Actually, it's never been a secret to my clients, because I always walk them through the whole thing.
Realtors often mention that the "standard" brokerage fee is 6%. In Piedmont, it's actually 5%. Only 8 of the 56 transactions that have closed in Piedmont since 1/1 involved a brokerage fee above 5%. I always say to my clients that I feel 5% on a million-plus transaction is fair enough, that I work very hard and won't work any harder for an extra percent (only a small portion of would make its way to my pocket), and the last thing I want to do is start out our relationship by having a fight about brokerage fees.
By the way, the 5% flows through to the listing agent's brokerage, which in turn splits it with the buyer's agent's brokerage, and each brokerage, in turn, splits that fee with the agent who was involved. The percentage "split" between brokerage and agent varies based on sales volume, as you can expect, but with so many fewer transactions, many at an incrementally lower sales price, all our incomes have been hit in the last few years.
So don't ask your realtor to market your home at a super-low rate--you can't afford that strategy. On the other hand, know the facts before you negotiate the brokerage fee--
Showing posts with label California. Show all posts
Showing posts with label California. Show all posts
Saturday, June 25, 2011
Friday, December 24, 2010
Now that We Live Here, Here's Why We Like Piedmont--
Was visiting a couple of days ago with clients who moved to Piedmont in 2007. Out of the blue, he said,
"You know, all this [renovation] stuff with the house has been fine, but we had no idea how great this move would be for our lifestyle. Compared to [living in Oakland and our kids going to private school with friends all over the area], it's all so easy. They walk to school. They walk to friends' houses. I catch the bus a couple blocks away to the Financial District. Our friends elsewhere have to have logistics meetings every night to organize for the next day."
That's essentially what you said, right?
"You know, all this [renovation] stuff with the house has been fine, but we had no idea how great this move would be for our lifestyle. Compared to [living in Oakland and our kids going to private school with friends all over the area], it's all so easy. They walk to school. They walk to friends' houses. I catch the bus a couple blocks away to the Financial District. Our friends elsewhere have to have logistics meetings every night to organize for the next day."
That's essentially what you said, right?
Wednesday, December 22, 2010
Trying to Make It Real Compared to What---
Like my family, you all probably decided to move to Piedmont after looking at Berkeley, Montclair, Lafayette/Moraga/Orinda, and Mill Valley/Marin County. I hear it all the time with my new buyer clients: "I should let you know that we're also looking in ....." or better yet, "do you know a great agent who could help us take a look in .....?" (I have tried and true agent contacts in each of these areas.)
But the Piedmont pride nevertheless shines through. I while ago I pulled together a factsheet comparing 2000 census and API schools data on Piedmont and the Lamorinda towns, and over the years I've expanded it to discuss proximity to Chronicle 100 restaurants, and so on.
Over the break, I took a moment to check on updated info from the American Community Survey ('05-'09 data) and to take a detailed look at the Mill Valley vs. Piedmont choice--Konrad grew up in Mill Valley, went to Tam High, and still has lots of friends there, so particularly given the Inverness house, I probably spend four times as much time in Mill Valley as I do through the tunnel these days.
Let me know if you'd like either of the factsheets to pass on to friends and family. If you're looking for what we've got, it's a pretty clear choice!
But the Piedmont pride nevertheless shines through. I while ago I pulled together a factsheet comparing 2000 census and API schools data on Piedmont and the Lamorinda towns, and over the years I've expanded it to discuss proximity to Chronicle 100 restaurants, and so on.
Over the break, I took a moment to check on updated info from the American Community Survey ('05-'09 data) and to take a detailed look at the Mill Valley vs. Piedmont choice--Konrad grew up in Mill Valley, went to Tam High, and still has lots of friends there, so particularly given the Inverness house, I probably spend four times as much time in Mill Valley as I do through the tunnel these days.
Let me know if you'd like either of the factsheets to pass on to friends and family. If you're looking for what we've got, it's a pretty clear choice!
Wednesday, November 3, 2010
Will You Be in Town on Thanksgiving?
