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The Price to Value Relationship

December 27, 2011 By Leave a Comment
We Need to Communiate the Value We Provide

How is value explained? Is it best defined as a monetary measure, or is it possibly related to a service that one provides. Is it tangible or intangible? The word “value” may best be described in an analogy that was used by Supreme Court Justice Potter Stewart when he attempted to explain obscenity..”I know it when I see it”.

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?

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Lunch at Papa Don’s Deli in South Pasadena

December 7, 2011 By Leave a Comment
Papa Don's Deli, 303 Pasadena Ave., South Pasadena

Need a new place for lunch in South Pas? You should try Papa Don’s Deli. It is a great alternative to the same old burger & fries or even that other place that serves sub sandwiches. While it’s not on Fair Oaks Blvd or Mission Street (Restaurant Row), it’s not far around the corner. Go west on either Mission Street or Monterey Rd. and you will find Papa’s located at 303 Pasadena Avenue.

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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Filed Under: Current News

California’s Foreclosure Economy

December 6, 2011 By 1 Comment
Traffic in LA

With California’s budget deficit in the billions of dollars, is California’s Foreclosure Economy a plan designed to profit from distressed homeowners? Does the Golden State have an economic interest in prolonging the foreclosure process?

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.

    Filed Under: Current News Tagged With: ,

    To The City of Pasadena, Thank You

    December 3, 2011 By Leave a Comment
    Pasadena Street Light

    Wednesday nights wind storm was described as a hurricane without the rain. Growing up in Texas, we know wind. Here in Pasadena it’s not uncommon for a breeze, but we very seldom have wind. Wind that produces the destructive force of a hurricane.

    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”.

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    iPad in Real Estate, iGetit

    August 4, 2011 By 2 Comments
    ipad-2

    How many times have you rushed out, bought the latest electronic gadget, come home and set it up, only to find out it is not working the way it was advertised?

    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.

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    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.

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