Monthly Archives: July 2010

Remember to Take Your Crazy Pills

Buckle up folks. Check the chin straps on your helmets too.  This is real estate. If you don’t keep taking your crazy pills you aren’t going to be able to keep up.

Real estate is all over the map these days – literally and figuratively. Terra firma here. And terra-a-lot-less-firma  there.  Or, as Groucho Marx said:  “You can get wood. You can get brick. You can get stucco. Boy, can you get stucco.”

Talk to an Agent who just closed a couple of escrows and the world is perfect. The market is back. Everything is coming up roses. Talk to another Agent short sale-ing his own upside-down beach house and the whole dream has suddenly been dragged under by the inexorable undertow of a rude awakening.  Just because we hype it, that doesn’t make it so.   We can kick the can down the road but we’re all still going to have to kick the bucket in one of the great reckonings that lies ahead. Maybe switching over to the Mayan Calendar isn’t such a bad idea after all.

Read about those local folks who thought they were getting an “amazing foreclosure deal” like the one’s late night infomercials have weaned us on and it  lends another perspective.  Amazing indeed. They ended up buying a worthless Wachovia 2nd  on the courthouse steps, putting in another $25,000 worth of worthless improvements, only to find out that parent company, Wells Fargo, was still holding the first.

Methinks the right hand knew exactly what the left hand was doing in this case.  The slight of the hands worked because they weren’t required by law to disclose the rules of the game to unwitting people.  Buyers beware and buyers be aware. A little due diligence is always worth your while.

But then, the great fix is in anyway, right?  The Financial Reform Bill was just signed into law as I write this, a mere 8 minutes ago. Once again, we’ve come to another intersection on the road to recovery or the other one leading to eternal damnation.  That mythical place on the flawed GPS System where Wall Street, Pennsylvania Avenue and Main Street are all supposed to meet in magical confluence.

Forgive me, if I’m not overly-optimistic. We’re already suffering the “new and unimproved” of HAMP, HAFA, HVCC,  HERA-MDIA and a whole hullabaloo of other H-ish acronyms. Lots of sound and fury signifying nothing but hassle. Business as usual made even harder than usual.  Sort of like rooting out the cancer by killing the patient.

Not that we should trust Alan Greenspan anymore – the man who knew too much who became the man who fell to earth by being the man who was the last to see it all coming, even when impending disaster was trick-or-treating through every neighborhood in America,  but… the former sage of finance cryptically says this about the new reform legislation: “There are unintended consequences in every page” of this 2,000 page bill.

And speaking of unintended consequences…how about our own little piece of pending local legislation relating to the regulation of rentals.  What happens if some unhinged landlord gets angry enough to set off a neutron bomb?  It would be easy to drive around town, log the addresses of hundreds of funky, illegal garage conversions and report them for code violations.

Forty years of growth by default rather than appropriate planning  – all coming home to roost in the over-crowded nests of small property owners who need that extra income to make their mortgage payments.  C’mon! Every Mayor and ex-Mayor living on the lower Westside has seen the extra units with the built-up bathroom floors to allow plumbing pipes to get to the sewer mains, electric feeds hanging precariously ten feet above ground waiting for unsuspecting kids to hit ’em with sticks and gnarly carpet-seconds thrown over bare concrete slabs in the middle of an incredibly high water table?

But take heart.  Santa Cruz was just named one of the 25 best cities for the rich and the single by Money Magazine.  Apparently,  we are the place where “surf culture meets tech geek.”  We’re going on a scavenger hunt next Friday night, to look for some of those rich and single people hiding in our midst.  The winner will receive a free  Keep Santa Cruz Weirdly Rich and Single bumper sticker.

Share

There Ain’t No Cure?

Here we are. All Quiet on the Western Front. And just about every other inch of frontage along the Maginot Line of the marketplace too. Way quiet.

In the softening fog of our Mid Summer’s Dream we’re running around like chickens. We don’t know where we’re headed but we’re staying busy, hurrying up and waiting. Waiting for Good Dough to arrive. All addressed up with nowhere to go. We’ve made our lists and checked them twice. At what point do we just Puck the whole thing, a la Shakespeare Santa Cruz, and observe with self-induced irony: “What fools we mortals be”?

What’s next? If more market doesn’t show up soon we’re likely to find ourselves moving in even slower motion, in the middle of the Doggier Days of August. And if that happens, we’ll probably end up migrating towards the fall, tails between our legs, feeling both snake-bit and flea-bit – by the sheer indignity of it all.

Who knows? Suffice to say, all those cars backed-up, bumper-to-bumper towards Scotts Valley, aren’t waves of weekend buyers streaming into town to search for perfect little beach-blanket bungalows. Most of them are coming to ride the roller coaster. The real one at the Boardwalk – not the real estate one on the Monopoly Board that has gone south for the summer.

