No, that’s not two homes for the price of one — sorry — but you do have the opportunity this weekend to visit two of our most beautiful recent listings in Cameron Park.  Vicki Agregado-Babcock will be holding these two listings of hers open this weekend.  These great homes are within walking distance of one another, so you can easily compare features.

The homes are :

• 2701 Sandhurst Drive in Cameron Park  (See the map, photos, or the listing details).
• 3262 Sandhurst Court, Cameron Park  (Map, photos, listing details).

We have more information about these homes today!

Please visit the Open House, Sunday 1-4 PM or call Vicki Agregado-Babcock at (530) 409-1100 for more information.

I’m working on an offer for a buyer on a bank foreclosure. We wrote up an offer. After some back and forth, five days later we got our final addendum signed and returned from the bank, so at that point we were told by the listing agent that we had “verbal acceptance.”

Before I get into what happened next, I should point out that I’m not putting the listing agent in this case down. This agent clearly was being respectful of my buyers’ efforts, and immediately had the listing marked pending sale. The chances are excellent that all the issues I’m describing here will get ironed out routinely. Still, I thought it would be helpful if buyers and sellers had a better understanding of some of the problems that are caused when you start talking about verbal acceptance.

Very often, it turns out that verbal acceptance is every bit as much an oxymoron as “military intelligence” and “fresh frozen strawberries”. First of all, in California, a part of the Civil Code known as the Statute of Frauds says that certain types of contracts (including contracts for real estate) are unenforceable unless evidenced in writing.

So what’s wrong with accepting an offer verbally and then getting the final signatures later?

Several things:

1. Someone inevitably changes something.
   When we finally got the written “acceptance” from the bank (about a week after we got “verbal acceptance”), it turned out that they’d crossed out our close of escrow date and entered a new one, and that they’d changed the allocation of closing costs. Again, I’m not faulting the agent, here. Many times I’ve been on the other end and told an agent that (for example) my client’s offering $300,000, only to submit the offer later for $280,000. Was I lying? No, my client told me $300,000, then later decided instead to offer $280,000. That’s why verbal offers are on a par with verbal acceptance — they’re not worth the paper they’re not printed on, either.
2. When did acceptance happen?
   The other problem that “verbal acceptance” causes is fouling up our ability to date when acceptance happened. This is not a trivial thing, since many of our time frames such as the buyer’s inspection period and the date for close of escrow start when we get acceptance. Traditionally, acceptance starts when the offer and any counter-offers are completely signed by both parties. Enter verbal acceptance, and now you have three choices:
   1. The date of verbal acceptance.
   2. The date you got signatures.
   3. But remember, now, if you got signatures evidencing acceptance, but there were changes scribbled in by the person signing, even on the date in (2) you still don’t really have acceptance, you have a counter offer.
3. Time is Of The Essence
   Banks selling REOs and banks approving short sale always seem to want to get the buyer to move forward on their inspections as soon as possible, but the buyer has to pay for these inspections. Normally, again, we can work this out, but it’s a legitimate area of buyer concern if they don’t have anything in writing from the seller yet, and they have to shell out $450 to $1000 or more on various inspections.

Pay Attention

As always, having an experienced agent or broker who who will carefully review and explain the paperwork at each stage of the process is your best protection. Your agent should be pushing to ensure that all the terms are clearly spelled out in writing as soon as possible, and should have no qualms about pushing back on your behalf if what you get in writing wasn’t what you had agreed to verbally.

To be sure, foreclosure bidding can sometimes be competitive, and the sellers (banks) tend to be slow getting the paperwork done. In that case verbal acceptance is sometimes a nice way to make sure your offer is the one that gets that home taken off the market. But if you do go that route, you should think twice before committing your money to inspections, and your agent shouldn’t open escrow until you have written agreement on the terms.

Today I took my daughter out to lunch and passed a Sacramento Bee newspaper box, which bore a headline blaming the housing market for a decline in car sales. The idea is that buyers can’t take equity out of their houses any more to buy cars, and now with rising gas prices banks are starting to repossess more gas guzzlers.

