Would You Risk an "Extreme Mortgage?"

We recently met with new buyers to discuss the process of buying their first home. Since the first step in today's market is always getting pre-approval for a home loan, we spent a lot of time on the subject. With our advice and recommendations, these buyers were already pre-approved by the time of our face-to-face meeting. Although their credit and finances are strong, they were concerned with the loan broker's recommendation to consider an interest-only loan. With housing prices on the rise, loan products have gotten creative to meet the demand for more affordable payment structures. With a myriad of options out there, real estate agents can not be experts in the area of home financing and do not have access to all the answers to suit each individual buyer's needs. I am not an expert (although, I can recommend one.) I do, however, have first hand experience in the marketplace and can put my finger on two conflicting truths:

1.) A gamble on financing your biggest purchase is not worth the risk of foreclosure or a short sale. Short Sales and foreclosures are losing propositions and should be avoided at all cost. A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. Sometimes the debt in not "forgiven," but rather the difference is paid through a personal loan or alternative collateral.

2.) Home ownership is an admirable goal which can lead to increased financial security making some risk worthwhile. See MSN Money's article Why its smarter to buy than rent.

Reconciling the above concepts is a tasks best left to the experts. Real Estate agents can help you understand factors affecting the value of a particular property. Similarly, a loan broker can help you grapple with the value of a particular financial package. Today a loan broker sent me this insightful newsletter:

(excerpt From Cohns Loans Financial Newsletter dated 6/29/07)

As housing prices rise on the coasts -- $1,000 a day in some places -- buyers are taking on outsized mortgages and outsized risks. With the median home price in the Golden State nearing a half-million dollars, it's no wonder that fewer than 1 in 5 Californians can afford to buy a home. But plenty of people are snapping up high-priced houses anyway, on both East and West coasts, thanks to a burgeoning number of nontraditional mortgage loans. Can't afford a $100,000 down payment on a half-million-dollar home? Get a separate loan at a higher rate and borrow the money. Think you'll be richer down the line? Pay just the interest on your loan for a few years. Scared of high monthly payments? Get an adjustable interest rate that will stay low, at least for a while. It's a far cry from the days when 20% down payments and 30-year fixed-rate mortgages were the norm.

Borrowers on a precipice
But not everybody is so optimistic. A small band of skeptics is warning that homeowners are setting themselves up for a financial fall. If interest rates go up and home prices dip, owners may be forced to sell their homes at a big loss, some experts warn. "I'm nervous about it," says Elaine Worzala, professor of real estate at the University of San Diego. "I do worry about the borrowers in markets such as this one, where homes are so expensive." Her cautions are mostly ignored. To many aspiring homeowners, the housing market is issuing a clarion call they can't resist. In some parts of California, everyone seems to know someone whose home has skyrocketed $50,000 or even $100,000 in value in just the last two years or so.

A rush to buy, now or never
Although there are signs that local real-estate markets are cooling, "people act like we're going to run out of homes -- if they don't buy now they'll be left out forever," says Dan Ruiz, a mortgage broker who specializes in assisting Latino buyers in southern California. Because many of his clients can't afford to pay tens of thousands for a down payment, nearly all borrow the money, Ruiz says. And no wonder. In popular "80-20" or "100% financing" loans, potential homeowners borrow 80% of the purchase price of a home at one rate and the other 20% at a higher rate. Down payments used to be virtually mandatory "because the banks wanted you to have money in the investment to protect themselves," says Worzala. But now, the complex world of mortgage securities allows more flexibility.

