Sometimes we get so wrapped up in the numbers and statistics for real estate in Sacramento that we forget to take a broader view.  To peek out beyond our little village for a moment, we note that Sacramento is not on a recently published list of the areas with the most REOs (foreclosures) being sold.  However our nearby neighbors Stockton and Modesto did make the list, with Modesto leading the nation in this particular form of misery. 

Read the full story on the Housing Intelligence Blog.

Those of you who prefer your glass of poison half empty (or do pessimists see a glass of poison as half full?) will note that our own rate of foreclosure sales of 44% for November is well above the national average of 28%.

One interesting piece of data that this story doesn’t cover is the number of short sales being sold.  In Sacramento that number is much smaller (22.3%) than the REO number (at least partly because short sales are often fake listings).  Still, adding that number in might change the mix of winners and losers somewhat.

Those of you who have visited this site over the years may be aware that we have basically two sources for Metrolist real estate listings working on the site. One source is updated daily by an automatic process, and this is the source that feeds our search tools such as our Advanced Search page or our Email Update page.  These listings are always no more than about a day behind what we as Realtors® have available in our MLS system.

Another source features the same listings, but is updated less frequently.  I am trying to return to my habit of updating it as I used to (about once per week).  (Now that I’m an extremely part time productivity guru,  that should be a piece of cake, right?).  This source feeds our browseable lists of of Sacramento area New Homes, our Sacramento Foreclosures Search page, and our Sacramento Condos pages.

I know, I know, it’s a little brain dead having to update some of this manually.  Believe me, I know – I’m the guy who has to do it!  On the other hand the local MLSs still have real estate listing data in a bit of a stranglehold, though since the justice department started sniffing aroudn the NAR, one might call it more of a “relaxed stranglehold” at present.  Now there’s an oxymoron for you.

In any case, I updated that which needed updating today.  Enjoy!

Why is it always the guy who has two jobs who’s reading up on how to be more productive?  Because he’s the guy who needs to.  The smart money is on being a bit more lazy, having more time do do the things you love, living your dreams, yada yada yada.  As for me, I wouldn’t know.  I’m too busy.

When real estate prices took their famous fall in 2005, there was a period of maybe two years where we had a little ant-trail of busy I-told-you-so types beating a trail to my web site, to say, as you might expect, “I told you so.”  The truth is that I don’t remember any of them telling anyone anything before that happened, but when it did, they imagined that they told me so, or they quoted the one or two guys who did in fact tell us so.

In any case, whether they told anyone so or not, what they told me in 2005 was that I’d end up at MacDonald’s.  I remember thinking that was unlikely, since I’m one of those people who always worked too much.  Because of that, I taught myself programming when I was working as an administrative assistant after dropping out of graduate school.  That gave me one sellable career.  Later while working as a software developer, I taught myself real estate, which gave me me another.

Fast forward three years.  In October, 2008, you may recall, Congress ignored overwhelming and unprecedented majorities of constituents who wrote to them in opposition to the $700 billion gift to the junk mortgage derivative industry.  By that time prices had already been falling for a few years, and my income had reflected some of that, so I decided it was time to blow the dust off my other career, software development. 

I started back to work a week after I sent out my first resume.

I told you so.

Well, that was childish, but what can I say?  The Internet is here.

For awhile having two things going on worked reasonably well, until the woman I’d hired to help me manage this business quit, and until business started to pick up again as it has been picking up recently.  (I’m not talking about the market here – I’m talking about my company’s business, which tracks it broadly but not precisely).

Fear not, by the way, I still have full time agents, and I manage to supervise them quite well as the law and your expectations require.  Certainly they get more direct attention from the broker then I ever got at any of my other real estate companies.

However, now I find myself with too many escrows to have time to blog. 

Boo hoo.

I suppose that when Thanksgiving rolls around I’ll do OK on the thanking part, if not so well on the turkey.

So these days I have too much going on in my two careers to teach myself a third, though if I did have time, I’d probably go for working with my newfound interest, to be a Productivity Consultant.

