Real Estate

So you found that new home you want to move into, and you made an offer which the sellers accepted.  Escrow is opened and your earnest money deposit has been deposited.  Everything's going just great at the bank, the loan officer says there should be no problem getting your new mortgage loan completed on time.  Couldn't be better - right?

Maybe.  You still have a few responsibilities to yourself before you start planning where the furniture will go.  First and foremost on that list is getting a thorough physical inspection of every aspect of the actual construction of the property.  For this hugely important step, there are some wonderful experts - professional contractor/inspectors - whose sole function is to provide you with a seasoned, competent report regarding the physical condition of the property you're buying.  After all, if you're planning to invest in a home, you need to know if there are any nasty little surprises waiting for you when you move in.

The best of these inspection reports will summarize the inspector's findings in a concise, easy to read format, and let you know about every detail of the property that might cost you time, money and/or aggravation later.  This report typically costs only a few hundred dollars, and is easily the best investment you can make (unless you're a seasoned property inspector yourself...).

Think of all the things that can go wrong in a building, and imagine how much it might cost to fix them!  It's positively frightening.

A few examples of inspection issues that we've seen in the last month or so are:

*     A bathroom was remodeled without benefit of a City building permit (what a mess this was...)

*     The polarity was reversed in several electical outlets (cheap to fix - expensive if it damages your high-tech equipment).  Also, in the same house, there were no ground fault protective devices in the kitchen or bathrooms, which are nowadays a requirement of the National Electrical Code.

*     The sewer pipes had been invaded by roots from a nearby tree, and couldn't be rootered any more (the cost to replace this section of pipe was over $2,000)

*     The roof had leaked (bad enough by itself, but it gets worse...), causing a mold growth problem inside an exterior wall.

Of course there are many more examples, but you get the idea.  All of these issues were expertly identified in the contractor/inspector's report to the buyer of the property.  In some cases, the buyer was able to prevail upon the seller to make the appropriate repairs, while in other cases, the parties simply agreed on a value of the repairs, and arranged an equivalent credit through escrow (this allowed the buyer to perform the work himself, and save a lot of money!).  In any event, the maintenance defects would've come back to haunt our client sooner or later, and we're so pleased they followed our urgent recommendation to get a professional inspection.  It really clarified the issues, and made the process of getting the escrow closed much simpler and much more "do-able" for all parties (especially the buyers and their broker).

The moral of the story?  Get the contractor/inspection done as early in the escrow period as possible - you'll be glad you did!!!

Ethics in the professional practice of real estate brokerage are of utmost importance.  A broker or agent MUST behave at all times in a trustworthy and honorable way.  The law requires it, and even more importantly, it's absolutely the right thing to do.

Having said that, there are times when every agent must make recommendations to his or her client that involves an ethical question.  I'd like to share an interesting example of such a moment with you.

Here at Always One Percent Realty, we have a client with a lovely Downtown San Diego condominium, which we've been trying to sell for our client for several months now.  As you're aware, the market for condo resales in San Diego is pretty depressing, with only the most aggressively priced units actually closing escrow.  Our client is not desperate to sell, and as a result, we've counseled with him to "hold his ground" on the price and terms he's willing to accept, and he's done so.

Zoom forward to this past week, and lo and behold, we got a serious offer from a buyer who recognizes the strong fundamentals of this particular listing, and would very much like to own it.  Great - right?

Here's the problem.  The buyer wants to do a 100% financiing deal, which in today's financing market, is very difficult to do.  Further, his broker is insisting on an exorbitantly high commission for himself (his logic is that there are other downtown condo offerings available to his client that have extra broker incentives, so why should he earn less solely because his client likes our listing better than the rest?).  There's a certain perverse logic to this broker's point of view, and while Always One Percent Realty does not endorse it, we submitted the offer (including the outrageous commission structure) to the seller for his review.  Even further still, the buyer will need to increase his offer to well above the negotiated "true value" of the property (i.e. the price the seller already confirmed was his "bottom line") in order to provide sufficient funds to pay his own broker the above-average commission he seeks.  Strangely enough, the buyer has agreed to do so (I'm choking on the concept, since our firm REBATES commission money to our clients - NOT increases it!!!)

Well, this might not sound like a problem on the surface - right?  But in this day and age of lender and appraiser scrutiny, it's likely we'll be unable to get an appraisal that supports the inflated price - and all the more so with a buyer who's doing 100% financing.