Then you have two choices: Run/walk the 5K race, or....be a course monitor! It's a very limited time commitment. You get your corner assignment, show up with your chair and coffee mug in hand, watch all your friends and neighbors pass by, and then head home for breakfast! Email Susan Freeman (susanfreeman1@gmail.com) if you have the time, and enjoy!
A great way to support lifetime exercise among Piedmont youth--the funds underwrite the PHS Track and Cross Country teams.
A great way to support lifetime exercise among Piedmont youth--the funds underwrite the PHS Track and Cross Country teams.
Wednesday, May 19, 2010
Increasing Capital Gains Rates? Sell Now or Sell Later--
A client pointed out that if the tax law does not change, long term capital gains taxes are likely to go UP after the first of next year.
That means that if you sell your long-held home this year, you may pay 15% in federal capital gains taxes (after your $250K or $500K exclusion, and after subtracting your ''basis'' from the sales price), while if you sell next year, you might pay 20% in federal capital gains taxes. (See this link for good information about this issue, and of course check with your accountant and legal advisor before making any decisions....). Depending on your circumstances, this could make a big difference in your taxes, or just a small difference.
That means that if you sell your long-held home this year, you may pay 15% in federal capital gains taxes (after your $250K or $500K exclusion, and after subtracting your ''basis'' from the sales price), while if you sell next year, you might pay 20% in federal capital gains taxes. (See this link for good information about this issue, and of course check with your accountant and legal advisor before making any decisions....). Depending on your circumstances, this could make a big difference in your taxes, or just a small difference.
Wednesday, January 6, 2010
"My Tax Record Isn't Right-----"
With our older home stock, it's always been the case that the County Assessor's record of our homes is sometimes different from what's on the ground. Sometimes this is because of illegal construction (naughty, naughty! Unfortunately a past owner's illegal construction is now your problem--). But sometimes the inconsistency is more innocuous.
If you know your house has four bedrooms and two baths rather than three and one, and the construction was all permitted, go to this form at the Assessor's Office website. Fill it out, be prepared for the possibility of an Assessor visiting your home, and wait for the record to be corrected. Assuming you purchased the home as a 4/2, there would be no change in your assessment.
In contrast, if you improved the home with permits, and the Assessor's office has not caught up with the changes, you can fill out the form and you'll eventually see a bit of an increase in the assessed value, but not a wholesale gross-up to current market value--Prop 13 still "protects" the assessment of the pre-existing elements of the home.
Why go through this rigamarole? When you go to sell your home, your buyers will expect all permits to be "finalled" and all space to be legal. If your rumpus room was informally drywalled in the '50s, your windows were replaced without permits with aluminum ones in the '60s, or a bathroom was added without permits in the 20s, a smart buyer and agent will notice, and you'll likely have to negotiate the issue through. While maybe 15% of sales were affected by these issues in years past, it seems like 50% are seeing them these days.
Call me if you want to discuss your situation further--better now than a day after you accepted a great offer for your home!
Click here for access to the current assessment record on your home.
If you know your house has four bedrooms and two baths rather than three and one, and the construction was all permitted, go to this form at the Assessor's Office website. Fill it out, be prepared for the possibility of an Assessor visiting your home, and wait for the record to be corrected. Assuming you purchased the home as a 4/2, there would be no change in your assessment.
In contrast, if you improved the home with permits, and the Assessor's office has not caught up with the changes, you can fill out the form and you'll eventually see a bit of an increase in the assessed value, but not a wholesale gross-up to current market value--Prop 13 still "protects" the assessment of the pre-existing elements of the home.
Why go through this rigamarole? When you go to sell your home, your buyers will expect all permits to be "finalled" and all space to be legal. If your rumpus room was informally drywalled in the '50s, your windows were replaced without permits with aluminum ones in the '60s, or a bathroom was added without permits in the 20s, a smart buyer and agent will notice, and you'll likely have to negotiate the issue through. While maybe 15% of sales were affected by these issues in years past, it seems like 50% are seeing them these days.
Call me if you want to discuss your situation further--better now than a day after you accepted a great offer for your home!
Click here for access to the current assessment record on your home.
Selling a Long-Held Home (with Lots of Capital Gains)
Former school board president, Boy Scout council president, and tax lawyer Dewey Watson and I put together a little brochure on this issue a couple of years ago--if you're lucky enough to have a million dollars or more in appreciation on your long-held home, how might you defer paying the capital gains taxes on the home?
