Archive for June, 2012

The Luxury Insider: Gourmet Outdoor Cooking Is “In”

By Alain Pinel | June 27th, 2012 0 Comments

When will a bedroom closet be the most important “room” in a house? Don’t know for sure but I bet it’s coming…. You see, our collective taste keeps on changing, largely influenced by TV programs showing the lifestyle of the rich & famous or the successful growing menu of HGTV house hunt shows.

At the age of individualism and originality, one can be puzzled by the persuasive power of these shows to condition viewers into an addiction to stereotypes. We, as human beings, just have to have exactly what our wealthy neighbors have. Case in point, watching those TV shows, you would think that today a house shows signs of physical obsolescence if the kitchen is not equipped with stainless steel appliances and a granite or marble counter!

Correct me if I’m wrong but I seem to recall that 50 years ago or so, the size of the master bedroom was THE big deal. Then, a lot of people figured that, actually, the size of the master bathroom was infinitely more critical. If you had a huge master bathroom, with all the fancy amenities and gadgets, it was the unquestionable proof that “you made it”.

For the last 20 years or so, the kitchen has been the star of the house, the proud focal point to showcase and brag about. I don’t care whether you eat spaghetti most nights or are in the habit of ordering your pizza, but you must have a Cordon Bleu kitchen that would make Julia Child envious. That’s all there is to it.

Well, here we are now, in 2012. Another era, another need, another want. This time, the real thing to impress is an outdoor kitchen. I am not talking about a barbecue here, I mean a full service gourmet kitchen, kind of a duplicate copy of what you have inside. That’s the new chic. You better start planning for it if you want to play your part in the “elite”.

Our global marketing partner, Luxury Portfolio, put out a paper on “Luxe Trends” the other day, with this evocative title: “creating an outdoor oasis”. It suggests that architects and homebuilders of luxury homes must now integrate the fact that the demand for outdoor kitchens has exploded. Not just where the sun shines most of the time, no, everywhere, anytime.

The judges at the Best in American Living Awards at this year’s International Builders Show said that entries to the prestigious design contest suggest that ready-to-party outdoor spaces have transcended geography and are no longer confined to warm weather climate.

Thus, as the study goes, the scope of those oases is limited only by the homeowner’s imagination (money too, I might add). This may include under-cabinet refrigeration, multiple ovens, six-burner stoves, grilling islands, ice makers, dishwashers, pizza ovens, bars, fireplaces, etc.

Maybe the next new thing after all will be an outdoor bedroom (and bath of course), right next to the kitchen, so that you don’t have far to go after a big meal…  Meanwhile, appliances and furniture manufacturers love what’s going on and are busy creating durable, sealed workhorses that are designed to withstand nature’s capricious moods and seasons.

With all that good outdoor stuff, who needs a house?!

  • Get new posts via email
  • Subscribe

The Intero Insider: White House Banks on Refinancing

By Gino Blefari | June 27th, 2012 0 Comments

In this election year with housing still securing a sore spot in the national economy, each presidential candidate is expected to have a plan, or at least some key messaging about what’s to be done.

President Obama’s plan is loud and clear: Let’s make refinancing easier for responsible Americans. It would put more money in their pockets and free up cash to flow more freely into the rest of the economy. And it would help underwater homeowners come up for some air.

“We all stand to benefit by simply refinancing.”

That’s the message on a full-blown refinance section on WhiteHouse.gov dedicated solely to the topic of refinancing as the key to helping Americans and the economy by extension.

The administration estimates the average homeowner could save $3,000 a year by refinancing at today’s low interest rates. What stands in the way for many, however, are complicated application processes, eligibility requirements, costly appraisals and the fact that many homeowners owe more on their mortgages than their homes are currently worth.

Obama essentially wants to remove all the complexities that currently stand in the way and make it easier for responsible homeowners to refinance. The current proposal would establish a quick and easy process for borrowers who are current on their mortgage payments by eliminating tax forms, appraisals and other hurdles.