Soon after I passed the Bee paper box, I heard the song “Nowhere to Run”, which is how Martha Reeves fits into all this. Here she is on YouTube.

That seemed apt.

The Blame Game

Let’s back up and look at the logic, which if I understand it goes like this: people can’t afford to buy new cars. They can no longer afford to use their houses as piggy banks to buy the cars they can’t afford (which runs on the gas they can’t afford), so the declining housing market is now behind the declining auto sales market.

Am I the only one who looks at that and thinks the logic is utterly surreal?

Here’s the thing: do you make enough money to support you buying and paying for that forty-eight cylinder GMC Suburban or whatever it is you’re driving?

I drive a Honda Accord myself. It’s a four cylinder, with over 100,000 miles on it. It could have a bumper sticker that says: Don’t laugh, it’s paid for.

Don’t worry, though. If you’re a Republican, almost all my agents have bigger cars.

Don’t Tax And Spend, Borrow And Spend

To my naive way of thinking, if you can’t afford to buy a new car, you shouldn’t buy one.

Even more to the point, if a lot of people can’t afford to buy cars without tapping the equity on their homes, and now they can’t do so, to me this begs the question of whether they could afford the car back when they could tap their equity.

The host of the 91st Carnival of Real Estate rejected my article on the relationship between expensive gas, cheap dollars, and the real estate market because of my partisan politics.

That’s OK, I’ll link to him. Liberal, adj. definition 9: “characterized by generosity and willingness to give in large amounts.”

Doublespeak

What always cracks me up about right-wingers is that they characterize Democrats as “tax and spend”, when it’s always the Republicans who have the huge deficits. Their attitude and behavior is “borrow like hell and keep spending anyway”.

Tax and spend actually makes sense. The analog at an individual or household level would be “earn and spend”. That’s what you’re supposed to do.

Am I Saying You Shouldn’t Borrow?

Don’t be silly. Not many people have $150,000 or $300,000 or $1.4 million or what have you lying around to buy a house, so if no one ever borrowed, I’d be out of business. And yes, indeed, I took out a loan for my four cylinder Accord back when it didn’t have 100,000+ miles on it.

I’m just saying this: whether you’re buying a house or a car or dinner on the town, you should ask yourself whether or not the debt you’re using to buy it will get you in over your head. Use some common sense.

On the other hand, if you really need that 72-cylinder Hummer to make your day special and you have to take out your fourth mortgage to do it, let me be the first to congratulate you for making sure the terrorists don’t win. And if you can’t do it now because you spent all your equity on toys, that’s no problem.   You can always blame “the housing market” for putting the cramp in your consumerism.

See, you have somewhere to run, after all.

I’ve been doing a lot of reading lately about how weak the dollar is compared to other currencies.

The chart below shows you how many Euros you could get for a buck over the last ten years, for example.

As you can see, the dollar’s value has been sliding now since about the year 2000, since about the time the Supreme Court appointed George Bush president. (Darn, are my politics showing again?)

One of the things that happens when the dollar is weak is that the price of things like gold and oil go up.  Steve Forbes recently estimated that “more than $50 of the per-barrel price of oil today comes from inflation and the speculation that inflation induces.”  So it’s not simply that Arab Sheiks and oil companies are fat cats, sitting around reaping huge profits — though I’m sure some of that goes on as well.  The high price of oil is a largely a reflection of the low value of the currency used to price it — the dollar.

OK, so why is the dollar low?  Well, remember that war we’re fighting in Iraq?  That cost about a half trillion dollars so far (and you thought real estate commissions were expensive)!  The Bush tax cuts to rich people like the oil fat cats we mentioned earlier will lose us about 1.7 trillion dollars in revenue based on what’s already been passed into law.

Partly as a result of these reckless policies, we have these huge budget deficits, so we borrow money to the tune of about $2 billion per day to finance a national debt of about nine trillion dollars (more or less). 

Aren’t big numbers fun?  To give you an idea of what nine trillion dollars is, if you spent a dollar every second, it would take you over 285,000 years to spend nine trillion dollars.  Nine trillion dollars laid end to end would easily make it well past Jupiter — almost as far as Saturn.

