Christopher's Hemet CA Real Estate Blog - Mission Grove Realty: September 2007

Hemet is soon to have one of the first of over 100 new "Fresh & Easy" food stores slated to open throughout the South West. Opening soon at the South West Corner of Florida Ave. and Lyon, U.K. based Tesco Foods has high hopes for this location and over 100 others scattered across the State of California, Nevada and Arizona to follow over the coming months.

At the very least, the shopping center at Florida and Lyon has received a much needed face lift as a result of the soon to open food store. Although complete details of the products and services to be offered at the Fresh and Easy stores is not readily available, it seems that these stores may mirror U.K. Tesco stores on a smaller scale.

Tesco in the U.K. offers a wide range of standard food and household products plus regional variations designed to attract more local business. You can find Tesco stores throughout England similar to what we see with Stater Brothers throughout the state of California. Just about every neighborhood has one within a stones throw. Major differences between the two other than being located half way around the globe and across the "pond", are Tesco's focus on prepared foods and offerings that change to meet a specific region.  Although you will find many Asian products in all stores, the variety will change from each region. Focusing on the consumers needs has helped them maintain market share.

Can California handle another food store? If they focus on the needs of the consumer on a local level, there is certainly room for them in this market. Stores like Wal-Mart, Trader Joe's and Stater Brothers rely on the "all things to everyone" approach. You can find just about the same items at all stores with little varietal change between locations. You will likely find the same items at all stores.

If Tesco's Fresh and Easy stores focus on area consumers by changing their offerings as they have done in the United Kingdom and offer freshly prepared foods that meet local tastes with a good variety, they may just fill a niche in the market. Maybe they will bring back the feel of the long missing neighborhood store. Only time will tell and we wont have to wait long to see the results. I look forward to seeing the store's grand opening.

More Tesco - Fresh & Easy News 

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California's Real Estate Market Snapshot for September 2007 shows a
dramatic drop in the average home sale prices. Dont let this one fool you
though as the higher end of the market has seen a substantial drop in activity mainly due to turmoil withing the lending industry which has greatly effected the "Jumbo" loan market.  

Unsold inventory is on the rise as expected yet only up 5.9% over last year. This report does not include new home inventory or sale data. One surprise is the median days on market compared to the median days on market. With sales down by 22% and iventory up a staggering 46.6%, one would expect the average days on market to be increasing.

What does all of this mean to to the average consumer or investor? Not a whole lot that you can hang your hat on unfortunately. New home builders continue to build and their increased inventories will continue to cause concern and further supress some of the market. This could be a great time for investors to seek out failing builders and purchase unsold inventory. I would not recommend this approach to the average home buyer. 

The next few months will provide us a more solid view of things to come. With the stock market reaching all time highs, it would suggest that what the real estate market is experiencing is much less of a 'Bubble" than a result of lenders being exposed due to the lack of rapid appreciation. Do we all think that with lenders offering 100% financing, negative amortization and loans with little to no qualifying documentation that these practices would not come back to haunt them? Some of these loan products would require 12-20% annual appreciation in order to go unnoticed. Lenders have been caught, the market has been effected and it will take some time to figure out how this will be handled.

The bottom line.....We still have demand for housing, California has the fifth largest economy IN THE WORLD, and regardeless of East Coast opinion, the state is not set to fall into the ocean due to a major earthquake. California IS and will always be an expensive place to live. Housing affordability issues will, in all likelyhood, never be solved.

A recipe for disaster? I dont think so.

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Riverside County closings are at an all time low of 30% on average.

What does this mean to clients who have their home "sold" and in escrow.  Only 3 out of 10 property sales in Riverside County, California  are making it to close. I would imaging that Riverside County is not the only place in the County experiencing this.

The drop, from an average close ratio of 70%,  has been attributed to a combination of lending issues and foreclosure proceeding that were not stopped before close. Lending issues were the main cause of escrow "fall out". Only a small percentage of fall out has been attributed to foreclosure issues which might have been avoided through client and agent communication. Within the "lending issues" cause  were sellers who cancelled because of extension requests from buyers or other issues related to escrow time extensions.