For underwater borrowers, Obama says the program is designed to help them as well. There’s not a lot of detail about how this would be different from HARP, except for one of the expert videos that alludes to the notion that lenders would have to offer the same low market rate interest rates to underwater borrowers.

The plan is not new, of course. The President previously has talked about it in the press and outlined key specs about how such a program would work. But with elections getting closer, I suspect this will be mentioned with more gusto as a viable option for helping American families.

The refinance plan is very careful to describe eligible borrowers and homeowners as “responsible” and those who’ve continued to pay on their mortgages through the downturn and recession. This is the deliberate attempt to thwart the impending political response of this being a taxpayer “bailout” in the same vein as that used for big banks, AIG and Fannie Mae and Freddie Mac.

I think Obama’s administration is also trying to make a valid point: Plenty of responsible homeowners out there really would love to refinance and save hundreds of dollars in the process, but can’t. Let’s reward them by at least making it simpler.

In doing that, we can help the economy as a whole recover a bit faster.

  • Get new posts via email
  • Subscribe

The Luxury Insider: Foreign Buyers Key to Real Estate Recovery

By Alain Pinel | June 20th, 2012 0 Comments

It will come as no surprise to you that the impact of international home buyers on our domestic market is substantial and increasing rapidly. The reasons are many and I had the opportunity to abundantly write about those reasons in past blogs, right here. So it was comforting to read the actual stats, proving the point, in some official data released last week by NAR, the National Association of Realtors.

Take a good look at the year-to-date numbers for 2012: on average, foreign buyers spent nearly twice as much (89%) for a house as did American buyers! That’s a relatively new reality in the real estate business. If you are an agent today, you must integrate the fact that your market is not your father’s market. Homes and homeowners are roughly the same; buyers are not.

Looking at the national image, here is what you see: a typical international buyer is paying an average price of $400,000 for a house. This is to be compared to $212,000, which is the average price paid by an American. Not even close. And the delta between the two is likely to keep on growing this year and next.

With the declining US economy and a weaker dollar, our real estate is very much wanted by buyers from emerging economies and a host of other countries whose currencies now buy more dollars & therefore more property for the money than in years past.  Not only do international buyers pay more, but they also buy more & more of the good stuff. In 2010, according to the NAR study, they spent $66 billion in US real estate. In 2011, they spent $82 billion, a 24% increase in just one year.

Many states, if not most of them, are benefiting from those sales. The two top ones are the “sun & sand” states: Florida and California. Let me quickly say for the record that Florida & California are a heck of a lot more than just sand & sun, they are incredibly powerful economic giants… But the sun & the sand help when it comes to attracting international buyers.

In Florida, international buyers represent 26% of all sales. Not a bad balloon of oxygen when the real estate business is anemic, as was the case over the last few years. The California numbers are also pretty significant: 11% of the sales involve buyers from outside the border. Perhaps even more significant is the fact that as the asking price goes up, so does the likelihood that the buyer comes from another country…

Where do those buyers come from? Well, the cake is plenty good enough & big enough to be split between a whole lot of countries. Two of them, however, dominate the pack: one that we all would expect, and one that we should expect. The first one is Canada. Our friends from the North account for 24% of all sales in the US, only a bit more than “usual”. The other one is China, with 11% of the sales. That’s more than double their percentage of 2009, just 3 years ago. At that tempo, Chinese buyers may represent half of the buying demand within ten years!

California is the State of choice for Asian buyers/investors. Florida, as is the case for much of the East Coast, is particularly appealing to Europeans. Those buyers, as realtors know very well, are particularly powerful in a negotiation as they usually pay cash. It is the case for two-thirds of international buyers today. It was only a third in 2007.

Last year, as the study shows, one in four Realtors handled at least one international deal. What will it be this year and the next one? More, I bet. At least for as long as prices remain low and soft. Real estate agents, from one coast to the next, would be well advised to learn about international real estate, particularly at the buying end, and associate with those companies that have both a specialized division and a comprehensive global marketing program. Otherwise they will simply be irrelevant. Sellers & buyers Beware!

