Category Archives: Uncategorized

Understanding the Language of Listing a Home in Sacramento

imagesHere’s an interesting article I read recently regarding language the sells and does not sell homes.

Seattle Times article

The book Freakonomics also has an interesting take on the usage of words and language in selling – a definite worthy read or listen.

Also, check out the blog for the continued dialouge –

Want to Buy a Foreclosure Property in Sacramento?

foreclosuresignIt seems as though many buyers that I’ve worked with lately have a misunderstanding or just a lack of understanding of foreclosure properties. This makes sense, as there is a lot of confusion surrounding the process.

Pre-foreclosure, otherwise known as a short sale …

Once a borrower misses 2 payments in a row the lender issues a notice of default (NOD) and the foreclosure process begins. The borrower has roughly 3 ½ months (maybe longer) before their home is foreclosed upon, unless the default amount is brought back to good standing.

Typically a home owner, that falls on hard times and cannot make their mortgage payment any longer will sell the home, if only to get out and break even. During time as these where homes values were inflated and now in decline, many owe more on their loan than their home is worth. A short sale is an option… that few find come to fruition.

A short sale is the scenario described above, where the loan(s) on a property exceed the amount of the home’s value. If the short sale is to close, the home owner will have to

1) Procure an offer during the 3 ½ month default period

2) The seller has to show hardship – e.g., loss of employment, divorce, medical condition, etc.

3) [The hardest piece of the puzzle] The lender will have to forgive the difference between the loan amount (plus real estate expenses) and the offering amount. This piece is why most short sales do not close. Prior to listing a short sale, most agents do not know if the lender will entertain a short sale, let along be willing to take a huge loss on the property.

4) [The second most difficult piece of the puzzle] The buyer will have to be very, very, very patient while they see other, potentially better deals pop up all around them. Lenders usually take a long time to respond. I’ve heard claims of short sales closing in 30 days – since I believe in miracles, I believe it. But from my own experience and the other agents I’ve surveyed the process is usually in the realistic range of 2 – 4 months. AND, many times a potential buyer waits around 2 month or longer, only to be denied by the bank, or to see the house go into foreclosure.  I love the marketing remarks on one short sale listing that read,”If you do not like disappointment and let-down, or are at all  impatient, then this home is not for you.”

I’ve had many potential clients call and say, “I’m looking to buy a foreclosure.” I think what they are really saying is, “I want a good deal and I heard on the news [or from a friend] that there are some great foreclosure buys out there!” And they are right, sort of. There are great buys in Sacramento, but they are more likely than not Bank Owned properties, rather than a true foreclosure.


This may just be semantics, but a true foreclosure is sold at auction at the county courthouse. There is a minimum price set and the auction begins. The potential buyer has to attend the auction and has to have cash in hand (a cashiers check will do) to pay the full payment immediately following the sale. As you can see, buying a foreclosure at the courthouse auction is not for the faint of heart.

Bank Owned

If no one meets the minimum bid then the property reverts back to the bank. Sometimes you will see the initials R.E.O., which mean Real Estate Owned, another term for Bank Owned. These are the properties that are most prevalent in the Sacramento area and most of the time the best deal.

Still want to buy a foreclosure? Let me show you a less painful way of buying…

Give me a call to discuss your next move, whether it will be your first home or 50th.

Local Area Specialist?

You may see for sale signs around your neighborhood with the additional ride message attached – “Area Specialist,” or it might say “Neighborhood Specialist.”  Now I don’t think these agents are being dishonest, because quite a few have been doing business in a certain area (usually the one where they live) for many years.  Or the agent might just pour most of their effort and marketing into a specific area (usually ones with high priced homes – ha ha ha).  With this said, there are many others that put this attachment on all their listing, as if to say, “I know more about this area than others – hire me.”  It must be a strategy that works,  because if you keep your eyes open you will see this sign flashed everywhere.

I was reminded of this when an investor client of mine asked me if I specialize in a certain area.  The reality of it is, I don’t know many agents, including myself, that won’t list a property or assist a buyer to purchase a property if it’s in their general region.   Unless an agent is a liability to the sale due to there unfamiliarity with the area or it is just too far from the normal book of business, that agent will usually take on the client.  Makes sense right?  A good agent will either be honest about there understanding (or lack thereof) of an area or special type of property, and either hustle to learn and serve the client to the best ability or refer it to someone who knows what they are doing.  Bottom line, what’s best for the client?

