newest addition is AcquaCotta http://www.acquacotta.net/ on Webster Street. They don't take reservations, so we ventured on a Saturday night at 7 pm and waited for a table. It was packed and noisy (concrete floors). But we didn't mind the wait because the bartender was such a joy. She kept us all entertained. When we couldn't make up our minds which wine to order, she let us taste two of our choices before we settled on what we wanted.

As delightful as the bartender was, we can't say the same for the waiter who may either be inattentive, inexperienced, or simply not good. He let our food get cold before he brought it out. As good as the food was, it was hard to overcome the fact that it had to be re-heated.

CUBAN - Havana

Havana's is presented to us as a fusion Cuban restaurant http://www.havanarestaurant.net/alameda-contact.html on Park Street. The first Havana is in Walnut Creek. Because we're from Florida, we are always looking and craving for good Cuban food. What we have is "sort of" Cuban. The nearest that came to what I remember as good Cuban food is their Ropa Vieja. This place is always rocking. We like the retro feel of the coctail bar, the pitchers of mojitos, the colorful pictures of life in Cuba. Some of the appetizers were tasty, and our personal favorite is the crab cakes.

VIETNAM - Dragon Rouge

People will likely disagree, but I thought the food at the Dragon Rouge http://dragonrougerestaurant.com/  on Encinal Avenue is better than Le Colonial in Oakland, and the people are less pretentious. I like the fact that three cousins started this restaurant to showcase their mothers' culinary skills. It's a family focused labor of love.

We thoroughly enjoy their signature Phantastic roll, anything curry, anything lemon grass....as a matter of fact, we've enjoyed everything we've ordered. There is a good selection. It isn't the usual Vietnamese fare of long lista and variations of the Pho, but if Pho is what your crave, it is great here, too. Since Dragon Rouge opened, I haven't ventured to Oakland for Vietnamese food anymore. Why bother? We have a terrific one right here.

It's happening! Properties are selling. As a matter of fact, compared to adjoining cities, we're beginning to see brisk movement.

HOMES IN CONTRACT
In March, we saw 70 properties go into contract --- and that's the second highest month in the previous two years (June 2006 was ahead by 74). That means that 24 percent of inventory sold that month.

Compare that to Berkeley where 54 out of 206 properties went pending, or 18% of inventory, In Oakland, 236 out of 3174 went pending, or 7 % of inventory.

SHORT SALES AND FORECLOSURES
From another perspective, we are also seeing our share of short sales and foreclosures.

Out of 163 active residential listings as of May 2, 2008, we have 17 short sales and bank-owned properties or 10% of total. Compare that to Berkeley with 16 out of 120, or 13% of total. Or Oakland with 788 out of 1816 or 43% of total.

PRICE IT AGGRESSIVELY
For a property to sell today, the sage advice is to price it ahead of the market (realistically speaking, even less than the nearest comparable). Classic example: a home on Garfield at the desirable east end of Alameda received an offer in less than 24 hours after it was posted and was accepted in 3 days. The secret? Price!

STAGING SELLS
And....without question, how it looks is critically important. Staging plays a very important role especially since there are many properties to choose from.

THERE ARE BUYERS OUT THERE
Serious buyers are seriously looking. Since I posted my new condo listing by the beach, we've had numerous showings, and we haven't even had our first open house yet.

TIME MAGAZINE SAYS "IGNORE THE HEADLINES"
Many Buyers believe they can afford to be choosy, and even wait. Maybe waiting isn't such a good thing. An article in Time Magazine on Feb. 14, 2008 makes the case against waiting to buy. It's titled "Ignore the Headlines". Here's the link to copy/paste.  http://www.time.com/time/magazine/article/0,9171,1713483,00.html


WHAT'S HAPPENING
We are seeing a trend of more realistic and in many cases aggressive pricing among the homes for sale. Sellers are begining to see and accept the reality that the selling frenzy of two or even three years ago is no longer the case today. As such, they may be more willing to reduce the price when the REALTORs recommend it, and more willing to negotiate the terms.

Single family homes are still the draw. Even fixers are finding an audience. Sales of condominiums and townhouses slowed, and we've seen several price reductions. Condominiums are still taking a bit longer to sell, averaging about 70-75 days on market.

Our sweet Goldador (Half Golden Retriver, half Labrador) was being trained for the Canine Companions for Independence, but was released before she completed her training because it appeared she may develop hips dysplasia. We were lucky enough to have been selected to be her permanent parents.

We were so happy to have Findell for nearly 13 years. But then she got sick. We did our best for her and took her to specialists. But when her quality of life degraded to the point that she had to be hooked up to oxygen and receive her sustenance through IVs, it was evident that it was time to say goodbye.

It was one of the worst days of our lives. And that's when I discovered that my partner Gary and I had different ways of handling grief. While he would sit quietly and cry, I went out and started scouring the various rescue sites and visited many shelters looking for a new dog to adopt. He thought he was being unfaithful to Findell if he got a dog too soon, whereas my thought was that we would be honoring Findell by rescuing another dog like we did her.