Steeper risk in 'interest-only' mortgages
Adding to potential risk, buyers in California and elsewhere are turning to "interest-only" loans. By paying down only their interest for a few years, they keep initial payments low. Variable-interest-rate loans also woo potential home buyers. In many "hybrid" loans, the interest rates are fixed for the first few years, then can go up in the future, although the amount of increases is typically limited. For example, a homeowner might pay a fixed 3% interest for the first few years, with future increases limited to two percentage points a year or six points overall. The interest rate in this case, therefore, would never go above 9%. Sound reasonable? Lyndon Garcia thinks so. He had his eye on a $355,000 fixer-upper in the Los Angeles suburb of Whittier, but he didn't make enough as an environmental project manager to afford a $70,000 down payment. An 80-20 loan with an adjustable rate and interest-only payments was just the ticket. "There are so many positives to it," Garcia says. "Overall, it's an excellent plan. It helps the little guy." At least for now. But when interest rates go up, increasing monthly payments under adjustable rate mortgages? Combined with lower home prices -- something experts have been predicting in California for months, if not years -- they spell disaster. "A lot of people are already spending 50% of their income on their mortgage payment," says Worzala, the real-estate professor. "If the interest rates go up, they're all of a sudden very cash-poor, putting themselves in a position where they have to default on their loan and lose their house." Borrowers will be in especially bad straits if they haven't begun paying down the principal on their loans instead of the interest. "What's the incentive of staying if you have no equity?" Ruiz asks. But to new homeowners like Garcia, who bought his home with the help of Ruiz, the risk is worth it. Thrilled about his new house, he thinks his complicated mortgage loans are a "win-win."

One should consult with a qualified mortgage professional prior to implementing any mortgage strategies.

CohnsLoans is a full-service mortgage brokerage approved with numerous lending sources throughout the state. CohnsLoans provides conventional, nonconforming, jumbo, FHA and VA loans. We assist customers with great credit, bad credit, and no credit. CohnsLoans can also assist individuals who are self-employed and require either full documentation and no documentation loans. We can assist individuals and professionals with their financing needs whether buying, selling, or refinancing real estate. If we can be of assistance, please email us at newsletter@cohnsloans.com or call us at 510-528-3400.

The Rehabilitation and Restoration of the Piedmont Way Project

Today the Berkeley Association of Realtors hosted a Membership Luncheon on The Rehabilitation and Restoration of the Piedmont Way Project. A grass roots organization, the Friends of Piedmont Way, has formed a partnership with the City of Berkeley and the University of California at Berkeley to rehabilitate and preserve one of Fredrick Law Olmsted's signature curvilinear parkways. Located along Piedmont Avenue, the parkway runs through the neighborhood originally know as the Berkeley Property Tract. The ambitious four part restoration marks a trend toward embracing landscape architecture for its important historical significance in conjunction with the existing movement to preserve land marked buildings.

The Piedmont Way Project was Fredrick Law Olmsted's first residential commission drafted in 1865. Olmsted is one of our country's first famous landscape architects, who's numerous accomplishments include New York City's Central Park and the Capitol Grounds in Washington D.C.

Olmsted envisioned a roadway sheltered from the sun and wind by "an over arching bowery of foliage."

Over time, the street scape has deviated from Olmsted’s original vision as a result of development, the addition of overhead power lines, road repairs and maintenance, and the removal of original flora.

Through a 100% volunteer effort, Friends of Piedmont Way has come a long way toward getting the project off the ground. This fledgling needs your help to fly. Donations and volunteers are needed to see the project to its fruition. Go to www.piedmontway.org for more information on how you can help recreate a historic greenbelt.

Local Flavor: A Bay Area Lifestyle Report

On KQED this afternoon, there was an interesting conversation on food (near and dear to my heart and stomach.) While driving, I caught a snippet of a conversation with Russ Parsons, author of How to Pick a Peach. The interview discussed the merits of seasonal eating. Specifically, how eating seasonally encourages a quarterly menu change (keeping your taste buds from being bored) and creates a cultural epiphany inspired by the miraculously great taste of produce, only to be experienced when it's eaten at its seasonal prime. I was touched almost palatably, in a way that had me instantly salivate and appreciate. First, I can't wait to buy a ripe peach. Secondly, I humbly thank our own local celebrity, Chef Alice Waters, who is largely responsible for the richness and availability of local produce here in Northern California. I can't do her justice so I feel compelled to quote Wikipedia here:

