Tag Archives: Questions

Philosophy Meets Real Estate in Sacramento CA and Beyond

While this post has everything to do with, and is focused on the details of the real estate market, the economy, investing, buying and selling property, my little neighborhood in Curtis Park, Sacramento, sometimes I can get a little philosophical.  What is the meaning of life?  What is the purpose of my life?  How do the situations and the context which I find myself shape life?  Are there forces at work bigger than the indexes?  Is this depressed economy doing something in our culture and country that may actually be positive?

I mused the other day over the thought that storms and hard times in my life have been the things that has been pivotal or a “rescue” of sorts for my life.  Let me give you an example.

When I hit the ripe age of 31, I started having chronic back pain.  This was the same time as we had our first child.  I have painful memories of not being able to carry my newborn son very far in the Baby Bjorn (front carrier), due to back pain.  My wife just thought I was trying to get out of carrying the baby 🙂  I tried a lot of quick fixes like a hot pad, muscle relaxing creams, simple stretching, and more.  I continued to not be very active and I lost sleep due to the discomfort.  As a result, I made a determination that I had to seek physical therapy and strengthen my core muscles, or I may go through the rest of my life with a dull, (kind of) bearable back pain.  I could not deal with the idea that I would not be able to carry, let alone wrestle with my sons as they got older.  As a result, I buckled down, swallowed my pride and got help.  I now stretch daily, am aware of my posture, wear orthotics, work out 4-5 days a week (focusing on core muscles) and am in the best shape of my life.  Oh yeah, there are nightly wrestling matches with my boys, now 4 and 6 years old.  I can sleep soundly and walk/run long distances without pain.  This pain-in-the-back changed my life for the better.

Whether it be a health situation, a tragedy of some sort, or a financial crisis, the “storms” in life will reveal in us who we really are and what lies at the core of our being.  I wonder, is this housing storm revealing what our nation is really about?  While it’s tragic for many (including myself), is there something underneath it all that is good?  Is there a corrective measure that we need as a country that will be of great benefit in the long-run?

I read an article lately about “The return to frugality” – how saving money is back in vogue.  Trends show that people are staying home and finding inexpensive ways to be entertained.  Maybe couples are conversing more and experiencing greater intimacy?  Maybe families are doing things like going on bike rides together, or spending a day at the park with a picnic lunch?  Maybe people are reading more?  Maybe consumption is down (I know that is not helping our economy in the traditional ways)?  Maybe people are shopping more locally?  Maybe people are saving resources by not driving as much, or using as much power?  I’ve heard that micro farming is becoming a big thing for some families, or at least there is rise in growing your own produce.  Maybe neighbors are talking more and sharing ideas and bonding over a shared plight?   Maybe people are looking after their physical health more?  I notice the gym is packed on Fridays with “furlough Fridays” in effect for state workers,.

I got to thinking a little deeper…. Usually I try to escape storms and run away from them – this is the rational thing to do, right?  However, if I am constantly trying to escape the thing that could radically change my life for the better, maybe I should attempt to look at storms a bit differently?  Do I just continue to put “Icy Hot” on my dull back  pain, or am I going to embrace the trauma and enter into a larger, positive, more life-impacting shift?

Your deep thoughts?

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030

Have we hit bottom in the Sacramento CA housing Market?

This is a question I get asked frequently and one that I hear attempting to be answered.  “Have we hit the bottom of the housing market?  At times I have fallen prey to the common thinking that says, “How much worse can it get?  The market has dropped ____%, how much more can it go down?”  Then the conclusion… “We must be at the bottom.”  Anyone with their head in the game has thought/asked this.

However, after just doing a little research you will find that there are key economic forces in play that have to change (unemployment for one) before “the bottom” is reached AND our economy comes out of the recession in which we find ourselves.  Forecasters have been calling the bottom for the last 2 years or longer.  So have we hit bottom yet?

For an excellent read on some of these economic factors, check out this article, The Orwellian Recovery.  The author succinctly states,  “I don’t see how housing prices can recover at the same time inventories, mortgage rates, and unemployment rise.”

A colleague an I were discussing this topic over coffee today… what’s going to happen when the government backs off the stimulus and interest rates rise?

It’s a complicated and highly opinionated topic, what are your thoughts?

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030

Real Estate Therapy in Sacramento, CA

Lately I’ve had the privilege of gaining several buyer referrals, where the previous real estate agent, for a variety of reasons, was not able or capable of getting the job done.  One agent was in the business part-time and did not have the availability to do the follow through.  Another situation, the agent said to the buyers, “You are too picky… you need to expand your search and buyer something [now].”  I’ve retold that story many times… how crazy is that?!  I mean, there are thoughts that might go through my head about certain buyer characteristics (especially if I’m hungry, tired, or unbalanced)… but let’s just say, FILTER!  Let me say it again, FILTER!  If I said everything I was thinking, I might get beat up (and that’s just my wife – ha ha ha).  Back to the subject… My point… plain and simple I’ve had the good fortune of capitalizing on other agent’s inability to do their job (well).  One frustrated client said, “Our agent wouldn’t return our calls!”  Most recently, I received a referral on a client whose previous agent decided that they could not make a living in real estate any more (this is pretty common these days).

