The Perils of Pricing Your Property Too High

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If you really want to get your property sold in a timely manner and at the best price the market will bear, most Realtors©, including myself, will show you a CMA report (a Comparative Market Analysis) sometime during the Listing Presentation. It is important to look at the “comps” (comparable properties to your property) for a number of reasons. In fact, sometimes I will even drive my clients around to comps in the area, so they can that they see firsthand for themselves what the homes in their area are selling for, or at least, what their list price is. We can see how long they’ve been on the market, and track when they go into escrow and are sold.

Lenders Require Appraisals

The number one reason that sellers need to be aware of the comps is because Appraisers depend on sold comps (comps that have sold within the last 3 – 6 months for their appraisals). Many buyers need or want to use a loan in order to purchase a property. Lenders require an appraisal. The Appraiser looks at the subject house and does a detailed analysis using the comps, adjusting for various factors. Does the house have a pool or not? Has it been remodeled recently or not? What is the size of the house compared to the comps? What is the size of the lot compared to the comps? Does it have amazing views or not? Is it on a busy street or not? All these factors play into the appraisal.

It can be trickier for an appraiser in areas that are not “cookie-cutter”, where the homes are all very unique, many built in varying years, many original vs. remodeled vs. recently remodeled. Some may have 2 or 3 or 4 or even 5 bedrooms, and a varying number of bathrooms. The architectural styles vary. Views vary. The factors that can make a difference are many! One thing sellers and listing agents should request from lenders to help get a more accurate appraisal is for the appraiser to be a reputable local appraiser, who is more familiar with the market here in the desert.

What Happens When The Home Doesn’t Appraise?

Many people assume that appraisals “magically” come in at the purchase agreement price. This happened often in the heyday of booming real estate prices in the years 2000 to 2006 but then home prices started falling and they really fell after the financial crash in September, 2008. They didn’t start climbing back up until about 2012. Even since that crash, lending practices and regulations were changed dramatically. Appraisers were selected using different criteria, and gone were the days that sellers could count on their properties appraising.

Today, one still cannot assume that the appraisal will come in at the price in the Residential Purchase Agreement.

If you price your home according to sold comps, real comps, then the likelihood of the property appraising greatly increases, and there is less stress involved.

If you have priced your house with a pie-in-the-sky price, in spite of the comps the Realtor has dutifully showed you, then there is a high likelihood that your house will NOT appraise.

What happens when this unpleasant “surprise” rears its ugly head? There are a variety of possible outcomes.

In the Worse Case Scenario

The worst case scenario is that the deal will fall out of escrow if either party is unwilling to renegotiate the price. However, typically, when there is a serious seller and serious buyer involved, then the purchase price is re-negotiated.

The Best Case Scenario for Sellers

In a case where there are multiple offers, this situation can favor the seller, because the buyer may want the house so badly, that the buyer will fill the entire gap between the purchase price and the appraisal, even if it’s $100,000 or more! It can happen!

However, multiple offer situations are not often the case here in the desert, where secondary homes are common and there is a fair amount of inventory.

The Common Scenario: Try for a Win-Win

More often then not, the seller will have to come down in their price, and the buyer will have to come up in the price, in order to complete the sale. The split can be successfully negotiated in many cases with guidance from your experienced Realtors©. It is generally wise to ask for advice from your Realtor© to weigh your options carefully and successfully navigate the transaction.

The Best Case Scenario for Buyers

If the buyer is NOT in a position to come up on the price, because they have an FHA loan, and they do simply do not have the funds to cover any of the gap between the purchase agreement price and the appraisal, the seller sometimes will opt to cover the entire gap. Another reason for this, is that an FHA appraisal stays WITH the property for six months, so if another FHA buyer comes along to make an offer, if the original offer falls out of escrow, that FHA appraisal will still be in force. So if the seller is serious in selling, during that time frame, they have little choice but to come down in their price.

This is also true of a buyer who is only willing to pay the appraised price, and the seller just wants to sell quickly and agrees to sell their property at the appraised price.

Needless to say, this situation generally increases the stress level for all parties involved.

Ground Hog Day or Make That Price Adjustment?

If the seller fails to lower their price to “fair market value” after a deal falls out of escrow due to a low appraisal, they may find themselves facing a Ground Hog Day kind of experience… a deja vu experience. Why not just price it right for the market and cut the stress level for yourselves?

