Photo of my very own “I Voted” Sticker

Exercise Your Political Muscle and Vote!

Exercise is good for your body and mind. Exercising your political muscle strengthens your community and the nation. Your vote matters. Just do it!

Go on, get to the polls and vote!

Photo courtesy of The Truth About Mortgage
With the financial markets in turmoil, and with the luster lost in the real estate market, one wonders where the savvy buyer/investor is placing his/her dollars. If you remove gold bullion, and/or stashing your money under the mattress from the safe haven equation, I would say that the REO (real estate or bank-owned) market is currently vying for the home buyer’s/investor’s cash.

I’ve been tracking the REO market here in Irvine for my buyers and sellers. Buyers want to know that if they decide to purchase a home now that their investment is protected from a further market decline. They feel that if they focus on foreclosed properties, then they have, to some extent, a built-in cushion just in case the real estate market experiences further declines. Whether or not this perception proves to be true is still debatable. However, this is the buyer’s/investor’s view of the current state of the real estate market.

On the other hand, sellers want to know how the foreclosure market is impacting their ability to sell their home in a declining and credit-tight real estate market. Equity rich sellers (and there are still some of those out there) who need to sell their home in the current real estate market, are finding that they have to price their property as aggressively as the REOs if they hope to be able to compete for today’s buyers. Even if sellers were to postpone selling their property in the immediate future, foreclosed properties in individual neighborhoods will certainly impact the comparable values of those future sales.

That said there is only about 20 to 40 real estate owned properties on the market at any given time in the city of Irvine–a relatively small number as compared to other south county cities. Those bank-owned properties that are aggressively priced and in an “interior” location (not backing to a busy street/freeway) are selling quickly and on multiple offers–many of which are all cash rather than lender financed.

Personal experience has demonstrated that unless you prepare your buyer for the REO experience, your buyer/investor may be disappointed, and may not be the successful/”winning bidder.” All REOs require that any offer be backed by high credit (FICO) scores, i.e., those 729 and above (and rising) if lender financing is applicable, and verified funds for the down payment and closing costs related to the purchase. Most will require that buyers be pre-approved by the individual bank’s lender of choice. Bank-owned properties are sold in “as is condition,” subject to the buyer’s inspection rights. What you see or what the inspectors find is what you get or choose not to get. If the costs of repair are prohibitive, the buyer need not continue with the purchase.

However, be aware that some of these foreclosed properties have deferred maintenance or are in need of repairs–the cost of which should be taken into account by buyers who are not contractors or who may not have easy access to one (i.e., a family member who can help refurbish). Also understand that the bank, who has already taken a huge loss, is not interested in the buyer’s list of repairs/requirements.

The REO properties in which I have personally been tracking have been sold at or above the asking price with little or no repairs being made. This may also include termite damage. A bank may provide a Termite Report, but may require the buyer/investor to cover the cost of any or all of the repairs. Other items for which buyers may have to pay include Association transfer and or document fees, and any other fees the bank chooses not to cover. These may show up in a lengthy addendum that the bank furnishes to the prospective buyer(s). Be aware that the bank/seller does not sign on any documents until there is full agreement by the buyer(s) with initials/signatures on all the paperwork including the bank’s addenda.

A striking example is one in which my partner and I previewed on a Sunday evening a week ago. It was a 3 bedroom, 2 bath single family residence on an interior corner lot of over 5,000 square feet in an established Irvine neighborhood. Upon entering, we discovered that the home had been vandalized to the extent that windows were broken, appliances were smashed, and holes were put through walls throughout the homes. We immediately phoned the bank’s agent to advise him of the state of the home. A return phone call the following day revealed that the listing agents were well aware of the vandalism (sadly it turns out that the irate homeowner who lost the home had unleashed a blind rage resulting in the destruction throughout this one-time upgraded and cared for home). The bank, however, we were told, would not be making any repairs except for the broken windows and would not be responsible for approximately $7,000 in termite damage that a recent report had revealed. However, no worries, there were already several offers, a few of which were all cash, and the property was going to be placed in “back-up” status that very day. Why would there be multiple offers on a home that someone had taken a sledge hammer to? One reason might have something to do with the fact that it was a single family home on a large lot in a good location within an established Irvine neighborhood that the bank had priced under $500,000! The other reason might have to do with the REO fascination factor: namely, buyers perceive properties that are tagged as “bank-owned” to be where the “great deals,” are whether they ultimately cost the buyer more in the long run in out-of-pocket fix-up costs.

