August 2022 update: And Just Like That

And just like that school is back in session for many and we are set to start the Fall selling season. Between June and July this year, the median price of homes in Oakland declined 11% in value while Berkeley saw no decline in value and prices remained flat, but the higher-end markets in both Oakland and Berkeley continue to perform well, selling within the same margins as homes did earlier in the spring.

I spoke with a top producing mortgage lender yesterday and she mentioned some of her clients who had taken a pause from their search have reached back out and have initiated an update of their pre-approval. I will be carefully tracking the market to see how things fair, but I predict that homes in great condition, with good light, layout, upgrades and aggressive listing prices will do well. Homes with challenges, especially challenges that one can not cure, may have a tough time.

Last week KTVU news called on me again to provide an update on our real estate market. The last two times I was on air with them I Zoomed comfortably from my own living room, but this time I went into the studio and interviewed with Sal Castaneda. While I was nervous, I really enjoyed the experience! Moreover, I am just thrilled to be a trusted expert in my field.

Thanks everyone for the continued trust and I am taking on new clients, so spread the word!

Check out the full interview and have a wonderful last few weeks of summer.

– Deidre

July 2022 update: In the Thick of Summer

As I write this, we are in the thick of summer which, historically, is a slow selling season with folks out on vacation and taking a break from house hunting. Unlike the spring market that is enhanced by morning dew, birds chirping, and fresh air igniting a feeling of exuberance, summer can be hot and uninspiring to search for one's new home. Generally, spring is the best season to sell in East Bay real estate with fall being the second best time to sell. Then the pandemic changed things up quite a bit! For the last two years our regular seasonality was not very pronounced because many people were timid about traveling due to COVID. This year is different. I am seeing many people I know are out of town via social media, traffic is noticeably thinner, and it seems people might be back to taking traditional summer vacations. There is a decline in open house and private-showing traffic, but how much of that is due to historical seasonality and how much is a result of the shifting economy with its rise in interest rates and change in consumer confidence? Whatever the case may be, I do know that there are still buyers who want to find a place to call a home of their own.

Although buyer activity has been falling, new listings continue to hit the market, creating an imbalance between supply and demand. As a result, key metrics in the East Bay are faltering, driving down median price as well as the amount buyers are willing to pay over the list price, while driving up days on market. For example, looking at active listings by the length of time they have been on the market, 42% of properties have been active for 5 weeks or more; at this time a year ago, only 27% reached this threshold.

However, not all properties are being affected in the same way. Higher-priced properties are generally performing better than lower-priced properties. Those that are "most attractive" – desirable neighborhood, appealing design and "move-in ready" – are often still generating a high level of interest from buyers. Indeed, when looking at properties that sold in Q2 2022, the higher the sale price, the further over asking the property tended to sell.

Buyers, if you are considering a purchase, now may be a good opportunity to buy. Right now there are 309 homes in Oakland that have been on the market for 30 days or longer, and in Berkeley there are 32 properties that have been active for 30+ days. With many people out of town and taking a break from the market, now may be an opportunity to get into a property that you love.

I am looking towards the fall market and I know that buyers will still be buying and sellers will still be selling. But nothing happens unless you can bring the two parties together! Please know as the seasons change, I will be carefully watching and tracking the market so you have market updates in real time.

As always I welcome your questions!

June 2022 update: Changes are happening!

Changes are happening!

What I'm seeing: Since last month, I have noticed that there are fewer buyers in the market which means fewer offers on many homes in the East Bay. What is important to note is that some properties are seeing lower offer prices than just 2-6 weeks ago, but that is not true in every case, so nothing has been predictable. Sometimes a buyer's personal need or motivation may be the reason why a home has sold for a neighborhood-high price which can skew average sales price data. Sellers, when looking at sold data to see what your property may be worth, please do not just look at one or two high sales, consider all of the recent sales in the area. What a home sold for a year ago is rarely considered by a buyer, as they tend to review the last 3 to 6 months worth of data. Planning what a seller may spend in pre-marketing preparations now needs to be decided knowing that you may get less in a sales price than homes in your area received just a month or two ago. Additionally, I am seeing some homes stay on the market longer than before, so a seller needs to plan for longer carrying costs. Also, if you are selling, this does not mean you can do nothing and get a good price - this means that your property's assets and challenges require more consideration before creating a punch list, as buyers will certainly analyze everything before they decide to write or walk away from a property. Bottom line: the market is shifting, recent neighborhood sales are only a snapshot in history and will not necessarily dictate what your home will sell for in the future. For the past few years, buyers have had to adjust their expectations on what their money can buy as they have seen prices actively jump in value while shopping for a property. Now sellers are in a similar position and should start adjusting their expectations. The market will likely be a place of compromise, both buyers and sellers adjusting so they can meet in agreement. Nothing happens unless both a buyer and a seller agree. 

