On April 5, the Obama administration  launched a new program aimed at ‘helping’ underwater homeowners avoid foreclosure.  The program is called HAFA (Home Affordable Foreclosure Alternative), and unlike its predecessors, its stated mission is not to ‘save’ the family home but to grant homeowners already in default what it calls a “graceful exit” via a three-thousand dollar  ‘get out without damaging the property’ incentive payment after completing either a Short Sale or Deed in Lieu of Foreclosure. The rationale behind  the HAFA foreclosure ‘prevention’ plan is that short sales and deeds in lieu of foreclosure are less damaging to defaulting homeowners credit scores than foreclosures.  I suppose one could surmise that, according to the government, it is possible to be a little bit pregnant with regards to credit worthiness.  Or perhaps the government would prefer that its economic engine – consumer spending on credit – be restored sooner rather than later.  Aside from the three-thousand dollar payment to homeowners, other financial incentives built into the HAFA program are extended to real estate agents in the form of (surprise/gasp) guaranteed commission levels for short sales; to servicers for partial reimbursement for the high administration costs of the program; and there’s a pittance to investors holding the ill-rated notes or securitized pools.

What are they thinking in Washington?  Accelerating the volume of distressed properties  places the government in the untenable position of facilitating further house price declines and jeopardizing the economy’s anemic and uneven recovery.  Through encouraging short sales, the government is signaling lenders of a policy change in the form of an all-clear sign that it’s acceptable to finally release the “shadow inventory” and to start writing down non-performing assets off loan books.  Perhaps  the timing is not coincidental, as an end may be coming soon to the Financial Accounting Standards Board (FASB) bizarre Rule 157  that allowed insolvent banks to mark assets to mythical valuations to artificially inflate their capital base –  and game their stock price.  

The administration seems to believe that the economy and the banks are strong enough to handle a foreclosure blow-out.  Now?  But when has the government been right about assessing risk and forecasting collateral damage?  Anyone?  The very real problem with this new policy is that there is a direct correlation between the percentage of distressed properties and house prices. A well orchestrated spike in distressed property sales is sure to cause wholesale price declines and destabilize the economy. Recent small gains in the Case/Shiller and other housing indices should not be taken as an all-clear signal. As backward indicators, the indices do not reflect the dramatic spike in foreclosures that has occurred over the last month. In California, for instance, there has been a 100% increase in foreclosure activity for March 2010, compared to March  2009.

Government directed compensation to lenders and real estate agents  – with taxpayer funds – for their participation in additional economic destruction is bad government policy.  It would be better for the government to address the financial damage done to Americans under its watch by undoing it, through changes in the tax code, bankruptcy code, and temporary changes in consumer credit reporting outcomes. (Of course, none of this will happen because of powerful lobbying groups).

And while short sales are heralded as doing less damage to credit scores and costing lenders less in expenses than foreclosures, short sales do just as much collateral damage to neighborhood house values as bank owned listings do. So why is the government doing this? Perhaps, in part, HAFA is designed to help prop up the perennially insolvent duo of Freddie Mac and Fannie Mae, which have oversight authority over the HAFA program. Thus, Fannie and Freddie’s participation becomes somewhat of a quasi-government jobs program and guaranteed revenue generator. The other slap-happy beneficiary of the  HAFA program are members of  The National Association of Realtors. On its website, the lobbying group boasts about fighting hard for a guaranteed 6% commission clause in the Short Sale Agreement contract for its members. (In fact, the 6% commission is referenced on five separate pages among the 43 page HAFA Supplemental Directive 09-09 document). Mission accomplished.

Some of HAFA’s objectives are mildly attractive, such as the anti-deficiency clause and the forgiveness of taxes (only on the first note). However, lenders have already implemented many policies that mirror HAFA, and have done so without blowing more TARP money and without the bias that the administration is exhibiting by determining which socioeconomic strata ’deserves’ to be helped by its programs and which groups are to be left out. The criteria for ‘benefitting’ under HAFA is printed below in gray. Keep in mind that homeowners must be turned down for  the HAMP (Home Affordable Modification Plan) program before being accepted into the HAFA program. What this essentially means is that after all ‘hope’ of being able to keep the home has been extinguished, people are supposed to call up their local Realtor to list their property as a ‘short sale’ and then cooperate with Disclosure Statements, Open Houses, Showings and the inevitable Offer and Inspection period.  Frankly, a deed in lieu of foreclosure may be a better option for the faint of heart. Short sales are, after all, asymmetrical transactions where the homeowner operates in the least powerful position and is the only party that has everything to lose in the outcome of the transaction. The mere fact that every potential buyer who enters a short sale property already knows the financial position of the homeowner should give one pause, as this type of information sharing  should bring up questions regarding the law of agency. The only possible advantage I can think of for a homeowner in a short sale transaction versus signing a deed in lieu is the possibility of extending their duration in residence.  But the trade-off requires a steely disposition.

In accordance with the provisions of Supplemental Directive 09-01, a loan meets the basic eligibility criteria if all of the following conditions are met:

• The property is the borrower’s principal residence;
• The mortgage loan is a first lien mortgage originated on or before January 1, 2009;
• The mortgage is delinquent or default is reasonably foreseeable;
• The current unpaid principal balance is equal to or less than $729,750; and
• The borrower’s total monthly mortgage payment (as defined in Supplemental Directive09-01) exceeds 31 percent of the borrower’s gross income.

My notes:

1) The $729,750 number refers to the unpaid principal balance and does not include the capitalization of arrears.

2) A condition of HAFA is that the homeowner must provide lien releases and proof of clear title.

At the end of the day, perhaps  HAFA is merely a political exercise in  future spin. With the mid-term elections coming up, perhaps the program will be touted as yet another stellar effort by this administration to protect homeowners from ‘ruthless’ lenders.  Regardless of the outcome, the ‘blame the banks meme’ is getting as tiresome as the ‘nobody could have seen this coming meme.’

                                                  - John Pritzker

Over the course of a perfect summer day last year, the transcendent beauty of Carmel Valley Ranch Resort  became the creative inspiration for John Pritzker’s all-together-different resort concept.  If nature can seduce a man straight through to his heart, then seduce it did.  For at  some point during his potential acquisition tour of the property, the renown investor  and Geolo Capital founder - whether he knew it, or not - was about to become the knight  in shining armor that a long neglected property had been waiting for. Between the land and the man, it was a perfect fit.

Of course  it only serves to enhance the fairy tale nature of the story that from an investment standpoint the acquisition had its happy ending too: Geolo Capital’s negotiated purchase price for the entire built-out property was less than the replacement cost of just its hotel units. Sweet.  However, as  Forbes  magazine found out in an interview with Pritzker last year, he takes umbrage with queries framing the purchase as merely the ’value play of a lifetime’ - or perhaps he simply grows impatient with one dimensional thought. Regardless, he’s far more interested in discussing the property’s experiential marketing potential, or its intrinsic value from a philosophical perspective. He told Forbes that he sees Carmel Valley Ranch as “the perfect canvas on which to paint a lifestyle and authentic resort brand.”  Then, more recently, in a  Travel Weekly interview with Arnie Weissmann, he provided more color as to the lifestyle brushstrokes he will be layering onto the resort experience.  What Pritzker wants to do, according to Weissmann  “. . . is create an environment that is, emotionally, a return to summer camp: a combination of recreation, education and relaxation. And he wants to inject a significant dose of whimsy into the experience.” 