Here's the ethical problem for Always One Percent Realty's side of the situation.  We believe the prospective buyer will not be able to close his deal, but the seller and the buyer want to enter into this deal together, so who are we to stop them from doing so?  Further, we believe the cooperating broker is the direct cause of this unseemly situation.

What to do about our dilemma?  We suggested to the seller to only accept the buyer's offer on the condition that his $1,000 deposit would become non-refundable, and actually pass through from escrow to the seller, upon the removal of the buyer's contingenies (i.e. on the 17th day after acceptance of the offer).  We did this to more equally share the burden and damage which will inevitably result if the buyer does (as we predict) fail to close the transaction.  The $1,000 won't cover all the seller's damages (loss of marketing time, cost of ownership, etc...), but it does apportion a fraction of it to a buyer who just seems not to be listening to us.

While we would usually avoid recommending a non-refundable deposit for ethical reasons, we felt in this instance that it is the highest form of professional ethics to identify probable outcomes and resolve them as equitably as possible in advance.

We hope you agree, and that you'll recognize yet another of the many reasons to have our team on your side of your next realty transaction!

If you've followed my previous postings, you've already figured out that Always One Percent Realty will save you HUGE amounts of money, whether you're buying or selling real estate in Southern California.  Even more if you're selling AND buying, as most folks do when they're ready to move.

So now, let's assume we've helped you locate and negotiate the purchase of your next home, and our team of skilled professionals has you well underway to getting that next purchase and/or sale complete.  It's time to talk about some of the more hidden functions that occur in your transaction - namely, the escrow holder and the title insurance process.

Escrow is actually a very simple process, in which a licensed professional who is supposed to be completely impartial (i.e. not related to either the buyer or the seller) holds the buyer's money and the seller's deed to transfer ownership of the property, and exchanges them to the respective parties at the agreed upon time, if all the contracted conditions are fulfilled.  While that sounds simple, there can be a variety of complex conditions imposed by the mortgage lender, the title insurer or even the parties themselves, so the Escrow Holder must be experienced and "Johnny on the spot" with respect to making sure the buyer and seller stay on track to fulfill all the conditions on time.  Usually, the Escrow Holder works very closely with the transaction coordinator (which I discussed at length in a previous posting) to make sure there are no unnecessary delays or problems.  At the time the transaction is ready to be completed, the escrow officer will usually receive the funds from the lender and the buyer and use that money to pay all the approved costs related to the transaction (such as the prior mortgage, the first year's insurance, the first month's HOA dues if applicable, possibly the first year's property taxes, brokerage commissions, title insurance premiums and their own escrow fee).  As soon as all the costs are paid, the escrow holder will authorize the deed (which transfers ownership of the property) to be recorded at the County Recorder's Office, and escrow can finally close.  Clearly, when handling this much money which belongs to other people and institutions, the Escrow Officer must be someone of the highest reputation and ethics, which most are.

The title insurance company has a related role in the transaction - namely, to make sure the seller has the legal authority to sell the property, and that the buyer receives title to the property without any surprise debts of any kind secured by the property (such as mechanics liens or mortgages they didn't know about).  This process is commenced immediately upon the acceptance by the seller of the buyer's offer to purchase, and the report that is issued to all parties is called the Preliminary Title Report.  This report details all liens and encumbrances against the property, and once accepted by the buyer, is the basis of an offer by the title insurer to sell insurance to the buyer which guarantees there are no other title-related issues (liens, loans, easements, convenants, conditions, restrictions, etc...) against the property.  Upon the closing of escrow, the buyer receives an actual written insurance policy, guaranteeing that they "got what they paid for", and if there's a problem that surfaces later, the title insurer will bear the cost of correcting that problem.

As you can plainly see, both title and escrow services are critically important to a safe transaction, so one might ask why is there a difference in providers.  Well, the biggest differences I've noted are the general competency of the individuals working on these important areas, and the price of the services.  At Always One Percent Realty, we've negotiated with many providers to get the very best deal for our clients, and as we always do, we've come up with a combination of quality, integrity and price that's just about impossible to beat.  When our clients follow our recommendation of selecting the escrow and title service providers, the companies we've chosen will rebate between $500 and $1,000 directly to our client.  We, of course, receive no compensation of any kind from these providers, other than the secure knowledge that they've done an outstanding job and provided an outstanding value to our clients.

