photo credit: akaalias

Hellooooo! Is anybody there?

It has been so quiet over the past week, you can hear a call drop. And it is just so hard to be a blur of activity, a working machine, when the real estate world feels like it is operating under a cone of silence. It must be August.

This happens every year, and I am having to remind myself that a lot of the lethargy we are seeing now may in fact be seasonal and not market-driven. Our market is less than ideal; we have consensus on this point. Buyers are buried under a barrage of reports of the end of the world as we know it, fearful that a purchase today would cause their friends to lob taunts and jeers in their general direction. There are always those motivated few, the few with a sense of urgency, but absent a true “need” to move in August, most people tend to put any buying (and selling) “wants” temporarily on the back burner.

So what does this mean if your home is currently offered for sale? Patience. Every summer-end, I find myself repeating this little speech: From now through January, stuff is going on, stuff outside of real estate. If seasonal trends hold true, showings will be fewer, and open houses will not likely be festive beehives of activity. We all enjoy competing demands this time of year, from the back-to-school daze and the vacations, to the “What am I going to be?” costume decisions and and the social and gift-buying obligations. The people who do look at your home during the next several months, however, probably mean business. And, don’t forget that there are a whole bunch of busy would-be sellers out there who are putting off listing until the relatives leave, so your competition is arguably less.

My father-in-law used to say, “Don’t fight the feeling,” and this is particularly good advice right now. When someone decides to view your home during the next several months, they have probably done so because it is a priority, a higher priority than basting the turkey. Expect fewer showings, but know that the quality of your showings will be greater for awhile. It always is. Veteran agents know the season all too well and use this time to improve systems, attend to those “projects” which have been languishing since last August, and generally mobilize for the next seasonal wave. Sellers would be wise to use this time to enjoy the things their potential buyers are enjoying while they aren’t looking at homes.

Lately it has been all about the market, but sometimes it’s just August.

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I say that Jim was our A-lister, but the reality is that he was the only name on our list. For almost as long as we have been in real estate, Jim has been a fixture in our clients’ homes and in our own. He did what he did primarily because he loved what he did. When he had knee replacement surgery last year, he took all of one month off before he was on the top rung of a ladder in our living room (the one that says “This is not a step!”) installing our new ceiling fan.

His hourly rate was well below market, but Jim made up for it with hours. He was a “visitor,” and each job was about one-half work and one-half conversation. On days when I was busiest, I avoided eye contact, knowing that the meter was running and I might be finding myself pulling up a bar stool to swap stories.  I invariably ended up swapping stories regardless. Jim was one of the kindest, sincerest people you could ever meet, and it was hard to say no.

We understand that his family is with him in Denver today. We pray he is at peace. Finding ourselves short on words, we have decided to rerun this post originally published by Steve in May, 2007, in his honor.ландшафт Our deepest prayers go out to his family.

As real estate agents we have a wide array of technical tools available to make ourselves more effective today - laptops, notebooks, Blackberries, and Treos to name a few. We also have an arsenal that includes e-mail, web sites, digital pictures, video tours, podcasts, blogs, and much more. We can literally expose properties to the world.

But for many transactions it’s the simpler, back to the basics type of assets that we need to bring to bear. Once a purchase agreement is consummated, the due diligence period begins. Virtually every home is professionally inspected and since inspectors have a secret agreement to always find something, if not many things, wrong (it’s in their oath when they become inspectors), a request for repairs list is commonly presented to the seller. If the items are agreed upon the transaction moves forward. If not, the transaction may be a risk.

So, notwithstanding all of today’s technology, in many cases the success or failure of a transaction is defined by how well you can negotiate and execute the repair list. Regardless of who is responsible for whatever repairs are agreed upon, it is common that some “punch list” items are beyond the capability or desire of the buyer or seller to complete, but they may not be significant enough to need a licensed vendor such as a plumber, electrician, appliance guy, etc. In most cases, the buyer and/or seller look to their agent to arrange for these items to be resolved.