By way of background, Carmel Valley Ranch Resort is a 400-acre, 30 year old, built-out property  neatly tucked into the Santa Lucia Mountains above Carmel’s mid-valley and  just  a quick 15-minute drive to  the quaint European-style village, Carmel-by-the-Sea. The resort property, notoriously sunny when the rest of the Monterey Peninsula is not, sits atop wildflower blanketed rolling hills,  has an incredible viewscape all the way to the coast, is generously dotted with majestic oaks and teams seamlessly with cute little bits of wildlife. It includes a picture perfect Pete Dye golf course that winds its way from the valley floor up through the steep foothills; and there’s a tennis club located in a historic, garden-lined, farmhouse adobe on the valley’s floor near the Carmel River. The resort grounds include 144 private hilltop hotel suites perched among the oaks, all with fireplaces and scenic balcony’s, accessible through meandering walking-paths flanked by billows of sweet lavender and bright copper canyon daises. In short, the natural landscape of Carmel Valley Ranch is absolute eye candy. Pity that the built environment’s interiors aren’t yet a match. (How fortuitous it is  for the property that John Priztker is quite smitten with the place).

As it stands now, there’s kind of no ‘heart’ to the property

                              – John Pritzker

Pritzker  immediately saw  the property’s “good bones” but he also knew that  in re-establishing the resort as a viable brand, he and his partners at Geolo Capital would have to commit far more than  just the requisite capital needed to realize their transformative ‘vision thing.’  A substantial, additional sum, is required just to mitigate the damage done to the property by the unfortunate remodel three years ago by fleeting owners and would be condo-flippers, Blackstone Capital (see my rant/post here) - who left an unintentional stain of  mind boggling sensory incongruity permeating almost the entire property.  Ergo, Pritzker, in addition to multiple fabulous add-ons, is also gutting almost every inch of structure on the property.  Thus, the “bones” acknowledgement.

The history of ownership at The Ranch only serves to illustrate the adage: who buys what and why, matters.  Its original developer, Gerald Barton, of Landmark Land Company, had a reputation  for developing  iconic golf course communities in beautiful places: La Quinta Resort and Club; Kiawah Island Golf Resort, SC; and the recently opened Apes Hill Club in Barbados, BWI – to name a few.  At Carmel Valley Ranch, Barton developed a golf course/resort property that tried its best to bring justice to the raw land it replaced. Instead of drenching the environment in the gaudy, faux-aristocrat style of the 1980′s, he carved out a lifestyle niche in the valley that was congruent with its natural surroundings: creating a sort of ‘California meets artist Doris Ewing inspired English gardens meets Provence’ environment that simply worked. What a pity it was all cut  short when the federal government egregiously swooped down in a blatant and baseless attempt to destroy Barton’s empire, and, in the process, made Carmel Valley Ranch and much of its meticulously selected friendly staff, collateral damage. (A 1999, Business Week story about Barton vs.  The U.S. is here)  In the end, a government agency, the Resolution Trust Corp, auctioned off the Ranch in 1994, netting just thirty-two cents on the dollar, as compared to the best offer Barton had on the table, which the government summarily rejected. Throughout the years, bought and sold, The Ranch merely became a small and somewhat souless holding of one conglomerate after the other, purchased at a discount and maintained on the cheap.

I wonder what Gerald Barton would think of  The Ranch today. Would he be pleased that a new owner had finally come along with big plans for the place. Plans referenced in heartfelt terms?  I think so. For, unlike a succession of other owners, John Priztker and his Geolo partners possess both the capital and the marketing gravitas to pull off the Ranch’s rebirth. Pritzker’s background as part owner of what was privately held, Hyatt hotels, is where he first honed his knowledge of the leisure and hospitality sector.  (Pritzker is credited as being the only family member that could actually check someone into a hotel).  But, as the story goes, he grew restless there. And so he left for greater challenges. Eventually, he founded Geolo Capital, where he and his overachieving partners have assembled a dynamic portfolio of  companies by either establishing or re-establishing consumer brands across multiple platforms, e.g.: Red Sail Sports, Ticketmaster, Western Athletic Club, MandaraSpa, Brand Connections (an experiential marketing company) and Aidells (the famous gourmet sausage company).

I’ve got a different take on how to do a resort

           - John Pritzker

John Pritzker’s concept resort build-out is  truly going to be a tyranny of the status quo:  a dynamic alternative to all of the cookie-cutter resorts out there, still basically offering up the same old time-tested static luxury formula: a formula, lest we forget, that the Pritzkers created a long  time ago.  ”I don’t want to do just another golf and tennis spa” he told Travel Weekly.  And so he’s not.     

 The project began for Pritzker  last fall during an extended stay to take in the property’s ‘vibe.’  What appears to be among his first inspirations came to him in the form of the majestic oak tree (pictured below #6). The earth surrounding the tree has been lowered by about three feet, which coincidentally or not, elevates its status as the centerpiece for Pritzker’s resort concept and new whimsical logo: a swing hanging from an oak tree.“The swing is the thing,” he told Travel Weekly’s, Arnie Weissmann, “without the swing, we take ourselves too seriously.”

 If it can’t be done on a very fun basis, I don’t want to do it

Pritzker’s injection of fun will come in the form of a sort of open and optional participation for resort guests to experience for themselves all the Ranch has to offer – or not. For example, rather than merely boasting to guests about an organic garden on restaurant menu’s, guests can walk through the two acre garden, pick their own produce and then help to prepare it in the new adventure kitchen. There will be lectures and art classes available, a yoga platform, beekeeping, a playground, bocce ball, basketball, tennis, golf, stargazing, hiking, swinging from trees and swimming in one of three  pools – where hopefully, cannonballs are optional.  And fun has a romantic side too:  Carmel Valley Ranch Resort is an  absolutely idyllic setting for wedding ceremonies and receptions. Two new wedding lawns are being added in a  sun-drenched setting, punctuated by majestic oaks and a vineyard nestled  just above the valley’s floor.

To oversee their multi-million dollar baby, Geolo has found the resort an ideal  General Manager/maternal presence in the form of Anna Olson, an immensely talented, yet thoroughly approachable executive, who was General Manager of Ojai Valley Inn and Spa, and  instrumental in its spectacular rebirth and transformation into a AAA 5 star resort four years ago. Olson’s selection is quite telling of the direction that the Geolo partners envision for their resort. Telling too is the selection of the resort’s new Executive Chef, Tim Woods, whose impressive resume is matched only by his affability. Wood’s can often be found in the dining room chatting it up about cuisine and he is always open to suggestions – a rare quality in a chef of his background. (Noteworthy too, is the inclusion on the menu encouraging substitutions: a green flag that your, albeit quirky, epicurean happiness is more important to the chef than his ego).

All this gushing about the new ownership at Carmel Valley Ranch on my part  is in equal measure to the level of disgust I exhibit when I see poorly executed marketing. Point is, what Geolo is in the process of doing at Carmel Valley Ranch is truly groundbreaking marketing.  If all goes according to plan, the end result will be a unique resort space that is fully capable of creating meaningful and memorable resort experiences for its guests and visitors. As a bonus, Carmel Valley Ranch Homeowners will once again find themselves in the sweet spot of desirability after a long dry spell. Of course, homeowners wanting to sell their property, especially in this real estate environment, would be wise to effectively leverage Geolo’s  ’lifestyle play’ through implementing a dynamic real estate marketing plan.

Post Author/Photographer: Diane L. Christopher (DLC). 

Diane is  a Sensory/NeuroMarketing Consultant on the Monterey Peninsula and can be reached at 831-625-9930 or at bhpcarmel@gmail.com

Photography by Diane Loren Christopher

1)  Sunlight peaks through the clouds on a rainy day and illuminates the 10th tee, 14th green and 15th fairway.