On Saturday, I previewed a 3 bedroom, 2 bath single family residence in an adjacent neighborhood which was also in need of some repairs. However, it was in a good, interior location on a large lot. Yesterday, I brought back a potential buyer. Within minutes of my arrival, several more real estate agents some of whom had brought their prospective buyers with them arrived. By the time I left the property with the buyer to whom I had showed the property, there were agents and buyers lined up outside the front door waiting to go in! Today, Monday, upon checking the availability of the property, the agent representing the bank already had two offers in hand, one of which was all cash over the asking price and offers were still coming in! Why all the activity? Again, simply stated an apparent strong demand for a single family home in Irvine on a large interior lot aggressively priced at under $500,000, and a plethora of ready, willing, and able buyers–some of whom have ready cash.

A similar multiple offer situation occurred on an Irvine four bedroom former model home price in the upper $600,000 range in which there were four all cash offers in addition to several others structured with lender financing. The listing agent for the bank came back to only the four all cash offers (they didn’t even consider the ones that required financing), with a “best and final price.” The home ultimately sold above the asking price to the highest and best bidder.

What about the higher end properties–above $1,000,000? These too are receiving multiple offers, and the successful buyers are the ones that are either purchasing with all cash or those who are financing only a small portion of the overall price of the home. Buyers who are trying to negotiate off the listed price, and/or those who need conventional financing seem to be considered if the all cash buyers do not show up. But show up they do, and they are the ones that are the successful buyers/investors–at least for now.

Photo courtesy of Tim Larson of Grey Clad Mystery

We all search for perfection in the real world. We look for the perfect person with whom we can bond. We look for the perfect culinary or wine-tasting experience. We look to catch the perfect wave. We look to achieve the perfect SAT scores; well, you get the picture. We all strive toward that elusive dream of perfection in whatever it is that we deem important in our lives.

Fast forward to the way in which buyers/consumers search for the perfect place to call home versus the way in which real estate web developers construct a real estate site. In his funny and illuminating article entitled Rethink Real Estate Search, in Inman News, Marc Davison, of 1000 Watt Consulting points out that real estate internet sites are engineered by programmers–”guys and gals with 180 IQ’s–guided by folks who get their kicks from Excel.”

A programmer might construct a search by zip code, or create an application that includes home-value estimates that “can never be accurate, no matter how many Ph.D.s are thrown at them;” or create searches that are “cluttered by advertising;” or provide maps that are either “hybrid,” “satellite” or “list” views (“humans don’t search from space”), instead of speaking to what real people are looking for when they search for the perfect place to live.

And while it is true that statistical data has demonstrated that over 80% of buyers/consumers begin their search for the perfect home online, their home search continues off line, on the ground, and at the local level in conjunction with a real estate professional

A real person–a “human,” if you will, pursues their search for a home by actually driving through neighborhoods, by talking with neighbors, by “test-driving” the commute from work to a prospective home, by asking about the neighborhood schools and test performance, by checking the proximity of schools to the home under consideration; real people ask about whether the home or condo has a yard large enough for a pet or a garden, whether the house has a home office, a main floor bedroom, a hobby room, a media room, a living room in addition to a family room, a master suite downstairs, a chef’s kitchen, a finished garage; whether the garage is attached or detached, a two or three car garage, where the neighborhood shopping centers, parks, fitness center, bike paths, movie theatres, restaurants, local pharmacy, cleaners, barber shop are located–you get the picture: the things/stuff/features that make a home the fulfillment of a buyer/consumer’s dream home and a neighborhood that is a perfect fit for their lifestyle.

The buyer/consumer wants to have a dialogue, a conversation, with their real estate agent about what the buyer considers to be the most important features in their search for the perfect home. This then, as Marc Davison suggests, can be formatted in an innovative way by programmers who would create a “natural search paradigm” that would describe homes in a manner that reflects how people really think.

