This IS Last Year!
Current mood: jubilant

I went to a barbeque in 2002 and was talking real estate with someone who had been renting nearby for about 15 years.  He planned to buy a home but wanted to wait until prices dropped because they surely couldn't go any higher. We talked about renting vs. buying and the equity building and write off advantages of owning real estate. We discussed that paying rent pays off the landlord's mortgage.  We discussed the risk of owning stock vs. real estate and that you can't live in your stock like you can in real estate or write off your taxes and mortgage interest.  He said he would think about it and call me when the bottom dropped out of the real estate market as, in his opinion, it surely would.

A year later in 2003 we met again at the same annual barbeque and we talked about it again.  What had happened in the ensuing time was that prices continued to go up and the property he could have bought "last year" was now out of his price range.  With the interest rates a bit higher, the mortgage payment for the house he had been qualified to purchase the year before was now qualifying him to purchase a townhome with an inside laundry, maybe a garage.  He said "I should have bought last year" and decided to wait until prices come back down as, in his opinion, they surely would.

Another year passed and in 2004 we met again at the barbeque.  His income had not gone up enough to allow him to save for the higher down payment he would need based on the higher prices and he would now qualify for a condo with community laundry and with someone living above or below him.  He was lamenting that when he retired he'd surely have to move out of state and rent or maybe buy somewhere else.  BUT his grandkids were here… quite a dilemma.  He said "I should have bought last year" and decided to wait until the bottom dropped out of the real estate market as, in his opinion, it surely would.

Well in 2005 we didn't talk much about it at the annual barbeque.   He was disgusted about this crazy real estate market and would just never be able to afford something.  He said. "Well I guess I should have bought when we talked about this a few years ago.  I would be in good shape right now as I want to retire one of these days."

The last quarter of 2005 marked the beginning of the end of the boom market we had been in for a nice ride in appreciation and at the 2006 barbeque he said, "See I told you the prices would go down, but I want to wait until it really bottoms out". 

When we saw him this year at the 2007 annual barbeque, he said "Well I'm still going to wait until we really hit bottom, because prices will surely keep dropping as I knew it would crash at some point."  The truth is, he will probably NEVER buy real estate.  He has analysis paralysis.

For many of us who believe in real estate as an investment, we can ride these real estate cycles. We choose when to sell. The point is we are on the real estate investment train and that helps us keep up in value and equity relative to the market we are in at the time.  There is certainly nothing to gain or lose if you are not in the market, but riding the cycles is preferable for some of us.  If we are not at the bottom of the bottom or top of the top, we still do fine as real estate just continues to cycle.  We can wait until the time is right.  In the meantime we get to live in our investment.  Or we can rent our real estate and earn equity while our tenants pay off our mortgages.  We write off some of the interest and taxes paid, and usually gain appreciation before we sell.  If prices are down when we sell, they are down for us to buy then too… it's all relative, but the key is that our real estate keeps us in the market and we can take our equity and move when we choose.  Your rent just goes to someone else's mortgage and equity.  YOU HAVE TO PAY TO LIVE SOMEWHERE, WHY NOT HAVE THE RENT YOU WOULD PAY GO TOWARD A MORTGAGE AND EARN EQUITY FOR YOU? 

The point our acquaintance missed was that had he purchased when he first started talking about it, he not only would have had a lot of equity (even today at the bottom of the market he'd have been ahead), at whatever point along the way (if he had chosen wisely when to sell) he would have had enough to retire comfortably and probably pay cash for a home if he moved out of state as he had planned.  IF he had bought in his area in 2001 or 2002, he'd have made about a 30 percent increase during those years, in some areas more.  So, this bottom we are reaching has dropped prices in his city about 10-15%.  And, he'd have had the 15% to 20% to take to his next home. This is far more than he could save in a year and still a profit over his original purchase price.

