by Roberta Murphy

I believe we have a new issue to negotiate on behalf of our clients:

CANCELLATION FEES

A couple of weeks ago we had a buyer cancel a transaction within the timeframes agreed upon by the buyer and seller. Notice of cancellation was sent out shortly after the physical inspection on the $400,000 downtown San Diego condo.

It should have been a simple matter, but that was not to be the case.

The Prudential listing agent had stipulated that Prudential California-owned Pickford Escrow handle the transaction. All proceeded smoothly until the point of cancellation, when Pickford assessed a $1115 cancellation fee against the buyer, and refused to back down from that claim, despite our requests to do so.

Never in our real estate experience had we encountered an escrow cancellation fee of this enormity, and I cannot recall any escrow cancellation fee that had been assessed against any of our transactions in the last few years.

In the rare cases when we have had an escrow that cancelled, the escrow and title companies bore their losses along with the agents involved in the transaction. Even though œreasonable cancellation fees are generally allowed for in the escrow instructions, it is something that is rarely levied against the real estate client.

Curious as to whether this is to become a revenue-generating trend of some sort in a sagging real estate economy, I called the Pickford Escrow manager involved in this transaction and asked if cancellation fees were part of a new policy. He said it wasnt a policy, but was something that was allowed for in the escrow instructions and could be charged on a discretionary basis.

Hmmm..

I called Steve Torneo, San Diego attorney for First American Title and Escrow, and asked what First Americans stance would be regarding escrow cancellation fees. He, too, said it was a discretionary call, but that they would not levy that fee against a cancelling client who felt it was unfair in any way or who felt that First American had failed to earn what was charged.

He also agreed that $1115 seemed excessive.

A call to Alonzo Castro, a Carlsbad service rep with First American Title, further confirmed the rarity of cancellation fees and he could not recall First American assessing them against any clients.

To round out this informal survey, I asked senior escrow officer Deanna Lynch with Southland Title Escrow in Carlsbad, CA what their policy was regarding escrow cancellation fees. She said, œWe just dont charge cancellation fees.

A final call to Gena Riede, a seasoned Sacramento real estate broker, confirmed that she had not seen any fees assessed against any of her cancelled escrows either. I mentioned that an authorization for this fee appears in the small print of escrow instructions, and that in the future we will be inserting language in our offers that prohibits the assessment of escrow cancellation fees against any of our clients.

Gena will be doing the same.

It is the least we can do to help protect our clients.

by Roberta Murphy

Brad Inman this morning wrote an excellent article about the mortgage and real estate crisis that has gripped so many markets in the United States–and elsewhere. In The Housing Market Blame Game, Inman reports that even formerly raging real estate markets that were once seen as unshakable, such as Manhattan, are now beginning to share the pain with regions that had collapsed earlier.

Many blame the real estate industry for hyping the real estate market; others the mortgage originators. But Inman makes an interesting observation:

“….hyperbole from every day Realtors is not the underlying problem causing the housing quake. I would assign more blame to industry experts who peddled their demographic-as destiny arguments and ignored other issues.

This is akin to the expert analyst problem in the equities industry, where favorable reviews were tied to conflicts of interest.”

My response:

The blame game and finger pointing has become a conversation staple from Wall Street to Main Street. Some blame greedy hedge funds, some the greedy mortgage industry, some the greedy real estate agents, and some the greedy mortgage fraudsters.

The conversations that interest me most are the ones that seek ways to sift through the rubble to find approximate market bottoms. That is where the next real estate fortunes will be made.

Greed survives.

by Roberta Murphy

Whenever I go to shop for technology of any sort, I head over to CNet to check out editorial and user reviews. Whether I am shopping digital cameras, tablet pc’s or cell phones, I know I can trust what they have to say.

It came as a recent wonderful surprise that they have also taken to rating blogs–or at least those that focus on technology. Luxury Home Digest of course did not make the cut, but that should come as no surprise. Luxury real estate blogs aren’t exactly at the top of tech blog lists.
Regardless, I thought readers might be interested in their 100 choices because they could end up providing valuable information for owners of luxurous residences:

• 1080Eye
• Alice Hill’s Real Tech News
• Apple Matters
• AppleInsider
• Ars Technica
• Between the Lines
• Beyond VC
• Boing Boing
• Burnham’s Beat
• BusinessWeek’s Blogspotting
• BusinessWeek’s The Tech Beat
• BuzzMachine
• C:\PIRILLO.EXE
• Channel 9
• Cleantech Investing
• Cyberjournalist.net
• Dan Bricklin’s Log
• Daring Fireball
• Declan McCullagh’s Politech
• digg
• Doc Searls Weblog
• Engadget
• Fixyourthinking.com
• Freedom to Tinker
• Geek Culture
• Geek News Central
• Gizmodo
• GPS Review
• Groklaw
• Hypebot
• IEBlog
• iLounge
• Jeremy Zawodny’s blog
• JKOnTheRun
• John Battelle’s Searchblog
• Joi Ito’s Web
• Jon’s Radio
• Jonathan’s Blog
• Justin’s Guide
• Kim Cameron’s Identity Weblog
• Kotaku
• Kottke.org
• Kuro5hin.org
• Lawrence Lessig
• Lifehacker
• Linux-Watch
• LonghornBlogs.com
• MacMinute
• Matt McAlister
• Micro Persuasion

• Microsoft Security Response Center
• Microsoft Watch from Mary Jo Foley
• Mini-Microsoft
• Molly
• MozillaZine
• Neowin.net
• New Media Musings
• O’Reilly Radar
• Om Malik on Broadband
• Ongoing
• PaidContent.org
• PCS Intel
• PhysOrg Weblog
• PressThink
• PVRblog
• Responsible Nanotechnology
• RFID Weblog
• Romenesko
• Schneier on Security
• Science Blog
• Scobleizer
• Scott Rosenberg’s Links & Comment
• Scripting News
• Search Engine Watch
• Seattle Post-Intelligencer Microsoft Blog
• Security Fix
• Seth Godin’s Blog
• Silicon Valley Watcher
• Slashdot
• Spamroll
• Sunbeltblog
• SunMink
• TaoSecurity
• Tech Confidential Blog
• TechCrunch
• Techdirt
• Tecosystems
• Terra Nova
• The Blog Herald
• The Gadgeteer
• The Internet Stock Blog
• The Mac Observer
• Things That … Make You Go Hmm
• Threadwatch.org
• TiVoBlog.com
• TVOver.net
• Venture Chronicles
• Vitalsecurity.org
• whatsnextblog
• XplanaZine

A confession by: Roberta Murphy

I could write a catchy piece about the cluttered look of most collectors homes, but the first finger I would have to point would be at myself.

My confession?

I have inadvertently become a collector of widgets, especially those clickable social ones. Some go straight to social bookmarking sites, others go to friends, Now I have a big one that lists other bloggers. I rather enjoy them all, but have begun to hate the home page clutter.

If a blogs home page is the living room, where we greet guests and exchange ideas, gossip and news, then surely there can be other rooms where we save our esoteric collections and save our home pages from becoming eyesores.

In the virtual space of a blog, I am now constructing a dedicated widget closet. In here, I can now collect widgets with abandon. And when kind strangers offer me a widget, I can now graciously accept the gift and put it where it belongs.

The first widget to go on the closet shelf will be my diploma from The Tomato University. I love the look and am proud of the accomplishment, but tomatoes do little for the decor of the Luxury Home Digest.

The second will certainly be that large blog roll widget. I love its surprises, and have discovered more than a few new blogs that I return to regularly. But it also distracts from the home page. Others will follow and the widget collection can be a growing one.
Its to be an open closet.

Please feel free to browse, click and borrow a few for your own home. This page will become its own clickable category, so feel free to return and rummage through it at will.

by Roberta Murphy

A dear old friend and wordsmith from Tuscaloosa, Alabama, Hank Holman, sent this to me recently.

It likely has little to do with luxury real estate, luxury homes, or real estate rants, but it makes for a luxurious diversion into one of the marvels of our universe.

The symmetry and balance of life and those things that surround us never cease to amaze me.

The Beauty of Mathematics

1 x 8 + 1 = 9
12 x 8 + 2 = 98
123 x 8 + 3 = 987
1234 x 8 + 4 = 9876
12345 x 8 + 5 = 98765
123456 x 8 + 6 = 987654
1234567 x 8 + 7 = 9876543
12345678 x 8 + 8 = 98765432
123456789 x 8 + 9 = 987654321

1 x 9 + 2 = 11
12 x 9 + 3 = 111
123 x 9 + 4 = 1111
1234 x 9 + 5 = 11111
12345 x 9 + 6 = 111111
123456 x 9 + 7 = 1111111
1234567 x 9 + 8 = 11111111
12345678 x 9 + 9 = 111111111
123456789 x 9 + 10 = 1111111111

9 x 9 + 7 = 88
98 x 9 + 6 = 888
987 x 9 + 5 = 8888
9876 x 9 + 4 = 88888
98765 x 9 + 3 = 888888
987654 x 9 + 2 = 8888888
9876543 x 9 + 1 = 88888888
98765432 x 9 + 0 = 888888888

Brilliant, isn’t it? And so is Hank!