When I started this career in 2004, I knew that I would always lead with putting my clients' needs first, working in the most approachable, creative way, leading with complete honesty, always keeping my values. Since I have been in this business, I have worked in both buyer markets and seller markets. Our local market is unique and our housing stock is very diverse. No matter what the market, price-per-square foot does not give us the winning formula for value; every home is maintained and improved differently, homeowner's personal design choices may not appeal to all buyers, and every buyer has a different set of criteria for a home they are wanting and willing to live in. If you have watched the news lately, you've probably seen that interest rates have further increased, the stock market has declined, and food and gas prices are rising. So a great deal of thought goes into how I navigate and consult with clients. Regardless of the market, if a seller wants to sell, I make sure that selling is the best option for them before we proceed. If you are thinking about selling your home, I will always ask "Why?" This is not to pry, but sometimes holding on to your property is best. For example if you are thinking of moving out of the area, is there a chance that you will want to move back to the East Bay and wish you had this specific property? Can you afford to keep it? Are there modifications/renovations that you can make to your home to make it a better fit for you so you can stay in it?

For buyers, in addition to analyzing the property's condition and sold data in the area, the bigger question is: will this property fit your needs long term? Buying a home should not be for a temporary need; when you buy your house you should consider if this home really suits you. It is my goal for all of my buying clients that once they buy a house, they feel happy that the property was available for them when they were in the market to buy. 

What should you offer? Given the sold data in the area, what is that number that you would not regret if your offer was accepted? Looking back, what maximum amount would you be comfortable paying? When you start thinking in those terms, you may have more clarity on your housing goals. 

No matter what the market, there will be buyers who will want to buy and sellers who will want to sell. Only you can determine what is right for you. I  am here to be a sounding board, and give advice based upon experience and data so you can make the best decision for yourself. 

Whether you are buying, selling or just need expert advice without pressure, I am here for you.

– Deidre

375 Marlow Drive, Oakland – Open June 18 + 19, 2022

May 2022 update: What's going on?

What have I seen over the last 3 weeks in the East Bay market? Buyers had been craving more inventory all year and May delivered with a spike in new listings. This also happened when buyers were bruised with the impact of the latest interest rate increase. Here is a real world scenario: I have clients who were pre-approved in mid March for a home purchase of $1.5M. They want to finance $1.2M. The rate increase made their future payment jump by $1000 per month. I am hearing from agents all over that they have clients feeling the same pain.

Last week, 2 of my listings heard offers and though both were special properties, they received fewer offers than listings that I had earlier in the year as well as the homes that I wrote offers on, but the offers were still well over the asking price with great terms. 

 So far I am not seeing much of an impact in the high-end market, particularly walkable homes in the $3M range (homes that tend to sell in the $3M+ range are often listed in the $2M+ range). I am seeing a higher percentage of cash buyers in this price range and typically their income and assets can absorb the impact of the interest rates.

 Properties that I am seeing on the market longer than the typical 2 weeks are homes that may be unconventional that are waiting for the right buyer. For example, my fully vacant triplex was on the market for over a month last winter. The location was superb, (Rockridge) while a buyer may want to make cosmetic updates, the owners had made meaningful improvements over the years, and the place was cute! So why did it sit? There are fewer buyers who want to be landlords in Oakland and Berkeley due to the increasingly strict rent control and eviction laws, especially with the recent moratorium on evictions due to COVID. I knew the ideal buyer for this particular property was a buyer who wanted to occupy the place. This home sat on the market for 42 days and then a buyer saw the place and wrote an offer the next day for the price my clients wanted closing 21 days later. 

 What does this mean if you want to buy? Buy smart. Investigate the house to make sure you understand the condition, investigate the neighborhood and make sure if you write an offer you will be happy if your offer is accepted. Something I have told my clients for years: see a house and notice if you are thinking about it the next morning. If you are not, that says a lot. I know money is more expensive, but it still may be worth stretching if that means you have a house that fits your needs for a longer period of time. Buying a house is like buying stock, the longer you hold on to a property the higher chances you have for greater appreciation. I advise 7 years+.

For sellers, hearing that there is a chance you may earn a little less in sales price than your neighbor did last month is a tough pill to swallow – I get it! Your house will sell, especially if you showcase your home to appeal to today's buyers. There is an art to analyzing a house and creating the most effective pre-marketing plan. Make your house memorable for buyers.

Whether you are a buyer or seller, I am happy to listen to your goals and provide insight to help you  decide what is best for you!

What the hell is my house worth?

