Pat Kennedy - Your Washington, DC Real Estate Connection

Yesterday, I sat down to write an offer on a house in northern Virginia.  There was an unfamiliar For Sale sign in the front yard, and I figured it was a local mom & pop I hadn't run across before.  

Wrong!

When I pulled up the MLS listing to fill in the broker's name and address, it was a firm in Hackensack, New Jersey, and its web site shows them operating in about 12 states and DC.

I called to request the disclosures and after several minutes in voice-mail hell, reached a person.  I asked to talk to the listing agent, and a very polite woman on the other end said that she was his helper.  She gave me the listing agent's Virginia license number to put on the offer and said she would email the disclosure information we needed to submit with the offer. At the same time, I asked if they could get me information about the sellers' time frame and how they wanted things handled.

Meantime, the seller called to follow up Sunday's showing.  He instructed me to deal with him directly, and I sent emailed all of the paperwork to him.  

A few minutes ago, I got a call from Hackensack.  It was the "helper" I spoke to yesterday.  I explained what I had done at the seller's request, and she told me that she handled he negotiations and would give him a call.

Now wait a minute!  In the Commonwealth of Virginia, that is committing an act of real estate that I think requires her to have a license.  Now I'm getting curious about how these guys work. 

My guess is, they have a broker for each of the states where they are licensed, then have assistants who, while perhaps licensed in New Jersey, may not be licensed in the states where the broker is licensed.

Shuttling papers back and forth between Hackensack and Virginia or DC (or any other state for that matter) probably doesn't require a real estate license.  That would fall under what we call "ministerial acts", and that is permitted. 

But negotiating on behalf of a client is a serious act of real estate, at least in these parts!

And who knows, maybe all of their people are licensed in every state and are totally pulled together.  If so, wow!  What a bunch of continuing educations requirements they must have to fill!  

There is plenty of room in the real estate market place for new and innovative services.  And so far, I have to give these guys credit for being responsive and getting me what I needed to prepare an offer.  And after checking their web site, I will also commend them on doing a great job of informing clients about what is or isn't included in their services.   

If they have addressed the license issues, this is even a pretty interesting business model! 

Like many cities, Washington, DC has landlord-tenant laws that really do protect a tenant's rights.  It is extremely difficult to get rid of a tenant who is paying rent, even after the lease expires.  If the tenant is a total deadbeat, it is very difficult to evict.

In addition to making evictions a major challenge, the law protects tenants whose homes are for sale.  When an offer comes in on a tenant occupied house or apartment, the seller cannot sell until the tenant "rejects" the right of first refusal.  And the tenants, even if they don't have two cents to rub together, have a bunch of months to make up their minds.  

I once acted as a buyer broker for a tenant who held up the owner of his Logan Circle townhouse for about four years, and during that time, the value dropped from something in the low $300's to the price the tenant matched of $185,000.  At settlement, it was pretty clear that the seller and his agent had little love lost for the tenant/purchaser.  And it was so unpleasant that, at one point, I excused myself, went into the ladies room and had a huge crying jag.  But it did eventually settle. 

So what's a poor landlord to do?

A tenant is clearly the elephant in the living room in any listing, but to the seller, the tenant is generating income. 

In this market, it's hard to tell how long a place will take to sell.  With rents being as high as they are, most landlords are reluctant to lose the income that the tenant provides.  And who can blame them?

Still, having the place tenant occupied greatly reduces the exposure to the market on two important counts.  First, most tenants place restrictions on when and how their homes may be shown.  Forget a lockbox on the door and come on by.  They often want 24-hours notice and may even insist on being present at all showings.  Not good.  Second, many buyers' agents here in DC are reluctant to even show a tenant occupied listing.  We know that if our buyer loves they place, it could be a long and difficult road to the settlement table - if it even gets that far.  

A few weeks ago, I wrote an offer on a beautiful place that has a tenant.  We don't think he's going to match the offer, but we may not know for sure until springtime.  It's been on the market for over a hear with two different agents, beginning with an asking price of almost $1.1 when the market was hot, to $899,000 as things cooled off.

