Melissa Loughridge Savenko

I got home this past Sunday at 3 a.m. from vacation in Costa Rica. WONDERFUL. Beautiful country, super nice people, amazing wildlife. I'll post a picture album once I can dig through all the work stuff. But I do not recommend the return trip schedule - leave house at 5 a.m., drive 2 hours to San Jose, fly from San Jose to Guatemala, fly from Guatemala to El Salvador, fly from El Salvador to Dulles, drive from Dulles to Richmond, collapse into exhausted sleep at 3:30 a.m., just over a full 24 hours later.

But enough whining - the trip was well worth that inconvenience. And I've come back to some good news:

1. We got another confirmed, executed reservation for the Windsor Court condominiums. Whoopee!
2. Housing sales rose sharply - 5.2%, I believe - higher in February 2009, far outstripping the economists' projected sales decline of 0.9%.
3. I had a new listing come on the market, 2113 Floyd Avenue, and the Open House on Sunday (yes, the same Sunday I returned from the "planes, trains, and automobiles" journey back from Costa Rica) was JAMMED, we guesstimate 40-50 people came through, in approximately 25 groups. Even better than the raw numbers was this fact: NINE of the sign-ins and/or attendees either came WITH their buyer's agent or signed in indicating they had a specific buyer's agent.

For folks not in the business, what is the significance of those nine buyer's agent represented buyers? It means these are actually serous buyers, READY TO BUY, not "looky loos" or tire kickers. Put another way, more than 33% of the folks that came through the Open House are likely to buy, and likely to buy soon.

Based on what I was hearing on NPR yesterday, lots of economists and analysts are prepared to chalk up the sharp spike in February home sales as a one-time deal, a fluke, an aberration. One talking head said it was due to the weather - a colder than average December and January depressed sales, and a warmer than average February unlocked that pent-up December and January demand.

I'm going to be a bit more bullish. Based on Sunday's Open House, activity at my other listings, and anecdotal evidence from other Realtors, I'm cautiously optimistic that this increased sales activity, illustrated by the February 2009 national sales numbers, is going to be a continued trend, at least in certain areas of the City of Richmond and close-in Henrico. But we'll just have to keep watching the data, and keeping our fingers crossed.

I've got to get back into my blogging and I have a number of topics I want to cover, some of which have been on the list for a while:

• A photo album for my new listing, 2113 Floyd Avenue;
• "It's Not Personal, It's Business": Why I Like Working with Investors;
• Update on the Status of the Certain City Schools' Physical Plants - Binford, Chandler Middle, and Richmond Community;
• Affordable Housing Week; and
• The 2009 Downtown Loft Tour.

I've been toying with writing a posting on my "Top Picks" for best real estate deals out there in the Fan and Museum District, with some Northside and West End tidbits thrown in here and there. I'd want to keep the list on a running basis, adding as new stuff comes on. But I'd want to explain WHY I think certain properties are such good deals. I'm a bit gun-shy that any such list would somehow tick people off - which would not at all be the objective. But I've already experienced the effect of unintended consequences two or three times from this blog, so I'm treading carefully here.

So, I pose the question to the readers: What do you think about such a list? What are the potential down sides? What "rules" should govern? For example, I think it would be fair, and smart, to restrict myself from including my own listings on the list. Should there be other limits?

Any suggestions and ideas would be GREATLY appreciated. Have a great day! Or "pura vida!" as the Costa Ricans would say. [:)]

In the interest of full disclosure, I have two personal conflicts with this story: (i) I graduated from the University of Richmond Law School in 1998, and have very fond memories of my times there; and (ii) my Dad's general contracting firm, Loughridge & Company LLC, was the general contractor on the University of Richmond Downtown project.

That out of the way, let me highlight something that I'm not sure people are aware of: Did you know that UR Downtown is the first project in the state to be BOTH a historic tax credit renovation AND LEED certified? ["LEED" stands for "Leadership in Energy & Environmental Design" Green Building Rating System. To receive LEED certification, the building has to meet very exacting standards for both energy conservation and use and incorporation of environmentally friendly products]. Not only that, but the project received GOLD LEED certification, which is almost as high as you can go.

Adapt. Recycle. Renew. Reuse. This is a textbook example of those standards in action. That's really something to be proud of, for the developer, The Wilton Companies, the contractor, Loughridge & Company LLC, and University of Richmond, the ultimate end user. Let's hope this project gets some local, state and national recognition for successfully integrating two major enviromentally conscious construction approaches - LEED certification, and adaptive reuse of a historic structure. Richmond rocks.

