Here’s a little slice of life. I’ve got some buyer clients who are qualified up to $900,000 looking for a house with minimum 3 bedrooms, one level, good area and not a tear down and, of course, a good deal. We were planning to go look at some places one Saturday recently. All of my clients are plugged into an automatic property search that’s part of my website and they receive listings as they come on the market. This on-line organizer allows them to mark homes they’re interested in or delete those they’re not too hip about. ( It’s not uncommon for a client to delete a real gem and mark as interested a real dump…but that’s what I’m here for…to educate them). Typically clients will express an interest in living “somewhere in the Mid-Peninsula”. It’s actually kind of unusual to hear someone insist on living in only one city, so again, it’s my job to cull down the choices to a selection that the client will like based upon the education they’ve been giving me during our relationship. It’s also common for a client to mark 15 to 20 houses as interested but I discovered a long time ago that once people get past the 5th or 6th house their memory of what they’ve seen blurs a bit and they find it hard to keep track of the many details of the houses they’ve seen. Consequently I almost never show more than 6 houses at a time, there’s a natural, human point of diminishing return if we do…for everybody. It’s important to note that if you’re looking in more than one community there’s always going to be something to see in any given price range at any given time. It does happen that one house stands out way over and above all of it’s competition but it’s much more rare than you might think. My point? If you’re a seller chances are your house is not unique…there’s other houses comparable to yours on the market too.

I wrote this post about a year and a half ago and I think it’s as relevant as ever…so here comes a redo:

In yet another example of the wonderful world of technology and it’s applications to real estate, I ran across some websites that can be very helpful when contemplating painting a home. One of the big challenges anymore when painting is choosing from an enormous selection of colors! It’s really kind of unbelieveable as you can choose from shades with names like Dove Wing, Western Accoustic and Swiss Coffee…and these are all shades of White! It’s bizarre! Some clients of mine painted their house colors called Cottage Walk and Echo. Who knew?

Well, there are some really interesting and useful websites right now that can be tremendously helpful when making these choices and I thought it would be useful to pass this info along.  The first is a site called Colorcharts.org and it’s great because it utilizes color selections from several different companies. You can also upload photos of rooms in your own home with your own furniture in it and actually then see how different colors go with your stuff. It also allows for you to match paint across companies and thus you’re not locked into one companie’s pallette. One caveat of this site is that you’ll need to register and there’s a fee of $9.95 for 30 days to use it.

Another great site is Behr Color Smart . Of course you can pick colors from a large pallette and find pre set combinations ideas easily but the best part of this site is that you can put in a color you like and it will automatically find accents that match it. You can also put in the colors of your appliances and the site will match them too. Small tip…you’ll need to click on the little “color smart” tab on the Behr home page to get to the color selection tool.

I went to a listing appointment the other night and I think the sellers had 7 or 8 different colors on variious walls in their home. They all looked good too! It’s a truly different age right now and websites like these…and many others are a very valuable tool. Have fun!

In the last few years maybe the biggest casualty for sellers in this area has been to their expectations of what their home is worth. Many sellers still labor under the illusion that it’s 2005 and if and when they sell their home they’ll get what they want for it. It often seems that, no matter what issues a home presents, many sellers steadfastly regard their homes as better than the competition…past or present.

All of us have blind spots…it’s not all that surprising that folks would lack objectivity when it comes to their own home. That’s why an experienced real estate agent is particularly handy. One of the most important things that experienced real estate agent can do is to set appropriate expectations. It’s sort of important that that happens actually.

Last week I had an interesting experience. I wrote an offer on a small 2 bedroom house that had been on the market for 17 days and had yet to receive an offer. My clients were absolutely crazy about it and when we went to write an offer these folks didn’t want to take any chances of losing it…so we came in at full price, close in 30 days, 20% down, AS IS. All the bells and whistles, basically. Meanwhile, the seller had expectations that they were certainly going to get multiple offers (since their house was obviously the best 2 bedroom house in town!) and, in their minds, the asking price was simply a starting point…bait with which to create a feeding frenzy that would propel them into a higher price range.

Like quite a few sellers, these folks just couldn’t get over the expectation that their home was worth SO much more than their asking price. In response to their disappointment…they countered us $20,000 over their asking price. After I climbed down from the ceiling I reminded the listing agent that 1) this is the 2010 market…not 2005, 2) there isn’t any other offers on the table with which the seller get’s to leverage an overbid against, 3) my clients have a spotless, full price offer (that could potentially become a less than full price offer if someone wasn’t careful) and 4) if they hadn’t gotten multiple offers by this point…it probably wasn’t going to happen and their chances of an overbid had become as unlikely as my chances of becoming the 49ers starting quarterback this season.