Mortgage industry issues have left fewer lenders providing funds and those lenders are, at this point, having to work double time to process loans. Particularly when it comes to Government guaranteed loans (FHA, VA, Section 184 and others) Investors are also requiring more information and taking their time investigating buyer qualifications and waiting for verifications of employment, assets and lastly, the verification of a properties appraised value. It simply takes more time to process the average loan, regardless of what some lenders will say when they are looking for business.

Although a 14 day, 20 or 30 day escrow is still possible....I would not count on ANY escrow closing on time. Not that it cant or wont happen....just doesnt count on it. You will be setting yourself up for an emotional roller coaster ride that may leave you as a statistic rather than being a successful home seller. Do you want to go through the process a second time? I sure hope not. Neither does anyone else involved. Whatever you do, do not buy another home, unless you are financially and emotionally prepared to do so, until your current home has closed escrow and the funds are in your hands.

So, what do you do when your home doesnt close on time?

Threatening your agent, escrow or anyone else will certainly not help your situation. Everyone involved has a vested interest in making it to the close. No one benefits when your escrow goes beyond the close date or fails to close entirely.

What can you do?

• KEEP YOUR COOL!
• Keep an open line of communication with your agent and escrow.
• Grant an extension.
• Ask for per Diem charges in Oder to grand an extension (ASK....Do Not DEMAND)
• Be Patient....The answers you may want today may not be available....or known.
• Keep your cool.
• Ask to speak to the lender directly. Be polite as your agent has already rattled their cage.
• Ask if there is anything that YOU can do to assist the buyer.
• Keep an open mind.
• Trust that all involved are doing everything they can to close the transaction.
• Cancel and put back on the market.
• KEEP YOUR COOL.

Remember that everything happens as it is supposed to happen. Adding additional stress to the situation will not make anything, other than the shortening your life span, happen any sooner. Rest assured, everyone involved is working behind the scenes to to get the job done. Keeping you cool may help you from becoming a statistic and having to see that "for sale sign" go up....again.

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So, you have made a listing appointment. A listing that you want to take.

Assuming that you already have a great listing presentation. You are confident and well prepared.  When do you review your presentation with the seller?

When attending listing presentations with other agents, I have found the transition from the personal side to the business side of a listing to be the most difficult and awkward for both the agent and the seller. An intial investment of your time, before your presentation, can have huge benefits for everyone involved. 

Why not shoot first and ask questions later?

 After a brief introduction and confirmation, I will ask the homeowner to turn on every light in the home before we tour it together. While the homeowner is turning on all of the lights, I prepare my camera and have a note pad and pen in hand. When they return, I let them know that I will be taking photos as we go. Rarely will they object and confirms ther committment to listing their home.

While touring the home and taking photographs, make notes and fill out a visual inspection form (AVI if utilized in your area) along the way. Keep the homeowner involved in the process and use the time to ask all of your questions about the property. If you need something moved for a photograph, your client can assist you then and there. Most are more than willing to make immediate changes to get the best photos.  

If a home needs major help before taking photos for your marketing materials, take them anyway. Review them with your seller and e-mail or hand deliver copies of the photos along with a list of items they have agreed to address.  Most sellers will be more motivated to follow your suggestions and make those corrections quicker when you have completed this step with them. The bottom line....ALWAYS take photos first and return for more after any work required is completed. 

When you keep the seller involved in the process , you will find that moving to the business side of the listing is more natural and easier for both parties.  You will both be better prepared, more relaxed, confident, and ready to complete the listing.

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We all know that the past 5 years, the number of people attempting the practice of real estate has more than doubled. 

It is estimated that, by years end, nearly 50% of those practicing real estate will leave the business in pursuit of...something else. 

Although it is sad to see some of them go, this cloud does have a silver lining.  

If the real estate business as a whole were down 50% and

50% of agents leave the market ......

                                           Just how much business if left for me....and YOU?

      The fact of the matter is that someone is busy. 
                         Someone is working. 
                Some one's business is booming. 
     Not everyone's business, SOMEONES BUSINESS.

             That  someone might as well  be YOU!

Real estate math can work as easily for you as against you. Look at the figures here and really think about the math and how it relates to your business. 50 percent of the buyers...GONE. 50 percent of real estate practitioners....GONE.  Business does exist. You have to go out and get it. Get your share before someone else does.

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Christopher Walker - REO Broker and Realtor with Mission Grove Realty is a proud member of the Active Rain real estate network.

Can a few minutes of your time and less than $50.00 be all you need to protect your home?

