Flea Markets, Dating and Househunting, too

I wrote in an earlier post about the similarities of midlife dating and finding the right home ( May 21, An Interesting Comparison.)
Now one of my favorite bloggers, Dating Goddess, has written a comparison of dating over 40 to garage sale shopping. She says that while some midlife daters are “brand new” — never married — most have been “used.” Some have been “gently used” meaning their last relationship(s) ended with a positive feeling, not having been mistreated. A house that is newly built may have some great features, but may also hide construction flaws. Sometimes, "gently used" is preferable.

Sometimes we find a gem at a garage sale that is slightly scratched or in need of minor repair. These are overlooked by others because they don’t want to take the time and care to polish the item to its former luster. She says that many midlife men are like this. They’ve had their hearts broken or were treated badly by a woman — or women — but with gentle care, you can repair those minor cracks or gently sand away those scars. They just need a little TLC to shine again. A house in need of cosmetic repair can be just right for you, too.

And then there are the faded treasures that need a lot of refurbishing to make the piece/man/ house sparkle once again. Some shoppers pass on these, knowing they don’t want to put in that kind of time and work with no guarantee that the end product will be as magnificent as they hope. Others love the challenge and jump at the opportunity to apply their skills to help make this prize glisten. This is the fixer-upper house that can be the true "find" for an ambitious buyer.

So, What finally happened?

Well, the dust has settled, and the Sold sign is up on my listing on South Mary in Sunnyvale. From the 24 offers, we chose to counter the top two.
Of the offers presented, there were 6 that came in at over a million dollars...list price was $885,000.
The successful bidder came back with a counter-counter offer at more than $200,000 over the list price, and including the free one month rent back that the seller wanted. SOLD! She is so happy to be moving closer to her children and grandchildren in Maryland.
This weekend, I'll send a mailing out to my "farm" area, just in case the homeowners aren't aware of just how hot their market is.

Presenting Multiple Offers

What started as "possibly a dozen offers" ended up as 24! I had offered the agents a chance to present their offers and talk a little about their clients in person, although I had a summary sheet waiting when they arrived, so things could move along a little more quickly.
My seller elected to be there, and the buyers' agents were able meet with us both.
I was surprised that six agents still elected to fax in their offers rather than take advantage of this opportunity. There were also several agents who hadn't bothered to read the MLS comments, and neglected to include the rent-back that the seller needed. We had completed all the inspections and made them and the disclosures available online, yet there were some who hadn't downloaded this important information.
Still, there were many very professional and personable Realtors, who presented themselves and their clients in a positive light, and wrote outstanding contracts. They also were aware of the "wow factor" of a letter from the buyers and photos of their families.

Schools Make All the Difference

My phone has been ringing off the hook today with calls from agents who have either written, or are about to write offers on my listing in Sunnyvale, which happens to be in the Cupertino School District. No matter what newspaper articles and television reporters might say to the contrary, this is still a hot market...but only if your house happens to be in the "right" location.
Surprisingly, in this instance, the house is on a wide street, South Mary Avenue. This hasn't deterred the buyers, who came through my weekend open houses in droves.
Tomorrow afternoon, we will look at a dozen or more offers on this well maintained home, and I think that the seller will be delighted with the outcome.

Is a Reverse Mortgage for You?

I've been hearing a lot more about reverse mortgages lately. This is probably because lenders are facing a tighter market and more restrictions on sub prime mortgages. A growing number of loan companies are targeting older homeowners, many of whom have a great deal of cash tied up in home equity. Even major nationwide lenders like Countrywide Financial have jumped on the bandwagon.
In a so-called "reverse" mortgage, the bank pays the older borrower a portion of the home equity in a lump sum or regular payments. The debt is paid off when the home eventually is sold, the borrower moves out, or when he dies. The number of these loans has almost doubled in the last year... over 85,000 were generated in 2006.
Most of these loans are federally insured, and fixed rate, but don't be fooled.
Because of the complexities of the loans, and the loan fees, which are usually extremely high, these loans should be seen as a last resort for seniors who need cash and want to stay in their homes.
John Rother of the AARP advises that you will often be better off selling if your only objective is getting money from the house, because of the high costs of these loans. Financial advisers also suggest selling the home and investing the proceeds, because you are often able to draw only around 50% of the home's equity after interest costs and a protective cushion for the lender.

