...oftentimes sellers crave hearing what they want hear, not what they need to hear...If a realtor provides a seller with a price for their home that very well may be the accurate number, but is one that the seller deems as too low, there's a good chance the realtor has just alienated him or herself right out of the opportunity to represent the seller.Considering that realtors don't get paid unless we are part of the transaction, we are faced with the choice to either: Tell the truth and perhaps take ourselves out of the equation, or... Tell the seller what they want to hear to get the listing, at the risk of creating false expectations, ultimately putting them in a compromising position of negotiation down the line... The housing market is constantly changing, which means the "right" price for a house will vary based on a few, specific factors: average prices of homes currently on the market in that same neighborhood, the number of homes currently in escrow, and the number of homes that have sold in the past three months. [If] there's a lot of activity: more homes on the move means higher demand, which leads to higher values and more room to push the envelope with the pricing... [If] Homes aren't flying off the shelves, meaning that one will need to aggressively price the home to get it to sell in that market - perhaps even listing it for less than the rest of competition to attract potential buyers...

http://www.huffingtonpost.com/nick-segal/inside-the-ropes-a-realto_b_804197.html?ref=los-angeles-real-estate

... In California last month, 74% of the offers submitted by Redfin agents on a property met with competition. In Washington DC, 51% of offers faced a bidding war

The problem is inventory, with the number of homes for sale down 43% in California and 27% nationwide compared to last year... The supply of houses for sale is now below six months – the threshold between a buyer’s and a seller’s market — in 13 of the 17 markets we could measure.

...The number of offers being signed by our customers in March was up 50% from this time last year, but our closings were up only 17%

....top-six tactics with everyone in Redfindia:

Data: arm yourself with information, about sale-to-list ratios for area homes and how many parties have bid on recent transactions. Be prepared for setbacks; in competitive situations, almost nobody wins his first offer – it’ll feel like the end of the world – but if you did win the first time, you’d just wonder if you overpaid. Just make the best offer you can without pushing yourself into an uncomfortable place. Sometimes that first offer will surprise you. But mostly, losing on the first or second offer is just an experience you have to go through for yourself.

Relationships: Research the listing agent by asking your agent to query Redfin’s Scouting Report or the local Multiple Listing Service for her deal history, just to understand how the listing agent prices homes – some use a low price to create an auction and others ask for top-dollar. If your agent doesn’t know the listing agent, the two can meet at a broker’s open house. You definitely want to find out how the listing agent prefers to communicate, by telephone, in person or by email, so you and your agent can be Johnny-on-the-spot without being a pest.

Communication: Don’t guess which terms matter to the seller. Your agent can just ask the listing agent what it will take to win the deal. Sometimes sellers will take a lower price if the buyer can be flexible about the closing date, or promises an immediate inspection with no follow-on repair requests. And even if you can’t afford a high overall price, let your money talk, offering up as much earnest money as you can afford, to underscore that you’ll follow through on the terms you offered.

Offer presentation: Your agent should deliver the offer in person when time allows, although sometimes bidding wars happen so fast it’s more important to get the offer on top of the pile. It helps to have your agent summarize key terms as bullets in a term sheet, then present the purchase & sale agreement in a package with the term sheet as the first page. The terms that favor the seller should jump out. Include a cover letter about your personal history, with a family photo; if you plan to live in the home, say so. Conclude with your agent’s deal history, to demonstrate that the escrow process will come off without a hitch.

Financing: For the pre-approval letter, use a local lender who understands neighborhood price trends, preferably one recommended by the listing agent. You can even ask your lender to call the listing agent, to testify personally that your money is good. Address appraisal concerns up-front: many bidding wars result in a price higher than the appraisal value of the property, leading the seller to worry that the buyer’s bank will balk at the price. Get a pre-approval letter for the highest-possible amount you can borrow and, if you have the money for a larger down-payment, make it clear that you are willing in a pinch to borrow less and pay more to offset a low appraisal.

Planning ahead: Arrange an inspection in advance if that is customary in your market, just so you can reduce the number of contingencies in the offer. Think through how you’ll feel if you win or lose an offer, calculating what different prices mean for your monthly payment. On one hand, don’t pick a price so high you’ll wish you hadn’t won the deal. On the other hand, don’t pick a price so low you’ll wish you’d bid more. Ideally, you want to have no regrets if you get out-bid, secure in the knowledge that the other buyer paid a price that doesn’t make sense for you. And you want to be ready for any outcome, able to respond to a counter-offer confidently and quickly, guided by discipline rather than emotion.

Redfin

More on the RealEstateArchitect Facebook page.

"Wall Street's Big Lie: Housing policies caused crash... Banks and their hired guns suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility..." -Barry Ritholz, The Big Picture

"Let's accept the role of gardener as being equal in dignity to the role of architect" -Brian Eno, Edge.org

"The central irony of the financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending..." -Lawrence Summers, Financial Times

"Regulators have provided a bare-bones website and frequently asked questions about the foreclosure reviews. But we thought things could be even clearer for readers, so we are providing this FAQ..." -Propublica.org

AIA Study: Tight credit=more stalled construction=less recovery. -AIA.org

"For best results, list your home on Friday." -Redfin.com

Proposed Senate bill brings introduces energy to mortgage underwriting equation. -NRDC.org

Homes in more walkable neighborhoods are worth more, study finds. -CEOsForCities.org

Shifting the Suburban Paradigm -Allison Arieff, NYTimes.com

- USA Today

Linked here

Randall S. Kroszner, Ph.D., (quoted in SecondMarket.com ) Norman R. Bobins Professor of Economics at The University of Chicago Booth School of Business, Governor of the Federal Reserve System from 2006 to 2009: "...people who are underwater now and are having difficulty paying their mortgages are likely to continue to face those challenges for the foreseeable future. So that means the foreclosures are going to be with us for quite some time...those who are out of work for long periods of time will have more difficulty repaying their mortgages....one of the things that has dislocated this market [is that Fannie Mae and Freddie Mac were] very big players and very big purchasers in the markets, but they were also trying to discourage others from coming in to compete with them for these services...Will they be public, private, merged, broken up?... That kind of uncertainty makes it very difficult for these markets to come back... being able to make markets during times of illiquidity, how to provide liquidity in market stress situations is incredibly important. It’s extremely valuable to be thinking about that in terms of any financial regulatory reform..."