And by the way, buyers/consumers want to see pictures, lots of them, and not crummy, blurry pictures, and not three pictures of toilet bowls with the seat raised, as Lynne Pope illustrated in her recent post. Imagine buyers finding an unlimited number of pictures, say 50 photos–more than enough to capture the essence of the room’s space and with descriptions that stir the imagination and paint a picture of what it would be like to live the lifestyle that this home evokes.

And what about creating and sharing a video of the neighborhood amenities–a journey into the heart of the community, highlighting the nearby pools, spas, tennis/sports courts, parks, restaurants, shopping centers, and schools.

Now I’m sure that you get the picture–in focus, evocative, and enlightening–and so will the buyers if you dialogue with them about what they would like to see in their search for the perfect home. And maybe the conversation will inspire change—moving the discourse toward a more perfect home-buying experience on-line through a human centric search algorithm, and off-line, through the human contact with your local real estate professional.

I decided to play the interviewer at my Open House yesterday. Yes, I am one of those real estate agents who believe in holding Open Houses as one way to market and expose a home to potential buyers, and to answer questions swirling around in the minds of buyers and sellers in the Irvine neighborhoods in which we market and sell homes. Yes, It’s real life, real-time interacting with your potential home buying/selling community; “pressing the flesh,” so to speak. And to be quite honest we have actually sold quite a few of our listings and/or our collegues listings through the contacts we have made holding Open Houses. However, yesterday, I decided to ask John and Jane Doe, and Mary Q. Public the following questions:

1. On which sites do you search for properties, and

2. If you could make one change that would enhance your online home searching experience, what would that change be? And the answers were enlightening:

The over 40 demographic, named Realtor.com and Homeseekers.com as the top sites used to search for homes. The under 40 set, said they searched for homes most frequently on Redfin, Zillow, and ZipRealty. Of the group polled, I asked if anyone had used Trulia. In this particular group, no one had searched on Trulia or had even heard of this site. I found this “trulya” surprising, since this site ranks quite high on Google for home searches of all kinds. Only one person used a brand-name real estate company to search for homes, and that one person found it to be a frustrating experience first and foremost because they were asked to “register” in order to perform any home searches. As a matter of fact, all the people polled said that they would not use a real estate site that forced them to sign in or register; they would just navigate away from that site, until they landed on one which provided free access to information and home searches.The number one complaint, and the most often cited criticism of real estate sites in general was the lack of up-to-date, reliable information. What consumers were led to believe were available homes for sale, turned out to be homes that were already in escrow or sold homes. The real estate sites that provided RealtyTrac information (homes in default or REO/bank-owned properties) were cited as being completely out-of-date in many instances.

Open Houses can be a viable, valuable marketing tool under certain circumstances and in particular niche markets. Real estate is after all local, and buyers often like to check out neighborhoods and houses up close and in person without having to commit to using the services of a real estate agents in the beginning stages of their search.

Just as many buyers prefer to view homes first online, anonymously, and educate themselves before actually making contact with a real estate professional, buyers also utilize Open Houses as a way to familiarize themselves with those particular communities in which they may ultimately have an interest in purchasing a home or condo.

We have found greater success in holding Open Houses than the average statistics may indicate in our local, niche markets. We hold Open Houses regularly in and around the University of California at Irvine in the villages of the University Town Center, Quail Hill, and Turtle Ridge in Irvine where homeowners and prospective buyers stop in to find out about about the current available listings, recently sold properties, types of properties, number of bedrooms and baths, floor plans, price per square foot, and proximity to specific schools in which they are interested. They ask about the current interest rates, whether housing prices are trending up or down, and ask us about our interpretation of local real estate market conditions.

An added benefit of holding Open Houses is the increased exposure these homes receive from showings by out-of-area real estate agents, who do not have local Board MLS access and, therefore, have an easier time showing our properties.

Because the demand/need for housing is driven by the proximity to the top-rated schools, in the villages in which we specialize, many of the potential buyers come from quite a distance to view the Open Houses. These communities are not only in close proximity to U.C. Irvine, but are within the school boundaries which include the top-rated elementary schools, including Turtle Rock elementary that feed into the villages of Turtle Rock and the University Town Center in 92603 and 92612, Alderwood Basics Plus elementary located in Quail Hill (92603), Vista Verde elementary (an award-winning year-around school), within the school boundaries of Turtle Ridge (92603), Bonita Canyon elementary in Turtle Rock (92603), Rancho San Joaquin Middle school, and nationally-ranked University High school which serve all of the local Irvine neighborhoods, south of the 405 Freeway, and near the University of California at Irvine.