This story, from colleague James Callejas at Fidelity Title's qualified intermediary, IPX, does a really nice job of laying out the tax-saving strategy.
Contact him, me, Dewey, or your tax advisor for more information--
This story, from colleague James Callejas at Fidelity Title's qualified intermediary, IPX, does a really nice job of laying out the tax-saving strategy.
Contact him, me, Dewey, or your tax advisor for more information--
Tuesday, October 13, 2009
Palo Alto Reports Piedmont (Not Palo Alto) among Top 3 Districts in CA
My daily Google search for Piedmont picked up the City of Palo Alto announcement that their K-12 district is now fourth in California, after San Marino, Canada, and Piedmont. Go Highlanders!
The three elementary schools in Piedmont ranked exceedingly well in the 2009 Academic Performance Indices: Beach-971, Havens-927, Wildwood-964. PMS's API was 930, and PHS's was 904 (an eight-point drop compared to the previous year, by the way). Five high schools in Alameda and Contra Costa Counties bested Piedmont High (though of course scores wobble up and down each year): Mission San Jose in Fremont, Oakland Charter High (a tiny school on 12th Street downtown), Campolindo and Miramonte in Lamorinda, and brand new Dougherty Valley in the Windemere neighborhood of San Ramon.
For more info on the data, see the API site here.
The three elementary schools in Piedmont ranked exceedingly well in the 2009 Academic Performance Indices: Beach-971, Havens-927, Wildwood-964. PMS's API was 930, and PHS's was 904 (an eight-point drop compared to the previous year, by the way). Five high schools in Alameda and Contra Costa Counties bested Piedmont High (though of course scores wobble up and down each year): Mission San Jose in Fremont, Oakland Charter High (a tiny school on 12th Street downtown), Campolindo and Miramonte in Lamorinda, and brand new Dougherty Valley in the Windemere neighborhood of San Ramon.
For more info on the data, see the API site here.
Wednesday, October 7, 2009
Pacific Union is Christie's Great Estates Regional Affiliate
Only Pacific Union has access to the international reach and highest caliber marketing expertise of Christie's Great Estates, which in turn is the only firm formally associated with an international auction house.
The Great Estates third quarter newsletter can be found here, if you'd like to hear a bit more about two sumptuous listings--a Frank Lloyd Wright home and Yves St. Laurent's Tangier home--and upcoming auction items.
Let me show you what I can do with Christie's materials and unique marketing placement in marketing your home.
The Great Estates third quarter newsletter can be found here, if you'd like to hear a bit more about two sumptuous listings--a Frank Lloyd Wright home and Yves St. Laurent's Tangier home--and upcoming auction items.
Let me show you what I can do with Christie's materials and unique marketing placement in marketing your home.
What's that Color?
READ THIS POST BEFORE YOU CLICK ON THAT LINK!! Check out this site--and turn down your audio! Totally cool site that will match a photo you take to Benjamin Moore paint colors (which in turn can be matched at your non-Benjamin Moore paint vendor).
Saturday, October 3, 2009
Whether You're Borrowing or Lending--IntraFamily Strategies
A nice piece in today's Journal about tax-savvy strategies to borrow funds from Mom and Dad, or lend funds to the children--perhaps for a home purchase?
Read it here.
Read it here.
Thursday, October 1, 2009
Market Trends Back Up--3Q09 Update
Following the national trends (see the cool NYT graphic we've been watching here.) Piedmont's average home sale price as reported by the MLS increased by 8 percent over prices last quarter. Recall that last quarter was the first time we saw a clear drop in prices--they were down about 16% compared to the second quarter of 2008. While the third quarter's prices are back up, they remain about 8-9 percent below the average we'd seen since November of 2005.
The average home price was $1.49 million, and $525/sf, and the typical home sold in 33 days at 95% of the original asking price. Prices ranged from $770,000 to $4 million, and $409/sf to $720/sf. No portion of the market seemed to have difficulty garnering an offer, once prices represented good value to serious buyers. Twenty one homes sold, moving us rather close to the typical volume of homes sold in the late summer.
