Kyle Rovinsky’s Blog

Today was a good day.

I showed two buyers around North Dallas.

I wrote a contract.

I had five showings on five different listings.

All of this before 3 pm. Great.

So I thought I’d reward myself with a little retail therapy. A quick trip over to Northpark - pop into Nordstroms…buy a sportshirt…bada-bing, bada-boom! As I pass Boedecker heading east on Northwest Highway, I had to do a double take.

 Is it Christmas?

There was not a spot to be had in the Northpark parking lot. I pulled past Neiman-Marcus.

Nothing.

Past McCormack and Schmick…Zippo.

Over towards Maggiano’s…Nutin’.

If my car’s thermometer didn’t read 100 degrees, I would have sworn that it was the holiday season. Maybe Northpark is running some special promotion I didn’t know about. Free money or something? I am a man that prizes convenience and high service (the same as I give to my clients) so I do not have the patience to sit through some promotion. Save that for the suckers.

Oh, well…I’ll pack it in and go to the Galleria.

I get to the Galleria, and its the SAME THING. Parking lot is mobbed. Cars hanging over parking spots…you know the drill. When someone sees brake lights light up they freeze…like a lion in the tall grass of the Serengeti when a zebra pulls a hamstring.

Anyway, I finally get a spot and go inside. The retail frenzy is in full swing. I feel like I’m at the food court of the Beijing Wal-Mart. Clothes are flying, sales girls are smiling…cash registers are ringing like the slots at Caesars. I didn’t find anything I liked on the rack at Nordstrom, so I ambled into the mall…where the REAL action is.

On my way to my store (Tommy Bahama), I pass all the usual suspects that seem to have something in common:

Mark Shale…Help Wanted.

Abercrombie…Help Wanted.

Brooks Brothers…Help Wanted.

Steve Madden…Help Wanted.

Now its one thing for a mall to be crowded in the summer. People love to use other people’s air conditioning. But to see the retail front-linesman actively looking to increase their expenses, that is another thing entirely.

For the last three days, every time I swing past CNN or MSNBC, they seem to be punching me in the face with news of the recession. Lagging economic indicators, record gas prices, slumping real estate. They report and certain presidential hopefuls position themselves as the savior to all these problems.They better hope too many people don’t do what I did today, or it will be hard to convince them that things are bad.

We are coming up on the time of the year when the “Best Realtors in Dallas” seems to be on everybody’s minds. I have been lucky enough to be named to the list for the last 2 years and I consider it a great honor. I have many friends who are skeptical of the list.”How much do you have to pay to make the list?” or “Do you have to sell to the editor of the magazine to make the list?”.Those who know me know that I barely have enough money to buy my way in to see “Indiana Jones”, much less by my way on to a list; but it did get me to thinking…“Over the last 12 months, what were my favorite transactions? Why were they my favorite?”. Most of you think the answer to that question is easy…

Real Estate in North Texas is a challenge right now. National headlines scream that investing in real estate is as smart as buying shares of Groceryworks.com. Local headlines constantly echo the opposite - that North Texas is insulated from the drop in Real Estate values. Where does that leave guys like me?

Buyers think they are going to get a steal while sellers think they are going to get full price offers within days of listing a new property. Who’s left in the middle trying to bring these two opposing sides together?

That would be me.

Looks like things are starting to pick up. Over the last 3 days my listings have gotten 33 showing appointments. Subtract those three days, and over the last month we has a total of 50 showings…IN 27 DAYS. A definite up tick.

Real Estate did take a back burner in my life over the last week. I guess you could say I got three new listings. My wife delivered our babies. Yes babies.

Three.

Boys.

On April 29th at my wife’s weekly (and what proved to be final) OB visit, she was told that she would be finishing out our pregnancy on “hospital bedrest”. She had some issues with severe nausea, but nothing we considered out of the ordinary. She was bummed out, looking at at least 8 weeks of becoming an expert on Oprah.

Once in the hospital, some routine blood tests were taken. Blood tests showed a severely elevated liver function. To make a long story short, on May 1 at 10:49 pm, I was the father of three!!!

We have known since last December that we were having three. We have known since February that we were having three boys. It has given us a while to think of names. There were few things wife and I agreed on - one was we did not want the boys to bee the 100th Aiden…or Cody…or Caleb in their class. This decision process is also a lot easier when you have three to name, I don’t know how someone could come up with just ONE name. Here are the factors that went into deciding what we were going to call the three little strangers:

1. Karen’s grandmother, Helen, recently passed; so to honor her, an “H” name (which also worked for me, because I had a grandfather with a “H” name as well)

2. My father passed in November of 1992. As a proud graduate of SMU in the early 1950s, he was partial to the glory days of SMU football. When I was born in the winter of 1967, my father wanted to name me “Doak” (after legendary SMU halfback Doak Walker). My mother forbade it. “No son of mine will be named after some stupid football player!”. So they compromised on Kyle. (She didn’t mind that Kyle Rote was the Fullback on that same SMU team )

3. My grandfather, Leon, passed away in 1988. I’ve always wanted to honor him.

4. Karen’s paternal grandmother wanted to preserve her mother’s maiden name; Yahr

5. Karen’s father’s initials are R.A.M. So, she thought it would be special if one of the boys shared his initials, but backwards - M.A.R.

So, introducing, in order of appearance:

Hiram Doak Rovinsky

Leo Yahr Rovinsky

Meyer Alexander Rovinsky

I hope you all get a chance to meet them soon.

As a busy Realtor I try to visit at least 50 houses a week. I love to know the inventory. I love to know what the dollar will buy. And I love to see what seller’s THINK are bargains versus what actually are bargains. For this entry we are going to focus on North Dallas… 

Let’s define the area as LBJ to the north, Northwest Highway to the south - east of Midway, west of Central Expressway. Yeah, yeah, area 11…I’m impressed with your real estate knowledge, now shaddup!

$500,000 in the psychological price barrier in this area. A good sized lot with mature trees that is not encumbered by any busy streets, power lines, Hare-Krishnas, or pushy Realtors shows value at under $500K. The least expensive listing in “Area 11″ (I like saying “Area 11″ because it sounds like a place where the government hides aliens, if the government would want them to be convenient to area private schools and Temple Emanu-el) is 4314 Merril. its a lot measuring 50×130 just east of Midway. Not big enough to build on, not nice enough to live in - thats why its listed for $185,000.

There are currently 110 active listings in Area 11 under $500K. Eleven of them are priced at $498,000 or higher, and none of those made my Top 10. They are all classic jumbles of granite or lot that think they are relevant. These 11 listings have been on the market an average of 72 days. Not exactly screaming off the market. Let’s take a look at Kyle’s top 10 active listings in Area 11 under $500,000.

1. 5218 Northmoor Drive

This is a three bedroom on a large lot (109 x 160) just west of the tollroad. This house has a nice level of finish, but it could use one more bedroom/bathroom. They made the mistake of overpricing early ($539,000). At $485,000 it is a good deal for the condition and location.

2. 7708 Mason Dells Drive

Hello Janmar! One of my favorite areas. This three bedroom has a great level of finish on a huge 110 x 160 lot. I can’t believe this one is still available, listed at basically lot value. Buy this one and pop the top. It could be relevant at $800K if expanded and finished correctly.

3. 6541 Azalea Lane

At $449,900 this one is screaming “VALUE”. Surrounded by new construction, this lot crowns the surrounding neighborhood. Someone could buy it, live in it a few years and have a sweet basis for their new construction home. Five years from now, you can “wow” your friends at cocktail parties, telling them you got this gem for well under $500K.

4. 4399 Shady Bend

So it kisses WT White High School and has all pool, no yard - there is a great level of finish and tons of space for an active family. $439,000 probably means $420K. Yeah, the school is a burden, but where else are you going to get this much space this cheap? How about here…

5. 5937 Saint Marks Circle

3491 relevant square feet this deep into the preston hollow area for $425,000? Don’t stand out in front too long, you may get run over by the traffic coming to look at this one. It is a foreclosure, so use the dust and grime to your advantage. If a family were in this house, it would be listed for $550,000. This one has been listed for 33 days. It shouldn’t make it 34.

