Who? Me? A Monster?

In honor of Halloween, I offer my fellow Realtors and you - home buyers and home sellers - the common types of client monsters I come across in the business of real estate.

Fairies

From the Latin word for "fate," in folklore, fairies are supernatural beings who occupy a limbo between heaven and earth. As home buyers and sellers, fairies are the most easily recognized. They know a lot about real estate, have perhaps been brokers or salespeople in the past and have friends in real estate. They have been known to invite more than one Realtor to their weddings, their children's birthday parties and other social gatherings. But the Realtors don't mind. These fairies of real estate transition easily and smoothly between homes and when they do enter the lives of Realtors, we are much the happier for their presence. As with the mythical fairies indeed, these people (while sometimes seeming almost mythical themselves) control the destiny of many a Realtor.

Zombies

Zombies are the clients who, through some freak of nature are forced to either sell their home or buy a home. They are completely unprepared for the ordeal, having promised themselves never to undergo such torture. It has been almost a century since they have either bought or sold a house and they are almost mindless, confused with the volume of paperwork, have little reasoning power but can perform some of the "remembered behaviors" from their living existence. Realtors find zombies pretty willing to buy or sell their homes but are surprised by their lack of excitement at either multiple offers or a great bargain. Often, Realtors are left scratching their heads at these clients and the transaction with a zombie often ends with a shrug of the shoulders and no referrals.

Demons

Demons - divine beings that are now fallen - are often first confused with fairies. The fall happens somewhere in the six to twelve months that the Realtor works with these home buyers while interest rates rise, home prices fall, home prices rise, interest rates fall, the economy wavers, then recovers... somewhere around this time, the Realtor filling his hundredth tank of gas begins to wonder if indeed he misjudged this demon as a fairy. Of course, the demons never admit it. So it is up to the Realtor to decide. But usually by that time, it is too late.

Werewolves

The transition of normal happy home buyers and home sellers into werewolves - like the demons - can be missed. However, whereas demons become demons due to their own meanness, werewolves are often victims of situations. Today's market sees many werewolves - home sellers that have been lied to by corrupt individuals into losing their homes. When these sweet, innocent, almost-Caspers enter the market again to buy a home, Realtors beware! Any fluffing of the truth, anything besides just plain, simple facts will force them to bare their claws and turn into werewolves. And then, they might not be the only ones howling!

Vampires

Much like demons. But meaner. The less said about these the better. For they are neither home buyers nor sellers. Realtors would do well to stay away from them. Most are easily recognized by their vacant eyes and fangs. And even when they promise that they have cash in the bank to buy a home, please, run the other way. Vampires grow on your inability to turn away business and slowly suck you into their lives. Vampires have no friends, except other vampires. Now, really, do you want referrals? Back away from the door, my friend. No trick or treating at this casket!

Frankensteins

The Frankensteins in real estate might perhaps be my most favorite clients. These are the diamonds in the rough, surprising themselves constantly, which makes me feel a little bit like I have magical powers of my own! (Yes, yes, I know - that would make me a witch. So be it.) As home buyers, these Frankensteins are surprised to know that they have the ability to buy a home and get a great bargain and that they actually recognize one! As home sellers, their homes are prime candidates for staging. But the efforts on the part of these Frankensteins make you want to weep. These imperfect, sensitive clients are what Realtors live for. They make us feel like we have made a contribution to someone's life. Frankensteins, don't be afraid. We love you!

So there you have it! Some of the most common monsters we deal with. Of course, the biggest monster may well be the real estate market. Hey, no one said this list was exhaustive!

Mortgage Myths vs. Facts - Part 5

This is the last post in a five part series of Mortgage Myths vs. Facts put together for us by Huck Ferrill, mortgage consultant. If you are considering buying a home today's market offers you some excellent options. And here's the last one.

MYTH: "I can't find any jumbo financing without paying about 8% in rate."

