AN OPEN LETTER TO BUYERS:

Dear Buyers:

Welcome to a changing market! You have been subjugated to sellers' desires for too long now-since 1996, to be exact-when the phenomenon of MULTIPLE OFFERS became commonplace. For all these years, the sellers have had what you wanted, so they possessed the power, picking and choosing who could buy their precious property. On the other hand don't believe what you read in the papers about how the market is crashing ... remember that no news is good news to the media. The market is not crashing, prices are not really down ... the numbers of sales are still high, on a par with recent years. The major difference is that there are fewer multiple-offer situations now, and that is good for YOU!!

Following are a few suggestions gleaned from my 27 years in the business, and from my clients' experiences, which I hope will be helpful to you:

1. RESIST the impulse to follow the crowd ... the most astute and successful business people will tell you to buy when everyone else is selling and sell when everyone else is buying. If you hear the market is "bad," that's good for you-because the market is defined in terms of the sellers' interests, and not yours! What the papers call a "bad market" is a call to action for a buyer!

2. TALK with a financial advisor or mortgage broker regarding the pros and cons of buying at a higher interest rate but a lower price, and vice-versa! You need to know your numbers! This is especially crucial when things are changing ... do you wait for prices to go down? Buy now before rates are up any more?

3. ACKNOWLEDGE the power of the seller and his agent when you are competing against other buyers; you need them more than they need you. But remember what the Quakers say: "Speak truth to power." They may have the power but you have the truth.

4. COOPERATE with the seller and his agent, show them how easy you are/will be to work with-make them want you! Ask the seller's agent who his favorite title company, mortgage broker, inspectors, etc. might be and offer to work with them. If the seller and/or agent doesn't like you, you're likely to lose the property.

5. COMMIT to an agent of your own. If you play the field, you will get a bad name in the broker community and that will not help you. But more important, if your agent knows you will buy from her/him, he will dedicate himself to you, heart and soul. There is nothing you can ask of him/her that will be too much. How much is that worth?

6. LEARN everything you can about any property you choose to bid on ... knowledge IS power! You may have to spend a little money to accomplish this, but it can never be a mistake, whether you buy or not. As someone once said, "Some of the best deals I ever got were the ones I didn't get!" On the other hand, if you do get it ... the knowledge will be priceless.

7. OFFER a good price when you love a property, and don't draw a line in the sand around the price you bid ... you must negotiate, in most cases, to be successful. Analyze the numbers in terms of your down payment and monthly payment and not in terms of who is right or wrong. You are better off paying a somewhat higher price for a really good property that you love ... than paying a lower price for one you do not love. (In the former case, you have gotten your heart's desire; in the latter case, you have spent a lot of money on something you didn't really want!)

Sincerely, Lee Bender

1. GET INVOLVED IN REAL ESTATE: While there are risks and costs, very few people make it financially without owning real estate. In the Bay Area we are dividing all-too-quickly into the "haves" who have real estate and the "have-nots" who do not. With interest rates extremely low, now is an excellent time to buy. (Note: A drop of 2.5% in the mortgage rates means a reduction of $500 per month on a $250,000 loan!)

2. HIRE AN AGENT, NOT A COMPANY, and commit to that agent. This is the person whose primary concern is you! So choose wisely an agent with whom you are comfortable, who can be trusted, and who will represent you well at the negotiating table because that is the only person you will see when it counts.

If you are a buyer, establish a committed relationship with the agent of your choice because most successful agents will not devote themselves to your cause unless they have a good reason to think they will be paid.

If you are a seller, you probably already have an agent, or at least know that you should be getting one soon. Research shows that people who sell their homes obtain, on the average, approximately 10%-15% less than people who hire licensed realtors. That's a high price to prove you can do it on your own, isn't it?

3. Hire an agent whose company has an ERRORS AND OMISSIONS insurance policy. None of us likes to think about it, but lawsuits happen and you must be prepared. All it takes is one angry person to result in litigation, no matter who is at fault. No one who has this insurance will tell you that you don't need it. And ZEPHYR offers additional insurance to sellers who occupy the homes they are selling.

4. BUY A HOME-WARRANTY PLAN: Tell your agent, whether you are a buyer or a seller, that you want a standard one-year policy that provides basic coverage on the major systems of the home you're selling or buying. (Some even offer roof coverage, but I have never used that particular feature so I can't speak about it.) If your agent has a long-standing relationship with a particular warranty company, then you stand a very good chance of having problems covered both before and after the sale even if the defective system is not up to local code!

