Contra Costa, California Real Estate

I Don't Need No Stinkin' Realtor

A few days ago I was attending a meeting and struck up a conversation with a man who is house hunting to buy a home in Walnut Creek. He does his own research, he knows the school district where he wants his family to live and the individual API scores of those schools, he has driven through every neighborhood in the school district to determine the neighborhoods he likes the most, he's been tracking the average sold prices and days on market and he has signed up for auto-alerts on multiple websites.  He has definitely done his homework and said, "I don't really need a Realtor except to provide access to the homes and write the contract."

I stared at him for a moment in shock because this buyer's livelihood depends on the real estate industry so I expected that he, more than John Q. Public would have a better understanding of the actual work required of Realtors.

I took a moment to gather my thoughts and said, "On behalf of your Realtor, I want to thank you for utilizing all of the resources on the Internet to educate yourself.  This may come as a surprise but most of us are thrilled with buyers that take the time to conduct appropriate due diligence on their own behalf.  Acting as a glorified chauffeur has never, ever been the highest and best use of a professional Realtor's time.  It was a necessary service, nothing more.

For the sake of conversation, let's put aside my personal belief in the value of Realtors and let me ask you a few questions.

Do you know the questions to ask your mortgage loan officer to determine if your pre-qualification is valid or really just a pre-approval?

Do you know that the type of your mortgage financing could impact which homes you can buy?

Do you know the customary buyer and seller costs to ensure you aren't paying more than normal?

Do you know the Point of Sale requirements?

Do you know which seller disclosures are required by California Law and who is exempt?  If the seller is exempt, do you know the additional investigation that you might want to consider?

Do you know the difference between "passive" and "active" contingencies and how that lack of knowledge could potentially result in the loss of your earnest money deposit?

When you view homes, do you know what to look for that would indicate something should be professionally inspected?

Do you have a list of qualified professionals for Home, Pest, Roof, Chimney, Pool, Sewer Lateral, Geological and Structural inspections?

Do you have an additional list of qualified, licensed contractors who can competently complete the structural, health and safety items on those inspections at a competitive cost?

Do you know how to make a compelling request repairs from a seller who already feels like you "stole" the property even though you are paying fair market value?

Do you know appraisal requirements and is your internet homework sufficient that you could legitimately challenge an erroneous appraisal if needed?

When you write a contract, you will quickly realize that the majority of a selling agent's work starts when the contract is accepted.

I think the National Association of Realtors should change their ad campaign.  Rather than showing an impeccably dressed, well-groomed Realtor handing the keys to delighted homeowners, they should show the real work of our profession. The harried Realtor scurrying between inspection and appraisal appointments while on the phone following up with the mortgage lender and title company, arranging bids, badgering the HOA for the late documents, reading disclosures and negotating repairs - all within the tight contractual deadlines.  It wouldn't be pretty but would help dispel the perception of "easy job, easy money".

This Part III of the journey of how one battered home became a beauty using the FHA 203k Renovation Loan.  This post addresses the "sexy" part of the renovation - the kitchen!

To discover where this journey started, read Part I

To view the exterior renovation on this home, read Part II

While the FHA 203k Renovation program is time and paperwork intensive, it is an amazing opportunity to give new life to a home and create your dream home in the process.  The amazing part is that my buyer's down payment was 3.5% of the entire project (cost to purchase + cost to renovate)!

This home was built in 1950 and the kitchen reflected the standards of the day: 

• a small kitchen with an equally small doorway from the dining area 

• one outlet for appliances

• one very insufficient ceiling light fixture

• the exhaust fan above the stove was a hole in the ceiling with a slowly rotating fan

• chipped, yellow, old-school formica counters

• you get the idea....

• The first - and most dramatic - part of the kitchen renovation was to remove the wall and doorway between the dining area and the kitchen, creating a "great room" with the dining/living area.

• Upgrading the electrical panel to the entire home was required to upgrade the kitchen to the standards needed for current use

• The chipped yellow formica counters were removed and measured for new, beautiful Silestone counters

• The single ceiling light fixture was replaced with 5 recessed lights. Pendant lights above the counter were installed after the photo

• Dedicated electrical outlets were installed for all of the major appliances as required by current code plus a lot more for appliances

• The hole-in-the-ceiling exhaust fan was removed and replaced with an above-the-stove microwave with built-in exhaust fan.

