Happy Thanksgiving!

Couldn't resist putting up this video. That child has got the essence of Thanksgiving down, hasn't he?



Happy Holidays! Have fun!

Ten Things for Realtors to do this Holiday Season

With the holidays fast approaching, not too many minds are occupied by real estate. Sure, there are a few home buyers there thinking about buying a property because this is typically the time no one is interested in looking and it creates an increase in inventory, thus leading to reduced home prices. But Realtors, home sellers and home buyers - in general - around this time of year are busy with their families.

So, what can a Realtor do to brighten the holiday spirit?

1. Throw darts at the bubble blogs (ensure that you have printed out the names before. Do NOT throw darts at your laptop!)

2. Instead of turkey meat, how about some Chicken Little for a roast?

3. Serve up some Orples too, while you're at it. There's nothing tastier.

4. When your guests start talking about how horrible real estate is, walk up to them and start spouting local real estate statistics. You can read them here and here.

5. After they're staring at you shocked because you've been talking in numbers only for about a half hour, remember to stare back with a deadpan look in your eyes and say, "Blood, blood, blood..." for the bext five.

6. Ooops! Did I just say, "Blood, blood, blood?" Okay. No harm done. Follow it up with "Real Estate is local, you..."

7. If they've been shaken out of their reverie by your intended bad language, continue with more local real estate statistics.

8. ...and the fact that inventory is down.

9. When you send out Holiday cards, include your business card in them. On the back, say something like, "Unless you refer someone to me this year, I'm closing shop." Attach a picture of a child (yours, preferably) crying.

10. Lighten up! Write a post on your blog about Ten Fun Things for Realtors to do and send me the link.

Happy Holidays!

Real Estate Quote of the Month

I'm sharing with you one of my favorite poems today, and although it really has nothing to do with real estate per se, I think it is one of the most important messages of all time. This poem has always been close to my heart and it is something I have always tried to remember when things get tough. Here it is:

[IF]

If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you
But make allowance for their doubting too,
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream--and not make dreams your master,
If you can think--and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on!"

If you can talk with crowds and keep your virtue,
Or walk with kings--nor lose the common touch,
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much,
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And--which is more--you'll be a Man, my son!

--Rudyard Kipling

Of course, the italics are mine. I've highlighted the parts I think relate to real estate today. The poem is terrific though. You might want to bookmark it and come back to it later when you need to. There is always something in it that will comfort and guide you in difficult times.

Home Sellers Take Heart

In my recent post on Sacramento Real Estate Gal, I mentioned that home sellers should remain stubborn if they are not desperate to sell their house right away and it looks like at least some real estate numbers agree with me.

Head on over to Dan Green's Mortgage Reports where he says that Sacramento inventory has dropped and how this bodes well for a real estate recovery.

And keep reading!

Condos: the New Real Estate? Part 2

Perhaps the single best reason for many first time homebuyers to buy a condo as their first real estate investment is that the cost for its maintenance is greatly reduced than, say, buying a single family residence and the regular upkeep is not as hands-on.

All condos have association dues. These range in cost - I have seen some condos like Crosswoods cost $260 a month and some others charge that for a whole year! Generally, the cost will give you an idea of what is included. Almost all condos will have insurance on the structure included in the association dues. So you only need to get home insurance to protect your valuables inside your unit. They also include regular lawn maintenance and, sometimes, a clubhouse which is a shared facility by everyone living in the condo development.

Contrast this with a single family residence where the homeowner is responsible for regular lawn care and repairs, not to mention home insurance on the entire structure of the house and it becomes pretty clear why today's busy first time home buyer might just opt for the condo.

Ask Sacramento Real Estate Gal

Sacramento Real Estate Gal,
I've never understood why a buyer needs an agent. Is it about making sure the escrow is handled correctly? The paper work? What would your fee be as a buyer's agent? - Steve E.

Answer:

Thanks for asking that question, Steve!

A home buyer doesn’t specifically “need” an Realtor, since you can just drive around and make sign calls to the agent who has listed the home for sale. However, it is a good idea for the home buyer to have his own agent so that the real estate transaction can run a little more smoothly. For example, you can view 5 – 6 different homes in one go rather than making multiple appointments with multiple Realtors. You just have the one. Also, lately, listing agents are hired by the bank to sell their REOs. These listing agents have anywhere from 10 – 100 listings active at any given time. From what some clients have told me, they don’t even get a return call from some. The listing agents count on you – the home buyer – having a buyer’s agent to show you the property. (We have e-keys that open the lockboxes you may have seen. The times the visits occurred are recorded and our keys are tracked.)