While this phenomenon has been good for my business and is a nice pat on the back, as I imagine the ones referring these clients say, “Call Keith, he’s the most solid (best, most professional, gets-the-job-done, intelligent, savvy…) Realtor I know!”  Okay, emphasis on I imagine.  Bottom line, I call people back, am full-time, and don’t say (aloud) everything that passes through my head.  It’s been good to get these referral, however, I find myself having mini-counseling sessions to give these beat-up buyers real estate therapy.  These are wonderful people now on edge due to their past agents.  For the one client, she kept asking me during the showing process, “Do you think I’m too picky?”  My response, “Why yes I do, let’s stop right now, I can’t take it any longer!”  Of course not!  And I wasn’t even thinking that 🙂  Here’s the genuine and right response, “You should be picky.  You are making one of the biggest investments of your life.  My role is to assist and help you find your ideal home that fits your buying criteria.”  Agents, takes notes – this is real estate 101 / Socialization 201.

You will be helping yourselves as well as your clients when you help them focus their search.  If they don’t want a swimming pool… don’t show them homes with swimming pools.  If the client can only afford a $250,000 home, then don’t show them homes that are listed at $300,000.  If they are using a down-payment assistance program that requires that they buy an REO (bank owned property)… yep, you got it, only show them bank owned properties.  I know, not rocket science, however, it requires that the agent listens, and asks questions, and takes notes, and is actually engaged.  The other day I met a clients for the first time that was frustrated and burnt out on her last agent.  I found out through listening to her story that they’ve looked at 40-50 homes over the last 5-6 months.  Naturally I asked, “What were some of the things about those homes that did not work for you?”  She replied, “Well, most needed too much work, and I don’t have a lot of money to do a lot of work.  Many had swimming pools, and I definitely do not want a pool.  Others backed up to a busy street, and I don’t like the noise.”  She went on.  I took notes.  Wen she was done I ask more questions and learned that she also was allergic to cats, loved gardening, and has a niece that would be living with her.  I asked specific questions like, “What do you mean by ‘a lot of work’?” And, “How much money could you spend on fix up costs.”  And, “what is your favorite thing about this house?” And, “Does your niece need to be in walking distance of the school?”  And, “What matters most in buying a home on the list we’ve created?”  Again, this is not new or an unusual tool in the agent’s belt, but I am surprised how little it is used.

I’ve found it a refreshing experience to have these real estate therapy sessions. The client finds relief from frustration.  They feel cared for and in good hands.  They get motivated and excited to find that home, as they now know we are not going to just look at anything that pops up.  The homes we look at will all be potential purchases.

My therapy sessions are free.

What are some experiences you’ve had as an agent or a buyer? I’d love to hear your story.

Keith Klassen – Real Estate Broker

916.669.9030

Home Buyer Tax Credit – How do you get it?

This is a big question that all my new home buyers are asking once we close.  Here’s a great article outlining how to obtain your tax credit once you close.

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030

Going “Green” in an Affordable Way in Sacramento

I was at Costco. and saw that they carry dual flush toilets now – I was shocked.  And for 80 bucks!  I don’t know if it’s any good or not, since I’ve seen them sell in the past for at least $200 and up.

I recently had a conversation with another real estate agent, relaying how one of my clients who rehabilitates homes, puts dual flush toilets in them.  The agent had never heard of a dual flush toilet.  While they are not new, it’s interesting how few people are aware of them and  to see Costco. getting in the game.  I guess if they can sell a billion of them and there is a buck to be made…  I’ve always thought that things like this need to be main stream for great impact to be made.  I hope everyone buys one or several and has them installed in their homes.

Oh, and now that our water is being metered in Sacramento, all the more reason to conserve.

Check out how these toilets function.  Also, watch the video on the link – good stuff to remember.

[note: toilet pictured above is not the one they sell at Costco.]

Cheers,

Keith Klassen

New Woodside Solar Homes in Sacramento / Rancho Cordova

I’m writing about these homes for two reasons:  1) I just got into contract on one for a client; 2) Solar is awesome.

Here’s the deal:

– New Home!  Ten year warranty on structure and solar; Two year warranty on plumbing and electrical; One year warranty on everything else.

– Solar!   The say that the power bills can be on average $20-40 / month.  Low power users actually get paid, as they sell back the power that they do not use!

– My client is paying under $225K for a 3 bedroom, 2 bathroom home that is about 1500 square feet.  Granite counter tops, good standards, and attractive finishes.

– Incentives!  $8000 from the government as the home will be ready by the end of June.  $5000 from Smud for solar panels.  $6000 plus from the builder to pay for closing costs!

– Decent location, especially since my client works in this area; good resale value due to the solar; Parents approval… the list goes on.  Check out the builder’s website.  They mention cows across the way in their disclosures – ha ha ha .