At any rate, we politely countered the sellers counter offer with one of our own. One that looked awfully similar to our original offer. This time, we got it. Fortunately.

It’s really not hard to understand how tied to our own unique perspective we get when it comes to our home. It’s clearly important, though, to objectively establish expectations that are realistic, that include an honest examination of what “plan B” looks like just in case the greater Bay Area doesn’t inundate us with multiple offers. It’s also pretty risky right now to create a “bait” asking price! I can’t imagine any buyer in their right mind who would willingly agree to a counter offer that’s over the sellers asking price when there is no other offers on the table. The simple truth of the matter is buyers don’t really care what the seller wants or needs when it come to the price of the house…they care what they want or need in that process.

Here’s an oldie but a goodie…this post is 2 years old but I think it’s still relevant…

OK, this may sound like a bit of a rant. (some of you are saying…”what else is new?”) Open House ads in the newspaper make me crazy. Last Friday morning I called the San Francisco Chronicle and placed an ad in the Sunday open home guide for a new listing of mine. During this process I create the ad itself, stipulate it’s length and pay for it at the time with either a credit or debit card. After we had worked through all of the details they gave me a confirmation number for the ad. Just for your info, a three line open house ad in the Sunday real estate section cost’s $118.00..slightly more if you want bold type. Sunday morning I went and got the paper from the driveway, pulled out the open house guide in the Real Estate section and guess what…no ad.

Of course, I called the Chronicle Monday morning to find out what happened and had to leave a message because nobody could help me…I’m still waiting for them to return my call.  I know from several past experiences just like this that it’ll come down to one of two problems…1) They (or I) transposed a number from my ATM check card and thus it didn’t go through (they never call you back when that happens, and who knows why they just don’t run your card while you’re on the phone with them)..and/or 2) the ad ran in the wrong community or county, oops! I’ve finally come to this conclusion…who cares?

Here’s one of the great secrets of the real estate business folks…Sunday Open House ads are worthless and Realtors buy them knowing that full well. They do it to appease their sellers, who want to be assured that they’re getting their monies worth out of the commissions that they’re paying. Many sellers think an Open House Ad is critical and we resisit illuminating them. We don’t want them to think we’re cutting corners on their marketing so we pay it, sort of like hush money. With each successive year of Internet technology, print ads have  gotten more and more irrelevant. In spite of missing the Chronicle’s ad on Sunday I had at least 100 people at my open house. They came from the directional signs, Craigslist and MLSlistings open house guide. For the last 3 or 4 years I’ve asked people at my open houses how they found the place…90-95% say from one of these 3 options. It’s rare to hear anybody mention a print ad. Yet I see 10 and 12 line ads in the Chronicle every weekend complete with photos of the houses…I’ll bet they cost $500.00 or more. There’s no way they bring one single person more than a 2 line ad will…if they bring anybody at all. Obviously, this is a very technologically sophisticated area where potential buyers see new listings instantly via multiple on-line resources, print Open House ads are an anachronism.

Last year I had a seller who called me at 8:15 one Sunday morning when he noticed the Chronicle didn’t run our ad.(Sound familiar?) He was really panicked that nobody would come to the open house. We ended up with more people that week than we did the week before with the ad! Once upon a time Sunday open house ads actually may have introduced a potential buyer to a listing…can you imagine that being said now?

Talk about an awkward pause…it’s that thing that happens when an agent initially broaches the notion of reducing the price on a listing. You see, when a seller puts their place on the market they’re all bravado…they really feel like their place is the greatest thing since sliced bread and certainly buyers out there will share their enthusiasm…won’t they? Often a seller will base their list price on what they feel they need to get out of the place. Those feelings can come from a variety of reasons, could be they need a certain number because they owe so much on the property that they’re stuck if they don’t get an offer at a given price. Could be they’ve done a fair amount of work on the property and their price reflects that expense. It could also be because the price they want will make them feel like it’s worth it for them to sell.

Here’s the problem…buyers don’t really care what the seller needs. Oh, I guess they do if it’s a multiple offer scenario, but then they usually exceed the sellers expectations. If you’re not getting multiple offers you can expect that the buyer isn’t going to be too excited to fulfill your needs if you’re a seller. The buyer is naturally concerned with his/her needs first and negotiating a price is typically high on their list.

As I wrote a week or so ago…if the relationship between the listed price and the perceived value of the house isn’t compatible there’s going to be a problem selling the place. There are several clues to whether or not you’re in need of a price adjustment of you’re a seller. 1) Are you getting showings? 2) Is your agent getting any phone calls inquiring about the property? 3) Is anyone picking up disclosures? 4) Are the open houses well attended? If the answer to these questions is no…it’s most likely time to make a move on that price. Maybe the greatest fallacy that I’ve discovered since I’ve been around is the notion that the right buyer is out there on the horizon and sooner or later they’ll come along and meet your expectations. All you have to do is be patient…eventually the right person will love the place just as you do…and they’ll meet your price. I have two responses to that, 1) Fat chance! and 2) be prepared to wait until the market naturally appreciates enough so that your current price looks like a value, probably over the course of several years! In some cases, if a house is going to sell it may need more than one reduction.

