Reprinted from Los Angeles Daily News

HOME SELLER'S DIARY
OWNERS FACE A HOST OF PROBLEMS AS PRICES STAGNATE AND BUYERS GET FUSSY
June 29, 1992
By Ed Van Herik
Daily News Staff Writer

By the time Ginny Pace Russell put her home up for sale in August 1991, she had no more illusions about the real estate market.

After attempting to sell her home twice before, she knew that the two- story townhouse wasn't going to go for the $300,000 her neighbors said it was worth, and that it wouldn't be snapped up quickly either.

Russell, who once turned down an offer of thousands more than she finally settled for, went through periods of frustration, resentment and depression before selling her home earlier this month.

For home owners familiar with the buying frenzy of a few years ago, today's market is more than a bit baffling. Then, there were plenty of buyers and double-digit appreciation; now there is a glut of available property and pricecutting has become the only way to attract purchasers.

"We had reduced the price several times," said Russell's real estate agent, Pat Sladky of Century 21 Victory Realty in Woodland Hills. "It's just that the market went down steadily ahead of us."

In many ways, Russell's experience offers a telling illustration of what many sellers face today, and in all likelihood, for months to come.

"Each time when I made up my mind to sell I would think, 'Boy, this is going to be it,' " said Russell. "Then I'd have to deal with each day as it passed (with no sale.) I'm glad it's over."

Originally, the Russells bought their Encino townhouse in 1975 for $69,500 when three of their five children had moved out of their five-bedroom house. Built only a year-and-a-half earlier, the townhouse had a brick facade, three bedrooms, a den and a bay window in the master bedroom. It was better suited to the needs of a smaller family, Russell said.

At that time, the street pretty much reflected the San Fernando Valley's unpretentious roots: several vacant lots and a number of small ranch homes. But over the years, the ranch homes were replaced with condominiums and apartment complexes.

In 1987, she and her husband divorced, leaving her alone in the three bedroom home.

By 1989, Russell was growing weary of the responsibilities of home ownership. She already had replaced the air-conditioning and heating units and the kitchen disposal. She dreaded the thought of what might be the next appliance to break.

After visiting her family over Christmas, she returned home to find rain water leaking through the ceiling and soaking the rugs. "Little surprises like that were beginning to get to me," she said.

Her monthly association dues had climbed from $45 in 1975 to $205 in 1992. And much of the dues money was used for upkeep on the pool and other amenities that Russell no longer used very often.

When Russell first put her 1,890-square-foot townhouse up for sale in October 1989, she thought her long-time residence would sell quickly at an attractive price.

While the red-hot real estate market was winding down, home sellers still heard tales of quick sales at good prices. Russell knew that a townhouse in the same Encino complex had recently sold for better than $300,000. She priced hers at $289,000.

Her real estate agent held open houses, advertised the property and listed it in the Multiple Listing Service, where brokers look for available properties.

"Three people came to see it right at the tail end of the so-called boom," Russell said. "I got one offer at $255,000 and I said, 'No, I'm not going to give it away.' "

The property drew a steady stream of prospective buyers, Sladky said. Then, in January, interest began to fade.

Though Russell's real estate agent told her the market was souring, she decided not to lower the selling price. Russell listened to her neighbors who kept telling her the townhouse was worth around $300,000.

"That's the thing that's very hard to get in your head," Russell said. ''You can think your home is worth whatever you want, but that's not the same as what the market will say."

Because she wasn't under any urgent pressure to sell, Russell decided she would try to remain detached from the emotional ups and downs that home owners often experience. Still, she did start making plans.

"The first time I was counting the (profit) I would have left, and what I was going to do with this wonderful windfall," Russell said, whose mortgage almost was paid off.

But with no other offers, she took her home off the market in April 1990. By August, she was ready to try again, after cutting her asking price to $275,000.

This time, she spent about $4,500 sprucing the place up with repainting, new rugs and other cosmetic touches. "My thinking was, the brighter look will help it sell and if it doesn't (sell), it will be nicer to live in," said Russell.

Once again, open houses were held and the home was relisted in the Multiple Listing Service. Once again, the timing wasn't great. Fears of recession and tension from the Gulf War were dampening the market. By October, home sales had declined for six straight months.

At first, Russell was adamant about the $275,000 price, telling her real estate agent not to bring her any offer that was lower. But her stubbornness softened when the home drew an average of one prospective buyer a week, Sladky said.