Here we are today, maybe at the bottom or we can see the bottom from here, and where are the people who would like the lower mortgage payment and low interest rates?  I guess they are waiting and next year will probably wish they had bought "last year".  I and many others like me have been investing NOW in real estate as we believe we are about at the bottom of the cycle. 

The time to buy is now when everyone else is not buying.  The good deals are now with an extraordinarily high number of homes on the market, signs in every neighborhood and foreclosures abounding.  We are picking up the "deals" and talk to our clients on a daily basis about the market opportunities.  I predict, THIS is last year. 

Next year is an election year and if you look at the history of the real estate market in election years, it is pretty good.  Generally interest rates go down and the market is given a shot in the arm.  In California, our economy is typically the last to go into a slow down and the first to come out.  So when I say, "This is last year", I mean "THIS IS LAST YEAR". 

If you want to make a great buy in a home or investment real estate they are around every corner.  Call your Realtor, find a good Realtor who is full-time actively working in this market as those are the people who know where the deals are (not a part timer who isn't out there day after day or a friend with a license who works only when the market up). 

With the current scares in the mortgage industry about the defaulting loans, take your Realtor's advice on a reputable mortgage broker.  40+ lending institutions have been taken over or gone under since January of 2007.  This too makes it a good time to buy as people who are afraid will not enter the market now and get the "good" loans that are still available as they are too afraid because of all the bad press.  This gives you the opportunity as the prices will stay competitive for you to purchase before the market makes a rebound the other direction.   It's time to get on the train as "this is last year".

This is a market update on the Realtor.org website for July, 2007:

Terrylynn Fisher, Realtor in Walnut Creek California for 30 years.

Diablo Realty  1800 DIABLO2   or 1800 342 2562

Currently listening : Voice of the Feminine Spirit By Cecilia Release date: 11 May, 1999

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Staging is NOT setting the table

First, if you are using a dining room as an office or playroom, it must be put back to the dining room if you are selling your home.  Why?  The buyer might use it the same way, but are expecting a dining room and the majority of people looking for homes are eliminated if you eliminate the dining room they are looking for. Most people are just not visualizers. 

Dining room-Table set with place settings of expensive china, silverware, candles lit, centerpiece, napkins, 6-8 chairs, tablecloth, and more.  This is how you live in a home and perhaps decorate.  This is not staging.

When staging your dining room, remove all the table leaves in most cases.  Some would say that a buyer can see how a big  table fits in the room if you leave the leaves in.  Well, when staging you want to show how big the room is, not how big the table is.  Understand the difference?  The buyer will see that there is space for their larger table as they see the space.

Hutches, and china place settings are visual clutter.  Empty 1/2 to 2/3 of all items in the hutch, removing collections and expensive china pieces to make space.  This allows the buyer to see the space not be distracted by your things.

Chairs - chair and table legs are visual clutter too.  Many dining rooms should have 2 or 3 chairs, most are fine with 4. 

Candles lit, a fire hazard...ok to use, not lit, a buyer or their childs clothing could accidentally get too close and disaster happens.  Silverware is visual clutter too, unnecessary to the effect of staging (creating uncluttered space), might be taken or used as a weapon (doesn't happen often I acknowledge, but why take a chance when it is not needed for the staging effect).

So decorate to live in your home, stage to sell your home.  Know the difference and you'll reap the benefits.  Happy Selling.

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Interview in Alameda Home Section, Spring 2006
Current mood: excited
Category: Life

How long have you been in the home staging business?  I have been selling real estate since 1977 and about 10 years later met Barb Schwarz who created this as a listing tool for sellers.  I have been doing so ever since (about 1987)…

The reason is that it was the only designation for real estate that I hold that my clients perceive directly benefits them.  It does help their home sell more quickly and in most markets, often for more money than homes that have not been improved or staged.

What lead you to the field?  A desire to find the thing that directly was a client bottom line benefit.  I take lots of classes on marketing, legal updates, but the client and I see that this brings them more equity when they sell.