Determining a property's value is very complex as most of us do not live in a planned development in which everything is pretty much “like in kind.” Many homeowners review online real estate websites and see property valuations as a possible value for their own home, but those may not be reliable. Here’s an example:

A few years ago I listed a home located on a highly trafficked street and two houses away from a major freeway. The online valuations suggested the home was worth between $750,000 and 800,000 because some homes within an immediate radius sold in the $800K range. However, what these online tools could not factor in was the property’s condition and needed repairs, or that this home was on a busy street or the close freeway proximity – all items that can greatly affect a property’s value. This listing garnered tons of interest, but in the end only two offers came in and the highest offer was $685,000. When I called all of the agents who showed the home but did not write offers, they all cited the street and freeway noise as concerns. Luckily I had prepared my clients for a realistic selling price based on all factors, but if I were to solely look at price per square foot and not analyze the challenges and assets I would have done them a massive disservice. In general, I find that the majority of homeowners have high expectations when it comes to what they think their home is worth, but sellers never set the price, the buyers do.

The other day I worked on a CMA, which is a “comparable market analysis,” for a homeowner considering selling. When looking at the recent sales in his area, I saw two homes that sold within the same block just 3 months apart: one home sold for $960,000 and the other sold for $1,240,000, and both were the exact same square footage. That is a difference of $262 per square foot. Both homes were vacant and staged but one was in better condition, had higher quality upgrades, designer touches and more mature landscaping. This is a good illustration of buyers responding well to homes with thoughtful improvements.

Here are three considerations for sellers: 

• The price you want to sell your house for does not matter to buyers. And there is no talking a buyer into buying your house, or paying you what you want. Buyers set the sale prices, so before you start preparing your home for the market, consult with your Realtor and look at the sold data. Work with an agent who will take a deep dive into the data, who knows your neighborhood, who will compare and contrast your property with the recently sold homes in the area and tell you what you need to know, not what you want to hear.

• Pricing a home too high may dampen your success. In our marketplace, many buyers stop their search often between 10–40% under their budget as they are keenly aware of all of the multiple offers over the asking price. (FYI, I have been coaching my buyers for years to search at least 20% under their maximum.) Let's say a buyer has a budget of $2,000,000… they may stop their search at $1,600,000. If you put your home on the market at $1,750,000 they may never view, consider or offer on your home. Additionally it is the multiple offers that give sellers leverage as this is a blind bidding process. Another example of this is that many buyer's agents will check in multiple times, asking the listing agent how many other agents may write an offer. A listing agent has to answer honestly as ethics and integrity are crucial. If your home is priced too high often you receive fewer offers.

• The homes that tend to sell at the highest prices have been meticulously prepared: often sellers are paying for painting, floor refinishing, landscaping, new light fixtures, professional staging, etc...  I am seeing many sellers spend between $25,000–$50,000+ to prepare their homes. I know you may be scratching your head, but often when we live in a home we get used to some of the imperfections but buyers are paying a great deal of money to buy in the East Bay and they are not so forgiving. The homes that I see more multiple offer situations on and sell for the highest prices are squeaky clean and are positioned so a buyer can just move right in. This does not mean that a buyer is not taking on repair recommendations, but cosmetically a buyer can move in and feel good about it. Proper home preparation is crucial for buyer appeal. If you have equity in your home and are short on funds, Red Oak now offers our Enhance Program which allows homeowners to use our team of professionals to improve your property for up to $60,000 and pay for it when you close escrow. 

As I  sign off, I  want to thank you for the trust and enjoy your summer!

4 buyers, 4 appraisals: real time real estate market intel with a focus on the appraisal contingency

The real estate market continues at a busy pace, with seasonality virtually thrown out the window as COVID has prevented most folks from traveling like they had in previous years. What I currently see are buyers that are hungry to win – they are willing to pay more than what the last home sold for in the immediate area in order to secure the winning offer. In December I was able to get four sets of buyers into contract: 

• Buyer #1
  There were 15 offers, the listing was in San Leandro, and my client was short of the highest offer by $5K. At first this property appraised $46K under the offer price. I worked with the buyer's lender to rebut the low appraisal and it was adjusted up by $45K, which made the difference between offer price and appraisal value $1K. In this case my client paid 20% down plus an additional $1K to make the deal work for her loan.

• Buyer #2
  In a North Oakland transaction, my clients wrote an offer and it was not accepted. The seller accepted an offer much higher than my clients’ offer. Three weeks later I received a phone call that the accepted offer was about to cancel their contract for personal reasons, (breaching their contract, meaning they had no way to cancel without risking their initial deposit) and after a little negotiation with my clients and the seller, we got into contract for $50K less than the original accepted offer. In this case the appraisal came back $70K short. I reviewed the appraisal, found some discrepancies and worked with the buyers’ lender to rebut the value. The appraiser said he was not willing to alter the appraisal report. In this case my clients started working with their lender to come up with a plan B. Still strongly believing that the appraiser got it wrong, I reached out to the listing agent and asked if the appraisal report from the previously accepted offer (that had canceled) was available to us. She was able to provide me with that appraisal report that provided a value of $50K greater than we were in contract at, and at a value of $130,000 more than the appraisal we were fighting. We challenged the appraisal one last time and prevailed.