Parents of both prospective and currently enrolled UC Irvine students visiting the UCI campus from a distant city, or from northern or central California, or, perhaps from out-of-state, or even from outside of the country, will stop by an Open House in the University Town Center, Quail Hill, Turtle Rock, and Turtle Ridge neighborhoods. They appreciate begin able to discuss the availability of off-campus housing during their short visit and can get a good sense of the area, view the current inventory on our laptop at the Open House, and schedule an appointment at the end of the day after the Open House has concluded to see the comparable homes/condos in the area.

As a direct result of holding Open Houses, we recently opened escrow on two of our listings in which we represented both buyer and seller, and assisted buyers in the purchase of two of our colleges listings in the same neighborhood. Moreover, as a result of an Open House we held in which a buyer happened to see, the buyer’s agent contacted us, an appointment was made to take the buyer through for a second look, which ultimately resulted in the sale of the property.

The bottom line is, as real estate agents, we are facilitators–enablers who strive to bring buyers and sellers together in a successful home purchase and/or sale. When it works, it fulfills the hopes and dreams of real people in their pursuit of homeownership. It’s an enduring and an endearing experience for all parties.

So the long answer (as it turns out, longer than I had anticipated), is yes, under certain circumstances, there ought to be a place for Open Houses in a real estate agent’s marketing strategy. But it’s a qualified yes. If it works, by all means use it; if it doesn’t, lose it.

There is light at the end of the tunnel…

It began this spring with whispers and mumblings in the real estate community and blogesphere. Buyers were emerging from their winter doldrums and showing up at Open Houses–at first checking house prices; not commiting, but still demonstrating a measurable interest in real estate.

While the reports from the established media were still cast in colors of May gray, and June gloom, the tweets and twitters from the chorus of real estate agents in their respective local nests were singing a different tune and what a sweet tune it has turned out to be.

Open the curtains, raise the windows, throw open the doors, and inhale the fresh air of a changing season in the real estate market. The flowers are in full bloom and their fragrance fills the air. The birds are singing and a new day is dawning here in Irvine and in the local housing markets around Orange County.

Psst…if you haven’t heard, homes are selling and they are selling in healthy numbers. Active listings down; pending sales up; inventory is rapidly being absorbed–these positive trends continue to emerge in the Irvine, California and Orange County real estate markets.

Irvine and Orange County housing sales reported to the MLS continues to be strong. The past two weeks have seen sales in greater numbers. Inventory continues to fall by an average of about 100 listings per week, compared to increases of approximately 200 listings per week at this time last year. The current inventory in Orange County number 1600 fewer homes than at this time last year. Active listings in Orange County have fallen below 15,000, and the index of how long it would take to sell/absorb the existing inventory at the current rate of sales is at its lowest point since August of 2006. In our local Irvine housing market, we currently have a total of 839 active listings in the Multiple Listing Service. Those homes/condos reported as in Back-Up or Pending Sales (in escrow) number 272 which indicates that it would take only three months to absorb/sell the existing inventory at the current rate of sales.

Buyers have a real opportunity to realize their dream of home ownership at significantly lower prices and favorable interest rates.

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As a veteran real estate agent, the message reverberated loud and clear: “Innovate or Disintegrate,” as Jessica Swesey writes in her fairwell article as a columnist for the Inman News.

If there’s one thing I’ve learned in my years as editor of Inman News, it’s that companies that do not innovate die–or worse, become irrelevant, which is much like being buried alive.

I hope that those in the real estate industry see the changing market as their opportunity to innovate. The Internet, open source, social media, the sub- prime disaster and housing downturn have changed consumers forever. Real estate needs to adapt to these changes.

Those who do not innovate will become irrelevant to these changing needs.

Indeed, real estate agents must embrace the new medium of the Web 2.0 by creating a voice through a network of interactive communication and participation, and by going beyond the static page of a Web 1.0 presence to deliver rich original content and information to the home buying and selling public.

In the 1960’s, Marshall McCluhan, a media analyst, wrote a book from which the title became the common vernacular for the transformative power and influence of the medium of television, still in its infancy: namely, The Medium is the Message.

