Pat Kennedy - Your Washington, DC Real Estate Connection

Today, I showed some condos in a new green building.  It had one of those roofs made of sod.  The toilets were even greener than the Totos that I put into my new bathrooms.  The floors were bamboo and the windows were really thermal.

There was only one thing.  The floor plans were a little odd.   There was a sleeping area that wasn't really a bedroom - like no window, so that made it a "den"!  The only bathroom was off the living room.  There was a little bitty balcony that was almost big enough to stand on.

I really wanted to like this place.   It has an attractive exterior design, and it's in a great part of town.  And I think that green building is an important wave of the future.

More important, my buyer was really into the green aspects of this building, but couldn't  get past the floor plan. 

There were a lot of things to like about this place.   And I do think that the energy savings aspects is highly appealing to prospective buyers.  I just wish the guys who came up with the floor designs can make their next building a little bit more functional.  Now that would really be a winner!

Good listing agents call for feedback, usually within a day of my showing or previewing their listing, and I am happy to share my thoughts with them.  But more and more often, they’ll ask how my guys liked their listing and then give me an argument about why my buyers are wrong.

In one case, my buyers thought the asking price for a particular condo was just way high, and the agent started to quote two-year-old comps.

One agent took umbrage when I told her my buyers loved her listing and the price was right, but they didn’t want to be in that location.  She then tried to sell me on the neighborhood.  Hello!  I was sold on the neighborhood already, which is why I showed the house in the first place!

Another agent got sort of upset when my buyers bought a similar house on the same block.  She started to trash the house they bought and ranting that hers was a much better buy - especially since her sellers would take less.  So tell them to lower their price already!

The reason I get feedback from my colleagues is so I can share whatever they are saying with my sellers.   When the source is someone other than me, it helps get the point across that their price might be too high, the litter box must be kept cleaner, or they have to get out of the house when it’s being shown.  Whatever our colleagues are telling us, we need to hear it so that maybe our sellers will actually get the message when we give them updates.

And then there’s good feedback.  When I hear about how much the buyers or agents loved to new kitchen counters, the totally compulsive house keeping or the price reduction, it helps me to reinforce whatever the sellers are doing right that is going to help get the place under contract.

Come to think of it, all feedback is good feedback! 

Last week, I wrote a post about my State Farm agent having the unmitigated nerve to retire on me.

Then, one of the comments on that post really struck a nerve when Todd Clark made the observation, "I've never been to a retirement party yet for an agent!"

Come to think of it, neither have I!  I've been to some memorial services for some agents who worked long into their geezer-hood, but they never retired!   One ratified a contract on an $8 million dollar house in Georgetown only hours before drawing her last breath.  And her friends actually convinced the Washington Post obit writer that she on only 79.  Yeah!  Right!

And I have to wonder whether so many agents hang in there forever because they didn't plan financially for a normal retirement, or because they just love real estate and can't bring themselves to quit. 

I have a colleague who has to be in her 90's by now, and her only concession to old age is that she is now partnering with her daughter.  When I was a new agent (25 years ago) we had a 70th birthday party for her.  She is still sharp as a tack and spry as all get out, and she still can qualify on her own for membership in Workahaulics Anonymous.  And she could have retired very comfortably decades ago had she wanted to.  But this woman loves real estate, and real estate loves her. 

But there are probably just as many agents who didn't sock it away in any type of retirement account.  We hear so many stories of agents who have been living from one brokerage check to the next, and if they're lucky, their taxes are up to date.  But they are still out there working hard because they don't have other options.

I'm at a point where many of my friends are retiring, and I could if I wanted to.  But it's hard for me to imagine what it would be like.   Other than bad knees (to be fixed soon), I'm in great health.  I love what I'm doing and have gotten pretty good at it.  I've learned to work smarter and take vacations.  But if I hung up my lockbox keypad, I'd really miss it.  I'd miss the interaction with colleagues and clients.  I'd miss all of the people and houses and condos and flat tires and almost running out of gas. 

So, am I going to be one of those geezer agents who doesn't know when to quit?  

Yeah.  I think so! 

The old Washington Hospital For Women has been turned into “luxury” condos.  Some of the units are luxury.  But most just don’t work.

The developers thought it would be a huge hit with well-heeled doctors who were at nearby George Washington University Hospital.  It wasn’t. 

The kitchens are fabulous.   But most of the floor plans are lacking.  The bedrooms are the size of monk cells, which is fine for a couple as long as they’re OK with bunk beds.  And a lot of the units have what we call “urban” views.  That would be bricks and windows of the building a few feet away.

While there are some drawbacks, a few of the units are great.  So is the location – on the cusp of the Foggy Bottom and Georgetown neighborhoods.   And it’s got a Trader Joe’s on the first floor, which is a huge plus.  (Three Buck Chuck just a few feet away!) 

