www.mountainupdate.com

Timely Feedback for Sellers

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Yesterday afternoon, I received an email telling me that one of my agents opened a lock box on one of my listings.  This morning, first thing I sent an email to the agent asking: 

Fred,
Lockbox says you showed it on Friday.  Any feedback from the showing.  I need to be meeting with the seller this week and feedback would be helpful.

Steve

The response came quickly:

Steve,
Our client looked at several (12) homes in this price range.  The Teakwood house was actually in her top three.  She ended up writing an offer on xxxxxxxxx listed for the same money with an attached two car garage, 5 bedrooms and 3 baths.  Based on the other homes that we looked at our buyer thought the price of Teakwood should be under $250K.

Fred

Feedback from agents showing and buyers is extremely valuable to sellers.  Lets breakdown this feedback.  First Fred said that his client saw 12 properties in this price range.  The asking price of this listing is $268,000.  There is a great deal to choose from for buyers in this market.  In fact less than 25% of properties that are listed actually sell as there are not enough buyers in the market to absorb the inventory. 

Next Fred told me that their buyer actually wrote and offer and what they wrote an offer on.  My listing was a 3 bedroom two bath home without a garage.  They wrote an offer on a property that had 5 bedrooms, 3 baths and an attached garage.  This information is valuable for a seller to understand what buyers are seeing out there for the money.

Lastly, Fred and their buyer make a recommendation that my listing should be listed below the $250,000 mark to be competitive in this market. 

In these tough economic times, it is important for sellers to have quick feedback on showings so they can act and make business decisions to best position their property for sale. 

Coldwell Banker Sky RIdge Realty is the market leader and has been since 1982.  Please contact me if you need assistance with real estate related services here in the San Bernardino mountains.

3rd Quarter Update, Lake Arrowhead Real Estate

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Friday marked the end of the 3rd quarter 2011. Year to date 2011 sales were relatively unchanged from the first 3 quarters of 2010.  2010 saw 205 sales where 2011 it ended up being 199. 

Of note was the change to median price.  The first 3 quarters of 2010 the median price in Lake Arrowhead was $339,000.  For the same period this year the median price was $284,000, representing a 16% decline in median price.  This number does not mean that homes for this period lost 16% in value, it just means that the lower sector of the market was much more active. Median price continues to be driven down by distressed properties (Foreclosures and Short Sales.) 

A comparison of home prices in Lake Arrowhead for the two periods reveal that values held steady, virtually unchanged.  Sellers have had to reduce prices from unrealistic listing prices, but the homes that are priced at market value are going out within 5% of asking price. 

Also interesting is that average market time for homes sold in the first quarter of 2011 was 193 days... over 6 months.  in the 2nd quarter that dropped to 93 days and the average market time for the 3rd quarter sales dropped to an amazing 44 days.  What is happening is that sellers are doing a better job of positioning their property in the market and these are the homes that are selling. 

Sellers that "test" the market, or list with Brokers who are not in tune with market values languish on the market and in most cases do not sell.  It has never been so critical to have your property listed with the right firm and agent. 

Historically, 50% of the homes listed for sale in Lake Arrowhead are positioned with no chance to sell, they are priced too high and listed with the wrong agent.  The other 50% are in the market, and only half of those will sell.  Less than 25% of the homes that are listed will sell in the current market.  If you are a seller it is very important for you to know this information and understand what will cause your property to sell.

Since 1982.... for 29 years, Coldwell Banker Sky Ridge Realty has been the leader in real estate related services.  If you or someone you know needs assistance with real estate, don't hesitate to contact me.  I will put you in touch with one of my top agents who will get the job done for you.

Steve Keefe

Do I wait out the market, or do I cut my losses...

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Recently I was contacted by a friend who purchased his home in 2009…. Really not that long ago.  His question was related to value.  He wanted to know , in today’s market, how much his home would be worth.  In order to answer the question, I had to do some analysis to determine on average what the decline was in median price. 

In 2009, when my friend bought his home, the median price home in Lake Arrowhead was $499,000.  Year to date figures for 2011 represent a median sales price of $389,000 a decline of 27%.  If his home is typical and follows the median, likely his home today is worth 27% less than what it was in 2009.

