Marvin de la Vega

I love a good analogy and often use them in client conversations. Catching a knife could be a bloody endeavor. In this story it's one of those multi purpose knives where you can use different tools for different jobs. Often enough the tool might not have the right size, length or capability. If you can imagine this knife falling to the floor, you wouldn't want to catch it either, right? Use the following symbolism and maybe you (buyers and agents alike) may or may not take a risk in "catching" certain types "knives".

The knife is a house. The blade (screwdriver, file, tweezers for plucking nose hairs, etc.) itself is the type of house. It could be a condo, single family detached, primary residence or investment/rental property. Different sizes and shapes, right?

The trajectory or flight path this knife is traveling is the market cycle. The path could be straight down or it could have an arc to it as if thrown up and forward through time, then falling down. In the case of a market cycle, this could be affected by many factors: location, size, condition, local economy, state of the lending industry, price and inventory, to name a few. In our San Diego market a good majority of home sales are bank controlled - short sale or bank owned. So the blade might be connected to a folding handle of different size and texture.

Catching the knife is the same as buying a house. Many buy for different reasons. Some will use it as a tool for short term pursuits and throw the knife back up in the air for someone else to catch (does buy low, sell high, ring a bell?). Others will leave it in the drawer just knowing it is there, enjoying ownership. With the upward path of any cycle, the homeowner doesn't necessarily have to engage in throwing the knife upward. Buying and holding is very, very wise in this market.

Whatever your purpose and role, don't be afraid to catch a falling knife, especially at the bottom of its trajectory. For buyers, don't just take my word for it. Ask someone (preferably a trusted source / professional) if this isn't the best time to buy real estate. Prices and interest rates are still low, inventory is fat. For real estate agents, yes we have to work harder to help our clients catch this knife with all the short sales and foreclosures out there. But we as agents have the tools for client success, one of them is an impenetrable Kevlar lined glove!

Sounds like a setup for another analogy...

Have a great weekend folks!

Marvin de la Vega

Okay, so I'm not an aspiring Pulitzer Prize winning author. I'm still searching for my voice as a blogger. As a hired professional I'd like to think I can be a decent wordsmith entering public and confidential comments in a listing to cause a buyer or another agent to want to come see my client's home. I'd also like to think that my buyers and I would do the same in response to someone else's verbal imagery and attention to detail.

Here are some of the finer examples of what our brethren out there are saying to sell their clients homes (these are cut and pasted from real listings, all expired):

"A beutiful property ready to move in. 4 spacious bedrooms. One bedroom/office downstairs. Large eclosed patio in a well mainteained community. Confidential Remarks: Short Sale Sale Price and Commions require lender approval. Commision split 50/50." I love the reckless abandon and blatant disregard for spellcheck here.

"Confidential Remarks: Call LA re LB. Home has talkative birds." Los Angeles, Long Beach? Do the birds convey with the property?

"NOT a short sale! NOT bank owned! Seller very motivated. Submit any offer!" I'll buy that for a dollar.

"Using an experienced short sale negotiator with 90% success rate." This one expired, part of the 10% I guess.

"CBB%: 100.00%" Commission to Buyer's Broker 100%?? (Typically 2.5%-3%). Quick, anyone, buy this!

" " (Nothing, zip, nada, no comments at all). I love this when agents have nothing to say.

And today's favorite - "Very Messy, Dirty, and outdated. Floor has soft spots. Hard wood floors may be damaged. Needs all new Flooring, appliances, and a seriously thorough cleaning. Crack in walls recommend buyers has stucture checked for stability. needs lots of work. Hold your breath or bring a mask."

Has anyone seen any funnier ones out there?

Have a great week.

Md

I've found myself in varied situations lately, from networking events to shopping at the grocery store to hangin' with the fellas meeting their friends. Sometimes my radar is on, sometimes not but my personality is such that I'm always aware of someone else's comfort and engagement in a conversation. Whether I'm actively looking to convert someone into a prospect or I just need them to pass the chips and salsa to this end of the table, I wouldn't want to exclude anyone.

I have noticed my elevator speech has evolved over the years, primarily because I listen to everyone else's routine. Sometimes I modify what I hear, sometimes I yawn like the MGM lion (yes it's a yawn, not a roar). Listening is key. So, what I've done is actually preface my speech (often just a few quick sentences) with preparatory questions. I'm usually the first to ask "what do you do?". Inevitably the question comes back in my direction.

