September 2007

It was 9:00 AM on a Saturday. The setting was idyllic, an ordinary residential street in an ordinary suburban neighborhood. Later, when the story of the day was retold, those who survived the ordeal would recognize that this day’s overcast skies and the threat of rain were in fact omens of the impending ugliness. Yet, on this morning, the unsuspecting families in this otherwise orderly community had not fully shaken the comforting bathrobe of a peaceful night’s slumber and were blissfully unaware of what was to come.

And come, they did. The insurgent troops appeared seemingly out of nowhere, the tanks and Hummers and traditional vehicles of aggression replaced by their modern-day counterparts: Lexuses (Lexi?), BMWs, and one lone pick-up truck. The soldiers converged, but stealth was not necessary this day. This would be a battle of hand-to-hand combat. And, as in most contests for sovereignty, their would be no victors.

“Good morning. I am Earl from What Were You Thinking? Property Inspections. Let’s take a look at this deathtrap, shall we?”

Over the course of the next three days, I will have the honor of attending three property inspections. The homes under assault will range from the 45-year-old property to the 10-year-new. I can guarantee that the reports for each will be indistinguishable save the buyer name on the attached personal check.

Inspection reports and inspectors are funny this way. The foundation slab split entirely in two with evidence of past civilizations wedged in the gap and the tub which might benefit from a little recaulking will be presented as having the same Defcon level of urgency. Tricky things are inspections. The inspector is charged with finding fault, the buyer and their agent are charged with sorting through the list of horrors to differentiate the truly important deal-breaking items from the ordinary, cosmetic, wear-and-tear issues, and the seller is almost always left feeling offended and defensive.

It is all negotiable, of course, but negotiations directly between principals most often regress to conversations involving hot glue guns, potato peelers, pinking shears and other commonly found and readily available weapons of everyday home life. This is why it is essential that the real estate agent accompany clients to the property inspection. Left unattended, the agents would only return later to find the buyers and sellers beating the crap out of each other with rusty lead-based paint cans and Fiesta Ware to determine who will be paying to have the back door rescreened. 

Now, as I gear up for the first of my inspections this morning and prepare to don my big girl Realtor uniform and pile into my shamefully under-armored VW Bug-Mobile, I take a moment to glance around my own homestead and wonder, “What if I were the target today?” At my home, where there is no ruling government, where anarchy reigns and where the rebel factions (15 and 17 year’s old respectively) have methodically set about destroying the very society in which they must coexist for the foreseeable future, the final inspection report summary would probably look something like this:

House utterly sucks. For the love of man, run!

My home just had only its seventh birthday, but where inspections are concerned, this is immaterial.

• Bathroom #2 - Fossilized arachnids in shower stall pose health risks. (They are pets, stupid. They have been there so long, I have named them.) Toilet flushing mechanism needs replacing. (Does not! Just lift the tank cover and pull on the chain attached to the little floaty-thing.)
• Kitchen - Chips in granite counter tops noted. (Yes, I know. After years of repeatedly whacking the corner with empty wine bottles as I whisk them off to the recycling bin, that is considered ”normal wear and tear”. At least I recycle!) Kitchen faucet leaks. (Only when you turn it on REALLY BIG.) Microwave makes unusual noise when operated. (Does the coffee get hot or not? I would submit, yes.) Oven, when heated to 350 degrees, registers only 342 degrees. Recommend service. (We have a, what did you call it, oven?)
• Presence of pets suggested by stains on floor covering over there (five-spice chicken), there (squirrel parts), and there (we prefer not to speculate). Recommend cleaning carpets if sensitive to dander. (Hey, buddy! Don’t touch that dog hair! I am saving up to make a new dog some day.)
• Laundry - Accumulated lint in dryer vent poses fire risk. (Where is this laundry room of which you speak?)
• Garage - Many areas inaccessible and not inspected. (Items to convey: Two Barbie Dream Houses, three bikes with flat tires, one “All About Me” poster from Mr. Ferguson’s 1995 Kindergarten class, and assorted rollerblades which only fit Gary Coleman. Items not to convey: Gary Coleman.)
• Exterior - Areas of dead or dying landscaping noted. Recommend testing/adjusting irrigation. (Recommend not owning a 95 pound male dog who eats five-spice chicken, furry rodents, and a largish rock on at least one known occasion, and squats like a girl.)
• Bathroom #3 (children’s bath) - Water damage to drywall noted next to tub/shower enclosure. (Duh. At least they bathe.) Plumbing at sinks could not be inspected due to under-cabinet storage. (And, where would you like them to store their empty hair-product bottles, the entire line of Tammy Faye Bakker Make Me Pretty products, and Tiger Beat magazines and returned homework assignments dating back to the British Invasion? Wait a minute - So that’s where my Cuisinart went!)

I could go on, but I’m already depressed. I am off to invade someone else’s previously safe-haven. Time to go to war.

I watched a combative President Bush at his press conference this morning and it inspired me to go out on my own limb. Of course, he has nothing to lose.

So, at the considerable risk of painting a big target on my back, here goes:

1. Prohibit mortgage brokers from acting as real estate agents for the same principal in a transaction (and vice-versa). This is a total conflict of interest;

2. Establish a separate license for mortgage brokers and require an Agency/Fiduciary relationship with their borrowers;

3. Increase conforming loan limits (currently $417,000) in California to at least $500,000 (median sales price was $586,000 in July). Review every five years for adjustments;

4. Update and/or overhaul the FHA by increasing the loan limits, currently capped at $362,790. This is pretty much worthless for California and is, thankfully, currently being discussed in Congress.