He purchased his home for $389,500 if he sold it today, it would likely sell for $284,335.  His response was … I won’t sell it for $284,335, I owe more than that on it.  My response was I understand…. And if you aren’t willing to sell it for $284,335, you probably won’t sell it.  I went on to explain after he told me that he was going to wait out the market…. That if the past was any indication of the future, over the next 12 months, he will have $36,000 in carrying costs putting him another $36,000 in the hole and if the property declined in value as it had in the previous year by 13% the home would be worth $247,371 next year. 

If the seller accepted an offer today at $284,335 today he would be losing money…. If he waits another 12 months, he could lose an additional $72,964…. Waiting it out isn’t the answer.

Each situation is different.  In this particular situation, the loss is greater due to the fact that the seller’s home sits vacant, he receives no rent and does not use the property.  Contact me, and I would be happy to evaluate your specific circumstance and assist you in clarifying the business decision that has to be made.

Ask the Broker: I want a lower commission

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Seller:  Your commission is 6%, that’s ridiculous I have never paid more than 5% to a real estate company.  I have talked to several other brokers that will take my listing for 5%.

Steve Keefe:  I can imagine that you would be able to find someone in our market that would be willing to list your home for 5%.  Some agents/brokerages pitch is all about “we will do it for less”.  In reality not only will they do it for less, they will do less.  If all you want to do is list your property, then going with the guy with the lower fee might be a good strategy, but if you are looking to sell your property, you need someone who will be doing a lot more than listing it.

I case you haven’t gotten the news bulletin, the real estate market is tough, tougher than it has been anytime during my 22 year career.  You as a seller have a couple of options… you can contract with someone who would be willing to list your home for a 5% fee, you could list with me at 6% or you could list with me for 7 or 8%. 

If you list with the guy who will do the deal for 5% a couple of things are going to happen, first they likely will split the commission, keep 2.5% for the listing side then offer 2.5% to the buyers side.  In our market, if there are 45 properties in your price range, 5 will be offering 2.5% to the selling side all listed with weak agents like the one you have contracted with.  Hate to say it, but agents who have a buyer, aren’t going to show your home when they can show 40 other properties all with a full commission.  So that leaves it up to your agent to sell it, because nobody else is going to.  They may agree to offer 3% to the selling side and keep 2% for themselves, but a good agent will not do this.  As I said there are 40 listings out there in your price range, and plenty of sellers willing to pay a full fee so the strong listing agent will move on to the seller that will pay for top service.  I will say it here any agent who reduces their fee isn’t worth dealing with.  You don’t have to worry you won’t be paying any commission because your property won’t sell.

Let me give you an example... lets say that Sylvester Stallone gets $3,000,000 for each movie he does.  How do you think he would react to a producer offering him $2,000,000?  You got it, he'd say thank you very much, offer the $2,000,000 to someone who is worth $2,000,000 and he'd move on to the people that want him and are willing to pay him for what he is worth.  How do you think the results were for the producer that hired the $2,000,000 guy... your right, not as good as if it had been Sly Stallone.

If you list with my firm and are willing to pay the full fee, you are getting a team of 60 agents standing behind the listing agent working together to accomplish your objective… the sale of the property.  Coldwell Banker Sky Ridge Realty has twice as many sales on the mountain as our next closest competitor.  What we charge is fair representation of what we are worth… how much is it worth to you to have the #1 team with the #1 results working for you?

If you list with my firm and you offer a 7 or 8% fee, you receive all of the benefits of working with our team plus you provide additional incentive to buyers agents to push your property to the top of the show list.  Same analogy as above, if there are 45 properties in your price range and you are one of 5 that is offering a higher commission rate to the buyer agent, what do you think will happen.  Correct, you will receive many more showings as agents want to maximize the return to them. 

In this market, to be successful a seller must do a couple of things.  First they must be realistic and aggressive with their pricing to attract buyers.  Second they need to choose a real estate firm that produces results.  In the mountains, there is no other choice than Coldwell Banker Sky Ridge Realty.  Next you must select the right Coldwell Banker Sky Ridge Realty agent.  Don’t be afraid to ask them the question “Why should I list with you?”  Last, creating incentive to the buyer agents will give you an edge and will provide more exposure for your property.  Consider offering more commission to the agents and you will likely see better results.