Why is home staging important?  "Buyers only know what they see, not the way it's going to be."  Barb's saying.  Most people are NOT visual and cannot see through the clutter and dingy paint etc.  The things that make rooms look small, leave the perception that it is too small for the buyer's things too. In reality, it may be a much bigger room, or be being utilized incorrectly as per floor plan.  Example, people using a dining room for a computer room—we would normally put it back to a dining room.  Most people WANT a dining room and lots of people have hutches, etc.  IF they later want to use it for computers, then "How we live in a home and how we sell a home are two different things".) Barb's saying.

If you want to appeal to the broadest market and the double income buyers with no time for fix up themselves, this is the way to do so.  They want things done so they can just move right in. 

Does staging help homes sell faster?  When a buyer is looking for something to purchase, they start with the assumption that they can deduct for deficits they see and get the price down.  They also think that if no one else wants the home, then they can wait a little and make a lower offer.  You know I'm right, don't you, perhaps you've even had that thought when looking to buy something (car, home, etc.)?  So staging and providing a product that creates  interest and urgency in the mind of the buyer to purchase is what helps properties sell more quickly. (In other words, there aren't many homes as nice as this, and it might be gone if I don't offer on it…)

What trends have you noticed in staging décor?  Stagers believe "less is more".

I am President of a Chapter of Staging Professionals (IAHSP).  I see them generally adding their creativity to each project.  You wouldn't do modern to a country style home…so they do customize each project based on the style of home, other furnishings that are there, neighborhood and all of that.

Do designs vary according to the season, i.e. Spring?  Yes, certainly.  Our stagers constantly change their inventory to be seasonal and current with local trends.

Who usually contracts your services? Seller's looking for a full service, experienced Realtor with ability to have "value added" to their home sale to maximize their equity.

Do you have any clients who initially tried to sell their home without staging and found it difficult (before/after stories)?   Yes, how many examples would you like, how much space, etc?

What is the price range for your services? Varies by property, square footage, what things are used of the sellers, what we have to bring in, if rental furniture is involved.  Actually, just as I cannot tell you what your home is worth if I have not seen inside and outside of the home, I cannot tell you what staging costs, unless I see what you have.  IF I did try to do so, it would be pretty arrogant and presumptious, don't you think.

Do you have any Real Estate agents/brokers with whom you work closely?<SPAN style="mso-spacerun: yes">  Our stagers have regulars that use them all the time.  Our Stagers find a "team" approach works well as they can better serve their realtor clients preferences and clientele.

How does the cost compare to preparing your home for sale yourself?  Well, first of all, preparing your home to sell by painting, and cleaning and all of that is not really staging.  Those should be a given when selling.  You MUST take care of deferred maintenance and fix leaks, deficits you know of or you are likely to have a buyer who will require it in their inspection phase anyway.  Last, but most important, this is what ASP Stagers and ASP Realtors do.  They have the most current trends and inventory.  Do you as a seller want to go out and purchase things you may not use again?  By the time you do all that, your ASP Stager/Realtor could have completed the staging and they come back and remove their things when your home sells.  It saves you time and money to hire an ASP Accredited Staging Professional.

Staging is "setting the stage" for the market.  Just as you would "stage" your car by cleaning it, making sure it runs well, tune-up, etc. (You have a much different reaction to a dirty car than you do a shiney clean one, right?)  You "stage" your home by washing windows, uncluttering, and making sure the systems are as viewed and finally having your ASP stager come and use the "staging" concepts to enhance your product.  "Your home becomes a house which becomes the product that we market and sell".  I find people who do it themselves take shortcuts (aww we don't want to move the hutch or can't physically do so),or are too emotionally involved and just don't see what needs to be done.  They are too close. 

Do you have décor tips for those seeking to sell their homes?  The "C's" of staging.  Clean, clutter free, color.  Décor, color can be the most important thing to update.  Allow your ASP Realtor or ASP Stager to assist with color choices BEFORE painting. The same goes for carpet choices. They know what makes rooms look larger, or for large rooms, what makes them look more intimate and cozy.