2) The ladies tee on the 12th hole.

3) Moss dangles from a young oak tree near hotel suite #115.

4) What is most remarkable about the property’s beauty is that the picture perfect scenes are everywhere on the property. These horizontal tree branches are along Barn Way at the cart path to the 15th men’s tee.

5) The bucolic setting of the hotel suites exemplified. This grouping overlooks the 11th fairway as seen looking back from the green.

6) The resort’s signature oak tree, located  just in front of the new reception area. (girl and swing -obviously -photoshopped in).

7) The honorary first swing (photoshopped).

www.youtube.com/watch?v=-T9u3L4Lnuc

(Video from Scent Worldwide Expo)

Scent research is among the most fascinating areas of marketing and behavioral research to emerge in decades.  In one landmark scent study, conducted in Japan during the 1980′s, researchers infused work environments with a citrus scent and then measured changes in productivity. What they discovered is that ‘citrus’ scented workplaces increased productivity by 30%. Needless to say, I began wearing a citrus fragrance during exams. 

Of course, it stands to reason that if a particular scent  can increase productivity in work and academic environments, then other scents, too, could affect behavior in a wide variety of built environments.  Naturally, it wasn’t long before research had mapped-out the expected emotional responses to just about every scent imaginable. By the turn of this decade, scientists were using FMRI brain scans to follow the neural activity of subjects while being exposed to a variety of scents.

Corporate marketers were so enthralled with scent science that they began sharing their research in “White Papers” on corporate and academic websites.  The Internet was abuzz with “Neuromarketing” studies. A top athletic shoe company found a particular scent that significantly increased perception of value; an auto manufacturer gained back market share by creating a complex leather scent to mitigate the loss of rich fragrance notes brought about by advances in leather manufacturing.

And then all the research sharing suddenly ended. Ralph Nadar, co- founder of a consumer protection coaltion called “Commercial Alert“, sought to have legislation passed through congress to stop what he considered to be the Orwellian practices brought about by fusing neuroscience and marketing.  Needless to say, for marketers, Ralph was a bit of a buzz-killer.  And so, in reaction to the sudden increased scrutiny, marketers expunged the web of almost all their research. (They certainly didn’t want a repeat of what had happened to advertisers after subliminal messages were regulated on network television back in the 1970′s).

Ralph Nadar’s paranoia aside, it is important to recognize that there are some great benefits that have come out of scent research.  For instance, we can now transfer this growing body of knowledge from the retail, work, and academic environment and deliver it right into the home. The proper scent can affect emotions in very positive ways. Science has mapped it all out for us. Why not use the power of scent research in our home’s  to increase our sense of well-being and modify our behavior.

A Few of My Top Picks for your Home:

• Westin White Tea . This fragrance was developed for Westin by Scent Air corporation for use in Westin’s signature resorts. 12 months in the making, the scent is designed to appeal to both men and women. It’s success has been overwhelming. Originally designed as a lobby scent, guests wanted to take the heavenly fragrance home with them and Westin responded by launching a product line. It is a heavenly mixture of green tea, geranium, green ivy, black cedar and freesia.
• Trapp Private Gardens Reed Diffusers  1) Orange Vanilla. The perfect combination of crisp orange notes elevated by the exquisite addition of Tahitian vanilla. 2) Fresh Cut Tuberose. A tropical white flower with an intense, heady floral fragrance – suggestive of a gardenia, only more powerful and memorable. 3) Water sophisticated and clean, with a fresh and energizing spirit
• K. Hall  1) Moss. Crisp fresh green and sandalwood create this earthy fresh scent reminiscent of a moss filled forest. 2) Milk.This blend of coconut, vanilla and cream is mellow.  K. Hall is available at Monarch’s Heaven -- just click the Trapp link above to their site.
• Alora Ambiance 1) Isola. Gardenia, tuberose and fig. 2) Due. Jasmine, cucumber, basil and ylang ylang.
  

 

Imagine that you have just finished preparing your house for sale, e.g.: you maxed out its curb appeal; the place is absolutely immaculate; you’ve decluttered and depersonalized; infused the space with natural elements, appropriate scents and subtle lifestyle vignettes. In fact, it looks and smells so good that you would consider keeping the place if you had that option.

 And then it happens: Your real estate agent wafts in to take pictures of your property with her cellphone camera. (Cue “Taps”). 

Predictably, the sky in your front exterior shot is white and your house is grey and shaded. The verticals are off  and one-third of your house is missing. The few interior shots she took are  narrow-angled and under-exposed. Naturally, all the windows are all blown-out (white) to match the sky.

Sadly, for your bottom- line, your realtor is marketing a gloomy house with views not worthy of  imagery and dark, soulless interior shots of your furniture and not the space you are selling.   

  ”90% of people start their home search online. . .” and they cull the list of the homes they would have seen if they left the search to their real estate agent by 50%.   -California Association of Realtors

This is a stunning statistic and it means two things. One, that people are getting dragged around to a lot of listings they really don’t care to see by their agents (time management problem). And two, there must be some sort of criteria online that makes the home search far more efficient – a criteria that culls the “must see” list by 50%.

“The most important criteria online for potential homebuyers are the number of photographs. . “ and, of course, the quality of those images.   -Realtor.com

Your odds of a successful sale increase exponentially with each crisp, clear, beautiful photograph included in your online advertising.  If your agent doesn’t think your home deserves professional photographs, what else isn’t your agent doing to effectively market your property?

 To see some great real estate photography jump to Flickr here

Staging is the essential foundation from which your home’s marketing plan begins.  Just as pricing your property too high could render your listing dead on arrival, so too will a poorly executed marketing plan.  Staging isn’t exactly rocket science but there is quite a bit of science involved when staging is done correctly.  We begin inside the home, as I have already addressed exterior prepping and staging in a prior post. First up are the obvious readying your house for sale tips.

• Q-Tip clean: Ultimately, your home should be so clean that the question you will be asked about your house is ” you don’t stay here often, do you.” It needs to be that clean. Which means that you will begin with a professional cleaning company to come in and concentrate on the baths and your kitchen, polish floors, clean carpets, baseboards, the tracks of sliding glass doors, clean the windows, dust and polish light fixtures, clean interior cabinets and polish the wood. Your blinds, shutters and curtains need to be cleaned as well. When searching for a good cleaning company it’s a good idea to ask a custom builder or your realtor for a referral rather than pick a company randomly out of the phone book or use the lowest cost bidder that gets the contract work at tract home sites. If you prefer to do your own cleaning then I suggest you purchase  a few outstanding specialty products to add to your favorite household cleaners. Edfred Shower Stall & Tile Cleaner (Orchard Supply/Ace Hardware)  removes hard water spots, soap and oxidation on your shower glass doors and can clean the chrome, grout and tile as well. If you have marble floors and countertops, shop at a marble supply store and pick up a product called “StoneTech Professional” for cleaning and polishing. In a separate post I recommended Signature Isbell’s Cleaning Polish and Conditioner for stainless steel, wood, door thresholds and wrought iron (available online here). Make sure that all your doorknobs and light switches are clean – never sticky.
• De-clutter and De-personalize: Your home’s staging will begin somewhat painfully, with the removal of most of your favorite nic-nacs, accessories, paintings, family pictures and collectibles. These things can become a distraction from your home’s attributes and should be kept at a minimum. People are going to want to visualize their things in your home, so it’s important to promote easy spatial thinking. Fear not, after a few days you will get used to the clutter-free look and may even feel less stressed in your home:  too much stuff can become oppressive.  Besides, your tabletops will not be devoid of all things decorative. The rule of thumb for decorative groupings on coffee tables, sofa tables, and counters is to display items in groups of three or five. For example, you can have a carved standing wooden object, a candle and a plant forming a triangle on a coffee table and the display will be homey without being distracting. You can add a small glass bowl of chocolates and a book as well.  Next, your stager will want to remove most of the paintings from your walls and all of your family photos.  I know, ouch.  Again, these are distractions from the space that you are selling. Plus, our minds are very inquisitive and we enjoy solving puzzles about other people. If you have your last vacation photo of the two of you on your fireplace mantle, people will naturally regard everything they see in the rest of your house as additional information about you. Remember, that too much of you will transform your showings into a lifestyle tour of your life –  and people will forget the space and remember you. (Wonderful You).
• Neutral Colors and generic accessories: If you have some fun crazy paint colors going on, it’s important to tone things down by repainting in generic taupe or beige. As an aside, I recall a new housing development where the models were all decorated using very bold complimentary wall colors. As the development built out, people began copying the boldness that the interior designer had used to decorate the models. Unfortunately, very few people pulled it off properly and their homes looked like little chopped-up  condiments: ketchup, mustard and relish. O-K. Back to neutral colors and generic accessories. It is important that your stager strives to make your home as generic as possible while taking into consideration the demographic (age, income, education) and psychographic (values, attitudes, lifestyles) profile of your targeted buyer(s). You want congruity: furniture and accessories tied to price point, architectural style and area lifestyle perceptions. 

