Know your limit to avoid buying on emotion

No way. It’s just not possible. Maybe the seller is not as motivated as we first thought.

What Is A Multiple Counter Offer?

A multiple counter lets you know the seller has received more than one offer and is making this multiple counter to two or more parties. The seller can also make different multiple counters to each of the parties involved. Typically what happens when you sign a counter offer, it means you have an agreement and can move into escrow. With a multiple counter, just because you agree to the terms, it doesn’t mean you have an agreement. The seller has to get back to you and resign the counter, notifying you of an acceptance.

Advantage Seller

In the golden days of real estate (circa 2007) a multiple counter offer was often used to eliminate the weaker buyers who typically had a lower down payment and maybe a less desirable credit score. There was a good chance the price would go up and an eager buyer might be willing to give up some contingencies or reduce their inspection times. But does it still mean that today?

With fewer qualified buyers, is a multiple counter offer still an effective strategy? Plus, as a buyer, how do you know there are actually more than one offer on the same property? The real answer is you don’t. The seller’s agent does not have to produce any evidence proving more than one offer.

So, what you are saying is the seller’s agent could possible be unethical in an attempt to make the prospective buyer bid up the price of the house and accept the sellers counter? No, I did not say that, I believe that is what you inferred from the material I presented.

The way to make you want something or desire it even more is to let you know that someone else also wants it. We learned this when we were kids.

Recently we were involved in a situation where the seller’s agent notified us they were making a multiple counter offer to our buyer. They countered back $5000 less than the asking price. Our buyer chose not to respond but to walk away. 45 days later they brought the price of the house down by $50,000. Was there more than one offer? We may never know.

What To Do?

When you make an offer on a house, you should set a limit as to the maximum price you will be willing to pay. Try and be realistic before you have an opportunity to become emotional. Determine the market price of the house when you make the offer and know the approximate cost of the repairs or changes you are going to make so you don’t blow your budget. Also, don’t place a higher value on the intangibles or on the amenities that are harder to quantify such as a view. It could be worth $25,000 to you but maybe $50,000 to someone else.
By thinking of these issues in advance, you may save yourself some money.

The transaction process at times can be a bumpy road for agents, not to mention a very stressful time homeowners. As a homeowner trying to navigate this process, you may discover the more information you obtain, the more confusing it becomes.

Pasadena Short Sale Guide

In today’s housing market it’s unfortunate that Short Sales and Foreclosures have become the rule and not the exception. While it’s definitely not a panacea, a successfully completed Short Sale is a much better option than the consequences from a Foreclosure.

You will also find links and additional resources to assist you with issues relating to your credit report, tax implications and a handy comparison of a Short Sale vs a Foreclosure, which I have also included here. It was put together by the Certified Distressed Property Institute.

Still have questions, or concerns? Give us a call at 626-432-4615. We are here to help.

View Pasadena area Short Sale Properties Listed For Sale

Pasadena Single Family Short Sales
Pasadena Townhome & Condominium Short Sales
South Pasadena Short Sales

I think what we have been seeing and experiencing with home prices and market activity defines the new normal. For those home sellers who continue to think we are only experienceing a dip and a rebound is just around the corner, are you also waiting for gasoline to return to $2.50 per gllon? Prices are going to fluctuate a few percentage points above and below the flatline for a while. Perhaps a long while.

Housing Market Characteristics

For the last couple of years if you were trying to sell your house, your chances were much better during the January – June period than they were during the July – December months. Could it be back to school, could it be the holiday season? Whatever it was, there was a tapering of demand in the back half of the year.

Annual Number of SF Sales in Pasadena

The other thing to point out is that monthly home sales are characterized by sizeable volume swings. So the next time you hear a media report that says monthly home sales increased or decreased by X %, you will understand that its nothing to get alarmed or excited about. That is one thng that has remained normal in either a bull or bear housing market.

Signs of Improvement?

