• Curse of the Lowball Offer

    Real Estate: Lowball Offers on the RiseDoesn’t matter whether it’s a Buyer’s Market, or a Seller’s Market. Lowball offers are as old as the oldest profession.

    Let’s say you just received an offer from someone who wants to buy your home. You’re excited and relieved, until you realize the offer is an unrealistic lowball price. Insulted? Disappointed? How should you respond to ensure the buyer doesn’t beat a fast retreat? Bottom line: set aside your emotions, focus on the facts, and prepare a counteroffer that keeps the buyers involved in the deal.

    An offer, even the lowball type, means someone wants to buy your home. As Alec Baldwin in Glengarry Glen Ross so eloquently said, “a guy don’t walk on the lot unless he wants to buy.”  Unless the offer is laughably low, it deserves a cordial response, whether that’s a counteroffer or an outright rejection. Remain calm and discuss with your agent the different ways you can respond to a lowball purchase offer.

    So unless you’ve received multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits. Sometimes it just feels like a class in Haggling 101.

    A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.

    Consider the terms

    Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.

    Review your comps

    Ask your agent whether any comparable homes have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.

    Consider the buyer’s comps

    Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

    If the buyers don’t include comps to justify their low purchase offer, have your realtor ask the buyers’ agent for those comps.

    Get the agents together

    If the purchase offer is too low to counter, but you don’t have a better option, ask your agent to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your agent whether the buyer (or buyer’s agent) has a reputation for lowball purchase offers. If that’s the case, you might feel freer to reject the offer.  No need to proverbially “drop your pants” if you really don’t need to.

    Don’t signal desperation

    Look, buyers aren’t dumb. Most buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home’s listing describes you as a “motivated” seller, you’re putting up a BIG SIGN that says “Make me a lowball offer.”

    If you can remedy the situation, maybe by renting furniture or asking your agent not to mention in your home listing that you’re motivated, the next purchase offer you get might be more to your liking.

  • Music in the Park Wednesdays are BACK!

    music in the parkStarting tonight!  6pm to 8pm, at Stafford Park, on Hopkins & King.  Every Wednesday from now until August 11th.

    Bring a blanket or lawn chairs, some refreshments, and come check it out!

    You can find the schedule of bands right here.

  • Show Me the Money — Redwood City Ranks #4 in VC Spending

    Good article in the Merc last week, comparing the amount of venture capital invested in startups in the region’s municipalities in 2009.

    For us Redwood Citizens, this is good news, as Redwood City ranks #4, behind some pretty big “powerhouse” cities for startups.

    The top 5 is as follows (along with the amount invested, in millions):

    1. San Francisco    1,013
    2. Sunnyvale              663
    3. Mountain View     574
    4. Redwood City       545
    5. Fremont                 528
  • The Annual Mt. Carmel Festival — It’s That Time Again!

    Carnival Food AssortmentIt’s baaaack….From April 30 – May 2. The 2010 “Wild West Days”, aka, the Mt. Carmel Festival!

    The annual Mt. Carmel Festival is a three-day festival, held each spring, in which we expect over 3,000 local families to join us for thrilling carnival rides, delicious treats, festival game booths, live local entertainment, and socializing with friends and neighbors.

    Also, the Cash Raffle is back! You could win $5,000; only 400 tickets will be sold! Buy your raffle ticket by returning this form to the school. Drawing to be held the last day of the Festival on Sunday, May 2 at 7pm – need not be present to win

  • The Party Might Just Be Ending for Low Interest Rates

    It’s safe to say that mortgage interest rates have been at historic lows since the summer of ’09, mostly around and sometimes even under 5%.  Currently, they’ve been floating around the 5 & 1/8% range.

    Part of the reason for these low rates has been because the Fed has been on a buying binge of Mortgage Backed Securities (MBS).  The Fed has been buying $1.25 trillion in mortgage-backed securities in its effort to prop up the economy but has said it will end those purchases March 31.

    As I speak fairly regularly with seasoned, well-informed, and intelligent mortgage lenders and brokers, one thing they all seem to agree on is that the expectation is that, after March 31st,  rates will head upwards, and will likely be in the 6% range.

