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Month: December 2006 (page 6 of 6)

December 4, 2006

Ask The Broker: What if my lender won’t underwrite a land lease?

by

Real Estate Investments Broker

Author website

I am a buyer in a real estate transaction for a condo in California. I have been in escrow for the past 45 days but have been unable to obtain a loan due to the fact that the condo is on leased land which is due to expire in close to 30 years and the bank does not want to take the risk. There was a finance contingency. A 15 year loan would not be satisfactory to me and I may not even qualify for it. Can I cancel and get my earnest deposit back, thanks.

California says the condo is, I guess technically, not considered real estate because of the less than 30 year lease term. This may be a large exit door for you.

Although I’ve run into this problem in Hawaii with clients, never in California. A practical solution is to find out if it’s possible to have the lease extended past 30 years. That worked for me many years ago. If the land owner will do this you’ll probably be able to obtain your loan.

Otherwise, this gets into a legal judgment call. Does the contingency specifically say you’re to obtain a 30 year loan? Or did you leave that section blank? If the terms of the loan are not mentioned you are in a gray area, and might be better of consulting a real estate attorney.

In the end, this may be much like a trick question on a test in school. My first comment will probably be your out. A five minute consultation with an attorney should solve this for you, and put a smile on your face.

December 3, 2006

An Uncivil War

by

Realtor, Associate Broker

Author website

(A Bloodhound Blog/San Diego Home Blog simulcast).

Negotiator: one who arranges for or brings about through conference, discussion, and compromise.

Bully: a blustering browbeating person; especially : one habitually cruel to others who are weaker; a hired ruffian.

As agents, so much of our value to our clients stems from our reputation among peers. As listing agents, pre-sale, we market homes, hold open houses and generally get the word out. As agents representing the buyers, we identify and show properties; we make the introduction. When a buyer identifies a property and it is proffer-the-offer time, however, many agents on both sides of the table consider this a call to arms, time to don the pith helmet of negotiation and browbeat their “opponent” in the name of representation.

What many agents forget is that the parties are not the Blue and Gray on opposite ends of a battlefield, but are real people who have everything in common. You have a side that wants to buy and a side that wants to sell, and the agents’ roles are to bring them together through negotiation of a treaty that satisfies all involved. Ardell DellaLoggia spoke to this last summer and, while I suggested then that the negotiating table scene in her Norman Rockwell portrait was the stuff of fantasy, the underlying argument was dead on.

Steve called my attention this week to a full-page ad in San Diego Magazine taken out by a local agent. It begins well enough, “Good deals can be found, but great deals are negotiated.” But here is the first paragraph:

The real estate market has changed. As an exclusive buyer’s agent in San Diego for the past nine years, I’ve witnessed the evolution first-hand. Given the current market, I firmly believe that lowball offers and strong arm tactics with the seller should be expected from a buyer’s agent. If your present agent is uncomfortable with pressuring the seller due to the fact that someone might not like the offer, come to me.

“Strong arm tactics” and “pressuring the seller”? I bet “trash talking” is among his list of services as well. As an aside, our Read more

December 2, 2006

Thoughts on a New Years Resolution

by

Associate Broker

Author website

Each year, many of us look back on the previous year with thoughts on how to improve ourselves in the coming year. Well… not all of us – but most of us, at least.

Sometimes we look to improve our looks. We vow to eat less and exercise more.

Other times it might be a resolution of faith… or charity. The giving of ourselves in service to others.

This year, I am making a commitment to increase my value to my clients. Not my apparent value (although the recognition would be nice) but rather my true value. I am looking to provide a better return to my clients than previously possible.

In the past, I have tried to stay a step or two ahead of the pack with innovative technology… sometimes too many steps ahead. It wasn’t that long ago that while most agents didn’t have a website – I was running streaming video tours of my listings. Not the crappy ones, mind you – good ones. I spent over $15K to have the equipment to produce quality video… and that’s exactly what I did. For a while, anyway.

In my opinion, however, quality still photography is a better medium than video… and if you combine still photography with a flash presentation complete with voice-overs and background music – you’ve got the best of both worlds. A multimedia presentation that the viewer can control.