One of the tips among the productivity gurus is to do your Most Important Tasks the first thing in the morning before the rest of the day intrudes.  Hence this blog post.

Do you feel special?

I told you so.

(This week I am very pleased to welcome my friend and colleague Alex Cortez, who has volunteered to do give us the following excellent guest post on what sellers can do to survive in this challenging and changing market).

In a volatile market riddled with distressed properties, sellers find themselves in a seemingly insurmountable position of competing with homes that are setting the price spectrum lower and lower. Here are a few tips that can help a motivated owner sell their property in timely fashion:

* Price – The biggest determinant as to how quickly a property will sell is its price. Yet many sellers are too emotionally involved and let said emotions cloud their perspective in pricing. Competing with REO’s and Short Sales means pricing accordingly, such that it will draw the attention of potential buyers. Also consider the way that potential buyers search for real estate: on the internet. Online searches are conducted (to large extent) in round numbers, so instead of pricing your home for $499K, price it at $500K (that way those searching for a home between $450-500K will see it, as well as those searching $500-550K).

* Seller Financing – If feasible, consider the possibility of offering seller financing. In today’s market, many otherwise qualified buyers are being left out in the cold by lenders who are now practicing unbelievably strict lending criteria. By opening the possibility of seller financing, buyers are further enticed to purchase a property for which they would not qualify (in part or completely) by conventional lenders. This is obviously not a pragmatic option for many sellers, but for those who can, it increases the pool of qualified buyers exponentially.

* Condition – Buyers who view REO’s (foreclosures) during their search come to the realization that REO’s are typically in poor condition, with many missing appliances, fixtures, landscaping and more. This becomes an opportunity for conventional sellers to further differentiate themselves from competing inventory by showing pride in ownership. In addition, staging can help sellers maximize property assets (i.e. window coverings that give attention large windows) and minimize flaws (i.e. a small room which is inadequate as a bedroom can be staged as a functional home office).

* Marketing – The days of the 4 P’s (‘Put a for sale sign’, ‘Put an ad in the paper’, ‘Put it on the MLS’, and ‘Pray’) are long gone and this is where it pays dividends to be represented by a real estate agent who is apt at marketing. With a large majority of potential buyers conducting their search online, it is imperative to be in the hands of an agent who has a strong online presence. Give it a try, go on Google and type in ‘Sacramento real estate’.

It IS possible to sell a property in today’s market, but it will take collaborating efforts of motivated sellers and knowledgeable real estate agents. Mahalo.

Guest blogger Alex Cortez specializes in Maui condos for sale and has in-depth knowledge of Maui REO’s and short sales. Should you have any questions about the Maui real estate market or wish to ‘talk story’, contact Alex.

It’s been a long time since I’ve enabled comments here.  The noise to signal ratio was just so great, so I shut them down.  But a few people who I’d like to get comments from have remarked that we don’t have them, so I thought I’d try them out again, at least for certain posts, to see how things work out.

This must be the shortest blog post ever.

Leave a comment.

Recently I had experiences with two salespeople that reinforced my view of what we in the sales profession should and shouldn’t be.

The Great Experience

The first salesman earned my business and “sold me” (i.e., didn’t prevent me buying) something I didn’t already have, a smart phone.  It should come in a few days.  His name is Evan Souza, and he manages the Verizon Store near the Borders Across from Citrus Heights Mall.  He’s a good guy.  You should see him if you need a phone.

I walked into his store interested in the DroidX.  He greeted me and once I told him what I wanted to look at, he let me play with it for a few minutes then asked me if it would be alright with me (note:  he didn’t insist on it) if he showed me some of the features of the phone.  I agreed, and he did, and clearly he knew the product well.  I really liked the phone but I wanted to sleep on it for awhile and told him I’d make a decision soon.  He said something like, “That’s fine, let us know if we can help.”" 