And to think some people are worried about Social Security.

Now you’d think that having nine trillion dollars in debt is problem enough, but meantime, there’s another problem.  The government borrows money largely by selling government securities such as Treasury Bills.  High interest rates on such instruments relative to securities available from other governments typically strengthen the dollar, while low interest rates weaken it.   This stands to reason.  Investors want a high return on their investment.  So low interest rates here mean more people can buy homes or refinance their existing homes, but it weakens the dollar, which in turn pushes the price of gas up.

With this in mind, here are some scenarios for 2008-2012:

• Catastrophic collapse in US currency.   I don’t really know if that’s a likely scenario or not.  I’m not an economist, but I play one on the Internet.
• Continued non-catastrophic decline in the value of our currency, pushing gas prices up higher while interest remains low.  This is probably “good” from a real estate perspective but bad from any other measure you can think of.
• Rising interest rates coupled with falling home prices, followed by a gradual return increase in the value of the dollar over time.

As we always do, my agents and I have been working with a lot of home buyers. A lot of these buyers have been really great, and we appreciate their business. Maggie closed escrow last week with me, for example, and Christine is closing in a day or two with Vicki. Another buyer of Mike’s will be closing later in the month.

To all those buyers who’ve given us the opportunity to work with you recently, Thank You! We appreciate your business!

At the same time that I’m grateful to our customers, one of the things I’ve noticed more and more in this market is that there seem to be lot more buyers writing offers that go nowhere. You can probably guess how depressed this makes me if I tell you the original working title of this article, which was this: “Home Buyers Beware: Shooting Yourself in the Foot Is Not As Fun As It Looks”.

Getting to see buyers shooting themselves in the foot is of course an occupational hazard. As Realtors® working as agents for buyers, naturally we have a fiduciary obligation to write pretty much whatever offer you want us to. This isn’t just a fiduciary obligation, it’s a practical one as well, since there’s always another agent who’ll write an offer for you if we won’t. So unfortunately, if you want to shoot yourself in the foot, one could make a case that part of our professional duty is to load the gun and hand it to you.

The other constraint that we work under is that when we write your offer, we really don’t know for sure if it will work until it’s presented. In my experience I’ve seen offers I thought were quite reasonable get flat out rejected, and on the other end of the scale I’ve seen offers that I thought were overly aggressive get accepted as written with no counter-offer. Usually, however, as people who write a lot more offers than the overwhelming majority of the buyers and sellers we work with, we have a pretty good idea if an offer is a contender or a non-starter.

What I’d like to do in the rest of this article is point out the mistakes that I see buyers making. My hope is that it will save you time, and help you get the house you really want.