I am a firm believer in the concept of communicating the features and benefits of a particular property to buyers and their agents, alike. I believe it serves my clients well to have the best exposure I can give them. Here is a draft of a presentation I am working on now. Keep in mind that it’s not finished… and the audio will have to be re-recorded as I did this while still feeling very ill and short of breath.

www.2561WoodCreekCt.com

So set your sights on the New Year soon to be at hand.

What will YOUR resolution be?

December 2, 2006

Praising Cain: Change the world forever by learning to love your life the way you actually live it . . .

by

Suburban Phoenix Real Estate Broker

Author website

Imagine this: You are the High Priest of a nomadic tribe following a herd of foraging sheep. When the tribe needs food, a beast is slain and the meat is shared equally. The political structure is hierarchical, but even the Chieftain is governed by the unchanging traditions of the tribe.

One year the herd wanders toward the seacoast. You encamp a short walk away from a trading post built by a sea-faring civilization.

For the first time in their lives, your tribesmen discover a way of life different from their own. The traders live indoors, sleeping on beds! Their diet consists of more than meat and foraged nuts. They eat grain, fruit and fish, flavoring their water with delectable nectars.

Wealth is not shared. Villagers trade with each other to get what they need — and each family owns its own land! Disputes are resolved by reasoned conciliation, not by fiat. Even so, each family seems to own more weapons than your whole tribe combined.

Anyone can introduce a new tool, technique or idea at any time — upending the whole civilization if it comes to that — and not only is this not forbidden, it is avidly sought!

This is horrifying to you as High Priest, but your horror is nothing compared to the apoplexy of the Chieftain. As he watches tribesmen disappearing into the village one by one, he turns to you for a solution.

Now you understand the story of Cain and Abel.

Cain made a sacrifice of grain, Abel of meat, and the meat — the wealth of the herders — was pleasing to the god of the tribe. Why does Cain slay Abel in the story? To scare the tribesmen back into the herd.

The Greeks found a better way to live, spreading it with capitalistic abandon. Those who abhorred the Greek way of life crafted their mythologies to portray Hellenism as evil.

Would you like to change the world, forever, for the good, one mind at a time? Here’s how:

If you live in Cain’s world, stop pretending to live in Abel’s.

If your life depends on capitalism, private property and free trade, stop pretending to Read more

December 1, 2006

Dave Liniger: The Power of Selling a Dream . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is an excerpt from Everybody Wins: The Story and Lessons Behind RE/MAX by Phil Harkins and Keith Hollihan. Jeff Brown and I were talking about this on the phone the other day, and I thought I’d share it. Don’t read this as an unlimited endorsement of the book. It’s a fun read, but it’s full of bogus charts that are imputed to mean something, but don’t. Even so, it’s a nice retelling of the RE/MAX legend.

The Power of Selling a Dream

If not for the price of a $20 ticket, that might have been the end of the story. But in the telling of any fairy tale or epic adventure, there are always those key moments when the naive hero stumbles across a piece of good luck. Jack, of Jack and the Beanstalk fame, for instance, came home with three magic beans for which he had traded the family’s last asset, a cow. His mother, crushed and beaten by Jack’s foolishness, tossed the three beans into the garden, and that should have been the end of it. But the beans were actually magic, and a giant beanstalk grew. Jack climbed the beanstalk, discovered a kingdom filled with riches, killed the giant who ruled the kingdom, and came home to a hero’s welcome, making his poor old mom proud of him after all.

In Dave Liniger’s case, a $20 ticket to see a real estate motivational speaker amounted to his handful of magic beans.

He went to the talk because he had already paid and, well, . . . what the hell. The magic speaker was a man by the name of Dave Stone. Hearing him talk at the Mountain Shadow Country Club in Phoenix was the turning point in Dave Liniger’s life. He sat in the first row, mesmerized. Stone was a brilliant real estate man who loved to teach, the predecessor of all great real estate instructors; and his words penetrated Liniger’s brain like none he had ever heard before. At the break, Liniger ran up to Stone and introduced himself. They talked until the speech started up again. Liniger watched Read more

December 1, 2006

Ask the Broker: Are new build prices negotiable?

by

Suburban Phoenix Real Estate Broker

Author website

When purchasing a home or condo in a new development are the prices quoted firm or can the buyer negotiate the selling price with the broker? Are the costs of “upgrade options” negotiable.