Lifestyle Vignettes: It is important that each room in your house has a stated purpose. Which means that your extra bedroom that became a storage room years ago needs to be transformed back into a bedroom. Stagers can be very resourceful about creating something out of very little.For instance, the two thumbnail pictures are a Before and After that I recently did. The finished bedroom is an illusion: two inflatable mattresses with down comforter and pillows, a detachable floor screen, movable art and the ubiquitous curly willow display on a small bedside table. Moving along, in your dining room, your table should be set for four with the table expansion removed and excess chairs away from the table - otherwise the room will look small and cluttered. Another anecdote. I was looking through a photographer’s portfolio and came across a dining room that had been staged by a decorator rather than a stager. The dining room table was quite large and she set it for 12. What came to my mind was “no elbow room.” Additionally, it looked like she was selling a table, not marketing a house. In fact, that table became such a source of pride for her that the photographer didn’t even bother to shoot the room with a wide-angle lens – leaving one to wonder if there were any doors or windows or perhaps a fireplace in the dining room. Who knew.Getting back to your home’s staging:  most of what will be displayed to replace your accessories will be tactile  textures to achieve a more sensory experience and natural elements: Large floor vases with dramatic branches of curly willow trees; baskets with green apples; rolled-up Egyptian towels; river rocks; lavender and imported soap displays. Your stager will also draw attention to the most significant areas of your house through staged vignettes, e.g.,  chairs rearranged in front of the living room fireplace with a classic novel opened up with a pair of reading glasses, used as a page-marker; an outdoor dining table set with wine glasses and a bowl of green apples; a large bathroom transformed into a resort style retreat – including the transference of your shampoo and shower gel into beautiful display bottles. Then there is the silly and over-used guest bedroom bed- tray, which brings to mind illness rather than pampering, in my opinion. In the kitchen a stager will remove all small appliances from your counters (coffee maker is negotiable) and place a wine display and baskets of fruit, an orchid, and perhaps a trio of decorative jars filled with colorful peppers in oil. 

Since staging is foundational marketing, the homeowner should not pay for it unless the house is empty. If you are paying an agent to market your property, they should market your property – not make excuses. Should you require rental furnishings, pricing for a small home begins at $1000 a month for a modest but tasteful look. Depending on the stager, they should also have access to antiques and estate pieces for very high-end properties.

If all goes according to plan, your home should sell faster than competing properties and may sell at a higher sales to list price. Of course, while staging is not 100% guaranteed to work in every sale, it may be best to think of it in terms of the following sports analogy: The best team doesn’t always win the Superbowl, but that doesn’t mean that they wasted their time in training. You always want to give every endeavor your absolute best.

At the end of the day, you are far better off in knowing that everything possible was done to professionally market your house. You don’t want to regret what could have been,  if only  . . .

 

Judith Heerwagen of  J.H. Heerwagen & Associates, Inc.,  in writing the Psychosocial Value of Space, has created an insightful and must-read analysis how to optimize the built environment’s design to positively affect our well-being. The article gives one pause for thought about the portents of our central planners’ mandate to develop high-density, souless communities close to rail and major traffic corridors. The science is indisputable. Chronic stress from over-crowding and noise is very bad for our brains, and it is downright dangerous to the development of our children’s brains.  Building residential communities close to traffic hubs and utility services is certainly more cost efficient for local governments.  But what becomes of a culture that mandates that its development schemes move in the direction of the old-zoo model.  

                       Article excerpt . . . 

                                                                                                                                                                                                                                                                                                                                                 ” What “What would a building space look and feel like if it were designed to promote psychological and social well-being? How would it affect the senses, the emotions, and the mind? How would it affect behavioral patterns and sense of community? For insights, it is useful to look not at buildings, but at zoos. Zoo design has gone through a radical transformation in the past several decades. Cages have been replaced by natural habitats and geographic clustering of animals. In some places, the animals are free-ranging and the visitors are enclosed in buses or trains moving through the habitat. Animals now exist in mixed species exhibits more like their natural landscapes. And, as in nature, the animals have much greater control over their behavior. They can be on view if they want, or out of sight. They forage, play, rest, mate, and act like normal animals.  What brought about this transformation in philosophy and design? A key factor was concern over the animals’ psychological and social well-being. Zoos could keep animals alive, but they couldn’t make them flourish. Caged animals often exhibit neurotic behaviors—pacing, repetitive motions, aggression, and withdrawal. In one famous example, an animal psychologist was hired by the Central Park Zoo to study a polar bear that spent the day swimming in endless figure 8s in its small pool. This was not normal polar bear behavior and the zoo was concerned about it. After several days of observation, the animal psychologist offered a diagnosis. The bear was bored. To compensate for this unfortunate situation, the zoo added amenities and toys to the bear’s enclosure to encourage exploration and play. Are there lessons from the zoo that we can apply to building design? The answer is clearly “yes.” Key lessons, applicable to all building types, include the following:”

                           click here  for more . . .

The sound of a water fountain is a great stress-reliever. The mere sight of water elevates mood instantaneously in the vast majority of us. Yet, very few of us live on the water, or have a fountain either outside or within our homes.   For most of us, a large indoor or outdoor residential fountain just isn’t practical.  But there is a carefree way to infuse the calming sound of a fountain into your home with a little bit of ingenuity.

Believe it or not, I am about to recommend to you that you take  a 9″ deep tuperware container or even a small bucket, along with a fountain pump, and transform it into an ‘auditory fountain’ to create a touch of resort/spa-like ambience. You are going to hide the fountain container from view and just go for the ’sound’. All you need is a mini- tabletop small fountain pump (available at any pet store that sells aquarium fish), a container and an electrical timer. Fill the container with just enough water to cover the small pump’s up-spout and plug the cord into a timer switch. You can set the timer so that the pump will go on when you rise in the morning for your first cup of coffee, and then set it for your return home from work.

When you hear the water while working at home, relaxing with a good book, or enjoying the company of friends and family, the sound will be an added source of tranquility. If you have traffic noise where you live, a  fountain noise is a clever way to reduce the incessant drone of cars and trucks.