6. 6923 Lavendale Drive

You know what my biggest pet peeve is in real estate? Calling houses on Lavendale “Preston Hollow Homes”. Listing agent, pull your head out! That little mis-speak will end up costing you in the long run. North side of Lavendale does mean power lines - kitchen and bathrooms need some love, lot is 100 x 160 so I’m interested. “Preston Hollow”….I’m still laughing.

7. 6463 Stichter Avenue

I don’t care where it is on Stichter, at $395K (probably could be had for $360K) Its worth it for the dirt. The property does front to the tush of Preston Hollow Elementary, but still strong. Someone could build a sweet 5500 square footer and list it for $1.3M and it would transact.

8. 5819 Northmoor Drive

A 2500 sqft house on a 120 x 130 lot south of Forest, just west of Preston. Houses around it that have been lovingly refinished have sold from $440,000 to $500K. This one does need some love. It could be remodeled, it could be torn down. At $349,900 its your choice.

9. 11220 Valleydale Drive

This one is a real mess. It reminds me of the house where the killer lived in “Silence of the Lambs”. House needs 34 piers to be salvaged, or you can tear down and rebuild - in the face of an onerous neighborhood architectural committee; but where else are you going to find .75 acre in traditional north Dallas for under $350,000? Speaking of “Silence of the Lambs” the lot is butchered by building setbacks and easements. It is three quarters of an acre, but only .11 is buildable.

Remember, I am just a putz, but I’m a putz who sees more real estate than anyone else in the city. These are just my opinions. Take them and have fun!

Today is the first Tuesday of the month. Foreclosure Day. For the past 5 years, I would spend the better part of two weeks preparing for this day. Researching addresses, driving by properties, evaluating positions…all in preparation for the first Tuesday of the month. Down to the courthouse to jump into the foreclosure auction fray.

It used to be a small group of people “in the know”. Information wasn’t published. You didn’t know who the participants were, and there were great opportunities to be had. Times have changed.

Now you can’t pick up a newspaper or watch 2 minutes of “Headline News” without hering about the foreclosure market. Everybody and their brother thinks now its time to get in on this “foreclosure business”. There is even a team of people that go down to the aucton in matching embroidered shirts announcing to the world that they are there to get foreclosures.

Neat-o.

Foreclosure listings are at record highs (although April’s list pulled back some). Now, the vast majority of foreclosures are properties of little or no interest - 3 bedroom, 2200 square foot houses in Duncanville that probably shouldn’t have been built in the first place.

Anyway, for the first time in five years, the foreclosure list held no interest for me or any of my clients. Any address considered “interesting” either had loan balances that were too high, or too many other liabilities. Another interesting factor; the banks are now realizing that the foreclosure auction pits anre now populated with amateurs, so they are starting the bidding higher, knowing that someone with more excitement than experience will possibly overpay for a property because of the “foreclosure” moniker.

Just for fun, I went through the MLS current active listings and I found 15 properties that are better oportunities than anything posted for April Foreclosure auction. These propeties are just sitting on the market collecting dust. If you were to take any one of these properties, raise the price $15K and call it a foreclosure, the rookies would come running.

There still great opportunities out there. Usually, you won’t find them by following the herd. If you want to know where the great buys are, give me a call. I’ll be happy to visit with you.

I’ve only gone to two schools in my life.

College: University of Texas. Hook ‘Em. I bleed orange.

Pre-kindergarten through high school…The Greenhill School. Fifteen years; the school community is like my second family. I love it more than I can state. My very best friends to this day comprise the community. They are alumni. They are parents. They are teachers. Their children are in gradeschool creating the same memories for themselves that I created 30 years ago. It is a wonderful place.