At the end of the day, all the marketing bells and whistles (virtual tours, magazine or newspaper ads, glossy flyers, broker tours…ad nauseum) are never going to sell the home if it’s overpriced to begin with. In my experience at least, buyers really know intuitively when a home doesn’t represent value. The house ultimately is the thing that sells itself…and if it doesn’t offer that value it’ll be very hard to sell.

I think it’s the suits in this pic that really gets me. It’s been so long since I’ve worn one that I forgot what it’s like…the picture seems weird to me! (Sorry if you wear suits all the time!) I think if there’s any hard and fast rules about buying a house it’s that it’s never over until it’s over. Even in multiple offer scenarios there could very well still be room to negotiate should you want to do that. 

There’s an assumption that once a buyer takes a property in As Is condition that’s it. The negotiating ends and the price and terms are locked in. Many many sellers think this way. They get property and pest inspections up front in order to ensure a clean as is sale. The thing is, on many houses there are open questions that the initial inspections open up that create an environment for renegotiation. In one example I can think of recently, a house I’m in escrow on received 6 offers and went $90,000 over asking, As Is.  The house needs work and even though there were inspections done the buyers did further investigation through an engineer that uncovered some significant drainage related issues that clearly effected the home. We went back to the seller and the price got reduced by $35,000. The weight of the new disclosures that the engineer’s report brought to the transaction put the seller in a position where they had to make a decision…if they said no to the buyer’s renegotiation and the buyer walked away from the transaction they would then have to put the property back on the market and any and all future buyers would need to see the new report. They have to ask the question, “what will that report do to the value of the place now?”  Often, the impact on the future marketability of the property by the new report will be put into serious question and it’s certainly much easier and, in the long run, profitable to work the problem out with the buyer you have in hand.

Last year I had this situation with a seller and agent in a house on the coast. The seller chose to ignore that engineers report and rejected my buyers request to pay for some necessary work. The buyers backed out and ultimately found a much better property. The first house sat for another 3 months and finally sold…for less than it would have if the seller had just taken our renegotiated price. I guess the bottom line is just be careful and don’t be afraid to get further inspections and renegotiate if need be.

When it comes to selling your home there are a number of relationships that are important to you. It’s obviously pretty important exactly who sells the place for you for one, but ultimately maybe the most important relationship a seller has is the relationship between the asking price of the home and it’s perceived value. If that relationship is out of whack or disfunctional your chances of getting top dollar are lost.

The truth is, it’s a fine art to get this relationship right. Months can be lost attempting to get it right too. Any given house, condo or townhouse has it’s pluses and minuses. Every home has a flaw of some kind. What every home needs when it’s on the market is for the buyer’s to have this experience…”I don’t really care about______________________, I just want this place!” When homes get overpriced the feedback is almost never “The price is too high”. Typically the feedback contains alot of very specific, detailed analysis of the flaws of the home.

“The yard’s too small”

“The windows are original”

“The bathrooms are original”

“The bedrooms are too small”

This type of list can be infinite. Here’s the thing…every home has value. At some price houses with very significant defects will sell with multiple offers. No defect is large enough to frighten anybody. Conversely, when a home is priced too high, every defect is magnified and ultimately blown out of proportion. Buyer’s intuitively understand the relationship between real value and the listed price. A great example of this came up in Foster City this week. Jan Majeski of Alain Pinel has a listing at 717 Widgeon that has 6 bedrooms, 2 baths, is an REO and is listed at $769,900. There’s isn’t really any question in my mind that this place is going to get multiple offers. It doesn’t really matter what issues this place presents either….they’re going to be eliminated by this value price. Of course it’s a different animal pricing a foreclosure over your own house, there’s no emotional connection that would argue against a lower initial price. It’s on the normal sales where this all really becomes an art. Homes that are listed a little lower than the market tend to get alot of attention right now and in many cases are receiving multiple offers. Others that have erred on the high side are sitting.

It’s sort of a strange dance. Recently I saw a house in San Carlos that was in almost original condition list for a price of $1,098,000 and that price represented a discount. They got 5 offers and it ultimately sold for $1,210,000. I really believe that if they had listed for $1,200,000 they would never have stood a chance of getting it. The houses flaws would have been exaggerated and it would have languished. Maybe it would have sold for $1,098,000!