Do you have anything you¹d like to add?

I can honestly say that the effort of staging your home prior to sale really makes a difference in your equity to take to your next purchase.  It helps you begin the purge and packing process and allows you to mentally begin moving.  I am a Senior Real Estate Specialist (SRES) and especially find it helpful with the seniors as they get easily overwhelmed.  Staging is really a step by step process and once complete gives you superior product to sell to the buyer.  Buyers are happier with their purchase and you can mentally and physically get on with your move.

And, you happily realize you are half way there.

As an ASPM Realtor, I use ASP Stagers to assist with the staging of my listings.  IF I am out of town, they know the answers to the questions for my sellers as well as I do as we have been similarly trained and "get it".  They are an invaluable part of my team.  And the continuity my sellers receive from having a cohesive, trained, professional just can't be beat.  I have seen people buy a fiscus tree and table place settings and think that is staging.  They don't understand the concept and that it is really about maximizing your homes potential.  I feel it is my obligation as the Realtor to maximize my clients home potential and bottom line.  That is real client service.  I feel I would be cheating them if there was something I know about maximizing their potential sale and I did not tell them about it. It is that simple.  To me it is an integrity thing.

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Be Too Good To Pass Up!
Current mood: excited
Category: Life

Saving Money
Current mood: cheerful
Category: Life

Speaking of saving money, according to the Alliance to Save Energy, Department of Energy and Environmental Protection Agency, American consumers and businesses spend some $21 billion annually, on lighting alone, and could cut their costs in half with energy-efficient light bulbs and fixtures while improving the environment. Installing efficient lighting in American homes and businesses would reduce carbon dioxide emissions by 140 million tons each year--as much as eliminating all the carbon dioxide produced by the state of New Jersey! Isn't that amazing?

I found a website (sponsored by the EPA and the DOE) that shows how to save money on energy bills by incorporating their energy efficiency suggestions. It's http://hes.lbl.gov/.

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Real Estate Appreciation

Know which neighborhoods have appreciated the most before you buy. You can search for neighborhoods where median house values have increased the most in any area of America.

What we provide

NeighborhoodScout reveals the percentage change in median house values for every neighborhood in America - from 1990 to present. This shows neighborhoods that have continued to appreciate through both up and down real estate markets, providing exclusive insights into which neighborhoods are likely good investments for the future. Remember the stock market in 1999 - everyone appeared to be able to pick great stocks because most stocks were rising, similar to what is occurring in real estate in many markets today. But only select stocks did well after the downturn in 2000-2001. Real estate markets are likewise cyclical, and NeighborhoodScout's data take that into account.

Las Vegas neighborhoods with the highest appreciation rates.
This is an example of what NeighborhoodScout will deliver to you when you subscribe. The darker colors depict which neighborhoods in Las Vegas have appreciated the most, compared to the lighter color neighborhoods that have appreciated the least. Subscribers can get such maps in seconds, zoom into them to see more street detail, and select specific neighborhoods to see individual appreciation rates. The data cover the entire nation at the neighborhood level.

Example

Once a subscriber clicks on any neighborhood, the actual appreciation rate is shown, along with how that appreciation scores relative to the state and nation.

These exclusive appreciation data at the neighborhood level help home buyers and real estate investors separate good performing neighborhoods from those that appear to be appreciating well right now, but that history has shown to lose their value more easily in past downturns. Since a home purchase is often the largest single investment for a family, such exclusive insights can be invaluable.

NeighborhoodScout has calculated appreciation rates for each neighborhood in America as a percentage change in the median house value from 1990 to present (e.g., 84%). We also show how each neighborhood's appreciation rate compares to other neighborhoods in the nation, and within the same state (e.g., 9 relative to the nation, 5 relative to California (10 is highest). This makes comparisons of house appreciation rates equally easy for professional investors and individual homebuyers. In this example, the neighborhood is one of the highest appreciating in the nation, but is only average in appreciation relative to other neighborhoods in the state of California.