Mistakes Buyers Make

1. Not Looking At Comparable Sales
   The number one mistake that buyers make when they write an offer is not looking at the market value for comparable homes. If there’s an Internet connection handy, your agent can usually get you this information in about five to ten minutes, especially if the home is not on acreage and is in an area where there’s a lot of activity.Even before “running the comps”, however, we know that there’s a good chance the home you’re writing an offer on is already a bargain. How do we know? Because you already compared it to what’s on the market when you selected which homes to go look at, right? Chances are good that you never said this to your agent: “Oh, let’s go see this one — it’s the same as these other ones but more expensive!” Then of the ones you saw, which one do you want to work on? The bargain, right? Of course. However, the reason you need to know the comps is that you need to know whether the home you’re interested in writing an offer on is a tiny bargain, a medium bargain or a huge incredible bargain.
2. Writing an Offer on the Market, Not On A House
   We all know that the market is slow, inventory is high, prices are going down, and things aren’t moving, right? Absolutely — all of that is true. Does that mean you can write a low offer on a house that’s priced really low already? Not necessarily. Remember that the house that’s low already is not average for the market, it’s at the low-priced end of the market “bell curve”. The definition of a buyer’s market is that the middle of the curve isn’t selling. The bargains always sell. There are bidding wars in this market just as there were bidding wars in a seller’s market — there just aren’t as many of them. We saw one home a few weeks ago that had twenty-nine offers on it!
3. Negotiating a Bargain Instead of Looking for One
   There are bargains available now, almost everywhere someone asks us to find them. Naturally there are exceptions — a few areas in where prices have stayed high or dropped more slowly than in other areas. But for the most part, in neighborhood after neighborhood, zip code after zip code, we have found homes that are listed below the comparable value of sold homes. In a market such as this, where prices are falling, the leading edge of the market is made up of today’s bargains that make up tomorrow’s comps. One of the successful buyers we mentioned above closed on a home that was priced better than twenty-five out of twenty-six pending and sold comps. Not bad!
4. Working on the Huge Incredible Bargain
   If a list price on a home in a given area is too good to be true, chances are that it’s either a major fixer upper, or there will be a huge amount of competition on the house, or both. Remember the house with the twenty-nine offers on it? This one was a house like that. Even offering full price on such a home will not secure it for you. If a house is priced extremely well, you should be offering more than full price. Remember, your job is to find the bargain and write the offer that will buy it. List price is irrelevant — what’s important is market value. Would I pay $50,000 above list on a home that’s $200,000 below market? Gladly. All day long if I could.As a general strategy, we find it best to work in that area of the market that you might say is “significantly discounted, but not a huge killer deal”. Forty per cent below market is a bidding war waiting to happen. Ten percent below market is a home with built in equity that you have a good chance of closing on.
5. Traveling Through Time
   One of the reasons I love real estate is that I grew up reading science fiction, and as a Realtor® I get to watch people travel to the future for their prices. The logic goes like this. The average sale price of a home in a given area, is, let’s say, $300,000. A home the buyer’s interested in is listed today at $260,000. Buyer thinks to themselves: Well, prices are going down, I can probably get this house twelve months from now for $220,000. I’ll offer $220,000.
6. Not Wanting to Leave any Money on the Table
   Alright, first of all let me say that anyone who knows me will tell you I say dumb things to get a laugh. For example, when I meet people for the first time or when someone I know well calls me on the phone, I’ll say “Welcome Back”.Given my propensity for saying dumb things recreationally, it’s probably the pot calling the kettle black for me to have a pet peeve about something that doesn’t make any sense. Be that as it may, I hate this phrase: “I don’t want to leave any money on the table”.

   Buyers will often utter this phrase when they’ve decided that 15% off of current market value isn’t enough of a discount for them. They usually say it as they’re getting out of their DeLorean having just come Back From the Future to make up a price. (I think there must be a tape player inside every DeLorean where this phrase is taught to buyers through some kind of subliminal hypno-training.)

   Buyers, let me be clear. Nobody’s going to leave any money on the table. You and the seller are paying a title company good money to do your escrow for you, and your escrow officer will prepare a settlement statement approved by the Department of Housing and Urban Development. These settlement statements account for every dime involved in the transaction. Also, part of my job is reviewing your closing statement before we close. In the absurd event that there’s an entry on there for “money left on the table”, I promise that I will make the title company give it to you.

   Your welcome.

   True story time: A buyer for a house I once had listed at $350,000 told us through her agent that she “didn’t want to leave any money on the table”, so she offered my seller $300,000. At the time of the offer, the buyer told us there was another house (a close comparable for my seller’s house that was right down the road) that she liked less, but she was writing up an offer on my seller’s house first because it was her first choice. The offer being too low, my seller was insulted, and the buyer and seller never did come together. Two months later, we saw that the buyer had closed on her second choice house, the one she didn’t like as much. Final sale price? $350,000.

   Load lowball. Point at foot. Pull trigger.

7. The Market Referendum / Kitchen Sink Offer
   “Look this is a buyer’s market, right? Well, I’m a buyer. Here’s what I want. I want to use Nehemiah down payment assistance program where the funds may or may not be available for me to close, and I want the seller to pay for that plus my closing costs, and I want to pick out a nice bank owned property that’s listed for 20% below market. Then I’d like to also offer less than the asking price.”Do you like jokes? Here’s a real estate riddle for you:

   Q. What do you call a buyer who knows it’s a buyer’s market, who wants 100% financing, their closing costs paid, and won’t pay list price on a home that’s already discounted? A. A tenant.

