Warren Buffet is our New Boss!!!! Press Release!!!!

PRESS RELEASE !!!!!

Prudential, Real Living brands to be Berkshire Hathaway HomeServices

Brookfield Asset Management remains a partner in new brand

BY INMAN NEWS, TUESDAY, OCTOBER 30, 2012.

The nation’s second-biggest real estate broker, Berkshire Hathaway Inc. affiliate HomeServices of America Inc., has entered the franchising business by acquiring a majority interest in the Prudential Real Estate and Real Living brands from Brookfield Asset Management.

The Prudential Real Estate and Real Living affiliate networks will be rolled into a new franchise brand, Berkshire Hathaway HomeServices, that will come online in 2013, the companies said.

HomeServices and Brookfield have formed a joint venture, HSF Affiliates LLC, to operate the Real Living and Prudential Real Estate affiliate networks, whose member brokers employ 53,000 sales associates and closed more than $72 billion in home sales last year.

HomeServices is the majority owner of HSF Affiliates, with Brookfield Asset Management retaining joint ownership. Brookfield’s relocation business, Brookfield Global Relocation Services, will remain wholly owned by Brookfield. Terms of the deal were not disclosed.

“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., in a statement. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”

Ron Peltier, chairman and CEO of  HomeServices, said the company was “honored and proud to be entrusted with the use of the Berkshire Hathaway name as our new real estate franchise brand.”

Berkshire Hathaway HomeServices will be based in Irvine, Calif., and led by Earl Lee, who will serve as chief executive officer. Other key management executives named today are Chief Operating Officer Stephen Phillips, Chief Financial Officer Brian Peterson, and Chief Marketing Officer Aleya Chattopadhyay.

Lee has worked under the Prudential brand since his Hawaii-based company, Locations LLC, joined the Prudential network in 1995. He was president of Prudential Real Estate and Relocation Services when it was acquired by Brookfield Residential Property Services for $110 million last year.

Real Living founder and president Harley Rouda Jr. will take over as CEO of Trident Holdings Inc., the parent company of Ohio-based HER Realty Real Living. Rouda said HER Realty does not plan to be affiliated with Real Living or Prudential Real Estate.

Canadian-based Brookfield entered the U.S. market in 2008, by acquiring GMAC Real Estate and merging the company into Real Living the following year.

Phillips served as executive vice president and chief operating officer for GMAC Home Services from 2001 to 2006, and as interim CEO of the GMAC Relocation Services business. Peterson has 24 years of experience in the real estate brokerage and franchising business, including 14 years with Brookfield and GMAC. Chattopadhyay has been with Brookfield since 2003, holding roles in Canada, India and the U.K.

Peltier said that while Minneapolis-based HomeServices is getting into the franchising business to accelerate its growth and build a website that will be a destination for consumers, the company will continue to expand its company-owned brokerage operations.

“The business model we have used to grow for the last 15 years was to identify great companies, regardless of their brand, and own and operate those local companies,” Peltier said. 

Since HomeServices was acquired in 1998 by Berkshire Hathaway subsidiary MidAmerican Energy Holdings Corp., the “independent brand” acquisition strategy has helped the company grow from 4,000 agents in three markets to more than 16,000 agents in 21 states who last year handled sales of homes valued at nearly $32 billion.

Peltier said that while HomeServices will continue to identify brokerages to acquire, own and operate, “being a franchisor, we’ll be in a lot of markets much quicker than (with the) existing strategy” alone.

With consumers typically starting their home search on the Internet, creating a single destination website under the Berkshire Hathaway HomeServices brand will benefit both company-owned brokerages and franchisees, Peltier said.

“At some point, you can’t ignore the fact that if you want to attract customer eyeballs, you have to have a presence on the Internet, and you can’t do it with local independent brands” alone, Peltier said. “You have to have a single brand.”

Company-owned brokerages that operate under independent brands will continue to have the option of pursuing that strategy, while still benefiting from the exposure they will receive from the Berkshire Hathaway HomeServices website, he said.

“We will continue to grow and support the independent brand strategy as well,” Peltier said. “We’re adding to our strategy — this is not deleting.”

HomeServices of America’s business model now looks more like the one employed by competitor Realogy Holdings Corp. Although Realogy operates the nation’s largest brokerage company, NRT LLC, most of the company’s 2011 adjusted net earnings came from providing real estate franchise services to companies operating 13,800 offices under the Century 21, Coldwell Banker, ERA, Sotheby’s International Realty, Coldwell Banker Commercial, and Better Homes and Gardens Real Estate brands.

