The Realtor makes an offer, Chapter 4: How will this end?

We did not get the Toluca Lake townhouse that we made the offer on.

We offered full price.  So did the listing agent's clients.

Our terms were good.  So were the listing agent's clients.

We were going to put 20% down.  The listing agent's clients were putting more down.  According to the listing agent, that's what persuaded her seller to take their offer and not ours.  Of course, the listing agent will get the full 6% commission, but I'm sure that had absolutely nothing whatsoever to do with who the listing agent's seller picked.

Will we continue to look? Maybe.  Maybe not.  Right now, we're busy licking our wounds.

The Realtor makes an offer -- Chapter 3: the negotiation

The Toluca Lake townhouse we like is listed for $439,000.  I believe the comparable sales in the neighborhood and complex show it to be worth about $425,000.  On Monday night, my husband and I made an offer of $430,000.  We have 20% down, are pre-approved by a direct lender, and can close in 30 days.  I will be taking my share of the commission, which is 2.5%, which will help with our closing costs.  We might go to $439,000, but I'm concerned about the appraisal coming in at that value.

The townhouse is still not available to be shown as painting is being completed, but will be ready right before Thanksgiving for Realtors and their clients to view.

On Tuesday, the listing agent tells me the seller wants to wait to respond to offers until after her Sunday-after-Thanksgiving open house and is stuck on her asking price.  Fair enough.

On Thursday, Thanksgiving Day, the listing agent calls me to tell me there is another good offer in and it is comparable to ours in price, terms, etc.  She sends a $439,000 counter offer to us.  We sign off -- appraisal be damned, my husband really loves this place -- and send it back.

The listing agent calls to tell me that she is representing the clients who are bringing the other offer (I wondered how anybody else got in to see it so soon) and they too have signed off on the full-price counter.  This goes without saying between agents, but she will make 6%, not 3.5%, if she double-ends this.
Next: how will this end?

The Realtor makes an offer - Chapter 2: Kitchen worries

The townhouse we're considering buying in Toluca Lake really suits us.  We like the location, the layout, the price and the HOA.  But the kitchen...doesn't work at all.  It's tiny (the picture above is not it.)  We're not gourmet cooks, but this kitchen is about 2/3rds the size of the one we have now, which is already too small. It's u-shaped, and there won't be room for two humans and 3 pets.  It has a double oven, which we don't need, and has no pantry, which we do need. It really needs a build-out, and we can't work with it as it is.

We went to Lowes and got cabinet catalogs.  And had a contractor who we've used in the past take a look.  (This contractor can sell ice to Eskimos.)  Yes, the kitchen can be remodeled, built out, expanded, etc. -- and will cost a minimum of $20k just to do a medium-line build out, probably more.  In cash.

Yikes.  That's on top of our 20% downpayment.  During this time, we were also watching HGtv remodeling shows.  Yes, a medium-line kitchen will cost $20k plus.

Other flaws become evident.  The rooftop patio has water intrusion issues.  The master bath doesn't have a tub. There's one less closet than we need, although perhaps we can do something in the garage.  The carpet is shot.

Although we had our doubts, the pluses outweigh the minuses, at least to my husband.  We went ahead and made an offer anyway, about $9k less than full price.  We won't sell our existing house until the Spring, and we can close in 30 days.  We're approved by a lender.

And the place hasn't been shown yet as it's being painted (but is on the mls), so we figure the early bird is going to get the worm.  The listing agent is in my office, is a friend, and has gotten us to see it in advance of the marketing.
Next: our negotiation

The Realtor makes an offer - Chapter 1: Money worries

My husband and I made an offer on a townhouse in Toluca Lake.  The seller will make a decision this weekend. We like our current place, but our current neighborhood is not what it was.  This townhouse has more space, is newer, has an attached garage, a patio with a view, etc.  It also needs a new kitchen and carpet.  You'd think we'd be sanguine about this, but no.  This decision was fraught with the same worries that most buyers have:
- Can we truly afford it?  Our monthly nut will go up!
- What if either one of us loses our job? And my husband is close to retirement!
- Is it wise to dip into savings for the downpayment?
- What about the higher property tax?
- Can we get what we think we can get for our current home?
Stay tuned...

Burbank's Holiday in the Park

Magnolia Blvd. in Burbank will be closed tonight between Buena Vista and Hollywood Way for the annual "Holiday in the Park."  This should be great fun if it doesn't rain.  My reason for going: this will be a good opportunity to visit some of Burbank's and the greater L.A. area's best resale and vintage clothing stores (yes, I've previously blogged about Burbank's clothing stores).