And I’ve been keeping an eye on the place because I have some buyers who really want to be in that part of town, and would love to live in a great unit (there are a few) in that building.

So imagine my excitement when two “sunny” units came up under a million with 1500 square feet of space.  I grabbed my lockbox keypad and hopped into my car to be the first agent through the door and then call my clients with a condo alert. 

“Hi!  I’m standing in your new living room!  Get over here!  Now!!!”

But guess what!  The agent sort of fibbed.  Both units were pretty tiny – monk cell master bedroom and another apartment’s windows three feet from the tiny balcony.  Not exactly the condo of my clients’ dreams!

The listing agent called me while I was in the unit.

“You think they’ll like it?”

“Well, gee!  I’m looking for the other room that must be here somewhere, because what I see might be 1000 square feet on a good day.”

“But I measured it!”

“Are these metric measurements maybe?”

So exaggerating the space and calling the units “sunny” in the MRIS print out got me through the front door.  If she had said it was 1000 square feet, I wouldn’t have bothered.   If she had said “dark with an urban view” my adrenaline rush would not have happened. 

But she pissed me off!  And she probably pissed off the other agents who came by to preview – and especially the ones who grabbed their clients before previewing.

And real estate agents have very long memories in this town.  For the rest of her (and my) real estate careers, I’ll shave off about a third of the square footage for all of her listings, and I’ll think to myself, “Liar, liar!  Pants on fire!”

In several posts and comments on other peoples' posts, I refer to my significant other, Willy the hyperactive Labradoodle puppy.  Most of the pictures I've taken of him look like the one on the right.  He zips through life in a blur.  

The picture to the left is Willie during a contemplative moment, waiting for someone to drop  a morsel of something fabulously delicious on the floor.   

If ever there was a dog who could benefit from psychotropic  drugs, it's Willie. 

So, a friend sent me a hilarious email about a new breakthrough, for dogs and humans alike.   With a little help from his friends, Mr. Willie could yet turn into a doggy who could accompany me on showing appointments, become the office mascot, and ride in the car without flying out the window or barfing on my leather seats! 

Check this out!   

In the District of Columbia, like many jurisdictions, condo buyers get a little extra time after their offer is accepted to look at the basic documents that cover the money stuff and the basic ground rules set down by the owners’ association they are buying into.

These papers cover

• The budget
• The rules and regulations
• The by-laws governing the association
• Information about pending litigation, fees and pending special assessments
• While not required, I recommend that buyers also request the minutes of the last several board meetings and check out the building’s web site (if they have one).

Sound like a big snore?  It is.

Still, it’s really important to go over these papers before you are obligated to buy the place. 

Will your hyper-active Labradoodle puppy be welcome in the complex?  Can you run a small business out of your unit?  Do they require carpet on top of the pretty hardwood floors?  Can you install a washer/dryer in your unit?  Is it OK to barbecue on the balcony?  These and other questions about the ground rules of the building are found, yes in the rules and regulations section.

Will the fees go up?  The answer to this question is always a resounding "YES!"  Still, you want an idea of the financial health of the complex.  Are any big fix-up projects on the horizon, and is there money in a reserve fund to pay for them?  This information should be in the budget, but you’re more likely to get the full scoop from the recent owners’ association meeting minutes.

Is anyone suing the building, or is the building involved in litigation, either with the builder/developer or deadbeat owners who aren’t paying their fees?  Some buildings have the dispute resolution thing down and have learned to work out problems without lawyers.  Others resort to litigation at the drop of a hat – an expensive way to handle most day-to-day problems.  In DC, the resale “statement” will answer this question.

Any condo project will have issues.

• At some point, fees will increase.
• From time to time, there will be special assessments.
• There will be problems with some owners who do not respect the rules everyone agrees to live by.

And it’s not always possible to predict what living there will be like.  Still, a reasonable amount of due diligence is a really good idea.

I have a guilty pleasure.  Well, actually I have several.  The ones that matter now are watching figure skating competitions and the other is a little addiction to Dancing with the Stars.  Tonight, it's the best of both worlds.  

Yes, it's Kristi Yamaguchi on Dancing with the Stars.  And with this Olympic figure skating champion, it's all about mastery.  I've always loved to watch her skate, and watching her dance is equally amazing.  

Tonight, her dancing put her in first place in the competition, and there was some discussion about whether her skating background gave her an "unfair" edge.

She has an edge, although I wouldn't call it unfair.  Her skating background is probably a huge advantage - but only because she became so disciplined as she learned to master the art of skating from the time she was a young child.  She knows how to practice, how to use imagery and how to be coached.

I am convinced that people who really get into something - anything - that takes this kind of discipline and mastery as a child or teenager have a huge leg up in later life.  Whether it's figure skating or learning to play a musical instrument, you learn to practice.  You lose a lot of your fear of failure, and you learn how to take risks and try new things to get a little bit better.

