Sacramento Real Estate Reflections

I worked at a semi, high-end restaurant while in college.  I started as a busser, moved up to “expediter” (the person who double checks plated food for accuracy before they go out to guests, puts garnishes on, etc.), then became a server, and ended up being a trainer for the servers.  One important piece I recall teaching was, “perceive the need of the guest (before they ask).”  Or when they do ask, you, like a magician hand them exactly what they wanted – that feels good and everyone is happy!  When a Caesar salad is served, bring the pepper grinder and offer fresh ground pepper.  When clam chowder goes out, put some crackers and hot sauce in your apron.  Steak knives go with steaks, straws go with certain drinks,

lemon wedges go on a fork with shrimp cocktail, kids like to color – give ‘em crayons.  Perceive the need.  This can be applied to most everything in life.  This may come natural to some, yet others need to develop and practice this skill – a little forethought and care goes a long way.

Attention Realtors and home sellers (at least in California), inspections and appraisals can go much more smoothly by perceiving the issues ahead of time.  I write this after applying my own advice, which is really just you taking advantage of my failure and experience of having 100’s of inspections done – some I got lucky, and others went badly.  Finally, I started making a mental note… then I made a physical note to self – a checklist of sorts.  Keith Klassen: Before inspection, make sure the follow things are in place…. aka., stop making the same mistakes!  Also, if you are the buyer’s agent, it’s not a bad idea to ask the listing agent or seller to make sure the following are done (Doesn’t not apply to cash offers, but still a good idea).

• Ask your favorite appraiser for a list of FHA guidelines, if the buyer is using this loan product. Some favorite overlooked items
  • Self-closing hinge on door to garage
  • Peeling paint
  • Low windows (usually to the side of the front door) that are not tempered glass
  • The obvious, smoke detectors and CO detector. Are they there?  If so, do they work?  Test them.  Ask your appraiser for the guideline they use (seems to vary from one to another).
  • Earthquake-strapped water heater

• Another seemingly obvious one: Make sure utilities are on –  Electricity, gas, water (WIFI with password and a comfy chair for me to keep working while I stand around – ha ha).

Since I deal with a lot of income properties, it’s common for a tenant to move out and the power stays on, floating without a name on the account.  Make sure it goes back into owner’s name.  Recently, a tenant moved out, power was on for months and I assumed it was transferred into owner’s name (good assumption, right?).  We get into contract and, of course, the appraiser and inspector go out and the gas is turned off.   I was just there two days prior!  Both charged $125 for a re-inspection for that error.  Who eats that cost?  Most likely me.

• Make sure attic and crawl space are accessible. Try to get owners to make open and accessible – take locks off gates; unlock garages, move things away from walls to get to electrical, etc.  Many times garages are so packed with gear, so much so, the inspector cannot even get to the hatch to the attic (same goes with entrance to crawl space if in a closet – no one wants to move dresses, shoes, suits and boxes with party hats and keepsakes).  Then you’ll get the ol’, “I don’t move personal items to inspect.”  That’s a whole nuther topic – don’t get me started!

What’s your #4?  What would you add to the list?  Thanks for reading and please subscribe, share, or leave your comments.

Cheers,

Keith Klassen, Real Estate Broker

916.595.7900

In an industry where the Realtor is often the scapegoat for any problems related to the deal that go sideways, it’s such a pleasure to get a thank you letter from a client, where hard work and professionalism is acknowledge.

[note reproduced}

Keith,

Just a short note to thank you for your extraordinary service in the recent sale of my property on [street address]. How lucky that I ended up working with you when my tenant decided to move!

In these days of poor customer service, it is heart-warming and reassuring to meet people like you. Not only did you help me navigate the difficult waters of fixing the place up for sale: you advised me well on which repairs would add value, and which would not. Your expert assistance in selecting just the right contractor for the job and seeing the job through far exceeded my expectations.

Thank you for responding promptly to my queries, and for a job well done.

I will certainly be happy to serve as a reference for anyone considering your services.

Sincerely,
[client’s name]

I get frequent calls from investors and referrals consistently of those who are looking to invest in and/or flip properties.  The latest was a semi-retired contractor who has enough cash to buy and improve a home, and would like to do several of these a year.  The potential problem:  He’s never done this before.  So I did a little hand-holding, went over spread sheets and took him through a real potential property to flip.   This was an off-market deal – not offered to the general public – derived from a relationship I have with another investor.  At the end of the day the seller asked for $5000 more than they originally said they wanted – still a good deal.  The buyer (being new) got really offended by this and said that he felt jerked around.  I agree, no one likes to pay $5000 more after expectations get set at the lower price.  Instead of trying to negotiate or come up with a solution, the buyer just emails me, “You’ve found some real winners to work with!  Have fun!”  I emailed him back (since he stopped returning phone calls), erring on the side of miscommunication I replied, “I’m not sure how to take this last email… clearly you are frustrated.  Are you calling it quits?  Is that the way I should read it, or are you just frustrated with this deal?”    I’ve yet to get a response, taking that to mean he threw in the towel, with no acknowledgement that I took the time to educate him, coach him, and served him up a sweet deal – just that I somehow was part of “jerking him around.”  He’ll probably never know how good it was, even at the higher price.  Some of you may wonder how sweet at deal it actually was, or if it was a good deal or not?  The proof is in the rest of the story.

The very same day I return a call to one of those investors who calls saying, “Looking for a good deal… want to flip a property [yada yada yada].”  I almost didn’t call him back after that last incident.  After asking the caller a few qualifying questions (realizing that this guys if for real), I told him about the same deal at the higher price.  He got so excited that he ran out to the property the same day, met his contractor, and we wrote an offer the following day!  He thanked me profusely.  The deal closed in two weeks without a hitch.  Again, he could not stop thanking me and was so glad for the deal.  In fact, they will be done with the project in a few weeks (1 month turn around) and they asked me to list the property.  A home run for everyone!

This is what a seasoned investor/flipper realizes:

1) It’s all about inventory – at least right now in the Sacramento CA area.  Without the project/property, nothing else matters.  If you cannot land the deal, everything else is a waste.

2) It doesn’t matter what the previous owner paid for it, nor what they will make from the sale, nor what the agent will make.  What matters is if the deal is good for them per the numbers.   Don’t miss the obvious and focus on your situation answering the questions, “Is this a good deal for me?”  This is the only magic there may be – figuring out the real disposition cost and an true exit strategy.

3) They don’t take it personally.  Clearly the first, unseasoned guy let his emotions get in the way and let them cloud his judgement.  I think that if he could have got past the feeling of being jerked around and realize that it’s part of the “game,” he could have executed a great turn-around.  The next guy swooped in and is going to make a chunk of change, and we’ll probably do a bunch more deals in the future.

4) Relationships are of the utmost importance.  I always appreciate the trust from those sending referrals and putting in a good word.  And it takes time and energy to develop relationships that create a win-win on both sides of the deal.

I guess the comments by the “rookie” that were meant to hurt me, were the truth after all.  I picked some real winners to work with [not him] and I AM having fun.  I took it as a learning lesson and reminder to qualify the would-be investor/flipper more carefully.  I am thankful for the experience and hopefully I can have more discernment on the future –  it never feels good to pour into a would- be-investor, only to get kicked in the stomach on the way out.  Thanks for playing!

What’s your recent “war” story, whether as an agent or investor?

Cheers,

Keith Klassen, Broker