About the Data

Our data are designed to capture changes in the value of single-family homes at the neighborhood level. Different neighborhoods within a city or town can have drastically different appreciation rates. NeighborhoodScout vividly reveals such differences (see example above). Our data are built upon median house values in each neighborhood, and combine data from the United States Bureau of the Census with quarterly house resale data provided by Fannie Mae and Freddie Mac. The data reflect appreciation rates for the neighborhood overall, not necessarily each individual house in the neighborhood.

Our data are calculated and updated every three months for each neighborhood, approximately two months after the end of the previous quarter. Each quarter, Fannie Mae and Freddie Mac provide their most recent mortgage transactions. These data are combined with the data of the previous 29 years to establish price differentials on properties where more than one mortgage transaction has occurred. The data are merged with neighborhood-specific median house values from the Census Bureau, creating an updated historical database that is then used to estimate the median house values for each neighborhood.

These resultant neighborhood appreciation rates are a broad measure of the movement of single-family house prices. The appreciation rates serve as an accurate indicator of house price trends at the neighborhood level.

How are the data calculated?

Neighborhood appreciation rates from NeighborhoodScout are based on both median house value data reported by respondents via the U.S. Bureau of the Census, and a weighted repeat sales index, meaning that they measure average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac. Neighborhood appreciation rates are updated each quarter as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac. The new mortgage acquisitions are used to identify repeat transactions for the most recent quarter.

What transactions are covered in the appreciation rate data?

Neighborhood appreciation rate data are based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. Conforming refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and that doesn't exceed the conforming loan limit, a figure linked to an index published by the Federal Housing Finance Board. Conventional means that the mortgages are neither insured nor guaranteed by the FHA, VA, or other federal government entity.

Mortgages on properties financed by government-insured loans, such as FHA or VA mortgages, are excluded, as are properties with mortgages whose principal amount exceeds the conforming loan limit. Mortgage transactions on condominiums or multi-unit properties are also excluded.

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Use IRA $$$ to invest in Real Estate, increase your return for retirement
Category: Jobs, Work, Careers

Hi all, thought I'd talk about a new way to invest in real estate with IRA $$$ through a self-directed IRA.  More info and a free 37 page book at penscotrust.com.  We will be taking a trip to Portland shortly to see about real estate there for this investment as we've heard they have lots of new companies coming to the area and the impending growth will put their real estate market in good stead.  Albuquerque may be a place to look as well.  I think we are at the end of a good cycle here and they are about to start one.  I am hosting a free class on the subject in June, so hope to fill the house for that.   

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CalHFA New programs!
Category: Life

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Investments
Current mood: excited

Hi there...just got very excited about Self Directed IRA's for Real Estate and other investment purchases.  RIGHT you heard that---money to purchase real estate with IRA funds and the profits go back into the IRA as return on your investment and IRA rules apply you don't pay tax until you take out the IRA money in retirement.  Same other rules apply, penalities if you withdraw early and NO tax if you put your ROTH IRA's there...

I have had a PENSCO account for years meaning to do something about it as our 401K and IRA's perform so horribly compared to our real estate investments long term.  And, as we are in California the last 5 years have been phenomenal.  However, here we are with a settling market in California so that is looking attractive, and our PENSCO account reactivated.  Tell me about your area for investing, are you on the verge of taking off, any areas of redevelopment that should be good for investing in the next 5 years or so?  For the free booklet "50 Questions about Self-Directed IRA's"...go to the PENSCOTRUST.COM and to the right is a free booklet.  Lots of good information to tell you if this is right for you.  Just a resource, there are about 4 good companies that do this nationwide.  The older, established companies, PENSCO...being one of them, are recommended as there is a lot to know about this.  Happy Investing.  Terrylynn:-) 

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Price and Sentiment
Current mood: hopeful

Price and Sentiment
- Ellen James Martin, the Contra Costa Times

It's a barn-red house, built more than 100 years ago on a large lot in what has become a posh suburban area. Still, Susan Hudson-Wilson and her family are planning to sell their property in the Spring of 2001. That's when her younger son will graduate from high school. Together with her husband and 14-year-old daughter, she has decided to take up quarters in an urban townhouse, closer to her job. They are also building a spacious weekend retreat that will be ready for use early next year.