FOSTERING WAS THE ANSWER

Eventually, we found a happy compromise by becoming foster parents for an organization that rescues dogs and cats from Taiwan, Korea and China. People say there are many animals that need help here in the U.S. so why rescue animals from abroad. The answer is simple: we already have many rescue operations here, many of them breed specific; whereas the abandoned animals we foster don't stand a chance unless we find them homes. These dogs have had such traumatic beginnings that we are happy to provide them love and affection. Thus far, these dogs have brought untold joy to the families who have adopted them. We've been doing this for 2 1/2 years now, and encourage people to visit http://www.ahan.org/ because we can really use your help.

We are on  our 15th and 16th dogs. Meet Joey (who looks like an American Dingo, and Yuen Yuen who....?

"Paws be to you."

On my listings, I've done it both ways: hired a photographer, and taken my own pictures.

Although I love having professional photos taken, I don't like it when my choices are limited. The photographers I've hired give me a CD or a link where they select about a dozen pictures that I can use. However, I also want and include a visual tour of my listings. And this will require another special photographer.

Many times, I've had to do my own photos. Time consuming, yes. Requires a skill set, yes. Rewarding, yes (if the results are good).

As I take more photos, I think I get better at it. Thankfully, my clients like the end-results. In the absence of truly wide-angle shots (my camera has a mini wide angle capability), I photostitch. Thank goodness for ArcSoft Panorama Maker software that came with my camera that allowed me to do that. Before I had the photostitching software, I used the panorama maker from my VisualTour. Granted that my photos are not perfect --- I think they are acceptable.

Here's a sample of my photo stitching

And here's a link to my visual tour of this property http://www.visualtour.com/shownp.asp?T=1490770

I think the reason why I like to be able to do this is so that I'm not entirely dependent on the availabilty of a photographer or the homeowner. That is, I can go when it's convenient, or take photos at different times as needed.

It's happening! Properties are selling. As a matter of fact, compared to adjoining cities, we're beginning to see brisk movement.

HOMES IN CONTRACT
In March, we saw 70 properties go into contract --- and that's the second highest month in the previous two years (June 2006 was ahead by 74). That means that 24 percent of inventory sold that month.

Compare that to Berkeley where 54 out of 206 properties went pending, or 18% of inventory, In Oakland, 236 out of 3174 went pending, or 7 % of inventory.

SHORT SALES AND FORECLOSURES
From another perspective, we are also seeing our share of short sales and foreclosures.

Out of 163 active residential listings as of May 2, 2008, we have 17 short sales and bank-owned properties or 10% of total. Compare that to Berkeley with 16 out of 120, or 13% of total. Or Oakland with 788 out of 1816 or 43% of total.

PRICE IT AGGRESSIVELY
For a property to sell today, the sage advice is to price it ahead of the market (realistically speaking, even less than the nearest comparable). Classic example: a home on Garfield at the desirable east end of Alameda received an offer in less than 24 hours after it was posted and was accepted in 3 days. The secret? Price!

STAGING SELLS
And....without question, how it looks is critically important. Staging plays a very important role especially since there are many properties to choose from.

THERE ARE BUYERS OUT THERE
Serious buyers are seriously looking. Since I posted my new condo listing by the beach, we've had numerous showings, and we haven't even had our first open house yet.

TIME MAGAZINE SAYS "IGNORE THE HEADLINES"
Many Buyers believe they can afford to be choosy, and even wait. Maybe waiting isn't such a good thing. An article in Time Magazine on Feb. 14, 2008 makes the case against waiting to buy. It's titled "Ignore the Headlines". Here's the link to copy/paste.  http://www.time.com/time/magazine/article/0,9171,1713483,00.html


WHAT'S HAPPENING
We are seeing a trend of more realistic and in many cases aggressive pricing among the homes for sale. Sellers are begining to see and accept the reality that the selling frenzy of two or even three years ago is no longer the case today. As such, they may be more willing to reduce the price when the REALTORs recommend it, and more willing to negotiate the terms.

Single family homes are still the draw. Even fixers are finding an audience. Sales of condominiums and townhouses slowed, and we've seen several price reductions. Condominiums are still taking a bit longer to sell, averaging about 70-75 days on market.

We submitted an all cash offer on a short sale listing on March 31. Although our offer was below the list price, we priced it according to a recent sale of a bank-owned property in the neighborhood. The seller accepted on April 3.

Change the status on the MLS! In our MLS, once there is a ratified contract between buyer and seller, even on a short sale, within 24 hours, the status should be changed to "pending" It took another week before the agent changed the status of the listing.

Follow up, follow up, follow up! Every so many days, I'd check with the agent to ask if our offer was submitted to the lender. He said he did. He sounded discouraging when he mentioned that there is an offer higher than ours.

Surprise! Then on April 23, he surprised me when he said a notirce of trustee sale was recorded on April 15, a week earlier for a sale date of May 1. How could he not have known? And how could the trustee sale be scheduled when there were two offers on the table, just waiting for a decision from the lender? Now, we only had a few days to try to get the trustee sale postponed and to get a negotiator to act on the offers.

Part 2 of Follow up, follow up, follow up! Every day, I followed up with the listing agent who said he was calling the lender, and each time he called, he got a representative who would say they will try to get a postponement.

Get ready for the trustee sale. In the meantime, I alerted my buyers that if they're still interested in this property, to go to the courthouse and try to bid on it just in case the sale moves forward. The said they would.

The trustee sale was today. I can't shake the feeling that had the listing agent been more diligent on following up with the lenders regarding the two offers that at least one of us could have moved forward with the short sale.  Or is this a normal occurrence?