It’s early on a Saturday morning as I write this and I’m trying to muster up enough strength to go out and show property this weekend. There’s a new phenomenon out there. I don’t know if it’s unique to the valley or if it’s spread across the country, but buyers and their agents are being massacred.Sales were way down here last year as buyers waited for prices to fall, some rather patiently. At the end of the summer we started to see a rise in short sales, but still prices didn’t move. It was in October that we started to see price reductions and they continued into the New Year. As I’ve written about in my newsletter, in January the average home in the eastern valley had dropped over $100,000. It was time to start shopping. All those buyers who have been waiting went to see their lenders and got pre-approved.
Then it happened – Foreclosures. Bank Owned properties started popping up like weeds. They are everywhere. Only they are priced $150,000 to $200,000 less than they were bought for 2 years ago.
The battles go like this: late in the week the property goes on the MLS. Agents and their buyers look at the property over the weekend. Because it is a bank owned property, the listing agent holds onto the offers, ignoring any date or time limits for consideration. On Tuesday or Wednesday or even Thursday they will send all the offers to the lending institution; by now 8 to 10 of them. There is no deal making here. Buyers are required to apply with the lender and have their credit scores pulled yet once again, risking the lowering of their scores for being requested too often. There will be addendums from the lender, often so poorly written that they contradict themselves. Buyers are required to give up many of their rights when they sign them. Then the lenders will just sit and ponder the offers. Some will get back to you in days, others weeks. Many will apply; one will be chosen.
None of these properties have closed yet, so we don’t know the difference between the asking and selling price and the listing agents are keeping mum. We only get one chance to make our “highest and best” offer. Buyers aren’t the only ones loosing out here. Because the original asking prices are artificially low, it is hurting other sellers. Remember, these are the same lending institutions that made the bad loans. Now we are allowing them to make a battle zone out of our market place. They may like the frenzy. It’s probably an ego boost to receive so many offers. But they are receiving so many offers because the general population sees them as weak – financially and morally.
Well, enough ranting, time to gather my files, my cell phone, and my energy bars. My buyers need me, now more than ever.
Million Dollar Fixer
Burbank is one of those places where million dollar fixer-uppers really exist. A couple of agents in my office listed one last week. Why is it worth over a million dollars? The view – it is breath taking. The home ain’t bad either. If you can afford a million dollar home should you buy this? No. This is for the person who can afford a 2 million dollar home, but would like something that can be remodeled and redecorated to his or her own personal style. This is a home with possibilities; a dream waiting to be created.
Remodeling Don’ts – Kitchens
I saw another one today: a great home with a disastrous kitchen. Oh, it has the usual granite countertops, new cabinets and flooring, even new appliances. It is beautiful looking. Yet, it is a cook’s nightmare. For those of us who actually cook (remember, I wasn’t raised here) there is something known as the magic triangle. The three points of the triangle are the sink/countertop, the stove/oven, and the refrigerator. The lines that connect the three points must, I repeat MUST, be straight. It must be a true triangle. If one must go around a corner to reach a point of the triangle, it doesn’t count.
Kitchens, like bathrooms, are functional rooms. They are designed and used out of requirements. Making these rooms difficult in which to maneuver, difficult in which to accomplish your mission there, makes them undesirable; no matter how “pretty” they are. Most buyers are not aware of the magic of the triangle in the kitchen. They only know that the room “feels” uncomfortable. As they imagine themselves in that spot the images do not flow, they feel disjointed, wrong. People buy according to their emotions. A home must “feel” right. Pretty will not compensate for any uncomfortable feeling. Buyers may not be able to pinpoint the reason things don’t feel right, making the feeling even more scary. So, remodelers – use the magic of the triangle. It expels the scary.
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