Remember that these closed transactions reflect deals struck 30 to 60 days ago (as our escrow periods have lengthened due to changing financing and appraisal processes). If we look at pending transactions, the good news continues. Sixteen homes are pending (two were short sales, and several received all-cash offers), and while we don't know exactly how pricing will turn out yet, the typical stats based on asking prices are very consistent with this quarter's outcomes.
In contrast, Berkeley average prices are off 13 percent (to $671,000) compared to the third quarter of 2008. Oakland's situation is very complex. The average price across the city has declined 27 percent compared to 3Q08. There were 200 more sales, however, and 200 more all-cash transactions (now representing fully one-third of all sales in the city).
Note that of the 21 homes currently on the market in Piedmont, none is distressed (defined as either a potential short sale or a bank-owned property). But life is not necessarily rosy in all quarters. I imagine there are a number of Piedmonters who are underwater (that is, they owe more on the property than it is currently worth) but can keep up with payments as long as jobs or savings hold up. Today's news that personal expenditures increased 1.3% (1% excluding durable goods like cars-for-clunkers) offers a nice shot-in-the-arm for those concerned about the broader economy.
I have a vision of households going off to Costco to replenish their stores of paper towels and jarred spaghetti sauce, having subconsciously cleared out the shelves these last several months, a story line from one of Jhumpa Lahiri's short stories. The future looks bright if you're laying in the larder.
See details on transactions here and email me if you'd like a copy of Clarus MarketMetrics report on the Piedmont market.
The average home price was $1.49 million, and $525/sf, and the typical home sold in 33 days at 95% of the original asking price. Prices ranged from $770,000 to $4 million, and $409/sf to $720/sf. No portion of the market seemed to have difficulty garnering an offer, once prices represented good value to serious buyers. Twenty one homes sold, moving us rather close to the typical volume of homes sold in the late summer.
Remember that these closed transactions reflect deals struck 30 to 60 days ago (as our escrow periods have lengthened due to changing financing and appraisal processes). If we look at pending transactions, the good news continues. Sixteen homes are pending (two were short sales, and several received all-cash offers), and while we don't know exactly how pricing will turn out yet, the typical stats based on asking prices are very consistent with this quarter's outcomes.
In contrast, Berkeley average prices are off 13 percent (to $671,000) compared to the third quarter of 2008. Oakland's situation is very complex. The average price across the city has declined 27 percent compared to 3Q08. There were 200 more sales, however, and 200 more all-cash transactions (now representing fully one-third of all sales in the city).
Note that of the 21 homes currently on the market in Piedmont, none is distressed (defined as either a potential short sale or a bank-owned property). But life is not necessarily rosy in all quarters. I imagine there are a number of Piedmonters who are underwater (that is, they owe more on the property than it is currently worth) but can keep up with payments as long as jobs or savings hold up. Today's news that personal expenditures increased 1.3% (1% excluding durable goods like cars-for-clunkers) offers a nice shot-in-the-arm for those concerned about the broader economy.
I have a vision of households going off to Costco to replenish their stores of paper towels and jarred spaghetti sauce, having subconsciously cleared out the shelves these last several months, a story line from one of Jhumpa Lahiri's short stories. The future looks bright if you're laying in the larder.
See details on transactions here and email me if you'd like a copy of Clarus MarketMetrics report on the Piedmont market.
Monday, September 28, 2009
Elements of the Principal-Agent Relationship
I’m on the advisory board of the Institute for Luxury Home Marketing, which in turn has a relationship with the Luxury Institute, which gives me access to the LI’s Wealth Report 9 times a year.
An article in this month’s issue was a great reminder. The managing director of the Bessemer Trust discussed five elements of a great principal-agent relationship:
1. Put the clients’ interests first.
2. Understand the clients’ total situation.
3. Be honest and transparent.
4. Deliver truly proactive client service.
5. Maintain absolute confidentiality.
A great list I aspire to!
An article in this month’s issue was a great reminder. The managing director of the Bessemer Trust discussed five elements of a great principal-agent relationship:
1. Put the clients’ interests first.
2. Understand the clients’ total situation.
3. Be honest and transparent.
4. Deliver truly proactive client service.
5. Maintain absolute confidentiality.
A great list I aspire to!