Well, I think CarMax, the successful child of poor ole bankrupt Circuit City, is still doing pretty good. For those of you not in the know, CarMax developed the model of "no haggle pricing" for the used car industry. No annoying salespeople. No back and forth to "the manager" to see if a deal would work. Just a sticker in the window that gives the price and other relevant used car information. So you can walk onto the lot, browse around for what you want, and buy a car without all the crazy annoying process that is part of thee REGULAR used car sales world.

Why can't we do the same thing with houses?

Now, I know houses are not the same as cars, but can't the same principles apply? In my opinion,there are three main areas that can lead to problems in the typical home sale:

1. Financing;
2. Inspections; and
3. Appraisals

Now, there is a standard way to deal with the financing issue - the issue of whether or not the potential buyers can actually afford to buy the house and get bank financing to do so. It is standard to require a bank prequalification letter with the offer when it is submitted. Then, the potential buyers have a certain number of days to nail down their financing, and if that time passes, and their financing falls through, the sellers are entitled to keep the earnest money deposit, the cash they put down on the house when they submitted the offer.

Why not do the something with the other two potential problem areas, inspections and appraisals, to eliminate them as issues?

For example, why not have the house pre-inspected, and either (i) make all suggested repairs, and provide receipts along with the inspection report to any potential buyer; or (ii) provide the inspection report, and discount the list price to include the cost of those repairs?

The appraisal, as I have discussed in a previous post, is the bank's assessment of the "actual value" of the home, based on recent proximate sales, which may be more or less than the buyer has offered to pay in the standard buying scenario. If the appraisal ends up being less than the contract price, and the buyer is financing the purchase (as opposed to paying cash, in which case you eliminate the appraisal altogether) then the seller has no choice but to (i) lower the price to the appraisal number, or (ii) walk away from the deal.

Both negotiations over inspections and appraisals can make deals go off the rails weeks, or even months, into a transaction. So why not take those issues off the table and offer essentially no-haggle pricing?

In this model the seller would:

1. Get an inspection, provide the inspection report to any potential buyer and either (i) make all indicated repairs and provide receipts for same; or (ii) discount the price to accommodate the repair costs:
2. Get an appraisal that set a lender's valuation of the house, so there were no last minute surprises if the valuation came in lower than the offer price.

Doesn't this approach make sense from a purely practical standpoint? Houses would be priced realistically, rather than with some premium that gave the sellers "room to negotiate," you would have some assurances that you could get financing for the list price, because some appraisal firm would have confirmed the value. People wouldn't waste their time trying to make deals happen that fall apart over the unknowns of inspection or appraisal.

It seems to make sense to me. But maybe I'm missing something. It seems to me with this approach, the focus would become finding the right house, and getting the transaction done. It would be a much more collaborative and pleasant experience, I would expect, because there aren't these hidden issues to derail a deal.

So, shouldn't Realtors be stealing a page from the CarMax play book?

This is something that both makes me crazy and makes me scratch my head in confusion. Crazy, because I have to deal with the (usually extremely well-meaning, but clueless) agents from outside of the historic City neighborhoods where I do most of my work. Scratch my head, because I do not understand why buyers choose a real estate agent, responsible for one of the most important purchases they will EVER make, being paid a lot of money for the advice and service offered during the transaction, who hasn't got a clue about the area where they are buying.

Now, let's step back and acknowledge a few relevant facts.

1. I work mainly in old City neighborhoods, that cannot be "comped" the same way subdivisions/newer construction in a suburban area can;
2. In these old City neighborhoods, there are differences and variations in value literally block-by-block, and within blocks, house-by-house;
3. Old houses have issues that you never see in new construction - asbestos, lead pipes, they aren't "square" any more - but these issues are usually resolvable, if you are familiar with them; and
4. It takes time to develop the experience and expertise to advise clients buying an old house in a unique neighborhood.

I am compelled to write about buyer's using inexperienced [in the area] agents because it's been happening a LOT. We're lucky down here in the Fan, I freely admit it. Our median sales prices are substantially higher than the regional median, our market has been less impacted by the economic downturn, and we have, it seems, ever-increasing demand for a unique product. But I'd say 50% or more of the potential buyers we're seeing - at Open Houses, at showings, calling on signs - are relocating "empty nesters" coming from somewhere in the Greater Metropolitan area, often from western Henrico, or Goochland, or Chesterfield. And many of these folks have NEVER lived in an urban environment. So they are not familiar with the realities of urban living, and they are comparing their experiences with buying new (or newer) construction homes to the experience of buying a 100+ year old house, which is a completely different animal.

