Category Archives: Real Estate Of Mind Articles

Tom Breszny is a frequent contributor to the Santa Cruz Sentinel. Read about his perspective on the real estate market.

Invert the Dominant Paradigm

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The traditional paradigm of real estate teaches young Realtors how to sell homes. But the longer I do this work, the more I realize it’s never just about selling homes. That’s really the smallest part of the job. And thanks to an astonishing market these days, also the easiest.

Real estate is really more about the profound life transitions that lie behind each sale. The all important “whys” that shape someone’s pivotal decision to move.

No one sells their home for fun, or decides to pick up and move on a lark. Never has that been more true than now. The average time people spend in their homes has risen to a record 12 years, almost twice what it was in 2006.

On a basic level, selling a home simply means getting from Point A to Point B. Perhaps going from a two bedroom, one bath bungalow to a three bedroom, two bath ranch. Or from a larger executive home on a few acres to a single-level house near the beach.

On a deeper level, it’s about moving the whole of you from Point A to Point B in life. Taking the next step in your personal journey. Whatever that “why-thing” is that’s driving your change. Maybe it’s getting married or having kids. Get- ting older or losing a partner.

Directions for getting from Point A to Point B in life are always fuzzy. There aren’t any road maps or GPS coordinates. You can’t put that kind of change into your Waze app and wait for a voice to tell you what to do.

The hardest part of the job these days isn’t selling houses. The greatest degree of difficulty comes from trying to figure out how to help the people selling the houses get over their own resistance to the very change they seek. So they can move forward in life.

Here’s a healthy meditation for anyone selling: draw a timeline of your life stretching from earliest childhood to now. Place all the homes you’ve ever lived in on it. Then take a long mental walk through each, remembering favorite rooms and the things you loved the most.

Then pull your focus back. Look at how old you were when each move happened. Recall those decisions and what was really difficult about them. See all the ways your life changed with each move. Up until the last one, when you became even more of the person you are today.

Your home isn’t your life. You are the force that animates the container within its four walls. Like one of those crabs moving slowly along the ocean floor, you are just looking for the next shell that will house your life.

It’s Not Rocket Science

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It goes without saying that real estate should never be confused with rocket science. The basic principles about how the market works are pretty straightforward. Especially if you’re a seller who’s selling in a Seller’s Market, like the one local sellers have enjoyed for the last five years.

Even when frustrated buyers get a little crazy and express anger over the “unfair” results of one of the latest multiple-offer fiascos they’ve lost out in, sellers typically remain calm and rational, secure in their knowledge about the inherent truths of the marketplace.

But what happens when the market starts to change? And some of those listings don’t sell as quickly as people thought they would? Suddenly, those same tried and true elements of wisdom and logic, so apparent before, no longer seem to apply.

Since we could be heading into one of those transition times in the market, let’s review a few simple rules that are true in every market:

A house is worth what someone will pay for it, and a house isn’t worth what someone won’t pay for it.

At the right price, every house sells. At the right price, all objections disappear.

There’s no such thing as an unsellable house. Only one listed at an unsellable price.

Definition of market value: the price a willing buyer and willing seller agree on. Every sale is its own best comp.

An appraisal isn’t an analysis of market value, more a justification of the price already agreed upon.

What you bought your home for ten years ago has nothing to do with its present value.

Every seller has the right to hold out for that one right buyer who will pay what they are asking. They just shouldn’t confuse this approach with having anything to do with market value.

Just because the market isn’t telling you what you want to hear, that isn’t the same as the market not telling you anything. When no one comes to look at your house, the communication is actually loud and clear: the price is too high.

The longer your house is on the market, the less it will sell for.

Death and Taxes

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Death and Taxes. Everyone’s heard those words. They’re part of a quote that originated with Benjamin Franklin:  “Our new Constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

Here we are more than 240 years after Ben made his pithy observation. A lot has changed since then but as of today, death is still at the top of the short list of inevitable facts we all have to face. (Until Google achieves The Singularity and starts transforming brain waves into algorithms uploaded into the cloud so we can live forever.)

Meantime, lesser mortals at Real Estate of Mind are working on that other most inevitable thing – taxes. More specifically, real estate taxes. Something so many people around the age of 55 are thinking hard about as they head into the last third of their lives wrestling with questions about downsizing, cash flow and leaving legacies for their kids.

Here’s a quick cheat sheet (reference guide, not an actual suggestion for cheating on your taxes,) for those trying to figure out how to avoid substantial increases in their property taxes if they sell their house and buy another one somewhere else in California.

The good news? California seems to be dedicated to the “proposition” that all people should try to avoid more taxes when possible. Here are some of those propositions:

Prop 13 (1978): The original granddaddy proposition reducing existing property taxes and significantly limiting increases in the future.

