Pacita's Quick Bytes of Real Estate: September 2008

In a separate blog, I mentioned that I was stunned to see who were losing their homes. In it, I mentioned a foreclosure map.

This may be new or old news to some, but if you haven't done so yet, go to hotpads.com and check out their foreclosure heat map that looks like this. And you can zoom in to areas that interest you. It's amazing at how detailed this information can get --- it won't give the exact address, but it will give the status (pre-foreclosure, bank-owned) and details about the house (number of bedrooms, square footage).

Zoom into your state, city, community, street ....and see who are in foreclosure stages of Notice of Default, trustee sale and foreclosure. This info was taken from public records.

Although the details may not be real-time, nonetheless, this map is somewhat sobering.

Once upon a time, there was a successful REALTOR who worked hard and did everything he learned from his mentor since he started 21 years ago. He selected areas where he could farm. He walks the streets and drops off fliers and puts door hangers. He listens to his very astute associate from the title company who taught him how to send letters to chosen target audiences to tell them about buyers who are looking for specific properties. So he sends "urgent need" letters. He mails "Just Listed" and "Just Sold" flyers. He just learned how to showcase his listings on REALTOR.com. He holds open houses. He is still doing this. 21 years and still going strong.  

Along came a newbie. After trying the good old-fashioned way of door knocking, cold calling, and sending postcards, she decided to find other ways to market herself, using the internet --- which she considers her toys.

She:

• Is proud to have earned her e-PRO.designation
• Managers her own website from Point2Agent. 
• Showcases her listings on REALTOR.com. 
• Posts the maximum pictures allowed. 
• Spouses posting listings on the Internet, most notably, craigslist. 
• Learned how to do her own Visual Tours. 
• And although Zillow was, to the real estate industry, a four-letter word at one time, she posts her listings there. 
• Uses and explores other marketing tools, like the email blasts from companies like Electronic Flyer Company.
• Uses Postlets and Vflyers. 
• Answers questions on Trulia
• Blogs on ActiveRain. 
• Holds broker's tours (and serves refreshments) and open houses (using attention-getting gimmicks like ribbons on her open house signs and colorful flags along the walkway). 
• Wrote and developed a master listing presentation that she book-binds with her CMAs (comparable market analysis), embossing the Seller's name in gold letters. It is so good that her company has introduced it as a template for the company's own presentation.
  

These two REALTORS are friends. And although their methods are different, both are top sales producers for several consecutive years in their company 

Two different styles, both successful. What makes their systems work? CONSISTENCY!

While checking out a local blogger's site whose primary focus and opinion is on the implosion of the local real estate market, there was a comment from one of the visitors. Okay, I have thin skin....but this is not the first time I've heard us Realtors being grouped with car salesmen.

As Seinfeld would say..."not that there's anything wrong with that..."

She said: "You know it's difficult to see what is the value of real estate agent given that buyers (smart ones anyway) are too savvy and do their own home work and share information. I anticipate the change in real estate agent's commission rate in the near future. Having bought three of our homes on our own, and seeing site like this this flourishes, I couldn't help but wonder if real estate agent could become the next dying profession (like the car sales people). Those who use internet and shop for the best rate know what I'm talking about."

It sounded like she was minimizing or devaluing our worth as service professionals.

I have savvy buyers. Yes, they do their own search online. And when they find something, I do the rest of the research --- how much it sold for, what the comps are, if it's a foreclosure then for how much, the history of the property, I call the listing agent for disclosures, make appointments, strategize with the buyers, write offers/counteroffers. And when in contract, there's another set of important tasks and activities until the day it closes.

I was almost compelled to say that perhaps we don't need teachers because everything they teach us we will probably find online anyway.

I'm sorry, it's late at night. My brain is slowly turning to mush, and I can't think of a witty but to-the-point retort.

I was shocked to read about people I personally know who are upside down with their homes.

Recently, a former co-realtor's house was featured on a foreclosure site as having received a notice of default. Then today, shock of all shocks, one of our lenders with Wells Fargo is also selling her house as a short sale.

Both of them bought their respective homes in 2004, at the height of the market. And both have been adversely affected by the downturn.

