Tony Trabucco Blog

Wait a Minute, I Thought it was "Buyer Beware"!

6/28/2015

Every once in awhile, I'll come across a listing that makes me shake my head a little and I think "...is that the Realtor's best work?".

For example this listing below from a few years ago (single photo, trash cans/truck in the photo, and a very negative description for a very typical Old Towne house!):

Or would this be preferable:

Or how about this one from today (and yes, all of the photos in the listing are upside down, with the exception of one):

Of course sideways photos are fairly common as well, along with my favorite (I'll post the next one that I see) the shot out of the car window, with the car rear view mirror proudly in the frame -- the agent can't be bothered to even get out of the car! In the photo below, the agent got out of their car, but then decided to use the car as a tripod (taking up about 1/4 of the shot!).

Here's a Beauty! Click to Enlarge.

The moral of the story is, when you list your house, ask your Realtor for a copy of the listing -- you may be unpleasantly surprised!

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Street Trees or Street "Asparagus"?

6/27/2015

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Recently, I had an opportunity to spend a few days in the Washington DC area, specifically in the Dupont Circle/Embassy Row area. What struck me, aside from the beautifully restored and maintained buildings, was the abundance of trees lining the streets. Not pitiful little wanna-be trees, but massive trees of a variety of type, all of their canopies intermingled, providing much needed shade as we walked the busy streets.

When my family and I first moved to Old Towne, there was a huge pecan tree in the parkway in front of our house. It provided a lot of shade, as well as housed the occasional gangs of parrots and crows, fighting over the pecans. Of course it also littered the sidewalk, the yard, the street, and the cars with the oily seedpods and what seemed like millions of leaves that fell until the end of December. And when the Santa Ana winds blew at night, it magnified the sound of the wind such that we were sure that the house was going to "Wizard of Oz" on us and we'd wind up somewhere other than Orange! But the winds took their toll and eventually the tree started to lean. While I was at work one day, the City decided to euthanize the old tree, and when I returned home it was nothing but a pile of branches in my front yard. It was kind of sad, as that tree was such a defining feature of the streetscape.

The City came out a planted a new tree -- a liquid amber -- and we watered and fed it feverishly so that it would grow as fast as possible. It's actually grown quite quickly, and is now beginning to provide a little bit of the shade that the old pecan tree provided so effortlessly. Now I wish that the City would leave the little tree alone and let it grow out into, well, a tree! For some reason each time they come to trim it they want to make it look like a giant asparagus! They refuse to let it grow "out", to spread its canopy like the beautful street trees in Washington DC (or locally, Floral Park and Park Santiago). We've lost 3 or 4 additional trees on our block that have not been replaced since we've lived here -- and it makes a difference -- so better an "asparagus tree" than nothing, I suppose!

If you've lost a tree, (or never had a tree) in front of your house, call the City of Orange today and have them plant one for you -- it's free! And if you want a head start, for a couple of hundred dollars, they'll plant a larger tree, which may give you a head start on the whole tree-growing, shade, parrot-roosting experience!

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Realtor's Role in Pricing and the Buyer Selection Process

6/25/2015

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Occasionally I'll read an article or hear a comment along the lines of "...the Realtors are driving the prices up" or recently, in the case of the Chapman University proposed expansion, "...the Realtors are making big bucks selling houses to Chapman University". I touched on this in a prior blog post, but here's the bottom line:

Realtors don't dictate prices. The market (willing buyers and sellers) dictate prices. We educate our clients on the price at which we believe their property will sell, and then they determine the price at which they would like us to market and advertise the home. The market will quickly tell us, in true Goldilocks fashion, if the house was priced too high, too low, or just right.
Realtors do not select who purchases the home. The owner of the home makes that decision, based upon the offer or offers in front of them. Price is only one of many factors that determine whom the seller chooses to purchase their home, as there are a myriad of factors to consider in any offer. Is the offer contingent upon the sale of another property? Is the offer cash or is financing involved? What is the preferred escrow period? is the prospective buyer an owner-occupant or an investor? Is the prospective buyer strong financially?
Realtors (the listing agent) have a primary fiduciary responsibility to the seller of the property -- all offers must be presented to the seller -- Realtors do not pick and choose which offers the seller considers (i.e. only investors, only owner occupants, only Chapman University parents, non-Chapman parents, etc.).