Prop 58 (1986): Allows parents to pass homes on to their children without a reassessment of property taxes. (See the fine print, folks.)

Prop 60 (1986): Offers homeowners the opportunity to sell and buy a new home (of lesser value) in the same County, while transferring a lower property tax base. (Not to be confused with the other, more recent Prop 60 having to do with condom use in the porn industry!!!)

Prop 90 (1989): Allows homeowners to transfer their existing property tax base to other participating counties in California. Only 11 counties currently qualify. (Call or email for the list.)

Prop 110 (1990): Extended Prop 60 to disabled homeowners of any age.

Prop 193 (1996): Extension of Prop 58 allowing grandparents to transfer property to grandchildren (provided their children are deceased) without reassessment of property taxes.

In the meantime, while continuing our quest to cheat both death (via Google) and taxes (via Proposition), I invite any and all of you who are wrestling with the numbers to give me a call to discuss how these Propositions can assist in your planning.

Blame It on the Gods?

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Today’s question: In a market where everything sells quickly and for more money…how does the unthinkable happen? As in: Why are there still places that don’t sell quickly? Ones that languish on the market for a long time before reducing their price?

I’m thinking about a Westside listing that came on recently. The kind of place that checked all the boxes: four bedrooms, single level, large yard. Plenty of buyers were lined up for the first open house, pre-approval letters clutched in their hands. Warm and fuzzy “seller letters” already written in their heads. This one was supposed to fly off the market!

But then? Nothing happened. Lots of showings. Tons of calls. Hundreds of hits online. But no offers. By the second week, the dynamic shifted. By the third it was completely different. Traffic dwindled to a motley collection of curiosity-seekers, looky-loos and low-ballers starting to smell blood in the water. Finally, a month later, the price came down $100,000 and it sold.

So what happened? Why didn’t it sell in a market where everything sells? What dark and mysterious forces conspired to create a less-than-hoped-for outcome for the unfortunate seller? More importantly, how can someone else avoid the same situation?

A wise Realtor once said the story of every listing could be written as a Greek play. Each, a real life drama embodying elements of irony, pathos, tragedy and humor. The fickle gods of fate testing the frailties of the human condition. Wait a minute…I said that. And it is still true!

Hubris is the tragic flaw responsible for the downfall of most listings that don’t sell. Too much ego and too much pride make some sellers think it’s possible to succeed without really trying. Doesn’t matter what the price is, they figure. Or how a house is prepared for sale. Why fix it up or stage it? All those buyers are lining up out there.

But everything sells only until it doesn’t. And that’s when it really costs you. Despite how it looks, those buyers aren’t really tripping over themselves to pay more for your house. They always want to pay less. And if you give them the chance, that’s what they’re going to do.

Think of it this way: everything sells. But not everything sells for the most money possible. That’s why you should hire a good agent and resolve to take their advice. If your house doesn’t sell in this market, you can always blame it on the gods or bad timing or a bad agent. But in the end…it’s your own fault.

Century 23 Real Estate

 

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There I was driving home on Highway 1 the other night, ruminating about the future of real estate, when I came to a grinding halt in traffic. Sitting there unmoving, I glanced up at the Caltrans Board near 41st and noticed random words running across it. Suddenly my cell rang and I heard an eerie voice on the other end say: “Pay attention and write.”

I was so shocked that I grabbed my laptop and for the next three hours, my meager typing skills tried to keep up with the string of crazy pronouncements channeling across the board. What follows is a small part of what I saw. Predictions for the future? Real estate news courtesy of some Century 23 Agent traveling back in time? Who knows? You be the judge.

~ Realtors will expand efforts to lure GenX homebuyers with cutting edge branding techniques like company tattoos and logo piercings.

~ A large pharmaceutical firm will begin clinical trials of a morning-after pill designed to relieve symptoms of Buyer’s Remorse.

~ As more Americans continue to seek smaller homes and simpler lifestyles, a dramatic increase in the number of Near-Life Experiences will be reported.

~ In a variation on the “ice bucket” challenge, Silicon Valley CEOs will take turns living in camper vans outside their headquarters to raise money for affordable housing efforts.

~ Busy techie buyers will start sending personal drones to look at properties rather than driving to see them on their own.

~ A new reality TV show will debut next fall called “Extreme Commute: Silicon Valley.” The first episode will feature two computer geeks sitting bumper-to-bumper in a sea of Teslas on Hwy 85.

~ The first ever Virtual Realty firm will open its doors in China where upscale clients will sit in luxury recliners, don VR goggles and shop for expensive Bay Area estates they never plan to visit in the flesh.