• An unexpected benefit was that the piping for a gas stove was already in place behind the wall!

• In addition to the new microwave, the renovation included a new refrigerator and gas stove

• Pantry style cupboards were added on both sides of the refrigerator to compensate for the cupboards removed with the wall.

• The ceilings and walls were re-textured and are ready for paint

Ta da! The outdated (ugly), claustrophic kitchen is transformed to an open, updated modern kitchen!

If you want to create your dream home using the FHA 203k Renovation loan in Contra Costa county, California, I can guide you through the process.

This Part II of the journey of how one battered home became a beauty using the FHA 203k Renovation Loan.

To discover where this journey started, read Part I.

While the FHA 203k Renovation program is time and paperwork intensive, it is an amazing opportunity to give a home new life and create your dream home in the process.  The amazing part is that my client's down payment was 3.5% down of the entire project (cost to purchase + cost to renovate)!

• Replaced the non-functioning hot water heater with a Tankless hot water heater.  This allowed sufficient extra space to create a functional laundry area.

• Added drainage to direct water from the downspouts away from the foundation

• New roof and gutters

• New attic insulation, sealed ducts and sealed building envelope (windows and doors) - big savings on future utility bills! 

• Removed the overgrown Palm tree that was a rodent bridge to the attic

• New sewer clean-out

• Wonderful new 12 x 14 deck.  Previously this home only had access to the back yard and patio through the garage

• New French Doors to the deck (the purple paint in the room is soon to go!)

Part III is the "sexy" part of this Renovation - the kitchen!

If you want to create your dream home using the FHA 203k Renovation loan in Contra Costa county, California, I can guide you through the process.

This is the journey of how one battered home became a beauty using the FHA 203k Renovation Loan.

Let me give you a little background.  My client, an absolutely delightful woman who will be retiring in one year wanted to purchase a small, single story home that she could afford on her retirement income and was reasonably close to her grandchildren.  We viewed homes for over 7 months, made 5 offers and were out-bid by cash buyers each time.  It was time for a change in strategy - purchase a battered home and make it a beauty using the FHA Renovation Loan.

It's true that this program is time and paperwork intensive and not for the faint of heart, but wait until you see the results!

This is where we started....an 890 s.f., 2 bedroom, bank-owned home that had three positive attributes:  structurally sound with dual pane windows and original hardwood floors.  The list of problems was much longer:

• the roof and gutters were at the end of their useful life
• the insulation was so old that it had turned to dust (it was literally vacuumed out of the attic)
• an overgrown Palm tree was acting as a rodent bridge to the attic
• the electrical was original, outdated, insufficient for current needs and had been spliced and repaired so poorly that it was a hazard
• the hot water heater was broken
• the downspouts were draining to the foundation
• there was no sewer cleanout
• the exterior of the home hadn't been sealed or painted in years
• the closet in the small bedroom had been turned into a 2nd bathroom and a psuedo-closet had been constructed (another poor DIY project of a previous homeowner)

The kitchen had a slew of issues:

• Very small and out-dated with a narrow door from the dining area
• One ceiling light fixture
• One electric outlet (hm, do you plug in the microwave, the coffee maker or the toaster?)
• the exhaust over the stove was a hole in the ceiling with an old-school fan
• original, chipped, yellow formica counters
• One piece of good news - the cupboards were in decent shape!

 The home has a large back yard that is adjacent to Open Space but the only access to the yard was through the garage.

The retaining wall (the fence is on top of it) was starting to lean.

We visited the home several times, made our list of repairs and anticipated costs and added 20% for potential issues we couldn't see (and thank goodness we did!).  My client took a leap of faith that this battered home could become a beauty and submitted an offer to the bank.  Our offer was declined.

 I told my client, "Don't worry, an investor won't buy this house because it requires too much work.  We'll let the bank sit on it for awhile."  Two months later, we submitted our offer again and this time it was accepted.

Part II - photos of the renovation in progress, Exterior

Part III - The Kitchen renovation

If you want to create your dream home using the FHA 203k Renovation loan in Contra Costa county, California, I can guide you through the process.