  • Get new posts via email
  • Subscribe

Intero Insider: Buying a Home Is Not What You See on TV

By Gino Blefari | June 20th, 2012 0 Comments

Plenty of studies over the years have shown that watching too much TV is bad for your health – physically and mentally. Not only are you sitting and inactive for long periods of time, but the brain becomes passive and often disengaged.

However, TV can be menacing in other ways too, like in the form of misinformation.

Reports this past week have revealed that HGTV’s popular “House Hunters” show is likely mostly fabricated.  One couple that was featured on the show came forward and said that their story was mostly made up. Maybe that’s not such a surprise, but it’s worth talking about.

For those unfamiliar with the show, the premise is to follow home buyers in their pursuit of buying the perfect home. It aims to capture the dramas that come along with that journey – the aspirations, disappointments and, ultimately, the happy endings.

I felt compelled to write about this because the show is marketed as a reality show and is shot documentary style. While many of us already realize that most “reality” shows on TV are far from it, there’s still a danger in people watching this show and thinking it reflects, in some way, the realities of a typical home purchase.

I feel this is a good example of why consumers need trustworthy agents to set realistic expectations about the real estate process itself far in advance, and also to educate them on the current conditions in their local market. Real estate, like personal finance, has always been one of those things in which people turn to the strangest places for advice. Parents, barbershops, colleagues, friends. Many tend to listen to anecdotes about what went wrong and what went right and take it as pure gospel.

Even though I give people the benefit of the doubt and assume that most were not turning to “House Hunters” as a way of educating themselves on the real estate process or turning to the show for financial advice, I’m glad this story was released. It is a nice reminder that often what we see on TV – even as it’s being touted as “reality” – is, in many cases, fabricated or distorted.

The true reality is that sometimes it works out and sometimes it doesn’t when trying to buy a home. The key is to be prepared, understand the process and the local market, and not let setbacks deter you from your goal of buying the perfect home. Use an experienced agent who knows the local market and you’ll see that, mostly, there’s no drama at all.

  • Get new posts via email
  • Subscribe

Radio Star Jumps into the Real Estate Game

By Teressa Francis | June 14th, 2012 0 Comments

Lead by Robert Milward and Joe Getty, Intero Sacramento Office to open.

Intero Franchise Services Inc., a company affiliated with Intero Real Estate, Inc. (“Intero”), voted best Real Estate company in Silicon Valley for 2011 and 2012 by readers of the SJ Mercury News, announced today that they will be opening their first Sacramento Office owned by Robert Milward and Joe Getty.

“After 2 long years of heavy research and of reviewing many other major real estate franchise brands, Intero stood out among the rest,” says Milward.  “It’s a rare and wonderful thing when you come across a company that has such a smart, positive, plugged-in culture. There’s incredible energy at Intero. We’re going to raise the bar, no doubt,” adds Getty.

Located in the affluent neighborhood of Sierra Oaks, the office will cater to the entire Sacramento area. Intero “Getty” will promote their modern, high-tech real estate marketing and sales office through a select group of extraordinary agents. Combining Robert’s vision of being “the ultimate servant” for clients with Intero’s technical, marketing and training expertise, Robert and Joe expect to change clients’ and agents’ view of what they can expect from their real estate company. “Robert Milward and Joe Getty bring a great deal of expertise and enthusiasm to Intero,” states Gino Blefari, President and CEO of Intero. “We are excited to have them heading up an office in such a spectacular area.”

Robert brings 22 years of real estate experience to the mix, 13 of those years as owner of Milward Realtors.  You may know Joe Getty from your favorite morning radio show, The ARMSTRONG & GETTY Show on Talk 650 KSTE.  “Not only are Robert and Joe a couple of great real estate guys, they have a special place in my heart for being such loyal 49ers fans for all these years,” says Dwight Clark, “The Catch” former San Francisco 49er, and now recent Intero team member.

Six Realtors will be brought into this new launch and Milward and Getty are looking to increase this number to 30 by the end of the year.