Yes, it is true that more homes sell in the summertime. And this summer probably won’t be an exception. But conventional wisdom obscures another unconventional truth residing in darker shadows cast by the sun. That truth is: There are always more homes that don’t sell in the summertime too. Think about it. If 20 more homes go into escrow this month, does that balance out the 120 new ones that come on and jump on top of the mounting pile of un-sold properties sitting idly by, twiddling their thumbs and thumbing their noses at their Sellers’ best laid plans and aspirations.

Looking back over the ups and downs of these past months…March came in looking like it might be a lion. A glimmer was there that was hard to grab hold of – but it felt good. Hope was ready to spring eternal. We set our internal clocks ahead towards a brighter future. It wasn’t exactly multiple-offer mania fueled by steroids and liars’ loans, but it seemed like enough buyers were chugging enough extra cups of caffeine to register a more detectable pulse on the market’s shaky Richter scale.

But not enough fools were rushing into the market by the first of April . Too many were holding back. Fearing to tread. They were taxed. Not by the IRS. Rather, by their own what-ifs and worst-case scenarios. And sure enough towards the end of April the market was already going out like a lamb. Exit stage left.

In May, we all crossed our fingers and shouted MAYBE! As de facto Tauruses, we were bullish. The market would grab itself by the horns, carpe the dinero and find a way to get much better, much faster. We trotted out stats to prove how much better-er it was all getting. Of course, most of the sold data we materialized was already old news – trailing indicators from transactions that had started in and around, oh, say March or so.

Then there was June. About all that rhymes with June as far as the real estate market is concerned is SWOON. We may have been polishing those shiny new listings with hype and filling our open house balloons with helium but the majority of those million dollar listings are glistening like jewels of denial right now and the air is slowly going out of the inflated list prices those balloons can’t seem to hold up.

As for July – I’m just going to ask WHY. Why aren’t buyers beating down doors to get at the huge window of opportunity that has opened, with interest rates about as low as they can go, here in limbo land? This is everyone’s chance to dance. Get in and get under the bar set by their fears. Three or four months ago, there wasn’t a mortgage broker alive who thought we’d see rates under 5% again.

So maybe we’ll be singing the Summertime Blues for awhile. I hope I’m wrong and that all the smiley-faced spinmeisters are right. As the new real estate blues song says: “If it wasn’t for short sales, we wouldn’t have no sales at all.” Just our luck – a market defined by a double oxymoron. Short sales aren’t short. And so far, very few have actually sold. They are simply homes stuck in the pipeline with no sunlight shining at the end of the tunnel.

Share

The Rochambeau Game

God Bless Real Estate. Neither rain, nor snow, nor heat of day, nor gloom of lead- based paint, electromagnetic frequencies, radon gas, agricultural spraying, underground storage tanks, black mold or any nearby methamphetamine labs that may be lurking , shall stay us Realtors from our appointed rounds.

Our sacred mission? That most basic of biological imperatives – survival. You know…saving humanity. And since we humans require such a significant amount of idiot-proofing to insulate us from our own strange natures, survival in this case also means: Saving Ourselves from Ourselves.

It’s a scary world out there. Ensuring the safety of mankind and the huge roof lying over its head is a difficult job. But someone’s gotta do it.

So here we are. Hard at work on the Herculean task of protecting everyone from everyone else and their cousins. And from everything and every other possible thing that anyone could conceivably conjure up in their wildest dreams and/or worst nightmares.

Someday we’ll actually have a complete compendium of all the what-if’s that could hurt, damage or otherwise disappoint people in their new homes. Of course, even when we pull that list together, we still aren’t going to guarantee that you won’t get hit by a bus while crossing the street or struck by lightning while watching Jeopardy during the next big storm. You’ll have to consult your local priest, shaman, bartender, attorney or other suitable expert for greater accuracy regarding those specific matters.

But we Realtors can do the next best thing. We can warn you. And warn you again. And then warn you some more. Until eventually you either get scared to death and run away screaming as fast as you can in the opposite direction from buying a home. Or…you proceed forward both forewarned and forearmed with the knowledge that something terrible could happen at any time. Big terrible. Or little terrible. Terrible-ridiculous. Or terrible-sublime. Or…you just become numb and numb-er to the whole process and succumb to the mindless tide of acquiescence that clouds the vision and makes the brain feel dumb and dumber.

In the great Rochambeau game of real estate we try to leave no stone unturned or rock uncovered by paper. Paper is the talisman we use to ward off the eventual consequences of all the potential evils that could happen to people living in glass houses. Paper is the most powerful device we can use to demonstrate our desire to save mankind and to actually save ourselves (me) from ourselves (you).