Last night was “The Greenhill Gala”. The largest fund raising event of the year. A giant event where the majority of the current parents and a good portion of the alumni gather for a dinner, live auction, and some redeeming live entertainment. This year the Gala Chair, Lael Brodsky (a dear friend and member of my graduating class) showed a level of creativity that no other institution of this caliber had the courage to even attempt.

Usually the event is at some neutral site. Pick the usual high end venue of your choice: The Anatole, Hyatt Regency, Wyndham, you name it. Close your eyes and it could be any school’s fundraiser. St. Marks, Hockaday, Parish…they are all lovely venues, but it gets generic.

What was Lael’s idea? So simple, yet so complex…have the party ON CAMPUS. Big party tent. High level catering, higher level of entertainment. Again, the usual play here is to find the funniest re-tread musical act from a bygone generation (cue KC and the Sunshine Band or Huey Lewis or the like…all done to death). What was Lael’s idea, only the most relevant, cultural phenomenon of our time. Anyone could get Kool and the Gang…just make a phone call; but what does America stop down for? How about American Idol? Again, genius. American Idol past champion Taylor Hicks rocked it out on the Greenhill campus. Now the parents could have something relevant to go home and talk about with their kids.

The warm up was amazing too. An artist named David Dunn does something called “PaintJam”. He starts with a huge blank canvas on a rotating stand (visualize a giant black pinwheel). Music blares, he flings paint…the canvas spins…it is crazy high energy…and the next thing you know, its a contemproray portrait. Ray Charles was awesome. When he finished Emmitt Smith, the room was amazed!

As far as the event planning went, there were soooo many moving parts…from disposing of dirty dishes to chilling the wine to making sure there were enough parking spaces; not to mention constructing a temporary structure large and sturdy enough to accomodate the thousands of attendees. Great idea, no way it could be pulled off.

Lael, you did a great job. I don’t know how you did it, but you did it. I’ve gone to about 12 of these things and this is the best one I can remember. All of that experience throwing parties in high school paid off for you big time. You made quite a statement.

Now what does this have to do with Real Estate, you ask?

The gala is a huge event. A big room of people all of whom I consider frineds. Many of whom are my clients. I have a personal rule when going to events like this; I never talk about Real Estate unless someone brings it up to me. There is nothing I hate more than the “hit and run” “How’s the real estate market?” question. I mean, thats a difficult question to answer with 20 minutes of undivided attention, but when someone is trying to kill 45 seconds while in line at the bar waiting for their cosmo? Forget it.

Anyway, many of my clients in the room. One in particular is a new, high end listing. We have just gone on the market and have had some exciting activity in the first few days. My client and his wife saw me from across the room and we made our way to each other to visit about how great the party was going. What he told me when we got together floored me.

” You know, I was just confronted by Realtor X”.

I’m not going to use any real names here. I know Realtor X. I have had a few interactions with Realtor X. In the marketplace, Realtor X is known as having the charm and finesse of a rhino. My client went on to describe his conversation as going something like this…

“SO…I see you just listed your house with Kyle?” (notice that there is no “Hello” or “How are you?”, or “How’s the family?”, or anything that could be considered polite repartee).

“Yes I did”.

“Where are you moving?”

“We don’t know yet. We’re still looking.”

“Who’s helping you find your new house?”

“Also Kyle.”

“Why Kyle? What is he giving you?”

“Nothing. He’s just aggressive and very knowledgable in the market.”

“Well, you know I’m in the top XX of realtors in my company. I don’t understand why you’re using him”.

If the above exchange reads as being confrontational, I’m sorry. I meant it to read as EXTREMELY CONFRONTATIONAL. To have this kind of conversation in a room full of people is at least inapropriate, and at most a violation of the code of ethics. Again, I don’t claim to have invented Real Estate, but I was under the impression that a Realtor is not allowed to start a conversation with a person about a property that is already listed. If the person comes up to you and initiates the conversation, then it is ok to follow up, but never start it. I still can’t believe this happened. I would never dream of having this conversation other than saying “Good Luck, and I hope I can bring you a buyer”. The clients were very upset.