I am speechless. The fear is starting to creep up my spine. I tell myself, "I will survive!" but when this crisis is getting close to home, I don't know what to say.

This may be new or old news to some, but if you haven't done so yet, go to hotpads.com and check out their foreclosure heat map that looks like this. And you can zoom in to areas that interest you. It's amazing at how detailed this information can get --- it won't give the exact address, but it will give the status (pre-foreclosure, bank-owned) and details about the house (number of bedrooms, square footage).

Sunday night, I spent time with buyers who want to write an offer on my listing which they have seen 3-4 times, and once with their contractor. We have the offer packaged and ready to go to present to the seller.

Today, one of them dropped off a letter they wrote to appeal to the seller. On his way out he  stopped to talk to another agent from my office.

As luck would have it, the other agent and I were going out together for dinner. She told me that the buyer has told her they don't think the offer they wrote with me will be accepted, so they want to make an appointment to see my co-realtor's listing on Thursday. And that if they like it, they will use her to write the offer on her listing.

When she asked him why they're asking her to do that when they have already signed with me (agency disclosure), they said that they only want to deal with listing agents.

What benefits do the Buyers think they're getting by working only with the listng agent? And how should we handle such a delicate situation of using multiple listing agents to write offers on their respective listings?

We often ease timid homebuyers into "starter" single family homes. But can we say the same about a condo?

Whether one is a first time buyer or someone who wants to simplify and downsize, this 2 bedroom, 2 bath condo meets many basic needs and then some. With 900 sq ft, in-unit laundry room with washer and dryer, patio that backs up to a greenbelt, gated access and secure parking, swimming pool...this condo offers and meets more than the average needs and wants. Aggressively priced at $192,000, it's a short sale.

As of this writing, Zillow zestimates it at $242,500; Cyberhomes, at $259,368.  Of course, there's no substitute for a thorough comparable market analysis a REALTOR provides --- but it's a start.  If you have sweat equity to invest and  a good eye, be the one to discover its hidden potential!

The Park is a condominium complex in a forest-like and private setting. If you blink you may miss the entrance on Beaver,  just off D street.

Visual tour

Vflyer

In my little island of Alameda, we've always felt more secure in the thought that we're innured from the economic upheavals known as foreclosures and short sales.

There is a certain "pride" in our beautiful island. We're ideally situated between metropolitan San Francisco and Oakland, we have year-round fabulous climate, we have fabulous events, and we have fabulous architectural gems.

But last week, when I posted current short sales and REO activity in Alameda, I was surprised to see the numbers.

Today, I looked again. Out of 157 active residential listings, there are now 25 REOS and foreclosures, 11 of which are REOs, and 14 are short sales, or 16% of total.

The activity for writing offers on these is quite brisk, and we're finding ourselves in competitive situations.

Looking in DQNews is just as revealing, comparing this period to last year. The number of sales are significantly lower. The median price and $/sq ft are also lower but not quite as drastic as in other East Bay cities.

We're not exactly quaking in our boots --- but there's reason to be concerned.

Today, we celebrated the birthday of one of our friends on his boat docked at Fortman Marina in Alameda CA. As we were interacting, I was amused at the energetic exchanges and the many accents. It brought a big smile on my face when I noticed the mix of people:

• Israeli (former Air Force pilot, now an entrepreneur, and the birthday celebrant)
• American Indian/Irish
• Filipino (me)
• Australian
• Myanmar (how do we call folks from Myanmar or Borneo?)
• Portuguese
• Russian
• German/Scottish
• English

Of the people who were there, only 4 were born in the U.S., and 6 are immigrants --- a nice reminder that this country is a real melting pot (or salad bowl depending on your preferred metaphor). Need I mention the different religions also represented at the party? Can you imagine a Jew partying with a Muslim? A Catholic with a Protestant?

There's a website called the Migration Information Source that provides interesting data about immigration in the United States.

The point of this is to underscore awareness and appreciation for, as well as understanding of multi-culturalism and diversity.

And to remind us once again that indeed, we are a nation of immigrants.