Yes, some people do get lucky, and get that out-of-town buyer with cash to burn, and is able to make an all cash offer, who falls in love with your house and simply impulsively makes an offer that is close to or matches your pie-in-the-sky list price! In that case, you had better seek to have a quick escrow, say close escrow in 10 days, before they change their minds!

Perhaps you yourself were that out-of-towner who made that impulse buy on the property years ago, and so you think that it will happen again. It very well could happen again, but I would not count on that. It does happen, but not very often. Say it’s been sitting on the market for almost six months now, and a buyer wants to buy it for “fair market value”. The worst case scenario, is that you have enjoyed the home for several years, and if you decide to sell it for the “fair market value” price that the buyer offers, you might even have to report a loss after all the closing costs. Look at the bright side! Then you won’t have any taxes to pay! In the meantime, if you paid all cash, you will get that cash back to invest in something else that you might want to. If you are Canadian, then there is the benefit of the better exchange rate from US dollars to Canadian dollars.

Bottom Line Is…

The bottom line is that it makes more sense to price your property according to the comps, and maybe a bit higher is the market prices are drifting higher. If you price it right, you may even get a bidding war going and get over the asking price! Realtors© want to list but even more than that sell your property. Realtors© are different from “real estate agents” because being a Realtor© requires that we take an Ethnics continuing education course every two years, and we are members of the California Association of Realtors© and the National Association of Realtors©, which has strict guidelines.

You will find that most Realtors© are very risk-adverse, and want to be as honest as possible with their clients. Therefore, when you pick someone to sell your property, choose a Realtor©, who belongs to the local board of real estate, and participates in the local MLS. When a local Realtor© gives you the comps for your property from the local MLS, you can generally trust them to be telling the truth. You can always trust me to provide you with the most accurate, up-to-date information regarding your property’s value, from the comps on the local MLS and then from the feedback I receive at the open houses when you list with me.

When You List With Me…

When you list with me, I will hold open houses almost every weekend until sold, and I will be hearing feedback from people who are either lookyloos, interested neighbors, agents and even serious buyers, many of whom provide valuable feedback, on the appearance of the home and the price, which I then share with my sellers. If the list price needs to be adjusted, we should know after about a month’s time of having open houses and the home being listed on the MLS. Sellers are better off when they listen to the advice of their Realtor©, as we have the knowledge and we are more than willing to share it. This is one of the ways we earn our commission: to provide sage advise based on experience in order to help facilitate a successful transaction.

I hope this article is helpful to you, and I invite you to contact me on my cell at 760-587-6009 if you have any questions or would like to schedule a listing appointment.

Wendy Campbell All Rights Reserved © October 2018

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Duran Duran & the Coachella Music Festival 2011

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Duran Duran ROCKS Coachella!

I wasn’t planning necessarily on attending the Coachella Music Festival 2011, especially since tickets for it sold out the day they went on sale.  However, since one of my favorite groups of all time, Duran Duran, was playing, I did not rule out the possibility of trying to get in to see them SOMEHOW or another.

I was lucky enough to attend a private party held by the Radio Station Mix 100.5 at a local hotel for Duran Duran. I’ll say LUCKY! I got some great photos of the band members up close, AND I actually got a photo taken of me in between Nick Rhodes and Simon Le Bon along with John Taylor and Roger Taylor, and three other Duran Duran fans, which I am looking forward to seeing on the radio’s website.

In the meantime, I shot this photo of lead singer and frontman Simon Le Bon as he entered the room to the stage where they would answer questions from the audience which had been pre-written on cards.

Simon Le Bon, lead singer and frontman for Duran Duran

The band members sat on the stage and answered the questions with typical dry English humor as well as a sense of warmth and gratitude.  Roger Taylor, the drummer, especially expressed his appreciation of Duran Duran’s invitation to the Coachella Music Festival, saying it was a highlight of his career with Duran Duran.

Duran Duran was one of the hottest rock and roll bands in the 1980s, and they were early pioneers in stylish music videos for their songs which aired on MTV. They were glam rockers with catchy tunes that were rock-based and dance-inspiring. Their luxurious lifestyles that included yachts, private jets, models, partying in style in all the hotspots, also caught the imagination. Their hit “View to a Kill” was featured in one of my favorite James Bond movies by the same title.