Alice Louise Waters (born 28 April 1944 in Chatham, New Jersey), one of the best-known and most influential American chefs since the 1970s, is credited with single-handedly creating a culinary revolution in America. She is the founder and co-owner of Chez Panisse, the original "California Cuisine" restaurant in Berkeley,
California, as well as the informal Cafe Fanny in West Berkeley. A champion of locally-grown and fresh ingredients, she has been credited with creating and developing California cuisine and has written or co-written several books on the subject, including the influential Chez Panisse Cooking (written with then-chef Paul Bertolli). She has also promoted organic and small farm products heavily in her restaurants, in her books, and in her Edible Schoolyard program in the public schools. Her ideas for "edible education" have been introduced into the entire Berkeley school system, and with the current crisis in childhood obesity, have attracted the attention of the national media.

Waters advocates eating locally produced foods that are in season, because she believes that the international shipment of mass-produced food is both harmful to the environment and produces an inferior product for the consumer.

It is hard to talk about seasonal produce, without shamelessly promoting our local Farmer's Markets. Our Farmer's Markets travel around the East Bay with a scheduled regularity, making it is possible to bring the freshest possible local produce to your dinner table for each night's dinner. (Last night I personally enjoyed to most spectacular mushroom ceviche; with fresh oyster mushrooms, heirloom tomatoes, cilantro, lime and a bit jalapeno pepper.)

Google Street View is Available for the San Francisco Bay Area

Controversial Google Maps Street View is in our town. This new view is significantly more intimate than the satellite view that has allowed us to find the rooftop of a specific house in a specific neighborhood. Street views bring you down to the sidewalk and even gives you a moment-in-time snapshot with anonymous rights to peek in windows. Has Google gone too far? Or, is this more useful technology in the age of information? For home buyers this could be a way to preview neighborhoods in your bedroom slippers. For the average citizen it begs the question, "Has our right to privacy finally been eroded all the way down to our own front door?"

Mortgage Rates Rose to Nearly 7%

NEW YORK (CNNMoney.com) -- Mortgage rates made their largest upward movement in nearly 4 years, and the 30-year fixed-rate reached its highest level since July 2006, Freddie Mac said Thursday.

Will this be the final straw that breaks the camel's back or in this case pops "the bubble?" Rising rates have stunned us this week with the sharpest increase in four years. Per CNNMoney.com:

Rising rates, among other factors, have caused the MBA and the National Association of Realtors to push back their forecasts for a home price recovery. Both groups are now looking to early 2008, compared with a previous outlook for mid-2007.

Still, the Bay Area is unique and we find reason to remain optimistic. We have not seen marked value depreciation of the homes in our marketplace. Because our geography (specifically the S.F. Bay to the west and East Bay Regional Park lands to the east) creates a natural boundary around our buildable land, housing stock is limited. Residential sales in this area are simply not affected by large scale developers or urban sprawl. Meanwhile, the University, our moderate climate and rich cultural offerings continue to bring new buyers to the area. Currently buyer demand continues to exceed the supply of housing. Multiple offers are less common, but still occurring.

We aren't seeing anything as dramatic as a pop of the bubble; however the market is treating buyers more justly. A bit more balance is a good thing. The influence of the National press has dampened the frenzy of the recent past. Buyer's mindsets have noticeably changed. During the height of the bidding wars, the Bay Area real estate market was much like a game of musical chairs: Buyers scrambled for a spot to plop their derrière when the music stopped, and they were often compelled to offer Sellers a premium to just to get a seat. There was legitimate fear in the marketplace as housing prices outpaced salary increases. If you didn't buy your way in, you may have quickly gotten priced out. That fear dissipated as the market mellowed. Now Buyers sense that they have more time to make more prudent decisions. Even in the cases of multiple offers, competition is not inciting the previous returns of 20-30% beyond the list price. Overbids seem to be a bit more modest, in the 7-12% range (with a few tantalizing exceptions still tickling the grape vine.)

This brings good news to Buyers. In addition to the tempering of the competition, buyer contingencies have regained some strength. In particular, buyer inspections have returned along with the negotiations associated with their findings. Unfortunately for all involved (this is an emotional process), we have also seen an increased number of homes "back on the market" as buyers struggle to develop a well rooted sense of value in what has been a changing market.

If you are a hesitant buyer, here are some more reasons to throw caution to the wind: First, historically speaking rates are still low (rates have reached double digits in the past.) Act now to take advantage of current rates. If interest rates continue to rise, any increases will continue to decrease affordability. Second, your life plans can also help dictate if the time is right for you. If your plan is to stay put for more than five years, your investment risks lessens. Despite dips in the value of real estate throughout the last century, California's housing values consistently reflected an overall gain. If you can wait out any turn in the market, time can help protect your investment. Third, owning your own home posses significant merits beyond the bottom line. With residential real estate, you also get the intrinsic benefit of the "use and enjoyment" of your own home. Lastly, increased rates and gloomy press reports are only part of the story. CNN says it best:

Mortgage rates, of course, are only one third of the affordability equation that plays out in the housing market. There's also home prices themselves and household incomes, both of which have been positive lately for buyers, according to DeKaser.

For Buyers and Sellers: Berkeley Hills Realty works hard to improve the odds in your favor. We remain ever vigilant and strive to think outside the box as it relates to all new information. For our Sellers, we have put new strategies in place designed to expand market exposure and to increase a property's perceived value. We also consult with our Buyer clients on factors that create and protect value as it relates to the purchase of their new home. As we embrace this new marketplace, we invite you, your friends, and family to call with any and all real estate related inquires. As always, we are happy to share our thoughts.

In Response to channel 5's local story: Internet Spawns Boom In Homes For Sale By Owner

http://cbs5.com/local/local_story_159212814.html

(CBS 5) SAN FRANCISCO One look on Craigslist, and you can see dozens of Bay Area homes for sale by owners. The practice used to carry stigma, but these days, with the market slowing down, sellers don't want to see any of their home's value lost in fees.

I am all for friendly competition, but there is a side of the story that has not been told amidst the onslaught of reports pertaining to saving the expense of commission. There are huge profits to be gained through the use of an expert. In an area of older housing stock, nearly each listing we take goes through its own "mini-flip" prior to coming on the market. This is much more extensive than just a bit of staging. We do full color consultations, organize a multitude of contractors and on occasion even move walls. And we do this with the expertise and know-how only gained through years of looking at houses through buyers' eyes. No one is better equipped to help you spend your pre-market prep dollars better than an experienced, active realtor. I have seen this create monumental gains for sellers. Much like the benefits obtained by traditional property flippers, our sellers see wonderful returns on these concentrated efforts (expertly designed to spend only the dollars that make the greatest impact.) I should add the obvious here: Even though we spearhead this effort, we do not take any of this windfall other than the agreed commission. Our efforts are designed to create greater opportunities for our sellers.

There is also a theory out there that Realtors paychecks have gone up exponentially throughout the housing boom. This may be true in some cases. However, good agents have added value and additional services to their repertoire. In addition, the Internet has made a techno-savvy realtor's job exceedingly more expensive and time-consuming (a myriad of sites to optimize, property websites to build, web locations to create a presence, email lists to maintain....)

The homeowner in the interview also stated that it doesn’t make sense to him to price something low and hope that it gets bid up. "Starting to price the home with $100,000 less than what other homes have gone for doesn't make any sense," he said. One final truth from the streets: Things are worth more when someone else wants them. This is never truer than in the current real estate market. If listed at the high price (where some of the homes do ultimately sell), we would likely see many more homes languishing on the market. In truth, there is often little more to justify an aggressive sold price other than “it had a lot of competition.” Absent competition the home's value may in fact be $100,000 less. Only an experienced agent can advise you on how best to cultivate competition.

Buyer Tip: Keeping an eye out for "for sale by owner" (FSBO) listings on Craigslist and through other sources is never a bad idea. Your agents commission can still be part of your offer (most FSBOs recognize this as necessary and may already offer a buyer agent a commission in the MLS) and their talents will serve you well. Your agent will help you navigate the process, negotiate items discovered during the inspection process and keep the unguided seller on track throughout the escrow.