Just one more in a long series of reasons that you, and everyone you know, should be represented in all your Southern California real estate transactions by Always One Percent Realty!

Okay, so you logged onto our website and found the perfect home.  You contacted one of Always One Percent Realty's excellent Realtors, and negotiated a great price.  You learned that you'd receive a huge rebate of most of our commission just after your escrow closes, and you're really getting excited to move into that new neighborhood.  So far so good - right?

Unfortunately, in real estate transactions in Southern California today, getting this far is only the beginning, as I'll explain.

First, you probably won't be paying cash for the full purchase price of the home, so you'll need a mortgage.  Also, you need to have the house professionally inspected, to make sure your largest investment is in the excellent condition it appears to be in.  At the same time all this is going on, you need an escrow service to handle the exchange of funds and documents between the buyer, lender and seller, and you'll need a title company to confirm and insure that you're actually receiving clear title to the home when your escrow closes.  Add to the above list of immediate demands on your time the need for a termite inspection, review of condo association rules/regulations, and possibly even other reports and services, all of which are designed to make sure your new purchase is a satisfying one, and it seems what you really need is a transaction coordinator, just to keep all this stuff straight (and to make sure it gets done on time).  Real estate transactions these days really are a "team sport", requiring a lot of input from a barrage of sources.

Ahhhh.... That's where Always One Percent Realty shines, yet again.  We provide a seasoned, veteran transaction coordinator to keep all the "moving parts" of an escrow in line, and to ensure the transaction closes as it's set to in the purchase agreement.  There are some escrows where this is a pleasure, but there are many more where this coordination is a bit more reminiscent of an Alfred Hitchcock movie.  Nonetheless, as Realtors committed to your complete satisfaction with the experience of buying or selling real estate through us, we're committed to smooth out all the rough edges in the process, and keep you fully informed of each step along the way.  There's nothing more reassuring than having someone who's "been there and done that" firmly in your corner when all this stress-inducing, time-consuming, "hurry up and wait" kind of stuff is happening, and that's why we assign a professional transaction coordinator to each transaction we work on, at no extra cost to our client.  This, in itself is a superb value.

Now, put together the transaction coordinator with your drive to get the transaction closed, and you'll be amazed at how much time, effort and money we can save you.  All for only one percent of the purchase price - by far, the best deal around!

So, imagine you're a buyer of a nice home in Southern Califnornia - let's say, San Diego, for example.  You probably know that the seller of that home has included in the price he's asking a budget for the real estate commissions due to his broker (the listing agent) and your broker (the cooperating broker).  I imagine you'd be very satisfied if the cooperating broker does a good job, helps you find the right house, helps you negotiate the best price and terms, perhaps even helps you find a good mortgage loan, am I right?  You'd probably be very happy for that broker to make a nice commission for his efforts - after all, the seller's paying it anyway, so why not?

Now, imagine your broker does all of the above (and more), AND, just after your escrow for your new home closes, presents you with a check for a rebate of most of his commission.  You'd probably be a whole lot happier - right???  Who (in their right mind) wouldn't???

Well, that leaves Always One Percent Realty in the enviable position of making you very, VERY happy, because that's exactly what we do.

We help our clients locate just the right property, we provide all the research (comps, neighborhood information, mortgage information, etc...), then we help them to negotiate the absolute best deal possible.  Once escrow is opened, we coordinate the mountains of paperwork, inspections, decision-making, etc... so our clients can concentrate on living their already busy lives.  In short, we do everything (and more) than any "full service" (which really means "full charge") brokerage does.  But, and this is absolutely huge, at the end of the escrow, we give all the commission money we receive that's above one percent of the purchase price to our client - in cash! 

Let me give you and example - this is a transaction that's actually in escrow right now, with a very satisfied client.  Our client, using our free website, located several high-end homes he was interested in trading up into.  We arranged private showings of the homes on his "short list" and toured them with him.  By consensus, the client, his wife and our Realtor associate agreed on a lovely residence in Rancho Santa Fe, for a price of about $2,100,000.  The listing on this gorgeous home included a 2.5% cooperating broker's commission.  Well, upon close of escrow (scheduled for later this month) we'll collect that entire 2.5% (a total of $52,500) and we'll turn around and immediately present our client with our rebate check in the amount of a whopping $31,500.  As you can see, our client will make substantially more on this transaction than we will, and we're very happy to get that money back for him.