Last night, over cocktails with clients, we were discussing the unbelievable economic havoc in recent days and weeks. Giant and prestigious corporations collapsing. Mortgage companies bailing out or needing to be bailed out.

My client made a comment that she is concerned about her 401K, and is thinking of taking out as much as she can and put it in real estate --- something we can see, touch. Her husband is just as concerned. None of us are comfortable relying on our social security or retirement for our old age.

This was echoed by others in our circle, those who did or do have 401K accounts. We were reminded of people who suffered tremendous losses when their companies folded (think Enron, for one). So although the stock market through the years have shown a robust growth in portfolio, nonetheless, the reality of it is that "it's all on paper".

So let's look at an actual situation. Here's a Zillow chart illustrating the value of my fixer Tudor listing at 983 Pearl in Alameda CA

So...this being a real estate buyer's market in many areas, is this the time to think of putting it in real estate? Real estate values may be down...so that makes it a good time to buy, right? And one will only lose if one sells at the height of the market?

Pay it forward --- if a seasoned agent guided you along in your early days as a realtor, then you should help mentor the newer ones, too.

Start by teaching them how to do an open house. Yes, they will need training wheels at first, and then you can let go.

PREPARATION

1. Know the property. Make sure the agent learns as much as he can about the property he will show with you. If he doesn't the standard answer should be "I will try to find out and get back with you." Never wing it.

2. Attire. Discuss proper attire, proper etiquette. Even in our business casual days, it's still important to present a professional image

3. Sign placement. Tell him the do's and don'ts on placement. Don't block the crosswalk. Don't move another agent's sign if there is one, but you can try to squeeze in yours, or make sure it doesn't block the other agent's sign. First come first served.

4. Prepare and print flyers. If he's creative, encourage him to do his own flyers and to make use of the valuable real estate by putting additional information on the reverse. RealtyTimes is a good resource. So is Realtor.com

5. Handouts. Besides flyers, will you have other handouts? Like printout of the list of open houses that weekend? Local maps? Lender estimates (some lenders will be happy to prepare their own flyers showing monthly payments under different scenarios)

6. What others do. Have him go to other open houses (by other agents) and ask him what he liked and disliked about the way the agents did their own open houses. This should help shape how he will conduct himself during his own open house.

AT THE FIRST OPEN HOUSE --- He just needs a little bit of help.

1. Observe. He can watch you first. Then assign him to distribute flyers. Have him listen to your answers.
2. Signing in. Put him in charge of getting people to sign in if possible. Just say the sellers have requested that people sign in. Challenge him to come up with a novel and unobtrusive way to get people to share information about themselves, phone numbers, emails, and if they are willing to be contacted regarding their real estate needs.
3. Conversation. Make sure that he sees you're there not only to promote the property, but also to pick up new clients. As such, interaction should be conversational, not confrontational. If someone criticizes the property, there are all kinds of ways to handle it (and that's another topic altogether). Or refer him to Objection Handling on ChangingMinds.org  
4. Take turns. If you and he think he's ready, take turns greeting and talking with the people who come in.
5. Feedback. Let him know what works, and what he can do better. Give him some examples of what worked for you and see if he would like to try it next time.

Then let go ---- and have him do an open house by himself. But do stop by and see if he's enjoying himself. That's the most important part: to "whistle while you work!"

When I posted that I had 70-80 groups go through my open house for a Tudor fixer, some folks asked how I did it. This doesn't happen often, but for starters, my listing had the most important ingredient: location, location, location.

And to complement that factor, I also did the following:

• Advertise frequently on craigslist See 10 things to do when posting on craigslist. This complements the regular local newspaper advertising that features our listing
  • The fact that this is a Fixer drew people who are looking for a good deal
• I put out several open house signs on main intersections.
  • By the way, each of my open house signs has long, flowing gold/red metallic ribbons that set them apart from other open houses. They also catch the eye when the ribbon flaps in the wind. I had bought rolls of this ribbon during Christmastime, and haven't had to replace them too often.
  • These ribbons make my signs more visible.
• During open house, in front of the house, I put up 8 neon-colored flags so it looks festive. This is how it looks (I have yellow, orange and red). As far as I know, I'm the only one in my city doing these flags (to date).