Of course, you may still want a visual fountain, too.  Small slate tabletop fountains can be purchased at most home center stores (Lowes, Home Depot), just be sure to buy one with an ample water basin. Most of the inventory are attractive enough to display but tend to be barely audible, which is why it’s a good idea to have a hidden container pump nearby.

An advantage to the pump and container fountain is that you can tweak the tone and volume depending on the height and material of the container, the depth of the water and by simply rotating the small pump’s water pressure dial. It’s a small price to pay for a whole lot of ambience. But be warned though, your household pets might sleep a bit more from the fountain’s calming effect –  mine do.

Of course, it’s a bonus to have your house outpace the rate of inflation by a  few percentage points, too.

www.youtube.com/watch?v=GCiFjkgZM3k

The video below, from Youtube, is a montage of Bernanke interviews from CNBC, as well as his testimony before the Senate. I think it’s fair to say that the Fed should now be used as a contrary indicator of economic prognostication.

www.youtube.com/watch?v=HQ79Pt2GNJo

While color trends can be fleeting , this year’s palette is worth keeping around because the colors are really quite soothing and mood elevating.

The palette is geared mostly toward pastel and imbued with nature: organic shades of taupe, green, burgundy and brown, accented with rich purples, orange, yellow, metallic silver and gold.

Eco-friendly textiles, grainy textures in wall coverings, tribal accessories and tree branches. Add a few table fountains, some natural elements and a mellow scent and you will have created a built environment that will be a pleasure for people to tour. 

This is a trend you’ll want to embrace when Staging your home

Humanistic Psychologist, Abraham Maslow’s, “Hierarchy of Needs”, is part and parcel toward understanding human motivation and personal development. Maslow’s theory states that as basic human needs are fulfilled, a progression occurs upward toward the elusive top of the pyramid.

In looking at the established chart at left, it is rather obvious that it would be difficult for a person to move beyond Physiological Needs without adequate food, water and shelter, and that it would be almost impossible to be a part of the ‘social scene’ if personal Safety Needs had not been met.  

However, Maslow’s  jump from Esteem to Self Actualization is quite a leap.  Does it make any sense that one can simply jump from Self Esteem right into Self Actualization? In other words, one day you feel kind of cool given your status at the Rotary Club and your next step in human development is to become Gandhi-like?

Given the low probability of anyone taking the leap from Esteem to Self-actualization,  perhaps something very important is missing from the standard five-tiered hierarchy. 

The chart on the left includes Maslow’s late life revelation, which added two important needs: Cognition and Aesthetics. Yet despite Maslow’s epiphany in old age, the chart is still depicted as a five-stage journey - and controversy remains to this day as to whether to include Maslow’s revelation about Cognition and Aesthetics .

Including both of these needs and motivators when targeting consumers’ Values, Attitudes and Lifestyle (VALs) provides greater opportunities for achieving positive marketing results.

For marketers, knowing why someone would want to buy a particular product is requisite to selling it. In organizations, understanding employee  motivation builds stronger and more successful companies.

In what is considered a ‘normal’ real estate market, sellers can expect an almost seamless transaction process. Buyers’ choices are, after all, somewhat limited, which can make their decision process on what particular property to purchase a rather uncomplicated one. And, of course, in a full-out sellers market,  sellers enjoy additional leverage because buyers are often forced to make snap decisions based on a sense of urgency derived from the fear that someone else will purchase ‘their’ property out from underneath them. 

But today’s real estate environment is like nothing else seen in generations. It is a mega buyers market. No matter how lovely your house is, potential buyers may still remain frozen in an uncomfortable inertia due to the paradox of too many houses from which to choose, or they may be simply driven by acute economic uncertainty.  

So, how are you sellers going to set your homes apart from the competition?

 Choose your listing agent wisely to avoid a commoditization trap. Marketing can make all the difference in the world, especially in today’s abysmal real estate environment. Keep your focus on your prospective agent’s ability to professionally market your house, and don’t get sidetracked by their skill-set at self-promotion.  A great listing agent’s seemingly small nuances, such as the angle of the front house photograph or the adjective used in your property’s descriptive headline can increase online click-throughs by up to three- hundred percent. (Based on Belle Haven Properties’ market research).  The number of photographs your agent will be using in their advertising can either make or break your listing. It is, after all, the number one search criteria for buyers on the national real estate websites. And, keep in mind that listings with fewer than nine photographs become notoriously lost to the bottom rung of search lists, so insist on the maximum number of professional photographs. And, of course, it is not just buyers who cull the list of ‘must see’ properties in accordance with the level of professionalism in a property’s presentation: it is their agents too. Great marketing matters!

Sellers should be aware of boiler-plate real estate sales tactics.  Do not succumb to believing that your agent and their network, or their broker’s corporate tendrils are enough to give your house the competitive edge it deserves. Keep in mind that in approximately 90% of residential real estate transactions, your listing agent doesn’t actually find you your buyer.  In fact, in thirteen states, it is illegal for a seller’s agent to represent the buyer – as it is rightly considered an obvious conflict of interest. The confusion as to ‘who’ actually sells what  is due to a rather convoluted  rule by the National Association of Realtors which permits a listing agent to send out “Just Sold” cards, without requiring  the agent  to reference the name of the agent and broker who actually procured the buyer.

Understandably, staging isn’t just an option in this type of real estate market, it is mandatory.  And, it should be congruent with your home’s architectural style, area lifestyle perceptions and designed with targeted demographic and psychographic buyers in mind. Unlike in your father’s era, today’s real estate market requires an amalgamation of  complex inputs: e.g., the use of environmental psychology, color psychology and sensory research should be integral components of the marketing mix as well.

The competition is fierce among agents today. As a seller, you probably won’t have an easy breezy sale. But you owe it to yourself to level the playing field a bit by demanding far more from your listing agent. Therefore, if little Billy, your neighbors son, just got his salesperson’s license and you are feeling a bit obligated to list with him, here’s his to do list when marketing your property:

• Billy needs to have some lifestyle-vignette staging done for you at his expense.
• Billy should understand how shapes, color schematics, textures, lighting and scents affect mood and perception.
• He needs to hire a professional photographer.
• He will need to know as much as you do about your property in order to write a comprehensive (minimum two- thousand word count) description of your property in appropriate upper and lower case, non-abbreviated, standard English.
• Billy will need to upload your listing on the top real estate websites, using approximately 25 photographs and include the aforementioned descriptive copy.
• He will need to create a dynamic property brochure to appropriately brand your property as being special, vis a vis, the competition.
• Billy will need to create a positive touring experience for prospective buyers.

Keep in mind the following:

1. Print advertising is just about dead. Its usefulness is in achieving name recognition for your agent, not in selling your house.
2. Ditto, “Just Listed” cards.
3. Open houses are not very effective at selling your house. (90% failure rate). They are an effective lead-generating tool for your agent.
4. A few Open Houses are worthwhile to get the neighbors on-board -  but that’s really about it.

I wish you Happy Selling in 2010.

Alternatives to granite countertops are many, such as the beautiful recycled glass from EnviroGLAS, pictured below. And, while no other material is as practical, durable and maintenance-free as granite, any kitchen can benefit from either mixing in or substituting another material, such as sustainable wood butcher block, stainless steel, glass or concrete.

Wooden countertops, which are mostly made of maple,  teak, walnut, cherry or oak add a warm tone to any kitchen. Wood is a bit high on maintenance, as it needs to be oiled every four to six weeks to prevent staining. However, when properly treated and seasoned with oil, wooden countertops can be relatively easy to live with. But, unlike granite, wooden surfaces do burn, stain and dent, so care must be used with hot pans and liquids. And, while they add a warm tone to any kitchen, wooden surfaces are not inexpensive. Cost is comparable to natural stone. 