New Loans for Veterans

I ran into Nancy Soule, a loan officer with GMAC Mortgage, at this week's Realtor Tour Meeting, and she was excited about a new opportunity for veterans. The unique feature of these below market loans is that the borrower need not be a first time home buyer.
The purchase must be a primary California residence, and the veteran may have served many years ago...Think how well this could work for a senior who wants to "move down" and take advantage of the Prop 60 and 90 Tax Base Relief Laws!
The terms are great: zero down payment, assumable financing, and a loan period of up to 40 years.
Important...This program expires in April of 2008!
For more information, contact Nancy at nancy@souleteam.com.

Online House Hunts

Our speaker at the Tour Meeting yesterday...Amos White from Baynet... brought up some interesting statistics. 87% of home buyers, nationwide, and 97% in the Bay Area start their search online. This doesn't mean that a good Realtor is obsolete. Most consumers see the Internet as an information source, not as a substitute for an agent.
Buyers say that the Internet provides a greater sense of control, particularly as real estate Websites become more consumer friendly. Agencies are putting more and more of their marketing budgets into Web advertising.
Why the Internet?
It's Fast. No need to wait for tomorrow's newspaper to check the new inventory or the open houses.
It's Convenient. You can log on to your computer at any time, and see listing information, still photos, and virtual tours.
It's Continually Updated. MLS information is regularly updated...daily, even hourly... unlike print advertising.

This Week at the Town Center

I was walking out of the Sunnyvale Target store today (bought an exercise ball for my new class) when I heard all the racket from the final demolition going on at old mall. The earth movers are hard at work at this project, and on the excavation at the two new underground garages. The number of trucks leaving the $400 million redevelopment project have grown to 500 a day, and although Sunnyvale Public safety is there to make sure that they obey traffic laws, there still have been complaints to the Mr. Roadshow column in the Mercury News. A number of tickets have been issued for speeding and blocking cross traffic, and truckers have been reminded to stay in the right lane. Nonetheless, that many trucks hauling dirt are bound to be a problem. At least it is only expected to last for another six weeks!

Preemptive Offers

In an active market such as ours, we customarily see a certain day chosen by the seller and listing agent for the presentation of offers...usually mid-week after the first set of open houses.
Most agents see the fairness of this practice, and are willing to compete with their peers. This is all well and good, but occasionally someone will approach the listing agent before the agreed upon date and ask to present an offer... a so-called preemptive offer.
I listed a house this week in the outstanding West Valley Elementary School District, on 1561 South Mary Avenue in Sunnyvale. We announced on the MLS that offers would be presented on Wednesday, the 27th, after buyers have a chance to inspect the home at open houses and read all the disclosures.
I have already been called by two agents, asking if they could present offers before that date. Part of their concern was that they would lose out if another offer were presented to the seller in advance of the 27th. I reassured them both that I would treat all agents fairly, and wait until the chosen date.
This is not only the ethical thing to do, it is also best for my client, the seller. She will have a chance to evaluate all the offers together, and we will be able to negotiate the best price and terms for her.

Be Your Own Contractor?

I recently ran across a new edition of "Be Your Own House Contractor," by Carl Heldmann on Amazon.com
This longtime best-seller home construction book is even better in its latest edition, which includes the author's Internet Web site resources. Heldmann also refers readers to his own web site for additional information. "You won't believe how easy it is to save money and get the house you want," Heldmann says.
Much emphasis is placed on construction financing. He encourages do-it-yourself home builders to compare several sources, especially community banks. He says that banks have become much more liberal in recent years, and it is now possible to obtain a home construction loan without having a general contractor.