• Buyer #3
  My client really fell in love with a property in the Oakland Hills. Because he had already been outbid a few times on other properties, he decided to write a pre-emptive offer, which is typically an aggressive offer that commands a seller's attention. It tells them, “work with me because here is a stellar offer, well over the asking price and completely (usually) contingency-free,” meaning: my offer is not contingent upon the property condition, what it appraised at, or a buyer's ability to obtain a loan. In this case my client did not care about the appraisal and I informed him that there was no sold data to support the offer price he wanted to place. In fact I talked him into offering $25K less than he originally wanted to offer. This home did not appraise, there was no data that I could use to fight the appraised value, and my client purchased the home he loves.

• Buyer #4
  The fourth deal was a fixer upper in the Dimond neighborhood of Oakland. My clients were fortunate and in a very rare scenario, finding themselves in early December 2020 wanting a home that showed poorly and due to a lengthy time on the market, they were the only offer at the time. In this situation my clients were able to get their offer accepted and retain both an inspection and appraisal contingency. The property appraised and there were no issues with the appraised value.

What I continue to see on the deals that I am tracking – which amounts to hundreds of transactions a year – is that many buyers have funds available to them over their 20% down payment. They are waiving their appraisal contingency simply because they want the house, regardless of what the appraisal states. I am also seeing buyers who are willing to take the risk, waiving their appraisal contingency with a plan B in place if the appraisal comes in short. Plan B is often a parent or family member willing to help out, or buyers tapping into retirement savings. Click here to read an article I wrote explaining how appraisal contingencies work.

I  want to lift the curtain to unveil a bit of the behind-the-scenes view of a few recent transactions from the buyer side. When you are looking at online real estate websites you will see the photos, the listing price and sold price, but you are not seeing the terms/contingencies of the winning offers. You may hear that most winning offers in our niche market are written completely non-contingent, which means, if a buyer were to write an offer and waive all of their contingencies and not close escrow, they could lose their deposit money which is typically 3% of the offer price.

• They are waiving their inspection contingency – a buyer is making their offer to take on the property condition: relying on the reports and disclosures that the seller provided, taking on all of the information in the natural hazard report and preliminary title report. Their offer is not contingent upon insurability, the reason this is important to note is some areas in very high-risk fire zones have high insurance rates. The buyer has also done their due diligence and is comfortable with the neighborhood, schools and has checked crime maps and the Megan's Law Database.

• They are waiving their appraisal contingency – meaning they are buying the house at their offer price EVEN if the property appraises for less.

• They are waiving their loan contingency – meaning they have confidence in their ability to secure a loan and close and their offer is not contingent upon securing a loan.

No agent is powerful enough to make a seller accept an offer for less money or with weaker terms than a stronger offer on the table, but a good agent is providing their clients with real-time market information so they can be the savviest of buyers.

Favorite Things: No. 6

I am a huge design magazine buff – I even save articles in inspiration binders I've created – and I always look forward to lists of items that a notable person "can't live without" because I often find new (or new-to-me!) products and services.

About three years ago I started collecting items for my own lists: things I'm grateful for, trends in real estate, and not only widely-available products, but items, experiences, and resources only available here in the Bay Area.

What are some of your favorite things?

2019 Year In Review

What a way to start 2020, I was just awarded company wide top producing agent! Here is a quick celebration …

And now, back to business…

As we start a new year and decade I can not help to feel blessed, I have just completed 15 years in business. When I started real estate, it felt very familiar as my mother was an Oakland/East Bay Realtor, however never in my wildest dreams did I envision a career that I have experienced thus far. Thank you for turning my dream of serving clients in a creative and ethical manner into my reality.

As I  gear up for the 2020 Spring selling season, I will share 2018 vs. 2019 data. Below you will see median prices in a few East Bay cities. Median price simply means the middle of where prices land. They do not tell the entire story as every home is different. For example, last week I had clients interested in a home in Oakmore Highlands. The sold data in the immediate area would indicate that the value of this home could be between $1.5 and $1.7 million, however the inspection reports revealed that the front porch was in need of replacement and the cost due to the architectural design was over $75,000. The point is someone could have paid a high price for the home being that there has been very limited quantity of inventory in this neighborhood and perhaps the layout, location and size was more valuable than the needed repairs, but due to our diverse inventory, my experience has proven that price per square foot is rarely the best method to determine a home's value. 

What are my optimistic predictions for this year?  Spring should be business as usual. I have chatted with several of my stagers and they are booking up quickly, this indicates we should have a new supply of inventory in the upcoming months. There are buyers out there that are eager to find quality properties. 

Here are two quick takeaways:

• If you are considering a move and want to sell your home, now is a good time to chat. While Spring should be a healthy selling season, historically our real estate market becomes fickle during the summer. With graduations, vacations, etc.. the market is not always predictable. Also, the market tends to slow during national election seasons. Prices may still increase, but not at the same pace as other years.