Derek Burress is a real estate blogger who I met at a recent flame war in honor of Greg Swann.

Hi Greg and Brian.  Hope all is well with you.  I apologize for my harsh words over the years.

Wow, that was easy.

Now On to the Neat Idea

The flame war itself was the usual secondary bully market non-sense  (Bluto Freddie Mac).  Some good came out of it, however, because I met Derek Burress.  Derek is a real estate blogger who’s given up his real estate blogging to write a novel.

What a neat idea.

I’d link to him if I could, but his site is down at the moment.  Well, what the heck, maybe it’ll be up by the time you read this.  DereckBurress.com.

Why This Is Cool

I have this book, Writing Fiction Step by Step, that I bought over a year ago.  I haven’t looked at it much, because being a broker keeps me busy, what with working on my own transactions and helping / supervising my agents with theirs.

Writing blog posts about the market in the Sacramento area really does pay the bills — albeit in a way that’s quite different from how the Real Estate Blogger A-List would have you believe.  About a year or two ago, it suddenly dawned on me that for the past few years, my true profession has been “professional writer”, even though the vehicle whereby my writing made me money was my occupation, which was real estate.

Self Improvement, Blog Improvement

Sometimes you reach these emotional crises where you discover that it’s time to start waiting for your life to begin and time to start living it.  Well, maybe you don’t reach those, but I certainly do.

I don’t want to be ungrateful to my hack market update writing — it’s paid the bills.  But I would like to improve this blog.  And I would also like to spend some time working on other writing projects that will pose me a different kind of challenge.

Does this mean the real estate business will suffer?  Not at all — well not from a client point of view, anyway.  Already my agents do a fabulous job with the clients who are good enough to reach us through this blog.  So the balancing act for me has always been how many clients do I personally help versus how many of those do I pay an agent to help. 

So improving the blog and doing other writing projects may mean a temporary pay cut for me (especially in this down market), but I expect the quality of service to remain high.

That’s my story and I’m sticking to it.  Hey look — I’ve made up a story already! 

One down.

I have two questions: 

• Where are we headed?  
• Are we there yet?

I’ve been decidedly off my blogging feed (no pun intended) lately.

When I was little and was getting over the flu, mom would always recommend something bland, like saltine crackers and flat ginger ale.

Lately I feel like that’s about what my writing has been like:  saltine crackers and flat ginger ale. 

Fortunately for me, Purva has been writing a lot or real estate FAQ posts and that’s been keeping the blog going.

Me I’m just fighting to get my eloquence mojo back, sort of like Rocky VIII.

Another Sad Market Tale

Darn, it was dispiriting to learn that a good friend of mine, an agent formerly with another company, and possible Elite Properties recruit went back in to property management lately — a job she doesn’t really like — even though she’s a very strong, experienced agent, who did better than most agents are doing last year.  I was talking to her today and she was finally pushed over the edge by tire-kickers and a short sale that is taking forever to close. 

It was sure nice to hear from her when she returned my call, but I wish it had been under better circumstances.

It’s one thing to see agents who are not doing well leaving the business — which happens even in up markets.  When strong people leave, that’s pretty disquieting.

What Kind of Blog Is This

That’s another thing:  What kind of blog is this.  For many years this blog has been about real estate in the Sacramento area.  A real estate blog vendor was nice enough to give us props recently as a purveyor of lots of good market information.

Sometimes I wish we had an exciting blog, where we wrote about things like showing homes with our IPhones and called Glen Turkee an idiot and had lots of people commenting about who’s the vendor and hey, let’s bring the Diet Coke and Chips.

Mostly, as I’ve pointed out, the A-list folks pretty much ignore me and I pretty much ignore them.  We’re not on anyone’s A-List.

It could still be a good blog, though.  I have high hopes.

Stupid Spam Comments

Generally in response to the shorter posts about real estate that Purva’s been writing lately, we’ve been getting all sorts of comments from people named “Florida Real Estate” and “Georgia Fishing Vacation”.