Enter the Handyman. More specifically, in this case the Scripps Ranch Handyman, Jim Reed. Yes, the good ol’ handyman. It is increasingly rare to be able to find a really good one; one who is a professional and who you, as the agent, can count on to fix a wide range of deficiencies in the home, know the building code, do it right (in many cases better than the licensed vendor) and not charge $100+ just to show up. I fear the handyman is a rare and threatened breed.

After many years of trying to refine our skills as agents and to acquire new skills, we have come to appreciate the value of such a talented individual. Kris and I don’t promote our stable of vendors very often (ever). Our best are already in great demand. But in this case we have someone who is approaching icon status. Take the top five or six agents that work the Scripps Ranch market and combine all of the homes they have entered over the years and it still doesn’t approach the number that Jim Reed has seen - and “fixed.”

Amazingly, almost every home we sell in Scripps is one that Jim has not only been in for the existing owner, but also for the two or three prior owners. He knows the whole history of so many homes, it’s ridiculous. And he has great stories. I guess since he has been doing this for so long, he knows where all the skeletons are buried, so to speak.

But, like anybody who has done anything for 35 years, Jim is starting to slow down. After each job, I meet with him at the back of his truck where he sits on his bumper to rest and we discuss how the job went. His knees are a problem and he is stalling on getting needed knee replacement operations - for both. Selfishly, I don’t know what I would do if he was out of commission for 6 to 8 weeks. May as well shut down, or ask Kris to give my power tools back.

What’s funny is that every month we see his little ad in the classified section of the Scripps Ranch Newsletter - “Scripps Ranch Handyman. One call does it all!” Why he runs this ad, I’ll never know. Jim is always booked up for weeks or even months at a time. And generally, he will not do work in other communities. Why? Because he doesn’t have to. That, and because (he proudly tells us this) his truck gets about 6 miles to the gallon. I had to practically beg him to do some work for a property I sold in Pacific Beach a few months ago. When there he was telling me stories and pointing in various directions of homes he had done in PB in past decades. Not anymore, except for my begging.

Jim’s office is his truck. When he raises the back panel, you are immediately impressed with the notion that Home Depot has thrown up inside. Every imaginable tool and spare part one could need to rebuild the Parthenon is on display, and those spare parts have saved our sellers and their repair projects more than a few times.

Our Scripps Ranch Handyman is incredibly good at what he does, but I get the sense his work is not about the money, at least not at this point. He loves the work, but mostly he loves the people. And, after all, this is a people business.

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Hat tip to Benn at Agent Genius for directing me to RockYou, a super-cool site for creating slide shows. I put together this montage of Scripps Ranch photos I had hanging out in my hard drive. Now I just need to figure out what to do with it.

(Edited to note that while the music was nice, it was driving me crazy, and it occurred to me that the music would be playing each time someone accessed our front page in perpetuity. Therefore, the soundtrack has been nuked.)

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I had this amazingly thought-provoking post of the epic variety in the hopper this morning when I took a call from an agent on one of our listings. OK, fine. The other post wasn’t all that great, but I couldn’t let this one go.

The agent was phoning to arrange a showing. I dutifully told her, just in case she had missed it, that we reduced the price just last night. “Are they motivated?” she asked. “Well, yes,” I said. “They want to sell their home, which is why it is offered for sale.”

Motivated? I am just so fed up with the “Are they motivated” question. So, I will attempt to answer it once here, and the answer applies to all of our listings — past, present and future.

1. The seller has listed his home for sale because he wants to sell it. He has not done so because he is a showing and staging hobbyist who thrills at the opportunity to have a cavalcade of perfect strangers rummaging through his closets at the most inconvenient times.
2. Using logic, we can conclude that the corollary to #1 above is this: If the seller was not motivated to sell, his home wouldn’t be offered for sale.
3. See #1 above.

As a matter of disclosure, we do not represent home owners who have no true interest in selling, nor do we represent home owners who expect a price closer to the National Debt than to true market value. We can’t, because those homes will not sell, and we only make a living when homes sell.