Given their meticulously timed plans, Hudson-Wilson is determined to price the barn-red house correctly from the outset. She vows not to attach a "sentimentality premium" to the price, as many do, despite the 10 happy years her family has spent there. Sentimental sellers hurt themselves because they lose control of the timing of their move. Even in communities where property values are ascending, overpriced houses will go unsold month after month.

"You may be in a hot-hot-hot market. But if you go to high water, no one will buy your house," says Hudson-Wilson, founder and chief executive of Property & Portfolio Research, a national real estate research firm that advises large property investors.

Easy to spot

Ready access to property value data means buyers can now more easily spot an overpriced house. "Nowadays it's awfully hard to fool buyers. That's because home value information that used to be hidden in the dusty basements of courthouses is now available in a timely fashion around the globe on a 24-hour basis," says Steve Kropper, president of Inpho Inc., which tracks actual selling prices in the top 50 US markets.

Here are some pointers for potential house sellers:

• Be alert to Internet or newspaper reports on property sales in your area.
  
  Real estate agents urge prospective sellers to monitor the prices at which houses change hands in their neighborhood, beginning well before they put a property on the market. Local newspapers now put out such real estate transaction information routinely - in the paper or on their Web sites, or both.
  
  Your real estate agent will check statistics of comparable recent sales in your area before you sell and recommend a price, usually within a relatively narrow range. But ultimately it's the owner's decision, and one worthy of some homework. Kropper suggests you check prices around your area at least 90 days prior to putting your house on the market. Hudson-Wilson and her family are already taking careful note of transaction prices more than a year before they plan to move to new urban quarters.
• Visit open houses in your neighborhood to gain a handle on local values.
  
  One way to make the pricing of your house more an objective than a subjective exercise is to put on the glasses that a buyer looks through. Sellers who visit other properties being marketed in their communities prior to listing will expand their general feeling for neighborhood value trends. More important, they'll sense how buyers bring a detached view to the purchase of a house. Besides suggesting that her sellers visit open houses in their own neighborhood, a real estate agent will sometimes arrange appointments so that her sellers can get a feeling for pricing.
• Be careful not to put a sentimentality premium on a property you've upgraded.
  
  Those who have spent years lavishing attention on improvements to their house and are proud of the outcome are especially vulnerable to a self-defeating surcharge for their positive feelings about the place, says Hudson-Wilson. Whether you've invested sweat equity or hired a contractor, the reality is the same. You're not going to be paid back for the pride of ownership alone. In fact, you may not even fully recoup the money you've invested - unless your dollars went for such highly valued improvements as kitchen and bathroom renovations.
• Review your personal history to help ascertain your attachment level.
  
  Some homeowners have so much emotion tied up in a property that they have great difficulty parting with the place, even after their family size and space needs have shrunk. If you have years of positive memories stored in your house, come to terms with your degree of attachment before it's time to sell. When you look at the dining room, do you think of a dozen formal holiday dinners? Does your smallest bedroom bring back recollections of rocking your babies to sleep? There's nothing wrong with nostalgia. But no matter how rich your house is in memories, buyers will not pay for them. Prospective owners of your house don't join you for Thanksgiving. And when they look upon the place where you rocked your babies, they see a bedroom - perhaps a space that could be converted to a home office.
  
  If you make peace with your emotions, you'll be in a better position to take a businesslike approach to pricing your house. "Whenever you're involved in real estate, you must be highly dispassionate and objective," Hudson-Wilson says.

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