Granted, this is not the kind of blog where we write about IPhones and GlenTurkee, so we don’t get a lot of comments.

And sometimes admittedly I’ve been a bit heavy handed with the moderate button, in the case of bubblers who often just want to stir things up and people trying to sell crap in Boise.

But look, if you want to comment on the blog such as it is, you should do yourself a favor and Google the following:  “nofollow tag”.  If you figure out what the search engines figured out five years ago, you’ll be more likely to come in here and tell us you’re real name.  Joe Scampi, or Peggy-Sue Hiply, or whatever it is.  We spend a lot of time writing stuff, and we go by our names.  If you’re going to do link spam, at least do it someplace where you’re going to get a benefit.  Don’t do it here.

That’s Enough Silly Ranting for One Day

Actually it’s enough for longer than that, but bear with me — I’m not sure I’m done.

Lani Anglin has asked me to use my phenomenal influence (or was that “phrenological influence” — my head feels a bit bumpy) to ask you to help the victims of the recent Tornados in the South.

So yeah, do that. 

If you want to help, you can make a secure, online donation at the American Red Cross.

Thanks!

On January 1st, be sure to look out for our new set of questions and answers for Sacramento buyers. This is a feature in which I will be answering questions that might come up in your mind when you think about buying your first home and will deal with all aspects of the home buying process – from looking for a house to closing escrow and getting keys.

We might even release an e-book later with these questions and answers. So check back often… and learn!

Congratulations to Brandon and Jessica on buying their first home together!

This couple just got a fantastic price on a home in the Foothill Farms area of 95841 with zero down. In fact, when the final net sheet was in, their total out of pocket expenses were a little more than $250. That includes closing costs, appraisal and all other fees. The seller paid everything! The home was an REO which had been priced extremely well and I’m sure the new homeowners will reap the rewards of this excellent decision just five years from today.

I believe the smartest thing these savvy home buyers did was to get a market analysis on the areas they were interested in and then pick one that has shown the best appreciation historically. Also, with Jessica’s detail oriented mind, we were able to coordinate with the title company, lender and everyone else involved perfectly, making this one of the smoothest transactions I have ever done.

If it wasn’t for the lender (with the lending rules changing everyday) this transaction would have been seamless. But all’s well that ends well!

Congratulations Joe and Rudy.  Buried hatchets are always good, especially if one can somehow work some Jackie Chan into the thread.

According to Wikipedia, the second best web site on the Internet next to this one, the fellow who called economics “The Dismal Science” was Thomas Carlyle, and he coined that phrase in response to the theories of Robert Malthus.  That’s the same Robert Malthus whose work on the limits of the food supply compared to the increase in population growth was one of the pillar’s of Darwin’s theory of Natural Selection.

See what you can learn on a real estate web site?

I don’t know about economics being intrinsically dismal, but I do suspect that dismal news helps us to sustain a dismal market, just as good news helps us to sustain a strong market.  People tend to operate off of their own perceptions, rather than reality.

Example:  on December 15, 2005, Freddie Mac reported that for that week the average mortgage rate for a 30 year fixed loan was 6.30% at .5 point.  That month the average home sold in Sacramento County for $246.19 per square foot.  Under those conditions, 1,480 buyers purchased a home in Sacramento County.

Now it’s almost the same time of year in 2007.  According to the latest Freddie Mac survey, interest is at 6.11% at .5 point.  The average price per square foot is $184.05.  Yet based on current projections, it’s looking like less than 600 homes will sell this December.  Maybe it’ll get up to 700 or so, but to give you an idea, as of now it’s December 14th and 276 units have closed in Sacramento County.

“So we keep waiting
(waiting)
Waiting on the world to change
We keep on waiting
(waiting)
Waiting on the world to change”

– John Mayer

The Joke About the Airplane

A four engine jet loses an engine.  The pilot comes over the loudspeaker and says “Attention ladies and gentlemen, please don’t be alarmed, but we’ve shut down one of our engines as a precaution.  Our flight will be delayed 20 minutes.”

Later a second engine goes out, and a third, and each time the pilot announces a longer delay.