Now, I recognize that my truisms do not always apply to every agent and to every agent’s  listings. We see homes every day where the prices suggest someone has been sniffing the Elmer’s. But, if you think the price is high, do not call and argue with me. The list price is not going to get any lower just because you wish it to be so or because it is more than your client’s can afford. It is going to get lower when market conditions demand it and the seller agrees to it. In the meantime, if your clients like the home, write an offer which reflects the buyer’s perception of value, and we can let our clients “talk about it.”

And, please, don’t ask me if the seller is “motivated.” What could you possibly hope that I would say? Giving an answer such as, “Why, yes, they are willing to sell for pennies on the dollar!” would justify stripping me of my license and thumping me upside my big fiduciary head with it for good measure.  Ask me where they are going, why they are going, and how soon they need to be there. If I am authorized to tell you, I will, and then you can deduce my client’s “motivation” all on your own.

Selling a home is time-consuming, it can be stressful, and it is always an intrusion. It is rarely a barrel of monkeys. Suggesting that the seller, my client, is just messing around is insulting to both of us. We would all have better things to do if that was the case.

“But,” she pushed on, “are they willing to take less because of all the short sales?”

Less than what? Good grief. I feel another post coming on.

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photo credit: spaceodissey

I believe I have set a record. It has been a full seven days since I have posted here, and somewhere around day four of my sabbatical I stopped worrying about it. Circumstances were simply beyond my control, and a blog post last week simply wasn’t in the cards.

My father had an uncanny knack for ignoring the things he couldn’t do anything about. I think it’s a guy thing, and I hated him for this. I, on the other hand, am an obsesser. I tend to take a trip to crazy town every time I sense I am not driving the bus.

Me, worry?

The truth is, I’m a worrier by nature. I worry when I am too busy, and I worry when business is slow. And when things seem to be chugging along according to the divine plan, I worry that I don’t have anything to worry about. Now, in fact, I am worrying that I just ended a sentence with a preposition.

I am seeing a lot of people like me in this market. This morning’s requisite Chicken Little article in the San Diego Union Tribune is one fine example. “Housing prices sink,” trumpets the headline. Sure, sales for July were up 10.5% in San Diego County from last year, but where’s the fun in that? Prices are down, so fortunately we still have something to worry about.

Nearly 41% of the sales, they report, involved foreclosure sales. This is bad. Or is it good?  We know that the mortgage mess has left us with a legacy of distress sales, and these distress sales will be with us for awhile. The fact that the foreclosed homes are selling in great numbers should be welcomed; our market won’t reverse course until we complete the cleansing process, and this is going to take some time and additional price decline. We can worry about this, or we can acknowledge it and move on.

The F-word

“Foreclosure” has become the new f-bomb. New foreclosure listings are still outpacing foreclosure sales, says the article, and we are reminded that this should be cause for concern. I will argue that it is what it is, and focusing on the nature of the sale is a lot of wasted fretting at this point. We will work through the distress sales in time; we will work through them because they are a symptom of an epidemic, an epidemic of irresponsible lending practices, which has been isolated and quarantined.

This is mainly because getting a home loan today is as simple as threading a needle wearing a ski mask. The lending pendulum has swung too far in the other direction, and obtaining financing leaves today’s buyer feeling a little like Michael Phelps but without the endorsements. There are plenty of people who want to buy in today’s market, at today’s prices, but for whom the door has been closed due to tighter underwriting standards. This is bad, and it is good. It is a matter of perspective.

If we weren’t so busy using the f-word, we would be acknowledging that traditional listings are also outpacing traditional sales. Our market is equal opportunity. Market times in the I-15 corridor are generally running 60 to 80 days, depending on the community. This is bad if you are a seller and only remember 2003. On the other hand, if you had the pleasure of listing a home for sale in the mid-’90s, life is not too shabby. And the same goes for prices.