Sunday, September 20, 2009
Stop the Phantom Watts Dead--
Remember last year when I ran our home through an eco-efficiency review, and found that the most powerful change we could make was to unplug our [many] computers? The New York Times just got the point.
See yesterday's story, and check out the "smart" power strip they discuss at this Treehugger post.
See yesterday's story, and check out the "smart" power strip they discuss at this Treehugger post.
Thursday, August 27, 2009
It's Back to School!
And I've been working furiously this week to get prepared! This week I've been shifting to newer, cooler business tools.
I'm trying to complete my shift from aol (home since 1993--that's a long time....) to gmail. Shifted my blog locus from Active Rain (the original blog platform for real estate) to Blogger. Staying with CoolerEmail for my e-newsletter. So here's the summary:
My best email remains Kennedy@MaureenKennedy.Net. MaureenKennedy@aol.com will continue to work for a long time (and no need to send to both, folks--both flow through to my Blackberry immediately).
Check out my new gorgeous Piedmont blog format at http://piedmonthouseandhome.blogspot.com/ or, to keep it simple, http://tinyurl.com/PiedmontHome.
All past e-newsletter articles continue to reside at my blog (and I've been up til 2 am these last few nights cutting and pasting everything to the new site). So if you know someone who's interested in moving to town, tell them to check out the archive or subscribe!
I now have four Google websites you or your friends and colleagues may find useful--just email me and I'll give you the links. They collect resources I've delivered to clients in various less ecofriendly ways over the years. They include:
Piedmont Information (links, photos, documents,school info, factsheets, resources for buyers)
Marketing Samples for Piedmont Sellers (case studies, ideas, background and resources for sellers)
Renovation Resources (energy and water efficiency incentives and rebates, eco-tips, Cost vs. Value reports, vendor lists, build-it-green ideas,links)
Distressed Sales in Piedmont (Q&As on taxation, legal liability, and so on for owners struggling to meet their payments)
Separately, I regularly offer buyers:
An email list of Sunday open houses delivered to their desktop every Saturday morning; automatic e-notifications every time a property meeting their parameters hits the market; a review of typical buyer costs for homes at various price points; a memo outlining strategies buyers can use to increase the chances their offer will be accepted; a table identifying East Bay public schools with high API scores, with click-thrus to sites with more information about those neighborhoods; a list of four deeply experienced lenders to call for financing ideas and insight; and a package of buyer factsheets from the National Association of Realtors.
My website (still www.MaureenKennedy.Net) allows buyers and sellers to organize e-notifications of new listings on their own, and includes a form to request an analysis of the current value of your home.
Bottom line: Jazzier presence, clearly organized information, and a seamless transition.
And don't forget that I'm never too busy for your referrals!
I'm trying to complete my shift from aol (home since 1993--that's a long time....) to gmail. Shifted my blog locus from Active Rain (the original blog platform for real estate) to Blogger. Staying with CoolerEmail for my e-newsletter. So here's the summary:
My best email remains Kennedy@MaureenKennedy.Net. MaureenKennedy@aol.com will continue to work for a long time (and no need to send to both, folks--both flow through to my Blackberry immediately).
Check out my new gorgeous Piedmont blog format at http://piedmonthouseandhome.blogspot.com/ or, to keep it simple, http://tinyurl.com/PiedmontHome.
All past e-newsletter articles continue to reside at my blog (and I've been up til 2 am these last few nights cutting and pasting everything to the new site). So if you know someone who's interested in moving to town, tell them to check out the archive or subscribe!
I now have four Google websites you or your friends and colleagues may find useful--just email me and I'll give you the links. They collect resources I've delivered to clients in various less ecofriendly ways over the years. They include:
Piedmont Information (links, photos, documents,school info, factsheets, resources for buyers)
Marketing Samples for Piedmont Sellers (case studies, ideas, background and resources for sellers)
Renovation Resources (energy and water efficiency incentives and rebates, eco-tips, Cost vs. Value reports, vendor lists, build-it-green ideas,links)
Distressed Sales in Piedmont (Q&As on taxation, legal liability, and so on for owners struggling to meet their payments)
Separately, I regularly offer buyers:
An email list of Sunday open houses delivered to their desktop every Saturday morning; automatic e-notifications every time a property meeting their parameters hits the market; a review of typical buyer costs for homes at various price points; a memo outlining strategies buyers can use to increase the chances their offer will be accepted; a table identifying East Bay public schools with high API scores, with click-thrus to sites with more information about those neighborhoods; a list of four deeply experienced lenders to call for financing ideas and insight; and a package of buyer factsheets from the National Association of Realtors.