I’ve successfully sold homes and assisted buyers in finding homes all over the Sacramento region.  However, I probably know the most about the Midtown and closely surrounding areas of Sacramento (95811, 95814, 95816, 95818) due to the fact that I’ve lived and worked in these areas for over 10 years now.  Also I own property and manage several others in this area, so I am familiar with the streets, businesses, and flavor in each little nook and neighborhood.  Especially with income property, the “area specialist” label may be more important than in other arenas of real estate, becuase the future income, vacancy rate, expense and headache are all associated with the intricate details of that location.

The interesting thing too about working with investors, many are looking for the bargains and the least expensive thing that they can get there hands on.  Investors want the best neighborhood, at the cheapest price (doensn’t everyone?).  I’ve worked with one particular investor that only bought in Oak Park.  Last year I closed a half a dozen deals or more for them (both on the buy and sell end) and really got familiar with Oak Park.  And probably wrote 50 plus offers.  Am I now an Oak Park Specialist?  For a while this is the only area that would cash flow, and now it’s the main area that someone can buy a home for under $30,0o0 and have many from which to choose.

Let me know if you have any questions about the Midtown/Downtown areas or surrounding neighborhoods – and I would include Oak Park in that category.

Calling all First-Time Home Buyers in Sacramento CA

A collegue of mine (John Maulding) recently wrote on a subject that I wanted to relay. He said it just a well as I could have and more sustinct!


On July 26, 2006 the U.S. House of Representatives passed a bill titled The Expanding American Homeownership Act. This is very good news for first time homebuyers. What it does is modernize and update the Federal Housing Administration’s (FHA) pricing structures and program requirements.

FHA has been a favorite loan program for first time homebuyers for many years, but in the last 3 or 4 years it became much less attractive to consumers. Why? The majority of first time homebuyers put zero down, yet FHA still required 3% down…and the #1 barrier to homeownership is coming up with a downpayment.

As FHA fell out of favor with homebuyers, we saw a big change in the mortgage industry, most notably, the increase in popularity of subprime (non-traditional) loans. These loans did a great job of getting Americans into homes, but did not contain the same consumer protections as FHA loans. Example: subprime lenders had much harsher interest rate adjustment caps on their adjustable rate mortgages (ARMs)…some also had prepayment penalties which imposed huge costs if a buyer should want to refinance or sell their home within the first 2 or 3 years of homeownership. This is not to say that while FHA faltered the mortgage industry was taken hostage by subprime lenders. The conventional standards of mortgage lending set down by Fannie Mae (FNMA) also changed to meet the changing needs of borrowers, and in doing so, became an attractive choice for many first time buyers (after playing second fiddle to FHA for years).

Here are the effects of the new House bill:

  1. Eliminate current 3% down payment requirement.
  2. Created new risk-based insurance premium structure that matches the premium (a.k.a mortgage inurance or PMI) with the credit risk that a borrower presents.
  3. Increased and simplified FHA loan limits. In many areas of America, FHA was not a viable option for many buyers because the average home prices were so much higher than FHA allowed.

This is going to help many first-time home buyers, whether you are in Texas where John lives, or here in Sacramento.  If you have any questions about loans or Real Estate in Sacramento don’t hesitate to call (916.595.7900) or email me at  Also you can search for all the houses that are currently on the market on our website:

Real Estate Services


We were with some friends the other night and real estate seems to always come up in our conversations, “What’s the market doing? Where are the good investments? Should I rent or buy? Should we wait to sell?…” I try not to be the initiator of these conversations in a social setting, not because I don’t like talking shop, rather I don’t want to be “that guy” (see comments on cheesy real estate salesperson in previous blog, “Carmax of Realtors”) that no one wants around or will continue to invite to the party. I digress.

One woman at this gathering said, “I just loooooove my Realtor!” As if to say, “Keith, we’ll never use you for your services [accept to ask for your advice on the market].” I responded, “What do you looooooooove about your Realtor?” – Expecting to hear what great services she provided to them. The woman replied in a peppy tone, “I loooooove the fact that our Realtor is a ‘hugger’! She gives the best hugs!” I don’t know if this is a commentary on the nature of humans or just this particular woman. I realized in that moment that I truly would never take the place of this “hugger” Realtor. Don’t get me wrong, I’m a friendly guy and a hug here and there might be appropriate, but I hope that my clients would not give this as a sole reason for why they use my services.

For my past clients and potential new ones, here a short list of general reasons why you might loooooooove me as your Realtor.