FACT: We offer financing up to $5,000,000 on 3, 5, 7, and 10 year fixed product, 30 year amortized or a 40 year with interest only payments for the fixed period, at rates in the 6s. For example a 70% LTV $2,000,000 purchase loan utlizing a 5 year fixed product would be offered for 6.5% with one point origination fee (6.75% APR).

I hope this series has been helpful to those of you who would like to buy a home but are concerned about financing it. As always, if you have any questions about financing, this series or any other real estate related question, drop me a line. Don't listen to the hype. Get the facts.

Real Estate Article about Sacramento

In case you missed this, read it here. The Wall Street Journal reports that Sacramento's inventory is falling. Sales are up, so even if prices have fallen, take heart. This might be the first step toward a recovering Sacramento real estate market.

Mortgage Myths vs. Facts Part 4

I'm beginning to enjoy these little doses of information provided for us by Huck Ferrill, mortgage consultant. Today's myth is one that I have heard often from clients looking at homes. See if this is something you are concerned about as a home buyer in Sacramento.

MYTH: Stated income loans are no longer available.

FACT: With adequate verified liquid assets (typically 6 - 12 months PITI reserves) and at least a 680 FICO score, stated income loans are available up to $5,000,000 for purchase or refinance of a primary or second home. Rate for a $4,000,000 loan is as low as 6.5% for one point (6.75% APR) interest only, 40 year term for product fixed for 3 years.

Mortgage Myths vs. Facts Part 3

Ready for today's mortgage myth? Here it is!

MYTH: Financing is no longer available for construction of a custom home.

FACT: We offer construction only loans upwards of $2,000,000. Contruction to permanent loans are available up to $1,500,000.

This is part of a five part series on mortgage myths offered by Huck Ferrill at First Security Financial Group. He can be reached at 916-788-9802.

Mortgage Myths vs. Facts Part 2

Enjoyed the first one? Here's dose number two:

MYTH: "I want to buy an REO fixer that is currently unliveable (no plumbing fixtures, broken indows, leaky roof, no built in appliances). There is no financing available."

FACT: FHA 203KS loans allow an owner occupant buyer to finance 97% of a home purchase "as is" and provides up to $35,000 for refurbishment/repairs AFTER escrow closes.

This is a five part series provided by mortgage consultant Huck Ferrill. If you are thinking about buying an REO, give me a call! I will put you in touch with him!

Mortgage Myths vs. Facts Part 1

Our very own mortgage consultant Huck Ferrill has put together this concise yet revealing look at the state of lending today. If you are considering buying a home in the greater Sacramento area, but are concerned about getting a loan, give me a call and I will direct you to him and then into the house of your dreams! I will be covering this in a five part series. So read on and come back for more!

We think we're seeing way too much bad news in the real estate market, stock market and the economy. So today we're here to offer a few bright spots in the area of residential lending.

Myth: There is no longer financing available for investors in rental property if the investor owns four or more financed 1 - 4 residential family dwellings.

Fact: A very limited number of lenders don't care how many other financed properties an investor owns. They will make loans to rental properties upto 75% LTV, for rates as low as 6.5% with 1 point (6.75% APR) interest only.

How about that? Come back through the week for more busted mortgage myths!

The Problem with Foreclosures...

For those of you who know me it should come as no surprise that I like listening to talk radio when I'm in my car. The topic of real estate often comes up in these talk shows and one of the financial talk show hosts yesterday was asked about foreclosures and buying them. The caller was wondering if it was a good idea to buy an REO and if so what he should look for to get a good deal.

The host's answer perturbed me a little. Knowing the host to be extremely conservative when it comes to money, I loved that he said it was a very opportune time to buy real estate and that the caller would be pretty thrilled about his purchase in the future because bank owned homes are greatly discounted. However, he also told the caller to look for a foreclosed home that is 30% under fair market value. Usually, the host said, he recommends 20% under fair market value, but now he suggests going for the extra 10%

Great advice. But here's the chink in the armor - here's my point: What exactly is fair market value?

