Our Most Valuable Resource – TBG Update 8/14
Time is our most valuable and important resource.
At our new listing at 106 N Vista, the owner is a super meticulous detail oriented person who took so much time to restore her house to perfection. Her house is rated by the city as an A++ candidate for historical restoration and so she easily qualified for the Mills Act. The Mills Act allows owners to spend money on restoring their house in lieu of paying property taxes. Houses in an HPOZ area that have architectural significance and are good candidates for being restored in keeping with the historic period details get approved for the Mills Act and then the owner pays for the restoration instead of paying for property taxes. The Mills Act designation stays with the house for ten years. The new owner of 106 N Vista will pay around $5000 a year in property taxes until December 2023 (and then they can renew the Mills Act designation for another 10 year period.)
Time is especially valuable in properties that are advertised for lease. It makes so much more sense for an owner to lease their space immediately than to hold out for a slightly higher lease price per month and have so many months of vacancy while they wait for it. Financially, I see owners looking to gain 2400 by holding out for 200 dollars more a month and sometimes losing up to 40,000 in lost rent while their place sits vacant and they wait for that slightly higher lease price per month.
For a house to sell, there is always the right mix of price, condition, and location. Often owners want to minimize the importance of condition and location and they jump to price per square foot. With time and energy and money and patience, an owner can improve their condition and thus increase their purchase price. I find myself telling owners every day that they can’t make all houses equal and determine value by average price per square foot in the area, and command a super high price irrespective of condition or location.
So far during Corona, we’ve encountered 6 loans that didn’t get approved the week of the close of escrow. All of them in our experience were with Citi or Wells Fargo. Buyers and sellers need to be aware that if borrowers will be going through Wells Fargo or Citi, there’s a chance that they have a preapproval letter and they’re told the loan will work but then they find out the week of the close of escrow that it didn’t. Ultimately, the borrowers seem to get approved for a loan but escrow needs to get extended 30 days for a new loan to happen. Some sellers choose to stay with the buyer who clearly wants the house and some sellers choose to start over with a new buyer. No matter which way a seller chooses to go, it’s frustrating to add 30 days of time before their house can close. It’s frustrating to find out so far into the process and for escrows to end up taking 60 days instead of 30 days.
In general, besides longer escrows, everything in real estate takes more time during Corona. It takes time to figure out how to work private showing schedules, and how to properly social distance, and to sign and circulate Corona waivers for every showing, and to redo loans multiple times, and to reschedule around lender delays. Patience (and hard work) is key now.
I had an encounter this week where a business owner showed up with an assistant and he explained that his plan for the next few years is to groom this gentleman to be his right hand man. I found it so awesomely cool to have a plan and the patience to invest in training an individual for the next few years. That patience is invaluable. As much as we all want things to happen right now, success takes time.
I used to think that vacations were all about the destination. I learned this week in Corona that more than the destination, a cool vacation is quality time spent with the people on vacation with you. I went with my family to Vail, Colorado this week. Best time we had was not on an exotic hike or riding mountain bikes down the Colorado Rockies. It was spending time on a lake not so different from Echo Park Lake (that we’ve never visited). And squished around a table in a hotel room eating dinner that we put together ourselves.
My thought of the week is that real estate, like everything done really well in life, takes time and patience to do it right. Rushing to put a sign in the lawn, or offering a huge commission to any buyer’s agent who brings a buyer instead of spending the time to prepare the house right, or cutting any corners to save time, is doing it wrong.
So many people call to ask if I have a really good deal for them to buy. That’s not my business. What I do is take the time to guide sellers through the process of selling their homes for top top dollar – from start to finish. Yes, it takes a lot of time and energy and patience, but it’s time so well spent because it gets results. To get results, it doesn’t work to cut corners and to save time.
Time is not only valuable and important, but it’s also limited. It’s an honor to spend my time with the clients I represent.