The most common question that I hear while holding an open house has got to be “Why are they selling?” There is, of course, multiple possible ways to answer that question. One of those ways is because of the death of a homeowner. Since I’ve been around the issue has gotten to be a fairly important one from a disclosure standpoint. Many many people want to know if there has been a death in the property.

One of the two main disclosures that sellers are responsible to fill out asks this question:

“Are you aware of any death, natural or otherwise, having occurred on the property within the last 3 years?”

At any trust sale listing that I’ve had, the question comes up all the time at the open houses. Some folks are not comfortable if the answer to that question is yes. It often has a bearing on the ultimate value of a home. I sold a buyer a fixer upper in Pacifica recently that was a trust sale and the buyer is getting an FHA loan. One of the criteria in an FHA appraisal is whether or not someones recently died on the property.

Believe it or not, sometimes it’s not a bad thing from marketing perspective. I’ve had more than one trust sale listing where the seller passed away of natural causes in the house at or near 100 years of age. In both cases we got multiple offers…the house was perceived as lucky.

What’s not perceived as lucky is the home where a violent crime has taken place with a death as a result. A murder took place at a waterfront house in Foster City a few years ago and the house took a very long time to sell and went for significantly less than it’s natural value because of that crime. Currently, there’s a 2639 sq ft, 4 bedroom house in San Mateo that’s in foreclosure and priced at an incredibly low $889,000 because of a murder that took place there late in 2008.

For what it’s worth, none of this I’m making light of. No matter how you look at it, if you’re buying it’s a good thing to know all of the facts. There may be a reason for that great deal you’ve found. The question will be, are you comfortable with the details?

One of the reasons the Foster City real estate market has been hot so far this year has been the low amount of inventory here in town. We hovered around 10 active single family listings for most of the first quarter and as a result multiple offers have been common. Well, that’s starting to change as 9 new listings have come up in the last 11 days here in town. It’s going to be very interesting to see if the momentum continues and we still have multiple offer scenarios around here in the coming months. Here’s a few of the new ones that are worth a look:

851 Grenada Lane listed by Sue Dickey of Alain Pinel for $1,498,000. This is one gorgeous house. 4 bedrooms, 2.5 baths on the water in Plum Isle. Remodeled everywhere and it has a nice backyard too.

701 Baffin listed by Joan Wachter of Coldwell Banker for $1,229,000. Interesting 4 bedroom, 2.5 bath house in Sea Colony. Good size backyard here too. It’s going to be interesting to see if this place gets this price.

52 Williams Lane listed by Joe Benvenuto of Alain Pinel for $888,000. This used to be a 2 bedroom floorplan at Williams Landing but the sellers completely remodeled it, added into what was once attic space and created a grand staircase to get there too. It’s now 4 bedrooms and 3 baths…and completely unique. It’s a nice property too.

See all this new inventory is like reading a mystery…will they sell? Will there be overbids? Is more coming on the market that will slow the pace? We’ll see…

I had the good fortune in the last few weeks to have a couple of very popular listings here in Foster City, 1121 Catamaran and 18 Dory Ln, and one thing became very clear to me while chatting with folks at each of the open houses…there’s a whole lot of buyers out there either not working with local real estate agents, or not working with agents at all. Dory had about 90 people at it’s open house, Catamaran at least 200. I’m sure of that on Catamaran because I printed 90 flyers and I had 4 left at the end of the day…people mostly come in groups and, almost always, one person takes a flyer.

In the case of Dory, I handed out 14 disclosure packets to interested parties prior to looking at offers…and I received 7 of them. On Catamaran I handed out 11 disclosure packets and received 3 offers. Of those 25 packets only 9 of them were given to local agents and 5 of the 10 offers came from local agents. Interestingly…of the 10 offers 6 of them were truly outstanding (price and terms) and 5 out of 6 were from local agents. Both winning bids came from local agents.

Why, you ask? It seems so obvious to me. These local agents know the Foster City market inside and out. They know what constitutes a good offer in a multiple offer environment and they know what will be important to a seller. One of the big reasons they know that is because they have sold listings here too. They also routinely see good offers from bad ones and thus they know what they’re doing.

Just so were clear, when I say a local agent I mean an agent who actually does a fair amount of business in Foster City. There’s real good agents in San Francisco, San Jose, Fremont…etc that would be lost in the Mid Peninsula and have no clue about Foster City. Honestly, I have no clue about San Francisco as a residential market. I’ve been a realtor for 20 years, sold hundreds of homes, but I’ve never sold a property in San Francisco. I would not provide a client the kind of service they deserve working with them in San Francisco.

Especially if you’re out there trying to do this thing on your own, consider working with a local agent…it will be more than worth it to you. That also applies to sellers.