• At the property, I distribute 2-sided flyers. On one side, I feature the property flyer, and on the other, the latest issue of Realty Times.
  • I also have a property binder with information about the property, the neighborhood, comps, inspections and other diclosures

I can't take credit for the attractiveness of my listing --- but I do try to augment that by using as many attention-grabbing things as I can think of.

How about you?

My clients who are sisters, are buying their first home together. They're both young, in their twenties. Because of their family background where both parents believed in owning real estate, they have an innate desire to own their own home. They are preapproved, have saved up for their downpayment, and are eager and serious buyers.

I've never seen buyers who exercise as much due diligence as they do in their selection of property, and then in their buyer investigation.

Property 1 was an REO. It was a house with extensive remodeling projects in process, but not completed. We competed against another buyer, and won. During the investigation period, the sisters researched the permit history, and discovered that not all the work had permits, and the ones that did had expired. Knowing the challenge of getting the work that was done to be permitted and getting new permits for the work still to be done, they backed out.

Property 2 was neither an REO or short sale. It was a four-plex. The sisters spent $1000 in inspections and discovered a lot more work needed to be done that they were not prepared to shoulder. Worse, one of the tenants was awarded by the Rent Control Board a rent of $10/mo (yes, ten dollars!) for 5 years because the previous owners had improperly raised the rents. So they would have been stuck with a tenant for the remaining 4 years, and they would be restricted in doing the changes they wanted because the tenant was in the unit that they wanted to convert. So they backed out. This went into contract later, and those buyers backed out, too.

Property 3 is an REO. Another competitive situation. The sisters went to city hall to research the permit history and also brought their contractor. Turned out that the second story expansion is illegal, and that $6K worth of permits were not paid. The City is notorious about forcing owners to rip out work that is unpermitted. In my clients' opinion, the property lost significant value for that reason alone. So for the third time, they backed out.

They're continuing to look, and have even intensified their research. I am amazed at their energy, diligence and perseverance in their pursuit of the right home. Me? I'm happy to help my first time buyers...but I'm exhausted!

An agent called me tonight to tell me that her buyer is interested in writing an offer, but would like to ask for $50K in credits towards repairs on a house that is listed at $648K.

When asked what the lenders think of such credits, she said the lender will approve the full price offer, and up to 6% credits which adds up to $39K, leaving a balance of $11K of credits.

Their plan is to keep the monies in escrow, and have the buyer draw out a little at a time to be applied towards paying for repairs and remodeling as they go along

Is this mortgage fraud?                                 

Somehow, this makes me nervous as this sounds too much like mortage fraud. There's quite a number of articles on mortgage fraud found on Realtor.org's achive . And I like what was mentioned  Elizabeth Weintraub's article on what constitutes mortgage fraud. And this is what it says on FBI's page

The agent wanted me to talk to my seller and see if they would agree to this arrangement. She said she doesn't want to waste anyone's time if the seller won't cooperate. I told her we would like it in writing, and for them to clearly spell out what they want to do.

I have handled several sales with credits to buyers towards non recurring costs....but I tend to shy away from creative financing that sounds too good to be true. If the offer is submitted, I would present it to mjy clients, but would always share articles on creative financing and see how my seller feels.

It happened once before

Before I got the listing on a property, one of my sellers tried to sell the property himself and got involved in something like this. He was in escrow for two months, had received $500 as initial deposit (on a $650K duplex), went through three appraisals by different lenders. Thus, I feel queasy when I receive requests like this.

I'm so happy that Alameda is continuing to grow in terms of services, attractions, etc. so much so that there's hardly any reason to get off the island.

Being a foodie of sorts, I was eager to try three new restaurants, and invited some clients to the experience (experiment?)

BAD: Aquacotta.  on Webster Street. Shortly after they opened, I invited a couple of clients to meet us for dinner there. First, we had such a hard time finding the place because the sign wasn't distinct enough. When we got there, the place was packed --- and noisy! Seems like there's nothing to dissipate the noise level. We were lucky enough to get seats at the bar, and were thoroughly impressed by the bartender. Everything was downhill from there.