For the housing market to begin appreciating again (and we are not speaking in terms of 2004-2006 appreciateion) certain things have to happen:

• interest rates have to be favorable. There is no doubt that current interst rates have never been more appealing. If you have not refinanced or if you have deceided to buy, what are you waiting for? Your housing dollar will never go farther.
• easier access to money – current lending policies and qualification requirements are keeping many people out of the housing market and placing a lid on demand. As business runs in cycles lending policies will eventually loosen up but it will be a slow process
• employment numbers will need to improve. Until more people are working and can meet the qualifications (see above) there will be a sluggish housing market.
• distressed properties – as long as there are plenty of short sales and foreclosures available for sale, price apprciation will be harder to obtain. Looking at markets where there are reported signs of a turnaround in housing, the market is either defined by fewer distressed propertis or a healthly local economy.

While our economy in Pasadena may be better than ther parts of California, we do have an above average inventory of homeowners who are either behind or underwater on their mortgage.

There's more to real estate than contracts and escrow

If you have been to an open house, bought or sold a home, you probably have an interesting story to tell. Now what if you do this all day, everyday? The House of Pasadena will present a fictionalized (or so they say) representation of the drama that makes this such an exciting industry to be in.

We have been privy to read the first few installments and it promises to be a very exciting introduction. Whether its buying a home, selling a home or working with an agent it offers an inside account of the everyday issues and turns it into one compelling story.

If you have ever thought about a career in real estate “The House of Pasadena” will be a great tutorial about what you can expect.

For those of you who are unfamiliar with the legislation, congratulations! You probably have not had to experience the financial hardship of being upside down on your home. To those homeowners who have been through a short sale or a foreclosure beginning in 2007 to present day, this law has provided some much needed financial relief.

Will Short Sales be Subject to Tax?

For instance, if you purchased your primary residence for $600,000 and then completed a successful short sale where your home was sold for $450,000, it results in a difference of $150,000. Since it was “forgiven” so to speak and it was not paid, our friends at the IRS view this as income. And everyone knows how you report income, you pay tax on it. So a double edge sword in which you receive both ends, a kick you when you’re down scenario. Lose your investment in your home and pay tax on the disparity between the purchase and final sales price. The courts call this double jeopardy when it applies to murder. When it applies to real estate we call it tax law.

Storm Clouds Loom

A precursor to foreclosure is a loan modification. With foreclosure becoming more and more of an arbitrary subjective process, loan modifications have become more commonplace. Far from ubiquitous, but more frequent. Read through a loan modification agreement. The agreements I have heard about are a negatively amortized mortgage in reverse. If your house payment was $2500 and the loan modification calls for a new payment of $1000, the difference of $1500 is just tacked onto the end of the mortgage. It doesn’t go away, it just kicks the can down the road until the eventual day of reckoning. Very much like the California budget process.

Implied in the loan modification is an eventual short sale, one day, sooner or later. No longer treading water, but sinking deeper. But it is an air tank allowing you to breathe until you decide its time to move on.

Preparing for the Big One?

With increasing loan modifications and a continual prolonging of the short sale process are we preparing for financial Armageddon? With the end of the Debt Forgiveness Act in sight, would you be better off selling your home this year as opposed to keeping it for an indefinite period of time and possibly facing a huge tax bill down the road?

At least if you were to sell this year you’re aware of you tax implications or lack thereof. Next year, it could be anybody’s guess as to what will happen. You would most definitely think the law would be extended, but these are crazy times. Who knows, it could possibly be given a 60-day extension just like the payroll tax cut.

This is not intended to be considered tax and legal advice. Please consult with the appropriate professional (Tax Attorney, CPA, etc) on your specific situation.

We Need to Communiate the Value We Provide

If you have been in the market to buy a home recently you are well versed in the examples of value. Look at 7-10 homes in one day and you begin very quickly to understand value. Features and amenities such as size, condition, upgrades, curb appeal and price offer a quick comparison of comparable home values. These are points that are easy to compare and usually rank high in consumer preferences.