Intero Getty
460 Drake Circle
Sacramento, CA 95864
916-204-9493
www.interogetty.com
  • Get new posts via email
  • Subscribe

The Luxury Insider: Words of Wisdom from the Experts

By Alain Pinel | June 13th, 2012 0 Comments

There is over one million real estate agents in the US. I was about to write “…. agents selling real estate in the US,” but realized quickly enough that it would be presumptuous to assume that just because they all have a license they are all actually selling something. Many don’t. They sure wish they would, but real estate is not an easy business. Only very few can succeed at the highest level.

What makes a real estate licensee a great agent? I have quite a few answers of my own but I would rather listen to the magic recipes from those unique individuals who made their way to the top. I solicited 5 of the most successful agents I know in California, each one well seasoned, knowledgeable as can be, passionate about the business and entirely devoted to customer service excellence. They are: David Troyer, Dominic Nicoli, Minhua Jin, Andy Wong and Tom Dallas.

I asked each one the two following questions:

1. If you had to identify the one thing that you did/do which contributed most to your success, what would it be?
2. If you had to single out one thing that an agent should not do if she/he wants to succeed, what would it be?
Here is how they answered:

David Troyer:

Question 1: “I encourage agents to become experts in their area. All top agents dominate a smaller geography and spend years becoming the reliable source of information for that one particular market segment. The days of the generalist are over. Specialization is a trend in all industries and it certainly is no different for real estate. I have spent 15 years studying the market and trends for my focus areas of Los Altos, Los Altos Hills and Mountain View. It is a daily commitment to really stay up to date, but it is what I enjoy the most about my business”.
Question 2: “I think most agents underestimate how much time and commitment it takes to build a consistent and reliable business. I am always surprised to see agents start a mailing campaign for 2-6 months and then drop the ball. Our business is simple in many ways but it is hard to actually do the work day after day to become successful.

Dominic Nicoli:

Question 1: “The thing that contributed most to my success is my 100% commitment to doing what is best for my clients. I am relentless in my devotion to helping each one of them reach their goals. I am tough with them whenever I have to be, for their own good. I stay focused on the goal and the big picture, regardless of the emotional swings and whatever obstacles on the way, to best guide them and assist them in making the hard decisions.”
Question 2: “When an agent puts their needs or the desire to earn a commission ahead of what is best for the client.”

Minhua Jin:

Question 1: “The majority of my business is from referrals. I have built my business on trust. I spend an extreme amount of time analyzing what is going on in any area or market I work in, going back several years to look at every closed sale, every pending sale and every new listing. I look at all aspects of a transaction: financing, possible multiple offer situation, any remodeling… This allows me to speak with confidence and conviction about value. My clients know without a doubt that I will get the best price for their property.”
Question 2: “The problem that prevents most agents from succeeding is that they compromise what they do for clients. It often starts with little things, like not following up, or assuring clients they will do something that they will not, or exaggerate their experience and capabilities.”

Andy Wong:

Question 1: “My clients always deserve top quality service from me. I am totally committed to their goals and always strive to exceed them, while maintaining a positive attitude. I employ uncompromising work ethic and methods, using my creativity, experience and my MBA in marketing. I am aware that I am not entitled to any commission unless I earn it. It is my privilege to work with each one of my clients. They have chosen me over other professionals so I never take my mission for granted. My reputation is built on integrity, diligence and professionalism.”
Question 2: “It is important to tell clients what they need instead of what they want to hear. It is a skill (or an art) I am constantly working on because there is always room for improvement.”

Tom Dallas:

Question 1: “Become an expert with total knowledge of property and land values in your marketplace. True knowledge of the unique product you may be trusted to market and sell. Understand quality and finishes that add or hinder value in luxury markets. Also, real estate is not just about homes. It’s also about the people who live in those homes. You need to know about them, know their background, their needs and motivations to best attend to their expectations. Develop your buyers and sellers to become your friends and best supporters.”
Question 2: “Try to remain humble and calm. A cocky, pompous agent loses the ability to gain invaluable daily information from his/her peers.”