And I can't help but wonder - is the amount of rent a tenant is paying is a false economy? 

The first time I saw an email announcing your birth, I had to have you.

I watched the video and wanted to hold you - to see what just under three pounds would feel like in my shoulder bag.  I wanted to edit my photos on your big, clear screen.  I wanted to use your little magic card to blog on the Vamoose Bus.

Do I need you?  Absolutely no! 

Do I want you?  Oh yes!  Yes!!  YES!!! 

But you are playing so hard to get!  After yesterday's showing appointment, I ran to the Apple Store, which was mobbed, as usual, debit card in hand.  But you weren't there!  They don't expect you for a couple of weeks!  

The nice lady said I could order you on-line, but when I signed on to your web site, it said you would not ship for two weeks!

Two weeks?

I want you now!  OK, not instantly, but two weeks?  Yikes!

I do not need a new laptop.  My trusty old MacBook is fine. It's more than fine - it's amazing!  Still!  After all these years it works perfectly.  Like me, it just gets better with age and a little upgrade now and then!  So, why would I take up with a younger, prettier model?

The marketing people at Apple are freakin' brilliant!  By the time the MacBook Air actually shows up on the shelves of the Apple stores, many people like me (who need a new computer like we need a new hole in the head) are going to be standing in a lines that snake out the front doors.  They have a fabulous product and really know how to build excitement.  I may not camp out in the corridors of Montgomery Mall the night before the store opens on Day-One, but I'll be there before the store closes that night.  

So, how do we apply this kind of marketing brilliance to our listings?   To ourselves?

I have an offer in counter, and one of the sticking points involves financial disclosure of the purchaser's assets to the seller and his agent (who happens to live in the building where my buyer is making the offer).

We sent over an excellent offer with a lenders letter from an extremely reputable local lender.  And the loan officer is an absolute favorite of good agents all over town.  The letter was more thorough than most, explaining that they had already done an income and assets check as well as a credit report.  He had readily available liquid assets sufficient to settle and a very high credit score.  The application had already gone through underwriting and was contingent upon a satisfactory appraisal.

This wasn't a months' old boiler plate letter from internetloansthatmightormightnotfund.com.   And it was updated last week.

Now, I am not comfortable knowing all of my clients' personal business.  So many of my buyers are close friends and relatives that I send them immediately to a trusted loan officer.  I come out knowing how much of a mortgage and down payment they can do, and that's really all I need. 

If a listing agents wants more information, I have my client authorize the loan officer to speak to them.  But I am almost never willing to send over detailed personal information to a real estate office across town's fax machine.

It seems that with upper bracket transactions (or agents who do a lot of them), this approach works.  And while the condo my guy is trying to buy is pretty pricey, the listing agent is with a firm that does most of its business in the mid to low end of the price spectrum.  

In some parts of the country, it's considered rude to expect a buyer to tell all to people he doesn't know from Adam in order to buy a house or apartment.  At the same time, I think it's good for a seller to have a high comfort level that the buyer is able to buy and will actually show up on settlement day with the funds to settle, from his mortgage company or his trust fund.

While I think agents are somewhat more careful than they used to be with other people's personal information, I've been in real estate offices where all kinds of stuff is on top of agents' desks.   

In this day of great concern about privacy and identity theft, I wonder how agents handle financial disclosure around the country. 

This is to all of the spouses and sweeties of real estate agents out there.

Once upon a time, I had a very nice ex-husband who greeted me at the end of each day as I walked in the door, totally pooped from a hard day on the streets, with a great big smile and a, "Did you sell a house today?????"  He was up and excited and there was no other answer I wanted to give than "Yes!"  

But when you're in real estate, there tend to be more days when you don't than when you do.  It's the height of your week when a transaction falls together!  And when it works, you run in the door to greet your sweetie, your hyper-active-Labradoodle or the cats with a "Guess what!!!!!  I sold a house today!!!!!  Woo Hoo!!!!!"

