The Reality of Real Estate (BlueRoof Blog)

Thoughts, opinions, and truths about real estate and life as I see it...

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Location: Salt Lake City, Utah, United States

I like long walks on the beach holding hands and.... oh, wait- that's a different site.

Saturday, July 22, 2006

First Impressions- Blind Dating for Homes

Ever go in a blind date? Beforehand, aren’t you just praying that they won’t be unattractive. If they are, most of the next hour will be spent thinking of reasons to leave early. Even if they are a wonderful person- you may never find out.

Home owners are going on a blind date when they come to see your home, or at best it’s like interenet dating. They may have seen some pictures and know a little bit about the home, but once they actually show up- none of that matters anymore. And if your home doesn’t look good outside they may never discover how great it is inside- they may just drive away.
If a buyers pulls up and thinks the home looks bad they know all of their friends will think the same when they come over to visit. We all want to have a home that we’ll be proud of.
When selling a home it’s important to present it well and this begins with the home’s curb appeal. You want the outside appearance to draw them in and make them feel comfortable. You want your home to be a place they would be proud to invite people to.
Some tips to make a good first impresson;

-Kill mold and mildew on the house, sidewalks, roof, or driveway.

-Stow away unnecessary garden implements and tools.

-Clean windows and gutters.

-Pressure wash dirty siding and dingy decks.

-Edge sidewalks and remove vegetation growing between concrete or bricks.

-Mow the lawn. Get rid of weeds.

-Rake and dispose of leaves, even if your lot is wooded.

-Trim tree limbs that are near or touching the home’s roof.

-Make sure your driveway is clean and clear.

-Spruce it up with some accent lighting.

-If you can budget it, a fresh paint job does wonders for a dingy house. Drive around your town to find color schemes that are appealing.

-Install a more attractive front door, maybe something with leaded glass inserts.

-If you can’t justify the cost of a new door, consider replacing plain doorknob hardware with something more attractive.

-If new hardware is beyond your budget, repaint or stain the door and polish the hardware?

Bring out the best in your landscaping and bring in the highest and best offer for your home. And as you look for your new place be sure to notice why your first impression is good or bad.

Wednesday, July 19, 2006

Improving Your Credit Score

Credit scores are more important today than ever. This score plays a large part in what interest rate you'll pay on loans, and whether you'll even get the loan, and it also effects your insurance rates among other things. A credit score is basically a summary of your credit report and a numerical measurement that reflects your management of credit.

Credit scores range from 300-900. A score above 620 is good, above 700 is very good, and above 750 is great. If your score is below 600 you'll be paying higher interest for your loans. If your credit is low, there are ways to raise it.

There are three basic principles to follow to raise your credit score.

First, pay your bills on time (or early if possible). When lenders look at your credit they want to see that you pay your bills as agreed. Having on time payments is one of the biggest factors on your score. Occasionally being late should not affect your ability to get new credit, as long as your late payments aren't too close together and too frequent. If you have a pattern of paying late you'll be considered a higher risk.

Second, don't declare bankruptcy, have an automobile repossessed, or have your home foreclosed on. These are the BIG ones. One of these and your credit will go right down the drain so be careful to plan your money.

Third, keep control of how much money you owe, especially on credit cards. It's good to have credit cards to show a track record, but your score not only looks at if you're paying your payments on those cards, but if you are "maxed out" on your cards. Lenders like to see that you haven't spent every dime you don't have. Plus, if you're maxed out on cards the chance you'll pay on time if an emergency comes up is not good. If you have three credit cards and each has a spending limit of $3000 and you only owe $300 on each card, that shows the bank (and is reflected in your credit score) that you can manage your money and you have a safety net if you need it.

It may not be as bad as you think, at least for buying a home. I've had clients who had just gone through bankruptcy and we still got them into a house, they just paid higher interest. Plus, it's actually easier to buy a house than a car (you can't drive away with a house). Owning a home and paying your mortgage on time is a great way to raise your score.

Follow these guidelines and your score will increase. Make sure you keep your credit report accurate. Periodically check your score with the three credit bureaus and be cautious before closing an existing credit card account because that can hurt your score. If you have an account for a long time and it has no balance that is good. Keep it open.

To get a copy of your credit report, contact the credit bureaus:

Equifax- 800-685-1111 -

Experian- 800-682-7654-

Trans Union- 800-916-8800-

Missing Child Alert- Destiny Norton

Destiny Norton, a local 5 year old girl from Salt Lake City, has been missing since about 8:30pm Sunday night after walking out of her family's front door.