HomeServices owns nine brokerages affiliated with Prudential Real Estate, including three acquired this year: Portland, Ore.-based Prudential Northwest Properties, acquired in February; Seattle-based Prudential Northwest Realty Associates, acquired in April; Prudential Connecticut Realty, also acquired in April.

The six other HomeServices brokerages affiliated with Prudential Real Estate are and Prudential California Realty (Southern California), Prudential First Realty (Iowa), Prudential Rhode Island Realty, Prudential Carolinas Realty, Prudential York Simpson Underwood Realty (North Carolina) and Prudential Yost and Little Realty (North Carolina).

HomeServices also owns Koenig & Strey Real Living, a dominant brokerage in the metro Chicago area, which it acquired from Brookfield in 2009.

“This is not a new thought,” Peltier said of the decision to create a national franchise brand, noting that HomeServices was interested in acquiring the Prudential Real Estate brand two years ago. 

When Brookfield acquired the brand instead, it did so knowing it would eventually have to transition to another name — parent company Prudential Financial Inc. made that a condition of the sale.

“They were looking for a great brand, and we were fortunate in that we’d been given permission by our parent” company to use the Berkshire Hathaway name to create a new brand, Peltier said. It’s “an internationally recognized brand that’s currently not being used in commerce.”

According to an amended registration statement Prudential Real Estate Affiliates filed on Jan. 19 with the Minnesota Department of Commerce, Brookfield was barred from signing up new franchisees to operate under the Prudential Real Estate name. Brookfield had the right to renew the right of existing franchisees to operate under the Prudential name for up to five years, but only if their franchise agreements expired on or before Dec. 6, 2013.

All rights to use the Prudential Real Estate name expired at the end of 2027 — when the franchise agreement with the longest term was set to expire — or on the date on which no franchise agreement is in effect, the registration statement said.

Brian Boero, a partner in the real estate technology consulting firm 1000watt, said in a blog post today that while many existing Prudential affiliates “are deeply invested” in the brand, “I think most will jump at the opportunity to associate with Berkshire Hathaway. I’ve heard from some already, and they’re enthused. A conversion process that could have taken a decade will be collapsed into months.”

In filing its updated registration statement with Minnesota regulators, Prudential Real Estate also disclosed recent litigation with several franchisees.

Last year, Prudential Real Estate said it received $1.9 million from Mason McDuffie Real Estate Inc. to settle a breach of contract lawsuit Prudential Real Estate filed against the Pleasanton, Calif.-based brokerage after it switched its franchise affiliation to Better Homes and Gardens Real Estate.

Prudential Real Estate also disclosed that it had received settlement payments in 2011 from Prudential Texas Properties and Missouri-based brokerage Carter Duffey Inc.

I read this article at: http://www.inman.com/news/2012/10/30/prudential-real-living-brands-be-berkshire-hathaway-homeservices

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Popcorn Ceilings – No Night At The Movies…

Please enjoy my candid journey through homeownership at http://ajourneythroughhomeownership.wordpress.com where I share my personal stories of being a young homeowner.  My newest blog is about Pop Corn Ceilings… Enjoy!

Thanks for reading – Sabrina

Susan Caton – of The Caton Team Realtors – Interviewed by the Daily Journal – Article by Sally Schilling

Please enjoy this article below, my partner and mother-in-law, Susan Caton was interviewed by Sally Schilling of the Daily Journal regarding the local San Francisco Peninsula Real Estate market.

First-Time Home Buyers Beat Out By Cash

By Sally Schilling – Daily Journal Correspondent 9.17.12 5am

Low interest rates and low housing prices have first-time buyers feeling optimistic about purchasing a good home. But people who have saved up enough money for a sizable down payment are finding they are still not in the most favorable position in the housing market.

Cash buyers are often beating out first-time home buyers who are taking out loans.

“They’re being beat out, but not necessarily priced out,” said Anne Oliva, president of the San Mateo County Association of Realtors. Sometimes, cash buyers get preference over buyers with home loans, even if their cash bid is lower, she said.

Traditional home buyers with a 20 percent down payment are struggling, said Oliva, who is currently working with a couple for whom she has put in nine different offers. Her clients have enough for a 20 percent down payment, but sellers are thinking it is better to go with the cash buyer for the sure deal.

The challenge may be even greater for first-time buyers of units in complexes, such as condominiums or apartments. Investors are buying up units with cash and turning them into rentals, said Oliva.

First-time buyers with a 3.5 percent down payment on a condo, for example, may get pre-approved for the loans and have their offer accepted. But they could lose final approval of the loan once the lender sees that the complex has a high number of rentals.