  • Get new posts via email
  • Subscribe

Financial Market Update with Katie Eichten of Western Bancorp

By Teressa Francis | June 13th, 2012 1 Comment

This Intero Insider – Video Series brings you Katie Eichten, SVP of Capital Markets for Western Bancorp, and author of the daily blog Market Matters: Just the Facts. In this episode Katie and Tom Tognoli break down what’s happening in the U.S. financial market and touch on the EU’s unstable market impact on the U.S. real estate buyer or seller.

Enjoy the entire series of Intero Insider Video’s.

  • Get new posts via email
  • Subscribe

Intero Insider: Underwater Loans Helping to Push Up Prices in Some Markets

By Gino Blefari | June 13th, 2012 0 Comments

An upside to underwater homeowners? Apparently underwater loans are credited as a cause of home price increases in markets nationwide.

This conclusion seems like a stretch – until you dig into the reasoning and data a bit.

A data report from CoreLogic this month shows that home prices are trending upward in markets with tightening inventories. The data provider goes on to find a correlation between markets with tightened inventories and underwater mortgages.

In other words: underwater homeowners who otherwise would be prime candidates to sell and move up instead are staying put because they don’t have enough equity to sell.

In some circumstances, these owners could try the short sale avenue. But even in that case, the ones who sell short are not going to be able to get another home loan for a few years because of the blemish to their credit history. For some families, that makes a short sale unattractive. They’d rather live in their home and wait it out than deal with a short sale, an attack on their credit and years of renting afterward.

According to CoreLogic, home prices, including distressed sales, increased 1.1% in April from the previous year and were up 2.2% from March. It was the first time two consecutive year-over-year increases occurred since June 2010, and it was the second monthly increase this year. The data provider expects home prices to increase another 2% from April to May.

CoreLogic points out that the national supply of homes for sale was down to 6.5 months in April, a level not seen in more than five years. CoreLogic’s Chief Economist Mark Fleming is quoted as saying the squeeze in inventory was “in part driven by the ‘locked in’ position of so many homeowners in negative equity.”

Maybe this is just what we needed to boost values a bit and rev up the housing engine in markets that have been hurting.  After all, I learned in my Econ 1A course in college that price is derived from the changing relationship between supply and demand.  Otherwise, this could be the spark that puts more emphasis on initiatives to help homeowners with negative equity modify their loans.

Are you seeing this happen in your market? Is inventory getting squeezed because the important move-up buyer segment is staying put due to negative equity in their current loans?

  • Get new posts via email
  • Subscribe

The Luxury Insider: Insuring the High End

By Alain Pinel | June 6th, 2012 0 Comments

When you put a lot of money in your property, it means that it is worth a lot. It also means that you are worth a lot. Two good reasons to protect your assets. That’s what a homeowner’s policy is for. Whether it is a good investment is not even a relevant question: the fact is we all need it. It is required to qualify for a secured loan and it is essential to sleep at night.

A couple of months ago, I had a nice discussion over lunch with a friend and a top pro, David Costello, who is running “Cause Insurance” in Northern California. He gave me an education on the menu of exclusive coverage options for the luxury market, options that are part of what he refers to as “ Private Client Group Services.” Here is his brief summary of the types of coverage often sought by the elite:

  • Wildfire Protection Unit: if a fire is approaching within 3 miles of your home, the Wildfire Protection Unit, at no charge, will come out and spray the house with an organic fire retardant.
  • Mechanical Breakdown Coverage: can be added to cover electronic gates, pool filtration systems, smart house electronic systems, home theaters and wine cellar refrigeration units.
  • Excess Liability Umbrella: direct writers usually max out at $5M for personal umbrellas; private clients limits start at $5M and can go up to $100M.
  • Double the stated homeowner’s policy limit (200%). A typical direct writer would go up to 120%. If a $1M home ended up costing $2M to rebuilt, many direct writers would stop at $1.2M.
  • 3rd Party Liability Coverage: can be offered as part of the personal umbrella. As an example, if a balcony gave way causing bodily injury to you, you may sue the owner and get a $2M judgment against him. If he has only $300K of liability coverage, you can turn to your policy and whatever limit you have purchased will pick up the difference,
  • Umbrella with Defense Costs in addition to the umbrella limit, with the ability to select an attorney of choice from leading national law firms.
  • Non-Profit Board Liability: If you are serving on a board (such as a Homeowner’s Association), your umbrella can be endorsed to include an extra $1M in protection (up to 5 boards).
  • Agreed Value Coverage on Automobiles: if your car was a total loss with a typical carrier, it would be adjusted on an “Actual Cash Value” imposing depreciation for wear and tear & prior usage. The affluent market allows for “Agreed Value” replacement cost.
  • New Vehicle Replacement Coverage: if you purchase a new car and total it 3 years later, it could be replaced with a brand new model.
  • Rental Reimbursement: a typical carrier may give you up to $50/day for 30 days max to rent a car, while the better coverage allows up to $12,500 to get the vehicle of your choice with no time limit.
  • Ability to consolidate a client’s personal assets worldwide as a package.
  • Kidnap & Ransom Coverage available when traveling outside the USA.
  • 150% Coverage Extension when scheduling fine art and jewelry: you schedule a $100K diamond and can replace for $150K due to the increase in the price of gold, etc.
  • Earthquake Insurance to include $500K in contents coverage and up to $120K in loss of use coverage on the house.
  • Concierge Level Claims Service: claims adjusters erring on the side of the client to reach top customer’s claim handling satisfaction.

Of course options vary, depending on who, what and where. Do the checking. By the way, I did not mean to scare you with all this. It is just part of a homeowner’s life.  Best to be prepared.

  • Get new posts via email
  • Subscribe

Intero Insider: Battling Classic Housing Data Conflict

By Gino Blefari | June 6th, 2012 0 Comments

National housing data headlines are very often misleading – at best. At their worst, they drill into one of the harder to measure, but equally important factors impacting the nation’s real estate markets: consumer psychology. In fact, if not for the reality that 99.9% of consumers buy a home for the sake of owning a home, improving their lifestyle and growing their families – three things you can’t measure with numbers – I’d be willing to say that national housing data often does more damage to market conditions than good.

Last week, we saw a classic example of this type of dubious headline shootout: The S&P/Case-Shiller Home Price Indices came out, indicating that home prices fell nearly 3% in the first quarter this year. This probably had some people scratching their heads if they were paying attention to the report from NAR released the week before noting that home prices continued to trend upward in April, climbing 10% compared to the same month a year before.

Upon closer look, it’s easy to point out that the S&P/Case-Shiller numbers are quarterly, while NAR’s numbers are monthly. It’s also important to point out how each report is measuring price changes. For instance, NAR measures existing homes that sell each month and tracks the changes in median values, while S&P/Case-Shiller looks at the same home and measures how much it recently sold for versus how much it sold for the last time it changed owners.

These are two very different takes on data that gets lumped into the same thing in a news headline: home values. As we all know, not many people pay much attention past that headline.

In my experience, many consumers aren’t that concerned with national statistics. However, paranoia and uncertainty about the market ensues after the last downfall and more people may be watching stuff like this than we think.

It’s our job as real estate professionals to pay attention to these data headline discrepancies and proactively help consumers sort out what these numbers mean.

It’s our job to reinforce the realities of our local markets. While these national data are painting two stories – one slow but steady recovery, and one that’s not yet started recovering lost values – your local market may very well be tipping back into a seller’s market. Indeed, some markets are back to multiple offer situations and are experiencing tight inventory, making it tougher to be a buyer than it has been generally in recent years.

Should we even pay attention to national housing data? Yes, to the extent that it’s news and news travels. But I think we should pay even more attention to what’s being left out of these news stories, and be prepared to help others understand.

  • Get new posts via email
  • Subscribe