A big advantage of this book is that it breaks down the home construction process into easy pieces that any reader can understand. He doesn't go into great detail, but just enough for you to know if becoming a do-it-yourself contractor is right for you.
Even if you decide that being your own contractor is not your thing, despite savings of as much as 25%, reading the fifth edition of his book will still help you immensely in dealing with general contractors. If you decide to hire a general contractor to build a new home or remodel an existing one, Heldmann explains how to keep costs down and to understand the home-building process.

While this book may not make the reader capable of building his or her own home without a general contractor, it alerts readers to what is involved, and advises reading more advanced home construction books and taking courses at local owner-builder centers.

The Next "It" Space

I met recently with clients who plan to list their home with me next year, and among other things, they asked if their wall of bookcases, which adjoin a cozy dining area, would appeal to buyers.
...and there it was, a setup almost identical to theirs, featured in Realtor Magazine as one of the new specialty havens that builders are designing to set their homes apart for potential buyers.
Orren Pickell is designing his luxury homes with a "pocket library." Rather than dedicating an entire room to a home library, he arranges one along a hallway, and another into the landing point of a stair, featuring a vaulted ceiling.
How exciting!...without realizing it, and just because they love books, my clients have created the next "It" space.

Green Building

It's not just for Al Gore!
Realtor Magazine, in last month's issue, talked about the many products and systems that are entering the marketplace to keep our environment healthier and to conserve our natural resources. The U.S. Green Building Council expects this market to exceed $12 billion this year.
Within "green" homes, choices run the gamut from rugs made with soybean plants to bathroom tiles made from recycled glass. On the outside, solar electric panels, attic fans, and water and air heating systems are becoming more common. Native drought-resistant plants catch and store rainwater for future use, cutting homeowners' water bills and conserving water.
The wave of the future is whole communities, like Baltimore's Clipper Mill, a new mixed-use community, being built with sustainable features, including a green roof, which captures storm water run-off. (www.clippermill.net)

More Downtown Sunnyvale Update

Trucks, trucks, and more trucks!
Signs of continued progress in the new Town Center by Sand Hill Properties. These vehicles which had been exiting on South Mathilda Avenue will now use West McKinley instead. Sand Hill has opened a temporary construction office at 704 Town and Country, near the corner of Frances and Capella. They welcome visitors and will answer your questions about the project, due to be completed in early 2009.
Sand Hill will also continue to hold public meetings at their office in Town and Country on the last Wednesday of each month. The next one is scheduled for 5:30pm on June 27. Look for more information on the city's website: www.sunnyvale.ca.gov.

How Buy-Downs Work

Yesterday, I talked about seller buy-downs, where the seller pays a lender to lower the buyer's rate. Although the rate can be bought down for the life of the mortgage, it is far more common to see sellers buy down the rate for the first two or three years of the mortgage.
This financial tool all but disappears during strong markets like the one we have now. After all, who needs them when potential buyers are bringing in multiple offers? But in slower markets, buy-downs return with a vengeance, and you don't have to pay for it in advance, so there's no cash out of pocket...it all comes out at closing.
The object of a temporary buy-down is to bring the initial rate down to a point where the buyer can either qualify for financing or can't resist the lower monthly payment. Generally, they come in two versions:

-- 3-2-1 -- Under this model, the rate is bought down by the sellers to three percentage points below the market for the first year, 2 points for the second year and 1 point for the third.

-- 2-1 -- This truncated version works the same way except that the rate is bought down by two percentage points in the first year and 1 point for the second year.

In both cases, once the buy-down period ends, the rate returns to where it would have been had there been no reduction. So, if the market rate for a fixed-rate loan is 6 percent, a 3-2-1 buy-down would result in a 3 percent start rate. Then, the rate would move to 4 percent during the second year and 5 percent for the third. After three years, the rate would be back to 6 percent for the remaining term.

A third version is a permanent one in which the rate is bought down just enough to make the property stand out -- but for the entire life of the loan.

This can be a win-win solution. It costs the seller less than a major price reduction, and saves the buyer more.