    Still pretty low, historically – but, a significant impact to the buying power of home buyers out there.

    Just think about it, if you’re looking at a loan amount of say $700,000, this means that a 1% increase in interest rate translates to paying $450 MORE per month on the same loan.  Or looked at another way, a 1% increase in rate just reduced the sale price you can afford by about $80,000.

    Quoting some highlights from a recent WSJ article:

    What happens when it (the Fed) stops buying hundreds of billions of dollars in financial assets?

    In its monetary-policy statement, the Fed said it would “gradually slow the pace of these purchases in order to promote a smooth transition in markets.” Suddenly cutting to zero, presumably, could prove too much of a jolt.

    But even a gradual pullback could have big repercussions. Zero interest rates and Fed purchases — financed by printing money — have played a massive role in reviving stocks and bonds and rekindling the economy.

    Mortgage rates will likely move up, as private-market buyers will charge more than the Fed for bearing the risks of holding government-backed mortgage securities. Now, the Federal Reserve has said they would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness

    In its best corporate-speak, the Fed said they will “evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.”  That is, if markets play along. Investors are already balking at the heavy use of printing presses. Just look at the sliding dollar.

  • When Does YOUR Street Get Sweeped? …Some Cool Online Tools on Redwood City’s Website

    Upon receiving my latest email installment of Redwood City e-news (which you can get by signing up at www.redwoodcity.org), Malcolm Smith, their Public Communications Manager, highlighted to me useful tools that the city provides on their website.

    Want to know when your street is going to get a visit from the City Street Cleaning sweepers, for every month in 2010? Then check out this link here:  http://www.redwoodcity.org/publicworks/streets/pdf/Street-Cleaning-Schedule.pdf

    An even more cooler tool is the Community GIS (Geographic Information System). This tool is a computer-based mapping tool that takes location information — such as streets, water features, schools and day care centers, neighborhood associations, census and demographic info, zoning, parks and places of interest, historic resources, parcel information, community information centers and more — and turns it into visual layers on a map, while also providing detailed data about a specific parcel.   Check it out at: http://pubgis.redwoodcity.org/communitygis/

  • New Mount Carmel Listings – Week of Jan. 12

    A few new listings have recently popped up here in the Mt. Carmel area. The first of which — a bit of a fixer — looks like a great value in terms of price (at least on paper). Take a look:

    • 327 Jeter: $585,000 – 2br/1ba, 1140 sq. ft. on a 6500 sf lot.  Already has an offer date set (tomorrow, 1/13).
    • 532 Ruby: $549,000 – 2br/1ba, 980 sf on a 4800 sf lot
    • 266 Lowell: $949,000 – 3br/3ba, 1370 sf on a 6500 sf lot (this one is a re-list. Had been on the market for the past year or so, at a higher list price).
  • E-waste Recycling Event at Mt. Carmel, Next Saturday, Jan. 9th

    CB067368

    Got a new TV for Christmas? How about a new game system or microwave, cell phone, or DVD Player/ Recorder? Don’t know what to do with the old ones?

    Bring your used, broken or unwanted electronics to school Saturday, January 9 and recycle them for FREE.

    • Computers/Laptops/Servers
    • Televisions/Monitors
    • DVD/CD Players
    • Fax Machines/Printers
    • Telecom Equipment/Telephones/Cell Phones
    • Speakers/Stereo Equipment
    • Microwaves
    • Cables/Computer Mice/Keyboards

    Bring all your old TVs, along with other broken, unused and/or unwanted electronics to the Mt. Carmel parking lot – 301 Grand St., Redwood City – on Saturday, January 9th from 9:00 a.m. – 3:00 p.m.

    Your car will be unloaded for you and those items will be safely recycled for FREE. You will be benefiting both the community and the school. You can also check www.mountcarmel.org for more details.

  • What's Sold in Mt. Carmel – Q4 So Far

    So wrapped up in a statistic that would make any pessimist say “No way”, is the tell tale “% of LP” — or, the percentage of list price that a home sells for.  In the last few months in the Mt. Carmel area, that average number was….drumroll, please…. 100%.