I know the definition of fair market value and I know how to get my clients a market analysis. But when every home is a foreclosure and already discounted and every sold comparative property in the neighborhood is also a foreclosure, just how is a buyer to figure out fair market value?

The value of a property falls or rises only in comparison to its neighbors'. The current market in Sacramento is replete with foreclosures. In fact, if you look at the real estate market statistics, almost 90% of the sales are foreclosed properties. So, in effect, foreclosures are making up the sold comps. To expect a property to be 30% under the recent foreclosures - already discounted - in the area would be to expect the economy to be in much worse shape than it is now. And if that happens, do we really think anyone would be buying a house?

The financial host's advice is (as in most other cases) pretty commonsensical, but only works in relatively stable markets and neighborhoods where you can compare a foreclosure to a non-distressed sale. In markets like we have today in Sacramento, that advice doesn't work as well. We need a new parameter to assess value in Sacramento REOs. Any guesses, Mr. Clark Howard?

Sacramento Rental Inspections - Still Mismanaged

First hand experience beats everything else. And lately, I have even more respect for the landlords in Sacramento that are holding on to their investment properties through the falling house values, increasing city and county utility bills and the general bad mood out there in the real estate market.

Why the new found respect? Well, I've been reporting the problems I've had communicating with the city of Sacramento regarding the new rental inspection program they have adopted and here's a new one.

I received a letter saying there would be a re-inspection. Now, a reinspection is only issued when there is something in the property not up to code. The landlord is required to fix whatever is not up to code before the reinspection. Great. Except no one told me what is wrong with the house. The last time I called I received no response. This time, someone answered. Thank God, I thought. Except nothing got resolved, because even the woman on the phone couldn't find any record of anything wrong with the property. She assured me she would look for it and mail it to me.

Somehow I doubt that record is ever going to get to me. Somehow I'm sure some more money is going to be wrangled out of my hands for no fault of mine.

Sacramento: Is Now the Time to Buy?

Now is always a good time to buy. Or so goes sales-speak. But perhaps there is a reason for it beyond just the job of sales? (Yes, it's a job... like any other!) But today I want to discuss with you why I say that about real estate in general and real estate in Sacramento in particular.

Time, not Timing

As you can probably tell, I'm not a big fan of timing the market - real estate or otherwise. True, some people can do it pretty well and profit from it, but I believe most people use market timing retrospectively to justify their own fears or expectations. In other words, when the market goes down, the fearful ones feel justified; when it house prices appreciate, the optimistic ones feel victorious. With all this tongue thrusting at one another, the reality of historical price appreciation, the inherent value in real estate and population growth gets ignored.

As someone pretty smart once said, "It's about time in the market, not about timing the market." I wish I could remember who said it. Real estate typically has cycles of about 7 - 10 years, with some pretty wide swings in between. One cannot look at the last two years or the two years that came before it as typical. How could you sleep at night if you did?

Wealth is Created Month by Month

I think there is a reason successful investors are older, quieter people. They are less prone to get carried away by every tick - up or down - of any index. They have learned to handle the two worst enemies of any successful venture: fear and greed. Unfortunately these two impostors run the market and the minds of most other people. So investing takes equal amounts of trust, research and guts. And of course, patience, something we 30 somethings need large heapings of, I guess.

Okay, I'll confess. The recent downturn hasn't been fun. It isn't easy to see one's net worth fall. My rentals have lost value. My own house has depreciated. The real estate business has suffered because the mood in the market is that of fear. And that leads to the overwhelming question: Did we buy our houses at the wrong time? And my answer is a resounding NO!

Before you think I'm insane, consider the fact that we used the equity from one house to buy another. Consider also that the tenants are paying most of the mortgages for us, thus reducing our liability every month. We get tax incentives. And we live in the home we always wanted. In today's market, we couldn't have bought this home, because there would have been no equity in the others. If you think about it, all things considered, we're in a pretty good place right now. And if you're a homeowner and can afford to keep it, unless you're retiring tomorrow, you're probably also not in as bad a shape as some might have you believe.