Enjoy,

Keith Klassen

Real Estate Broker

Short Sales – Taking it Personal

I have landed in a place where I am selling a few of the properties I own, in a short sale position.  It seems like a year ago there would have been ridicule and maybe a little pity for those poor folks who find themselves in this situation.  I struggled to come to grips with this reality and felt some remorse.  Now we all know someone who is facing foreclosure, being “upside-down,” late on their mortgage payments, or trying to short sell their home.

Short sales may currently comprise up to 75% of the market right now.  All arrows are pointing to 2010 to be the year of short sales.  Supposedly banks are getting government incentives and getting a clue in general.  Oppose to letting these homes foreclose, a short sale is now the most workable route for both the owners and banks.  Personally I’ve had successes with short sale at the end of last year and one already this year, which has changed my demeanor toward them.  Now I trudge through the grueling process of pushing my own properties through.

I met with an agent and his buyer at my 4-plex that is up for short sale yesterday.  After handing me the offer we discussed the short sale process.  The other agent commented, “They should be called long sales, not short sales!”  For the most part, very true.  I just closed one that took the bank 4 months to approve.  While another one that I listed got approval in 1 week!  I still stand in unbelief.  I just contacted an agent representing a short sale property, where they had a buyer waiting for ….. 15 months!!!! before they said, “Uh, this is ridiculous!  We’re outta here! [my conjecture]”

I hold my breath and wait to see how my own experience will transpire.

Enjoy,

Keith Klassen

Real Estate Broker

Home Inspection Musings

I make it a practice to attend the home inspection walk-through with my clients – I think this is pretty common.  I want to hear what’s going on and be able to address concerns that are brought up as a result of the inspector’s findings.  Many times this can be a tedious experience… I’ve heard the same spiel from the home inspector 100’s of times now and Mike Phillips (one of the main guys I use) does a great job.  But, following the inspector around for an hour and seeing where the water shut off value is, and hear that it’s typical to smell gas at the meter, and how gutter is Sacramento get leaves in them, and how no one installs their anti-tip bracket on the stove, and…..  Sometimes I have to amuse myself by taking pictures of things that strike me as odd or funny in the “glaze” of the moment.

Here’s the latest…

What’s wrong with this picture?

Did you figure it out?

Enjoy,

Keith Klassen

Real Estate Broker

Short Sales Revisited

In past posts I’ve been adamantly against short sales due to all the hiccups involved.  It is still true that a buyer needs patience, emotional disconnect, and a reality check, however, this year and the years to come might be much different.

Definition – Short Sale:  When a home’s value is less than the money owed on the note/mortgage; This produces a scenario where the lender (one holding the note) is given the opportunity to approve or reject an offer to “forgive” the difference between the offer amount (and real estate fees) and the current amount owed on the loan.

To reiterate:

1) Patience – I closed a few short sales this year for buyers and the average wait to hear back from the bank on an approval was 2 months.  I currently have an offer out there for a client on a short sale and we’ve waited about 4 months with no approval from the bank as of yet.  The other agent keeps saying, “soon, soon… hopefully soon.”

2) Emotional Disconnect – This is a tough one… How does one make an offer on a home to live in and not become somewhat emotionally attached?  It can be such an emotional roller coaster!  Here’s the real picture – one can make an offer and finally hear back from the bank 2 months later, only to find out that the sale is not approved.  Or, what is more common, there is no approval or call back, just the information that the home has gone to foreclosure.

3) Reality check – Much of the time short sales are listed in better condition and less expensive than REO/Bank Owned properties.  Why is that?  That’s what I ask my clients.  Here is the answer – the agent is never sure what the bank will accept until an offer is received and submitted to the bank.  So, in fact, the listing price is not completely accurate.  And it stands to reason that an agent might just list it for lower in an attempt to garner offers.

Here’s the other side of the coin.  I just took a short sale listing.  The seller’s were very cooperative in filling out our short sale package.  My staff and I were diligent to contact the bank.  We did out own Broker Price Opinion (BPO) and due diligence.  We priced it fairly and receive multiple offers.  We picked the best one and submitted it to the bank with all of the information they requested (we knew this ahead of time).  The offer was accepted and approved by the bank within ONE WEEK! I add the emphasis because my jaw also dropped with I heard this news.  I can’t really take too much credit either, but I do know that the banks appreciate a complete package and agents that have their act together.

Bottom line, my faith is renewed for short sales.  Also this coming year I believe that along with government incentive, laws being pasted, and banks getting more adept at dealing with short sales, this segment of the market will be huge.

My company is primed and geared to entertain many short sales in the year to come.  Let me know if you have questions, or think you are a candidate for short selling your home.

Enjoy,

Keith Klassen

Real Estate Broker

The Best Time to Buy/Invest in Sacramento Real Estate

1) Right now Sacramento consumer confidence is on the rise.

2) The interest rate is extremely low (about 5%, maybe lower).  And everyone predicts that it will not stay this low, and in fact may skyrocket (according to Obama, as we continue to borrow from other countries).  As the interest rates go up, even if the prices go down, this will take many potential buyers out of the market.

3) One report shows that the housing affordability index is the best it has been in 40 years.

Call me or write if you want to see the numbers OR discuss your scenario.