In the past two weeks, I have encountered real value for my money. I define real value as meeting and in some cases, exceeding my expectations for the price I pay.
First was a brief three day stay in the Ritz Carlton Hotel in Lake Las Vegas, Nevada. Lake Las Vegas is one of the major developments in the fastest growing area in the US. It is located about 20 miles from Las Vegas strip, and is an "experience rich" resort in the middle of the desert. The experience is "luxury". Sue Stephenson, the Human Resources Vice President for the Ritz Carlton world wide spoke to our group of Windermere owners about the "knowledge of luxury and the luxury of knowledge". Everyone who works at the Ritz Carlton, no matter what their job or where they are located seems to be "on fire" with exceeding expectations of the customers who stay at their hotels. Stephenson has taken "customer service" to a level that amazes the guests - and I know because I was a guest. Needs are anticipated and fulfilled with great efficiency. The rooms are beautiful, spacious and comfortable. What makes the difference are the people. Sue Stephenson refers to employees as "ladies and gentlemen serving ladies and gentlemen". Passing employees in the hotel hallways and lobbies was wonderful. This may sound corny, but every one of them looked me in the eye, smiled and said hello. If I paused as if to need more than the hello, they asked about my stay and if there was something they could help me with. I was thoroughly impressed, and inspired. These ladies and gentlemen had a purpose above and beyond making a living. They enhanced an experience for the guests, and in so doing, for themselves. The retention at the Ritz Carlton exceeds that of any other hotel chain measured by Fast Company - the customer service reporting firm. They have won the Malcolm Baldridge award, an international award for customer satisfaction for the past two years, competing with other companies like Nordstrom. They are friendly, helpful and humble about it as well.
My second experience in value was a lovely meal of small plates at Six Degrees on Solano at 1403 Solano Avenue in Albany. Saturday evening, a jazz trio with vocalist started playing at about 7:30PM, and we had our choice of an extensive and creative drink menu ( we chose a vodka gimlet and a strawberry crush - vodka, strawberry puree and finished with champagne). The small plates were wonderful - ours, snow peas and shitake mushrooms sauteed with fresh ginger and olive oil, herbed thin potato fries - outstanding - with a russian dressing that had a hint of citrus for dipping the fries, and a lentil soup that was heavenly. The only place where improvement was needed was in the fruit crisp dessert. The fruit was not cooked sufficiently to provide the puree and juice. The service was great, and for a while, you will be able to get in at most times, but once they are reviewed, they will be up there with Fonda for drinks, and Cesar for small plates. That is all the commercials for now. Buy value!
Sunday, March 18, 2007
Thursday, March 8, 2007
One of the Good Guys
This is a small story about a big guy - a guy I work with, a colleague, a friend, and an inspiration. His name is Arthur White. He is a real estate broker and he is an inspiration to me. The reason is that Arthur really believes that his clients deserve his best efforts.
He responded to a telephone call from a couple who owned a big house about 5 miles from our office. The house was built about 5 years ago and the couple wanted to know what it was worth. Arthur picked up the call and went out to give them an Opinion of Value. He received a call back from them about a week later and he subsequently listed the house for over a million dollars. The house was awkward, but had a wonderful Bay View and was nearly 4 thousand square feet in a nice neighborhood. The couple had moved to Texas, and the house was vacant.
What Arthur later found out were two very important pieces of information: The husband had a terminal disease and the house had received a Notice of Default from the lender. These people were in trouble, deep trouble. We now know that the wife had cashed in her retirement benefits, and this couple hoped to get a few hundred thousand dollars from the sale of this house. It was all they had left. To make a long story short: Arthur White became their advocate, their broker, their friend and a fierce ally of this couple in the sale of this house. He showed courage, determination, and a wonderful set of values I can only hope to match. He makes me proud to be his friend and colleague. No newspaper is interested in this piece of "good news", but I thought you might like to know that there are heroes in the everyday experience of some people.
He responded to a telephone call from a couple who owned a big house about 5 miles from our office. The house was built about 5 years ago and the couple wanted to know what it was worth. Arthur picked up the call and went out to give them an Opinion of Value. He received a call back from them about a week later and he subsequently listed the house for over a million dollars. The house was awkward, but had a wonderful Bay View and was nearly 4 thousand square feet in a nice neighborhood. The couple had moved to Texas, and the house was vacant.