Time to unwind and rewind

Perhaps agents, sellers, buyers, the whole lot, should maybe stop worrying so much. We can fight our circumstances and obsess about our little paradigm shift, or we can deal. If we take a step back, this market is not fundamentally different from any other. There are people who want to buy homes for the lowest possible price, people who want to sell homes for the highest possible price, and agents who want to make a living assisting them in the transaction.

What is different is that our circumstances are forcing us all to push the rewind button on our thinking. Being a real estate agent, for all but the exceptional few, has not historically involved out-earning a Hollywood A-lister. The past half-decade, a time during which anyone who could find their way to the testing center and successfully fill in the bubbles on a Scantron was guaranteed a six-figure income, was an anomaly. Homes have not historically been our singular investment vehicles. To our parents and grandparents, their homes represented security and shelter, not a mega-lotto ticket. The fact that many saw their “investments” double in three years was an exception, not the rule. And home buyers have traditionally had to work and save toward this end and demonstrate that they could ultimately afford the American Dream, rather than having the dream handed out as freely as potsticker samples at Costco.

I couldn’t blog last week because this week I am one daughter short. In a few short days, I saw my own paradigm shift in a very big way. We pushed a personal rewind button of sorts. Operation Dorm Delivery was a success, but while we have spent the past 18 years preparing for this day, nothing can entirely prepare you for the reality. Life, like the real estate market, is cyclical. Now I have less laundry, less arguing (”Clean your room, and release that headlock on your sister!), and a smaller grocery bill. And I have more time to blog.

It’s good, and it’s bad.

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photo credit: TheTruthAboutMortgage.com

I vented about the joys of the short sale last week on Inman News. Yesterday, the San Diego Union Tribune published the story of an East County resident who lived the nightmare, not as an agent, but as a person simply trying to save his home. Sadly, he failed, and his story is so incredible, you can’t make this stuff up.

For those who are rusty on the concept of short sales, we talked about it here. From the CliffsNotes, short sales are sales in which the settlement charges (costs of sale including the pay-off of outstanding loans) will exceed the sale price of the home. Unfortunately, we aren’t seeing a light at the end of our short tunnel; these situations are going to be with us for awhile.

A year ago, we saw agents tending to avoid short sales like that gallon of expired milk. First, the whole idea of negotiating with a faceless lender was daunting; for so many of us who were doing other things during the last down market, the idea of navigating these waters was mysterious, the disclosures ominous, and the shear level of difficulty involved in meeting the paperwork requirements enormous.

Second, an agent takes on a potential short sale listing at great risk. There is no guarantee a lender will ultimately accept a short pay-off and, even if the odds are favorable, the entire exercise often becomes a game of Beat the Clock. As agents, we make the daily calls to the lender begging for action, calls during which we may speak to a half-dozen or more different people looking at different computer screens, each of whom will tell us we will be hearing something in “a week to ten days.” Each new day, we rinse and repeat, but we ultimately have no control over the pace at which they will consider and act on our client’s request. So, often, the weeks become months, the buyer loses interest, and we find ourselves in a position of having to start the process again. And sometimes, it is just too late.

Finally, while most of us have resigned ourselves to short sale listings, both because they are becoming so commonplace that they can’t be avoided and because we feel a social obligation to assist all sellers, even when it is not convenient, comfortable, or even lucrative, agents representing buyers today are running for the hills in greater numbers at the first sign of bank involvement. They are doing this for all of the reasons previously mentioned, and they are doing this because short sales do not pay handsomely. The listing contract can call for a 6% or a 16% commission, but if the bank’s approval after months of time and effort stipulates that I will make $1.95, that is what I will make. We have yet to see a short sale transaction of our own that didn’t involve an arbitrary, eleventh hour pay cut to the agents.

In Phoenix, it seems that even the listing agents are thinking twice about taking on short sale listings. Phoenix is a different market, however. While Jay Thompson cites a 90 to 95% failure rate for attempted short sales in his market, Steve and I are currently (and fortunately) batting a thousand.  But it hasn’t come without a lot of brain damage along the way.