Destiny is described as about 3 feet 6 inches tall, about 45 pounds, with short blond hair that had a green streak in it. She was last seen wearing a black adult-size T-shirt with gray stripes. She has silver caps on her teeth and also goes by the name Annie. Anyone with information about this case is asked to call 801-799-4636. Information may also be sent to

* The volunteer search headquarters has been set up at an LDS wardhouse at 445 E. Harvard Ave. (1142 South).
* A Web site - - is up and contains the latest information about the search for the 5-year-old.
* A fund has been established under the names Rickey and Rachael Norton at Washington Mutual Bank to help defray the costs of the search and assist the family.
* MeadowGold and The Carole Sund/Carrington Foundation have donated $15,000 as a reward for information leading to Destiny's recovery.
* Anyone with information about this case is asked to call 801-799-4636. Tips can also be sent to

Freshman class of 2006

The Beloit College in Wisconsin puts together a list every year for their faculty to give them a sense of the mindset of that year's incoming freshmen. The people who are starting college this fall were born in 1984 and here are some of the items that made the list about them;

They have no meaningful recollection of the Reagan Era and do not know he had ever been shot.
Black Monday, 1987 is as insignificant to them as the Great Depression.

They were 9 when the Soviet Union broke apart and they don't remember the Cold War.

They have never feared a nuclear war.

Their lifetime has always included AIDS.

They have likely never played Pac Man and have never heard of Pong.

The compact disc was introduced when they were 1 year old.

They have always had an answering machine.

They cannot fathom not having a remote control.

Roller-skating has always been in-line.

Jay Leno has always been on the Tonight Show.

They have never seen Larry Bird play.

The Vietnam War is as ancient history to them as World War I, World War II or even the Civil War.

They have no idea that Americans were ever held hostage in Iran.

They don't know who Mork was or where he was from.

They never heard "Where's the beef," "I'd walk a mile for a Camel," or "de plane, de plane!"

The Titanic was found? They thought we always knew where it was.

Michael Jackson has always been white.

Kansas, Chicago, Boston, America and Alabama are places, not groups.

McDonald's never came in Styrofoam containers.

There has always been MTV.

For us in the real estate industry these people will be potential home buyers in the next few years. Most of these people do not read the newspaper and all of them are online, many have never had to deal with dial-up.

Tuesday, July 18, 2006

Where are all the singles?

Money Magazine has listed it's Best Places To Live for 2006, and tops on the list is Fort Collins, CO, followed by Naperville, IL and Sugarland, Texas. Interestingly, the top ten are all in different states. Representing Utah in the top 100 best towns/cities to live in were Sandy (23), Orem (38), and Layton (41). I remember a few years ago the Places Rated Almanac rated Salt Lake City as the top city in America overall and listed about a dozen Utah cities in the top 100. Ah, those were the days...

Highest average income honors go to Greenwich, CT ($112,493), Cupertino, CA ($110,518) and San Ramon, CA ($109,500), while Bloomington, IN has the highest percentage of singles (58.2%) and the skinniest people, based on body mass index, live in Roseville, CA (24.5) and San Francisco (24.8).

You'll also find cleanest air, youngest (three Utah cities rank in the top 25), most educated, hottest, and priciest to buy a home among others.

Top Ten Reasons Salt Lake City isn't Seattle

I was living in San Francisco during the tech boom and it was a total blast. Whether or not you were into technology or cared at all about start-ups or the internet, you could just feel the energy. There was electricity in the air and everyone could feel it. That's how Seattle seems to me now, too, with all the start ups and tech companies and the energy that's swirling around in the air. It's a pretty cool environment to be in if you are interested in technology.

The Salt Lake area (Wasatch Front) is a great place to live and it's growing and it has a ton of potential, and Utah actually was an early adopter state with regards to the internet, with more people per capita online in 2002 than any stat in the nation, so what's the deal? Why isn't Salt Lake, with all of it's incredible recreation, people online, and good working class, more tech-centric?

Here is my Top Ten list of reasons why the Salt Lake area isn't more tech:

1. Salt Lake is a bit cheap. And by cheap I mean people will go out of their way to save every penny they can. People sell their own homes, people sell their own cars, yard sales are everywhere (and every day people are going to them), and there are possibly more fast food places in the area than the rest of the universe combined. Some people are so focused on saving money they miss out on the big opportunities, stepping over a quarter to pick up a dime. And that's unfortunate because there are a ton of innovators in Salt Lake.

2. Too many people doing the same things. Being innovative is not the only quality a business needs. There are a lot of things that can contribute to a company having that critical early success, and one of those things is being first to market. In this area noone can be first to market because everyone here is doing every thing.