• Preparation and attention to details matter. Likely your direct competition will be doing extensive repairs and renovations. As buyers are becoming more discriminating I definitely noticed that they will pay less or pass over properties that they feel need too much work.

Here is a buyer tip:

• It is highly likely that you will like a property that is popular. It always happens. I highly recommend getting pre-approved by a local lender who is known in our niché market. I have seen this help in multiple offer situations when all things are close or equal. Email me for a list of highly regarded local lenders.

Favorite Things: No. 5

I've long been a collector of magazines - Dwell, Elle Decor, Vogue, and Sunset to name a few. I look to them for ideas and inspiration... when I read something like Elle Decor's "12 Things Can't Live Without", it turns me on to new things and places.  And it makes me feel like I've gotten to know the designer or celebrity through their 12 things.

So, I do the same thing twice a year. I share things that make me happy, and showcase local tidbits - it allows you to get to know me better.  Here is my winter 2019 edition... What are some of your favorite things?

Happy Holidays!

Favorite Things: No. 4

Spring has sprung! Here are some of my recent favorite things!

The Impact is Preparing Your Home for Market

AFTER

In spring 2018 I had the privilege to meet and work with Bob, the successor trustee for 14 Drake Lane, the home he was raised in. The house had some deferred maintenance and was last used as a rental to help pay for his mother’s assisted living expenses. Bob lived out of town, so after reviewing my past work, he asked for my ideas and design advice to help transform his family home within a limited budget.

As part of my recommended process, we obtained inspections of the property up front. In our marketplace, buyers request inspection reports before they decide to write an offer so they can better understand the house, determine what to anticipate fixing and ultimately decide if the home is right for them. In Oakland and Berkeley, most properties are older and many homes have, on average, $35,000 in repair recommendations. As a seller, it is wise to make sure there are no big-ticket structural or system deficiencies before making cosmetic improvements.

After obtaining high-quality inspections on Drake, I created a plan for Bob’s review and approval. Every client is different, however, in this case, Bob deferred to me on colors and finishes as long as it worked within his budget. The goal for Drake was to keep the classic mid-century details and give it a fresh look without a big renovation. We wanted to provide the buyer with clean walls and floors to allow them to move right in and give them a canvas for their touches.

The kitchen floor was an old 1970’s vinyl, which we replaced with new solid oak floors matching the existing oak. This allowed the upstairs, kitchen, living and dining rooms to live as a cohesive space. The solid wood cabinets were coated with crisp white paint and new cabinet pulls to match the old copper hinges and cooktop exhaust hood. The worn tile counters and backsplash were replaced with porcelain penny round tiles, providing texture and are a nod to that mod era. The counters were a simple grey quartz known for durability and easy maintenance. The old cast iron sink was replaced with an oversized, deep stainless steel sink and gooseneck faucet providing room for large pots and sheet pans to be washed with ease.

The interior of the home was painted throughout including the brick accents. The original 1950s wood paneling was preserved as some mid-century purists covet this detail. The nailed-shut interior planter, a quintessential 1950s detail, was opened and new low-light tolerant succulents were added.

The downstairs level was given a facelift with new carpet and padding, and the 1970s wood paneling was painted white as well as the red brick fireplace surround.

All of the interior lights were replaced with new fixtures, which adds mood, style and is an important aspect of sale preparation. I look at light fixtures as equivalent to a belt or pair of shoes to an outfit.

The exterior of the house was painted with a bold trim color of black with a black garage door, and a white base color to give a salute to what homes were painted back in that day. Brass house address numbers (neither vintage or new) were replaced with Corten steel modern numbers to create warmth.

The landscaping had the additions of fresh lawn with new sprinklers and rows of ferns and Oakleaf hydrangeas. The barren brick planter was filled with fresh soil and mature succulents.

Details matter and buyers want homes that are clean, stylish and have good vibes.

BEFORE

AFTER

COST BREAKDOWN

Painting (interior/exterior) and window cleaning $16,000 Staging $6,800 (Staging can cost more or less; not all staging is equal and there are times that a more expensive staging may be recommended ) Landscaping $4,200
Plants $500
Carpet and installation $2,905
Hardwood floor refinishing and added new hardwood flooring in kitchen $7,115 Wall oven $1,573
Cabinet pulls $132
Kitchen faucet $392
Under-mount sink and tile for backsplash $418
Quartz for kitchen counters $1,047
Installation of tile backsplash, quartz counters, sink and faucet $3,450
Grout deep cleaning, new grout, and caulking in the bathroom $1,045 Handyman services (replacing some plugs/switches) $775
Hauling debris $500
Light fixtures and bulbs $1,570
House numbers and front door mat $235
Total $48,657

When looking at this example of costs, it is important to approach it as an investment into your property that will provide you with a greater return. It would be a fair statement to say that Bob saw a 3-4 times return on his investment. In some cases, this type of renovation can/may  generate interest from  buyers looking elsewhere.In this case, his property sold for 23% over the asking price and went pending with multiple offers after 14 days on the market.