Forbes says: "We created a list of the 10 U.S. cities with the biggest home price discounts. We compiled this list using the newly launched quarterly Home Offer Report from Trulia.com, a San Francisco-based real estate listing site. Trulia evaluated price cuts in America's 50 largest cities." Another way to put it: 10 U.S. cities in which homes were originally the most overpriced. Trulia has also been issuing a "Price Reduction Report" The data is certainly useful but the continued use of words like "reduction" and especially "discount' tend to confuse. "Value" requires a willing buyer. Until then a price is just a price, and the "Price Reduction Report" is just an "Index of Unreasonable Expectations."

"Bank of America Corp. (BAC), faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer... Disposing of repossessed homes is one of the biggest headaches for lenders in the U.S., where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June... “No one needs these homes, no one is going to buy them,” said Christopher Thornberg, founding partner at the Los Angeles office of Beacon Economics LLC, a forecasting firm... " -Bloomberg.com

"...There are several national estimates of homelessness. Many are dated, or based on dated information. For all of the reasons discussed above, none of these estimates is the definitive representation of "how many people are homeless.” In a recent approximation USA Today estimated 1.6 million people unduplicated persons used transitional housing or emergency shelters. Of these people, approximately 1/3 are members of households with children, a nine percent increase since 2007. Another approximation is from a study done by the National Law Center on Homelessness and Poverty which states that approximately 3.5 million people, 1.35 million of them children, are likely to experience homelessness in a given year (National Law Center on Homelessness and Poverty, 2007)... These numbers, based on findings from the National Law Center on Homelessness and Poverty, Urban Institute and specifically the National Survey of Homeless Assistance Providers, draw their estimates from a study of service providers across the country at two different times of the year in 1996. They found that, on a given night in October, 444,000 people (in 346,000 households) experienced homelessness – which translates to 6.3% of the population of people living in poverty. On a given night in February, 842,000 (in 637,000 households) experienced homelessness – which translates to almost 10% of the population of people living in poverty. Converting these estimates into an annual projection, the numbers that emerge are 2.3 million people (based on the October estimate) and 3.5 million people (based on the February estimate). This translates to approximately 1% of the U.S. population experiencing homelessness each year, 38% (October) to 39% (February) of them being children (Urban Institute 2000)...It is also important to note that this study was based on a national survey of service providers. Since not all people experiencing homelessness utilize service providers, the actual numbers of people experiencing homelessness are likely higher than those found in the study, Thus, we are estimating on the high end of the study’s numbers: 3.5 million people, 39% of which are children (Urban Institute 2000)... In early 2007, the National Alliance to End Homelessness reported a point-in-time estimate of 744,313 people experiencing homelessness in January 2005..." - National Coalition for the Homeless website www.nationalhomeless.org

"...The practice of architecture is directly regulated by at least 50 entities—the United States of America—in wildly varying degrees. In the last generation, “the controlling legal authority” of state governments has amped up its level of explicit specifications and inspection in direct proportion to the loss of public confidence in architects’ abilities to effectively protect the public’s interest. New agents of state, county, and local authorities have been created to deal with things such as the protection of historic architecture, the preservation of the natural environment, and the specific risks of coastal construction, not to mention the interests of those who are handicapped and the need for energy-efficient buildings. Additionally, village districts, historic districts, and architectural review boards boldly went where no regulatory body had gone before: aesthetics. Essentially, the ebbing moral authority of “the mother of the arts” practitioners has caused a withering of the architect’s role by a thousand cuts of government intrusion and regulation...." - Complete article by Duo Dickenson in Architecture Boston

Did the iconic architect appropriate an obscure line of poetry for repurposing as his modernist dictum? Robert Browning (above left) wrote a poem about Florentine painter Andrea del Sarto (above middle) in 1855 (according to Wikipedia) which uses the phrase later made much more famous by Ludwig Mies van der Rohe (above right). Was Mies a Browning fan? Exerpt beneath works by del Sarto and van der Rohe (...and Sondheim. Read on.) below.



What got us thinking about this? Well, we were reading Finishing the Hat, Stephen Sondheim's new book about his own work in musical theatre. In the preface, Sondheim cites "Less Is More" as one of the three basic principles necessary for the lyric writer, along with "God Is in the Details" (also widely credited by architects to Mies. Wikipedia's speculation ranges from Flaubert to "anonymous." ) and "Content Dictates Form," an inversion of a the more gently framed, alliterative directive "Form Follows Function," first issued in the late 19th century by "American architecture" advocate and practitioner Louis Sullivan. Or was it...?

"...To paint a little thing like that you smeared
Carelessly passing with your robes afloat,--
Yet do much less, so much less, Someone says,
(I know his name, no matter)--so much less!
Well, less is more, Lucrezia: I am judged.
There burns a truer light of God in them,
In their vexed beating stuffed and stopped-up brain,
Heart, or whate'er else, than goes on to prompt
This low-pulsed forthright craftsman's hand of mine.
Their works drop groundward, but themselves, I know,
Reach many a time a heaven that's shut to me,.."

Complete poem at PoemHunter.com

Image sources:
from J Paul Getty Museum, designclassics.cn, guardian.co.uk, wikipedia