Did you notice how he just sold me on buying the phone from him.  How?  Simple:  He sold himself by not selling the phone.  You can call this just being nice, or maybe you can call it “The Golden Rule”.  If you want a “salesey” explanation you can call it “the paradox close”" because it both is a close and isn’t at the same time.  It’s closing by not closing.  So I got his card and promised that if I decided to buy one I’d buy one from him.

A week or two later I returned to the store because I wanted to see the phone one more time and make up my mind.  I asked for him by name and he was behind the counter working with some of his employees.  He greeted me and assured me that anyone in the store could help me.  So I returned to the phone and played with it some more, and I had a question that I asked another salespeople there.  He answered my question courteously and then he shut up.  I had now been paradox closed twice by the same company. 

Now don’t get me wrong.  All this would have failed if the product had been a loser, but this was a wonderful product – nice big screen, an easy-to-use way to enter notes and emails (Swype rocks!) – pretty much exactly what I wanted.  But here’s the thing:  I could buy the same phone on Amazon.com or any one of probably a dozen stores in the area.  But I didn’t do that – I got my credit card out and bought it there that very day.  It arrives Monday.  I’ll let you know what I think.

My Horrible Experience

The other salesman managed to prevent me from every buying anything from him again after I’d bought something from him once and had previously been quite happy with it.  To avoid unnecessary cruelty I’m not going to mention him by name, but the background is that he owns the company that sells a software product that I already own and until recently was quite happy with.  Now I wouldn’t recommend you buy it on a bet, because if you do, [NAME REDACTED] might treat you to one of his special business-killing letters, which I reproduce in part below.

The subject of his letter (minus my company name and registration info):

“Please let us know why you didn’t upgrade”

Word of honor, I’m not making this up.  This is a teaser line in the negative sense, because it prompted me to ask myself, “Hmm, I wonder who this idiot could be?” His letter continues:

We noticed that this license was not upgraded to v10. We’d really like to know why.

You’d “really like to know why” I didn’t upgrade my product?  What compelling voice inside your tiny little head whispered that I was somehow obligated to hang around your web site waiting for the next version of a product I already own so I could give you more money?

We take user feedback seriously!

Fair enough.  Here’s my feedback.  Run, don’t walk, to this charm school and beg them to take you on, paying them whatever hazardous duty rate they should demand of you. 

Please reply to this email to let us know why you did not upgrade to [Software Product Name] Version 10.

Oh, I’ll do better than reply to the email.  I’m going to contrast you in a blog post to someone who knows how to treat people.

But my “favorite” part of his email is coming up.  He’s already irrevocably lost my business, but the point where he becomes truly flame worthy emerges here:

Also, please let us know if you would like a response back. If so, we will respond, but please allow us a few days to read and reply to all the feedback we receive.

His “thought process” on this must have amounted to “Obviously, I’m going to be incredibly swamped with a huge volume of people standing in line to explain why they’re terrible customers, but if you do manage to make it past my incredible stupidity and do what I clumsily asked you to do, I’ll get back to you when I feel like it.”

Mistakes I’ve Made

I’ve made lots of mistakes in my sales career, especially early on before I mastered some of the technical details of real estate transactions and before I learned to shut up and listen to the client.  The second mortgage on my house is a product of the “success” I had during my first year in the business. 

I started to make more money than I spent on gas when I finally took off the jacket and tie, relaxed, and realized that a good salesman was simply a good person who uses knowledge in a specific area to help someone decide to own – or not to own – a product that can benefit them.  So now that’s what I do.  And I’m so proud of my agents because that’s what they do, too.

Of course I still make my share of mistakes with people, but when I do I try to fix them right away.  I hope that even on my worse day I was never as bad as the guy in my second example.  And I hope that at least nine times out of ten I’m as good an example as Evan Souza, from whom you should buy a phone if you’re looking for a phone. 

If you’re looking for help with your real estate transaction, we’re here to help you with all the knowledge and skill we can bring to bear.  When you work with us to buy or sell a home, we don’t hound you forevermore asking you to refer us, but we do work very hard to try to earn them from you naturally.