Think I’m kidding? Your honor, I want to draw your attention to Estate’s evidence C.A.R. Form SBSA Revised 4/07, Otherwise known as the Statewide Buyers and Sellers Advisory, Page 4 of 10, Item #18, which reads and I quote:

Errant Golf Balls: Buyer and Seller are advised that if the Property is located adjacent to or near a golf course there is a possibility that golf balls may damage the Property or injure persons or pets on it. Additionally persons playing golf may enter the Property to retrieve errant golf balls or for other purposes. Broker recommends that Buyer investigate this possibility during Buyer’s inspection contingency period. Brokers do not have expertise in this area.

Realty truly is funnier than fiction sometimes. The fatal flaw in all our exacting efforts to disclose and encourage due diligence and real active investigation? Human nature. The more paper that people are presented with, the less they read. The quicker they fall asleep. Thus we keep shooting ourselves in the foot and the number of lawsuits in real estate keeps increasing in direct proportion to the stumbling attempts we make to jam consumer protection down everyone’s throat in lieu of common sense.

There, I’ve finished my written Agent Disclosure for this Saturday. I’ve done my small part to save ourselves from ourselves. Sign Here and Press Hard to acknowledge your receipt.

Meanwhile, I’m off to my appointed round – a 12:30 tee time – while you move forward, forewarned and forearmed, in the purchase of your new home. If it happens to be on a golf course, I promise to yell fore before my next huge slice flies off the fairway and lands in the middle of the guacamole dip resting on your future back patio. Today’s golf game is certainly going to prove once and for all that “brokers do not have expertise in this area.”

Share

A BAD CASE OF REEFER MADNESS

There’s the long and the short of it…..but in real estate, sometimes it’s more germane to talk about the big and the small of it.

Many of the things that cause frustration, consternation, perturbation  in real estate often arise from people not being able to distinguish between what’s big and what’s small. Specially when they are in the heat of the moment. What’s worth the time, effort, money and brain-space? And what’s not?

What’s that animal part of your nature saying when it insists that you should: get even, teach the world a lesson, draw an imaginary line in the sand, preserve some  semblance of pride by not succumbing to anything that is galling no matter how much of your own nose you have to cut off in order to save face?

And what’s that cool, more detached, smart part of your brain saying that is able to: let it all go, not sink to anyone’s level, recognize the value of living yet another day without lugging a ton of extra baggage around. And… isn’t so arrogant to think that it can force someone to learn a life lesson that they are not ready to accept.

Cardinal rule in all negotiations? Make sure you win on the big stuff. If you have to lose – lose on the small stuff. If you gotta give the buyer a home warranty for 350 buckaroos and throw in a couple of 1.6 gallon toilets to meet the County’s water-conservation requirements to help leverage another $10,000 on the purchase price – go with the flow.  Ten thousand bucks will buy a lot of Totos and TP. It will flush away all kinds of bad feelings that might either wash over you for a few moments or completely inundate you if you let them.

For quite a while there,  we  didn’t have a lot of normal negotiation in a marketplace dominated by multiple offers, overbids, fewer days on market and a general sense of entitlement on the part of the Sellers.  Many negotiations, circa 1999 through 2005,  pretty much went like this: Sellers said: “Jump!”  Buyers asked:  “How High?” Negotiation concluded. Bite your tongue. Sign here. Press hard.

It’s not that there wasn’t any negotiating going on in those years.  It’s that the bulk of the negotiations were between Buyers worrying about what other Buyers were willing to do, capable of doing or just crazy enough to conjure up. Buyers versus Buyers rather than the usual one Buyer v. one Seller going at it in a tete-a-tete, mano y mano steel cage wrestling chess match.

When the  national economy goes down, invariably, the collective incidence of serious crimes – murder, assault, armed robbery – goes up. Coincidence? I think not.

Whenever the real estate market slips into a transition period and stops running at an exorbitantly accelerated pace, it messes with the collective heads of people out there in real estate land.  It tweaks their ability to maintain perspective between big and small. It acts like some kind of mind-altering drug  that’s been surreptitiously slipped into the tap water. Suddenly instances of people behaving badly about little things increase with alarming frequency. Coincidence? Definitely not!

Almost 20 years ago, I was involved in a sale between two principals who got their knickers in a twist about an old refrigerator – a lovely harvest gold model.  Much to both Agents’ exasperation the refrigerator became the raison d’etre for the whole transaction. It kept popping up in the negotiations at every turn. It resurfaced during inspection contingencies. The buyer was determined to get it.  And the Seller wasn’t going to part with it, even though it was something he had absolutely no use for, end of story.

Well not quite the end of the story…..The Seller prevailed.  Sorta. The fridge was personal property. And in the end, his after all that squabbling. Arrangements were made for the Salvation Army to pick it up.  While moving the appliance, a bumbling volunteer managed to scratch the hardwood floors throughout the house. The Seller had to spend thousands refinishing the floors at the same time the Salvation Army decided the refrigerator wasn’t worth it and left it sitting at the curb for someone else to haul away!

Worst case of reefer madness I ever saw. But that’s what happens when you stop distinguishing between big and the small and can’t see the floors for the freeze.

Share