Tuesday, February 22, 2011

A Great Bible for Home Maintenance

Well, more like a computer game.

This month's Realtor magazine had one useful item: A reference to their new website called HouseLogic. Check it out here. You enter a bit of information on your home and location (I hate it when we get home maintenance lists that start with "bring clay garden pots in to avoid freezing and cracking"). And it generates a great body of information and background on keeping your house in tip top shape.

It integrates some of that "Cost vs. Value" information I keep talking about; it focuses you on opportunities to save money--kind of like a Mint.com for your home.

I've already got a few points from creating a profile, and reading and taking quizzes on a couple of articles.

Now I have to go change my furnace filter------

If Your Home is Cluttered or You're Selling in the Next Year---

My organizer colleague Nina Johnson (click here to sign up for her weekly blog or call her at 482-1619) sent a note about Oprah's March issue on decluttering.

Check out a great list to work through, one chunk a week, at this older article.

If you're organizing donations (for instance, to Dress Best for Less, supporting the Piedmont schools), take a look at the list of Salvation Army values for donations.

Nina, who's a fabulous resource for recycling and reuse opportunities, mentions Bookmark Bookstore in Oakland, a non-profit whose proceeds go to the Oakland Public Library--we brought 60 boxes of books from the East Coast, and that was before the kids became bigtime readers. I imagine we can divert many many of those to the Bookmark Bookstore!

Finally, the February issue of Realtor magazine has two nice pieces on prepping a house for sale here and here. Some of these ideas (spray painting stainless-look paint over appliances (and disclosing it)) won't fly here in Piedmont, but changing out outdated light fixtures, having dark cabinets professionally re-painted, changing out original cabinet knobs and pulls, replacing large frameless bathroom mirrors with framed ones that look like they walked out of the pages of the latest Pottery Barn catalog (yes, all buyers really do want that look), and replacing some tile grouts can make a house look "move-in ready" rather than like a "fixer" in buyers' minds.

And that can mean a huge amount in terms of pricing!

If we're working together, let's make sure to discuss these and other options before you invest.

Update: Check out this article from the NYT regarding how minor changes can completely change a buyer's perception of your home.

If You're Refinancing---

Had a chat with "our Schwab guy" last week, who mentioned infrequent appraisal issues for their bank's refi operation.

I've mentioned before that appraisals have been relatively straightforward these last few months, after a difficult period (difficult because there were too few sales in some cases to provide a basis for cautious appraisers to assess value, and difficult because the appraisal community went through a regulatory overhaul, which led to a variety of transition problems).

One continuing issue is that in trying to avoid inappropriate communication between lender and appraiser ('hey; can we get this value up to $1.5 million? My owner would really like to refi and take out $100,000....'), regulators created intermediaries. Lenders call the intermediary, who in turn assigns an appraiser to the property. Too frequently, the appraisers on the list bid low (with only some of those savings passed on to you), but they haven't been west of Manteca in a year.

We agents or brokers have the right to essentially take a pass on an out of area appraiser assigned to appraise your home. Your refi lender (like our Schwab guy) can't do the same, but you can.

When your appraiser calls to set the appointment, you can probe his/her experience in the area and price range. If you don't hear a good story, you can say "let me call you back." Call your lender and ask for a new appraiser. (They'll in turn call the appraisal management company, and you'll be assigned the next appraiser on the list.)

And don't forget to ask me for comparables, in case your appraiser doesn't realize that Piedmont Avenue is not the same as Piedmont, CA.

Not long ago, my sellers were assigned an appraiser from Sacramento. With trepidation, I called the appraiser expecting to have to take a pass. Instead, it turned out that she had only recently moved to Sacramento, had previously practiced in Oakland, and had lived off Park Boulevard. She did a beautiful job on the appraisal (and by that I don't just mean that she hit the purchase price).

Questions you might ask include: Where are you based? How many appraisals have you completed in the East Bay on this side of the Tunnel in the past year? When did you last do an appraisal in Piedmont? If the answers hang together, you should get a solid appraisal, even if the number isn't as high as you might prefer.

Tuesday, February 8, 2011

Piedmont Connect and Google PowerMeter---

You know, our house in Inverness is in the epicenter of the anti-Smart Meter movement. I have to say I've been attempting to contact PG&E and tell them "please, come to our house and install a Smart Meter!" but I can't find a contact for the program on their website!

Most likely as at your house here in Piedmont, our Smart Meter was installed with no fanfare (notice intentional use of the passive voice). It just--was there. It should be producing some decent data in the next month or so (you can set up an info-account easily at pge.com, and can review your past electric and/or gas usage on a monthly retrospective basis already).

Along with a lucky dozen or so other Piedmonters, we've taken an additional step however, and worked with the great Piedmont Connect team to install some real-time electricity monitoring equipment in the house.

Based on the notion that you can't change what you can't see, the two monitors (see TheEnergyDetective.com and check out the TED5000) send a stream of KwH usage data to our computer network and to Google.Org as part of Google's PowerMeter effort (see google.com/powermeter/about/index.html--thanks you Google meisters!).

In turn, we get moment-by-moment feedback on our usage and costs. We can turn the outside lights off and see what a difference it makes. We can set them up on automatic timers and see what a difference it makes. A great tool for teachable moments regarding stocks and flows.

But seriously.....

It's been making a difference. Every day I can see, when I choose to go and look at it, a comparison of this Monday's usage compared to last Monday's usage, including a break-out of "always on" energy draws. We can set goals--e.g. stay on track compared to last Monday's usage, or shoot for a 10% reduction (in which case all the data are relative to that target). The impact can be measured by KwH, by $, by pounds of carbon, and by estimated annual utility bill. It all depends on what tickles your toes. You can see that for Type A personalities, this can spin out of control.... But it hasn't; I promise.