Note: Although Berkeley Hills Realty maintains a large list of resources and service providers, the Agents are not licensed as general contractors. Your project may require the services of a general contractor in addition to the valuable advice provided by your Realtor.

Fix Your Credit, Get a Better Loan!

Berkeley Hills Realty
News You Can Use
Summer 2007 Issue

Giving Credit Where It’s Due
How to Improve Your FICO Score

By William Rodarmor

Anyone who has considered buying a home recently has heard the term “FICO.” It’s an acronym, and short for Fair Isaac Corporation. That company develops the software used by the three major credit bureaus to calculate their financial data on consumers. The bureaus use different names for the resulting numbers, but “FICO score” has become a universal shorthand way to describe a person's creditworthiness when they apply for a mortgage. (FICO scores range from 300 to 850. By law, each bureau must give consumers one free credit report every year.)

Most loan brokers find FICO scores convenient, some think them overly rigid. But love them or hate them, credit scores are here to stay. They make a big difference in how much borrowers pay for loans, so it’s worth finding out what factors affect your score and how to make them work to your advantage.

“FICO scores are huge now,” says Robert Jackson, an East Bay loan broker with BayCal Financial. “The credit score is the most important item that banks look at nowadays. They also look at your current amount of debt, job history, income, amount of savings, and how much down payment you are making. But the FICO score has become the real predictor of how you're going to pay your mortgage back.”

Paul Riccardi, president of MPR Financial in Albany, agrees. “Lenders now are very credit-score driven,” he says. “Income and assets are taken into account, but credit scores have become a sizable portion of the way a person's credit worthiness is evaluated.”

“In the old days, the numbers that mattered were your age and weight,” says Hazel Valera, a credit consultant in San Jose. “Today it’s your FICO score.” Valera claims that she once even heard a woman say that if you're thinking of going out with a man, “first find out what his score is.”

A Short Course In Score

A bank’s decision to lend someone money is based on risk, and one way to evaluate that risk is to look at the person's history of paying other people back. That's reflected in credit scores. A borrower with a high score, documented income, and other favorable factors is a desirable customer to do business with. (Also, loans are often resold on the secondary mortgage market, so the better the overall package, the more salable it is.)

The picture is clearest at the low and high ends of the score range. With a score of 550, you pay through the nose. With a score of 820, you get the red carpet. The chart makes this painfully clear. On a fixed-rate 30-year $700,000 loan, someone with a 550 score will pay $2,601 more a month than someone with an 820 score, and pay $936,341 more in interest over the life of the loan.

“As a general benchmark, if your credit score is over 720, your eligibility is increased,” says Riccardi. “Also, you can increase your loan to value to 100 percent financing. If it goes over 740, in some cases you get pricing compensation; the lenders knock off a percentage of your loan fee because your score is so high. That’s a rarity, but they will do it on occasion.”

But what about more average borrowers who want to buy a house, can document their income, and have a FICO score between 620 and 680?

“A 680 credit score is right in the middle of the road,” says Sam Krueger, a residential loan consultant with First Residential Mortgage Consultants in Berkeley. “If you're able to document your income and are putting 20 percent down, you’re probably going to get a really good loan.”

“In general, a score of 680 or better will get you in the door to almost all loan programs,” says Lisa Wagner of KLA Mortgage in Berkeley. “The higher the score, the better the lender likes it.” At 720 or better, some lenders may give you a discount, says Wagner. “They might give something back on the points, for example. Depending on the size of the loan, that can represent a significant savings.”



How to Improve your Credit Score

FBut what if your score is around 620 or below? It takes work, but there are a number of things you can do to raise your score and the esteem in your banker's eyes. Be warned, though: It's hard to change your credit score in a short period of time. It usually takes six months to a year to show results.

“I would get in touch with a mortgage broker and have a loan application and credit report pulled so you work on any potential problems,” says Jackson. “In fact, it's a good idea to pull up your credit report at least once a year to make sure that everything is being reported correctly. There are serious errors on lots of them.”

“Credit reports are usually pretty clear as to where the problems are,” says Riccardi. “Late payments, collections that have gone unpaid, balances that are too high. Or maybe something happened in the past that hasn't fallen off the credit report yet. All of these can affect that score.”