5. VA Loans - see No. 4 above;

6. Require a minimum of 5% down payment (except FHA and VA) unless borrower is Bill Gates or of similar credit.

7. Eliminate pre-payment penalties or, at a minimum allow borrowers to purchase, upfront for a reasonable fee, an “escape clause” from pre-payment penalties after the first year of a loan on homes where the loan-to-value is greater than 95%. Yes, an appraisal is needed, but you would need it for a refinance, anyway;

8. Absolutely, positively outlaw the use of negative amortization loans. No matter how many times it’s explained to people, most still don’t get it.

At this point, I must take a break to go to Starbucks for Kris (it’s part of our pre-nup), so the rest of this post shall become interactive, at least until I return from coffee-land. Go for it:    

9. Your suggestion here;

(Since I, Kris Berg, have full access to the Blog Admin Panel and all authority and privilege that goes with the title of Administrator, I have hi-jacked Steve’s post to add my own #9).

Bury this in your front yard:

10. Your suggestion here;

We seem to have become Termite Central lately. This is another Ask the Broker email, received yesterday, regarding our home-ingesting friends:

I am planning on selling my house but have been told I have both drywood and subterranean termites.  My quandary is what method to use.  I have quotes for both tenting and using Bora Care and Termiticide Termidor.  What do realtors or lending companies think. I would prefer using a method other than tenting but I don’t want a problem down the line.  I only want to have it done once.

Thanks so much for any advice you can give me.

I don’t know where your home is, but I’ll give you what I know about our local practices. If a contract calls for the home to be free of active infestation, which is most typically the case, the buyer and the lender will expect a licensed termite company to deliver a “clearance” prior to close of escrow. How you get the clearance can vary. In many pest inspection reports where evidence of drywood termites is noted, primary treatment (fumigation) and secondary treatment (localized treatment, such as injection) will be identified. Often, the report will caution that the secondary treatment method, which is typically less costly than fumigation, is considered “substandard”, yet opting for this path will still result in receiving the necessary clearance.

When issues arise, it is usually because the seller wants to take the least expensive route while the buyer wants the primary solution. A clearance is a clearance in the lender’s eyes, but the Wood Destroying Pests and Organisms Report itself is a disclosure issue and a buyer contingency, so the buyer may elect to dictate the treatment method as a condition of the purchase. In other words, it becomes negotiable.

As far as the products you mention, Bora Care and Termiticide Termidor, I would have to refer you to a professional pest control company. As an agent, I do not have specific knowledge of treatment options or their effectiveness - I leave this to the professionals. From the standpoint of the agents, the lenders and the would-be buyers, the bigger issue is not how you accomplish the remediation but that the home is ultimately certified as termite-free.

Having said that, I will confess to having worked with a couple of buyers over the years who would not have purchased a home which required fumigation, but in my experience, this is the exception to the rule.

I’ve been playing around with Google Maps. On our website, we have been (slowly) adding pages under our “Better Know a Neighborhood” drop down feature, but it became apparent that over time the drop down menu would be unwieldy and confusing. So, I have replaced the drop-down listing each community we have featured to date with a single mash-up. The map allows the user to click on the area in the map for a brief neighborhood overview, and then the “More Info” link will take them to the related pages on our site.

I think this is better, but always value the opinions of others, as I am not entirely objective.

View Larger Map
 

I think our seller’s home has gone international! I hope they like it in Europe, although I really can’t be sure. Here is what Derherold had to say about us at the Der Makler Blog (Is “the Der” redundant?):

Hier ein Beispiel der Maklerin Kris Berg aus San Diego, das zeigt, was man aus Fotos alles herausholen kann … zugunsten der “Werbung” um einen neuen Eigentümer:
http://sandiegohomeblog.com/2007/09/10/some-homes-just-scream-shoot-me-at-night/#comment-139198
Man darf erwähnen, daß die Kollegin professionelle Fotografen beauftragt - und das nicht nur für Immobilien mit einem Verkaufswert von mehr als 300.000 Euro !

If anyone out there speaks German, please tell me if this is good or bad. Best I can tell, he is saying something about me, our photos and Eminem’s next concert tour. To Derherold, I would post a reciprocal comment on your blog, but I am shamefully one of those boorish Americans who never learned another language.

 Marketing a listing is no longer an undertaking for the less-inspired (or less-capitalized). It takes time and money, but it mostly takes a tool box runeth over for giving each home the full-exposure it deserves.

We have never believed in a marketing “class system”. What is good for the goose is typically good for the gosling as well, yet sometimes a home will have features or a location which just call for something different.

Here is a photo of our newest listing which was taken Friday.

It is lovely, of course, but this particularly home’s uniqueness required a little extra pizzazz. Enter Twilight Photography:

This custom Del Cerro Heights home lights up like a candle with the nighttime shooting, but it is the view that really cried for an evening shoot. San Diegans know about our summer marine layer which is admittedly not the end of the world, unless you are trying to promote a view home.

Know any takers? The webpage isn’t ready to go until tomorrow, but if you are in the $1 million plus range, you might want to take a look at the virtual tour.