Seller Buy-Downs

More news from our Tuesday office meeting: Sue Baker-Dirickson, our in-house lender talked about the increase in mortgage interest rates and the need for buyers to "lock in" their rates.
Our local market in the Sunnyvale/Mountain View/Cupertino triangle continues to be strong, but should that change, there isn't much a seller can do to compete with other sellers for a buyer, other than lowering the asking price.
Lew Sichelman,in The Chronicle says,... "They can't throw in extras or upgrades like builders can, but sellers can go toe-to-toe with anyone, including builders, when it comes to financing. In fact, they can go even further than most builders do. What's more, they might find that helping would-be buyers qualify for a mortgage or trimming their monthly house payments might prove a much better alternative than cutting their prices -- and at a lower cost."
This is done through an interest-rate buy-down, which is usually one of the first tactics builders use to stimulate activity when sales start to slow. Individual sellers, on the other hand, rarely turn to buy-downs as a sales stimulus. Not because the move doesn't work for them, but because they don't realize the option is available.
Buy-downs aren't cheap, and they come right off the seller's bottom line. But in the long run, they achieve the same result -- that is, lowering the monthly payment -- as cutting your asking price. But the seller's bottom line takes far less of a hit with a buy-down than with a drop in price.
More about the types of buy-downs in tomorrow's post.

Senior Women as Clients

I am presently working with several women who fit in the category of senior citizens, or whatever the politically correct phrase is for people like myself who are Baby Boomers or older.
Women’s earning power has accelerated over the past 30 years and they tend to be the “chief purchasing officers” in almost every household. Author Marti Barletta, in her book PrimeTime Women™, calls them the ultimate bull’s-eye for marketers. Women ages 50 to 75 are the healthiest, wealthiest, most educated, active, and influential generation of women in history, according to Barletta, president of the TrendSight Group, and an expert on gender-savvy marketing strategies. Her book aims to help readers understand this consumer, and appropriately target their marketing efforts, but this is not really new information to an experienced Realtor. We know that women are usually the decision makers in a home purchase, and will work closely with us when preparing a house for sale.

Real Estate Value Estimates Online

Yahoo recently added property value estimates from two companies to its real estate site. This addition allows consumers to view an estimate of value on their property from three sources simultaneously.
They have added Reply, based in San Ramon, and appraisal.com, of Orlando Florida to those from Zillow. Even though all three companies attempt to give values of millions of properties nationwide, their estimates can vary widely. One example in Southern California showed the same house as being worth somewhere between $1.14 and $1.42 million dollars, depending on which company did the calculating...quite a difference!
Appraisal is not an exact science, at best. In my appraisal class, we learned that a 5% differential was acceptable. However, a good Realtor who knows the area and local schools will use the right comparable sales and come up with a more realistic value for the property. Most of us will perform this service without charge.

Helping Seniors to Move

I often work with seniors, because I have the SRES (Seniors Real Estate Specialist) designation. One of the biggest problems I see is the panic that sets in when they think of downsizing to a smaller residence. I recently read an article in the June issue of the AARP Bulletin...and yes, I am old enough to be a member.
It referred to a growing industry of professional organizers, called Senior Move Managers. These specialists not only help with packing and unpacking, but they advise older adults and their families what to take, and what to give away or sell.
They are also sensitive to the concerns of their clients, listening, and helping them to feel in control. I have found that there is usually a strong emotional tie to their possessions and to their homes. The National Organization of Senior Move Managers has online information at www.nasmm.com. I have used a wonderful local organizer, Tom Anderson, and found him to be a pleasure to work with: www.clutterboy.com.

More Progress on Sunnyvale's Town Center

When I was volunteering last Sunday at the Art and Wine Festival, (so successful that we ran out of wine and beer glasses to sell by 3:00PM!) I had a chance to pass by the "work in progress" next to Macy's.
Four viewing ports have been cut in the fence at the project's north and south ends. Two ports are on W. Washington Avenue near Macy's, and two are near Target's west entrance.
Demolition of the old mall building is moving along, and excavation has begun on an underground parking garage. Preliminary excavation work is expected to take four more weeks. Trucks hauling debris and dirt enter on Washington and exit on W. McKinley Avenue and W. Iowa Avenue, and workers with warning flags guide traffic on Iowa.