After we were seated at a regular table, I should have guessed we'd have less than a good time when I asked for a bit of cheese to go with the balsamic vinegar and olive oil for dipping bread. The waiter seemed a bit put out by the request. Then he brought our entrees so late that two of the them were cold. Although tasty enough to be good, there was nothing special about them.

Unimpressed, we didn't want to go back to try it again, but a friend gave me a gift certificate. So back we went, hoping for the best. We liked the young lady who was in-training (by the same unimpressive guy who waited on us the first time). Alas, alack. The food was ordinary. For the high cost of the dinner, we'd rather drive out to Oakland's Montclair Village to Il Porcellino anytime, and be guaranteed good food and good service.

UGLY: Zeytini at Alameda Town Centre. It is in a delightful spot in the center of the newly revamped shopping cneter. So I had high expectations. I took a client for lunch and even tried the Greek wine on the wine list, but had to change because what I got tasted like doctored water. We both ordered moussaka --- which it was so disappointing. It had thick slices of potato and nearly curdled sauce. I've had a much more delicious version at the Gold Coast Grille.

But I thought I'd give it a chance. So I took another client there for dinner. My pork chop had a good sauce, but it was bone dry. The paella was mostly rice. And the waitress looked like she was so bored with it all. That's it --- I won't be back, not unless they make vast improvement in the service, the food, and the wine list!

GOOD: Barceluna on Santa Clara. I liked it before, and I was keeping my fingers crossed that this would be a good experience at their new location. I invited a client to check it out. We tried the fresh tomato salad, the pork barbecue sliders and paella. Everything was really flavorful and cooked to perfection. This isn't just a tapas bar anymore since they added main courses such as the Paella which was just as tasty, in my opinion, as Asena's. Our waitress, Neen, is studying at the Culinary Academy of San Francisco to be a pastry chef. and she made the experience even more delightful with her brand of service with a smile.

As the Guv says, "I'll be back!"

Here are before and after....

I held my first open house yesterday, and I must say I'm exhausted. I had 70-80 GROUPS (definitely over 100 people who came with family, neighbors, etc). It was hectic. Wish I had more time to chat with the folks but they just kept right on coming.

The question is, does it pay to stage a fixer?

ATTAGIRL!

Although the house needs a lot of work, it was important to showcase its good bones and hint at its tremendous potential. Too many cracks in the walls, tons of peeling wallpaper, outdated kitchen and baths. So I had the carpets ripped out --- and voila! Hardwood floors! I brought in some light furnishings (all my chairs and tables fold). It was all I could to do make it look a little nicer than what it used to be. At least I had place to sit down to catch my breath.

If anything, I got an "attagirl" from my sellers who told me that they definitely hired the right agent. The sister of the seller said that when she gets ready to sell her house, she will use me.

For more views of this fixer, check out the visual tour

In attempting to encourage my co-realtors to blog, the question, or perhaps fear, is whether they can blog if they can't write well.

OF COURSE!

When blogging, we are:

• Providing information
• Stoking discussion
• Searching for answers
• Sharing personal experiences
• Cultivating new associates, clients
• Promoting our listings
• Teaching, learning and interacting

This reminds me of a story about some salespeople who were complaining (or perhaps butt-kissing) to their manager about another salesperson whose reports were chockful of misspellings and poor grammar. The sales manager, noting that the English grammar challenged-sales person was posting top sales numbers, responded by saying:

"Sel, don't spel!"

Just learned something today --- this may not be the case every time....but it's interesting to know.

One of my listings is a property which I tried to sell as a short sale. Problem is, the lender is Downey Savings, and they won't approve ANY short sale.

I followed up today to see if this policy has changed. Nope. No short sales. Since this is going to be foreclosed, I asked if I can list it when it becomes an REO. I was referred to their REO Department. The lady who answered said they have a policy NOT to use the short sale listing agent of a property to be the REO agent of the same property because of potential conflict of interest.

So I asked to be an REO agent for other properties. Unfortunately, they're not hiring any more agents in my area. (I was actually surprised to be able to talk with someone when I called --- no long menus of press this or that!)