3. People are doing pieces of things. Instead of putting together a solid business plan, raising capital, recruiting a top notch staff and implementing a well thought out plan, many businesses here are really just a couple guys thinking they have a cool idea so they register a business name and website and open for business. No focus or direction really, just a cool idea.

4. The city/government doesn't encourage a start up environment. We have weird liquor laws, even stranger bar/club laws, and a spread-out and sparse nightlife. The culture is not a young, hip, fast-moving tech culture. It's a family fun, get home early for the kid's soccer game, work three night's a week for the church kind of culture. That's not a bad thing- just one way the area is different.

5. Utah is the youngest state in the nation. You might be thinking, "Younger people are more tech savvy and bring that into the workplace". You would be right, but also wrong. Young people in general are much more tech savvy and do bring that into the workplace with them, but our youth is largely in children, and many of the brightest move out of state to chase their tech careers- we need to encourage them to stay.

6. Too many tract homes. Cookie-cutter homes are everywhere in Utah. Even many of the custom homes aren't custo, they're "semi custom". So people live in these boxes that are the exact same as everyone else's boxes and that just doesn't encourage creativity. You can't think outside the box if you spend your entire life in one.

7. Not enough people. There's something about being in a highly-populated area that makes people thrive. Maybe it's a competitivness that develops or a wanting to get ahead, or maybe it's that with more people come more ideas and it's just the law of averages and the more people the more chance some will make it. Maybe being stuck in hours of traffic just gives people time to be creative and the road rage gives them the energy to keep thinking.

8. No NFL Football. I don't really know how this could effect things either way, but Seattle, San Francisco, New York, and Boston all have NFL teams and they seem to be the most techy (that is a real word) cities in the country and I need some filler.

9. Not enough tourist attractions. Most of the VC money is not here and since most of that money goes to regional, if not local, start-ups, we don't see a lot of it. And because there aren't enough people flying in to Salt Lake to check out the dinosaur exhibits, we have a harder time meeting these people. We do have a phenominal ski industry- maybe the resorts could host some tech events.

10. Not enough coffee drinkers. The LDS religion frowns on drinking coffee, and much of the population is mormon so there aren't enough Starbucks- and we all know that that's where the tech deals are made. Probably has something to do with people who in the tech industry get their brains so wired up on cafeine that they can think of outrageous ideas and then have the energy to actually make those ideas work.

Salt Lake and it's surrounding areas are beautiful and there are a ton of outdoor activites, incuding the best skiing in the country. Low crime, friendly people, big mountains... but not nearly enough people blogging or conspiring to become the next Google. That's not all a bad thing, but it sure would be cool to see Salt Lake grow it's tech sector.

Monday, July 17, 2006

How Agency Agreements are Ruining the Real Estate Industry

Editors note- my blog address has changed to:

This is a much better blog host for me, thanks! Post follows:

First, let me start by saying that I believe in agency. I believe in the concept of agency and I believe in it's place within the real estate industry. I teach the agency classes at the real estate school and have never accepted teachers pay, because I teach agency for one reason only- to teach agency.

Having said that, agency agreements, as they are and as they are used (at least in Utah, Colorado and California where I have been a broker) is hurting the industry and clients as much as they are helping. This is mostly due to the fact that there are too may crappy Realtors out there doing a crappy job.

See, the problem is that many Realtors use these as a ball and chain for their clients. They meet the client, give them their schpill about why they should sign the agency agreement and then stop trying. Sort of similar to how a lot of people try so hard to make a good impression while they are first dating someone they like and then after they get married/committed/engaged they stop trying.

An agent meets a buyer, convinces them to sign an agency agreement, and then feels entitled to a commission whether they do any work for the client or not. The client can get tired of the agent not answering their phone (very common) and not returning their calls (very common) and find another agent, then go out with that new agent and find a home they like and the first agent feels like they should get the commission because they got an agency agreement signed first.

An agent meets a seller and convinces the seller that the best way to sell their home is to "price it right" and put it on the MLS. This is my favorite line used by agents. I'll have to dedicate an entire post to it later so this one doesn't go on too long. But, essentially, "price it right" means price it as low as the agent can get the seller to go, and then put the home on the MLS so some other agent can do their work and sell it. This way the listing agent has no marketing expense and no work to do. And then if the seller is unhappy with this "service" they are stuck in this contract, usually for six months.

I wonder why people would have a bad taste for Realtors after this...?