The informational display of the Town Center project has been rescheduled to June 28, 10 a.m. to 1:30 p.m. at Plaza Del Sol, 200 W. Evelyn Ave.

What the Realtors Did in Sacramento

Hot topics pressed by Realtors included opposition to the following bills:

AB 1574 (Houston), Allowing the use of private transfer taxes, which would in essence, add to the cost of owning a home and would encourage developers and private entities and others to impose these fees with no restrictions.
AB 239 (DeSaulnier), Authorizing the Contra Costa County and San Mateo County Boards of Supervisors to impose a document recording fee on all real estate recordings to generate funds for affordable housing. We're concerned the bill targets just one group to pay for affordable housing, and would basically create a tax and run counter to Proposition 13. It would ultimately add to the cost of buying a home and hurt the very people affordable housing policies seek to help.
SB 464 (Kuehl), This one forces landlords to stay in business for at least five years and requires them to give all tenants a one-year notice of termination of tenancy should ANY of their tenants be a senior or disabled. C.A.R. believes this bill is an attack on private property rights and an affront on business – landlords should not be told how long they should stay in business. The bill would also discourage investment in rental housing and could ultimately lead to landlords evicting tenants before putting their property on the market.
Senator Joe Simitian thanked us for meeting with him and addressing these issues. He noted, with 900,000 constituents in 13 cities and towns, “It’s tough to stay in touch. You make it easier for me to do it by coming to me and expressing your views. Is anyone listening and does it matter? The answer is yes and yes.”

Report From Realtors' Legislative Day

I joined over 2,000 Realtors and affiliates from California gathered in Sacramento on yesterday. SILVAR, our local association, sent over 55 members to the capital for the event, which is organized by the California Association of REALTORS®. Realtors make up one of the largest groups that hit Sacramento every year

We first gathered at the Convention Center in the morning (Our bus left Cupertino at 6:00 AM!) to listen to greetings and a Hot Issues Briefing from C.A.R. officials. California Governor Arnold Schwarzenegger, who was out of town, also greeted Realtors by video.

C.A.R. President Colleen Badagliacco said, “Attending Legislative Day is a tremendous investment in your business. … It’s an opportunity to let our legislators know what works and what doesn’t work.”
We also heard from Senator Lou Correa, whose bill SB 670 sought to prohibit private transfer taxes did not make it through the Senate Housing and Transportation Committee.

The impact of political participation was emphasized during the morning gathering. .

The day proved to be one in which Realtors got the opportunity to witness legislators at work, and because of this, Realtors were not able to personally meet with all of their representatives. The Assembly was in session, and legislators were scheduled to discuss 125 bills that day, which meant they would be working till late in the evening.
SILVAR members met with staff members of Assemblymember Sally Lieber, Senator Elaine Alquist and Assemblymember Ira Ruskin, and they were able to personally meet with Senator Joe Simitian, who comes from Palo Alto.

Staff members of Assembly representatives met with us and assured us that they would report our concerns to the representatives. They also noted it’s important to let the legislators know about their concerns. A staff member of Senator Elaine Alquist said the Senator was impressed when her office received 60 phone calls regarding her need to oppose SB 464 (Kuehl).
“Let them know we represent people looking for the American dream. Let them know we are watching and we are not going to go away,” C.A.R. officials said.

More on the important issues we discussed in tomorrow's post.

Legislative Day

Tomorrow I'll board a bus at 6:am and head up to Sacramento. SILVAR, our local Association of Realtors is just one of the many that will be represented when thousands of Realtors from all around the state descend on the state capitol. We make this trip every year to meet with the governor and our local legislators to discuss issues of importance to Realtors and the homeowners that we represent.
These laws range from "point of sale" mandates, to taxes, to housing opportunities.
Look for details about the trip in tomorrow's post.