So is Now the Time to Buy?

If you are a first time buyer, the best time for you to buy has passed. It was last year. Yes, I know - home prices have fallen since then. But there are no zero down loans unless you are buying a home in a rural area. I can't tell you how many first time home buyers have been given this sad news. By the time zero down loans come back, the market will be far higher than today. So much for timing the market.

And what about mortgage rates? Just last week, they jumped higher than anyone could predict. For some home buyers, that was the end of their real estate purchase dream. In such a volatile time, mortgage rates can go anywhere and if you haven't locked your rate, a home purchase might need to get put off for a long time.

And then there are those that would like to buy a home with the equity in their current house. They would either like to move into a bigger home and hold the first as an investment rental or buy a rental. Lenders now require at least 20% down for an investment property, with 25% down getting better interest rates. If you didn't refinance last year, you can't buy that home now, seeing that prices have fallen farther. If you still can, do it, but know that mortgages have more fees attached today and - surprise, surprise - mortgage rates are higher.

So What's the Answer?

Simply this: No one can tell you when the right time is. Not the doomsdayers, not the news, not even me. When you look at your family budget, you'll know. Real estate is still one of the most solid investments you can make into your future, but it is not to be taken lightly. If you are one of those that sway with every breeze, it is perhaps best you stay away. No shame in that - you should always know how much risk you can handle. You don't want to be another Casey Serin.

Think Realtors can be Funny?

As if I didn't have enough to do, I just started two new blogs you have to read. Okay, you don't have to, but it would be nice if you read them. Buying and selling real estate doesn't offer much comic relief, so I've been forced to entertain myself and a few of my friends (few, very few - just a handful, really) with these.

Landlord Landmines

Mommy Wants Another Baby

Go ahead, click on the links. You know you want to.

Property Tax Bills Being Mailed this Week!

Yes, it's that (dreaded) time of year again. Property tax bills will be mailed out this week to all homeowners in Sacramento county. El Dorado county should have already received theirs.

Taxes are due November 1st (late after December 15th) and February 1st (late after April 15th) - NDFA - No Darn Fooling Around. (Nice mnemonic, huh?)

If you have an impound account with your mortgage company, these taxes will be paid by them, since you have been paying a little every month into the year's account. Be sure to check with your mortgage company however. Some are notoriously bad at paying these taxes and there is a 10% late fee, which you will be responsible for if they slip up.

Real Estate FSBOs - a Perspective

I'm not ashamed to admit it. My neighbor is a FSBO. He is selling his house as a for sale by owner. I've watched the debacle happen. First, there was a sign in his yard listed with a Realtor's phone number and name, then there was snow. Then there was a small sign with a tiny scrawled phone number. And then again there will be snow.

What happened?
This is the wrong time to be a FSBO. The time of the FSBOs was when the market was so hot, people were thrilled to find a home that they suspected had not been seen by anyone else. Home buyers were making offers before yard signs went up. All to avoid being in multiple offer situations. I know. I was there. I saw a house sell on a listing appointment. I'm not kidding. But we aren't in that market now. And if houses are not selling with marketing exposure, low pricing and buyer incentives, FSBOs stand a very low chance of ever selling at all.

It's not about (only) about commissions!
I know. You want to save money, right? And you think listing your home as a for-sale-by-owner will save you thousands. Let's put that into perspective. First off, if you think you're going to save the entire real estate sales fee, you're mistaken. If you want to get your house sold, your best bet would be to co-operate with at least the buyer's broker. The chance that someone will walk by your yard sign and buy your home are almost nil. (And, by the way, "Hey, you never know!" is not a marketing strategy.) So, co-operating with the buyer's broker will cost you 3% of the sales price. Some of the best FSBOs have been sold this way, but you better count on having a network of Realtors for this to work or very good marketing.