“Every lender looks at the renter-to-owner ratio,” said Oliva, who ran a program for first-time home buyers in San Bruno. “If the renter-to-owner ratio is high, they will not lend.”

While she understands that buying and renting condos is a good move for investors, Oliva worries about how this trend will affect the number of homeowners.

“We could have a huge problem with increasing homeownership if this keeps happening,” she said.

Abundance of cash

“There’s a lot of cash out there,” said Susan Caton, a Realtor based in Redwood City. “It’s amazing, even over $1 million there’s a lot of cash.”

Caton worked with a client who was outbid several times on homes priced at more than $900,000. “They kept getting beat out, and beat out,” she said.

One home priced at more than $1 million in San Francisco had 25 offers on it. A client offered with 60 percent to 70 percent down and had excellent credit. They were beat out by an all-cash offer that was less than asking price.

The all-cash offer closed in nine days, whereas the client’s offer which would have closed in 30 days.

“In San Mateo County, it’s the same thing,” she said. “With 40 or 50 percent down or better, you are still beat out by cash offers.”

Caton agreed that the low housing inventory is a big part of the problem, along with the conditions that come with first-time home buyers with loans.

“Fifty percent down is a darn good offer and a good loan,” she said. “But the sellers or agents are saying ‘take the cash, it’s a sure thing,’ especially with no financing or property conditions.”

Many home buyers do get discouraged.

“It’s a hard battle,” said Caton. “It takes a lot of patience, but they can’t give up.”

But she sees a silver lining in the dark cloud.

“In each instance when a buyer is beat out a number of times, when they finally get a house they are so happy they got the one they got,” she said.

Strings attached

There are many reasons for sellers to prefer all-cash offers from prospectors over a down payment from a home buyer with a loan. Many strings are attached to a deal with a first-time home buyer; the sale may take longer to close, an appraisal is needed and sometimes sellers are required to do repairs. And on the other hand, a cash offer may have no conditions.

“If you’re up against cash offers, it’s very difficult,” said Diane Viviani, a longtime real estate agent in San Mateo County.

The cash-buyer trend is especially apparent in the $500,000 to $700,000 range, where inventory is low, said Viviani.

Recently, a home on Oneill Drive in San Mateo had 30 offers on it, she said. The listing price was $525,000 and it sold for $675,000, after being on the market for just eight days.

“I’ll tell a buyer to make the best offer you can,” she said.

For those taking out Federal Housing Administration loans, the down payment only needs to be 3 percent, said Viviani. But with such a low down payment, the lender’s liability is higher and the buyer seems less attractive.

“It’s doable,” said Viviani of FHA loans. “But when something comes at or below market [price], they’re seeing them go [to cash buyers].”

Fading trend

Joe Rodden, a longtime real estate broker based in Redwood City, has seen this trend. A home on 18th Avenue was recently sold to a cash buyer, despite the offer being 5 percent less than the other offers from people taking out loans, said Rodden.

“[The seller] felt more comfortable taking cash because it was a sure thing,” he said.

When asked what happens to the houses after they are bought with cash, Rodden said this is up to the buyer. Cash buyers could potentially close a deal with cash and then take out a loan, but the contract would still say all cash.

The cash trend has become less common in the past couple of months because prices have bumped up, said Rodden.

“Now cash buyers don’t see the same bargain,” he said.

I read this article at:

http://smdailyjournal.com/article_preview.php?id=1754902&title=First-time

Sabrina’s 2 cents…

Reading this article, it is clear – the local San Francisco Bay Area Real Estate market is highly competitive – so really nothing has changed.  We live in one of the greatest places on earth!

Though the focus of this article made it clear how tough it can be – The Caton Team has seen the light at the end of the tunnel.  After our clients experience writing multiple offers and being out bid – we reevaluate the situation and get back into the market.  I’m happy to say in the end, we find the right home for the right client.  Each experience is different though… thus our ‘Cinderella Story’ blog entires.  ENJOY!

A Cinderella Story… Lisa and All Those Offers…. at:

https://therealestatebeat.wordpress.com/2012/07/02/a-cinderella-story-lisa-and-all-those-offers/

A Cinderella Story… Jake  and Sophia…. at:

https://therealestatebeat.wordpress.com/2011/09/09/a-cinderella-story-part-2-jake-sophia/

A Cinderella Story…Nisi and Rip… at:

https://therealestatebeat.wordpress.com/2011/08/15/a-cinderella-story-part-1/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-cityå

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina