October 29th, 2006 . by Mike Kelly
A client asked me if we could list his property above the current competition. I pulled out my “Declining Market Valuation” graph to show him why trying this could cost him dearly in lost equity. To explain this to you I first need you to draw something! 
Get out some 8×11 paper. Now get a bold marking pen and in the middle of the page draw a horizontal line from the left to the right side of the page. Now draw a vertical line in the shape of an arrow, with the arrow end pointing up,”above” starting at the horizontal line. Now draw three more arrows starting at the horizontal line but all going down “below” the line. Make each arrow bigger than the next. The horizontal line is where all the competition is now listed. My client wanted to list at the arrow “above” this line or “above” the current market. I wanted him to list at the first arrow “under” the line. Why? !The why is that “everyone” else is sitting on the market and they have not sold. He needs to sell as his loan is getting too much for him. But listing above the line would not do him any good at all. He needs to “set” the new price. Listing below everyone else, at the first arrow, will get him noticed and sold quickly. But if he tries at the high arrow what happens is someone sells or lists at a price at the first arrow down. He reluctantly moves to the original “horizontal” or market price line. But now the market is below that! So he hangs around then reluctantly lowers “chasing” the market but never “setting” the new price. Where he could have sold at the first arrow “down” he now finds himself below that having lost valuable equity in the process! So the moral of this story is NEVER chase the market. Set the new price and buyers will flock to your house! Hear me next week and if you wish to chat about YOUR real estate needs—707-322-8503 or Toll Free in the nation: 800-959-7244.
Posted in Tales from the Trenches | 1 Comment »
October 29th, 2006 . by Mike Kelly
Happy almost Halloween! Our current market is full of Tricks AND Treats!! The tricks are those folks who bought at the last moment of our Bull market and now find themselves over their heads! How? Paying way to much to get the property as was the case in some of the “feeding frenzy” which was the height of the market and then adding even more in order to obtain credit back for closing costs. They then took the “option ARM” loan program and are now paying Negative Amortization loans (see my separate post on this!) and are paying the least expensive “option” of less than interest only.
What happened? The market has declined a solid 8-10% in price since those go-go days. They have been making payments which don’t even cover the interest only part of the loan; hence they have been accruing the unpaid interest onto the principal amount (loan balance). Couple this with a 3 year “pre-payment” penalty, re-casting of credit cards at the turn of 2006 (increasing their debt burden) and you find someone who’s probably out trick or treating to get a meal!!
Our topic on the show today was all about declining values, sales and price appreciation expectations. The California Association of Realtors (CAR) has realized their prediction of dramatic sales declines. How about 31% over this time last year!! Our medium in Sonoma County has dropped from $590,000 in October of 2005 to $560,000 for October 2006. Sales are off in excess of 30% also. Time to sell a house in this market? Now at 90 days on the market. Not the usual put it on the market and wait a week for the offers to pile up! Now I’m having my SELLERS writing letters to a prospective buyer as to why their home should be considered by them. Pendulum swings like a pendulum do!
We also had Keller Williams Realtor, Grace Lucero, on the show today. She lives and works in Cloverdale and works the North County area. She sells commercial, residential, land and estate properties. We just closed a lovely property in the Dry Creek Valley for $1,700,000. It was on the market for over a year and had been first listed at $3,500,000!!! She has a historic home on the market now in Cloverdale; The summer residence of Colonel Armstrong. Think Armstrong Redwoods Park. Price is $1,300,000 and has 3 parcels in total and 3 residences. Grace can be reached at 888-2649. Hope you enjoyed the show!! Please post a reply or give us some feedback. Oh by the way, Temple finally won a football game!! Our big blowout College football score of the week did NOT have them on the loosing side for once! They broke a 20 game loosing streak!! Now let’s try and turn this market around. Hear me next week and if you wish to chat about YOUR real estate needs—707-322-8503 or Toll Free in the nation: 800-959-7244.
Posted in Real Estate Radio Show | Please post a response »
October 15th, 2006 . by Mike Kelly
Good morning! Join me this morning as we bring back Mr. Pete Phillippe of Countrywide Home Mortgage. Pete will share with us the latest up-tick in interest rates due to the increase in the 10-year Treasury bill which is now hovering near 4.80%. This is one of those “key” indicators for the trend in interest rates. If you go to www.inman.com you’ll be able to read Lou Barnes column today. Lou discusses the overall economy but with a particular interest in the interest rate sector.
He can be a bit “ready” at times but hang in there as his information is vital to your move in this market. Also on the show will be Shawn Hermosillo (206-4534 direct office line). He’s a young Realtor at Keller Williams and will share his market observations with you. More will follow this posting after the show shakes out! Thanks for listening and please make a post to the show as this site has been developed for YOU the listener to respond to the show.
Posted in Real Estate Radio Show | Please post a response »
October 15th, 2006 . by Mike Kelly
I wanted to make sure you all can go to www.52balmalane.com and preview the lovely new listing I feature there. This home just got new carpeting and the Sellers are doing everything “right” in the way of preparing the home for marketing. One of the items I asked Mrs. Petersen to do is write a letter to the prospective new homeowner. I was so impressed by this letter that I decided to publish it here unedited. It is emotional but splendid in it narrative. I know Mrs. Petersen will be embarrassed at drawing attention to this letter but we have it available to convey the care and love this home has recieved over the years. Here it is:
Dear Prospective New Homeowner,
Selling our home has been a long and difficult decision. We built our home, have made good friends in the neighborhood, raised our 2 children and love it here.
We bought our property in September 1985 and began designing our “dream home”. One major decision we made was to set the house a bit back on the lot so that we would have a view and wouldn’t look at a neighbor’s house. And to site the house at an angle to deflect the breezes that come through the Petaluma Gap of the Costal foothills. (This has made our deck usable, whereas our neighbors’ decks face into the wind.) So, construction began in earnest in March of 1987. It was an exciting time – we lived in an old 1953 40’ long travel trailer situated just where the lawn edges the pathway in front of the privet hedge in the back yard! We did a lot of the work ourselves: installed the cabinets, did the tile work, stained, varnished & installed all of the trim, put up the siding, painted – then collapsed!!
It is hard to pick any one part of our house that we love the best. We really love it all! Our open floor plan and all of natural light would probably top the list. You never need to turn a light on during the day with all of the light from the transom windows and deck skylights. And having an open living area is great for everything from sitting and watching the fire in the glass-door Lopi woodstove, to watching the kids play while you are in the kitchen, to entertaining with ease. We have had small dinners with friends, larger gatherings with both of our families and 50 people here for a party! All types of entertainment work in our home. And our large covered deck (12’ x 35’) is perfect for having more entertaining space or a BBQ year-‘round. The deck was built with this in mind – we installed a hood over the stainless steel barbeque and a roof vent to draw cooking smoke off the deck. The deck is a great place to enjoy a cup of coffee in the morning or a glass of wine at the end of the day. The pastoral views are so peaceful. The steps and ramp leading to the backyard encourage you to get out there for a game of croquet!
Our kitchen has always been a gathering spot. And when we remodeled it in 2003 it only got better! We love the warm colors; the long counter on the island that makes a perfect buffet. The customized cupboards (a mixer cupboard, appliance garage and wicker pull-out baskets are just a few) from KraftMaid are hickory and the Dynasty cabinets from Omega are stained a rich red. The butcher block counter and the black Richlite counters round out our gourmet kitchen. The 2 ovens make cookie-baking a breeze - one even opens from the side rather than opening down so you don’t lean or reach over a hot door! Our Jenn-Air downdraft ceramic top range was easy to get used to. And we use the adjacent pot-filler all of the time. Our Swanstone sink with integrated drainboard is just as great as we knew it would be! The Mannington laminate flooring in Australian Cypress runs into the dining room and the home office.
Our office is not just an office. Although it has 2 phone lines, a large file cabinet and a computer work area (we have high-speed cable internet too) in the desk area that lines one wall, there are shelves for cookbooks and cupboards for office and pantry items. An area closest to the garage door is where we have our freezer. A wine bar, complete with a wine rack and large cupboard for glasses, sits next to our soda refrigerator and wine cooler. A glass door with an etched pantry design can be pulled closed for privacy or decorating impact.
We designed our master bedroom to be roomy enough for a sitting area. Little did we know that in raising a family there is very little chance for parents to escape! The bay window and large French door bring the morning sun. We remodeled the master bathroom in 2000. It is complete with 2 large closets with floor-to-ceiling sliding glass doors and a 4-foot wide, ceiling-height wardrobe. All of our clothes are able to be in our bathroom, making getting ready in the morning easier. Our Swanstone barrier-free shower has a raised shower head and a second adjustable hand-held shower head for versatility, a fold-down seat and grab bars along with the Kohler shower door. The vanity is Kraftmaid hickory cabinets topped with a Swanstone integrated sink and an off-set Kohler single-lever faucet. Just outside the bedroom doors in the hall is the laundry room.
Our vegetable garden was not our first landscape venture. Before we built our home we put in the well and planted the photinias and eucalyptus along the road. There was just bare land here when we bought the lot. We had the raised beds in the garden from the beginning, bringing in topsoil and compost to begin. It seemed so silly to buy dirt when we owned an acre! We have grown strawberries, potatoes, beans & peas, squash, pumpkins & corn. We also have asparagus (that we let go wild for the last few years), raspberries, wild blackberries by the road, apples, peaches, pears and a pomegranate tree. Growing more than food, we also have roses, butterfly bushes, jasmine and a large archway into the garden covered with wisteria. Our front yard, bordered by an escalonia hedge and redwood trees, is complete with roses, ferns, a beautiful red rhododendron, wild garlic and various other perennials. We are visited by goldfinches, bluebirds, towhees, bush tits, hummingbirds, black phoebes, and woodpeckers throughout the year. A crape myrtle, butterfly bush, hydrangeas and lavender give us color all summer. The ramp that curves around to our covered front porch branches out near the small pond and fountain to a sitting area complete with chimenea.
Around the side of our house is an entirely different work area that has seen a lot of use. We have a 24’ x 40’ shop building. Tall enough to drive an RV into, it also has a 12’ x 12’ room inside that we’ve used for storage and as a workshop. This supplements the work area that we have in our attached 3-car garage, where we converted the 1-car section into a large work area, complete with tool bench and lots of shelving. We round out our storage capacity with two large shelving areas in the part of the garage closest to the house and a loft that is perfect for storing our Christmas decorations!
Wow! Talking this through for you has been an experience in itself. We will clearly miss our home, but trust that it’s new owners will experience the fun, the challenge, the pride, and the comfort of this home as much as we have. We wish you many years of happiness in your new home.
Sincerely,
The Petersen Family
Posted in Real Estate Radio Show | Please post a response »
October 2nd, 2006 . by Mike Kelly
My, have things changed! And yes, they usually do don’t they? This market over a year ago had Sellers “taking” offers at their liesure. They would stack up like cord wood. We would sift through them and pull out the “best” or the one with the biggest “overbid” to “consider” counter-offering!! But we’ve “shifted” and now the SELLER is having to entice a would-be buyer with some of the following ideas which we’ve taken from an article in the Wall Street Journal and provided to me by Marc Kahn of Sutter West Mortgage (mkahn@sutterwest.com). Read on for some great new ideas! Read the rest of this entry »
Posted in Housing Updates | Please post a response »