Every generation has their medium and those who succeed in embracing the medium connect with the people with whom they communicate. In the realm of politics, President Franklin Roosevelt used radio–the medium of the day to connect with the depression-era populace by way of the intimate Fireside chats.

President John F. Kennedy used the new medium of the time, television, to connect with an unprecedented seventy-seven million Americans (over 60% of the adult population,) to win the Kennedy/Nixon Debates in the eyes of the public and ultimately win the Presidency. At the time, CBS news correspondent, Charles Kuralt, declared that “Kennedy’s skill with the medium helped to make television the nation’s ‘new front porch’.”

Fast forward almost half a century, and the political pundits are now attempting to deconstruct Barack Obama’s below the radar successful candidacy for the Democratic nomination for the Presidency.

In Frank Rich’s Op-Ed article entitled, One Historic Night, Two Americas, he points out that “the Obama forces out-organized the most ruthless machine in Democratic politics because the medium of their campaign mirrored its inclusive message.” In other words, they empowered the ordinary citizen rather than relying on the typical top-down hierarchical structure of the past.

“Such viral organization and fund-raising is a seamless fit with bottom-up democracy as it is increasingly practiced in the Facebook-YouTube era, not merely by Americans and not merely by the young.”

Out with the old ways of doing business; in with the new social media.

He goes on to point out the similarities between Hillary Clinton’s and John McCain’s strategies in their respective “cultural tone-deafness” and “stodgy generic web site(s) ” in which their “blogs, video and social networking are static and sparse,” and how both Clinton and McCain repeatedly invoke “I,” in their respective speeches, while Obama’s message invokes the inclusiveness of the “Yes, we can” mantra: speaking to a multi-racial, multi-ethnic, multi-generational inclusiveness–a post boomer, post-partisan inclusiveness that jettisons the baggage of the Me-Generation and embraces the You-Tube, MySpace, Facebook generation. “His [Obama's] vocabulary is so different from that of Mrs. Clinton and Mr. McCain that they often find it as baffling as a foreign language.”

In Rich’s opinion Mrs. Clinton and Mr. McCain see change as “nothing more than a marketing gimmick,” while Obama uses the message of change as a sea-change of all inclusiveness and optimism. “On one side stands Mr. Obama’s resolutely cheerful embrace of the future… On the other is John McCain’s promise of a wise warrior’s vigilant conservation of the past.”

Parallels may be drawn in the real estate industry as real estate agents continue to cling to old ways of the “I’s” instead of focusing on the all inclusive “we” or “you.” Indeed, there are the veteran real estate agents who remain comfortable with the methodologies of the past–reluctant to embrace the new technologies–even the most basic ones in the face of the public’s desire to have a free flow of information available to them when they want it and on their terms.

Others of us are empowered, energized, and willing to embrace the kind of change necessary to educate ourselves as we move toward understanding the new message of inter-connectivity and seek to immerse ourselves in this new medium, resolving to deliver the information that the buyers and sellers desire in an interactive Web 2.0 way.

The real estate agent who seeks to remain vital in this rapidly changing industry needs to evolve and embrace the new message of total transparency with the free flow of real estate information, including real-time market trends and statistics, accurate and available “sold” data, access to real-time mortgage rates, original hyper-local community information, instant chat and instant messaging. We need to embrace and disseminate the information through the new medium of Web 2.0 real estate whether it be in the form of an interactive web site, blog, and other social media, such as Facebook, MySpace, YouTube, LinkedIn, and the newest micro-blogging phenomenon, Twitter.

For those real estate agents who wish to experience the new Medium and Message first-hand from the internet gurus, such as Pat Kitano of TransparentRE, Kevin Boar of 3OceansRealEstate, and Dustin Luther of 4Realz, check out the Real Estate Connect Conference in San Francisco from July 23rd – July 25th. You will be inspired to find your own voice and re-construct your business for the new Web 2.0 real estate community.

If you’ve watched Sabrina Soto on HGTV’s “Get It Sold”, you know that she takes a home that’s been languishing on the market, makes some changes, rearranges, spruces it up, stages it, and it sells… Even if you haven’t watched the program, a home that is well presented will sell faster.