 Stainless steel is sleek and modern, durable and burn-proof. Once a staple in commercial kitchens, stainless has become quite popular in residential kitchens. And, while it costs as much or more than natural stone  it is an absolute show-stopper.

  Glass countertops allow for maximum artistic expression and durability Gaining in popularity, glass can be customized in a number of colors, textures and finishes.

From HGTV about concrete countertops:

Concrete can be earthy and natural, with a tactile quality not found in synthetic or stainless steel surfaces. Because each concrete countertop is hand-cast, it exhibits subtle variations in color and texture. Concrete countertops can also be adorned with botanical imprints from real leaves or embedded with colorful stones, seashells and even fossils.

The environmental benefits of concrete also appeal to homeowners. Concrete is an eco-friendly alternative to petroleum-based synthetic products and nonrenewable natural materials such as quarried stone. Some concrete countertop makers incorporate natural minerals and recycled materials into their creations, such as fly ash (a byproduct of coal production), metal shavings, plastic regrinds, recycled glass and scrap wood chips. “

For more information about all of the possibilities for your countertop surfaces,  this HGTV link is a great resource. 

The Carmel real estate market had a difficult year in 2009. There were 398  single-family and condo-units listed  in 2009, of which 155 properties sold. With an average of just 13 sales a month, the inventory build-up reached a high of 30.6 months to clear. Days on the market averaged 172 days. Of the 155 properties sold, there were 12 sales in which the listing agent(s) also represented the buyer(s) (7.75% of sales).

 The chart below shows the sales to list price for the 93923 zip code. 

Looking at the selling data and tracking the historical price points of repeat sales, the market in Carmel has, by and large, returned to 2002-2004 price levels, depending on location.

Of particular interest to many readers will be the Carmel Valley Ranch data points. There were 15 active listings for sale in 2009, with 4 properties sold. The average selling price was $962,500. Average listed price $1,116,250; days on the market 177; sales to list price (13.8%). Average square footage of sold properties: 2,338; average price per square foot: $411.68. Three out of the four properties sold were on the golf course – all had multiple quality photographs.

On Wall Street there is a saying that “so goes January, so goes the year.”  With just 5 days  into 2010, there is already one sale pending. With the worst real estate market since the Depression probably behind us, the downside risk at this point is probably minimal. Bargain priced opportunities for qualified buyers are excellent, vis a vis the last four years.

The following  is a passage from the book Freakonomics,  by  economist Steven D. Levitt and bestselling co-author Stephen J. Dubner. Here is their insightful and delightfully irreverent  blog .

“An analysis of the language used in real-estate ads shows that certain words are powerfully correlated with the final sale price of a house. This doesn’t necessarily mean that labeling a house “well maintained” causes it to sell for less than an equivalent house. It does, however, indicate that when a real-estate agent labels a house “well maintained,” she is subtly encouraging a buyer to bid low.

Listed below are ten terms commonly used in real-estate ads. Five of them have a strong positive correlation to the ultimate sales price, and five have a strong negative correlation. Guess which are which.

Ten Common Real-Estate Ad Terms

• Fantastic
• Granite
• Spacious
• State-of-the-Art
• !
• Corian
• Charming
• Maple
• Great Neighborhood
• Gourmet

A “fantastic” house is surely fantastic enough to warrant a high price, isn’t it? What about a “charming” and “spacious” house in a “great neighborhood!”? No, no, no, and no. Here’s the breakdown:

Five Terms Correlated to a Higher Sales Price

• Granite
• State-of-the-Art
• Corian
• Maple
• Gourmet

Five Terms Correlated to a Lower Sales Price

• Fantastic
• Spacious
• !
• Charming
• Great Neighborhood

Three of the five terms correlated with a higher sales price are physical descriptions of the house itself: granite, Corian, and maple. As information goes, such terms are specific and straightforward—and therefore pretty useful. If you like granite, you might like the house; but even if you don’t, “granite” certainly doesn’t connote a fixer-upper. Nor does “gourmet” or “state-of-the-art,” both of which seem to tell a buyer that a house is, on some level, truly fantastic.

“Fantastic,” meanwhile, is a dangerously ambiguous adjective, as is “charming.” Both these words seem to be real-estate agent code for a house that doesn’t have many specific attributes worth describing. “Spacious” homes, meanwhile, are often decrepit or impractical. “Great neighborhood” signals a buyer that, well, this house isn’t very nice but others nearby may be. And an exclamation point in a real estate ad is bad news for sure, a bid to paper over real shortcomings with false enthusiasm.

If you study the words in the ad for a real-estate agent’s own home, meanwhile, you see that she indeed emphasizes descriptive terms (especially “new,” “granite,” “maple,” and “move-in condition”) and avoids empty adjectives (including “wonderful,” “immaculate,” and the telltale “!”). Then she patiently waits for the best buyer to come along. She might tell this buyer about a house nearby that just sold for $25,000 above the asking price, or another house that is currently the subject of a bidding war. She is careful to exercise every advantage of the information asymmetry she enjoys.”  end quote

         - pg. 73-74 Freakonomics

Funny and sad at the same time. . . 

Back in 2005, at the peak of the housing bubble, there were plenty of newly minted status conscious consumers, wearing Prada, driving Mercedes’ and acquiring chichi little dogs they named either Chanel or Versace. Of course, nobody was more thrilled by the inexhaustible ‘wants’ of consumers than marketers were. Perhaps it was inevitable then that marketers teamed up with neuroscientists to conduct behavioral research on consumers while they were having their brains scanned. What fun. Not. While lying in a claustrophobic functional magnetic resonance imaging (FMRI) machine, consumers were shown prestige brand logos and were subjected to beautiful imagery and sensual scents. The scans followed the neural activity in the brain to determine how effective the marketing messages were. Predictably, status oriented stimuli, beautiful imagery and scents lit up an area of the mid-brain called the nucleus accumbens, an area involved in reward and pleasure circuitry. Yet even after years of research and tens of millions of dollars, marketers had not exactly found their holy grail - which is the brain’s “buy button” – but they had amassed a significant amount of data which now stands frozen in economic time: bubble brain scans.

Of course, 2005 seems like a lifetime ago and consumer behavior has changed dramatically over the last four years. But does the passage of time mean that FMRI’s should be fired-up again to revisit those same brains to determine how today’s economic environment affects the participants perception of status merchandise?  Well, we probably don’t need brain scans to figure this out. We have historical precedent and we know that consumers adjust their behavior quickly in changing times. We also know that in reaction to material loss people will eventually compensate by turning objects of past desire into objects of disgust. (Hey Prada, hey Toll Brothers, you light up my brain’s insula).

In austere times people find reward in emotionally meaningful experiences rather than in consumptive behavior. Which (finally) brings me to my tie-in to real estate marketing. Sadly, the real estate lobby still continues marketing houses as “investments” even though the wealth concept message is perceived as disingenuous and it presents a painful reminder of financial loss to a significant number of consumers.  Adverts peppered with the false promise of real estate riches are extremely counterproductive. (Short sale magic, REO tours and auction secrets).  By sticking with an outdated message, the real estate lobby ignores what their customers ‘wants’ which are to feel good and to have experiences that are meaningful and relevant. Today, simple pleasures simply matter much more.

Realtors will probably have to wait a generation or two before being in the sweet spot of the economy again but they should not wait another minute for straight honest talk about the product they are selling.

