Maureen Kennedy

If you're a new buyer in this market, you'll want to be prepared, now more than ever! I can offer you:

· A free, comprehensive list of all open houses in the East Bay (not just those in the Chronicle, etc.), sent to your email box before noon each Saturday;

· Free email updates sent to your email box the moment a new home meeting your criteria hits the market or sees a price change;

· A free, no-obligation 1-2 hour tour of any neighborhood you think might meet your needs (or a referral to a deeply experienced agent who covers that area, if I don't), stopping into a couple representative homes;

· Access to a website that includes:

-a review of typical buyer costs for homes at various price points;

-a list of strategies you can use to increase the chances your offer will be accepted, beyond just offering more money;

-a table identifying East Bay schools with high API scores, with click-thrus to sites with more information about those neighborhoods;

-a list of five deeply experienced lenders you might call for ideas and insight on the market and your situation; and

-a free package of buyer factsheets from the National Association of Realtors.

Just give me your email address and I'll get it to you!

You know me well enough to know that I'm a straight shooter, more interested in making sure you have the right advice and insight than in getting a check in my pocket. My reputation depends on that. And it's important to know when market trends are counterintuitive. "Everyone knows" that now's a bad time to sell, if you can avoid it, right? Wrong.

Here's a scenario for you: Assume a household in a great house in Crocker Highlands. They've always wanted to move to Piedmont when their children get to school age. Prices have dropped 15% since the peak, though they are way ahead since they bought in 2001. They really need that fourth bedroom.

If they sold the Crocker house and bought a more expensive home in Piedmont in 2006, they would have sold high and bought high--but they were fully prepared to do it. If they sold today, they would sell "low" and buy "low." The key takeaway is that the dollar price discount on the more expensive Piedmont home is larger than the price discount they'll see when selling the Crocker home [assuming a 15% lower price in both cases].

Let's say the Crocker house will sell for $725,000 (was worth $850,000 at the peak). Including lower brokerage fees and transfer taxes, they'll net about $120,000 less than if they'd sold in 2006. But if they buy a home in Piedmont for $1.5 million (was worth $1.750 million at the peak), reflecting the lower fees and transfer taxes, they'll save about $265,000, compared to a 2006 purchase. Between the two homes, then, they are about $150,000 ahead of where they would be had both transactions closed in 2006.

And don't forget ongoing mortgage and insurance costs. That less expensive Piedmont home translates into about a $15,000 a year savings compared to the carrying costs of that more expensive home not bought in 2006. Email me for a copy of the spreadsheet.

How smart is that?

An even more attractive scenario is moving down-Piedmont homes have held their value quite well through the downturn. The same cannot be said about the condo market in general, nor homes in much of the rest of the country, and particularly in typical retirement areas like Arizona, San Diego and Florida. Unless you're planning to retire anywhere in Texas, in Denver, Detroit, Charlotte, Salt Lake or Philly (according to today's Wall Street Journal), you'll likely be selling "low" and buying "super low"!

OK-here's a bit of a diversion. Did you hear knowing moans around you when you saw Julie and Julia--the part when the four friends are out for drinks and one says something like "I asked my personal assistant to go to Safeway and buy pancetta for my big dinner tomorrow, and when I got home she said, ‘Oh, Safeway didn't have pancetta... ‘ I asked her ‘well, did you go to Piedmont Grocery????'"

I so get that "I want you to take care of it and not make me take care of it" feeling.

And Winans Construction gets it too, when it comes to home maintenance. They've just set up a handyperson service to complement their remodeling business (see www.winconinc.com for a portfolio), so make your list, check it twice, and then contact them at 510-653-7288 or info@winconinc.com and they'll take care of it.

Mention my name and they'll take 10% off your gutter cleaning bill through September 30^th. You know that deferred home maintenance can be the definition of penny-wise and pound-foolish, right?

Recently, a client I'd been working with for quite a while mentioned that he was thinking that he'd stay here in the Bay Area for 2-3 years, and then move away. Always paying attention to serve my clients' best interests, I said, "hey; we should rethink this home purchase gameplan, then."

We talked about what is known (and NOT known) about market trends for the next couple of years, for his locations and for his price point, because these can be very different than for other locations and price points. We talked about transaction costs--he had already seen my buyer's costs spreadsheet each time we've made an offer, unique for his city and purchase price, estimating escrow fees, city transaction fees, inspection fees, and homeowner insurance fees, among others.

But he wasn't thinking about these as transaction costs to be recouped, and definitely wasn't thinking about what the "seller net proceeds" sheet would look like when he went to sell--the brokerage fee, staging fees, and recordation costs. That is, between the 2% of costs to buy and 6.25% of costs to sell, excluding loan fees, and any surprise repairs and staging, he needs about 10% appreciation in the coming three years to make buying pan out.

While he hasn't yet made a final decision, I suggested that he take a look at two sites:

http://realestate.yahoo.com/calculators/rent_vs_own.html includes an NPV analysis, allows you to enter inflation and discount rates, clearly reflects interest rate deductibility, and allows you to do the math over a range of periods ("what if we move in x years? y years?"). But doesn't seem to reflect transaction costs--the not-insignificant costs of actually buying, and then selling, the house.

The New York Times has a nice tool which DOES allow you to including these figures if you go to the "advanced" menu (and who wouldn't, given that the basic menu leaves so much of the analysis out??). See http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html#

I can't tell if the New York Times site reflects the deductibility of your mortgage payments--it references "owner fee" deductibility, just under the HOA fee field, leading to confusion. While there are many who would argue that one shouldn't make choices based on tax effects ("I'll buy lunch for everyone because I can claim it as a business expense!" Not!) there's no doubt that the net cash flows change depending on your tax bracket and so on.

So if you're on the fence about buying vs. renting, take a look at these buy vs. rent calculators!

We repainted our trim in Piedmont not long ago (now have a Warm Brick thing going rather than Forest Service Green). The brown paint for some trim and the gate has a touch of red in there, which feels like Mexican mole sauce if you stare at it long enough. Yum!!

If a paint job is in your future, read this story from HGTV, and think about calling Angelisse Karol for consulting (ask me for her contact info) or maybe stop by Scout Hardware in Temescal near Donya Tomas. Scott Silvera held an evening info session a few months ago on the topic, and sells zero VOC paints for exterior applications.