Which brings us to the second hurdle - just how are you going to market the home? By trying to sell the home yourself, you have just taken on the role of the listing agent. The first thing any listing agent does is enter the home for sale into the MLS, where it is seen by all the other agents. Craigslist, Zillow, and that other Red... whatever-it's-called - no other site compares to the MLS. Why? I'm glad you asked.

It's a process
Everything Realtors do follows a routine. It's boring at times, but that's why it works. We know the next step. We don't have to stop to think - it's automatic. So when your home is not on the MLS, chances are it won't get noticed. We're not intentionally ignoring it, it just happens. You are not co-operating with the normal rhythm of work. And we haven't even talked about showings yet. Unless you are willing to stay home so that home buyers can see your home while they look at ten others (yes, that is how homes are viewed!) they're not making the extra trip. Sure, you can put a keybox on, but are you really going to hand out that combination to whoever calls and let them walk through your house when you're not around?

I know it seems like an easy task: show a home to a buyer, get a title company and get the home sold. The reality is very different. I know we're at a time when real estate agents are hated. But the truth is that, like every other profession, selling real estate is pretty hard work. And going FSBO isn't the answer.

Guess Who's Back at Sacramento-Home?

No, I haven't stopped selling real estate.

No, my baby isn't all grown and flown away.

No, I haven't completely given up on real estate.

Yes, I'm back at work. Go check it out! (And come back here for more.)

I Promised a Follow Up...

...to the rental inspection underway at one of my rental properties in Sacramento. And here it is. I came to Sacramento and decided to wait at Starbucks, just in case the inspector needed me to be there. (Which, by the way, the letter I received said he would.)

But they don't. So here I sit. With some real estate related work to be done. I'm just going to make sure the inspection gets done before I leave. You just never know.

Sacramento adopts Rental Inspections

I recently received a letter in the mail from the Code Enforcement Division of the city of Sacramento regarding a rental inspection program they have adopted. According to the letter, a fee of $140 per rental unit for a period of five years (billed annually at $28) will be assessed to landlords and general inspections will be carried out to make sure rentals are safe havens for tenants and do not cause blight.

Good idea. Bad execution.

Case in point: The inspection time is set for between 8 a.m. to 12 noon. The letter to my tenant doesn't say that the owner must be present. My letter insists I must be present. What am I supposed to do? Sit in the driveway for four hours? Or shoot the breeze with my tenant while we wait for the inspector? A re-inspection fee costs $80 so I'm going to be there.

Will keep you posted!

If you live in Sacramento...

... and are looking for a nice quiet place to relax on the weekends, come up to Pollock Pines. It's no wonder many Sacramentans and people from the Bay Area buy vacation or second homes here in my neighborhood. While Tahoe is still a drive away from Pollock Pines, the lakes around here provide some quiet calm places to relax and - if you're into that sort of thing - fish, boat or swim.

This last weekend, we headed out on our first family picnic to Forebay Lake, less than a mile from the middle of town. We fished, but didn't catch anything, so, darn it, no pictures of huge fish. But here's a random one anyway - a man, his dog and the clear blue water with trout - sigh! It was Sunday and so, so quiet! What's the chances of that ever happening in Sacramento?



And yes, shameless plug here, if you're considering a vacation home, give me a call!

"My Dad's a Broker! Help!"

Ever so often the Realtor on call at our office gets one of those real estate calls every agent hates. The one where a potential buyer asks a bunch of questions about a property. Not being one of those companies where we know our ABCs (Always Be Closing lines), we are glad to help. The fact is, information is all around us, so traditional floor techniques where the agent withholds information about the property until he gets the client's telephone number really don't work any more. But I digress.