~ A new Facebook scandal will surface when Russian hackers are caught targeting Bay Area homebuyers with a series of fake ads depicting 3 million dollar luxury homes that later prove to be average tract homes.

~ The Conversation Pit will make a comeback in American homes. More of them will be located in lead-lined safe rooms, where no electromagnetic television or phone frequen- cies can penetrate.

~ By spring of 2020, there will be a noticeable backlash against technology in real estate. More buyers will refuse to let their agents communicate with them by text. New “high-touch” real estate firms will open, touting “organic and algorithm-free agents.”

The World’s Most Interesting Realtor

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I don’t know if you noticed that Dos Equis recently retired Jonathan Goldsmith, the American actor who became famous for his role as The World’s Most Interesting Man. Turns out that Gold- smith will be relocating to Santa Cruz to start his new career as The World’s Most Interesting Realtor. Since there are more than 1300 Realtors in the county already, there’s always room for one more.

Here are a few of the tag lines he is considering for his initial rollout campaign:

He’s the Most Interesting Realtor in the World…

• Other agents have his name on their vanity license plates

• He gives virtual tours in person

• His clients sign disclosures acknowledging he’s The Most Interesting Realtor in the World

• He can make a house go up in value just by appreciating it

• He once foreclosed on a bank

• He once picked a loan lock

• Buyers he doesn’t work with suffer from remorse

• When he lists a property, half baths become whole again

• Even the geodesic domes he represents have square footage

• Loan underwriters wait for his approval

• He once sold a dream house in his sleep

• He once went to mime school to look more convincing when going through the motions

• He uses a tailor for arm’s length transactions

• His termite company once tented a circus

Turn Off and Tune Out

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“There are some searches Google just can’t help you with.”

                             – Recent message in front of a Sunnyvale church

Continuing the conversation…is it possible that maybe, just maybe, we’ve reached an inflection point where enough people have become disenchanted with the cumulative effects tech is having on their lives?

Someday we may all look back and be able to see that the all-encompassing embrace of the digital age really started to shift in 2019 as more people began to resist the tempta- tion to integrate one more device, one more password, one more set of insidiously engi- neered algorithms into their daily routines. Opting instead to turn off, tune out and drop back in to life in ways that allowed them to be more present.

One of the things tech likes to brag about is the meaningful opportunity for social interaction it affords everyone on the planet. Hyper-connectivity, hyper-local, hyper-per- sonal are all part of the hype. Most Realtors struggle with a daily avalanche of informa- tion that encourages them to spend huge amounts of time cultivating their online real estate personas. Without a strong digital presence, the message goes, they won’t have the kind of “social proof ” that’s necessary to be successful.

Similar to personal Facebook feeds where people’s carefully curated lives often seem too good to be true, the current generation of real estate hopefuls is busy crafting shiny new avatars that don’t resemble who they are in the real world. Instead of simply venturing out into their own local communities to connect with people on a more experiential level. Not understanding that deeper connection with fewer actual buyers and sellers will make them far more successful than generating lots of shallower “clicks.”

Everyone has heard the meme: “getting information from the Internet is like trying to get a drink of water from a fire hose.” These days, homebuyers and sellers don’t need more information, they need more context to help them think about all the information they already have. So that the flood of data and details makes a lot more sense when they suddenly find themselves in the heat of the moment. Especially when the choices they make have such a profound effect on the big life transitions they are going through. The ones that involve the largest assets they’ll ever own.

Flood of New Listings?

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This is for all the would-be buyers waiting in the wings. Those taking a temporary break from the rigors of the real estate market after experiencing months of frustration and fatigue.

The ones who are girding their loins and girding their loans in preparation for the coming year’s battle. Hoping to rest and recuperate now, so they can be ready for the flood of new listings they are hoping will arrive.

There are plenty of leftover buyers out there who gave it their all in 2019. They deserve an A for effort, even if they weren’t quite able to make it over the hump to the promised land. Well-qualified folks who just couldn’t seem to out-smart a difficult market and find their way home.

It’s hard to live a normal life and look for a house at the same time. That’s particularly true in a market that demands such an exhausting state of readiness and preparation at the same time as it only parcels a few meager listings at a time to choose from.

Buyers who’ve been slogging around in the trenches in search of inventory for the last six months or longer know what that “always on” feeling is like. The barrage of search engine emails that begins to look like spam rather than real opportunity. Hours spent parsing Sunday open house ads trying to figure out whether “charming” really means “fixer” or whether “cute” really means “tiny.” And whether they should drop everything, jump in the car and head out to the open house to see for themselves.