And finally, take a look at this symmetry:

1 x 1 = 1
11 x 11
111 x 111
1111 x 1111
11111 x 11111
111111 x 111111
1111111 x 1111111
11111111 x 11111111
111111111 x 111111111

by Roberta Murphy

This is an issue that should trouble many real estate professionals….

• Some months ago, I met with clients and wrote an offer (at buyer’s request) that was substantially below the listed price (599,000 list price:475,000 offer). It was a rare Carlsbad, CA beach condo property with no recent comparable sales.

In prior markets, I might have urged clients to target their offer into an acceptable range to avoid the risk of an insulted seller who might refuse to even counter the bid. This time, I held my tongue.Most real estate markets are undergoing a major shift, and appraisals from months ago may no longer be valid; yet, they may be the only comparables available. Where once our San Diego sellers were entertaining multiple bids for their properties, we are now seeing buyers who make multiple offers and accept the property that comes closest to what they are seeking. This has happened with three of our listings the past twelve months.

Since that time, I have considered the potential liability for agents who “encourage” higher offers from their buyers.  In our litigious society, what might be the legal consequences for a knowledgeable real estate professional who advised or pressured a higher offer–and whose clients a year later have a home worth less than what they paid? I am not referring to agents who foolishly promise a gain on a real estate buyer’s purchase, but well-intentioned agents who work hard to negotiate the best transaction for their clients–a task that usually involves the crafting of an offer that will be acceptable to all parties.

This is a challenging market for all, and one that troubles a number of concerned Realtors.

by Roberta Murphy

Its not just Encinitas, but Solana Beach and other areas in California blessed with magnificent ocean bluffs. To be able to dangle ones feet over the edge of the earth with nothing but endless ocean beyond is a singular experience. But to lose ones property to crumbling ocean bluffs is not the heartstopping experience we would wish on anyone.

Yet bluff collapse has been a reality for an unfortunate few during the history of North San Diego Countys ocean bluff living. And it has been a painful and controversial history, especially in more recent years.

In short digest format, the problem might be viewed from two perspectives:

• Environmentalists and the Surfrider Foundation believe that Mother Nature should have her way. After all, sand for the local beaches is provided by erosion from the sandstone bluffs at its shore. Rain, wind and storms are only doing what comes naturally: Smoothing out a craggy and cliff-fronted shoreline and naturally providing sands for the beaches below.
• Property owners believe they have an inherent right to protect their property and its boundaries. Theirs is a lonely fight because there is no insurance coverage if their home and land crumbles into the Pacific Ocean even if there if the property is mortgaged with debt. The most typical solution to prevent this natural erosion has been the construction of expensive sea walls, which are generally fought by the mentioned environmentalists along with the California Coastal Commission.

In 1942 Encinitas Self Realization Fellowship lost their Golden Lotus Temple after a waterlogged bluff gave way and the temple slid down the bluff towards the ocean below. The Fellowships pragmatic response was to:

• 1. Drill wells and pump away accumulated ground water (near the bluffs) into city storm drains
• 2. Plant indigenous vegetation on the bluff face to help hold it together
• 3. Build a wall of boulders on the beach below to break the oncoming waves.

It was a solution that has held the Encinitas bluff together for over sixty years.It is also one that many are considering as a solution today.

I was recently showing some luxury oceanfront condos on Fourth Street in Encinitas and where I had sold three years ago. The owners have recently replaced the grass that fronted the bluff with artificial turf and drains that moves any water accumulation into city drains. It is a simple remedy that fights the problem from above.

And that may be the best alternative for ocean bluff preservation until environmentalists and property owners can come to a reasonable resolution.

by Roberta Murphy

It is difficult to avoid the subject of short sales and foreclosures when discussing real estate.

We receive ongoing emails and calls from people wanting to buy short sales and foreclosures because they want the best deal possible. They believe that the best buys can only come from bloodied sellers and lenders and that somehow real estate agents are the best bloodhounds of all (which is often true).

Theres this misconception floating around that if a lender is willing to shave off some of the debt owed on the property and sell it for less than what is owed, it must be a good buy. The same logic is also applied to foreclosures.

But reality sometimes paints a different picture.

Many of our San Diego clients have been able to get outstanding buys on real estate not through short sales or foreclosures, but from the best kept secret of all:

Motivated sellers.

And it makes a lot of sense. If, as a savvy real estate agent, I decided to sell my own home in todays market at the best price and within the shortest time frame possible, I would:

1. Stage the home.

2. Price it 3 to 5 percent under the competition. (Hear that, Freakonomics?)

In short, I would compete with any short sale or foreclosure competitors in pricing because I can, and thats because I have enough equity in my home to do so. There are also more sellers in my position than those who are in over their heads.