The NBC Universal Expansion Plan, Burbank and the Burbank Leader

Today's Burbank Leader has an article about the NBC Universal Expansion plan and how it may effect Burbank.  The environment impact report link is here -- but it's 27 volumes.  Burbank's Community Development Department is in the process of reviewing the report's findings, and comments about the report can be submitted to the City Council by Jan. 3.  The report states that traffic will only be minimally impacted, because everybody will take the bus.  Oh, please.

More about 1435 Pass, Burbank or the trouble with "auction prices"

See below for previous posts -- and comments -- on the listing at 1435 N. Pass, Burbank.  An agent in my office, whose client made an offer on it for $435,000, tells me that there were ten offers by last weekend.  His client's offer was not the highest, and he believes Pass went into escrow around $440,000+.  This is still less than what I think the house is worth, and in my opinion, the buyers got a fabulous deal.  I'll know exactly what it sold for when the price is published in the multiple listing service next month.

I think that if the sellers had priced this a little closer to the comps, it would have taken a longer to sell.  That's a bad thing.  But I also think they would have ended up with a higher price -- and that's a good thing, if you're a seller.

I may want to buy 10645 Bloomfield in Toluca Lake for myself

Along with my husband, I got a sneak peak at Mimi Kim's listing at 10645 Bloomfield in Toluca Lake.  We liked it.  A lot.  For ourselves.  It has the requisite space, an attached garage and we like the neighborhood and complex.  Problem: the kitchen doesn't work for us; it's much smaller than the kitchen we have now.  Should I buy it and remodel the kitchen? Dare I take money out of savings to do so?  All of a sudden, I'm having the same dilemnas that my clients have.  Stay tuned.

Need a laugh? Agent comments from the multiple listing service

Today's post from our friends at AgentGenius.com is a "blooper reel" of comments written by listing agents on the multiple listing service.  Sample: “Beautiful satan wallpaper in foyer” (No doubt it’s a flame print.)."  No doubt many of these were from Realtors in the San Fernando Valley. Click here for more.

More on 1435 N. Pass, Burbank

See the post farther down on the page.  Here's the email string between the listing agent and me.

Mike, your email went into my spam folder.  I will remove the comment about offers over listing, although I'm sure you did get offers over listing.  That's all.  I think you should thank me -- that post has gotten lots and lots of site vists, and I suggested that any buyers bring their A+ game and not mess around with making lowball offers. It may turn out that your prevailing buyer took my advice, which is to the benefit of your sellers.  Further, my listing two doors away closed at $480k just a little over six months ago and I stand by my estimate of the value of this listing.
Judy Graff

-----Original Message-----
From: Mike Babakhanyan <soldbymikeb@gmail.com>
To: Info@JudyGraff.com
Sent: Wed, Nov 10, 2010 11:47 am
Subject: Your Blog on my Listing

Judy,

 

I read your blog regarding my listing on 1435 N. Pass Ave. 

1435 N. Pass, Burbank: real price or auction price?

 

 

You certainly have the right to express your opinion when blogging, but you have information that is misleading and I want you to remove certain comments immediately.

 

1.        I never informed you anything about the prices of our offers.   You asked if I have multiple offers and I said YES.  I never said anything about the offers being over asking price. 

2.       You are commenting that the price of the home will sell between $460k-$480k.  Today’s comps don’t justify a sales price that high.  You are misleading and I need you to remove that.

 

My office is ready to file a complaint at the Professional Standard Hearing Board if the corrections are not made.

Thank you,

 

Mike Babakhanyan
Prudential California Realty

More animal statues in Burbank, CA!

It has been awhile since I've had the opportunity to do this! And I so look forward to publishing pictures of graven animal statues in Burbank, CA.  This roaring, winged lion is one of two who guards the gate of the Doge's Palace in Venice a house on Brookshire, right next to the listing posted below.

3301 Brookshire Ct., Burbank for $2,599,000 - office exclusive listing

Here's the front door (plus a lot of Realtors) of a home at 3301 Brookshire Court, in the Highridge Estates in Burbank, CA.  It has 5 beds, 7 baths, 6645 square feet, a pool, a view of the San Fernando Valley, and all the bells and whistles you could want in a high-end home.  It's really gorgeous and it's listed for $2,599,000.  But unless you retain a Dilbeck Realtor, like me, you may not be able to view this home for sale in Burbank for awhile.

Why? Because it's an "office exclusive."  This means the house is for sale, but is not yet in the multiple listing service.  The seller has decided that buyers at this point in time must be represented only by Realtors from the listing agent's office -- that's us, Dilbeck Realtors.  How does that benefit anybody? The sellers chose to do this as they want to wait to publicize the listing until after the holidays, but wish to make the home available for (really) motivated buyers now.

Own a condo in Burbank or the San Fernando Valley? You may wind up paying your neighbor's bills

Here's a story from today's L.A. Times (yes, again) regarding condo associations and how finances are handled, especially when several home owners association members are in foreclosure.  Yes, the remaining members have to take up the financial slack.