Alarmed, one passenger wonders out loud what will happen if the last engine fails?

“In that case”, says the stewardess, “we’ll be up here all day.”

What Does the Joke About the Airplane Have to Do With It?

$246.19 per square foot:  1,480 buyers buy homes

$184.05 per square foot:  less than 700 buyers buy homes

Oh my gosh, what will happen if we get down to $10.00 per square foot?

When that happens, no one will buy anything.

This is a not so focused real estate article.  I’ll let you in on a secret:  we’ll be lucky if it comes into focus at all by the end.

Of course, the flip side of a total lack of structure is a great deal of freedom.  I could, as it were, romp through this article willy nilly, and you could marvel that I don’t fly sheer through one of its flimsy walls.

I just didn’t have the heart for a market update today, to be honest.  Prices are down.  Volume is down.

On the other hand, at Elite Properties, it’s December and we should have a couple of escrows closing within the next week or so, so I consider us ahead of the pack. 

We’re not super high maintenance, just good solid agents who get things done.  We don’t have a lot of big hair.

Our articles usually are a lot more focused than this, however.

It’s not like there aren’t some things that have been on my mind lately, that I was half-heartedly planning to focus on.  If my focusing muse hadn’t flown off somewhere to lie on a couch sipping lattes, I might have tackled:

• What do real estate production boasts really tell you?
• Low ball offers and the women who love them.
• Breaking the ActiveRain habit without expensive gum or “the patch”.
• What’s up with financing, anyway?
• How perception drives real estate.
• The new mortgage blog.  [There's a new mortgage blog?]

In fact, come to think of it, this would make a really nifty little writing agenda for the next week or so. 

It’s hardly as ambitious as Purva’s 312 real estate questions.  I really should ask her to send me that list.  312?  That’s a book length set of questions, all right.

Are we there yet?

One of the most frustrating things about being a real estate agent or broker is the extent to which you have to hound other people to work, and / or do their job for them.

You’d think that people who drive around all weekend long without necessarily getting paid for it would pay attention when they have an escrow open.  An escrow means you probably are going to get paid now.  That would be a really good point to start paying more attention.

Unfortunately, many, many of the agents in this business seem to pay more attention to work that might get them paid than the work that will get them paid.  They treat driving around all weekend hoping for something to happen like important work (and don’t get me wrong — it is), but then when something does happen, they ignore it.

The upshot is that we have to beg other agents to do work they should be doing as part of their job, while they slip their deadlines.  Right now I have a buyer in contract with a team at K_____ W______ (not to mention any names).  Cash offer on a short sale, written in August.  Here it is almost close of escrow, three months later, and we’ve got all our short sale approvals from the bank, but we’re still holding their hands on disclosures.

Grow up.  Do your paperwork.  Don’t make me kill again.

An article in the Sacramento Bee this morning caught my eye. Apparently, there have been a few cases of women stealing things during an Open House of luxury homes. According to the Realtor who was holding the Open House, they looked like serious buyers. So now it’s getting to where they’re going to ask for picture IDs when someone walks into an Open House.

By the way, just what does a buyer look like? I’d like to know. In fact, I’d love to know. It would be a lot easier if people walked around with a little light flashing over their heads that said “buyer!”

Oh well, so much for my laziness in prospecting.

Here’s are some things you can do to help make sure your home doesn’t get burglarized during an Open House:

• Make sure you put your jewelry and other valuables away under lock and key.
• Make sure your agent walks with the person through the home.

And no, I can’t tell by looking at someone if they’re a buyer. I wish I could.

As much as I sometimes think I’m hot stuff, with my 2003-vintage real estate blog, I don’t always keep up with life on the Internets as well as I should.

I only learned about Cyber Monday today, co-incidentally, on Cyber Monday, the first Monday after Thanksgiving.  This is the online retailer equivalent of Black Friday, the day after Thanksgiving, so named because it is the busiest day for shopping and the day that retailers begin to run their business “in the black” for the year.