Check and Balance on the offered price -- Appraisers conduct appraisals and are a check and balance in the system to protect the lender's potential interest in the property, as well as insure that a buyer is paying close to market price for a property (and not more). In many cases the appraisals are close to the price offered by the buyer -- or in some cases there is a sizeable disparity between the offered price and the appraised price. If the buyer elects to continue with the purchase at the offered price in spite of a low appraisal and it closes, paradoxically now that price becomes a legitimate comparable for the next sale in the area.

In Old Towne Orange, basic supply and demand is a huge factor in the price that prospective buyers will pay. We have a limited number of homes for sale, a great location for quality of life and for commuters, and an overall unique environment that attracts buyers. So prices go up -- Realtors aren't driving the prices up. I was in Washington DC last week and looked at a couple of real estate ads just for fun -- by DC standards, living in Orange County is affordable:

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Apple, Driverless Cars, Hyperloop, and the Bullet Train

6/16/2015

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A couple of months ago there was speculation that Apple was going to build a car. Apparently they have hired a number of engineers from the automotive industry, and there was a mysterious van driving around Central California that was registered to Apple.

I don't think Apple is interested in building a car at all -- but I do think that they are interested in being the brains of the driverless and semi-autonomous cars that are on the horizon -- maybe a slightly different approach than Google is taking. As cellphones become even more powerful, and are already being integrated into newer automobiles (Apple's CarPlay, or Android Auto for example), wouldn't it be natural to utilize your phone as the hub of the driverless car? It can already communicate wirelessly and transmission speeds will only increase over time (although I've read that current cell connections are not fast enough to support car-to-car communications, but that will rapidly evolve). Not only will the phone be tied into the autonomous driving system within the car, and interact with the other cars, but will also support all of the sensors that deal with engine, drivetrain, and onboard computer (no more "check engine" light, but a complete description of the issue and what it takes to resolve it -- although there are apps that will do some of that today).

If Apple can integrate itself fully into the automobile from the sensors and wiring harness outwards, then it will have almost completely immersed itself into our lives. Even older cars would be able to take advantage of some of the car-to-car networking capability -- just download the app and go! Which also makes me wonder why they are selling wifi connected cars? Isn't the car already wifi enabled once a person with a smartphone hops in?

And if all of that isn't exciting enough, now Elon Musk/SpaceX has announced plans to build a prototype Hyperloop (does that guy ever run out of ideas?). I'm hoping that enough resources will be thrown at that to derail California's bullet train, which seems to be focusing a LOT of scarce resources on a project that will take years, and will likely be obsolete by the time it's completed (if ever). So aside from teleportation, a lot of exciting transportation options (and one not-so-exciting option) are on the horizon!

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Chapman University Expansion Poll Results

6/16/2015

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Revised 6/25/2015: I posted the exact same poll included in the prior blog entry to www.NextDoor.com, which in my case includes Old Towne Orange and several surrounding neighborhoods. In addition to the votes, there were also 86 comments regarding the University's proposed expansion -- the majority of comments were anti-expansion, however there were several comments regarding well-behaved students/tenants and enthusiasm for Chapman's proposed growth -- included in the 86 comments were a handful regarding Orange public schools as well. The results of the poll were as follows (with 86 votes -- more statistically significant than the handful of votes on my blog poll) are shown below. If you would like to read the comments, simply login to www.NextDoor.com to view and/or join the discussion:

Click to Enlarge

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City Council Meeting Non-Agenda Items

6/10/2015

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I attended last night's City Council meeting and, as expected, there were several speakers that exercised their right to speak for up to 3 minutes on a topic not on the current meeting's agenda. By my count, there were 6 speakers who eloquently spoke for their allotted time regarding their opposition to Chapman University's proposed expansion within the City of Orange.

Which got me to thinking -- aside from Chapman University themselves and their consultants, at the Chapman scoping meeting of a week ago, at last night's City Council meeting, and on a long thread on NextDoor.com regarding the subject, I haven't heard anyone overtly support Chapman University's proposed expansion. One online commenter did express that she had 2 different groups of Chapman young men living next to her over a 2-year period and that they were all well behaved and only had the occasional weekend party. So while not directly supporting the expansion (my words -- not hers) she did want to acknowledge that not all of the off-campus students were problematic -- fair enough.