Hence, it makes good sense to work with a Realtor who is in tune with seller motivations and local market conditions and who keeps an ear to the ground to hear market rumblings as well as occasional agent gossip that doesnt appear in MLS descriptions.

In times like these, working with a knowledgeable and wise real estate professional may be one of the best investment decisions you could make. And when looking for the best buys in real estate, pay attention to short sales and foreclosures and look even more closely at seller motivation.

Read also:

Short Sales in the Luxury Home Market

Short Sale Trauma Drama

Home Pricing Dangers

Real Value in Real Estate Gossip

San Diego Home Home Losses Hit New High

Search San Diego Real Estate

by Roberta Murphy

It seems nobody is immune from the power of the internet or the inevitability of progress.

Zillow shook the real estate industry (and lots of homeowners) with last years unveiling of its near-instant online real estate valuations. The complaints came primarily from Realtors who feared the public would come to rely on Zillow Zestimates for home valuations and from homeowners whose property values were decimated by the zestimates. After all, Zillow has no way of knowing about property upgrades or negatives. It bases its valuation on comparative sales in the neighborhood.

Now attorneys may get to wrestle with a similar online competitor called AVVO, whose business model has not yet been revealed.

Their current Googled mission statement is vague enough to keep us all wondering:

Avvo: Helping Consumers Navigate the Legal Industry (providing) law resources and consumer tools to help people make informed decisions about legal services and navigate legal business.

As interesting as the similarities in the two companies might be, the familiarities are almost more interesting. Seattle Post-Intelligencers great blogger John Cook reveals the relationship between the founders of each company in his blog. According to Cook, AVVO CEO Mark Britton and Zillows CEO Rich Barton both worked at Expedia. They left the online travel company at different times, but took similar extended sojourns in Italy after leaving their jobs. Both returned to Seattle with industry-shaking ideas.

Now the two friends are linked by more than their history. It appears Barton is serving on Brittons AVVO Board of Directors and that Barton even helped come up with the AVVO name, which is taken from the Italian avvocato (ie lawyer). And the business model for this legal site is just as shrouded and discussed as Zillowss before its online debut. Could this be a searchable legal site, a rating service for attorneys, or perhaps even a œbid for service model? The secrecy surrounding this venture is great and is likely also part of the marketing buzz and plan.

Forgive the pun, but it appears the bar is being raised in online ventures.

by Roberta Murphy

Todays tragic massacre at Virginia Tech leaves us all wondering how such a thing could happen and what we might have done to prevent such a horror.

There is the predictable grandstanding for gun control, the demands for metal detectors on campuses, and more efficient lockdowns. I suppose these are all good and reasonable solutions, but I cant help but wonder about the small role real estate might play in solving or easing some of these pressing issues.

I think about the way we live and how we disconnect from our neighbors.

Once upon a time, people had the luxury of sitting on front porch swings where they could greet strollers and the mailman, hear the neighbors piano practice and watch the neighborhood kids barrel down the street on their bikes and scooters.

Neighbors knew one another and what was going on in their respective neighborhoods. On hot summer nights and before the proliferation of air conditioning and closed windows, people would sit outdoors sipping cold lemonade, Nehi Colas or other regional beverages. And even during cold or inclement weather, windows were eyes to the outside world and front windows were the most valued.

And because neighbors talked, gossipped and had telephone party lines, news travelled faster than blogging.

Sometime after World War II, the backyard patio and barbecue became the focus of outdoor living. People moved to their fenced back yards, and with the proliferation of television, moved indoors where rooms were air conditioned in the heat of summer. The living room recliner eventually replaced the front porch swing and after time, front porches became little more than architectural decor.

Front windows in newer homes are generally relegated to unused formal living areas. It is usually the family room at the rear of the home where families wish to gather and relaxin private.It is rare that neighbors stop by for an uninvited casual visit.

Years ago, I remember discussing neighborhoods and crime with Grover OConnor, former police chief of Dayton, Ohio. He was convinced that when America abandoned the front porch for the back patio, neighborhoods œwent to hell in a hand basket. In the old days, he said, kids couldnt get away with anything because one neighbor or another would be reporting the mischief to the parents. And burglars were more hesitant to break into homes because of front porches and peering eyes behind windows.

Life was more public and people were more involved in each others lives.

And though a front porch swing might not have prevented todays tragedy, a return to front porch living might make just as much sense as gun control, metal detectors and lockdowns.

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