My second husband did the same thing, and with some difficulty I managed to retrain him.  I started to think that maybe everyone who lives with a real estate agent just does that!  That enthusiastic wish to be supportive?  Well, it just isn't.

Sometimes it can even be a little dangerous to simply ask, "How was your day?"  In this business, you could really get an earful!

Earlier this week, I got a call from an agent who showed a listing I have last week.  His people loved it, he said, but the husband was out of town until the end of the week.  They planned to make an offer Friday or Saturday.  This afternoon, Saturday, as I was driving to my Mother's 85th birthday party, he called to say he was sending it via MongoFax and would like to present it over the phone.  I explained that I'd be available late this afternoon to take a look at it and would call him then.

Then 20 miles down the Baltimore Washington Parkway, my Blackberry's ear bud tickled my ear once again.  It was a second agent calling to say she was leaving the same listing with her clients and was writing an offer.  And what did my sellers need as a time frame.  An hour or so later, her offer was in my Blackberry's mailbox.   

When I got back and looked at the two offers, it became clear that the first buyers wanted to play Let's Make a Deal.  And it's an offer that might have worked as the only thing on the table.  And it would have been if they had written right away.  But when a second offer comes in, the dynamic totally changes.

Here is Washington, the market is not exactly red hot.  But it's nowhere near blue cold either.  And buyers who see a good house can no longer assume they can hang the sellers out to dry, negotiating the thing to death.  While multiple offer situations are not every day events any more, they do happen.  

If you come in way below the asking price, thinking you have weeks and weeks to go back and forth, you could lose a house you love.

And if you love it, it will probably appeal to other people as well. And if it is in good shape and in a popular DC neighborhood, Let's Make a Deal may not be the best strategy. 

With condos, you might be able to pull it off.  In the Virginia and Maryland suburbs, ditto.

But if you want to buy a house in DC, you snooze, you very well could lose! 

There is something beautiful and amazing about many of this areas old stone homes.  The one at the right is a 20's vintage craftsman bungalow  here in Washington.  The wall are thick.  The house is solid.  The stone exterior is virtually maintenance free.

Nearby, in the same neighborhood is a house I listed many years ago that I called the Perma Stone Palace.   It is covered with a product that was popular during the 1930's.  The original patent was issued in 1929 for Perma Stone, and for a long time, I thought their top salesman lived in Baltimore.  

But there were several companies around the country that manufactured the polyester of stone, and one of them, the Lasting Products Company in Baltimore, manufactured a synthetic stone product called Formstone.

This stuff is all over Baltimore, especially on row houses, and it was sold as a permanent solution for maintenance free exteriors.  It was used to cover homes that had problems with wood siding that was weathered or bricks that needed a bit of re-pointing.  It was thick, and it was supposed to insulate pretty well.

There's only one problem.  This stuff looks tacky.  And people who own homes with this stuff on the exterior take a sizable risk should they want to remove it.  It's not called Perma Stone for nothing!

In Baltimore, the Formstone salesmen were so good that their product is seen in neighborhoods across the city, often on row houses that had problematic facades.  And the fake stone covered more than just the funky bricks.  It hides many of the original architectural details of these turn of the last century tract housing.  

Not that they were gorgeous to begin with.  

The product is found in homes around the country and under a bunch of different trade names.   

It's difficult to remove.  You can try to bury it in stucco or paint it red, as one of the owners did in this row of homes in Baltimore's Little Italy. 

And, believe it or not, there are some historic preservation folks who actually want the stuff preserved!   

Go figure! 

Once I dumped a perfectly nice man because he gave me a blank stare when I asked him if he knew how to fix my leaking kitchen faucet.

"My people call plumbers," was his response.

When, like me, you are a single woman living in This Old House, handy is sexy.  And it's not like I can't afford to call in the pros when it's necessary.  It's just that there's something about a guy who can fix things or build things.   

For years, I thought I was attracted to engineers because that's what my father did for a living.  And when he wasn't in the office, he was building an addition to the house, or framing my mother's paintings, or building bookcases.  So I sort of grew up thinking that was what guys did.