You don't have to rush out and buy a home security system to protect your home and your valuables. Not unless you have a Million dollar art collection. If you do, there is no need to read on. For the rest of us, effective home protection does not have to break the bank.

• Making certain that all of your windows and doors have working and properly installed locks is the first line of defense in stopping would be thieves. The #1 entrance point thieves use is through an unlocked window or door.  Inspect all of your locks and secure them when you leave.
• Install secondary window and door locks.
• Installing security system and community watch decals and community watch, in a visible location, on windows and doors along with the addition of a yard sign can be just as effective as installing a security system in most cases. You can purchase decals and yard signs online, from various sources, for less than $10.00. Buy them only from a reputable seller. Remember that they will have your address. I recommend having these items shipped to another location such as your office. Just in case.
• Inspect the lighting around your home. A well lit home will deter thieves and increase safety bot inside and outside of your home.
• Your nosy neighbor just may be they key to completing a home protection plan. Get to know your neighbors, exchange phone numbers and agree to watch out for each others homes.

An ounce of prevention (Develop a home security plan) is worth a pound of cure (Insurance claims that increase premiums).

Home security does not have to be expensive and you probably don't need the added, monthly expense of a security system. In many cases, they are more hassle than they are truly worth. Thieves will enter a home and be gone long before someone arrives to respond.

The ActiveRain Real Estate Network is a social network of real estate agents, mortgage professionals and others involved in the real estate industry. The information provided in this blog and elsewhere can help homeowners, investors and Realtors find the information they need to make better, and informed real estate decisions. Mission Grove Realty is proud to be a contributing member of Active Rain.

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Christopher Walker - REO Broker and Realtor with Mission Grove Realty is a proud member of the Active Rain real estate network.

There are many "flat fee" real estate start ups  revolving around "partial service" and "do it yourself" listing platforms....There are also thousands of homes available in almost any market area. Could choosing Redfin, or one of many others desperate for your business be the right choice when considering the sale of your home?

How could your choice effect you?

Most "limited full service" listing companies, and their "clients",  find that other agents avoid their listings. Having no single agent to turn to for required documentation, additional information and a lack of "personal" service creates tension and, in many cases, additional work for the selling agent. Work that is typically handled by a listing agent.  Worse yet, some "limited service" and "flat fee services" provide some of the necessary forms and  advice yet, leave their completion to the homeowner. This could create additional liability for both the home seller and the agent who represents a potential buyer. This, in itself, requires thorough consideration by all parties involved. Burdening a potential buyer and agent with additional, and unnecessary liability is something that any responsible broker will surely not allow.

Another basic reason that this type of listing may be avoided is that there are many other homes available. After narrowing potential properties to meet a clients specific needs,. agents may find that they still have far too many to remaining.  How might a professional Realtor narrow their search ?

• Familiarity - Does the Realtor recognize the listing agent or agency? Does the agent play well with others? Are they responsive knowledgeable, have a reputation for closing on time?
• Accessibility - Is the property easy to show? Does it have a lockbox typical to the area or will it require multiple calls, appointment setting and additional effort to schedule a simple showing.
• Commission - What will an agent be paid to sell the home?  An offer of 1 -2% is certain to influence a decision when there is an exact model match offering 3.5% or more. Listing a property and offering compensation is a job offer. Will you be attracting applicants?
• Time on Market - The time on market can be an indicator of many things. Some will be quite obvious and others only evident to an experienced agent. Local agents may know of neighborhood issues, past or current issues with a particular builder, prior physical issues with the property itself a local agent can address these issues. Can you?

Selling your home involves much more than analyzing the cost of listing. You will be offering compensation to a selling agent if you plan on listing on the MLS. want additional "add on" services offered by "DIY" listing providers and the cost will usually go up. Add a full marketing package and???? You may ultimately spend more than you think and end up with no one at your door. Carefully consider all of your options and weigh all of the costs before making any choice. A choice that could cost you much more than you ever imagined.

The ActiveRain Real Estate Network is a social network of real estate agents, mortgage professionals and others involved in the real estate industry. The information provided in this blog and elsewhere can help homeowners, investors and Realtors find the information they need to make better, and informed real estate decisions. Mission Grove Realty is proud to be a contributing member of Active Rain.

Join the Active Rain Network Now,
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Christopher Walker - REO Broker and Realtor with Mission Grove Realty is a proud member of the Active Rain real estate network.