Eventually consumer behavior will change. Trends often turn on a dime. Perhaps the ‘green shoots’ we are hearing about in the economy really are signaling an end to this deep recession. Eventually, we will see a spike in consumer confidence and our austerity will morph into prosperity.  Then and only then will it be time to dust off the superlatives and pepper descriptive real estate listing adverts with bits of appropriately used French and the occasional and - hopefully –  sparingly used word “investment.”

Regardless of the economic environment, there really isn’t any need to ‘hype’ homeownership as a great investment. A house is, after all, a highly illiquid under-performing asset class. But that really doesn’t matter. It is a home’s intrinsic value (the pleasure derived from the thing itself) that matters most. It is in our homes that we live, love, learn, raise our children, nurture our pets, entertain the people we care about and experience the triumphs and tragedies of life. Where we live and how we live help us to become who we are. There should never be a need to hype that.  

Debtor’s Dilemma: Pay the Mortgage or Walk Away Wall Street Journal

Leading Economic Indicators rise 0.9% in November Market Watch

Moody’s Changes US Homebuilding Industry Outlook To Stable Wall Street Journal

Shadow US housing inventory seen at 1.7 mln in Sept Reuters

Senate committee approves Bernanke on 16-7 vote Market Watch

TREASURIES-Bonds rally as investors pare risky trades Reuters

Higher Bay Area home sales, prices offer hope Alameda Times Star

Foreclosure notices decline in S.J. Stockton Record

Stocks Fall on Citi Stock Sale, FedEx Forecast Business Week

BofA’s CEO Moynihan faces tough job in 2010 The Associated Press

Mortgage Q&A: Treating mortgage as savings Washington Times

Philly Fed: Factories show continued strength Market Watch

Jobless Claims Rise in Latest Week Wall Street Journal

 BEN BERNANKE NAMED TIME’S “MAN OF THE YEAR.”

www.youtube.com/watch?v=ef23nkGU7O4

 Of The  Golf Course!

You wouldn’t believe just how often agents simply forget to showcase what they are selling. For instance, if the property has a premium attribute, such as a golf course view, then by all means, the online listing pictorial should show plenty of  pictures of the golf course view.

The beautiful picture at left is an advertisement for plantation shutters. But it reminds me of a particular stale bay area golf course listing.

In writing the copy for the listing, the agent boasts that the house has the best golf course views of any house in the area. Yet, when the listing agent took a series of absolutely horrible, over-exposed  interior photographs, the golf course view was neglected. Potential buyers were, what,  just supposed to line up to see the actual views of the golf course by appointment only?

It is a pity. The property is lovely and truly worth seeing – and it’s not overpriced. Yet it’s been on the market for over two years.  Long past time to get a stager and a professional photographer in there. Immediately, if not sooner!

Attorney Stanley G. Hilton, catapulted into the national media on November 16, just shy of a week after filing his lawsuit in San Mateo County, naming hundreds of defendants in a lawsuit seeking tens of millions of dollars in damages.

In the first part of the complaint, Hilton alleges that the airport noise and pollution from San Francisco International Airport destroyed his marriage, his career and caused him physical and emotional problems. The second part of Hilton’s complaint is against his Realtors, regarding a  purchase transaction for a single-family residence in Hillsborough, California,  four miles away from SFO airport, which Hilton purchased in 2003. In his Cause of Action, Hilton is suing his Realtors, and in part, a home inspection company, for fraud, breach of contract, breach of covenant, and breach of professional duty .

Hilton’s Complaint (pdf):

• First Cause One of Action: Public Nuisance/ Noise and Air Pollution.
• Second Cause Of Action: Assault
• Third Cause of Action: Battery
• Fourth Cause of Action: Fraud
• Fifth Cause of Action: Breach of Contract
• Sixth Cause of Action: Breach of Covenant
• Seventh Cause of Action: Breach of Professional Duty

I cannot comment on Hilton’s suit against his Realtors except to say that successful lawsuits against real estate agents are in near proportion to the complexity and number of pages added to real estate contracts in recent years.

What is most interesting about Hilton’s suit, however, is that it may draw some attention to the important science regarding the affects of chronic stress (including stress caused by both ground and air traffic noise) on the brain. Unfortunately, given Hilton’s infamous zest for litigation, he is probably the wrong protagonist to capture public sympathy and understanding regarding the detrimental affects of environmental stress on the brain. Even so, perhaps an acknowledgement of the science could help lead to a change in residential and commercial building criteria -- changing our priorities regarding the built environment, to enhance, rather than lessen our well-being.

By way of background, Hilton already suffers from post traumatic stress disorder. His current living circumstances, in addition to a set of recent multiple psychological shocks, has added to his pre-existing condition.  Unlike my brain, or hopefully, your brain, his brain has already suffered a loss of gray matter, hippocampal damage and dendrite death due to chronic stress. Hilton’s chronic exposure  to toxic levels of glococorticoids (stress hormones) has perhaps irreparably damaged his brain, adversely affecting his memory, learning, and emotional stability. 

Of course, it is not just the brain that suffers damage under chronic stress.  It is every cell in the body. The science is clear regarding the negative affects of traffic noise on children’s brain development and on adult health and brain performance.  

 A few examples. . .

Transportation noise and cardiovascular risk: updated review and synthesis of epidemiological studies indicate that the evidence has increased.

 Babisch W. Federal Environmental Agency, Berlin, Germany

Health Effects caused by Noise: Evidence in the Literature from the Past 25 Years

Authors: Ising H.¹; Kruppa B.

Source: Noise and Health, Volume 6, Number 22, Jan -- Mar 2004 , pp. 5-13(9)

Does stress damage the brain?
Biological Psychiatry, Volume 45, Issue 7, Pages 797-805
J.Bremner   “

The video below is a brief talk about the affects of stress by Professor Robert Sapolsky. His brilliant book, Why Zebras Don’t Get Ulcers, is a great introduction toward a better understanding about the affects of chronic stress on the brain.

 

www.youtube.com/watch?v=sPS7GnromGo

 For more information about Environmental Psychology, here  is a prior post.

Below are a few examples for sellers to contemplate.

ACCEPTABLE USE OF PHOTOSHOP. . .

The shot above (left) was lifted from the internet. Notice that it was not only a rainy day but it was  garbage and park your truck in the driveway day as well.     Changing the weather and removing the garbage bin and truck doesn’t alter reality but it does show the house in a much better light.

The shot above at left, taken into the sun, needed the exposure changed to brighten the entrance and a blue sky layered on top of the blown-out sky. A few red and yellow blooms were added as well. 

NO ONE SHOULD EVER DO THIS. . .

Power lines can be quite a distraction and are a negative selling point.However, to remove them from a listing photograph misrepresents the property. So does altering the landscaping and   removing the neighbors house – which I did here to illustrate a point.

The National Association of  Exclusive Buyer Agents finds staging so dangerous that it has  published a “know your enemy” list with the names of  the extraordinary marketers in the forefront of the staging profession.

What is so dangerous about staging? According to a paper published by the buyer agents trade group, staging results in (gasp) listings that sell at higher prices and in shorter time frames.

From the NAEBA paper. . .

There have been a number of staging studies, and virtually all of them have shown that a staged home typically sells for a lot more money and sells in a shorter time.”

and

There is absolutely no question in the real estate industry that staging can make the same home sell for more money.”

and

Staging is a smart way for home sellers to present their home to you to get the highest possible price.”

 

If the NAEBA paper is in search of a point in which to cast staging in an actual negative light, it attempts to reach one with the ridiculous accusation that some staging is done to cover up cosmetic defects, as well as serious damage, such as structural deficiencies. The implication being that collusion may exist between sellers, their agents and stagers.