An associate sent me this in my email and I think it’s important that every home buyer know these top ten no-nos when it comes to their credit during the home buying period. I had earlier shared that Fannie Mae has adopted a new loan initiative to ensure that only qualified borrowers receive mortgages, a post that may be worth reading again. And if you’re in the process of buying a home or in escrow, remember these top ten no-nos.

1. DON’T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This would include adding new accounts, co-signing on a loan, changing your name or address with the bureaus. The less activity on your reports during the loan process, the better.

2. DON’T APPLY FOR NEW CREDIT OF ANY KIND. Including those “You have been pre-approved” credit card invitations that you receive in the mail or online. Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately. Depending on the elements in your current credit report, you could lose anywhere from one to 20 points for one hard inquiry.

3. DON’T PAY OFF COLLECTIONS OR CHARGE OFFS during the loan process. Unless you can negotiate a delete letter, paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it through escrow – at closing.

4. DON’T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS. This is the fastest way to bring your scores down 50-100 points immediately. Try to keep your credit card balances below 30% of their available limit at ALL times during the loan process. If you decide to pay down balances, do it across the board. Meaning, pay balances to bring your balance to limit ratio to the same level on each card (i.e. all to 30% of the limit, or all to 40% etc.)

5. DON’T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS. It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in 4. If you want to save money on credit card interest rates, wait until after closing.

6. DON’T CLOSE CREDIT CARD ACCOUNTS. If you close a credit card account, you will lose available credit, and it will appear to the FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you HAVE to close a credit card account, do it after closing.

7. DON’T PAY LATE. Stay current on existing accounts. Under the new FICO scoring model, one 30-day late can cost you anywhere from 50-100 points, and points lost for late pays take several months if not years to recover.

8. DON’T ALLOW ANY ACCOUNTS TO RUN PAST DUE — EVEN 1 DAY! Most cards offer a grace period, however, what they don’t tell you is that once the due date passes, that account will show a past due amount on your credit report. Past due balances can also drop scores by 50+ points.

9. DON’T DISPUTE ANYTHING ON YOUR CREDIT REPORT once the loan process has started. When you send a letter of dispute to the credit reporting agencies, a note is put onto your credit report, and when the underwriter notices items in dispute, in many instances, they will not process the loan until the note is removed and new credit scores are pulled. Why? Because in some instances, credit scoring software will not consider items in dispute in the credit score – giving false data to the lender.

10. DON’T LOSE CONTACT WITH YOUR MORTGAGE & REAL ESTATE PROFESSIONALS. If you have a question about whether or not you should take a specific action that you believe may affect your credit reports or scores during the loan process, your mortgage or real estate professional may be able to supply you with the resources you need to avoid making mistakes that could drop your credit scores or possibly, cause you to lose the loan.

53 homes sold in the area of Carmichael this last month, an overall unit volume increase of 43.2% year over year. Of these, 14 were foreclosure sales, 8 were short sales and 31 were non-distressed homes. Non-distressed home sales have jumped 82.4% year over year, a statistical detail that would have been good news except for the short sale inventory that remains steady at 20+ months. 1 out of 2 homes sold are now non-distressed sales.

Average price per square foot is now $151.31 which is a 5% decline year over year from $159.33 last May. Home buyers asa result afforded themselves homes on average 10% larger than they did last May. Average sales price seems to have increased from $279,950 to $291,331 – a 4.1% increase but keep in mind that the average price per square foot gives a more accurate picture. Median sales price is fairly stable at $240,000. Last May it was $236,659.

Overall inventory in Carmichael is at 6.3 months. Foreclosure inventory is at 2.2 months and short sale inventory as previously mentioned is at 20.3 months.

Nope. You got that one wrong. Just kidding. I have no possible way of knowing what you were thinking. I’m not John Lockwood! (Sorry, John.)