My website (still www.MaureenKennedy.Net) allows buyers and sellers to organize e-notifications of new listings on their own, and includes a form to request an analysis of the current value of your home.
Bottom line: Jazzier presence, clearly organized information, and a seamless transition.
And don't forget that I'm never too busy for your referrals!
All You Need to Know about Shower Heads
Just today, the New York Times Home section included this story comparing several shower heads. The author was looking for that WaterPik feel from our teenagerdom-----
How to Green Up your Real Estate Practice
I've been doing some file clean up and came across a Google doc I put together last year as part of a panel on Green Real Estate Strategies at the Institute for Luxury Home Marketing last October. Here's the URL to my factsheet on steps you can take to "green" your practice:
http://tinyurl.com/GreenREPractice
http://tinyurl.com/GreenREPractice
New Buyer Resources
If you're a new buyer in this market, you'll want to be prepared, now more than ever! I can offer you:
· A free, comprehensive list of all open houses in the East Bay (not just those in the Chronicle, etc.), sent to your email box before noon each Saturday;
· Free email updates sent to your email box the moment a new home meeting your criteria hits the market or sees a price change;
· A free, no-obligation 1-2 hour tour of any neighborhood you think might meet your needs (or a referral to a deeply experienced agent who covers that area, if I don't), stopping into a couple representative homes;
· Access to a website that includes:
-a review of typical buyer costs for homes at various price points;
-a list of strategies you can use to increase the chances your offer will be accepted, beyond just offering more money;
-a table identifying East Bay schools with high API scores, with click-thrus to sites with more information about those neighborhoods;
-a list of five deeply experienced lenders you might call for ideas and insight on the market and your situation; and
-a free package of buyer factsheets from the National Association of Realtors.
Just give me your email address and I'll get it to you!
· A free, comprehensive list of all open houses in the East Bay (not just those in the Chronicle, etc.), sent to your email box before noon each Saturday;
· Free email updates sent to your email box the moment a new home meeting your criteria hits the market or sees a price change;
· A free, no-obligation 1-2 hour tour of any neighborhood you think might meet your needs (or a referral to a deeply experienced agent who covers that area, if I don't), stopping into a couple representative homes;
· Access to a website that includes:
-a review of typical buyer costs for homes at various price points;
-a list of strategies you can use to increase the chances your offer will be accepted, beyond just offering more money;
-a table identifying East Bay schools with high API scores, with click-thrus to sites with more information about those neighborhoods;
-a list of five deeply experienced lenders you might call for ideas and insight on the market and your situation; and
-a free package of buyer factsheets from the National Association of Realtors.
Just give me your email address and I'll get it to you!
A Good Time to Sell?
You know me well enough to know that I'm a straight shooter, more interested in making sure you have the right advice and insight than in getting a check in my pocket. My reputation depends on that. And it's important to know when market trends are counterintuitive. "Everyone knows" that now's a bad time to sell, if you can avoid it, right? Wrong.
Here's a scenario for you: Assume a household in a great house in Crocker Highlands. They've always wanted to move to Piedmont when their children get to school age. Prices have dropped 15% since the peak, though they are way ahead since they bought in 2001. They really need that fourth bedroom.
If they sold the Crocker house and bought a more expensive home in Piedmont in 2006, they would have sold high and bought high--but they were fully prepared to do it. If they sold today, they would sell "low" and buy "low." The key takeaway is that the dollar price discount on the more expensive Piedmont home is larger than the price discount they'll see when selling the Crocker home [assuming a 15% lower price in both cases].