So…Realtor X, keep your bony fingers out of peoples faces…maybe help bring a buyer and next time around they will have a favorable opinion of you and give you the listing.

Some people must have too much business.

Or not enough.

I got a phone call from a friend of a friend who was in the beginning stages of finding their new home. First time home buyers, well qualified, excited about the prospect of home ownership. Mr. and Mrs. Rookie , we’ll call them. Where were they entering the market?

$300K.

Not too shabby.

They were looking in the Highland Village, Flower Mound area. They wanted 4 bedrooms and a pool. From $250K to $300K there were a ton of great houses from which to choose.

On their first weekend out “open-housing” they met a Realtor in the area. For the sake of this story, his name is Scammy McScammerson. Scammy latched on to the Rookies in a heartbeat. He set himself up as the area expert and stoked the excitement of these first timers.

After two more weekends of open-house hunting, the Rookies found two homes that they would be proud to call their own. They called Scammy to begin the offer process. They asked Scammy if he thought there were any other houses they should see…

“No”, Scammy said…”the ones you like are the best, lets get an offer in”.

“Well, Mr. Scammerson,” Rookie husband asked…”Can you provide us with some neighborhood comps to support our decision?”.

Scammy told the Rookies that it was not customary to provide comps in this area. That if they felt that the houses they liked were worth the list price, that they should go ahead and make the offer. If that is not enough to make you laugh…and cry…and boil; wait until you hear what comes next.

“My company charges a $100 fee to make an offer”.

WHAT?!?!?!?

In all of my time working in Real Estate, I have never heard of a fee charged to make an offer. The Rookies had good enough sense to apply the breaks at this time and solicit the advice of a friend, who directed them to me. Now, I didn’t claim to invent Real Estate, but I do know how to navagate MLS and find sold comps in an area. Long story short - the subject house they liked was originally listed at $309,000 reduced to $299,000. In the same subdivision, over the last 6 months, the average sale was $232,000 and the highest sale was $258,000. This house had the same floor plan, square footage, and finish out (including the same pool) that the house selling at $300K had. Seems like a far cry from the ask of $299,000. No wonder its not customary for this guy to comp.

No comps plus the $100 offer fee is the best way I’ve seen yet to show a client no respect. Maybe if Scammy waived his $100 fee, he could have gotten the Rookies to make their overpriced offer.

Half day today.

New listings need some attention and they are getting it from the home office. Touching up the marketing materials, look for keynote listings in Oaktree, Devonshire, and near Hockaday (new construction that hits all the hot spots!).

Today is the start of March Madness, so my attention is slightly diverted. Half days of work today and tomorrow. Since I am in “empathy mode” with my expectant wife, my alcolhol intake will be drasticly lower than past opening days of the tournament. Will the games still be fun? I’ll let you know. (I’m reminded of the Simpsons episode where Homer gives up beer - “Who knew baseball was SOOOOO boring!”).

Remember these dates for the activity of the real estate market - time honored and true - like the salmon migration or the swallows return to Capistrano, this holds true for every election year:

Market slow from New Years to Valentine’s Day.

Market up from Valentines to March 1.

Market dead from March 1 to St. Pats.

Market vigerous from St. Pats to April 1.

Market Dead from April 1 to Tax Day.

Selling season begins day after tax day (April 16). Selling season ends July 30; at which time everyone will focus on the election which kills the market until the new first lady (or first hubby) picks the new china pattern. December will still stink, but it will be a little better than the average December.

 Go Horns!

Listing a house can make you nervous.

Getting an offer makes you happy.

Going under contract makes you excited.

Closing can make you nervous.

There is an ever-swinging pendulum related to your contract. “When do I move out? When do they move in? When do I get my money for selling? What if I move out and they don’t close”?

The way you protect yourself from this is the “Temporary Residential Leaseback.” For the sake of this explanation, your property is scheduled to close today, Friday February 29th. Congratulations.