That said, there are many ways to maintain a high score or improve a low one.

Have multiple lines of credit. The ideal number is four open lines of credit, says Jackson-a car loan, a mortgage, and two credit cards, for example. “Use these 'lines' actively, and pay them off on time every month,” he says. “That keeps your score high.” Store cards-whether from Nordstrom or The Good Guys-don't have the same weight. Stores just don't extend a lot of credit, even to good customers.

Low balances, high limits. Keep balances low and credit limits high. A balance of less than 50 percent-30 percent is even better-on a card with a $10,000 limit is helpful. To lower a high balance, spread the money owed among a number of accounts, so it’s not over 50 percent on any single card.

Guard your older credit accounts. Even if you feel you have too many credit cards, don’t close the ones you’ve had for a long time. “The payment history on an old account counts for 35 percent of your score,” says Valera. “That’s the largest portion of your score.” It’s best if the accounts were opened some years ago, and show a perfect payment record.

Make all payments on time, especially your mortgage. “It's crucial not to have late payments on current mortgages,” says Wagner. “Those will hurt you with the lender more than any other kind of late payment you can have.”

Beware of unpaid medical bills. “Medical bills are notorious for causing problems,” says Jackson. “People go to the doctor and think their insurance company has paid the bill. But when they apply for a mortgage, they discover they've had a collection pending for the last two years.” Valera agrees: “Your ambulance bill will go straight to collections even before it gets to your insurance carrier, so if there is a mistake, it ruins your credit. Even if you pay it, the collection stays on your credit report.”

Pay off past due accounts, but let sleeping dogs lie. “Paying off a really old debt can actually hurt you,” says Krueger. “If you have an account due on your credit report that is a four or five years old, it will often be worse to pay it now, because that makes it more recent.” Just wait, he says. “After seven years, things are supposed to drop out of the score.”
Avoid public liens and judgments. Don't get into a fight with the guys who screwed up your kitchen remodel. They might slap a mechanic's lien on your house, and it will linger on your credit report even after it’s been satisfied. Bankruptcies, public liens, and judgments can stay on your credit report for ten years.

When asking for a mortgage, don’t apply for new credit. There are two reasons for this. First, you are showing the lender a snapshot of your current finances, so don’t change the picture while it's being looked at. Second, applying for new credit generates inquiries on your credit report, and the more inquiries you have on your credit report the slower the bureaus become, says Valera. There are two types of inquiries, “soft” and “hard,” she explains. A “soft” inquiry is what happens when you ask for your credit report from AnnualCreditReport.com or directly from one of the bureaus. A “hard” inquiry occurs when you actually apply for a loan.

Take your name off marketing lists. People often wonder why applying for a mortgage seems to trigger a flurry of marketing solicitations. It’s because the credit bureaus sell your personal data to banks and mortgage companies. This can generate an onslaught unsolicited marketing material, and may even lower your credit score a bit. Valera urges her clients to sign up at OptOutPrescreen.com. “That takes your name and address off all the lists that the credit bureaus use to sell marketing data,” she says. “It will reduce your junk mail and all those offers for pretty 0% interest cards. I can't prove that going to OptOutPrescreen.com actually increases your score, but my clients gain 5 to 7 points every time they do it.”

Piggyback on someone else's established credit. “Here is a trick that can increase your score a lot, and it's especially useful for young people,” says Krueger. “Suppose you're a student in your twenties with a student loan and one credit card, and your mom or dad adds you to their credit card: Boom! You now have ten years of credit history. It's like magic.” The primary holder's card will appear on your credit report, he says, and the report will treat that account as if it's yours. That way, you benefit from the card's low balance and long payment history.

Watch out for the little things. Small errors in a credit report can have a large impact. One Albany couple recently came to see a local mortgage broker with a tale of woe. They said that Bank of America had issued them a credit card that they didn’t use, and had been mailing the statements to the wrong address. “They never used the card, so no payments were made for four or five months,” says the broker. “It dropped their credit score 120 points!” The broker contacted B of A to clear up the mistake, but without success. “The credit card division was a complete pain about it,” he says. “This was a simple little error that wasn't my clients' fault, yet it was quite a ding to their credit.”