Since the 80s, they have periodically staged “comebacks” and now they have a new album called “All You Need Is Now”.  I have the CD and have listened to it several times since I received it yesterday at the private party and it is great! They have returned to their roots– the catchy, rock-dance-pop sound that made them hugely popular in the first place. I highly recommend it!

Here is a group shot I took of the guys on stage, as they amused the adoring audience.

Simon Le Bon smiles at me! 🙂

One of the fun questions that was posed to them was, “What did you spend money on as soon as you hit it big financially?”  John Taylor said” a car”; Nick Rhodes said “art”; Roger Taylor said “a Mercedes”, and Simon Le Bon said he spent it “on a long string of beautiful women”, which cracked everyone up. 

From left: John Taylor, bass guitarist; Nick Rhodes, keyboard player; Simon Le Bon, lead singer & frontman; Roger Taylor, drummer

 
After the interview, all the fans there were invited to get up on stage in groups of four to get up on stage with the four members of Duran Duran that were there, and have our photos taken.  What a blast! Here is a photo taken that day of me and Nick Rhodes (my Favorite!).  As you can see, I was tickled pink to be so close to Nick and immortalized in this photo! (Note: I did crop the group photo to show just me and Nick, for fun!)
 
So, after that fabulous experience, I was more determined than ever to see Duran Duran at the Coachella Music Festival, especially since it is 15 minutes away from my home AND especially since I missed Woodstock in 1969! 
 
This year’s festival sold out in one day! And so I was going to have to get creative to attend.
 
I drove over to near the restricted area and parked at a friend’s house.  And trekked over to where many attendees were streaming out, figuring my best bet was to buy a wristband (absolutely necessary for attending! no ifs, ands or buts, as I found out!) from someone leaving.  After all it was the last night, a Sunday, and I figured many would be leaving to drive back to LA so they could get a good night’s sleep before working on the next day.
 
I met about three people who had luck doing just that in my efforts to flag people down to sell me their wristband.  Some paid $80, one paid, $38.  I ended up paying $20! All I had on me was $25 anyway. So, SUCCESS!  Getting the wristband was the main hurdle.  But then there was the seemingly endless, dusty trek to get to the gates into the festival.  Literally, I walked MILES to get there! In high-heeled platforms, which was ridiculous, of course, to wear in the first place to such an event.
 
I heard Duran Duran hit the stage. I was anxious to get in! Finally I got in, but wait! At first the chip in my wristband failed! OH NO!  But then– YAY! On came the Green Light when the guards scanned it again.  OH my God.  All this high tech stuff is freaky.
 
So I limped and sprinted across the fields toward the sounds from the stage where Duran Duran was playing, and there they were and there I was. GOOOOOOOOOOOAAAAAAAAaaaaaaaaaLLLLLLLLLLL!!!!!!

John Taylor with Roger Taylor on the Big Screen

They sounded great, and looked great. The crowd was enthusiastic and many sang along with the band, showing that Duran Duran has fans from all age groups.

 

Waving crowd

They had a great light show as well, especially during their James Bond hit “View to a Kill”.  Simon Le Bon is a top frontman, elegant, with an exuberant personality and understated charisma.
 

Simon Le Bon

After Duran Duran played, I stuck around for a while, listened to a song by the following band the Strokes, but decided to then check out some of the art.

Attendees relax under a giant bug sculpture

After a while the melange of sounds and glowing lights and rambling people made me feel like I was inside of a giant video arcade.  I was more an observer at this festival than a participant.  After all, this is the Woodstock of this generation, not mine, but I was happy to observe and be a participant even at a limited level.  It was great people-watching and a beautiful evening under the full moon and bright stars on a warm desert night.

I loved the wild and creative spirit, but it was highly organized, much more so than Woodstock was, obviously!

Fortunately, on the way out, a nice young couple on a golf cart took mercy upon me and gave me a hair-raising ride across fields, down dirt roads and through the crowds to one of the main roads that was closed off.  They dropped me off, and I discovered I still had at least a half mile to walk down the corner where my indulging husband would be able to pick me up.

He took forever, because in his words, “it was like a police state” getting through detours and checkpoints, to find me.

All in all, it was an unforgettable experience, and alot of fun, in spite of my aching feet which are only now recovering.