  1. I do an in-depth interview with each potential client before I begin to work with them.
  2. I tailor my service to meet each client’s individual needs.
  3. When I work with buyers and sellers, I focus on benefits rather than features.
  4. When I work with investors I provide portfolio stewardship, and an investment system, including but not limited to financial investment spreadsheets, property management incentives, contractor estimates if needed, creative leveraging, innovative strategies to maximize profits, and more.
  5. I find out what is important you to, not just my opinion or what I’ll like to sell you.
  6. I have a comprehensive marketing plan.
  7. I offer a “no-hassle” listing plan – meaning, if you are not satisfied with my service, at any point in the transaction you can cancel and back out.
  8. When I close a transaction, I ask or survey my clients what I can do to improve my service in the future.
  9. I have a strong support team (escrow coordinator, finance, title, inspections, etc.) that makes it easy for my customers throughout our entire transaction.
  10. Oh, and I give hugs, when appropriate – ha ha! But that will cost you a little extra J

As a result I find that my past clients refer me business and want their family and friends to get the same exceptional treatment that they received.

The CarMax of Realtors


A past client of mine was over for dinner the other night and mentioned that she just bought a new/used car from CarMax. She raved about the great experience she had with the salesperson. She went on about how he put no pressure on her and educated her and so on. She said, “It felt like we didn’t even buy a car – I mean there was no stress or anxiety. Just like when we bought our house. Because of you, it was so relaxed and easy [emphasis added]. I quickly replied, “Well thank you for that compliment. [Tongue and Cheek] You know, I am the CarMax of Realtors.” We laughed.


I got to thinking, when I entered this business one of my goals was to NOT become a cheesy and desperate sales person. From my experience there are at least two types of sales people:


1) The guy in the cheap suit that employs tired clichés to make a sale. The last time I was on a car lot the guy actually said to me, “What would it take to get you in this car?” A friend of mine was buying tires and the sales person was trying to up sell a larger set of tires (that would actually not fit the vehicle). The sales person said, “Are you man enough for these tires?” No joke! He was serious! (However, I’ve told this story a dozen time and gotten huge laughs.) You know the person I’m talking about… It’s why this picture of a used car salesman is vivid and infamous. Unfortunately there are these types of Realtors in abundance.


2) While I hate buying car, even from the dealer, I have had positive experiences too (like my client at CarMax) – Experiences where I was educated, not pressured, listened to and served by the salesperson’s expertise. As my client said, “It was as if we didn’t even buy a house OR have to go through that horrible process [that seems inevitable to the transaction].” This is what I’d refer to as a real estate professional or even consultant, and what I strive to be.


I will earn your business and prove my professionalism.

Zillow – The good and not so good

Right now, Zillow is the hype, and rightly so. Check it out for yourself, this home value estimator has slick features, such as, “Heat Maps”, great mapping, tools for buyers, sellers and owners.

The first time I tried to find the value of my home, right after I purchased it, I was disappointed to see, according to Zillow, that I over paid $100,000. OUCH! Oh wait, there is another small link to adjust the value of your home for improvements and special features. Whew, I was able to bump up the price close to what I paid.

For a seller/owner, Zillow is a good tool.

Here’s the “not so good.” When it comes to buyers trying to find a legitimate valuation of a potential property, there is no way Zillow can accomplish this without actually viewing and physically inspecting the property. This is where a professional (like myself) is necessary. Many of the urban neighborhoods that I work in have complexities that make pricing an art-form, rather than an algorithm or science. Values vary from street to street and block to block. A liquor store next door will (obviously) lower the value of a property, whereas (not so obvious, and non-existent on the Zestimator) a nightclub next door may, not always, increase the value of a property (I have first had experience on this one). The interior of a home, which the Zestimator cannot see, make all the difference . As in my own case, we have $100,000 of upgrades in our home. While in another case, the exterior of a home is flawless to the eye, yet there is dry rot and structure issue that lie beneath the surface. The plumbing is pieced together by the previous owner/”weekend warrior” and the electrical is updated, but not to code (can you say fire hazard).

How about this case study in valuation: One investor of ours just bought a parcel with two homes on it – they were boarded up and very undesirable. However, we were able to negotiate the price down $30,000, have our contractor bid the job to rehabilitate these home for $30,000 and work with the city to divide the parcel into two lots. This investor will be able to resell these, now individual properties and net $75-$100K. Now I don’t expect Zillow to do this kind of “magic.”