NAEBA real estate agents identified a series of potential hazards when viewing staged homes.  These included using area rugs to cover damaged flooring, or paintings to hide nail holes.  More dramatic problems agents saw included painting over peeling wallpaper or a new exterior paint job covering up rotting wood..”

Nonsense. In real estate sales, failure to disclose known defects and material facts is Fraud. An agent who fails to communicate to a buyer (in writing) the importance of conducting a series of professional inspections may be guilty of Negligence. Sellers of residential property in California, consisting of 1-4 units, are required to complete and submit a standard form, detailing the condition of the property, called a Transfer Disclosure Statement  – bank owned properties are exempt - to the buyer(s).  And, when received after the Purchase Agreement is signed, the buyer has the right to rescind the contract if the buyer is not satisfied with the stated condition of the property. Additionally, both the buyer and seller’s agents are required to conduct a visual inspection of the property and submit their observations, as well. In addition, a recommended form called a Sellers Property Questionnaire, which asks sellers very detailed questions should be used too, IMO.

While NAEBA represents a small number of  agents (500 members), the vast majority of agents working with buyers prefer showing their customers beautiful properties – especially staged properties.  It just makes sense to show clients the kind of houses that most people actually want to buy.

NOTE and POST UPDATE: The past president of the NAEBA contacted me and thought it only fair that buyers be given a link to the entire NAEBA pdf. Point taken.  Here is the link.

 From The Associated Press

Americans are borrowing less as they try to replenish depleted investments. Many are finding it hard to get credit as banks, hit by the worst financial crisis since the 1930s, have tightened lending standards.

The 2.6 percent rise in the category that includes car loans reflected a rebound in auto sales in October after they fell sharply in September. That drop came after a surge in auto sales in August as consumers rushed to take advantage of the government’s popular “cash for clunkers” incentives before they expired.

While economists have worried for years about the low rate of savings, the concern is that consumers could derail the recovery if they start saving too much of their incomes. Consumer spending accounts for 70 percent of total economic activity.”

(emphasis added is mine)

 

1.       Where is the economy headed?

2.       What has the Federal Reserve been doing to support the economy and  the financial system

3.       Will the Federal Reserve’s actions lead to higher inflation down the road?

4.       How can we avoid a similar crisis in the future?

Link to the Fed’s website and entire speech

In This Economy, Servicers Are Unable To Find Qualified Participants For Mortgage Modifications (Gasp).

It is a peculiar government policy which seeks to stimulate the economy by infusing unprecedented monetary stimulus into the economy and then restricts access to that capital for consumers and small businesses – the two groups essential in achieving an economic recovery.

Tomorrow, the House Financial Services Committee will question mortgage servicers as to why their mortgage modification success rate has failed to live up to expectations.

However, also tomorrow, new stringent verification of consumer borrowing capacity rules will be discussed to further tighten credit restrictions.

This really isn’t rocket science, is it?  The only way out of this mess is to inflate house prices and then hope against hope that the inflation can be tamed. If the collateral backing loans increase in value then the risk of default decreases substantially and future losses can be mitigated. Restricting credit while simultaneously demanding an explanation from financial service companies as to why they are not lending more money to homeowners may be good political theater but is counterproductive toward achieving economic growth.

 Bank of America: 2/3 of Borrowers May Lose Mods

 From CNBC: Diana Orlick reporting:

Tomorrow the House Financial Services Committee, under the leadership of Chmn. Barney Frank, will grill mortgage servicers as members examine the “response to the mortgage foreclosure crisis.” This is all about how banks are converting all those trial modifications under the government’s Home Affordable Modification Programinto permanent modifications. Today, as a little precursor, the servicers were called over to Treasury for some browbeating and sandwiches, sorry, “to discuss the urgent need to convert eligible homeowners in trial modifications to permanent modifications,” according to a Treasury spokesperson.”

More from Olrick. . .

Treasury is now considering upping the ante on the trial modifications, requiring much more documentation up front, so that banks won’t have all these trial mods going with borrowers who inevitably won’t reach permanent modification status.”

Dubai rocked the worlds’ financial markets, late November, when concerns over a potential default on a $ 60 billion debt owed by government-owned holding company, Dubai World, was expected and then averted. Even more interesting than the financial turmoil, is the place itself. “The World” is a collection of 300 man-made islands shaped in the configuration of the Earth’s continents. Take a look at “The World” promotional video. (Below)

www.youtube.com/watch?v=7eUcRjo9Yv4

Here is an update on The World, from The Guardian newspaper (November 2009).

That project is unlikely ever to be completed. Work on it stopped earlier this year when the developer, Nakheel, ran out of money. Deprived of essential maintenance and reinforcement, the islands are slowly slipping back beneath the waves. “They’re just blobs of dirty sand sinking back into the sea,” said my sailing friend. “It must be the biggest shipping hazard in the Gulf.”

And to see the city of Dubai’s transformation into an unbelievable tourist destination, see the video below.

www.youtube.com/watch?v=k7JASOno2IQ

 Senator DeMint asks the Chairman all the right questions.  He then uses the Chairman’s answers as a setup to point the blame for our financial crisis directly on the Government and the FED.

Then the Senator takes the Chairman on a trip down memory lane to revisit how very wrong the Fed has been about everything at every turn.

www.youtube.com/watch?v=BwBprKRlDEw

To see a great video of Bernanke’s  bad economic calls, click  here

FHA Seeks Authority To Raise Annual Borrower Premiums  Wall Street Journal 

U.S. housing market meltdown not over yet: Zandi  Reuters 

Behavioural Economics Professor, Dan Ariely, in a very short video (below) explains how the perception of value becomes altered through ownership. This is seen quite often in real estate transactions, especially when sellers are discussing pricing their property, of which they often state, “We are not going to give the place away.” The reason that most people ‘add’ additional value to their property is due to the emotional experiences they’ve had in their home. The home becomes a part of their life narrative, wrapped up in nostalgia and tinged with a sense of loss. 

Buyers, on the other hand, in anticipation of the first inspection, are looking for the best possible house at the lowest possible price. And, while the ultimate purchase decision is usually driven by an emotional connection to a particular property, that emotional tug is tempered quite a bit by the ‘pain’ of having to give up something quite tangible: money.

Because of the buyer vs. seller ‘loss’ dichotomy, it is important for real estate agents to try to alleviate the emotional sense of loss both parties experience by ‘framing’ the transaction in a way that lessens the negative emotional responses of both buyer and seller. Home staging can play a key role in accomplishing this objective.

For sellers, having their property ‘staged’ helps them begin to emotionally separate their ‘life narrative” from the space they are selling. Through the process of decluttering and depersonalizing a seller’s property -- by packing up and removing prized possessions and memorabilia -, staging accelerates the emotional detachment necessary in order to fulfill what is ultimately a business transaction.

Buyers, on the other hand, have not enjoyed any ‘life’ moments in the homes that they view, and, as a result,  are better able to keep a safe emotional distance from the properties. Here again, home staging can help to tap into a buyer’s desire to find a ‘love match.’ Buyers, are, after all, not just looking for a house that fills a set of criteria; they are looking for a place in which they can see themselves and the people they care about enjoying the space that is for sale. Staging creates a neutral palette which helps encourage buyers to visualize their things in a seller’s property.  Additionally, appropriately staged lifestyle vignettes tap into the positive aspects of the residence, neighborhood and community, helping buyers to visualize a potential life narrative after purchase.

When it comes to a successful real estate transaction, it is essential to understand the motivations and trepidations of all parties involved. Behavioural economics can serve as a guide toward understanding and addressing the needs of both buyers and sellers. 

www.youtube.com/watch?v=drEVExtrUgQ