BEFORE

AFTER

Signs of a slowing market

Here are the latest listing inventory stats (per Red Oak Realty):

• Active inventory is declining, but at an uneven and slow pace. We have been at a 6-year record high for the past 8 weeks.

• A wave of new listings hit the market last week, particularly in the $750K-$1M price range, keeping seller competition stiff.

• The number of pending properties has declined for the past two weeks, reflecting in lower buyer demand.

Additionally, average days on market for active inventory is at a 6-year year high: this week it is 37 days (it was at a record low the same time last year at 32 days). 

If these trends continue, sellers are going to have a harder time getting properties into contract and may need to take price reductions.

Buyers may want to consider getting aggressive on their offers for those not-so-perfect homes. There may be a "bargain" waiting to be discovered.

Data from the MLS for the following cities: Albany, Berkeley, El Cerrito, Kensington, Oakland and Piedmont. These charts are for Red Oak Realty and clients.

Selling in this market

I am noticing homebuyers are more selective and discriminating when viewing homes, considering price and deciding what to offer. They are analyzing the inspection reports closely, looking at functionality more than ever (i.e., is there off-street parking, what is the indoor/outdoor flow, how long will this property fit my needs), and looking to see if there is any potential to increase the value long term. All of my buyer clients this year have not felt "pressed" to buy, but are willing to throw in a great offer if the house checks all the right boxes.

What does this mean for sellers? A few things, it means now is not the time to overprice a home. The details matter and thoughtful touches that make a home stand out from its competition are important. Working with a local Realtor who understands this market and can make the calls to other agents and be the squeaky wheel on your behalf can make a huge difference in your outcome. This is not to say that we are suddenly in a buyers' market because, as of now, we are not. There are still many buyers who want in and are ready to plant roots; it means that a bit more care and analysis is needed to navigate this market. 

Below are recent questions/concerns from a potential seller:

1) Can we make minor fixes (floors, paint, light fixtures, staging) and stay living in our home while it is for sale?

Vacant and staged homes typically sell for more than owner-occupied houses for many reasons. Most stagers that do a great job will not stage owner-occupied homes. When we (in general) live in homes, we tend to generate smells, food, moisture from the shower, etc. One can absolutely live in a home while on the market however extra cleaning before leaving may be necessary. With owner-occupied properties, buyers are typically restricted from viewing the home certain hours as opposed to being able to view it anytime, so it would be ideal if there could be a broad opening of showing hours. Also, some Realtors are predicting a surge in inventory and if this is the case, buyers will have more choices, so it is important that your home shows its best within your ability. 

2) How much do you anticipate for the cost of minor fixes?

Many sellers spend between $15,000 - $25,000. Here is a breakdown on a recent deal:

Paint = $8,000, staging = $7,000, current inspections = $1,000, new light fixtures = $1,000, yard clean up and improvements = $2,000, window cleaning = $400, deep grout cleaning = $900

3) I have some concerns about inventory and that we need to sell ASAP. 

I have worked in all type of markets and will work my hardest no matter what the scenario. My best advice for having the most success with the sale of your home is this; go on the market showing your best. The details matter and buyers need to not only like the space, but imagine themselves in the home. Use a local Realtor who really knows our marketplace who knows how to help you prepare the home for today's buyers who tend to be younger (i.e., paint colors, staging, light fixtures - really matter!). I would start as soon as you can as not all inspectors, painters and stagers are available immediately.

Favorite Things: No. 3

A few of my favorite things... Next week I'll visit the Decorator Showcase house to get new ideas and inspiration for my listings. Get your tickets at decoratorshowcase.org soon! Hope your May is great.

Penthouse Lifestyle, Neighborhood Vibe

Impressive penthouse-living without the dues. This single family home has a marvelous floor plan that is open and generous – entertain on the main floor, retreat to the bedrooms on the second floor. The natural light is abundant and your eyes will dance to the shadows the sun casts throughout. Newer modern west-facing deck with full sun and prized views. The grandiose upstairs has a dreamy master suite with a walk-in closet and a custom window that flaunts the awe-inspiring Bay, San Francisco, Downtown Oakland and Bay Bridge views.

When I took this listing in April of 2017, this well-loved home was in need of updating. The kitchen was worn and all original from 1974, the floors downstairs were original entry tile and old carpet, the master bathroom had seen better days, and the deck was deteriorated and not safe, just to name a few immediate tasks. This home meant the world to the Wang Family so they wanted to present this property in it's best light.