Here's my solution;

All agency contracts should allow the client to cancel anytime they feel they are not being taken care of. There could be a provision in a listing that states any actual marketing expenses incurred during the listing period will be reimbursed by the seller, but the seller can cancel and find a good agent if the one they got doesn't do a good job for them. The government tries to keep corporations from having a monopoly so consumers will benefit from competition. But when some schmuck lists a home and for six months no other Realtor can approach that client, help that client, or even talk to that client, there is a six month monopoly happening and often times the seller suffers. And the same goes for buyers working with an agent that does not do their job.

My solution is to let agents earn the business. Sign an agency agreement and represent the client, and know that if you do not represent the client well you will lose out on that business. Isn't that what agency is really all about? Representing the client? Putting the client first?

There are a lot of really good agents out there and they do represent their clients well and they do earn their business. If agency contracts could be cancelled the bad agents would suffer and the good agents would be able to show more people what it feels like to represented well by a good professional Realtor.

Editors Note-
Apparantly I'm not alone- Ardell at RCG wrote a post about the same thing on 7-25-06.

Backyards Get Extreme

Used to be that people wanted some room for a small garden where they could grow tomatoes or maybe a swingset for the kids. Some even thought about room to plant a few fruit trees. Today more people are choosing to turn their backyards into full out waterparks and outdoor living areas. Some want a place where the kids can have fun while under the watchful eye of mom and dad, while others would just rather have the fun of a park without losing their privacy. Here are some of the latest trends;

Rock Your World

Don't let little things like space get in your way. Go vertical with huge boulders, rock and brick. Shape waterfalls, waterslides and just about anything else you can think of.

Outdoor Kitchens

The kitchen may be the most important room in the house, but it's also becoming the center of the outdoor living space. Whether part of a patio or bar area, or an all together separate space with a fireplace and ceiling, today's outdoor kitchens are getting to be as nice (and expensive) as their indoor counterparts.

Pools, Waterfalls, and Water Features

Remember that little four-foot wide blue plastic wading pool you played in as a kid? You could use that to slide down some of today's waterslides. Fifteen foot waterfalls, rope swings, hot tubs that flow into the pool from five feet above, fiber optic lighting systems, and audio powerhouses that turn your home waterpark into a concert venue.

Make friends with your neighbors and maybe they'll let you come over without admission.

Sunday, July 16, 2006

Making Money vs Earning Money

You've probably heard the phrase, "The richer get richer while the poor get poorer) and there's some truth to that. And one of the main reasons for this is the education and understanding the rich, or their representatives, have toward money, and more specifically, how to make, and even more important, earn money.

today's lesson- there is a difference between making money and earning money.

When I was about twelve I started mowing the lawn of a woman who lived behind us. She paid me $5 to mow and trim her lawn and she'd give me all the lemonade I could drink. And this was actually not even just lemonade, it was freshly squeezed and had a twist of other fruit (usually strawberry or raspberry). She could have paid me with just the lemonade and I would've been happy. That would have been a fair trade for me. I didn't mind mowing her lawn and she didn't mind making me lemonade. She offered me the lemonade as a bonus and so I sipped it up and then took my money as payment.

Most people have that same mentality. They go to their job and they work hard day after day after day. When they receive their pay they are happy. Sure, most everyone wishes they had more, but as long as they feel like they are making a fair wage and they have enough to pay the bills they are content to keep doing what they are doing. At least to the extent they don't change their habits.

Two friends, Ben and Jim, both get a job at the local grocery. Ben takes $100 from every check and puts in his savings account. Smart. Jim takes $100 from every check and puts it into a stock account. Smarter. See, Ben earns 4% and Jim earns 12% on their money. Over the course of five years Ben now has $6760 saved up and Jim has $8538. They both saved $6000 in made money but Ben only earned $760 on his money and Jim earned $2538 on that same money.

Now let's apply this concept to real estate. Ben rents a home $1200/month plus utilities. Jim buys a home worth $160,000 and has a monthly payment of $1200. After five years Ben has earned $0 on his rented home while Jim has written off an extra $10,000/year on his taxes by owning and now his home is worth $200,000 so he's also earned an extra $40,000 owning his home.

People who are wealthy earn money and as their money grows they earn even more on that money and they begin to brag about how the rich get richer. Those who only make money continue to make enough to get by and then begin to complain about the rich keep getting richer.

In five years Ben and Jim both made the same amount of money, but now Ben has earned $760 and Jim has earned $42,538 on his money. Is this fair? Is this because of the system or their environment? No, this is because one person learned how the system works and benefited from it and the other did not.

I'll bet Ben is the one complaining.