But I learned something new:

• Short sale agents won't be hired as REO agents for same property(ies)
• REO agents must be within a 15-mile radius of the service area
• They have a lot of applications --- and one's resume will be placed in a file
• Keep calling for updates in case they are looking to hire more REO agents
• When sending your application or resume, make sure you include your REO experience (writing successful REO contracts would be a plus --- but what if you haven't listed any REOs yet?)

Is this the case with other lenders?

I just listed a fixer home, and posted it on craigslist, using information I got from Zillow and Cyberhomes.

The local Alameda blogger saw it immediately. And although I got points for straight-talkin' the condition of the property, he zinged me (or realtors in general) for using Zillow zestimate in my craigslist/vflyer/postlet post.

And speaking of Zillow, after all the flak the big Z is getting from the real estate industry for their Zestimates(tm), I find it a bit rich that a Zestimate(tm) is not only mentioned in a listing, but ostensibly used to establish a "fair" list price by deducting $50K from that Zestimate(tm). And for what looks like a serious fixer, $648,000 ($350 / sqft) seems a bit high considering how easy it is to spend $150K on a house that size in that condition--which would bring the price up to a risky $430 / sqft.

My response was that since many people go to these sites, it seems an oversight not to mention them. Heck, when I went to the listing presentation, my sellers have already downloaded the Zillow zestimate. I came with an additional estimate from Cyberhomes.

Interestingly enough, Zillow's estimate is $697K (it's a moving target....)

And Cyberhomes estimate was $720K before I activated the listing. After the listing was posted, there was no estimate anymore, just charts for median price, etc.

In my opinion, we can refer to these sites as another resource, but there's no substitute for an in-depth comparable market analysis from a REALTOR.

I'm so happy that Alameda is continuing to grow in terms of services, attractions, etc. so much so that there's hardly any reason to get off the island.

Being a foodie of sorts, I was eager to try three new restaurants, and invited some clients to the experience (experiment?)

BAD: Aquacotta.  on Webster Street. Shortly after they opened, I invited a couple of clients to meet us for dinner there. First, we had such a hard time finding the place because the sign wasn't distinct enough. When we got there, the place was packed --- and noisy! Seems like there's nothing to dissipate the noise level. We were lucky enough to get seats at the bar, and were thoroughly impressed by the bartender. Everything was downhill from there.

After we were seated at a regular table, I should have guessed we'd have less than a good time when I asked for a bit of cheese to go with the balsamic vinegar and olive oil for dipping bread. The waiter seemed a bit put out by the request. Then he brought our entrees so late that two of the them were cold. Although tasty enough to be good, there was nothing special about them.

Unimpressed, we didn't want to go back to try it again, but a friend gave me a gift certificate. So back we went, hoping for the best. We liked the young lady who was in-training (by the same unimpressive guy who waited on us the first time). Alas, alack. The food was ordinary. For the high cost of the dinner, we'd rather drive out to Oakland's Montclair Village to Il Porcellino anytime, and be guaranteed good food and good service.

UGLY: Zeytini at Alameda Town Centre. It is in a delightful spot in the center of the newly revamped shopping cneter. So I had high expectations. I took a client for lunch and even tried the Greek wine on the wine list, but had to change because what I got tasted like doctored water. We both ordered moussaka --- which it was so disappointing. It had thick slices of potato and nearly curdled sauce. I've had a much more delicious version at the Gold Coast Grille.

But I thought I'd give it a chance. So I took another client there for dinner. My pork chop had a good sauce, but it was bone dry. The paella was mostly rice. And the waitress looked like she was so bored with it all. That's it --- I won't be back, not unless they make vast improvement in the service, the food, and the wine list!

GOOD: Barceluna on Santa Clara. I liked it before, and I was keeping my fingers crossed that this would be a good experience at their new location. I invited a client to check it out. We tried the fresh tomato salad, the pork barbecue sliders and paella. Everything was really flavorful and cooked to perfection. This isn't just a tapas bar anymore since they added main courses such as the Paella which was just as tasty, in my opinion, as Asena's. Our waitress, Neen, is studying at the Culinary Academy of San Francisco to be a pastry chef. and she made the experience even more delightful with her brand of service with a smile.

As the Guv says, "I'll be back!"