Besides getting escrow handled correctly, it’s also a good idea to have a buyer’s agent so you have representation during escrow. Especially if you are a first time buyer and have never bought or sold real estate before, chances are you don’t know what to ask for on the contract. The listing agent is first and foremost the seller’s agent. When he signs you on as well he becomes a dual agent with a duty of "fair honest dealing" (contract terms) to both the home seller and home buyer. Being a dual agent, while not illegal in California, still seems a little odd to some people and they want to ensure that they have their own Realtor looking out for their interests.

There is almost never a fee for a buyer’s agent. And that’s true for me as well. The buyer’s Realtor gets paid at close of escrow. Usually, the fee is split from the listing agent’s fee. So if the normal commission to sell a house is 6% of the sale price, the listing agent gets 3% and the buyer’s agent gets 3%. (If you were to buy the house directly from the listing agent, the “dual agent” gets to keep the entire 6% so it doesn’t really make a difference to the buyer on the fee side of things.)

Do you have a question for Sacramento Real Estate Gal? Submit it here!

Condos - the New Real Estate? Part 1

Many first-time homebuyers are attracted to the idea of buying a condo instead of a single family residence, so I want to take the time to go over some of the differences between a condo and a single family home so you can make an informed decision. Today, I'm discussing an important aspect of the price of a condominium.

First to Fall, Last to Rise?

It is a common real estate belief that condos are always the first to fall in value and the last to gain. There is some basis for this but you cannot use it as a blanket statement. Let me explain why this idea persists. At any given time, the value of a property is judged by the selling price (in the absence of sales, active listings are used) of similar properties around it. Most Realtors and appraisers use a one mile radius around the subject property. With condos, these comparables ("comps") are easy to find and there are usually many. More listings means more competition. An increased supply helps price drop.

But is it always True?

Simply put, no. Even with real estate prices lower than we have seen in a long time here in Sacramento, midtown and downtown condos are maintaining their value. So perhaps it's back to the basic real estate premise of location, location, location. It is also simple economics: demand for real estate in downtown Sacramento is high, so the condos don't sit on the market very long. There are rarely price reductions and the supply remains low thus leading to stable prices in certain areas. There are not a great number of units in downtown and that limits the supply side as well.

So if you are considering buying a condo, remember that you are also buying the neighborhood the condo is in, and it affects you more than a single family residence would. So be sure to look at the other active listings, even if it is just on the MLS, before you make a decision!

Are Home Sellers Really in Denial?

According to a recent story published on MSN, many homeowners believe their home has either held its value or gone up in price. Real estate agents in once-hot areas are having a hard time convincing sellers of what their homes are really worth. In my experience as a real estate professional, it is always hard to convince sellers of their home's value. Even during the real estate boom, most home owners priced their home above their neighbors' simply because it was theirs'. It's hard to put a price on something that close to one's perception.

But perhaps this denial is a good thing. Not for home sellers who must sell in this market (competing against foreclosures is pretty devastating to a home's value) but for homeowners. Why do I say that? I think although in this market the denial might be keeping homes from finding a bottom (I'm still not clear on what the writer means by that and how exactly that would work), in the long run stubborn homeowners will help the market recover.

It's said that the bull takes the stairs and the bear jumps out the window. Sorry, but perhaps this time the bull might use the elevator. Bank owned houses are priced at wholesale prices because many of them have deferred maintenance. What's more, the bank can afford to drop prices to rock bottom. Once the bank owned inventory is gone, non distressed houses set the price.

So, homeowners: If you simply don't have to sell, weather out this storm. Stay stubborn. Stay strong. You can thank me later.

American Real Estate...

... is what it is because of them & the sacrifices they made. Thank a Veteran today.

Building Green

Here's the rest of the post submitted by Jesse Herman of the Mesothelioma Cancer Center:

Building Green

Most individuals give little thought to what’s being consumed when they turn on their lights or fire up their furnace. Few workers pay attention to whether or not they’ve turned the air conditioning off when they leave their office building or whether they left the faucets dripping in the company washroom.

In a world where electricity is expected at the flick of a switch and where water rarely fails to flow from the bathtub or shower, the Green Building Resource Center estimates that in the U.S., buildings account for:
• 36% of total energy use
• 65% of electricity consumption
• 30% of greenhouse gas emissions
• 30% of raw materials use
• 30% of waste output (equal to 136 million tons annually)
• 12% of potable water consumption

So many buildings. So much waste. And with the building boom continuing, despite present economic hardships, adherence to construction practices other than what’s become known as “green building” will surely continue to increase the proverbial “carbon footprint.”