I am grateful that I was able to have this experience, and I am glad to be able to share it with you!

The Coachella Music Festival helps to put this wonderful desert on the map, including for people who are looking to buy real estate.  This is a beautiful spot on our planet earth, and it is very reasonably priced, especially at this time.  As more and more people discover this area, more people will want to call the desert their home, at least for part of the year.  As a full-time realtor, I can help you find your piece of paradise here!

Trifecta Perfecta! The Desert, The City & The Beach

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Desert Living, fantastic in the winter months!

Southern California offers such a rich diversity of wonderful places to live! If you have the means, you can choose to also have a second or even third home! Why not?

A home in the desert, whether it’s your primary, secondary or tertiary, is very desirable for so many reasons, as people who have been here know.

During the winter and spring months, it’s simply divine weather here, for the most part.  Surrounded by mountains, groves of palm trees, blossoming trees and colorful flowers in great abundance, what is not to like? Rain is unusual, and so hiking, biking, golfing, tennis, swimming and horseback riding are the order of the day. Or watching polo games, shopping along El Paseo, dining at our many restaurants may be. It’s all up to you! At night, there are the casinos, or concerts and top entertainers at the McCallum Theatre, or take in a newly released hot movie. So much to do, so little time!

The fabulous modern contemporary home pictured above is in Palm Springs, however each desert city offers its own charms and attractions. Palm Springs has the world class cachet and world recognition, but some of the best luxury real estate in the desert can also be found in Palm Desert, Rancho Mirage, Indian Wells and La Quinta.

During the year, you might get the itch for some Big City excitement. What better place to go than the new L.A.Live area, the new Times Square West area, around the Staples Center of downtown LA?

Fabulous new condos in downtown LA!

I explored some of the new condos in downtown LA, and I was impressed! I took the photo above from the pool area of the EVO condos, a 24 story, eco-friendly constructed complex.  The two sister condo buildings at the left of the photo, the Elleven and the Luma condos sold out immediately when they were completed during the hey-day of real estate buying, just before the 2008 crash.  There are some resales in there now, some short sales and some foreclosures, for the bargain-hunting buyers.  However, at EVO, which is brand new construction, there are now only 30 units left to buy.  The great downtown location with all its entertainment venues, along with many amenities that come with the condos, and most importantly, the spectacular views afforded by the walls of glass, combined, make these condos quite attractive indeed! Prices at EVO start at around the low $500,000s.

I understand that it’s mostly owner-occupied in these condos, which attract mostly professionals who work in downtown LA, but also many empty nesters.

To step it up quite a few notches, there are the fabulous new condos at the Ritz-Carlton Residences.  This building can be seen to the far right of the photo above, and is a spectacular, blue-hued tower that sparkles at night.  I learned that they just closed escrow on their first condo residence just recently! About one third of the condos are still available, and most are still waiting to be completed.  These condos with spectacular floor to ceiling views have attracted top entertainment figures in music and sports, as well as those who can afford this level of luxury and want to be in the midst of all the excitement that L.A. Live has to offer.  Don’t forget the Walt Disney Hall is close by as well as too many interesting markets, venues, restaurants and attractions to list here!  Prices start at around $800,000 and the amenities are top-notch, as you can imagine!

Finally, on a hot day, where else would you want to be but at the beach?  And perhaps the most amazing stretch of beachfront properties to be found in the world are in Malibu!

To have a house on the beach in Malibu would be like a dream come true in many people’s minds, and there is quite the variety of homes to choose from along this rarified 27 mile stretch of shoreline.

Spectacular views from this newly built Malibu beach house!

Last time I looked, they were asking $14 million for this newly constructed home with this to-die-for view of the Pacific Ocean.  I have a feeling that if it is still available, it is listed for considerably less.  However it does have a great location on Malibu Road, very near Malibu Colony, which is gated and perhaps the priciest real estate in Malibu.

If you watch the Bravo show “Million Dollar Listing” like I do, you can see that there are spectacular houses on the beach in Malibu listed for in the $5 million range now. Amazing but true!

Now that our MLS encompasses real estate from the desert to the sea, I can help you make your dreams come true, from a fabulous desert getaway, to a condo in the midst of  the excitement of downtown LA, to the best beachfront property perhaps in the world!