I hope this helps, please send your real estate related questions to steve@cbskyrige.com

Ask the Broker.... Big Termite Bill?

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Seller:  We are in the middle of a transaction and my Realtor called earlier today to inform me that the termite inspection has been done and there is an estimate of $25,000 in section 1 work that needs to be done to get a clearance.  We negotiated down to a price that we can’t afford to do any of the termite work, I want to cancel the transaction can I?

 

Steve Keefe:  There is a section in the purchase agreement which addresses this topic refer to the form RPA-CA Section 4A-1 which reads as follows:

 4. Allocation of Costs (if checked): Unless otherwise specified in writing, this paragraph only determines who is to pay for the inspection, test or service mentioned it does not determine who is to pay for any work recommended or identified in the report.  

A.    Inspections and Reports:
1. ___Buyer or ___Seller shall pay for an inspection and report for wood  destroying pests or organisims (Wood Pest Report) prepared by ________________________ a registered structural pest control company.

 In the event that the purchase agreement was executed and there was no addenda attached addressing who was to pay for the work, it becomes a point of negotiation, and you the seller can reject any request for corrective work.  The buyers remedy is to cancel the escrow pursuant to other language in the agreement.  The important distinction is that you the seller are not obligated by contract to do the corrective work.  In this instance a huge amount.

 Often, in fact normally what we see is the standard contract with an addendum attached known as the WPA which specifies not only who will pay for the inspection, but also how the costs to correct will be allocated. 

 Paragraph C contains language that can bind either buyer or seller to action.  It reads as follows:

 2C  The wood pest report shall be separated into sections for evident infestation (Section 1) and for conditions likely to lead to infestation or infection (Section 2).

    1.     (Section 1) ____Buyer___ Seller shall pay for work recommended to correct “Section 1” conditions described in the wood pest report and the cost of inspection, entry and closing of those inaccessible areas where active infestation or infection is discovered.

    2.     (Section 2) ___ Buyer____Seller shall pay for work recommended to correct “Section 2” conditions described in the wood pest report if requested by Buyer

 In the event that this addendum was used, and the buyer and seller agreed under paragraph 2C that the seller would be responsible, the seller has obligated themselves contractually to complete the work and pay for it.  The difference in these two scenarios is that the seller can opt out and not be obligated to do the work.  In the event a WPA is used, they have not choice, they are contractually obligated to do the work and pay for it.

 The WPA is helpful in that it clarifies responsibilities for both the buyer and seller, but it can also be harmful if a seller isn’t expecting a large termite bill that comes in that they have obligated themselves to pay.  It would be prudent in every circumstance that the WPA is used for a seller to protect themselves by offering a cap on the work.  The form does not allow for a cap to be initiated, so the seller must convey this limitation on an addendum or counter offer. 

 In your example, the WPA was used, and it specified that you were responsible to do Section 1.  Contractually, you are obligated to do the $25,000 in corrective work.  If you don’t you are in breech of contract which can have other consequences.  You should have on an addendum or counter limited your exposure by stating something like:  Seller to pay for Section 1 work not to exceed $4,000 or some other figure.  Not including language that limits your participation can create a situation where you are obligating yourself to a much larger contribution.

I hope this helps, please send your real estate related questions to steve@cbskyrige.com

2010 How to Succeed in Real Estate

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Success in the current environment requires specific action.  I have been asked over the last 30 days many times by my team members... "How do I prepare for success in 2010?".  There is no one path to success in todays real estate market, but there are some things to consider that will enhance the opportunities for 2010. 

Consider this approach when looking for improvement:

• Choose your own path- Choose what you really want in life if you have a passion for the real estate business, commit to it and commit to providing the highest level of services through hard work and professionalism.
• Make a Resolution- Focus your energy and attention on a limited number of goals and you will increase the probability of success.  I would choose no more than 3 major goals you are going to commit to and resolve to complete.  These goals must be SMART goals Specific, Measurable, Achievable, Realistic and Time based.
• Create a Plan- A goal without clear steps is just wishful thinking.  The chances of succeeding without a plan is significantly diminished.
• Create a Plan NOW- Those who wait capitulate!  In spite of what we hear about broken resolutions, those who make the commitment are 10 times more likely to succeed than those who don't put their plan in action.  If it is worth doing, it is worth committing to TODAY!
• Tell Your Friends and Family- If others know what your goal is, you are going to get asked about it which will give you motivation to keep at it.  Even better is to find an accountability partner to discuss your objectives.  They will remind you and keep you on track to get it done.  Anyone can be an accountability partner, pick one who will hold your feet to the fire.
• Remind Yourself of the Benefits- Reaching a goal or objective has huge payoffs to you.  Keep the end in mind.  Remind yourself often what it will be like when the goal is achieved.  What will it mean to you... that will keep the fire going and help you reach for it.
• Reward Yourself for Hitting the Milestones-  Every goal that is achieved has milestones along the way, those significant steps that lead to the end.  In the planning stage pick those milestones and plan for rewards at each significant step of the way.  Each step will become more exciting if you now there is something special for you when you make it.
• Develop a Ritual- This business can be all consuming... many don't have a set schedule.  Those who achieve have specific non-negotiable time set aside to take them closer to those things they want to achieve.  Success comes from knowing what needs to be done, establishing the tasks and setting aside time to make sure it gets done.
• Expect an Occasional Setback- Convince yourself that challenges and difficulties are part of the process and temporary.  Learn to expect them and never allow them to be a reason to give up.  Good things happen to those who perservere.  We only become better and stronger with every challenge.  Jim Rohn says "Don't wish it were easier, wish you were better."

Using these simple reminders will assist you in reaching for it in 2010.  Everyone wants more, the hard part is determining what "more" means and sitting down to create the action plan to achieve it.

Good luck and lets make 2010 the best year ever!

Shouldn't Somebody Have Told Me The Seller Died in the House?

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

 

Shortly after closing escrow on their new home, the buyer came home one afternoon to a note plastered on the front door of their new home informing them that it was too bad they had just bought a home that someone had committed suicide in.  Mortified, the buyer called his broker and asked the question "Shouldn't Somebody Have Told Me that the Seller Died in the House?

Not all states require identical seller disclosure, so it is a good idea to inquire as to the specifics of state law where the property is located.  In California, if a death occured within the past 3 years, it is considered a material fact and must be disclosed.  I have been asked on several occasions by sellers whether or not they are required to disclose when outside the 3 year window.  Although not required to by law, it is our policy to advise the seller to disclose anything they feel would be a material fact that a buyer may come back on them at a later date.  Sellers need to use common sense, if it is a fact that they would want to know if they were buying the home, then they should probably disclose it.

Likewise an agent must use common sense with regard to disclosure outside the 3 year window.  Sometimes the seller will not want to disclose the fact and will also insist that the agent (even though they know it is something the buyer would want to know) not disclose the information.  The agent must disclose if it is deemed a material fact.

In this particular instance, the property was a bank owned (REO) property and the sellers agent had no knowledge regarding the the circumstances of death. All that was known was that a neighbor had approached a Realtor that was showing the property and said that someone had died in the property offering no specifics or timeframes.  The listing agents investigation determined no factual evidence that anything had occured in the property.  When the agent told the bank that they felt a duty to disclose the bank insisted that they not do that as there was no evidence that anything had occured. 

A Personal Invitation

Steven R. Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@cbskyridge.com
(909)  336-2131

You have my contact information above.  I invite you to use it.  This site has been designed and is intended to provide real estate information for the Southern California Mountains.  Please let me know if you need further information on any of the topics, or if you have a suggestion for something I should cover. 

My objective is to provide service by creating a resource for our customers, agents and the general public.  Please let me know your thoughts.

Coldwell Banker Sky Ridge Realty Can Sell Just About Anything

Well Almost Anything!

Is Now a Good Time To Buy?

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

The answer to that question is yes, now is a great time to buy.  Interest rates are at a 40 year low, there is a lot for buyers to choose from, sellers are extremely workable and want to put deals together with buyers, and most of the B.S. about declining values is exactly that B.S.

In our market, we are fortunate that we don't see the peaks and valleys when it comes to value.  Anyone who is buying on the mountain is making an investment in lifestyle.  In my opinion the longer someone waits the longer their family will have to wait for the memories that are made here on the mountain. 

I say to those of you on the fence waiting, get off the fence, give us a call and start making memories with your family here in the San Bernardino mountains.