Housing Values

Why do some homes sell within the first week with a couple of offers while others sit several months with no activity. Simply because they are perceived as offering a better value, there is a better price to value relationship. The same reason single family homes are preferred to condos or townhomes. Based on the price differences single family homes are offering a better value. Price can compensate for the lack of value, if condo prices were to drop 10%, you would begin to see an increase in sales.

These days real estate agents are faced with the question of “What Value do they bring to the transaction? Read most any real estate agents bio, contact us, or about us page and they will compliment themselves on the “service” aspect they bring to the transaction. Here is where the train usually begins to jump the track. Ask the agent to describe the service or value they provide in the transaction, or what distinguishes them from their competition.

Has Your Agent Communicated Their Value?

After asking them about their unique selling proposition, try finding out the main three benefits provided by their brokerage company. If they can’t tell you why they work for the company they do and the benefits you as a consumer will receive, maybe you should look behind door #2 and interview another agent. After all you are paying your agent a nice chunk of change, shouldn’t you understand the benefits of which you are supposedly entitled?

Selling a home should entail more than taking a few bad pictures and entering a couple of lines of text. Some agents do this very well and provide their clients with a great experience and service, while others rely completely on the “not what you know, but who you know concept”, which hides a tremendous amount of incompetence. It’s this level of unprofessionalism that gives our industry an unfavorable reputation.

Selling Price or Selling the Value

I learned in my previous career you either sell on price or you sell on value. Selling the value is much more complex than selling on price. Its harder and requires more effort. It actually requires a well thought out strategy. You have to understand the features and the corresponding benefit derived from the product.

Conventional thinking in the real estate industry is if a house does not sell, it must be overpriced. I think we should evaluate all aspects of the transaction and the marketing plan (or lack of one) and did the agent do everything possible to aggressively sell the property.

Or did they just enter a few lousy pictures and a couple of lines of text?

Papa Don's Deli, 303 Pasadena Ave., South Pasadena

What is the foundation of any good sandwich? It is the bread and at Papa Don’s its always very fresh. You could actually sit and savor it with some olive oil and a glass of Chianti, but since that isn’t available you can enjoy it on a variety of hot and cold sandwiches available on the menu. Every day features a new special. The hot corned beef (Thursday) and the hot pork (Friday) are highly recommended from yours truly.

I have been fortunate to visit many cities and towns in my travels and one of the things I have always enjoyed is having the opportunity to drop in and patronize the local neighborhood eatery. Unfortunately, we don’t have that many around here and that is what makes Papa Don’s so special.

The proprietors Susanne and Samuel always do a great job of making you feel at home and are on a first name basis with many of their customers. It’s nice to walk into a local business and know that you as a customer are truly appreciated.

Stop in and give the a try. You will become a fan just like we have .


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Traffic in LA

Absurd? Outrageous? Well, possibly until you begin to dissect the reasons behind the State’s continuing intervention and delays that seem to inevitably prolong any recovery in housing.

Case in point, Kamala Harris, the Attorney General for California refuses to sign on to an agreement which would allow the big banks to pony up an estimated $25 billion (yes with a “b”) to settle disputes related to “robosigning” Seems like everyone is pushing for a settlement to get this case closed so we can move on to the next calamity with the exception of California.

Is the decision not to settle based upon political or financial reasons? Certainly not both? Well, possibly.

Political or Financial?

Political decisions are easy to disguise and usually based on theory, kind of like economics, so lets go with Financial for $200, Alex.

I guess we can also throw the political element in as well, don’t they always say “follow the money?”.

Local revenue – If homeowners are not making their monthly mortgage payment, what are they doing with the money? Granted many people are in the financial doldrums, but some are also in the same financial situation as to when they bought their home. Maybe the monthly payments have now escalated due to an adjustable rate mortgage, but whatever the reason, that monthly housing payment is not paying off the mortgage. Perhaps you are upside down several thousand dollars and realized your home will never regain its value, maybe a strategic default is in your future.