The definitive answer: Maybe.

New home sales is a retail business. The builder has to move current inventory to finance the future inventory, just as Sears has to clear out all the Fall and Winter goods to make way — and pay — for the Spring line.

Sometimes builders have more business than they need — and in consequence nothing is negotiable.

Sometimes — like now — builders need to move inventory, and they are willing to Make Deals, as they say down at the new car lot.

Even then, the deals may be set by higher ups, with the on-site sales staff authorized to smile and say the same things over and over again.

But what is that classic car dealer’s line: “What’s it going to take to get you into a Cadillac today?”

If a salesperson says something like, “If the only thing standing between us were the carpet upgrade, would that make a difference?” — that is a closing question, but it’s also a hint about flexibility. Even then the salesperson may not be able to make concessions, but the hint is that concessions are possible.

If you’re truly interested in the home and if you can be persuaded by a better deal, now is the time to sit down and dicker. Even if you have to leave the deal on the table for referral back to the main office, you may have won.

As with cars, upgrades are where the profit margins are highest. If you can arrange for and pay for your own granite countertops, don’t buy theirs unless it’s free or deeply discounted. Seven-inch stainless steel sinks are crap, buy you can buy a top-quality sink at Lowe’s for much less than that same sink at the builder’s design center.

There can be exceptions, though. For example, right now in Arizona, a great deal of spec home inventory is being sold at huge discounts. People bought new homes contingent on the sale Read more

December 1, 2006

Ask the Broker: Giving the bum the bum’s rush . . .

by

Suburban Phoenix Real Estate Broker

Author website

What do you do when the dual owner of a house refuses to leave or cooperate after signing the purchase and sale and a document to agree to sell the house? This is a nasty divorce situation. The divorce court’s finding was to sell the house and split the proceeds. He is occupying the house now and the closing is in 15 days.

The answer to this question is: I am not an attorney. You have to take this up with your divorce lawyer to see what can be done lawfully and without resort to the long arm of Colonel Colt.

It happens that I have a sale going on right now with a very similar situation. She’s gone, he remains, and he managed to kill two prior contracts with his recalcitrance. I represent the buyer on the third contract, but we got lucky: The divorce judge has ordered that the soon-to-be-ex-wife is solely authorized to negotiate and sign for both parties, with the proceeds to be split according to the judge’s orders.

I don’t know if this could work for you, but it is at least possible to resolve a conflict like this. I wish you good fortune…

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December 1, 2006

Use full appraisal to correctly assess house’s true value

by

Suburban Phoenix Real Estate Broker

Author website

This is me from today’s Arizona Republic (permanent link):

Use full appraisal to correctly assess house’s true value

Who can best judge what a piece of real property will sell for?

We all know the answer to that. The best estimate of the value of real estate will come from an experienced real estate appraiser.

After that, a Broker’s Price Opinion will come second. In certain very homogenous neighborhoods, a Price Opinion may be just as accurate as a full appraisal.

Third place belongs to an experienced agent’s Comparative Market Analysis. This can be very accurate in homogenous neighborhoods, substantially less so where homes or lots differ significantly.

Last place goes to the results produced by an Automated Valuation Method, such as Zillow.com or Eppraisal.com. An AVM does not evaluate houses, but rather provides statistics and records about houses. It cannot, for an extreme example, tell you whether the house is still there at the time of the evaluation.

It is fairly common to hear people say that AVMs will get more accurate in time. In fact, there is a finite limit to how much they can be improved.

A CMA is essentially an all-paper calculation. But a CMA is produced by an agent who has a great deal of on-the-ground experience, most of which will never be encoded into an AVM’s software. Amenities such as landscaping, decor, orientation or views cannot be accounted for by an AVM.

But the other end of this question is need vs. costs. If you want to know what your supervisor’s house is worth, use Zillow.com. It costs nothing, and close enough is good enough.

If you need to know what to offer on a house you want to buy, you need a CMA at the least. The good news is, your agent will probably provide it free.

The same is probably true for a Broker’s Price Opinion, which you will want if you are planning to sell a home.

But if you need to know the value of a piece of real property to a very high degree of accuracy — for instance, to qualify for a mortgage — you’re going to pay $300 or Read more

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