Short sales are, at least for the foreseeable future, going to be a sad reality of our market. If you find yourself in the position of needing to sell short, recognize that the process is complex and potentially lengthy. There may be tax and credit consequences, so it is advisable to chat with a CPA or attorney at the first sign of trouble. Your second call should be to an agent who has some experience with these transactions and is prepared to stand by you throughout the process.

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I got a little suspicous when I first posted this Altos chart showing the Market Action Index (less than 30 suggests a buyer’s market, duh) and weekly absorption (homes opening escrow) for Scripps Ranch. Specifically, this data shows Scripps Ranch detached homes going into escrow at a clip of approximately 8 to 10 per week, yet I know that we aren’t closing 40 homes a month.

My own experience tells me why we are seeing a discrepancy; more homes are failing to close once under contract or, as we more commonly say, falling out of escrow.

This morning I took a quick peek into the statistics, courtesy of the Sandicor Multiple Listing Service. I looked at both homes which successfully recorded in July and homes currently in escrow to see how many of these had experienced previous failed attempts.

On the one hand, I expected the data to be worse (more “fallout”). On the other hand, if you have found yourself in that smaller slice of the pie, it’s pretty bad. And, from purely the agent’s perspective, you can imagine how much we love doing everything twice. Again based on my experience, this is partially due to buyer cold feet in an uncertain market but mostly due to the difficulty in obtaining financing in a market where the rules of underwriting are changing as often as a new mother of twins. In recent times, up until about a year ago, failed sales were quite the unexpectedly anomaly. Today, it is important to remember that your home is not truly sold until the Fat Lady gets her County tax stamp.

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I need people.
I spent much of yesterday with my head buried in statistics and faced with an ongoing technical dilemma. Admittedly, this kind of work is not very sexy, but then I don’t have “people.” (And, I mean no offense to Cyber-Steve, Master of the Crashed Hard Drive. He just has different skill sets.) Since the breached birth of our new MLS system in May, I have been struggling with a way to easily import market statistics given that they (the perpetrators of Tempo 5) robbed me of my right-click capabilities. So, I started Thursday morning on a mission to right the wrongs, the “wrongs” being my data living under lock and key and a website which has consequently been displaying very outdated real estate numbers for a couple of months.

Skip this part if embedding stuff in web sites doesn’t turn you on.
If you don’t care about the nuts and bolts of my solution, scroll down a paragraph or two; the braver may soldier on. My first thought was to import the data in PDF format. In response to my question of how to embed a PDF on my web site, my bloggy buddies on Twitter quickly responded with the Docstoc and Scribd solutions. These turned out to be the right answers to the wrong question. I quickly remembered that the MLS reports include too many fields which are of no value to my readers, plus they offer the added bonus of getting truncated about halfway across the page when printed to file.

The ease with which I can post and update statistics is of paramount importance. (See “I don’t have people” above.) For this reason, I have always loved the Altos charts for listing activity because, once embedded, they are perpetually updated, kind of like magic. If at some point, I get hit by a truck, or a burning brick for that matter, consumers will have the comfort of at least knowing what the median listing price is for homes in their community. So, my solution for providing homes sales data comes about as close to being magically self-sustaining and worry free as I can get it, with the help of EditGrid.

Here comes the cool part.
Using EditGrid, I created a spreadsheet of homes sold, thirty-days back, for each of six San Diego I-15 Corridor communities. I embedded the spreadsheets in our web site and now, future updates require simply that I update the data on the EditGrid site. This is an example of my handywork:

All of these statistics currently live under the Market Stats button on our web site. I intend to update the data every two weeks or so, which should be quite manageable. Time permitting, I also hope to branch out and add some coastal communities to our list. Maybe this isn’t quite as exciting as, say, doing a load of laundry, but it’s all I’ve got for the moment — until I get me some of those “people.”

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photo credit: garryknight

First we got the news that the San Diego Union Tribune is on the auction block. Now we hear about the demise of the Los Angeles Times Sunday Real Estate section.

