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I spent the majority of the day today trying to protect my buyers in a purchase transaction and responding to this post. Well, it was fun.
I get the sense that a lot of people do not like real estate agents. And perhaps they have run into a few (God knows I have!) that we hope are out of the business now. So people are a little jaded and very wary.
Good for them.
An investment is an investment is an investment and should be considered very carefully.
That being said, I just heard (on audio CD in my car) Seth Godin’s THE DIP. And I think if you’re already invested in this real estate market and have no more to invest, don’t really want to sell but are watching home prices fall and all the negative news out there, you should read this book.
The Dip applies to everything, not just business. If you master the dip, you soar into success. Basically, the writer says that when you try something new there is the initial surge of interest that carries you through for a while. It’s new, it’s interesting, it’s fun. You might even have some beginner’s luck. But if you are in it for the long haul, you will inevitably run into the dip. And how you deal with it tells you whether you will succeed or give up.
Read the book.
Okay, fellow Sacramento Realtors - what is with pricing a home at 199,999? I understand you want to stay under the $200,000 mark, but seriously! At least refrain yourself and set the listing price at 199,900. The buyer gets the idea.
Even Metrolist has started to add a home at $200,000 on both sides of the $200,000 price.
A smart fellow Realtor looks for a certain amount above and below what his buyer wants anyway - the amount varies with the market. But if my client says she’ll buy a home up to $300,000 I will usually search between the parameters of $240,000 to $320,000. Who knows? The sellers might be motivated!
So instead of letting this drive me nuts, I did some research. Turns out there is a reason behind the 99 cent pricing (Thank God the MLS doesn’t have cents!) and the roots are economic. Go here for the entire story.
But feel free to call and scold me if I ever add too many 9s. Unless it’s a million dollar home. I’d make an exception there -wouldn’t you? But then, I’m the last Realtor in Sacramento not impressed by 9s. 
Sacramento real estate investors are (finally!) standing up and taking notice. The Handyman’s Special might be sold pretty soon. Now, with this being a short sale, it still has to go through all the right channels with the lender (Countrywide) to be approved, but since it had been approved earlier at $239,000 without knowledge of the pest report, this one should be a pretty simple “yes” or “no” based on price.
In a short sale, the lender is usually willing to look at only one offer at a time, so of the ones that come along, I’m hoping we get a decent enough offer to submit to Countrywide. That being said, there has been genuine interest. Yesterday and Monday felt like a hearkening back to the real estate boom market we had in 2004, what with the number of Realtors and others interested.
Want a closer look at the property? I plan on showing it Sunday between 9:30 and 10:00am. Feel free to come!
For all those of you concerned about real estate values falling in and around Sacramento, listen up! Today Elite Properties’ floor agent (me!) received eight - count it - eight inquiries from seven different people on eight different listings.
The buyers seem to be waking up and realizing there’s deals to be had around here!
While bemoaning the idea that none of my buyers want to buy right now and we’re hearing the “we’re holding off buying for now…” (By the way, never - NOT ONCE did I hear that when prices were headed up two years ago. Heard it from sellers that wanted more for their home - their houses are still on the market. Do we see a similarity here? Hmm… buyers?)
… That sentence got too long, so let me begin again. While talking about our potential buyers, Huck - my preferred mortgage consultant - and I got into an email commentary of the Sacramento real estate market and how it will end eventually. Here’s a direct quote:
“Here’s what will happen: Without [the buyers on the fence] constantly in (watching) the market, inventory in a neighborhood of interest will drop, then some house will sell
for a comparatively high price, it will then become “the comparable” for
everything selling subsequent, and we’ll be off on the upswing again. I’ve
seen it happen over and over…
“There’s one almost identical to mine that did just that and it closed about
2 wk ago, driving mine from about $850,000 to $900,000 in one shot. Now
there’s another one like mine pending for $895,000.
“Truly savvy investors are willing to buy BEFORE that happens, and are
willing to see lower prices for a short time before the rise…”
Something to think about!
This morning while searching the MLS and getting lost in all that real estate inventory out there for sale, I noticed a house on Priscilla Lane that is such a steal, I would write an offer on it today. Alas, I’m fully invested and my husband will definitely want to send me to be mentally tested if I thought about another home.
My ambition, like someone else mentioned in the SacBee a while ago, is to own entire streets. Monopoly player, for a long time (and Scrabble too, which is the right combination for a Realtor, I guess!) This real estate investor owned all the houses on the street he lived on and the Bee cautioned him that he was not “diversified!”
Let me fall back on my favorite quote from Warren Buffett again: “Diversifying is insurance against ignorance.”
But, back to the neighborhood: the Colonial area is largely ignored by investors and first-time homebuyers today for two main reasons:
1. There seems to be a general look of untidiness in the neighborhood, thanks to the vacancy factor of foreclosures, and
2. The zip code 95820 is shared by Oak Park, which we know not too many people want to move to because of the crime.
To combat that, I say:
1. Foreclosures have hit this area hard - which makes it perfect for you investors! and
2. 95817 is also shared by Oak Park - these are postal codes, not crime or wealth codes.