I also freely acknowledge that this goes both ways. I can't sell - or to be more accurate, I should not be selling - in the suburban markets, with very few exceptions. I made the mistake once of working with a very lovely couple relocating from Arizona. His job was going to be in Chesterfield, and they had done research on school systems and decided they wanted their daughter to be in the Cosby High School District. So, I showed them houses in Hampton Park, and Woodlake, and other subdivisions out that way. I made myself NUTS trying to learn the area, and probably spent hundreds of dollars in gas driving back-and-forth from the Fan to the Southside. Ultimately, they were unable to move because they could not sell their house in Arizona. But it was a good lesson learned. Next time I had clients searching in a neighborhood or area I am unfamiliar with, I decided I would refer them out to a good agent that specializes in that area. I was working really hard, trying to do right by those clients, but I just didn't know enough. I wasn't value-added to the transaction.

A friend of mine told me a story about his family's relocation to Richmond from Northern Virginia. At the time it struck me as a bit odd, but now it seems pretty daggone smart. His Dad hired two different agents - one who specialized in South of the River, one who specialized in North of the River. That way he got true expertise, wherever he ultimately decided to buy.

Now, some agents will tell you they can sell anywhere. Baloney. With very few exceptions, like my broker, who has been in the business in Richmond for 34+ years, there is no way a real estate agent can know Brandermill, and Wyndham, and the Fan, and Bellevue, and Stratford Hills, and Hampton Park, and new construction, and historic homes, and bare land, and...you get the idea. I personally think having specific focus and expertise is a good thing.

So, if you know where you want to move, please, consider using an agent that specializes in that area. Don't get stuck using your best friend's daughter, or your work colleague's brother. DO YOUR RESEARCH. Drive through your dream neighborhood, and see which names you see on the "For Sale" signs. Call around and ask friends, family, and business colleagues that live in the area if they've had a good experience with an agent. Do your due diligence on the Internet. Interview multiple agents, at least on the phone. Ask them some relevant questions:

1. How long have you been in the business?
2. How many houses have you sold, representing the buyer, in the neighborhood?
3. How many houses have you listed in that area?
4. What are some of the best features of the neighborhood?
5. What are some of the worst features of the neighborhood?
6. What services do you provide to your buyer clients? How can I expect you to work with me?
7. What makes you the best choice for the job?

Remember, the buyer's agent is paid by the seller, so compensation isn't an issue. You are just looking for the best expert, with the best personal fit for you. Just find someone who knows their stuff. Buying a house is a big deal. Make sure you've got the best agent for the job. Good luck, and happy buying.

USING THE INTERNET IN YOUR HOUSE HUNT - HELP OR HINDRANCE?

The Internet is a hugely important tool for home buying, and the rise of the Internet as a source of information in the home-buying process has been nothing short of meteoric. Look at these statistics, on how many people use the Internet in their home-search process:

• 1996: Under 20%
• 2006: 80%
• 2007: 84%
• 2008: 87%

I bet by 2010 we're pretty d*ggone close to 100% of people using the Internet independently in their home search. But people need to realize that while the Internet is a highly efficient tool to help you collect information, it is not the end-all, be-all in the home-buying process. And no amount of data can transform any buyer, no matter how smart, into the real estate expert that a good, conscientious Realtor, specializing in the market where you want to buy, will be.

In fact, I'm sitting here, giggling, thinking of those commercials, "No, I'm not a surgeon, but I DID stay at a Holiday Inn Express last night!" The same thing seems to happen in real estate all the time. And I'll tell you who disproportionately decides some Internet research has made them an expert in the purchase and sale of residential real estate: doctors, lawyers, and to a lesser degree, investment bankers. In fact, lawyers are the absolute worst for deciding to represent themselves in the purchase, and to a lesser extent sale, of residential real estate. I know real estate agents are NOT considered on the same professional level as lawyers, doctors and bankers. I also know that fact is primarily the fault of the real estate agents themselves. But people, really. Doing Internet research and then deciding that you can represent yourself in the purchase or sale of a home - it's the equivalent of me reading medical journals for a week and then deciding that I know enough to successfully perform an appendectomy.

The Internet can give you vast amounts of data, but unless you know how to sift through that data, evaluate it, and assess the realities of the market on the ground, it is of limited value. As Mark Twain famously said: "There are three kinds of lies: lies, damn lies, and statistics."

As an example, data on home sales in Area 10 in the Central Virginia MLS, which includes Church Hill, Downtown, Jackson Ward, Carver, the Fan, Oregon Hill, Maymont, Byrd Park and the Museum District, does not help you AT ALL if you aren't able to break down that data into those specific neighborhoods. What streets define those specific neighborhoods? Do you know about the elementary schools? That is a critical element for resale, even if you do not have school-age children. What about the crime statistics for those sub-markets? What accounts for the price differential between a sale of a 3,000 square foot home on Grace Street versus Hanover Avenue in the Fan? Why are two houses within 1 block of each other priced $250,000 apart?

So use the Internet, but be aware of its limitations. Here's a great article from MSN that basically says the same thing. The Internet is a valuable HELP, but over-reliance turns it into a hindrance.