Contingent Sales in an Active Market

I've recently been asked by both buyers and sellers about contingent sales.
In our market, most sellers won't even consider a contingent-sale offer. If the buyer's house doesn't sell, the deal if off and the seller has to find another buyer. Common seller concerns are: How salable is your property? Will you price it right for the market? Will you negotiate reasonably to sell your home as quickly as possible?
In a market like ours, where multiple offers are the norm, buyers need to arrange interim financing, either through a line of credit through a "bridge" or "swing" loan on their present house.
In an active "seller's market," usually the only sellers who will entertain contingent-sale offers are those whose properties have been on the market for some time, and are overpriced or have other problems.
In a more balanced market, when homes take longer to sell, a homeowner may consider an offer contingent on the sale of another property, especially if the buyer's agent has done his or her homework. A comparative market analysis will show the seller that your home is listed at a marketable price, and provide information about how long it is taking to sell properties like yours. A seller might be more receptive to your contingent sale offer if he thinks your home is more salable than his.

A release clause should be in the contract to alleviate the seller's concern about withdrawing his property from the market for a transaction that may never close. A release clause allows the sellers to continue to offer their home for sale, and if another offer comes in, the buyers have a set time frame to remove the contingency...usually 72 hours. If they are unable or unwilling to do so, the home goes to the other buyers.

Great Resources for Househunters

The San Jose Mercury News ran an article on Saturday about researching an area before deciding where to buy a home. Good advice, which I give to all my buyers.
They also included a list of online resources that should prove helpful.
*Schools: Two excellent sites are: www.greatschools.net and www.ed-data.k12.ca.us.
*Crime: For San Jose crime statistics, go to www.sjpd.org and click on "my neighborhood." For Sunnyvale crime data, go to http://sunnyvale.ca.gov. and look under Departments, Public Safety. (The site also has useful information about permits, recycling and water quality.
*Transportation: The information is at www.sbay.org/transportation-info.html but the best advice is to drive to work from the home you plan to buy during commute hours...a true test of road conditions!

Some Interesting Statistics

According to Joe Brown, our area manager for Coldwell Banker, we are part of an area where jobs are very strong and the ability to buy a house is high. The housing affordability index is now at 25% for California (up from 14% not so long ago). This is greatly due to prices decreasing in outlying, less desirable areas of the state. A pattern in the attached report on Single Family Homes is days on market decreasing. Look for the number of days on market to decrease even further!

2007 Santa Clara County


January/ February
Current Inventory 2648/ 2904
# of sales 611/ 661
% LP Rec'd 98.34%/ 99.84%
Median Price $740,000/ $790,000
Avg. Price $852,098/ $971,443
Tot $ Vol $581,731,859/ $642,124,015
DOM 71/ 71
New Listings 1,355/ 1369



March/ April
Current Inventory 3345/ 3924
# of Sales 890/ 891
% LP Rec'd 99.73%/ 100.36%
Median Price $830,000/ $869,000
Avg. Price $1,065,798/ $1,097,127
Tot $ Vol $948,560,615/ $977,540,840
DOM 57/ 35
New Listings 1,888/ 1,930

June Market Flash

Summer days are just around the corner and as the weather warms up, so does the Northern California real estate market…in certain ways at least. While sales have slowed in comparison to last year, median prices continue to rise – making home investments even more valuable – and most areas are enjoying an abundant supply of available homes for sale.
As I've said before, one aspect of the market that is certainly heating up is the million-dollar plus home category where sales are swift.
April median price, at $843,710, is improved by 7.4% for the month and over 9% from April 2006; sales are down by almost 8% for the month and 19% compared to a year earlier. The Santa Clara County median price of $868,410 is up 4.6% for the month and a strong 12.1% for the year; sales are down by a hair for the month and 17% from April 2006.
Coldwell Banker, in its "Market Flash" for June, says that "This is not one market; it is a whole bunch of tiny local markets, each with its own characteristics."