Take a good look at your home… Is it ready for its debut–it’s entrance–in our current Buyer’s market? Would you buy it if it was for sale? In today’s market, it needs to stand out among the inventory. If not…

Here are some low-cost ideas:

• The Brush-Off: Freshly painted interior and exterior walls in neutral colors are appealing, and tell the prospective buyer that your home has been well maintained. Call your Home Owner’s Association (if you have one) for exterior paint brands and colors. There are several “green” paints–low Volatile Organic Compounds or VOC’s available for interior paint.
• A Place for Everything: Remove clutter from exterior and interior stairways, bedrooms, kitchen and bathroom counters. Observe the one-appliance kitchen rule: just one on the counter, whether it’s your coffeepot, toaster, or food processor. This says there is plenty of cupboard and counter space.
• Counter Proposal: Your kitchen should sparkle and give the impression of plenty of working space. Be sure the faucets don’t drip, and the built-in appliances work.
• It Makes Scents: Borrow a friend’s bread maker if you don’t have one. The smell of fresh bread is almost irresistible, and gives a warm welcome. Do not use floral room sprays; they make the buyer wonder what you’re trying to cover up.
• Take a Powder: Put away shavers, makeup, curling irons, hair dryers, etc. Shine bathroom tubs, sinks, fixtures, and mirrors, and put out fresh towels. The caulking around the tub/shower and grout around tiles should be free of cracks and dirt. A good way to clean the caulk is with a toothbrush and liquid sink cleaner.
• Plenty of Hang-ups: Neat and orderly closets reveal plenty of storage space is available. Dispose of unwanted or unneeded clothing to a favorite charity. Store boxes of files, holiday decorations, etc. in the garage or at a storage facility.
• Beauty by the Yard: Make a great first impression by having the lawn neatly mowed and edged, flowers planted (especially fragrant ones), bushes trimmed, and the yard of free of garden tools and toys (swing sets excepted).
• Doing your Homework: You will rarely recoup the dollars invested in major home improvements just prior to selling your home. Exceptions: upgraded kitchens and baths.
• Take a Good Look at Yourself: Would you buy your home if it was for sale? If not, use these low cost investments that will return greater dividends.

The key to selling your home in a reasonable time frame and maximizing your sales price, especially in today’s market where there are many homes from which to choose, is to prepare your home for sale before its debut. Remove the clutter, the personal effects and paint the walls in neutral colors. Create an environment that can suit many buyer’s tastes. By depersonalizing your home, buyers will visualize your home as their home, and it will be as good as sold.

Photo is Courtesy of HGTV’s “Get It Sold,” by Sabrina Soto

“Sex and the City,” the movie, opened Friday to the tune of $26.9 Million based on the strength of sales by women and their friends (the buzz) resulting in sold out shows.

Your home for sale is the equivalent of an opening–it has to have the right “buzz” to be included on the buyer’s short list. Whether or not you have a successful opening can impact how many dollars you may gain or lose in terms of the sales price of your home. You usually do not get a second chance to make that all important first impression.

Your house for sale has to entice the buyer. If you were meeting a blind date, you would not don an ordinary “house dress,” but rather you might slip into that killer Little Black Dress, and accessorize it, perhaps, with a pair of strappy Manolo Blahnik heels, the latest “it” handbag, and an alluring “come hither” scent–in other words you would be “dressed to kill.” Your house needs to be “dressed to sell,” when a prospective buyer drives up to the front of your home for sale. Does your house have that all important “it” factor?

If not, you would be well advised to obtain a makeover (and it doesn’t necessarily require an extreme makeover) prior to putting your house on the market for sale.

In her article entitled Staging is House Marketing, Marion Duffy aptly points out that “You want your house displayed so as to give shoppers an idea of how your home may fit into their lifestyle. This is staging. Staging sets your house apart from the houses on the rack or the rows of houses.” Indeed, your house needs to appeal to the emotions of the buyer.

In a related article entitled Intuitive Home Finding, Lynne Pope paints a picture of how a buyer perceives their home: “When you think of a home, you look into your heart and you picture it, a picture so clear you feel it in your soul, the place you’ve dreamt about and longed for, ” namely, your Ideal Home. Indeed, your home may well be compared to one’s perception of an ideal soul mate. The image arises from our dreams…Your house is now the star of the Silver Screen: Ready, lights, camera, action!

Photo is Courtesy of StarPulse.com