Benefits of Green Construction

Thankfully, however, the idea of “building green” is gradually becoming much more than a trend. Builders and investors are recognizing that eco-friendly construction provides not only long-term positive environmental benefits but also immediate financial payoffs as well.

Cities throughout the U.S. and the world are also slowly recognizing the necessity of green construction practices in the remodeling and renovating of older residential and commercial facilities, taking advantage of loans offered to them by various foundations, designated for the purpose of upgrading lighting and heating and cooling systems in aging buildings, where the most energy is consumed.

Such initiatives also prompt the need for healthier and more cost-efficient options in the world of building materials. Indeed, the United Nations Environmental Program says that the use of recycled building materials, like cotton fiber insulation, in addition to the installation of energy saving appliances and the maximization of natural lighting in a building, can reduce energy use energy use by 25 to 35 percent. In some best-case scenarios, they say, results have been as high as 80 percent.
The United States Green Building Council (USGBC), in a study conducted in 2003, estimated a savings of $50-$65 per square foot for well-constructed green buildings in the U.S. (see table below) during that year. The numbers continue to improve as more eco-friendly options become available, and those kinds of figures have finally begun to attract those who thought eco-friendly construction was just a bunch of hogwash.

Type of Benefit 20-year Net Present Value / sq. feet

Energy Savings $5.80
Emissions Savings $1.20
Water Savings $0.50
Operations and Maintenance Savings $8.50
Productivity and Health Benefits $36.90 - $55.30
Subtotal $52.90 - $71.30
Initial Investment in Green Building Practices $3.00 - $5.00
Total 20-year Net Benefit $50 - $65
Source: USGBC Capital E Analysis, 2003.

Green Remodeling

While the remodeling of existing older buildings to make them more energy efficient is certainly a necessity, it doesn’t come without its hazards. Remember, older homes and commercial buildings probably contain all sorts of toxins, most notably asbestos. The miracle of the 20th century building industry, touted for its amazing heat- and fire-resistant properties, this hazardous mineral can be found in attics, wrapped around pipes and furnaces, and even in walls, floors, and ceilings, especially in buildings constructed prior to 1980.

Once the asbestos is addressed and then removed by a licensed professional and disposed of properly, green insulation options should be given serious consideration. The Department of Energy says heating and cooling accounts for 50-70 percent of the energy used in the average American home so finding sound and healthy insulation options are a necessity. Today, these options can save natural resources as well. Eco-friendly insulations are often made of recycled materials and include cellulose (old shredded newspapers treated for fire resistance), cotton fiber (usually made of recycled batted denim), and spray polyurethane foam.

Statistics show that the foam, for example, can cut energy costs by about 35 percent annually, according to studies done by manufacturers. The other projects claim similar figures. And because these are recycled materials, less waste is going to the nation’s already crowded landfills.

Formal listing of Insulation Alternatives

•Cotton fiber – This has become the favored insulation of many green builders or remodelers. Made of recycled batted material, such as denim, this fiber insulation is then treated with a chemical to make it fireproof. However, cotton fiber insulation is non-toxic and produces no off-gasses, making it a healthy choice.
•Cellulose – Who would have believed that someday we’d be insulating our homes with recycled newsprint? Well, that’s exactly what cellulose is and it’s become one of the most popular new green insulating materials. Chemically treated to reduce mold and promote heat and fire resistance, figures show that cellulose can reduce air conditioning and heating bills up to about 20 percent each year.
•Icynene – This water-based spray polyurethane foam keeps a home very tight, allowing little opportunity for things like mold to form. This healthy insulation also contains no polybrominated diphenyl ethers (PBDE), which are often found in spray foam insulation products. PBDEs can be quite toxic and are already banned in some states. Icynene also contains no hydrochlorofluorocarbons, which are believed to prompt global warming.

Listing Landmine

You might be master brewer, but get the beer buckets out of your bathroom before you list your home!

Sacramento County Condo Update

This is a market update for October condo sales in Sacramento county. If you're looking for single family residences, go here.

These numbers are beginning to get pretty boring, aren't they? Nothing much changed, nothing's happened this month that's different from last month, blah, blah, blah. Well, unfortunately it's the same story this month as well. (An indication of bouncing around the bottom, perhaps? Guess we'll see.) 131 condos sold in the month of October and 114 went pending. September had been a strong month for house shopping and October seems to be the beginning of waning off for some people due to the holiday season approaching. Median price for condos is at $110,000. Inventory is at 4.4 months.

Sacramento County Market Update October

This is a market update for single family residences only. If you want to see a market update for condos in Sacramento county, please check back tomorrow.