What Arthur later found out were two very important pieces of information: The husband had a terminal disease and the house had received a Notice of Default from the lender. These people were in trouble, deep trouble. We now know that the wife had cashed in her retirement benefits, and this couple hoped to get a few hundred thousand dollars from the sale of this house. It was all they had left. To make a long story short: Arthur White became their advocate, their broker, their friend and a fierce ally of this couple in the sale of this house. He showed courage, determination, and a wonderful set of values I can only hope to match. He makes me proud to be his friend and colleague. No newspaper is interested in this piece of "good news", but I thought you might like to know that there are heroes in the everyday experience of some people.
Wednesday, March 7, 2007
The dreaded mortgage rate adjustment
This is my call to action, my entreaty, my urging you to do something...now
If you purchased a home in the past year or two with an adjustable rate mortgage, please run, don't walk to your trusted and trustworthy mortgage broker and refinance into a fixed rate loan. If possible, get a 30 year fixed rate loan and never worry about the mortgage mess we are about to enter. Make sure the person you trust is not a mortgage broker who says things like, "don't worry about it, I'll take care of it" or "I am sure that when it adjusts, it will be a small adjustment, and anyway, the value of your house will increase well beyond the adjustment". If you need names of the good ones, the trustworthy ones, the ones who can tell it to you so you understand how it will affect you and who will help you get out of the fix you are in now, please call me - any time of the day or night for some suggestions. 510-409-6977. I don't care who you use to get into a fixed rate loan as long as they are trustworthy! Read the Wharton School of Business article from the link on this blog. Good article on SubPrime lending. That's all for today. Now down off my soapbox and on to easier things, like lunch.
If you purchased a home in the past year or two with an adjustable rate mortgage, please run, don't walk to your trusted and trustworthy mortgage broker and refinance into a fixed rate loan. If possible, get a 30 year fixed rate loan and never worry about the mortgage mess we are about to enter. Make sure the person you trust is not a mortgage broker who says things like, "don't worry about it, I'll take care of it" or "I am sure that when it adjusts, it will be a small adjustment, and anyway, the value of your house will increase well beyond the adjustment". If you need names of the good ones, the trustworthy ones, the ones who can tell it to you so you understand how it will affect you and who will help you get out of the fix you are in now, please call me - any time of the day or night for some suggestions. 510-409-6977. I don't care who you use to get into a fixed rate loan as long as they are trustworthy! Read the Wharton School of Business article from the link on this blog. Good article on SubPrime lending. That's all for today. Now down off my soapbox and on to easier things, like lunch.
Tuesday, February 20, 2007
Perception...
A bit more on Value Buying in today's real estate market.
We are like lemmings, we humans. If 25 people stood in Times Square looking up at the sky, within an hour there would be 1000 other people joining them. "The Wisdom of Crowds" was published a couple of years ago and the main premise is that buying a stock that has created the Perception of a winner may be the best strategy for those who don't want to do the work to figure out the underlying value of a company prior to purchasing their stock. Just buy what the crowds are buying. Hopefully, not too late in the "cycle" of growth of the stock price.
The same is true of most buyers of residential real estate.
"Honey, I want this house (because there is a crowd around the block) waiting to see it" - scene from 2005 Open Houses
So, what is the perception now? In many markets, including my own SF Bay Area market, the perception seems to be that things are "bad" and they will "get worse" before they get better. that's the agents' perception! Many buyers think that prices will plummet before 2007 is over, and that there is nothing to be gained by looking seriously at buying now. Let me say that there are good values out there and you can all wait till the interest rates rise before you buy, but I'm buying now - so are my clients. We are not buying like buyers bought in 2004-2006. No urgency. But we are looking for the value in the market and we will find it. We are not waiting to benefit from the bad fortune of others, nor ignoring the law and buying properties from defaulting owners at pennies on the dollar. We are buying value. Decent neighborhoods that are positioning to get better. Look for the places that good retail stores like Starbucks are opening new locations - How about LaFarine in the Laurel district of Oakland? These companies have done their homework - they are buying in Value Neighborhoods. Look for good architecture - maybe a little down on its luck. Look for good floorplan. Look for good lot size. As our population continues to grow, and as more and more homeowners will be forced to buy in denser areas, lot size will mean "alot" - sorry for the pun. Go out looking on a rainy day. That is the best time to go value home shopping. Enough preaching...I just want our clients to be the smartest buyers and sellers in the market. Oh, by the way, the agent that thinks "things are bad and they will get worse" is probably not the best value buyers' resource. More later...