Redfin and other "Hybrid" real estate service provider's "less is  more" business models can help sellers realize higher gains on the sale of their property.     

Some agencies, when seeing an offer presented by web based information companies like Redfin will cringe. Having an informational, rebate driven, company rather than a Realtor with personal involvement on the other side of a transaction does tend to create additional issues. Issues that must be addressed by a home seller and their real estate agent. Although both the seller and their real estate agent must be prepared for a little additional work, that work comes with huge paybacks.

An overlooked side to offers from "limited full service" startups like Redfin is the buyers motivation. With the Redfin "rebate at closing" enticement,  an uneducated or disillusioned buyer is usually motivated only by receiving a 2/3 rebate at closing. By Redfin's own claims, a buyer could receive a rebate averaging $10,000.00.

Why is this great news for a home seller? All one has to do is search Google for comments from Redfin "Satisfied Clients". The majority comment only on the rebate they received at close. Not their satisfaction with negotiations or the money they saved between the listed and sold price. Some are proud and quick to tout that there was no need to negotiate as they would receive a rebate at close. A rebate averaging $10,000.00.  "No need to negotiate!" "I got a rebate at closing". Want top dollar for your home? Your Realtor should be soliciting Redfin for business. Welcoming them into your community....and encouraging them to send buyers to your door.

It is easy to see the upside for sellers when you have an experienced, local Realtor on your side and a rebate driven buyer on the other! One that could mean much more for your home when you, and your agent, are willing to put forth a little extra effort.

Does your listing agent understand the various business philosophies out there when it comes to the changing world of real estate? You had better hope they do. Without this understanding, they may not be able to capitalize on the buyers true motivation and leave money on the table...worse yet, they may encourage you to walk away from a great offer. An offer from someone who says...who cares about price...Im getting a rebate!

Since the beginning of the year, there have been well over 40,000 jobs lost in the mortgage industry. I hate to say, I will not lose too much sleep over it. Not that I am cold hearted, it is just that we tend to forget those that will be effected the most as a result of the current "opportunities" facing all of us.

The mortgage side?...40k is a ton of folks...most of the folks involved in the "front end" of the industry entered that job market in the past few years.....they did not migrate from lending...to lending. Most will go back to retail or wherever they came from? The "back end" folks will go back to Dr's offices, accounting firms and other administrative positions that are readily available. Every local and regional paper has MANY of this type of job posting. Not too hard to find another job....just not the "easy money" they once had. Back to reality. Although their families will be effected in the short run, it is an easier transition with little trickle down effect. Paper, staples, Monster Beverage Company, Coffee?....some effect...just not anywhere near the effect the downturn in housing starts will surely have.

The loss of jobs on the construction side, in my opinion, is the biggest problem we are facing. Do you even stop to think about Ol' Bill the framer?....what about the roofer, sheetrock, cabinet maker, electrician, plumber and....all of the products and people associated with the building industry.....lumber, manufacturing, steel, copper, concrete and all of the workers down the line...Specialized tradesmen and women..Think of all of the products and people effected. . From basic commodities to computer systems, the chain is long and nearly endless.

The real estate agent side is not too different than the mortgage side.... A near mirror with a higher median age group.  Many will leave....just as quick as they entered real estate. Did most ever even practice real estate? They too will go back to their "regular" jobs. MANY industries lost large percentages of their workforce to the real estate industry over the past 5 years. They will now...get them back.

I still worry about "Bill the framer" though....and everyone down the line. Specialized tradesmen and women with no where to go. Most tend to look down on them and disregard the effects of real estate greed will have on them. We tend to look at the 20 something that will now be faced with losing the BMW, the ROLEX and all of the other STUFF we use to gauge success (Poor kid lost their BMW...what now? Awwww). Dont forget about Bill though. For he...and other men and women like him, form the largest percentage of our population. They will lose not a BMW, Mercedes or Rolex.  They will lose the BASICS...food clothing and shelter. And they are not just 40,00 strong.....They are the Millions. They are the ones we should have a true concern for. They are the ones that will truly be needing and deserving our help. A fine time for all of us to look at our priorities and....lose some STUFF.

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Christopher Walker - REO Broker and Realtor with Mission Grove Realty is a proud member of the Active Rain real estate network.