Bottom line, Zillow may be a good place to start. Oh, I love Zillow’s qualification – they say that their estimates will come within 10%. I’d fire myself if that were my margin of error. If you want to know what your home is really worth or the homes that you are looking to buy, please call me for a free consultation and accurate valuation. Or if you are looking to invest, let’s discuss some strategies to get you going.

Also, there are tools on our website that can assist you in your search. Go to:

Renting vs. Buying

Q:  Buying or renting – which is best?
Sometimes I am asked if it would be a good idea to rent instead of buy as the market levels off.  A recently published National Association of Realtors brochure gives some interesting stats: 

Over the past decade, the cost of rental housing in the United States has increased an average of 3% per year.  That cost is now moving towards 4.5%.
In contrast, a $210,000 home purchased today with a down payment of $10,000 and a 30-year fixed rate mortgage at 6.5% would yield a net appreciation of $138,521 after 10 years, assuming an historic 4.5% annual appreciation rate.  CA stats are even better—see back article.
If you want to accumulate wealth, then owning a home is probably your best choice, even in this market.  

Buyer’s Fear

This was sent to me by another agent – I thought it was helpful content and visiual creative.

As you all know, the real estate market is sloo_o_w_i_n_g down across the USA, and specifically in California.
The reason seems to be
Buyers’ FEAR of

housing price$, due to *so many* homes being For Sale.

This little quiz might help you get a new perspective on the current real estate market.

Quiz: (yes the answers are below)

Q. What was the single biggest annual percentage Drop in the California Median Home Price?

A. 4.5% That’s all…..can you believe it?

According to the California Association of Realtors, since WAY, WAY back in 1968 (38 years),

in only 7 years did median home prices GO DOWN !!! (1993, 1995,1992, 1994,1990, 1996, in that

order, oh and 1984 was teenie)

Q. How many years WAS the longest streak of consecutive annual percentage drops in Median Home Price?

A. If you were paying attention, the previous answer holds the key. Only 5 years and during that time…..

THE D.o.D Closed 32 bases in California from 1988-1995, with a loss of nearly 100,000 California jobs.

Tearing all those jobs out of good ol’ CA’s heart was CLEARLY A ONE-TIME EVENT. (If you don’t agree, take a lunch break, then start again)

And…. PILING ON the HURT… Between 1990-1996, interest rates on 30 year fixed rate mortgages ranged from 7.2% to 10.5%.

Q. What was the total drop in California Median Home Prices for this (longest) 5 year __streak__?

A. In the worst series of value drops in recent California history, homes only lost 13.2% –

is that ALL??

Contrast that with 12 of the individual years since 1968 had more than 13.2% appreciation!!

And MORE: 3 years after the (longest) state- wide downturn was over, prices were up 21%.

Q. What was the HIGHEST annual percentage increase in

California Median Home Price$?

A. 28.1% What? Twenty-Eight.One Percent? Do you know what Kansas is? Maybe 10%?

Q. Guess which year had the highest annual appreciation?

A. 1977 …………….you thought it was during the last 5 years?.

One More Thing,

after a 6% drop from June 2005 to June 2006, how much further do you think prices will fall before the market changes?

Have you changed your perspective on the current California real estate market?

Investor’s Corner

As I talk to investors on a daily basis my question to them is, “What are you looking for?” Invariably the response is…, “I’m looking for a good deal!” OR “Let me know if you see a good opportunity.” Here’s my reply:

“There are always good opportunities depending your level of risk and financial position/buying power (ability to get a loan and capital on hand). Here are some of the recent opportunities we’ve worked for our clients:

– We have done a number of transactions where the client gets cash out at closing ($10-50K), with closing costs covered.

– Also we have done a number of short sales where the client buys in with $50-75K in instant equity. These are very good opportunities, however, they take 2-4 months to close as we are negotiating with the banks.

– We have referral programs for sales division and for our property management co.—Ask me how you can benefit and earn money with us.

– We work closely with a few contractors who do property rehabilitation for us where we can maximize the value of a property to flip or buy and hold.

– We can give discounts on our property management (as it is we are one of the best deals in town – $50 / unit). We sometimes give 3 months free for investors, and have even gone up to 6 months free.

There are so many creative ways to find and cash in on good opportunities. Sadly, we find that most people are more in love with the concept, than the reality of launching out and actually investing. However, those that do usually never look back and thank us dearly for the coaching and consultation.

Let’s talk about your next step.