We are like lemmings, we humans. If 25 people stood in Times Square looking up at the sky, within an hour there would be 1000 other people joining them. "The Wisdom of Crowds" was published a couple of years ago and the main premise is that buying a stock that has created the Perception of a winner may be the best strategy for those who don't want to do the work to figure out the underlying value of a company prior to purchasing their stock. Just buy what the crowds are buying. Hopefully, not too late in the "cycle" of growth of the stock price.
The same is true of most buyers of residential real estate.
"Honey, I want this house (because there is a crowd around the block) waiting to see it" - scene from 2005 Open Houses
So, what is the perception now? In many markets, including my own SF Bay Area market, the perception seems to be that things are "bad" and they will "get worse" before they get better. that's the agents' perception! Many buyers think that prices will plummet before 2007 is over, and that there is nothing to be gained by looking seriously at buying now. Let me say that there are good values out there and you can all wait till the interest rates rise before you buy, but I'm buying now - so are my clients. We are not buying like buyers bought in 2004-2006. No urgency. But we are looking for the value in the market and we will find it. We are not waiting to benefit from the bad fortune of others, nor ignoring the law and buying properties from defaulting owners at pennies on the dollar. We are buying value. Decent neighborhoods that are positioning to get better. Look for the places that good retail stores like Starbucks are opening new locations - How about LaFarine in the Laurel district of Oakland? These companies have done their homework - they are buying in Value Neighborhoods. Look for good architecture - maybe a little down on its luck. Look for good floorplan. Look for good lot size. As our population continues to grow, and as more and more homeowners will be forced to buy in denser areas, lot size will mean "alot" - sorry for the pun. Go out looking on a rainy day. That is the best time to go value home shopping. Enough preaching...I just want our clients to be the smartest buyers and sellers in the market. Oh, by the way, the agent that thinks "things are bad and they will get worse" is probably not the best value buyers' resource. More later...
Wednesday, February 14, 2007
Value buys
There are plenty of agents and brokers out there who will tell you it is a great time to buy, but they may not know why. It is only a good time to buy if you do it with the perspective of the cycle of the market. The market has just said, loud and clearly, affordability is at a critical point - enough already! The loud sound of screeching brakes has become clear to all but some intransigent sellers. (does this remind you of the Nov 06 elections?)
The California Association of Realtors membership was up 63% from 2000 to 2004. Egads, that means one in 50 adults in California is a real estate agent. It has become harder to get a drivers' license than a real estate license. So what does that mean for the buyers and sellers who are ready to deal? It means that the well prepared buyer and the realistic seller will love this market. The agent who does not hone their negotiating skills on behalf of buyers will suffer pain. The sellers who will not read the tea leaves of change will be lonely and their patience will be tested.
Do your homework. Decide what kind of buyer or seller you are:
Do you want to buy because you couldn't buy in the crazy sellers' market and now you think you can buy something that you would want to live in? Maybe in a better neighborhood? Maybe a good investment?
Well, you are probably right, but it takes strategy and you doing some initial investigation is the most important part. More later...
Do you want to sell because you have to sell? You need a good broker much more than the buyer does right now. You need to make your house accessible and price it so it is the best buy among its peers. Get a good broker and double check their research and comparables. Once you find one you trust, trust them. There are lots of good brokers out there - especially in the East Bay cities that I know of...Berkeley, Albany, Kensington, El Cerrito, Richmond, Pinole, El Sobrante and Oakland. There are some stinkers too. Trust your instincts and trust your friends' referrals.
Do you want to sell because you think you can command more than a comparable house on your street received last year at this time? Forget it.. this is not the time that your strategy will work. Last year's market rewarded that behavior, this year's does not. Brokers cannot pull rabbits out of their hats. Wait for the cycle to move on.
