Security: own your home,
and work there
San Francisco Victorians bring wealth and friends to Bonnie Spindler
Bonnie Spindler listens for that snap. When it happens, the snap signals that her client will likely make an offer on a Victorian home in San Francisco. The snap indicates keen interest, which Spindler senses intuitively. "I feel it," she says, "a palpable snap. It's increased energy, like a heat signature. There's emotion and alertness. Even if they try to hide it, 98 percent of the time I nail who is interested and who is not."
"I try not to stalk people through the house or hunt them down. Let the house unfold for them," Spindler says. "They become engaged. I can tell if they like it. I hear that snap of interest, the way they look, how they open doors. They look for a reason to stay. They have questions. I alleviate a worry or need rather than try to sell them something. I give them a reason to like it more, validate their opinion. If they don't like it, they are in and out."
Instead of hiding a house's defects, Spindler points them out. "There's always something wrong with it," she says. "An interested buyer finds reasons to believe. The emotional mind has to be involved first. Then you involve the numbers. It is not a numbers game."
Listening for interest has helped her sell nearly 500 homes in San Francisco over a 15-year career. In her best year, 2006, she sold 56 houses. By 2010, sales had dropped sharply.
"Before real estate, I used to come back to my job and cry. It was so stressful. I didn't feel appreciated. I was miserable going back to work after a vacation."
Spindler had careers before real estate: advertising sales, including radio, television and print, followed by antique importing and interior design. In between she also had a brief stint selling IBM computers for home use. "Before real estate, I used to come back to my job and cry," she recalls. "It was so stressful. I didn't feel appreciated. I was miserable going back to work after a vacation. Now I never dread doing my job unless I am super tired or sick."
When she was 23 and living in the Midwest, Spindler bought her first house in Minneapolis. Her boss at the time had a 30-year-old sister, a flight attendant, who made plenty of money but spent most of it on jewelry and clothes. The boss worried that his unmarried sister would have no financial security as she grew older. He wanted her to buy real estate to provide security.
"I went out that weekend and put an offer on a house," says Spindler, who already showed keen business acumen. Interest rates were 18 percent, so she agreed to take over the seller's loan at only 9 percent. The house was listed at $85,000, but had been on the market for many months. She offered $55,000. "My agent was embarrassed," she recalls. "He didn't want to present the offer." But the sellers accepted.
Spindler's dad helped her build an apartment in the house's basement. She rented it, creating enough income to pay for the mortgage. Then she obtained a second mortgage on the home, used the money to buy another house and moved there. At that point she could rent the entire first house to generate income. "That cash-flowed nicely," she recalls. "That started my real estate investing career." Despite her success with real estate, Spindler still finds it difficult to convince a young woman to buy a house alone.
At age 26, she started her own advertising agency. But she moved to San Francisco to attend art school and market her art. She bought a home after a year in San Francisco. "My house burned down," she says, and insurance did not cover the repairs to the property. It was the early 1990s recession. She tried to find an advertising job with no luck. "Someone suggested real estate," she recalls. "But the reputation of real estate sales was like a used-car salesman. I had high ethics and principles. Could I be a real estate agent?" As it turned out, her varied background worked to her advantage.
"You are self-employed," she says. "You have to understand contracts, advertising, marketing, self-promotion, ethics, bookkeeping and accounting. You have to be self-motivating. There are so many aspects to the job that it's hard for anyone to do well. That's why there are so many bad real estate agents. They can't afford to hire around their incompetencies."
"I can play with my dogs. I take my first two or three business calls in my bunny slippers."
Most new real estate agents work 12-hour days for at least six months before they land their first sale and start earning commission, especially in a down market. In her first year as a real estate agent, Spindler made more money than she had in advertising. "Not because I was wildly successful," she says. "It's just that a regular job sitting at a desk doesn't pay you as much as if you are really diligent running your own business."
Spindler loves working for herself. "I don't have big brother looking over me," she says. "I don't have the weird corporate structure with all the paperwork. I don't have chains of decision-makers."
"Working from home is my favorite part of the job," she says. "I can play with my dogs. I take my first two or three business calls in my bunny slippers. Clients come to my home, which makes them comfortable. They don't have to go to a fluorescent-lighted corporate office. I don't like working in environments like that. I don't want to gossip around the water cooler. Commuting, parking, having to say hello to people I don't want to socialize with—it's stressful, a waste of time."
While she was frequently bored in earlier jobs, "real estate is unbelievably challenging," Spindler says. "No day is the same. No market is the same. Clients change. Financing changes."
Her first sale was her first property listing so she earned commission on both sides of the deal. Then she nearly doubled her income every year for the next decade. "It's staggering," she says, especially as the real estate market slid from 1989 before she entered it until about 1996. "When I got into the market, agents were complaining about how bad things were," she recalls. "Sales were down. This market is worse than it was then. But I didn't know any better. I didn't know what normal was. It seemed easy and intuitive for me. I had done advertising. I had done difficult sales of computers. I had written business plans."
Many agents advertise houses but not themselves. Spindler branded herself as the "Victorian specialist" using image advertising, establishing her business personality. It worked. She focused on structures built before 1926, which were generally of higher quality. While she sells throughout San Francisco, Spindler especially knows the area where she lives, north of the Panhandle and Alamo Square.
Real estate markets vary from city to city, state to state. "This market is so sensitive that it will be booming and then one day later it will just stop," Spindler says. "Nothing happens. It's bizarre. It's hair-trigger sensitive here." She noticed recently that agents list properties at extremely low prices to attract multiple offers then sell over the listing price. "That hasn't happened for a long time," she says. "If you are really tuned into a market, you notice small fluctuations. You know when the tide is turning long before anybody else does."
Deals that open don't necessarily close. The fallout rate during the recession, when buyers have plenty of options, has reached 30 percent. "There's another deal around the corner," she says. "They keep waiting for prices to go down further."
"This market is so sensitive that it will be booming and then one day later it will just stop. Nothing happens. It's bizarre."
Convincing people to buy now is challenging. Spindler expects housing prices to decline three to five more years. "San Francisco is just starting to get foreclosures and short sales," she says. "Banks hold properties off the market." Though flush with cash, banks don't lend readily as they wait for higher interest rates and profits. They shun self-employed borrowers—common in San Francisco—in favor of buyers who can prove income on W-2 forms. "San Francisco is very entrepreneurial," with numerous start-up companies, she says. "Self-employed people cannot get loans right now. It doesn't mean they're not making a ton of money."
Climbing interest rates may diminish buyers' options far more than higher home prices, she observes. Because banks refuse loans where buyers have less than 20 percent as a down payment, Spindler persuades sellers to provide secondary financing where possible.
A three-story Victorian in San Francisco might sell for $2.4 million with a housing unit on each level. A few years ago, Spindler helped 60 percent of her buyers divide buildings using tenants-in-common agreements. Three buyers could then buy such a building for $800,000 apiece and share expenses on the whole building. Seeing risk in having three loans on a single property, banks boosted interest rates on lending to such ventures and the market evaporated.
If a building is divided into legally separate condominiums, banks more readily lend on those properties, she notes. Condominiums in default can be foreclosed separately.
Despite the weak real estate market, Spindler exudes joy in her work. Clients often become friends. "I am engaged in my job," Spindler says. "I love it. I help people find their nest, their home. I have also made my friends a lot of money in real estate. It's shockingly rewarding as a career."
—James Dunn
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