Without a leaseback, you will have spent last week scrambling to organize movers, get your stuff packed, put it on the truck, and either get the stuff to your new house or to storage. In most cases, the cost of moving can be estimated at about $2,500.

You have signed your documents, only to find out that the buyers have had a change of heart and they are not going through with the contract.

Super.

So now what are your options? Well, you could receive the earnest money, but does that even come close to covering the cost of moving? Plus now you have to go through the frustration of putting the property back on the market. It’s just a mess.

Lets take a few steps back and start over…If you were scheduled to close today AND remembered to get your “Temporary Residential Leaseback”…lets say, for 5 days, you would not have to move until next Wednesday. You would have plenty of time to see the buyer’s did indeed close, and the money would be all comfy and cozy in YOUR bank account before you went through the efforts of moving.

Here is a scam to look out for in soft seller markets -A buyer finds a house to put under contract; he does so at a strong sale price, BUT WITH LOW EARNEST MONEY (anything less than 1% of sale price is considered low). House goes under contract and seller is EXTATIC to have gotten his list price in this soft market. Contract is for list, but earnest money is only $500. Who cares, seller has been told that when the sale closes he will be getting his full price (let’s say the number is $250,000). Not only is earnest money low, but also the buyer did not give the seller a leaseback. Property has to be vacated and transferred day of closing.

The seller is as happy as all get out! He starts calling all of his friends to brag that he got full price in this soft market, he must be some kind of genius - when everyone else is suffering. Closing day arrives and the buyer does a “final walkthrough”. The property is empty, and now this buyer realizes he has the seller right where he wants him. The buyer’s agent calls the listing agent and says the buyer has had a change of heart; he doesn’t want to close on the property. The buyer would be happy to go through with closing if the sale price of the property was lowered from $250,000 to $210,000.

The seller now has two options due to his weakened position –

1.     Agree to the adjusted sale price and take it in the shorts for $40,000 or…

2.     Terminate the contract, collect the earnest money and put a vacant house back on the market

Either option is enough to make you sick, and it could have been easily avoided with a temporary residential leaseback.

Once a year I get an audience with greatness; the grand, exalted, pre-eminent real estate appraiser in Dallas. If you own a property north of I-30, this guy knows its value better than you do.When I get a chance to be in this man’s presence, I do three things:

• I sit down
• I shut up
• I listen

I learned so much information vital to the area real estate market for 2008, it is going to take several blog entries to cover it all. I am going to leave it in several digestible bites. 

The golden rule of any real estate transaction is “KNOW YOUR LOT VALUES”.When you look at a total list price for a property, then you subtract out the improvement’s building cost (less depreciation), the number you are left with is the LOT VALUE.

Today’s lesson is going to deal with the epicenter of North Dallas Real Estate - The Park Cities. You ultra competitive suburb dwellers can try to argue anything to the contrary, but it would be like trying to argue that Wednesday comes after Saturday. 

If you have a lot in UP from Caruth to Greenbrier with a 70′ front, low-end values are estimated for 2008 at $130 per sqft of dirt. That makes the bald lot value …(ahem)…$1,365,000.  

Take this same lot and put it hard against Preston Road or Hillcrest…BOOM - $682,500 - A 50% hickey for being up against a busy street. 

Second in from Hillcrest, $1.02M (25% discount)  

3rd in, $1.16M (15% off).  

Ideally, you are five lots in from a major thoroughfare before you don’t see a discounted lot value according to today’s appraisal numbers. REMEMBER: these are not my rules. These rules were given to me by the top appraiser in the area. He gives them to the banks, and the banks set the market. 

I have these numbers for 31 specific areas in North Dallas. Janmar, Disney streets, Bluffview, North of Royal, Forest Hills, you name it. If you have any specific questions, give me a call or shoot me an e-mail. I will be presenting area info daily over the next few weeks. 

Also, the three babies are coming along nicely. All boys - two identical, one fraternal (my wife refers to him as “the frat boy”). We expect to meet them at the end of June.