I recently broke the "Agent's Car = Agent's Success" chains of bondage and purchased a Prius.  I get it, it's not a sexy car (just asked my husband who literally BEGGED me to buy another Mercedes) but the lure of 45 - 50 mpg and reducing my carbon footprint was a siren song that I couldn't resist.   My Prius fits four adults comfortably, has leather seats, premium sound, cool touch-screen for navigation, climate control, etc. It's true that the tires look like puffy doughnuts but I'll accept that in exchange for the smooth ride and $300 per month gas savings I've already realized.  In my opinion, it's the perfect Realtor car given the crazy number of miles we drive.

My bold and daring (practical) purchase started a series of unexpected conversations with other agents,  "I wanted to buy a hybrid car too, but aren't you worried that clients won't realize you're successful if you drive a Prius?"

Do clients choose their agent based on the car they drive?  I think that some clients do.  Success attracts success and cars tend to be the most obvious reflection.  Since my Prius purchase was a choice, I think I should buy a custom license plate frame that says, "Purchased By Choice, Not Necessity".  No, it needs to be more funny. Any suggestions?

I am representing the buyer on a short-sale that requires the approval of a 1st and 2nd lender.  That in itself isn't unusual.  What is CRAZY is that the short-sale approval is stalled over a gap of $25.86 payable to the 2nd lender.  You read that right, a mere $25.86.  My rough calculation on the per-diem loss to the 1st lender is $55 PER DAY but they won't approve the additional $25.86 payment to the 2nd lender to get this transaction closed. 

Both agents are willing to write a check for $25.86 or take $25.86 from our commission to get the approval matching between the lenders but, NO, we can't.  The 1st lender won't authorize the additional $25.86 to the 2nd lender and further states that "payment from any other party can't show up on the HUD Settlement Statement".  Of course, any payments outside of closing (not reflected on the HUD Settlement Statement) are considered lender fraud so now we start another 2 weeks of phone calls and faxing HUD statements to get the 2nd lender to accept $25.86 lower payoff.......which will cost the 1st lender $550 of additional losses.

With crazy decisions like this, is it any wonder the real estate market is struggling to stabilize?

Please consider this my formal Thank You for leaving the smart real estate buyers and sellers to me. Bear with me as I explain how I know this.

I was recently invited to attend a round table meeting with Realtors from various markets in Northern California to provide input as to the best way to incorporate Green features in the MLS.  The intention is to provide sufficient data for valuation and marketing purposes as well as to enhance home buyers' ability to make discerning comparisons between homes.

I was more than a little suprised to hear numerous suggestions that we should "dumb it down", inferring that the average client would somehow be confused or overwhelmed if they didn't understand the terms "Low E windows", "Smart Irrigation Controller" or (treading dangerously here) "A/C with SEER rating of 14 or greater".

That's when I realized that I must be the recipient of all the smart buyers and sellers.  Every one of my clients knows about the wonderful world of the internet (apparently still a secret to the other Realtors' clients) and have developed the highly advanced skill of using search engines to quickly research new information.

 I've never had a client develop an inferiority complex or run from their decision to buy or sell a home because they were faced with a new concept or information.  Nobodys head has exploded. In fact, when the information is new to me as well, my secret cache of smart clients pull out their smart phones and immediately find the answer.  And guess what.....they don't doubt my competence because I didn't have the answer.  I think that's the real concern behind "dumb it down".

 To my smart clients, I am grateful for your inquiring minds - and the fact that your heads don't explode.

As I woke up this morning, the first day of age 49, I decided to poke fun and mentally describe my qualities as a home for sale.   I had to laugh because I quickly realized I would need a buyer with vision.

My ad would read:

• Not upgraded but well-maintained

• Strong foundation but some recent settling

• Although original, the electricity and plumbing are fully functional

• Located in a neighborhood of newer model homes

Sure, I could hire a contractor and spend money on upgrades to match the better homes in the neighborhood but I am pretty comfortable with the house the way it is.  It helps that the "buyer" who married me almost nine years ago still thinks I'm the best house on the block!

49 is a great birthday!

This is an official rant to less-than-professional Realtors:  A lock box does NOT give you license to violate showing instructions!

The ease with which a Realtor can show a home has a direct correlation to how often the home is actually shown.  I get that.  But there ARE situations where "leave message and go" isn't appropriate. The seller may have small children at home, work from home, have a physical handicap that requires a little extra time to leave the home for a showing (or a host of other issues). 