And the fact remains, if you’re looking for great deals, they’re all here! The average home is about 1000 sq. ft. with 3 bedrooms and 1 bath. Backyards are modestly sized and streets are cleaned every month on third Thursdays. (Yes, I did live there for a while - in a home we knew would be a good rental in a couple of years.) Most homes have real hardwood floors and if you get lucky, homeowners have put on new roofs and central air. Rent hovers right around $1250 a month. Property values are depressed now to about $180,000 but generally have been hanging around $250,000 for a turnkey home.
If you have an extra $50,000 to invest, you should be looking around Colonial! Consider these!
When shopping for houses in Sacramento as a first-time buyer, which zip code is preferred?
I got a call from a potential buyer the other day wanting to look at houses that she had picked from the MLS herself (I love it when buyers are involved in the process from the start and don’t wait for Realtors to do the research) and the two themes I saw repeating were 95608 and 95821. Personally, I like 95821 because there are some pretty great deals out there for first-time buyers. But my client has never lived in Sacramento, so I want to really make her feel at home. Any ideas?
I had lunch with two of my best business associates today at a Mexican Restaurant I wish I could remember the name of (and swore to myself I would) and thought, “Well, this is really what the real estate business should be like.” And then realized, this IS what the business is. It’s about getting the best people together and then making sure everyone gets what they want.
As Realtors, we’re sometimes sidetracked by the all the glamor, the pictures on the Open House Signs, the paperwork, the (shudder!) scripts. Sure, we’re salespeople. But what else is sales but getting people to like you? And if you can help them get what they want, why won’t they like you?
Last year, I promised my clients to provide only the best people - lenders, property inspectors, contractors, and of course, their Realtor, me! Today’s business lunch was in keeping with that promise. One of those people was my new broker-friend-fellowwriter John Lockwood (whom you know enough about now) and the other was my mortgage consultant Huck Ferrill.
The story behind how I met Huck is pretty interesting. I was working in Prudential at the time and was pretty brand new as an agent. I had no contacts, no one I knew except for the company recommended vendors. You know, the kind that hover around the front door and send you cookies and bagels and turn you into lambs for slaughter! Around that time, I also had some clients with challenged credit and some other shady lenders not worth mentioning here because of whom buying a house for myself turned into an absolute nightmare.
That was when I decided & promised my clients I would only have the best people for them to work with. Too many deals go sour at the signing table and make me as a realtor look bad. So the search began. I sent out form letters to about 25 local mortgage professionals. About three answered personally. Two with a phone call and Huck with an email and a reference. Of the two that called, one has quit the business (nice, honest guy, though - maybe too nice?) and the other was just cold when I came to see him. I mean, here I am, trying to set up a busines relationship and he isn’t even friendly!
Huck was completely different and I knew it the moment I met him. He wanted to explain interest rates, the people involved behind the curtains, not just what the loan meant to me. What’s more, he is a real estate investor himself - an acquirer of real estate - much like me and believes in personal service just like I do.
If you want to be successful, you must surround yourself with successful people. John and Huck are definitely it! You can reach Huck Ferrill at 916-788-9802
I woke up yesterday smelling smoke. “Someone’s burning something,” my husband said. Someone was actually trying to put something out. As I went through my morning routine (coffee, workout) I watched the news and realized my street was the last one the CHP has chosen as the last safe exit off highway 50. Everything from there on until the state border was closed and thousands of homes were being evacuated. 240 homes burned down yesterday.
Honestly, Realtor or not, the sight of a fireplace being the only thing left in a home burned to nothing is a sobering sight.
While I prepared an overnight bag, just in case, I packed up the jewelry and the insurance documents, realizing we were not prepared for an emergency of any kind. See, I always believed I would pick up sentimental things if the house were threatened by fire. But I didn’t. Your mind in survival mode is cruel, but very efficient.
Every home needs a fire safe. Every household also needs a safe deposit box - about 30 miles away. And having home insurance yesterday for everything including valuables inside the home was priceless.
This has got to have been the most painful episodes I’ve watched on TLC’s Property Ladder. A young couple - they were 21, I think, bought a home in Del Paso Heights hoping to flip it and make some money. After an agonizing hour, the show ended with them having made maybe $10,000. Bad contractors and just wood rot threw them overboard and they may have walked away with the $10,000 if they were lucky.
Sad. But not the only case of flipping houses here in Sacramento gone wrong. This year, in early spring while I was out previewing properties in the Colonial area, almost every other house on the market was someone’s ambitious flip gone wrong. Failure, when it relates to homes, is extremely painful to watch.
So what can you do to avoid these mistakes? Here are a few ideas:
1. Know the neighborhood - know the prices like the palm of your hand. If you don’t know what the houses are going for, it gets easier to let optimism get you carried away. Also, make sure you can get to the neighborhood easily. Anything more than an hour’s drive is too far.
2. Do the math. This should probably be number one. If the math doesn’t work out for you to make a profit that’s substantial, do not do it. The carrying costs might eat into that profit and probably will. The best math will not save you from a market crash, so do more than your homework and leave some wiggle room.
3. Get to it! This is the biggest piece of advice I can give you. Vacant homes are a liability. The sooner you can get done and get out from under the mortgage, the more profit you can make. Time is literally money. Treat it as such.
More tips coming up! Mostly from experience, so believe them!
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