And, like my mother, I am pretty much of a house wimp.  Of course, my mother was smart enough to end up in new construction where a resident handy man isn't a necessity.

A lot of my clients are single, professional women, and they are buying old houses.  We like to joke about how one's taste in men changes with homeownership.  What one of these high powered attorneys used to think of as "dating down" is now a good thing.  As renters, they may have sought out guys who they thought were headed for a partnership at Akin Gump, or even the White House.  Now they troll the profiles on Match.com looking for cute plumbers, engineers and carpenters.

But I have to ask myself, would I have dumped the guy who said he didn't do plumbing even if he had pulled a wrench out of his back pocket and, with a flourish, repaired my little drip?  

Yeah, I would have.   I should have said handy is often sexy.  There are still exceptions to the rule.

Last Friday, I had two settlements with buyers who were referred to me by good friends, and both of these transactions were pretty typical.

Both sets of clients were fun and wonderful to work with.  And they’re both totally psyched about starting new chapters in their new homes.

You know, you look at a bunch of houses, and we all know that time spend in a car can get pretty intense - and fun.  You joke, trade life stories, make fun of some of the houses you see.  Then you find Dream House and go through the intensity of a negotiation.  Then House Nerd Home Inspector comes in and picks the place apart, and you and House Nerd help them fall back in love with it. 

And we get to know our buyers awfully well.  If it’s a couple, you see how they interact with each other, and hopefully they like each other and the same house.  And we know all the personal business about assets, debt, job prospects and all their money stuff.  We learn about their hopes and dreams for starting a family or starting a new life after they've launched their grown children into the world.  You talk every day, sometimes more than once a day.

Then, we come to the settlement table for the big day when we help our clients give birth to the American Dream, and they move into their new place.   And everything changes. 

For many agents, it's a momentary downer that lasts but a moment.  After settlement, we go right on to the next victim and start the cycle all over again.

I do a pretty good job of staying in touch with my clients.  I've even stopped calling them "past" clients.  I send them notes, call to schmooze and see them at parties - often ones that I throw.  But it's just not the same as that pre-settlement intensity. 

Right now, I'm missing George and Maria - we haven't spoken in days.  And I offered to photograph some of the rooms in Kathy's new house.  I'll call her, too.  At this point, it's easy.  They are still on speed dial!  

What we share with our clients is truly special.  And this year, I've decided the settlement day high is going to continue.

Damn, this is a fun gig!  And they pay us to do it.

And it’s time for me to stop blogging and make a couple of phone calls.

It's been 25 years since my last move.  And I can't even imagine what it would be like to whip my house into showing condition, live like a total compulsive neat freak for however long it would take to get the place sold, then have my home invaded by a bunch of hunky moving men to take many decades worth of stuff, albeit pared down, to a new place.

Now, while I constantly fantasize about moving, I don't plan to go anywhere soon.  My house has appreciated to the point that I’d need a marriage of convenience to avoid a bunch of capital gains taxes. 

Looking back, I should have moved at least once every five years to, first, minimize capital gains and, second, to make me more empathetic to my clients who are going through the process.

I think it may not be possible, without moving out of my house, to do a totally thorough de-clutter and get rid of all kinds of “stuff” that someone who shops at the Salvation Army needs a whole lot more than I do. 

Spring is around the corner, and sometime in April, we’ll probably have a joint front porch sale that everyone on my block can participate in.  Of course, last time I sold some of my unwanted junk, then turned around and bought some more from my neighbors!

A few weeks ago, Value Village, a thrift shop that supports disabled veterans, called and I left a bunch of stuff for them.  I’m resisting the urge to drop by to see if there are any cobalt blue dishes or glasses on their shelves!

And it may be time to hire a professional, and I’m not sure whether it should be a de-clutterer or a therapist!  I mean, as a little kid, my father made us clean our rooms before we could watch Saturday cartoons, and all of the Kennedy children are slobs. 

Or maybe it’s something astrological, and as soon as the Moon enters Tidy, it will all come together and I will discover the Zen minimalist trapped inside of my clutterer’s body.