So we are here on Active Rain looking for ways to be better bloggers and better real estate professionals.  And I maintain that watching Kristi Yamaguchi is a fun way to get ideas.

Morning Edition's coverage of the real estate market had another interesting item during this morning's broadcast.  It seems that a group of former Countrywide executives, now out of work, have come up with an honorable way to make a living.

They are investing in "troubled" mortgages.  

Here's how it works.

Let's say a lender holds an adjustable rate mortgage on a property for $300,000 that is going to adjust way up in a couple of months.  And let's also say that the house is worth less than $300,000. If the bank holding the first trust wanted to sell this loan on the secondary market, well, good luck.

Until today!  They're calling it "Penny Mac".  The former Countrywide executives will buy the loan for less than the $300,000 face value.  Sometimes way less.  Then, they go to the homeowner and try to work out lower interest rates that they might actually be able to afford, thereby avoiding foreclosure.

Of course, they had a guy from NACA (National Assistance Corporation of America) doing a rant about the evil bottom feeding capitalists trying to make a buck off of a bad situation that they helped to create.  No, it's guys who helped create a bad situation coming up with an interesting solution that could be seen as a win-win for everyone -

• The Bank avoids the hassle and expense of dealing with a short sale or foreclosure.
• The homeowner gets to keep his home, and hopefully start to amass some equity when we come out the other end of this tunnel.
• The "Penny Mac" guys get to redeem themselves, and maybe earn an honest living by helping people keep their homes.
• Taxpayers don't have to spend our hard-earned dollars bailing anyone out.
  

I, for one, would like to see the marketplace come up with more ideas like this one to address the current mortgage crisis.  While Countrywide was never on my favorite lender list, these former executives have come up with a winner that could be evidence that even capitalists have redeeming qualities.  And left on it's own, the marketplace can actually work things out.  

Since I first moved to Washington in the early 70's, I've had an insurance agent who was totally fabulous - Greg Lyons from State Farm.

He was a referral from one of Ralph Nader's car guys.  When I heard that he gave a lot of money to The Center for Auto Safety, he became my insurance guy for life.  I referred a ton of clients to him, and he gave me and all of them totally amazing service.  

When I went into real estate, I tried to model a lot of what I do in my own practice on Greg's insurance business.  And now, it looks a lot like his and is mostly repeat and referral clients. 

Then last week, I got a thing in the mail.  This lovely man who saw me through all of my car stuff and all of my burst pipes and bathroom renovations, was retiring.  And his clients were being "assigned" to other State Farm agents on the basis of zip code!  Zip code????

First of all, Greg, you're too young to retire!  You're not 70 yet!  Second, how could you just let them "reassign" me by zip code?  Finally, you just need to know that after decades of providing unbelievably great service, I feel abandoned! 

All of this got me to thinking that one of these days, I'll hang up my key ring.  I really don't know any agents who've actually retired, and some of them are really, really old.  But when I do, I'm going to do it differently - it's one aspect of Greg's business plan I will alter.

It still seems like it'll be a couple of decades away.  Right now, I've no idea what it will look like.  It'll involve lots of phone calls and a huge party.

During today's Morning Edition, there was an item about the mortgage mess in the UK.  Even I was a little bit shocked by what I heard.

They interviewed a young woman who, with her boyfriend, bought a house that she couldn't believe they'd ever be able to afford.  And they couldn't.  As she described the terms of their loan, I almost had to pull the car over to avoid a distracted driving situation!

• The mortgage had an introductory teaser rate that was very low.
• The bank (now in a bit of trouble) offered to do 100% financing.
• When the buyers had no money for closing costs or to buy furniture for the place after settlement, the bank (now in a bit of trouble) said no problemo!  We'll up the loan amount to 125% of the purchase price.

That was two years ago, and the payments are about to double.  Like many homeowners on our side of the Atlantic, they can't afford the higher payments and can't sell their house for anything close to the mortgage balance.  Nor can they find another lender willing to refinance for more than the place is worth.   

Now, this young woman sounded a bit ditsy, describing the furnishings they bought with all that extra money (previously owned stuff from the 1950's - mostly orange)   And she kept repeating that she and her sweetie could not believe the bank would be dumb enough to lend them that much money.  So now they, and the bank that must have made these screwball loans to a lot of people, are in trouble.  And she was sort of laughing about it.

So they might "lose" their house.  But was it ever really their's? 

Like many of the homeowner "victims" of this mess, they got into the place with no money of their own.  For the first two years, their mortgage payments were far cheaper than renting a similar property.  And if they stop making their payments, they are likely to get several months of "free" housing while the wheels of foreclosure turn and force them to move.

And as I listened to the young buyer giggling her way through her story, I felt a little guilty - like a real hard hearted bitch - because I didn't feel sorry for her.

And I had to wonder - will the bank also foreclose on the previously-owned orange mid-century furniture they bought with the extra money?