Buyers who buy now can be described as Value Buyers. If you have ever invested in the stock market, the Value Buyers buy good company's stock when the company's stock is not in favor and does not reflect the true value of the company. You look at the underlying value. The same is true for the Value Buyer of 2007. You want to be a Value Buyer of real property because you are not betting on a huge short term appreciation to make your investment good. You are betting on the underlying value of the property. You want to make your money on the buy. Then, however long it takes to cycle to another hot sellers' market, you have made your money. How do you identify the Value Properties?
I always want to buy from someone who has to sell. I don't want to buy from someone who has alot of options - like if I don't get my price, I will just rent it. In a Berkeley investment property, I want to buy from the owner who is so sick and tired of Rent Control and being a landlord that they are in a selling trajectory. I want a get me away from these tenants attitude. I want to buy investment property from someone who has not managed it well. My management can improve the cash flow with little or no investment of further cash.
A house with good bones is what I want to buy now for a value buy.
Good bones means a well designed and quality built home in a pre-transitional neighborhood. A good floorplan is important. I want to be able to understand how I can live in a home and the floorplan is my first instruction. Secondly, I love to be able to see from the living room to the back yard - a look through - is what I call it. Separation of spaces - primarily separation of common areas from bedrooms. Lots more, but those are the most important. Good outlook from the windows. I don't love looking into someone's bathroom or bedroom or living room as if I could touch it. Good drainage means the world to me. A basement is a plus. More later.
I will describe some Value Buys in future entries and tell you what makes them values. That's all for now. Liz
The California Association of Realtors membership was up 63% from 2000 to 2004. Egads, that means one in 50 adults in California is a real estate agent. It has become harder to get a drivers' license than a real estate license. So what does that mean for the buyers and sellers who are ready to deal? It means that the well prepared buyer and the realistic seller will love this market. The agent who does not hone their negotiating skills on behalf of buyers will suffer pain. The sellers who will not read the tea leaves of change will be lonely and their patience will be tested.
Do your homework. Decide what kind of buyer or seller you are:
Do you want to buy because you couldn't buy in the crazy sellers' market and now you think you can buy something that you would want to live in? Maybe in a better neighborhood? Maybe a good investment?
Well, you are probably right, but it takes strategy and you doing some initial investigation is the most important part. More later...
Do you want to sell because you have to sell? You need a good broker much more than the buyer does right now. You need to make your house accessible and price it so it is the best buy among its peers. Get a good broker and double check their research and comparables. Once you find one you trust, trust them. There are lots of good brokers out there - especially in the East Bay cities that I know of...Berkeley, Albany, Kensington, El Cerrito, Richmond, Pinole, El Sobrante and Oakland. There are some stinkers too. Trust your instincts and trust your friends' referrals.
Do you want to sell because you think you can command more than a comparable house on your street received last year at this time? Forget it.. this is not the time that your strategy will work. Last year's market rewarded that behavior, this year's does not. Brokers cannot pull rabbits out of their hats. Wait for the cycle to move on.
Buyers who buy now can be described as Value Buyers. If you have ever invested in the stock market, the Value Buyers buy good company's stock when the company's stock is not in favor and does not reflect the true value of the company. You look at the underlying value. The same is true for the Value Buyer of 2007. You want to be a Value Buyer of real property because you are not betting on a huge short term appreciation to make your investment good. You are betting on the underlying value of the property. You want to make your money on the buy. Then, however long it takes to cycle to another hot sellers' market, you have made your money. How do you identify the Value Properties?
I always want to buy from someone who has to sell. I don't want to buy from someone who has alot of options - like if I don't get my price, I will just rent it. In a Berkeley investment property, I want to buy from the owner who is so sick and tired of Rent Control and being a landlord that they are in a selling trajectory. I want a get me away from these tenants attitude. I want to buy investment property from someone who has not managed it well. My management can improve the cash flow with little or no investment of further cash.
A house with good bones is what I want to buy now for a value buy.
Good bones means a well designed and quality built home in a pre-transitional neighborhood. A good floorplan is important. I want to be able to understand how I can live in a home and the floorplan is my first instruction. Secondly, I love to be able to see from the living room to the back yard - a look through - is what I call it. Separation of spaces - primarily separation of common areas from bedrooms. Lots more, but those are the most important. Good outlook from the windows. I don't love looking into someone's bathroom or bedroom or living room as if I could touch it. Good drainage means the world to me. A basement is a plus. More later.
I will describe some Value Buys in future entries and tell you what makes them values. That's all for now. Liz
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