San Francisco Market update

I ran into one of my favorite San Francisco real estate agents at Rulli’s in Larkspur this morning.  He said the homes that came on the market in the early spring that were ‘show ready’, priced right and had few, if any downsides flew out the door to buyers who had been waiting for more inventory.   Sounds familiar….

Newspaper Story (‘old media’) Brings in Viewers and Buyers!

When my listing at www.40Steven.com was featured in the Friday Chronicle “Walk Through” section, the hits on the website went through the roof!   Well, to be fair, the home was also featured on SFGate.com, but most buyers who came through over the next couple of weeks had seen the old-fashioned paper article.  We may have an offer coming in from Denver buyers who did see the SFGate photos, and put the home at the top of their ‘must see’ list on their next trip out.   There is still some room for good press!

Davidson Middle School: Impressive, a Surprise

Davidson Middle has an image problem.  In part due to perceptions that have been cemented over the last decade or so…in part due to low scores on standardized tests.   As a real estate agent in Marin County, I have provided test scores to my clients as an important part of the buying process…and even as an element in pricing homes for sellers.    In every transaction in central San Rafael, the topic of Davidson Middle School came up.   When I was invited to tour the campus, I felt I had to take a look for myself.  I heard there were dramatic changes, so I visited the campus last week, skepticism in tow.

Wow!   The campus was pristine — frankly in better shape than the ‘good’ schools in Marin County.  No litter, no graffiti, and some beautifully remodeled buildings and classrooms.    The teachers I saw had wonderful command of the classroom.  Students who were not behaving had their names go on board for staying in the class during lunch.  The kids were as respectful as any I’d seen in other schools…and frankly, more respectfully dressed (although in the winter it’s a little easier to achieve that)   The curriculum seemed rigorous.   As to the scores, if the non-English speaking students were separated out, the principal says the school would be one of the top scoring middle schools in the county.

Top 10 Mistakes Buyers and Sellers Make

Buyers

  • Using an out-of-town agent or relative who is not active, informed or connected in the area…or worse, expecting good advice from the agent representing the seller (who is paying the commission)
  • Starting to shop without first being pre-approved and having funds in place
  • Saving money by asking a friend or acquaintance to do inspections, rather than a qualified, thorough  inspector
  • Finally finding just the right home, fortunately it’s listed at a great price, and deciding it’s not a deal unless the sellers will take a random, fill-in-the-blank huge amount less.
  • Being reluctant to be the first one to move forward, then being put off if there are other offers

Sellers

  • Not spending the money to make their home look inviting and chic from day one on the market
  • Neglecting to review agents’ marketing materials, ad plans, property websites and tech know-how prior to committing
  • Not strategically planning the debut date for maximum impact
  • ‘Trying out’ a price that will strike most buyers as too high, leaving a negative  impression of the home
  • Becoming offended about the price the home is actually bringing in — and counting on the fact that it will change in the near future

Why Buyers Need Their OWN Agent (and a local one)

It’s a Sunday open that usually prompts a blog post like this.   It’s usually lost-looking potential buyers that come through after viewing homes that are completely wrong for them.   Inevitably, the buyers are ‘flying blind’, figuring they will find an agent later, or they feel loyal to an out-of-area agent, or they will use Aunt Millie from Manteca whose mouth is watering at the thought of a Marin-sized real estate commission.    Here are just a few reasons why, when you are ready to buy, it is a really good idea to have an honest, hard-working, local expert on your side.

– You save a lot of time because your agent can suggest itineraries for open homes based on your criteria

– Your agent will take you on a tour of the area if it is unfamiliar territory.   The good ones will include schools, pros and cons of various neighborhoods, micro-climate summaries, and the highlights of each town.

– A good local agent is up on all the latest news and regulations surrounding towns and transactions.  (Sewer line requirements, flood history, permit practices)

– If you make an offer, the last person you want writing the offer is the agent representing the seller.   Remember, the seller is paying the commission and has known the listing agent for much longer.   If you go into contract, will you have confidence in the agent’s recommendation against a fireplace or structural inspection?   Remember, the agent who does two sides of a deal has a lot at stake.   He or she will be doubly-motivated to make sure the deal goes through, possibly at your expense.