The first less-than-professional situation occurred with an out-of-town Realtor who GAVE HIS LOCK BOX KEY TO HIS BUYER (a personal friend).  Of course, the friend didn't have access to the MLS so he didn't know the Showing Instructions and just let himself into the house.  My seller was a single-woman who worked from home.  Imagine her surprise when a strange man let himself into her house with no advance notice.  (Yes, I turned the Realtor in for the many violations that occurred in this situation AND required him to write a letter of apology to my seller).

The most recent Showing Instructions violation occurred on a listing with "24 hours notice required" and "Call Agent" on the Showing Instructions.  My seller has small children and is having a difficult pregnancy.  I received a call from a Realtor to show the property the same day.  I called her back within 20 minutes to find out her time-frame and call the seller to determine if the less than 24 hour notice could be accommodated.  Imagine my surprise when the Realtor told me, "Oh, don't worry, we just viewed the home. We knocked on the door and no one answered so we just went in."  You did what?  Are you serious?  What if my seller was having a difficult day and chose to not answer the door?  I was appalled! (Yes, I will be writing another complaint).

Once is an anomaly, twice is a trend so I immediately drove over to another listing that has a daughter at home alone during much of the day.  I had horrible visions of someone walking in unannounced while she was in the shower!  I took the lock box OFF the front door and handed it to her with the instructions to set it out only when she gets a message that someone will be showing the home or when she leaves the house.

Let me go on record here.  If you violate Showing Instructions that say "2 hour notice required", "24 hour notice required" or "appointment required" and therefore violate my sellers' privacy and security, I will write an official letter of complaint to the Board.

Real estate market report for detached homes in Danville, California

Active Listings

Number of Active Listings = 142, of which 7 are short sales and 4 are bank-owned

The highest list price is $3,995,000
The average list price is $1,273,758 and the median*list price is $1,062,450
The lowest list price is $460,000

In Contract and Pending

There are 112 homes pending, of which 46 are short-sales and 1 is bank-owned.  The sold price is not disclosed until the transactions close.

Closed detached Danville home sales for the recent month (3/20/2010 - 4/20/2010):

Number of closed sales = 45

The highest closed price is $1,700,000
The average closed price is $941,866 and the median* closed price is $874,900
The lowest closed price is $585,000

Danville real estate by quartile:

The top 25% (first quartile) averages of 4500 s.f., 5 bedrooms, 4.5 baths and a .50 - 1.0 acre lot with a median price of $1,999,000.

The second 25% (second quartile) averages 3276 s.f., 4 bedrooms, 3 baths and a .25 - .50 acre lot with a median price of $1,196,750.

The third 25% (third quartile) averages 2466 s.f., 4 bedrooms, 2.5 baths and a 8,000-10,000 s.f. lot with a median price of $882,450.

The fourth 25% (fourth quartile) averages 1926 s.f., 3 bedrooms, 2.5 baths and a 8,000-10,000 s.f. lot with a median price of $733,000.

*Median price is the mid-point of the market where half of the homes are above this point and half are below.

Real estate market report for condos/townhomes in Danville, California

Active Listings

Number of Active Listings = 47, of which 8 are short sales and 6 are bank-owned

The highest list price is $720,000
The average list price is $440,734 and the median*list price is $433,000
The lowest list price is $199,000

In Contract and Pending

There are 38 homes pending, of which 19 are short-sales and 2 are bank-owned.  The sold price is not disclosed until the transactions close.

Closed Danville condo/townhome sales for the recent month (3/20/2010 - 4/20/2010):

Number of closed sales = 11, of which 2 are short-sales and 1 is bank-owned.

The highest closed price is $490,000
The average closed price is $410,056 and the median* closed price is $452,000
The lowest closed price is $273,000

Danville real estate by quartile:

The top 25% (first quartile) averages of 1885 s.f., 3 bedrooms, 2.5 baths with a median price of $579,000.

The second 25% (second quartile) averages 1553 s.f., 3 bedrooms, 2.5 baths with a median price of $499,950.

The third 25% (third quartile) averages 856 s.f., 2 bedrooms, 2 baths with a median price of $359,900.

The fourth 25% (fourth quartile) averages 980 s.f., 2 bedrooms, 2 baths with a median price of $319,000.


For additional details, please visit my interactive real estate trend chart for Danville, California.