What the article doesn't say is that it can be very difficult to sell a condo, even if you're not in arrears in your dues, if the HOA finances aren't healthy.  That's because banks don't want to make loans on these projects -- they believe, rightfully so, that the value may decline due to lack of reserves, inability to pay for maintenance, inability to pay insurance, etc.  Just this year I've experienced this for condo projects in the north San Fernando Valley, Burbank, Toluca Lake or Studio City.  If you are interested in purchasing a townhouse or condo in any of these areas, please contact me and we'll find out about the Association's financial health before you make an offer.

Universal City expansion: necessary for growth or traffic nightmare?

Update 11/10/10: the terrific Burbank, CA blog has a great post about this. As you may know, Universal City plans to expand by adding more buildings to its lot.  This includes almost 3,000 housing units.  Here's the article about the environmental impact report from today's L.A. Times.  Some of the more interesting items in the article with my comments in color:

"The 39,000-page report identified noise and solid waste removal during the construction process as the primary negative effects of the development. " Hmm, since construction is slated to go on for twenty years...

"Our principal concern continues to be traffic," said Daniel Savage, president of the local residents group Hollywood Knolls Community Club. "Especially traffic driven by the apartments on the back lot." I'm with you, Daniel.  Traffic comes to a standstill on Barham on a regular basis.

"About half the $100 million would be spent on improving traffic flow on nearby streets and intersections, which would have to handle an additional 2,750 car trips each afternoon.  That's similar to the traffic generated by a regional shopping center (italics mine), said Patrick Gibson, a traffic consultant for NBC Universal. Mitigation measures such as street widening would ease the flow at most intersections, though Lankershim would remain a bottleneck where it is flanked by the subway on one side and an office tower on the other." Yes, that's similar to a regional shopping center -- especially on those days when all 2,750 cars try to get into the Costco lot between 6:05 pm and 6:15 pm.

I just don't see that traffic won't be a nightmare.  I also don't see that the area needs another 3,000 housing units.

Pending Home Sales Index declines 1.8% in September

From our friends at Calculated Risk: Pending Home Sales Index declines 1.8% in September. No surprise here. It's been slow for the last several months.

1435 N. Pass, Burbank: real price or auction price?

Update 11/9/10: I just spoke with the listing agent on this and he has five offers in. 1435 N. Pass in Burbank, CA is a 3+2, 1154 sf. house with a pool that just listed for $400,000.  I had sold the house two doors away at 1441 N. Pass in February for $480,000.  This new listing has one extra bathroom, a teeny bit more square footage, and is nicely done inside.  It has only a one-car garage where 1441 had a two car garage.  1441 also had an unpermitted guest unit with a bath.  Therefore, these houses are quite similiar; what gives on such a low price on this one?

I predict this is an "auction" price.  The sellers may have wanted to sell quickly and price it low to get a lot of offers really quickly.  And they will -- I also predict that they will have multiple offers by this weekend.

If you're a buyer that wishes to purchase this house, here's my advice: bring your A+ game and don't mess around.  Start high with your offer (certainly no lower than $460,000.  That's right.  $460,000.) and plan to go up to $475k or $480k.  I know the truth hurts, but trust me: this will go fast and will go out around that price.

How will the election affect homes and real estate in the San Fernando Valley

Our friends at Calculated Risk have a blog post about how the election will affect the financial markets.  But how will it affect real estate in Burbank, Studio City and the San Fernando Valley? 

Here's my non-economist guess-of-an-answer: it won't affect it much.  On the federal side, Fannie Mae and Freddie Mac aren't going away any time soon, no matter what party controls Congress (it would be a major-league game-changer if they did).  The banks have all the incentives in the world to keep loaning money to people for houses, so that won't change. Of course, good financial news, such as employment going down, will have a positive effect, but I don't think just one house in one branch of government is going to be able to do much there either.  In California, there may be more government oversight of the foreclosure process, which isn't such a guess since it has started already.  The government in Sacramento will be working faster, now that a supermajority is no longer needed to pass a budget or much other spending except for tax increases.

How do you think the election will affect real estate?

4552 Morse, Studio City is in escrow

4552 Morse in Studio City is in escrow.  Actually, it has been in escrow for several weeks, but all contingencies have just been removed.  It will close at the end of November or the beginning of December.

From today's L.A. Times, but it left me scratching my head

This article from today's front page states that people paying mortgages on underwater homes are creating a drag on the economy, because that money could be used to purchase other things.

I think the logic is a little tortured. It doesn't consider the fact that the vast majority of people are going to have to pay for a roof over their heads, whether it's in rent or for a mortgage.  So, is all money spent on housing a drag on the economy because that money could be spent on something else?