Now, I do not profess to be a marketing genius, but I do have a couple of ideas about what might have gone wrong. I have some ideas because, in many ways, I am the newspaper.

Up until about a year ago, Steve and I were still money-bleeding, staunch supporters of advertising in the Sunday Real Estate section. My logic was that if there was one person out there still reading the paper, then it was incumbent on me as an agent to expose my client’s home to that one person. Further, I argued that our in-line ads could include our web site address, thereby cross-promoting our brand and our homes.

Here’s what went wrong. Because readership was down, the newspaper folks decided it was time to raise our rates. This flies in the face of supply and demand, of course. An analogy is the message we deliver to our selling clients along with our feedback reports. The buyers may be saying that your yard is too small, your kitchen is too dated, or your garage is too “two-car” versus three, but it is amazing how many objections are overcome the minute the price becomes compelling. If your home is not selling, you don’t raise the price; you lower it. The Union Tribune missed the memo.

Then there was the issue of the tail wagging the dog. When it suddenly became apparent that the Internet wasn’t going away, they made it mandatory that every open house ad placed be accompanied by a paid ad in SignOnSanDiego, their on-line companion. I couldn’t run one without the other. Now, I understand the goal. Seeing the writing on the wall, they wanted to populate their on-line site. Since all I really wanted at this point was an ad in SignOnSanDiego, not in the newspaper that no one was reading anymore, wouldn’t it have made infinitely more sense to give one or the other away for free? Then, everyone wins. 

Finally, there was this ostrich mentality. With heads firmly stuck in the rocky, San Diego soil, they thought that they could ignore the Internet groundswell and make it go away. On numerous occasions, we submitted press releases only to see them published absent our web site or blog site addresses. This was presumably done thinking that promoting web presence might diminish the value of the print medium. All the while, ironically, the Real Estate section in particular and the paper in general were being filled with articles with a purposely negative slant; bad real estate news was embellished and, when there was none, seemingly fabricated. While the Real Estate section had arguably been their cash cow, they appeared to do everything they could to bite the hands that were feeding them.

So, I am the newspaper. The only difference is that I am not for sale, and I am doing what our newspaper should have done years ago. We still spend buckets of money on print advertising, but we have also had the foresight over the past couple of years to entertain and embrace new ways of reaching our audience. Our print materials will continue to be an essential as long as there is one person who isn’t comfortable with a computer, but our print efforts partner with our on-line presence (and the other way around). One hand feeds the other, and one doesn’t have to go away. If we can effectively integrate both, we expand our reach, our effectiveness, and our success.

The demise of our old ways of doing business makes me sad on some level, certainly. Steve still trudges to the driveway each morning for his news printed on stock of tree-origin, and he does this because it is familiar and comfortable, while I am at the same time booting my computer for my daily dose of goings on. But much like Steve with his newspaper and me with my laptop, Anderson Cooper with his computer in front of him while we watch him on TV, and the Ikea catalogue in my mailbox and in my inbox, we are at a crossroads. Those who are able to successfully marry the two media will survive. Everyone else will be yesterday’s newspaper.

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It’s been quite a little project, but our interactive companion map to the table of Scripps Ranch Homeowners Associations (brought to you by EditGrid) is mostly complete. I say mostly, because I know of one subdivision for which we are missing information and another four which I somehow failed to include in the map, but at this point, finding the missing data is like a little game of “Where’s Waldo?”

This little labor of love was created using Google mapping. Ultimately, my goal is to include a photo for each subdivision. Of course, we have created a monster which we will have to continually update, but it beats the heck out of spending my time obsessing over those wacky Case-Shiller dudes.

View Larger Map

We have long been acquiring and posting floor plans on our web site for the various Scripps Ranch neighborhoods. Our newest creation represents our latest installment in our information overload series. This will permanently reside on our web site under the “Scripps Ranch ‘Hoods” tab, and now that we have more or less answered the question of who does or doesn’t pay Mello Roos, I am off to figure out what other useful neighborhood information I can provide that people don’t know they need or want.

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