    But of course, averages don’t always tell the whole story. I’ve always been one to point out that averages are never an indicator of future performance.  Location, neighborhood, condition, the economy — all play a role in what any particular home will sell for.  The fact of the matter is, that some homes sell for more that asking, some for less.  Pretty black and white.The good news is that the average points to some relative stability in our recent market.

    Here, in no particular order, are the recent sales in the last 90 days:

    174 Jeter – 4br/2.5ba – Original List Price (OLP): $969,000, Sale Price (SP): $889,000.  98 Days on Market (DOM) – 92% of LP

    313 Topaz – 3br/2ba – OLP: $739,000, SP: $730,000. 12 DOM – 99% of LP.

    270 Jeter – 2br/1ba – OLP: $675,000, SP: $680,000. 12 DOM – 101% of LP

    491 Topaz – 2br/2ba – OLP: $669,000, SP: $654,000. 17 DOM – 98% of LP

    1740 Whipple – 3br/1ba – OLP: $650,000, SP: $675,000. 14 DOM – 104% of LP

    188 Inner Circle – 2br/1ba – OLP: $579,000, SP: $612,000. 9 DOM – 106% of LP

  • Crazy Urban Legend Hits the Real Estate World

    Be forewarned — no, this is not about kidney harvestingNigerian Lottery winnings, or Bill Gates giving everyone lots of money for forwarding an email — there is an email making the rounds titled “HR 2454: CAP AND TRADE ENERGY BILL”, which purports that new legislation will require all homes to retroactively pass new energy standards before they are sold.

    Some even say that all homes will now be required to get a “label” for your house every year, proving that your home meets new energy standards.

    This is all patently and unequivocally FALSE. (and you can even checkSnopes.com here to doublecheck)

    Firstly, whoever started this email has a serious conspiracy theory complex. They also probably fall into the category of “birther”, “teabagger party member”, or “Glenn Beck-lover”.

    Bottom line, our gub’mint is not going to do anything – ANYTHING – that will adversely affect the real estate market, which is absolutely one of the key elements in our ongoing, slow economic recovery. Why do you think they recently overwhelmingly voted to extend the first time buyer $8K tax credit bill, as well as extend the $729K conforming loan limit? They want to encourage people to have more confidence in home ownership.

    Anyway, I also consulted our National Association of Realtors (NAR) position on this, and below is what it said. The most revealing statement, which contradicts this email is that this bill  ”Does not create a federal energy audit requirement for real property”

    “The U.S. House of Representatives approved H.R. 2454, the American Clean Energy and Security Act by Reps. Waxman (D‐CA) and Markey (D‐MA). Following NAR’s long‐standing policy to only take a position on legislation, or provisions within legislation that have a direct affect on real estate, NAR worked with our Congressional allies to strip the Energy Bill of provisions that would have adversely affected our industry.

    After multiple consultations with the NAR Climate Presidential Advisory Group, the NAR Land Use, Property Rights and Environment Committee, and state associations who had dealt with energy audit legislation at the state level, the Land Use, Property Rights and Environment Committee directed NAR staff to concentrate on the real estate provisions in the bill.  As a result, NAR issued calls for action and made this a talking point for Capitol Hill visits during its recent Midyear meeting.

    Overall, REALTORS® succeeded in making a number of positive changes affecting the real estate provisions of the bill. The House‐approved bill:

    • Does not create a federal energy audit requirement for real property;
    • Exempts existing homes and buildings from any federal guidelines for new construction energy efficiency information labels.
    • Prohibits the implementation of any labeling during a sales transaction.
    • Leaves the decision to states as to whether to require energy audits, disclosures, etc.
    • Provides property owners with significant financial incentives, matching grants and tools to make property improvements and reduce their energy bills;
    • Prohibits the Environmental Protection Agency from regulating residential and commercial buildings under the Clean Air Act;
    • Eliminated an early proposal to allow citizens to sue over minor climate risks under the Clean Air Act; and Establishes green building incentives for HUD housing, including a loan program for renewable energy, block grants and credit for upgrades in mortgage underwriting.”
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