Take your time finding a knowledgeable, tough, straight-shooter to work with.   And make sure he or she is a likeable sort.   Why does ‘nice’ matter?  Because the listing agent is well aware of who may be more likely to act unethically during a transaction.    Buyer’s agents should be tough negotiators.   Walking away from the deal is your best weapon.  But as a buyer, you want to make sure that your agent doesn’t have the other side leaning away from you and toward another buyer before the negotiations even begin.

Tax Increases Next Year: One example

My accountant, TJ Williams in Mill Valley, sends out a very informative newsletter that included the following about the Bush tax cuts that have not been extended by the Obama administration.   It’s hard to understand how all this will affect us until it’s spelled out.   Here’s TJ on one example showing a 2011 tax bill unless Congress and the President act:

Working couple:  John and Marsha both work, and have two children in grade school.  Their income is from wages, and they also use the standard deduction.  Their income is $70,000 in wages.

In 2010, starting tax is $5,439, less the $2,000 child credit, and less an $800 for tax credit for workers.

TOTAL for 2010 is $2,639

In 2011, unless the direction is changed, the starting tax on this couple is higher by more than a thousand dollars:  $6,555.   The child tax credit is cut in half, only $1,000.   And there is no tax credit for workers.

TOTAL tax bill for 2011 will be $5,555.

Back to me:  Businesses and families are planning for these increases and uncertainty by pulling back now.  In my opinion, hiring, salaries, or home values will not be increasing any time soon.  (but here in Marin, they may not decrease, either!)

The Debut of Your Home on the Market: Think of it Like a Broadway Show

I help my clients put everything in place PRIOR to the debut of their home on the market.   Because we live in an incredible place like Marin, real estate buyers are sophisticated…and they look for ‘the best.’  

Sellers who want to ‘try the market’ and put their home on the market without the elbow grease and funds necessary to make it shine, could be leaving 10% of the sale price on the table…or worse, it doesn’t sell at all.   If you think your home will sell for a million dollars, you may have to settle for $900 thousand if you don’t use experts to de-clutter, paint, and arrange furniture in a way that makes the home ‘invite’ buyers to sit down and stay.    Sellers have one chance to do that.   Going back on the market later with a ‘new’ look really does not prompt agents and buyers to come back and take another look.  We’re busy, we have our first impression…we think we remember everything that needs to be remembered.  Unfortunately for some sellers, that first impression can include pet smells, old carpets, dated furniture, unattractive color palettes, and clutter that makes the home seem smaller.

If you were the producer and investor in a Broadway show that was known to have a good script and top-notch actors, would you make the decision to pinch some pennies in the ‘staging’…and skip the costuming, lighting, music, and publicity to herald your big debut?     A decision like that could cost you a large chunk of your investment when your production fails to attract an audience.  When it comes to property preparation, think of the $10,000 to $30,000 investment as insurance.    That insurance makes it far more likely that your home will sell.. and there is a good chance that your home will recoup several times your ‘investment’ in a higher price.   Spend a little…you will be more likely to ‘make a lot.’

It’s just as important to debut your home with an agent who you have seen puts money into high quality flyers, professional photography, photo montage property websites, and other key print and internet advertising placement.   The busy agent that throws up a sign the week before a holiday week-end, has an assistant host the little-attended opens, and has print-outs from the MLS as hand-outs  is providing little service.  Worse yet, an agent like that makes it more likely his or her client will have to drop their price significantly.   Agents that offer you a small discount on the commission and promise you a much higher price than you’re hearing from other experts, are looking out for themselves, not for their clients.  They are counting on a long-term listing that will eventually be dropped in price significantly, but will still make them a commission.   Instead, do your homework and go with the hard-working, honest agent, high-end materials, and a realistic price.   You will walk away with a much fatter bank account.

A Win at the Probate Window

I always enjoy a new experience of any kind, and presenting a sealed offer for a probate sale at Marin County’s Public Administrator’s Office turned out to be a good one.  My clients and I had monitored the competition on this sale for weeks, strategically planned inspections just prior to the offer, and submitted a very carefully thought out bid.   With no competition, and a strong pre-approval letter, they walked away with an acceptance on an incredible price.

It was a very strange place to get such great news… we were on one side of the plastic barrier at the counter — the official reviewing the offer on the other.  No matter… great news is great news… and even probates suddenly don’t seem as difficult a process as I expected.   Another interesting piece of information:  the county will sometimes do light remodeling on a home in order to bring in a higher price.   In some cases, like in any sale, it’s necessary to do some work for the home to sell at all.