The rush of an unexpected For Sale sign popping up in the perfect neighborhood.
The promising sneak peak of a new listing on Thursday’s Brokers Tour. The call from a sister-in-law who heard a rumor about a friend of a friend thinking about putting their house on the market. God forbid you should take a vacation and miss that once-in-a-lifetime opportunity that could happen at any moment.

On again, off again. Hurry up and wait. All dressed up with no address to go to. Weeks and months of looking hard but finding nothing. Until suddenly, a house appears out of the blue. It’s perfect…except for the fact that five other buyers with competing offers seem to have had the same revelation.

So many questions for all those would-be buyers lining up in the queue. What are they waiting for, exactly? Is 2020 really going to be any different? Is that flood of new listings really on its way?

Clicks and Confusion

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I’ve been in a contemplative mood lately. Something that often happens when the
winds of real estate settle into their customary calm this time of year.

Most buyers are on a furlough until after the first of the year. That’s when they’ll push the reset button and venture back into the fray. And most sellers have their sights set on 2019 and are busy prepping for early spring. For now, I’m enjoying a little distance from the daily grind.

There’s been a nagging notion rolling around in my head this year. Maybe it’s a symptom of the bigger anxieties floating around in a world that seems increasingly wired by negative emotions. The uncomfortable feeling I’ve had is that real estate’s growing reliance on technology isn’t such a good thing.

I’m haunted by a quote from a former Facebook employee echoing Ginsburg’s seminal line: “I saw the best minds of my generation inventing new ways to make people click on things.” When I look at real estate and how the process works these days, I can see ways it is headed down the wrong path.

I meet hundreds of people at open houses and because I’m curious, I always ask about their experiences with buying or selling. Recently a theme has emerged from all the random sampling I’ve done.

More often than not, people describe being confused or frustrated about their recent real estate ventures. They often talk about feeling left in the lurch without any context about how all the separate parts, moving with dizzying speed, actually fit together into a whole.

They complain about never really talking to their agent. How she/he only texts them. About being left alone to fend for themselves on the internet. Or about receiving Dropbox links with hundreds of pages of inspections without any explanation, until a second email arrives asking for their electronic signatures on each page to prove they’ve read them.

There’s a powerful drive to translate everything we do as Realtors into a one-size-fits-all digital format. To go faster and to paint our clients’ lives by the numbers with newer and better algorithms. To boil their decision-making down to a series of 1s and 0s for our own good, and supposedly theirs.

It doesn’t help that we live right on the edge of Silicon Valley, where a huge percentage of buyers and sellers participate in the larger tech economy surrounding us. Life and work via the internet is what’s expected here. If you don’t have it, you aren’t successful. And if you can’t embrace it – it’s time to get out of the business.

Next week: How real estate should learn to live with and without the internet.

Secret Dreaming

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Buying or selling a home is never just about buying or selling a home. There’s always a more interesting story weaving its way around the more mundane aspects of the “real estate process.”

The house, the offer, the negotiation, the escrow – all the things we like to think of as real estate – are really just stage props and window dressing. Tips of a much larger story about people’s lives that lies hidden beneath the surface of every transaction.

Ask any Agent. They can tell you. Every home sale could be written as a novel or a Greek tragedy full of fate, pathos, hubris and profound changes of fortune. Each could easily become a TV mini-series or a future binge on Netflix.

Every home sale has a unique story about the human beings involved. People going through major life transitions (births, divorce, aging, death et al.) Ones that involve their largest asset as well as their core feelings about safety, comfort and refuge (a.k.a Home).

If real estate were only as simple as those young yayhoos on Million Dollar Listing make it out to be. The true cost of living index is much more complicated than the shallow fodder they dish out.

Here’s the thing: the real payoff for Realtors lies in witnessing the intimate stories about change that happen every day. After 30 years, I’ve amassed an amazing library full of life’s rich- ness. Heroic feats. Stupid human tricks. People slaying dragons. People snatching victory from the jaws of defeat.

I feel both blessed and cursed at times. Bearing witness to the good, bad and ugly of human nature offers a powerful vantage point as well as a precarious perch in the eye of the storm. What comes out of all these individual stories is a deep feeling for the pulse of the culture that surrounds us. The culture we don’t always notice we are part of while we’re busy trying to live.

What also emerges from all the stories is a glimpse of the secret dreaming beneath all of the exterior trappings people cloak their lives with. People think a lot of stuff. And people say a lot of stuff. But real estate is the place where, in order to buy or sell a house, people actually have to do something. Home is the nexus where change resides.

It’s a fascinating irony that we live in a world linked closer than ever before – at the same time so many people feel more alone and isolated than they’ve ever been. Next week we’ll explore how people’s desire for real connection in the world is reflected in the real homes they choose.