5. OBTAIN WRITTEN INSPECTIONS: No home warranty can ever repair the damage likely to be done by not having your home properly inspected by a licensed contractor who puts his or her findings on paper. If you are a seller, I can almost guarantee that you will realize more profit in your home sale if you obtain inspections before marketing your home rather than waiting for the buyer to hire one. If it's true that "knowledge is power," then you and your realtor had better be darned sure of what you are marketing or you will not have the upper hand!

A popular legal opinion holds that if you hire and pay for your own inspections and subsequently sell the house "as is and as disclosed," then your liability for future defects is greatly minimized.

6. If possible, insist on YOUR OWN ESCROW AGENT: This team member can be crucial to the transaction's success. If you're a seller in a seller's market, or if you are looking for something the buyer can trade to you, you might consider choosing an escrow agent. This is the person who will be handling every last detail from the point of sale to the moment when you receive either the house or the money, so choose wisely.

7. TELL YOUR AGENT WHAT YOU WANT: Your agent's job is to attain the mutual goal of closing escrow. However, it is important for you to understand the job your agent is doing so you will know for yourself what is going on - that is, you must perceive the service provided to you or else no one will be pleased. How often do you want your agent to call you? How active a role in the sales process do you want to assume? Some people want to be taken care of and others want to participate in almost every decision.

8. If you are a seller, CREDIT THE BUYER so you don't have to do the work for agreed-upon repairs. If you are a buyer, TAKE THE MONEY and have the work done for less than the amount of the report; make a few dollars!

9. ASK WHAT'S NEXT: There is nothing special you must know, have, or do in order to have a successful real-estate transaction. People who go to home fairs, read detailed books on sales strategy, etc., are probably wasting their time. A good agent should keep you informed every step along the way, so there will be no surprises other than the ones life springs us in its daily course. Remember: "There is no substitute for experience."

10. TIPS TO SELLERS:

(a) LIGHT UP your house like a Christmas tree. People buy homes that make them feel good, and lighting does just that. Turn on every light in the house (yes, in the bathroom and garage too). Open the drapes. And wash the windows, especially if one of the house's main assets is a great view.

(b) PLANT TREES in front of your house if there aren't any. Friends of the Urban Forest may be happy to assist you, and you can double your home's "curb appeal" overnight. Also, hire gardeners to add bright and cheery flowers inside and outside your home. Gardening "stagers" can take care of the whole project for you. MAKE IT LOOK HAPPY!

(c) EXTERIOR PAINTING can be costly, but you will usually get your money back if done well (consider hiring a color consultant). If you're going to paint, do it right because buyers make many negative buying decisions from the sidewalk and never even set foot inside.

(d) GET RID OF CLUTTER. Make your home look like no one lives there! I don't know why this works, but it does. Just put it all in boxes and hide it away. Then, when you are actually packing to move, you'll find that you don't need or want much of it anyway.

(e) SELECT THE ASKING PRICE WITH CARE. Many people believe they can ask whatever they want for their home and then come down when they get a lower offer. This is absolutely irrevocably false in 99% of cases. No one will make an offer on your home who hasn't seen it, and only buyers looking for a home in the range of your listed price will see your home. If a home is listed above what it will actually sell for, the buyers who might have afforded it will be looking at lower-priced properties. Your home will be viewed only by those who will find better homes than yours at your listed price, and you will literally make the others look good!

Also, a seller with a home that's new on the market is in the strongest negotiating position. Buyers know they have to make a good offer to impress you and induce you to sell early on. Once you've been on the market a while, the seller is in a weaker position relative to the buyer who will always want to know how long has this house been on the market. The observable fact about time is this: The longer your home is on the market, the less money it will sell for.

The last thing you should worry about is under-pricing your property! As long as it is fully marketed i.e., posted on the Multiple Listing Service, shown on brokers' tour, and given enough exposure to bring in multiple offers you will do fine.

11. NO PAIN, NO GAIN. This is a difficult transition for most people, so expect to be inconvenienced, disappointed, frustrated, frazzled, insulted, chastened, and ultimately rewarded because most who have gone before you have experienced the exact same things. No matter how smart or tough, you can and will have these experiences, and you will get through them. The awful truth is that you are not in total control.

12. LEARN THE STRESS CHART (above): If you can accurately anticipate when the hardest times will occur, you will be far less vulnerable to events as they arise. You'll know it's all part of the process, and you won't take it personally.

13. ACCEPT THAT YOU WILL STRETCH financially and personally. Buyers will stretch as far as they can possibly go. Sellers usually receive less than what they had expected. The old saying is: "Buyers think high, sellers think low." And all of this is contrary to our natural inclinations, isn't it?