So, how do you like the concept of real estate rebates now?  Give us a call at Always One Percent Realty (619) 398-2995, to see how much your cash rebate will be.  If you're a buyer and you use any other business model for your broker, you're leaving huge amounts of money on the table!

Disount Real Estate Brokerage In Southern California

So, what does the term "discount" mean, anyway?

In my mind, the term conjures up an image of paying less - often while GETTING less!  How many times have we all heard "you get what you pay for..."?

On the other hand, with the price of everything we need to live reasonably in today's world in Southern California, getting a discounted price on high-impact purchases is more important than ever.  The key to this is obvious - VALUE.  If one receives an excellent value, the price really becomes a second-tier issue after a while.

Always One Percent Realty was founded in order to provide that outstanding value in Southern California real estate brokerage.  No matter how hard you try, you just can't pay us more than ONE PERCENT of the value of the transaction (per "side").  This is an extroardinary value, in and of itself - but, wait - it gets better!  Our firm is a full service real estate brokerage.  This means that when we represent a client, that client gets FULL SERVICE - as good or better than any other brokerage can possibly provide.  So, this naturally leads to the question of just how we can do that (we get that question a lot...).

Our outstanding service is available to clients buying and selling real estate in Southern California for only one percent for the following reasons (in no particular order):

1)     Since 1970, the value of real estate in our area has increase roughly ten-fold

2)     During those years, the amazing development of internet-based data management has made the process of finding that perfect home drastically easier for clients - but even more so for the real estate agent (we can now offer our clients thorough photographic arrays of a listed home, along with all the pertinent details of the neighborhood, with a few mouse clicks).

3)     Back in the 1970's, the "standard" real estate commission (i.e. the prevalent fee charged) was six percent.

4)     Nowadays, even though the prices have zoomed up ten-fold, and even though the amount of time required to professionally broker and facilitate the transaction has been reduced by all our wonderful technology, most brokerages are STILL CHARGING THE FULL SIX PERCENT!

5)     At Always One Percent Realty, we see the huge decline in VALUE to the client, and we've decided to do something about it.  So, we've set the bar exceedingly high, and we challenge the rest of the Southern California real estate brokerage community to follow our example.  We provide absolutely FULL SERVICE brokerage, at a hugely DISCOUNTED price.  Thus, we are the best VALUE going right now.

We look forward to saving our clients huge money, every day - and that's exactly what we're doing!

Southern California real estate brokers - look out.  If you don't do it our way, soon, you may not be doing it at all.

Are We At The Bottom Of The San Diego Real Estate Market?

Is that a light at the end of the tunnel I see?

That's right, folks - there are signs we may well have hit bottom in the Southern California Real Estate Market!  Low-end condos - usually short-sales or bank-owned properties, are actually experiencing multiple offers.  Not only that, but - get this - the offers are from QUALIFIED prospective buyers.

We're seeing a lot of investor purchase offers on some of the nice, low-end condos, and it's clear these savvy clients are seeing a true value in these properties.  They're buying them with the specific intention to rent them out for a few years, and then - "cha ching" - they expect to cash in.  From what I can see, they're making fundamentally sound decisions, and I think they're going to get paid off nicely as the inevitable upswing in values arrives.

Glory be!!!  The pendulum is FINALLY swinging the other way.

Make no mistake about it - it's not over yet, but those savvy buyers whose plans include a vision of a few years into the future recognize historic value in today's bank-owned and short sale offerings.  Plus, the tenants (in some instances, the very same former homeowners who had to give up their owned home due to the lending crunch!!!) will pay market-based rents that will provide these entrepreneurs the "staying power" to weather any delay in the full recovery of our Southern California Real Estate Market.

Here's to their success - since it foretells the end of a pretty depressing episode in our industry!!!

Do you like roller coaster rides?  Careful observation of our home values recently is a bit reminiscent of one, so if you like those crazy ups, downs, twists and turns, you should be positively ecstatic just now…  For the rest of us, who don’t particularly care to subject our financial well-being to such “ups and downs”, the current downward swing in the market value of our properties, just like any good roller coaster ride, is bound to make us reach for something to settle our stomachs.