The first task as their Realtor was to determine the property's condition. Before any of my clients invest in cosmetic updates, I always advise them to get current inspections from highly regarded professionals. I would hate for clients to invest money into their homes when there could be significant structural or system repairs needed that could devalue the property.

After inspections are performed, I review the findings with my clients and determine what repairs will yield the best return on their investment. Once my list is prepared, I help my clients obtain bids for said repairs/improvements and work with my clients to create an action plan.

In this case, I envisioned taking this 1970s home and making it sexy, yet comfortable. One of the biggest assets of this home is the panoramic views of Oakland, the Bay, San Francisco and the Golden Gate and Bay Bridges. The deck was in hazardous condition, so engineer Monte Stott was hired by my clients to design the rebuild. After calling six contractors to rebuild the deck, my clients were able to secure a contractor to remove one pier-and-post deck off the living room and remove one cantilevered deck off the master bedroom. The deck off the living room was upgraded with a stainless steel cable with Redwood railing, and the upstairs deck was removed altogether and replaced with a custom 110-inch picture window. The old carpets that had seen decades of life were removed and solid Red Oak floors were installed downstairs.  With the exception of the original tile entry and the tile in the powder room, the entire downstairs was transformed to natural finish floors giving the large space a cohesive feeling.

A few likely original 1970s brass track lights remain in the house, but the majority of the interior light fixtures were replaced with groovy West Elm fixtures. Some of the dying juniper shrubs were removed and a few drought-tolerant plants were added to the front yard, such as variegated Phormium. The inside and outside of the property were painted with Benjamin Moore paint, with the exception of Kelly Moore paint on the interior ceilings. 5 1/2-inch solid wood baseboard with no edge detail was added to add a pop to the clean design. The original 1970s geometric railings and the old Harvest Gold double oven give a nod to the decade it was built.

WHEN A GOOD BUY IS NOT A GOOD BUY

Recently I was hired to sell a home. Two years ago it was on the market but it did not sell. At the time the listing agent recommended $45k+ in marketing preparation which the sellers did. From what I understand, an offer came in but it was $200k-$300k less than what the listing agent said the house was worth, so the offer was rejected. The owners decided to rent the property out and, fast forward 2 years, they now want to sell again. As I viewed the lovely home and shared my honest opinion, the owners stated that they got a good deal on the property.  I looked up the listing from their purchase and noticed it was on the market for more than two months in a strong seller's market.  So my question was, what is a "good deal"?  

Is getting a home at listing price when all other homes are selling well over the asking price a good deal? Maybe. You have to  compare apples to apples.  Perhaps the homes selling for more in the same neighborhood are in better condition, have generous rooms, have great indoor/outdoor space, and the property that is a "good deal" does not.

Let's say a home fits your budget and is cute, however, the surrounding area has challenges. It's important to think about future resale. If you decide to sell in the future and are in an outskirt neighborhood, and perhaps a softer market, your adorable home may get passed over due to someone opting for a better location. Another example is buying on a high-traffic street. It is highly likely that buyers will opt for a side-street or quiet street if given the choice.

Many of my buyer clients say to me "are you trying to talk me out of buying this home".  I do not try to talk anyone in or out of buying a home. I want to point out the assets and challenges of any potential property of interest so you can be a savvy buyer.  The wrong time to hear about a property's flaws is after you have purchased a property and are later trying to sell it.  

Here are a few buyer tips:

• Do not buy with fear as a driver. Meaning, don't be in the mindset of "if I do not get a house now I will never be able to own a home in my lifetime".
• Location. Do not get caught up on staging and the superficial appeal; many items can be fixed, including foundation. However, you cannot move a home's location nor alter flaws you can't change, i.e., no off-street parking, extraordinarily small rooms, an apartment building adjacent to a home or being on an earthquake fault line.
• Are you settling? Ask yourself the tough questions. Really hone in on why you want a particular house.
• Sacrifice. Live with granny's kitchen and awful carpeting if that means you get a home in a desirable area, do not get caught up on the "new updated kitchen".
• If a house has been on the market for a long period of time ask yourself "why?"

What Buyers Need to Know When Viewing Open Houses

If you are shopping for a house you may feel like you are overwhelmed with questions or uncertainty and have anxiety over the unknown. It is helpful to work with an experienced buyer's agent. If you attend open houses without your agent, here are a few tips to keep in mind:

• Any agent hosting an open house, whether they are the listing agent or not, should be helpful and honest with you; however, their fiduciary duty is to get the highest and best for the seller. Don't ask a listing agent what they think the house will sell for. Frankly, they likely do not know and they do not want to scare away any buyer by saying, "I hope we make a record-breaking sale for the neighborhood and it goes hundreds of thousands over the asking price".
• If you do talk with the open house host, other potential buyers are listening and are "sizing up" their competition. It is like poker, do not show your hand. One time I had a buyer tell a listing agent what their budget was and asked the listing agent if they thought they could win the property in competition. Don't do this! You just showed your hand.
• If you ask the hosting agent question after question, you may be conveying the wrong message. Yes, buyers deserve answers to their questions, but let your agent do the research and ask on your behalf. You could be inadvertently sending vibes to the hosting agent that you are uncertain about the house, have grave concerns about the property condition or that you may not be a deal closer.  For example, I had a buyer client ask a listing agent about plumbing and water pressure. My client noted that she loved her showers in the morning. My clients called me that night to tell me that they found an old farmhouse that they loved. I immediately called the listing agent to ask for the disclosures/reports on the property. The listing agent immediately remembered my clients and said, "I do not think this is the right house for your clients." I asked, how so? The agent replied that it was a 100-year old home with old pipes and she could not guarantee that the water pressure would be sufficient. Pipes can get replaced and no home is perfect. I was able to discuss at length the property condition with my buyers and inform them about what is typical when reading the disclosures. Buyers may not be aware that certain comments to the listing/hosting agent will convey details that could be possible deal-killers.
• Many Realtors host open houses actively and legitimately to seek out buyers. They may ask guests to "sign in".  You don't want to do this if you are already working with an agent. This is a way the host can contact you and solicit your business. Kindly tell them you are working with an agent and give your agent's name. You can always say "I will take your card and ask my Realtor to contact you if we are interested". Some may think there is an advantage to working with the listing agent as their buying agent. But ask yourself, if a conflict arises, would you be comfortable with the same agent representing both sides?
• Don't ask the listing/hosting agent for a showing. Call your agent to set up a private showing. Likewise, when perusing homes online, don't request a showing via online real estate websites. Realtors pay to be sponsor-agents on various websites. If they show you a property that you later purchase with your agent, they can claim they are entitled to the commission; this is called procuring cause.
• While viewing open homes, social courtesies apply. I have seen open house visitors act in way that appears defensive or even hostile. You don't need to engage in long conversations with the host or disclose a lot of information about yourself. Listing agents do remember the visitors and will convey to their seller what their impression is of the buyer.

Bottom line, choose your buyer's agent early in your house hunting process. If you are working with a stellar agent they will do research, talk with you about comparable sold data and pricing, review and discuss property condition, and provide you with answers to your questions. They should be putting your needs above all else and be transparent. Bring all of your questions, concerns and fears to them with full confidence in their advice.

Favorite Things: No. 2

Summertime in the East Bay is unparalleled! Here's a list of my favorite things to savor the season. What are your favorite things for summer?

Words for Buyers

With all of the online tools available today, many new buyers feel that they have a grasp of the market and don’t need the help of an experienced Realtor to assist in navigating the market. 

The other night  I was talking with a client who was seriously considering submitting an offer on a property in North Oakland. The home checked off nearly all of the boxes on her needs list and we were knee-deep in analyzing the property disclosures. As her advisor, I pointed out the flaws while also sharing with her the reasons I liked the place.

The house had an open floor plan and some thoughtful improvements, while maintaining the essence of its 1908 construction. The downside was that some of the finishes were inexpensive and already showing deterioration; additionally, it could use a bit more storage. We both commented on how we couldn't believe that the sellers didn't deep clean or paint the property in preparation of the sale. (Sellers, yes it is just paint and carpet cleaning but this conveys a lack of care and pride to buyers).

Just three weeks prior, this client wrote an offer on a home that she adored and made her giddy with excitement. She had put in a killer offer on the place but didn't prevail. The heartbreak of not winning was real and the disappointment was tangible.

As we were talking last night, my client spoke about the house she didn’t win in comparison to the house that she was potentially writing on today. I explained that the property that she lost on had sold for more than $100,000 over her budget and was potentially worth $400,000 more than the current house in question. It was indeed a dreamy property that received more than 20 offers. I gently said that although we still covet the house lost (I covet it too) it was not attainable. I suggest that we focus on properties that are attainable. 

Think of it like this, there is a handsome man, who is smart and funny. He is flirting with you and gets your heart racing. The only catch is, he is married. He is a big tease and you can't have him. Let's put him back on the shelf and look at real candidates; ones who are genuine, may not be as sexy at first glance, but with a wardrobe makeover could be even better.

Losing out on properties can be an emotional roller coaster. It taps into emotions that often surprise us. It can be a combination of real disappointment coupled with anger. Anger that you work very hard to be able to buy a home and how dare this real estate marketplace be so expensive!  Don’t get caught up in the tease. Focus on real candidates that are fulfilling, attainable and will give you true joy. Let the flirts be a fantasy and inspiration on your Pinterest board. Buying a home is a process requiring true focus.

My job and experience is to help you streamline your search. I help organize (and re-organize) your shopping list, explain the nuances of the market and provide inspiration on how you can make your ordinary home magical for you. I know that house hunting requires real support, if you are house hunting right now, hang in there.