The reason cyber Monday takes place the next Monday is the same reason why Monday has always traditionally been our best day for people inquiring about homes, and our busiest web site traffic day.  That reason is that people generally have faster Internet connections at home than at work, so when they go back to work on the Monday they can use the boss’s broadband connection to inquire about real estate, or to buy things on line, from places like (go figure), CyberMonday.com.

So there you have it.  Happy Cyber Monday. 

I hope your turkey was good.  I spent the last four days reading science fiction and eating turkey.  What a treat.  Today my Realtor® on duty over the weekend called to tell me how busy it was over the weekend, with lots of inquiries and more showings than usual then, too.

So it looked like some of you couldn’t wait for Cyber Monday.

That works for me!

One of the great things about real estate is that there are a host of consumer protection laws — mainly at the state and federal level — that we have to follow.  However, one of the aspects of my job that bugs me is when it turns out that one of these laws is just superfluous smoke and mirrors.

According to web site of The US Department of Housing and Urban Development, HUD, which enforces the Real Estate Settlement and Procedures Act (RESPA) Section 9 of that law

…prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

Wow, if you’re a buyer, that sounds great, doesn’t it?  You get to pick, period.  Pretty clear cut and straightforward.  Let’s go ahead and re-elect the lawmakers who wrote that, shall we?

So What’s Up in Sacramento County?

In Sacramento County, the tradition is that the seller picks the title company, and the reason given is that they pay for the CLTA (owner’s title policy).  Any buyer getting financing, however, still needs to get — and generally, to pay for — an ALTA policy to protect the lender. 

HUD’s position on this?  According to a letter written by Rebecca Holtz, acting Director of Consumer Affairs for HUD, in a letter written in 2000 (regarding a similar situation, not Sacramento County specifically, but the shoe fits):

In summary, the Department [HUD] will not enforce Section 9 of RESPA against a seller who selects the title insurance policy if the seller is paying for the owner’s title insurance policy, and does not require the buyer to use the title insurance company for the simultaneously issued lender’s policy.

(A huge thank you to Judy Benton at CAR Legal for forwarding this along.)

OK, so far so good, right?  The seller’s paying for CLTA, so no skin off the buyer’s nose there.  The buyer can buy the ALTA policy from a different company, right?

Wrong.  Take the case of Placer Title for the purchase of a $380,000 home.  A CLTA policy costs $1,584.00.  The ALTA Policy costs $585.20, if it’s issued concurrently.  What does an independent ALTA title insurance policy cost?

I spoke to Placer Title:  they don’t have pricing for that, because it wouldn’t make sense to do it.   But to give you a rough idea, the ALTA policy on a refinance loan of $380,000 would be $1,008.00.

So, according to HUD logic, the seller can’t “directly or indirectly” require you to use a certain title company, but “directly or indirectly” doesn’t include requiring that you either use their company or pay significantly more to go elsewhere.

Oh well, at least if there’s a major hurricane you can count on the government to fly water and supplies in and not hang around on vacation.  Right? 

Oh, wait…

Yes, nowadays most Realtors have blogs. We also just type up offers on WinForms and email them immediately to our clients in pdf format. We’ve learned to use websites to promote our listings and order flyers online. We make a huge effort to draw people to our website, blending traditional methods like yard signs and Open Houses and online marketing. Some clients can even sign electronically if they’re away from home.

Now it looks like companies we do business with are catching on. The lockbox is going high-tech. According to the Sacramento Bee, the lockbox Realtors use to enter a home is now going to have a panic button that will send a message to five people the Realtor chooses, just in case he/she feels in danger. I must admit, I have often worried about going into a home alone with someone I do not know.

The lockbox, which contains the key to the home, already has the ability to tell the listing agent that the home has been shown, but GE – the maker of the lockbox – plans on adding new features soon. These will include information about the home, perhaps instructions such as “Don’t let the cat out!” (a familiar one!) and better ability to communicate with the other agent. This might just come in handy when clients see a home they haven’t made an appointment to go inside. If the lockbox tells me it’s vacant and it’s okay for me to enter and show it, it would save me the time of going back to the computer and checking the showing instructions.

All I can say is I’m looking forward to the changes.