In October 1990, an offer came in for $260,000 from a former owner in the same complex. An excited Russell began making preparations to move to Camarillo.

Then came the bad news. The home entered escrow but the buyer backed out in November, unable to sell his current residence, Russell said. "That was the biggest letdown," she recalled.

Russell found herself getting resentful toward her husband, who had since died, because he wanted the property in the first place. "I never wanted a townhouse and now he's gone and I'm stuck with it," she remembered thinking.

Depressed, Russell took her home off the market when the listing expired in April. But her desire to be out of her home led her to put it back on the block for $269,500 in August 1991.

This time, she spent about $2,500 to put in lighting and repaint the kitchen cabinets. She also updated her attitude.

She quit planning her next move and concentrated on the task of selling her home to minimize the type of disappointment she had felt when her home hadn't sold before.

"You have this kind of euphoria when you have these plans and then nothing happens and nothing happens and nothing happens," she said.

Russell's experience wasn't unique. After a sharp spurt in home sales when the Gulf War ended, home sales steadily dwindled and the inventory of unsold homes in the San Fernando Valley reached a record 14,330 in August 1991.

To sell her home, Russell decided to stop listening to her neighbors and start paying attention to her real estate agent, who emphasized that the market was very tough and that overpriced homes weren't selling. "They were all thinking of this as a goldmine investment," said Russell of her neighbors. "But they're not selling their units." The big price cut worked, drawing a steady stream of potential buyers.

Though no offers came in, Sladky said it was just a matter of time. They cut the price again in November 1991 to $255,000 - the price Russell had rejected two years earlier.

Real estate agent Marsha Swiller, who had been scouting out townhouses, thought the property might appeal to her clients, Sebastian and Tamara Kaz. With one child and another on the way, the Kazes were looking for a threebedroom townhome to accommodate their growing family. "Besides, we have family coming to visit from Argentina," Tamara Kaz said, creating a need for a larger place.

Tamara Kaz said her family knew that while it was a good time to buy a home, they wanted to keep their expenses low. Swiller also knew that the townhouses in that area of Encino were selling for less than comparable units in other areas. She thought a deal could be worked out.

In February, the Kazes made an offer for $195,000 - $60,000 less than Russell's asking price. Insulted, she counteroffered at $255,000 and the two sides started bargaining. Russell decided to leave the negotiating to Sladky.
The two sides were $10,000 apart at $230,000 when the talks abruptly broke off because of a dispute over the deposit, Sladky said. She had inserted a clause requiring the Kazes to forfeit their $7,000 deposit if they couldn't complete the deal. Sladky said the Kazes balked.

Swiller said they knew of Russell's previous problem with her home falling out of escrow but she didn't feel her clients could be expected to put themselves at risk.

Later in the month, Russell's accountant advised her to hold onto her home for another three years until the market revived enough to restore some of her lost value. "He said, 'The only people who are trying to sell their home are those who are desperate to sell and those who are stupid.' "

Her agent told her it might be as long as five years before the market for townhouses recovered fully.

After the final Kaz offer fell through, few people came to see her place, and Russell instructed her agent to be prepared to lower the price if the Kazes made another offer.

In a few months, Kaz returned. Sladky told Russell, "You know, this is the second time he's come back and in this market when you have someone who's motivated by your house, you know they're serious."

The Kazes reopened talks with their same final offer of $220,000 and Russell accepted it on April 26, without requiring a deposit forfeiture. "A few days later the riots started and I thought, I hope they don't decide to pull out and go back to Argentina," Russell said.

But the sale held up, and the house closed escrow a week and a half ago. After agent commissions, closing costs and related fees, Russell estimates that she netted around $180,000.

Last Wednesday, Russell moved out - but not before experiencing a bout of nostalgia.

She said she found herself wandering from room to room in the house where her family had lived for so long, remembering when her sons had lived there and how excited the family had been when they first moved in.

Russell said she isn't concerned about the money she might have made if she had sold earlier. "I never looked at a home as a chain of events for making money," she added.

And where is Russell moving to? A Wilshire Boulevard high-rise that rents for $1,325 a month. She looks at it as a good deal.

"When you consider the mortgage and the $205 (association dues) and the $300 air-conditioning bills every other month and the property taxes, I figure I'm money ahead," Russell said.