After we have given out this information however we have to ask the usual, albeit traditional, question - Are you working with an agent? Most homebuyers say no. But I think lately a better question I'm going to have to add my repertoire is this: Are you involved with a real estate agent in any way? Are you dating one, related to one or otherwise planning to adopt one possibly? Is there any one in your family who has just passed a real estate exam? A distant cousin somewhere? Give them a call. Chances are they'll pop up anyway when you decide you're going to buy a home.

Because I'm tired of giving information and investing time and energy(not to mention spending my phone minutes) in helping someone who already has a buyer's agent. Note: if your brother, mother, in-law or father is going to be writing up the offer, he IS your agent and he should be furnishing you with the information you just called me to find out.

And the same goes for other Realtors showing homes calling us from the road to look up a property address for details. Do your own legwork. You have the MLS. Use it. Or pay me 25% as a referral fee. I'd be glad to help.

Information is free, but it's not gratuitous. At least not when I'm handling phones.

Real Estate vs. Mercury Retrograde

"Tell me what she has!" - concerned parent.
"A cold!!!" - Dr. House.
(From the prime-time drama "HOUSE")

Not too many people are aware of this, but I read my astrological horoscope (in addition to watching TV, oh no!) Yes, I'm aware it means nothing to most people, but I read it. And I try to make sense of it, try to apply it to my life and wonder what I'm doing wrong. Or right. There are times when I am right. Or I just believe what I think it does. There's some early morning solipsism for you. That cappuccino must be working!

Anyway, this past week has been interesting. Since I came back to work, I've been glad to know that real estate seems to have picked up since last year. And the clients have been more interested in buying something.

I met some wonderful people last weekend and they were looking in Pollock Pines. Their daughter even had the same name as mine! Unfortunately, they fell in love with a home in Nevada City. Well, unfortunately for me, fortunately (hopefully) for them. Such things are common, say the astrologers, for the period of Mercury retrograde, on until about October 31. Along with communication snarls come computer crashes and other networking errors, lost checks in the mail (read late rent payments) and so forth.

All this madness leads to annoying, nagging worries and unnecessary panic. And I am not good when I'm annoyed or panicked. Go figure. The good thing about the Mercury retrograde period? You run into friends - old and new. And the confusion adds a heaping bunch of creativity to whatever you've been doing. Here's hoping!

Sacramento County Market Update - Single Famly Residences

September was the month for bargain shoppers! And come out they did - in droves. Pending numbers almost doubled from July's 2064 to 3729.

Statistically and from personal experience we seem to be seeing more activity toward the bottom of the pricing, so while the median price for homes active on the market stays at July's $225,000 the sold median price has fallen again to $192,000.

1944 homes sold last month - pretty much in step with July. Inventory is down slightly - we are at 3.7 months as compared with July's 4 months.

Sacramento Real Estate Market Update Coming Tomorrow!

Where did the time go? After Sierra got here, I've completely lost track of real estate time, so to speak. But it is the sixth of the month and the Sacramento county market update will be here tomorrow. I hear the median price has fallen, but there have been more houses sold so far this year than all of 2007 combined.

Check back tomorrow!

Adding Value to your Real Estate has a Fan!

Hey look, someone likes Sacramento Real Estate Gal. It has been said somewhere that when people don't like you, they tell thirty people but when they do like you, they tell three. Well, one of the three just blogged about me.

Nice to know I'm liked somewhere. Even if it is halfway around the world!

Sacramento Real Estate Gal is back!

Yes, the rumors are true. A baby was born and I had to take a break to take in the joys of parenthood like poopy diapers. Okay, that's not fair. She's a wonderful girl - now seven weeks - and has just begun to recognize me. She smiles at me every morning at her four a.m. feeding.

And I'm back at work. Luckily for me, I'm working from my home office and showing homes on the weekends. One of the perks of being a Realtor.

So you can be assured that the same great real estate posts will continue. Adding Value to your Real Estate, Ask Sacramento Real Estate Gal, and of course the market updates.

I missed writing about real estate! So glad to be back!