Is FICO a Four-Letter Word?

Loan brokers know a lot about credit scores, but that doesn’t mean they like them. “I hate these scores,” says one broker. “They're arbitrary, and a lot of erroneous information appears on people’s credit reports. I’ve seen people with bad credit but high scores, and vice versa. You might be a good credit risk but have a poor score because of one stupid thing you did. But that's the way it is now, so you have to play by the rules.”

Hazel Valera studies those rules carefully, and says she uses them to her credit clients’ advantage. “One thing I like about FICO is that if you make a mistake, you can correct it in six months. Before FICO came along, if you had a bankruptcy, that was it. Nobody would talk to you for seven years!” Today, Valera claims she can help people get right out of bankruptcy and buy a house when they are gainfully employed again. “But they have to follow my plan, and work at it,” she says. “The worst thing you can do is to do nothing.”

Sam Krueger isn’t crazy about credit scores, but has learned to live with them. “In the early days, you could write letters about unfavorable items on a credit report and explain them away,” he says. “Some lenders still operate that way, but very few.” On balance, however, he says that credit scores work okay. “We could probably come up with a better system, but credit scores are like SAT scores. Ultimately, they reveal a lot of truth.”

William Rodarmor is a writer, editor, and French translator in Berkeley, California.

© 2007 by Berkeley Hills Realty

Not So Random Acts of Kindness

Annette Bening wasn’t so far off in American Beauty when she played a Realtor stripped down to her unmentionables in order to scrub toilets for her open house. Sometimes we have to do what it takes. Sometimes you go the extra mile because you know that’s what it will take to sell the house. More often, we go the extra mile because we want to create greater opportunities for our clients.

Take a current listing our company has in the Berkeley Hills: It is well maintained with a good floor plan, original charm, and a desirable street address. This property will likely sell quickly based on its own merits. A relatively new agent in our office has the listing, so she has been mentored through the process by a couple of more seasoned associates. We recommended the usual to the Sellers; an intense cleaning, some de-cluttering, window washing…. In the meantime, the owners (a sweet couple with an infant and a two-year-old to add to the challenge) have been working their tails off to get this house ready for the market. In less than two-weeks time, they have packed up all the superfluous baby gear, touched up paint inside and out, repelled down the west side of the property to remove an awning that was robbing light and outlooks from the living room, and moved some large heavy furniture. This is only a partial list, but you get the idea. We, the agents, have been there almost daily through the process; re-arranging the furniture to best showcase each rooms potential, hanging a few or our own photos and props, picking paint colors, running errands, replacing light bulbs….

Upon the second trip back from the nursery with a car load of plants for the landscaping, our new agent (who is very hardworking and bright, but wearing impossibly high heels for a trip to the nursery) asked, “Do you do this for all of your clients?” The short answer was, “you need to create your own sense of boundaries, but when people need us we try to be there.” The longer truth is that the Sellers themselves were adding to the momentum and helping lead the charge. Through the stress of everything they have going on, including inspections on the house they were buying (not to mention the infant and two-year-old), they were always pleasant and appreciative. It’s sometimes these simple niceties that give you energy to do more. I work at a company where our mission statement is to take the best possible care of each person that walks through our doors. That said, our best work – the work which exceeds our own expectations, is often a reflection of someone else’s kindness.

Seller Tip: Light sells. Be critical of things that may be robbing your home of light. Trees that have become over-grown and now block windows should be pruned or removed. The awnings that have spared your heirloom carpets, need to be removed now in order to let the sunshine in. Heavy draperies may need to come down in favor of sheers. Use the maximum wattage allowed by the manufacturer in all of the light fixtures. Add lamps or up-lights to dark corners.

Buyer Tip: Ask your agent to help you track sale's prices of all of the homes you have visited. Even if you did not like all of the homes you have seen in your price range, knowing the sale's price will give you valuable insight into the current market.