So like a good listener, I tend to ask a lot of casual questions. I'm not a very good snake oil salesman but I am genuinely interested in what the other person has to say. Often this even helps me modify my shtick by incorporating what they've said, just to validate the fact I was indeed listening. However, in Southern California most people know about the state of our market. It's all over the media, even planted in the front yards of every neighborhood. So my speech often comes on the heels of what my audience is already aware of. Note: It really is a great time to be selling real estate in SoCal.

Without further adieu, when asked "So what do you do?", here's one of mine:

"You know a little about the tremendous amount of foreclosures in San Diego, right? (Yes.) And the trouble a lot of homeowners are in, yes? (Yes!) Well I'm a REALTOR® that helps homeowners avoid foreclosure AND I've helped many first time buyers purchase a home they couldn't afford two years ago. Do you know anyone in either of those boats?

Most of the time they do, and the door is open...

As a good student, I'd love to hear yours - I'm always open to improvement. Anyone have any suggestions? Please share!

What's in your toolkit?

Thanks in advance,

Md

I have a listing that has expired and have re-listed it $50k less than the last list price. It's a normal sale, not a short sale or a bank owned foreclosure. It's even owned outright, no money owed (how's that for different?). Since re-listing I've had about a dozen calls in the first two days asking what the seller will accept.

Being that the majority of homes listed here in San Diego are bank controlled, buyer's agents tend to ask very pointed questions about price. REO agents tend to be tight lipped while short sale agents are very free flowing with info, often to the point of saying what the highest offer is.

But many real estate agents will not even show the home unless they "pre-negotiate" the price. I'm seeing this a lot lately. It almost bugs me.

Now I tend to be very diplomatic and say something to the tune of "Make sure you run the comps, you'll see why we priced it there. If your client likes the home enough to write an offer, advise them to do the best they can. We'll work with you."

So, regarding a normal sale my question to you is, how would you answer the question, "What is your client's bottom line?"?

Thanks in advance for your input.

Md

How to Buy a Short Sale Home - Simplified

Here is what I recommend to buyers not in tune with what a short sale might entail. A good buyer's agent can walk their client through the process with this as a thumbnail sketch.

1. Get pre-qualified / pre-approved.

2. Set realistic search parameters based on what you can afford and what you need.

3. Interview agents. Get good help. Commit to one agent.

4. The house hunt. See as many as it takes to make a wise, swift decision; bring a clipboard/checklist for notes.

5. House found. Have your agent call the listing agent for info. Many good agents will be free flowing with info, some will not. Ask listing agent for their protocol - many are different in their approach to a short sale, unfortunately.

6. The offer. Run the comps (recent comparable sales). Be realistic in your offer, look at it from your perspective and the short sale bank's as well. "Too low = No Go, Too High = Bye-Bye". Cheap rhyme, couldn't cut it as a rapper Emcee Emdee. While everything is negotiable, know that the short sale bank might not approve all requests (repairs, credit for closing costs, home warranty, etc.). SALE PRICE, TERMS & CONDITIONS ARE SUBJECT TO LIEN HOLDER APPROVAL.

7. Wait. Listing agent will submit entire short sale package. If you're in it to win it, HANG IN THERE!

8. Check in with the listing agent. Ask for updates. Refrain from being the 9-year old asking "are we there yet?" every 10 seconds.

9. There are tons of short sales on the market, not all are successful. Be ready to write more than one offer on different houses. Go back to #4.

10. Preliminary approval. Expect the bank to resist a little, if the seller hasn't already. Hint: a good listing agent knows what banks will give/take and will not advise their seller to give the house away. Listing agent will then notify you of Bank's proposal. Agents reading this - don't cry if your commission is cut a little, your client is buying the house of their dreams. Be happy for them.

11. Written Approval - Hallelujah! Make sure it matches what was negotiated in the preliminary approval. If not, don't bail out; everything is still negotiable.

12. If it's all good, open escrow (start the normal transaction).

13. Close escrow. Here are your keys.

Note: If you (or your agent) are in a time crunch or have an aversion to short sales, look the other way - although, normal sales (not short sale or bank owned) are a needle in the haystack in SoCal. They really are not difficult, just time consuming. Go get lucky...

Too simple? Go back to #3.

Peace,

MC Md