What really matters is not the input, or the output, but the outcome, so what gives? Well, in mid-January, our daily usage on our main monitor linked to a yearly bill of about $2200. And now we're seeing annual bills in the $1400 range. And this is likely because our usage reduction has been very high-leverage: The Bay Area has a four-tiered billing structure, and our lowered usage is pulling us out of the top tier and into the cheaper-by-the-KwH third tier.

Check out PGE.com and see what your electric and gas usage are, be shocked as I was, and then spend a bit of time making some adjustments. Get that insulation in the attic, install that programmable thermostat, have a chat about the "always on" use, and save some money!

(I'm assuming that we'll keep our monitors forever, but if you want one of your own, I'll pay to get one of these set up at your house--first come first served!)

Update: The week after the beginning of daylight savings time, I realized our programmable thermostat was still set to PST--so the heat was coming one even though we'd all left for school/work. Take a quick peek and make sure yours is clicking on and off at the right time.

Thursday, February 3, 2011

Great New Pacific Union Report on the Bay Area's Real Estate--

Maybe the firm has been taking notes on my research and writing---

See this great-looking report on the Bay Area's real estate trends broken down by region. If you're thinking about a move to Napa or Marin or the City, start there!

Tuesday, February 1, 2011

Selling? Ask for your Marketing Blueprint----

I was talking to a seller-client recently after forwarding her a typical "pricing memo." The memo covered a number of topics all related to value, but her reaction was "when we moved from the City, we didn't get nearly this level of detail and insight on the market, how our home fits into it, and pricing for our home!"

My memos probably are about the best in the local market, but I'm frankly most surprised by information the typical Piedmont agent offers regarding marketing a home they are in competition to sell (as opposed to pricing it).

Fundamentally, most agents or brokers take a "trust me" approach--"here are samples of my past work (flip, flip, flip through a presentation binder); if you sign my listing agreement, I'll do the same for you. I can't really answer too many questions right now because I'm not yet hired to do the job, so haven't spent much time thinking about your situation. And I won't--not until I have the signed listing agreement."

If you've ever worked for an ad agency (as I have) or if you've ever watched an episode of Mad Men, for that matter, you know that's not how advertising agencies get the "deal."

The "creatives" slave away deep into the night trying to clearly understand the product; they come up with concepts, and cast them off, finally settling on the "ah-HA" marketing effort. The pieces all fall into place and the client says "yes, you understand the essence of our product."

And while the ad guys probably won't have a sample ad that's perfect and ready to go to the media buyers, they have enough of a gameplan to let the corporate decisionmaker know with whom he'd like to place his sizeable marketing budget for the next several years (we're still with Mad Men here).

And make no mistake--when you go to sell your million-dollar home, you're putting $50,000 to $60,000 in the hands of your agent for, fundamentally, marketing.* Half will go to the buyer's agent for responding to the marketing and bringing your buyer, and a bit less than a quarter will go to the brokerage to provide back-office support (much of it marketing-related), and a small amount will go to E&O insurance, and to cover time spent in negotiations and while in escrow. But the vast majority of what you're paying for is the marketing of your home--the framing of your home within its market, the marketing ideas themselves, and then their implementation.

I think it's fine for agents to say "trust me" on implementation--the ads, postcards, brochures, e-newsletters, broker open houses, Sunday open houses and so on, assuming they have a good reputation on these fronts. And of course many agents don't realize that real estate is, in fact, not a one-size-fits-all business. (They were taught that marketing a home involves nine nice photos, a bullet list of features (*3 bedrooms *two baths *2100 sf *Lush landscaping *Rich details) and a paycheck.)

But it's what I call the Marketing Blueprint for a home that actually sells it. The blueprint gets inside the head of the buyers for your home, and then feeds them the details they need to make an offer on your home.

So if it's a "fixer" and buyers may be uncertain about how big a job it is, I have suggested a Renovator's Open House (with vendors who can give your buyers the information they need up front). The San Francisco Chronicle thought that was such a cool idea that they wrote a cover story on me in 2007.

If it's a mid-century modern home, I bring my library of mid-century modern books to the open houses, I place the home in the mid-century pantheon, and I've even added a Google Earth shot from above to emphasize the boomerang shape of the home for buyers.

If it's an historically important home in Piedmont, I've had a Piedmont historian at the open house telling stories about how the home fits into the neighborhood and how life was "back in the day."

If it's a great value for the money, there will be plenty of detailed information outlining that fact for value-sensitive buyers.

And so on.

Developing that Marketing Blueprint takes some time, expertise, good punctuation, and risk. I can pull together a fabulous Marketing Blueprint for your home, but if your brother is a real estate agent in Alameda, I may not convince you to hire me (and I'd hope that you wouldn't pass all my hard work on to your brother, but I completely understand the temptation).

Of course the strategy comes into better focus and the missing pieces (OK--how old exactly is that roof?) get filled in once we sign the deal and get seriously working. Nevertheless, I feel sellers deserve to know my gameplan--how I plan to market what's likely their biggest asset--before they hire me.

The Marketing Blueprint is the rough equivalent of the specs you expect from a contractor giving you a bid for a new kitchen, or the roofer giving you a bid for a new roof. You'd never accept "trust me" from those vendors; why would you say "yes, I trust you; just go and sell my house" from a real estate agent?

Instead, you should expect each to say, "this is how I suggest you position your home; this is how I would propose to do so; this is what I am planning to do; and this is what I anticipate you will net."

When you go to sell, expect each of the three agents (or better yet, brokers) you interview to give you a Marketing Blueprint. Your house is unique; doesn't it deserve a unique Marketing Blueprint?

*$100,000 to $120,000 for a $2 million home......