Let's say the Crocker house will sell for $725,000 (was worth $850,000 at the peak). Including lower brokerage fees and transfer taxes, they'll net about $120,000 less than if they'd sold in 2006. But if they buy a home in Piedmont for $1.5 million (was worth $1.750 million at the peak), reflecting the lower fees and transfer taxes, they'll save about $265,000, compared to a 2006 purchase. Between the two homes, then, they are about $150,000 ahead of where they would be had both transactions closed in 2006.
And don't forget ongoing mortgage and insurance costs. That less expensive Piedmont home translates into about a $15,000 a year savings compared to the carrying costs of that more expensive home not bought in 2006. Email me for a copy of the spreadsheet.
How smart is that?
An even more attractive scenario is moving down-Piedmont homes have held their value quite well through the downturn. The same cannot be said about the condo market in general, nor homes in much of the rest of the country, and particularly in typical retirement areas like Arizona, San Diego and Florida. Unless you're planning to retire anywhere in Texas, in Denver, Detroit, Charlotte, Salt Lake or Philly (according to today's Wall Street Journal), you'll likely be selling "low" and buying "super low"!
Here's a scenario for you: Assume a household in a great house in Crocker Highlands. They've always wanted to move to Piedmont when their children get to school age. Prices have dropped 15% since the peak, though they are way ahead since they bought in 2001. They really need that fourth bedroom.
If they sold the Crocker house and bought a more expensive home in Piedmont in 2006, they would have sold high and bought high--but they were fully prepared to do it. If they sold today, they would sell "low" and buy "low." The key takeaway is that the dollar price discount on the more expensive Piedmont home is larger than the price discount they'll see when selling the Crocker home [assuming a 15% lower price in both cases].
Let's say the Crocker house will sell for $725,000 (was worth $850,000 at the peak). Including lower brokerage fees and transfer taxes, they'll net about $120,000 less than if they'd sold in 2006. But if they buy a home in Piedmont for $1.5 million (was worth $1.750 million at the peak), reflecting the lower fees and transfer taxes, they'll save about $265,000, compared to a 2006 purchase. Between the two homes, then, they are about $150,000 ahead of where they would be had both transactions closed in 2006.
And don't forget ongoing mortgage and insurance costs. That less expensive Piedmont home translates into about a $15,000 a year savings compared to the carrying costs of that more expensive home not bought in 2006. Email me for a copy of the spreadsheet.
How smart is that?
An even more attractive scenario is moving down-Piedmont homes have held their value quite well through the downturn. The same cannot be said about the condo market in general, nor homes in much of the rest of the country, and particularly in typical retirement areas like Arizona, San Diego and Florida. Unless you're planning to retire anywhere in Texas, in Denver, Detroit, Charlotte, Salt Lake or Philly (according to today's Wall Street Journal), you'll likely be selling "low" and buying "super low"!
Nagging Items Bogging You Down?
OK-here's a bit of a diversion. Did you hear knowing moans around you when you saw Julie and Julia--the part when the four friends are out for drinks and one says something like "I asked my personal assistant to go to Safeway and buy pancetta for my big dinner tomorrow, and when I got home she said, ‘Oh, Safeway didn't have pancetta... ‘ I asked her ‘well, did you go to Piedmont Grocery????'"
I so get that "I want you to take care of it and not make me take care of it" feeling.
And Winans Construction gets it too, when it comes to home maintenance. They've just set up a handyperson service to complement their remodeling business (see www.winconinc.com for a portfolio), so make your list, check it twice, and then contact them at 510-653-7288 or info@winconinc.com and they'll take care of it.
Mention my name and they'll take 10% off your gutter cleaning bill through September 30th. You know that deferred home maintenance can be the definition of penny-wise and pound-foolish, right?
I so get that "I want you to take care of it and not make me take care of it" feeling.
And Winans Construction gets it too, when it comes to home maintenance. They've just set up a handyperson service to complement their remodeling business (see www.winconinc.com for a portfolio), so make your list, check it twice, and then contact them at 510-653-7288 or info@winconinc.com and they'll take care of it.
Mention my name and they'll take 10% off your gutter cleaning bill through September 30th. You know that deferred home maintenance can be the definition of penny-wise and pound-foolish, right?
Subscribe to:
Posts (Atom)
Posts