What is better for California, dollars being spent locally or monthly payments going into some lockbox to satisfy some investor?

Property taxes – When a property is in the foreclosure process, the monthly payment is not being made, but the property tax meter never stops running. So if your tax basis is $500,000, your property taxes continue to accrue monthly based upon that amount. You may qualify for a loan modification, but that will not affect the taxable value of your home.

Property taxes can be reassessed through an appeal process or the primary manner is to sell the property. Selling today will most likely result in a lower price than when the property was purchased, thus a lower property tax for the new owner. The longer California can postpone the foreclosure process either through auction or “Short Sale“, the longer the higher property tax accumulates. The balance of which is always paid and brought current at the escrow closing.

The prevailing thought is that once these outstanding issues are resolved, the foreclosure process will begin to speed up. However, that was the prevailing thought last year until robosigning surfaced and created more delays.

Until this happens, don’t bother putting more change into the property tax meter, it’s collection process is the most efficient program ever adopted.

Speaking with many of our neighbors, a lot of us experienced a near sleepless night. The wind would howl, then almost slow to a whisper before it would rev back up again and blow open the windows of our house. Luckily, we were spared the hostility of mother nature. Unfortunately, many others were not.

The morning after looked like many of the images we see on television after a hurricane develops in the gulf coast or on the eastern seaboard. The only difference is many of those residents have early warning and time to prepare. I dare say none of the residents of Pasadena or the surrounding cities were prepared for the devastation that awaited them upon daybreak.

Trees that had to be near 100 years old were uprooted with an attached square of sod. Traffic signals were twisted and reconfigured into 90 degree angles and still flashed red, and streetlights snapped at their base or lost their luminous globe.

The Cleanup Begins

With a storm of this magnitude, the reality begins to set in when you flip on the light switch and the electricity is not working. In most cases this was realized well in advance of the next morning as inside temperatures approached 60 degrees. With daybreak on Thursday morning, the process of clean up and repair began.

The City of Pasadena seemed to take the lead in restoring electricity to its residents. As of this evening many residents in surrounding communities were still without power.

To make matters, worse if you upgraded to a tankless water heater, you are beginning to question your decision as you have been without hot water for a couple of days. Now what do you do? Tanklesss water heaters are powered by electricity, not gas.

As a resident of Pasadena, I would like to say Thank You, to all of the City employees and everyone else who has been working tirelessly to restore our electricity and clean our streets. Your efforts have been greatly appreciated.

When you see these people in the next few days, honk, wave or just pull over and tell them “Thank You”.

Technology can be the greatest thing, that is when it works like it is supposed to. If it can actually save space, save time and save paper, then it becomes a real advantage.

A real estate transaction file can easily be 3″ thick, so cutting down on the use of paper is a wonderful benefit, increasing your productivity is a welcomed bonus.

The iPad has become a great tool for real estate agents. Now in addition to using it at open houses to watch videos and play the latest game from the App Store such as Angry Birds, it can also be used to quickly create contracts and view disclosures.

With this new App named PDF Expert, the iPad has become a tool no agent should be without. Create, sign, and email all from your iPad. If you are still using your iPad as a glorified contact manager to make yourself appear tech savvy, we’ll now you have something you can use to razzle dazzle your clients and associates in the office.

Lastly, if you’re one of those agents who still feels the need to hand write a contract as opposed to completing it on the computer, it’s time to get on board the technology train. So update that picture of yourself you have been using for the last 20 years and learn a new skill. The times are a changing.

We have created a short instructional video to demonstrate its productivity and user friendliness.

Another great App is called Open Home Pro. With this you can create a presentation of your open house, complete with pictures and a description of the property. Plus the unique benefit of this tool allows visitors to sign into the iPad as a guestbook with their contact information. You might consider finding a good level surface on which to view the iPad as opposed to handing it back and forth. Any changes to the listing will generate an email to the visitors who signed in. A short informational video of Open Home Pro is included here.