First, the Stats

Median price for sold single family residences was slightly higher than last month's median at $192,000. This October, we saw the median price at $195,000. 1992 houses sold this month, again similar numbers to September. The disconnect between pending and sold homes month after month continues. While September's pending sales were at 3729, we only saw 1994 close escrow. If this trend continues, November will probably be a pretty lackadaisical month. Pendings in October are at 2054. Inventory is at 3.8 months again almost the same as last month.

Then the Opinion

On another note, I have been seeing more short sales sell. No telling when they went pending, however. I am also noticing the inventory of bank owned homes shrink to just 2 months or so. Based on these facts and other numbers I've been seeing, I think we could go two ways:

On the one hand, we seem to be bouncing around the bottom of the market. Many bank owned homes that sit on the market currently are not great deals without having to add quite a bit of sweat equity and are not potential homes to most buyers. These homes might get picked up or might continue to sit on the market with homebuyers migrating to other houses in better shape. Homes in better shape command more in price and so we might see a resurgence in home values by next fall.

On the other hand, there is a slight glitch. And this comes from the short sales. In the past, we have seen short sales completely mess up the numbers for everyone. Listing agents are not told the price at which they will sell by the bank upfront and that causes them to take a long time to sell or they sit in contingent (pending) status forever. Approvals take anywhere from weeks to months. These short sales could potentially become foreclosures. If that happens, the market might take longer to recover until all the inventory is absorbed by buyers.

So unfortunately, it comes down to what lenders might do. If they accept short sales now and get them sold, the market recovers faster. If not, we might have to wait awhile. The buyers are here. Now it's up to the sellers.

Market Updates & New Feature

Yes, it's that time again when we get to look at the real estate sales of last month. Now I've cheated already, since I have seen the numbers. You'll get to see them, get my take on them and a prediction - coming tomorrow.

Also, a new feature: Listing Landmines. Inspired by Landlord Landmines, this feature will be entirely in pictures, showing home sellers what not to do when they list their homes. Of course, identities and addresses will be kept confidential to protect sellers (and their Realtors!)

Remodeling your Home? Consider This!

Today's post is contributed by Jesse Herman, the Awareness Coordinator at the Mesothelioma Cancer Center. Read on!

Remodel Safely: Protect yourself & the Environment while saving Money

There are many things to consider when remodeling or buying an older home. Homes built before 1980 could easily contain asbestos. Of course, even homes build after 1980 still may contain products that are worth taking note of. As technology and long-terms cost efficiency is constantly evolving, so too is our need for environmentally and health safe building materials. If you are interested in remodeling, saving money and improving your environmental standing in the world, then here is some information to get a project started in the right direction.

In the Beginning

If you’ve thought about remodeling a home that was built before 1980, you’ll probably be faced with a number of toxic materials during the process, not the least of which will be asbestos. Asbestos insulation was used in millions of homes during the housing boom of the 20th century and though it’s safe to be around when it’s enclosed or in good condition, damaged asbestos can be a real problem. It can cause different types of mesothelioma, such as peritoneal mesothelioma and pericardial mesothelioma. In addition, removing asbestos in order to replace it with a healthy alternative can be a pain as well – it needs to be removed by a licensed professional – but the end result is well worth the time and expense.

Asbestos Removal

Non-regulated asbestos material can be legally performed by homeowners, regular contractors, or licensed asbestos abatement contractors as long as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) are not violated.
The health risks involved in handling non regulated asbestos materials is small but the removal should be done in a manner that will minimize the release of fibers due to breakage. It is recommended, because breakage in inevitable, that one wears asbestos related safety equipment including a disposable tyvek suit, gloves and must be medically able to wear a half mask respirator with High Efficiency Particulate Air (HEPA) filters, and adhere to the principles of wet removal and without visible emissions.
Removal in workplaces, schools and public facilities must be done by a licensed asbestos abatement contractor.

Disposal

The best way to dispose of asbestos is to bury it or any way that will prevent it from becoming airborne.
Service area landfills will often accept large amounts of asbestos provided it is properly contained or shipped in bulk.

Next week: Building Green.

Mortgage Myth vs. Fact Part 6

Since the response I received to the mortgage myths vs facts series was so very good, I am extending it beyond the five part series I had initially conceived. Feel free to send in your questions and I will have Huck see if he can answer them and perhaps we can feature them here as well.

Here's the latest one:

MYTH: One needs a two year work history to get a loan.

FACT: Not necessarily! For example, a newly hired college graduate, working a job related to his/her major, will often get his/her time in college counted as "work history."

Contributed by Huck Ferrill, mortgage consultant. He can be reached at 916-788-9802.