But seriously, we’ve gone ahead and made ourselves one of the sheep on Facebook and wouldn’t you know it – have a little group forming. So if you’re into being awake at 4 am just to check on what we’re doing here on this blog while getting your first cup of coffee or on your way to check on your kids, or whatever those crazy people in the blogosphere do (no pointing fingers, now!) come check us out. And join our group.

Or just friend John. Apparently I’m still maintaining my artistic integrity.

If you’re looking to do something with the young ones this Easter, here are a few places you can go if you don’t have invitations for neighborhood or church easter egg hunts already!

At Arden Fair Mall, you can go visit the Easter Bunny over in the Center Court. You can take pictures and get a free gift. Here are the details.

The Southside Park is hosting an Easter Egg Hunt on April 3rd at 2115 6th Street in Sacramento. The event begins at 11 am. Here are the details on this one.

Here’s something else that quite cute. After the Easter Egg hunt you can catch the Easter Bunny at your own home! Check it out! The kids might just love it.

Happy Easter! See you Monday!

A new friend of mine from Equador, whom I met on the outstanding language learning blog LiveMocha.com, told me about the old year (año viejo) celebrations they have in Equador.  As I understand it, they build intricate representations of things that happened in the old year, they drink a lot, and blow things up with powerful and dangerous fireworks — sometimes including (so I understand), the representations of the old year themselves.

None of this namby-pamby first night crap.  These are serious equatorial Latinos, folks.  They have humidty there that would wilt the average Sacramentan, and she tells me today it was about 99 degrees or so.  So when it comes to blowing whatever got them mad in the old year, these people are probably a bit grouchy to begin with.

Top 2009 Explosion-Worthy Stuff

If I had to pick my number one thing about 2009 to blow up in effigy, it would have to be the shift from foreclosure sales to short sales.  When the 2008 bank bailout demonstrated the extent of congressional contempt for the will of the American people, the market was still dominated by foreclosures, and month after month more foreclosures were being sold.

Was that a good thing?  No, of course it wasn’t.  The only winners in that scenario were the banks, whose losses were covered by well-bought politicians, and the buyers, who could relatively easily close on a bargain home.

A year later, the market has shifted to one dominated by short sales.  In December, for example, we sold 52.2% fewer bank owned (REOs) than in December of 2008 in Sacramento County, but 70.2% more short sales.  Is that better?  Well, if you think short sales are a lot better from a “save your credit” perspective, nothing I’ve learned has demonstrated the superiority of short sales.  Maybe there’s some slight psychological benefit for the seller, but at the end of the day, the seller loses the house, so to my way of thinking it looks like a wash on the seller side, especially considering the recent news that the banks have only executed on some 5% of the government approved loan modifications that they could have made.

From a buyer perspective, however, this year has been pretty awful, with buyers waiting months and months on short sales.  I have a friend at work who went through the short sale process (with another company) for months on end, and is now so fed up that he’s looking at an overpriced fix-and-flip listing.  I showed him some comps, but he doesn’t want to hear it.

I suppose that on some level there’s good news in that prices are flattening or improving again in many areas.  County-wide, prices have risen 2.2% in Sacramento County from December to December, and the number of non-distressed sales has risen 88.5%.

I guess overall I liked it better when the schadenfreude bloggers were hollering at me and it seemed like foreclosures were the biggest deal in town, rather than the systemic collapse of the economy through the failure of dismantling New Deal bank legislation.

Are things getting much better in real estate?  On paper, yes they are.  What remains to be seen from my perspective is the extent to which we can “recover” economically with neither jobs nor savings nor strong economic policy.  I hope I’m wrong and everything’s hunky-dory, but the job numbers don’t support that.  I was lucky as heck to land a second job within a week of the bailout, but we all know too many people in the real estate industry and outside it who have not been so fortunate lately.

So my effigy that I’d like to blow up for año viejo looks like George Bush and Barney Frank doing things with Goldman Sachs that I´m not going to talk about on this family web site.   If only I had some good Ecuadorean fireworks, I could do it justice.