So what do you think? Results are anonymous and you can only vote once (theoretically). If there is enough response by June 15, 2015 I will pass the results on to the City of Orange -- so let your friends know and have them vote!

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Drones and Real Estate

6/4/2015

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Click to Enlarge

Drones seem to be everywhere one turns these days, and real estate has not been left untouched. But is there a benefit or are drones just another gimmick to make the listing agent seem "hi-tech" and on top of the latest trends?

While I'm an early adopter of many technologies, I can't jump on the drone bandwagon. Most of the aerial shots of real estate that I've seen look exactly as you would imagine -- a picture from 50 ft. above the house, with a slight fisheye effect from the usually lower-quality wide-angle lens. I suspect if Google Maps/Earth and the the like weren't so prevalent, this might be beneficial, but we've all been able to get the same (or a very similar) perspective for several years by simply logging onto our computers. Would that view compel me as a buyer to consider a particular home over another? Probably not.

Recently I ran into another use of drones in real estate -- during a home inspection. The inspector used a drone to "inspect" the 2nd story concrete tile roof. Most inspectors will use binoculars if the roof is too tall and/or has too steep of a pitch on which to walk. Likewise, they will avoid walking on concrete or clay tiles to avoid breaking them. When the inspector first mentioned it, I thought the idea might have merit -- then I saw the photo (upper left corner of this post) included in the inspection report -- not much substance -- it would have to be a HUGE problem to even be noticed! But I guess now the home inspector has a cool toy that he can write off as a business expense as it's used in the course of his work. He's happy, his wife is happy, and the client believes that their inspector is "hi-tech"! Disclosure: This is not the inspector that I generally use -- this inspector was retained by the buyer of one of my listings.

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New Truth in Lending Act Procedures and Forms

6/3/2015

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Click to Enlarge

On August 1, 2015 buyers, sellers, Realtor, lenders, escrow companies, moving companies, and generally anyone involved with the purchase or sale of a property, and its aftermath, will be impacted by the new Truth in Lending Act (TILA) requirements.

On the surface, the revised forms and timeframes are designed to assist consumers in making informed choices -- that's a good thing. I can speak from experience -- when I purchased my first home in the mid 1980s (from the builder) no one mentioned anything about "closing costs". When escrow called me to have me bring in my funds a few days prior to closing, the number that that quoted me was wildly above my expectations -- I had to scramble to come up with a few extra thousand dollars that I wasn't anticipating -- all very stressful! And it's not uncommon to meet with first time buyers today who, after learning of the incremental impact of closing costs, elect to put things off for a few more months while they save up the necessary funds.

The new forms should be more straightforward for buyers to understand (I use a spreadsheet that I've developed to essentially accomplish the same objective - to lay out ALL of the expected upfront and monthly costs involved with purchasing a home) and is to be delivered by the lender to the buyers no later than 3 business days after the loan application is completed/signed. No problem there.

Where the industry might run into issues is with the final set of paperwork required to be delivered to the buyer, which compares the initial estimates with the actual costs -- again, a good thing for consumers (and in an easy to understand format). Where the law of unintended consequences might strike, is that it must be delivered to the buyer at least 3 business days prior to loan docs being signed. While it sounds good in theory, it may cause some issues. A last minute credit from Seller to Buyer that changes the APR by more than 1/8th of a point? New TILA documents and a new 3-day waiting period. "But wait a minute, I've got the movers scheduled for this weekend!" Sorry, you will need to reschedule (if you can). "Escrow forgot to credit me the $$ that we negotiated for repairs!" Oops -- new TILA documents may have to be sent out -- another 3 day waiting period goes into effect. Factor in 2 or 3 houses that need to close concurrently so that buyers and sellers can "move-up" and the situation gets even worse!

It will be interesting!

Click here for additional information.

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Wait a Minute, I Thought it was "Buyer Beware"!

Street Trees or Street "Asparagus"?

Realtor's Role in Pricing and the Buyer Selection Process

Apple, Driverless Cars, Hyperloop, and the Bullet Train

Chapman University Expansion Poll Results

City Council Meeting Non-Agenda Items

Drones and Real Estate

New Truth in Lending Act Procedures and Forms

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