Greed in real estate

From Wikipedia - Greed is the selfish desire for or pursuit of money, wealth, food, or other possessions, especially when this denies the same goods to others. Greed is selfish, excessive or uncontrolled desire for or pursuit of money, wealth, food, or other possessions It is generally considered a vice, and is one of the seven deadly sins in Catholicism. Now, I admit that greed is a part of what makes the American market-based economy work; however, that doesn’t make it any less of a sin. I would say that it’s certainly a deadly sin in real estate, too.

Greed is what makes sellers start out way to high in price for their house. And, greed is what is driving many buyers to offer way too little for homes these days. It was likely greed that drove many homes into foreclosure – sellers not willing to take what the market would bear. I’m sure that there is more than a little greed involved in the feeding frenzy of buyers going after foreclosed properties. In both cases I see the people involved not only wanting to get a “good deal”; but, many going beyond that level of self interest and trying to “stick it to” the other side a bit (sometimes a lot). In today’s market it is most likely the buyers who are the “stick-ers” and the sellers who are the “stick-ees”, but that will eventually change and the power to make the other side squirm will return to the sellers.

I really have a hard time with that. I always advise my clients that a good real estate deal has to be a win-win, with both sides coming out feeling good. Most sellers are already asking much less than they thought (or hoped) the property is worth. If they’ve listened to their listing agents, the house should be positioned to get offers in the 95-97% of asking price range. And, ruthless buyers who take pleasure in making those low-ball (80-90% of asking price) offers, just makes matters worse. They’re a part of our society and a part of the real estate landscape. I may have to deal with them on either side of a deal; but, I don’t have to like them.

So, when I have buyers ask me for pricing advice on a house, I always advise them what I believe to be a fair price for the house in this market – a fair price, not a low-ball price. Some take my advice and seem to be successful in buying the homes that they want. Some do not, preferring instead to make low-ball after low-ball offer, hoping that they can steal a house from some desperate seller. A few actually succeed; but, most fail and eventually just wander off, undoubtedly looking for the next opportunity to “stick it to” someone. I suppose that I could make more money by cultivating and aiding these vultures of the real estate world; but, then I have to live with myself long after they’ve flown off to start circling above the next wounded homeowner. I just quietly say good riddance!

Remembering Things, People & Places

I saw a car yesterday with more than one bumper sticker that had to do with remembering the Korean War. I don't actually have many memories of that war; but,for me that immediately conjured up other memorable events that seem to define our lives (at least as we all get older). I remember Viet Nam, because I was there. I remember the day that President Kennedy was shot. In fact, like so many in my generation, I remember where I was and what I was doing at the moment that the news flash hit the TV screens. I'm sure that many younger people remember where they where when the news of John Lennon's death hit the news. And, I'll certainly never forget the happenings of 9/11/2001, which is another day for which I remember exactly where I was and what I was doing when the TV started covering that horrific event.

Last night, I was also reminded of the importance of the people that we meet in our lives. I went to one of the semi-annual get-togethers of the local Digital Alumni group. These are all people who worked for the non-defunct Digital Equipment Corporation in this area during the 70.s, 80' and 90's. Digital was one of the pioneer companies in the computing industry and one of those that went belly up or got bought out (the Digital fate), when it's management failed to recognize too many signs of change in the industry. Last night I ran into Will and Guy and Patrice and Dick and Ed and Tom and so many more of the friends that I worked with in the heyday of Digital. We get together to reminisce and to catch up with each other's lives. It's always a bit poignant, and perhaps a bit pathetic; but, also good just to see each other again - sort of our version of the old high school reunion. Our touch point is Digital Equipment, but our real interest is in staying in touch with each other.

The other thing that I realized was that I remember fairly vividly all of the houses that I’ve owned over time. The rentals in the early days, not so much; but the ones I've actually owned I can remember in fairly good detail. I suspect that's because the houses that you own become "homes"; and homes occupy a special place in our hearts and minds. My wife and I have great memories of the first home that we owned, a nice little ranch in Indiana; even though, when we went back to see it again a few years back it had somehow shrunk significantly and was no longer the palace that we once saw it to be. Our kids went through their toddler years there and we'll never forget those years - especially the time that our three year old daughter, Christie, and her best friend Robbie climbed the trellis out back and ended up running around on the roof. Both she and we survived that incident; although, I still believe that incident was the start of grey hairs for both Carolyn and me.

So I guess the point is that; in life, both the huge events that define eras and the little events that portray everyday living are context sensitive and we always remember "where we were when." The homes that you own will be a big part of that context. There is an old saying in real estate that you sell a house, but you buy a home. One of the reasons that I enjoy the real estate business is that I get to help people find new homes that will for some period of time define the context for their lives. Call me and I'll help you find a new home in which to begin building your memories - one without a trellis out back.

Getting outside the box

The Auction Alternative - As the real estate market malaise continues to deepen, it is definitely time to try to think and act outside of the box. We all get comfortable within the "box" that defines our own "conventional wisdom." In the current market, we need to break out of the box that defines a sale as a standard real estate listing process. Many sellers are turning to an old familiar process in order to sell — holding an auction.

Now before you start conjuring up those pathetic images from the 70’s of farm families standing around while the auctioneer sells off the farm and all the livestock and equipment, it’s not really like that today (unless, of course, you’re headed to foreclosure already). There are many very good reasons to consider letting a real estate auction company sell your house.

The auction process offers several advantages to the seller -

- The seller stays in control and sets the terms and conditions (and even the reserve)
- The auction separates the real buyers from the tire kickers; and, buyers are financially pre-qualified and have real money in the game.
- The competitive bidding process may end up netting you more than a regular sale
- The seller has a “date certain” when the auction (and hopefully the sale) will take place
- The process takes less time, so the seller is not hassled with showings and open houses for long periods (Note: there will be one or two "buyer preview" dates set to allow bidders to look over the property.)
- There are less post-sale hassles since the sale is “As Is, Where Is, with all faults”. That means no surprises from post-sale inspections or financing issues.

The process does have up-front costs for marketing that are paid at the time the auction contract is signed; but, those typically will be less that the full commission on a normal sale. In an auction, it's the buyer who pays the "commission" (called a buyer premium) to the auction house, not the seller. There is also no guarantee of a successful sale; however, in the end you will get market price for the property or at least know what that is, or that your "reserve" is above the market price. If the auction is not successful the seller is out the up-front marketing money that he/she has paid; so, there is risk there, too.

Auctions aren't for everyone; but, if you really want (or have) to sell and you have at least 30% equity in your property, an auction might be right for you. Auctions also work well for properties that are hard to put a value on, such as large vacant land parcels that could be split or unique properties for which there are no comparable properties in the area. Call me to discuss whether looking into an auction sale might work for you. For more on auctions visit www.themilfordteam.com. I have a link there in the Sellers section of the menu to Real Estate One's newest auction partner - Masterbid, Inc.

Feeding Frenzy

I suppose that this is just the American market economy working as it is supposed to work,but lately thee seems to be a feeding frenzy as buyers, many of them young, first-time buyers, rush to pounce on foreclosed properties. Even my new neighbors are a part of that action, They bought the house behind me out of foreclosure. We certainly welcome them, since anyone new there will likely take better care of the property than the previous owner.

I've noticed that about half of my buyer customers are asking me to find them a foreclosed property. They aren't even looking at regular properties for sale. That feeding frenzy mindset is skewing the market even more. The last two foreclosed houses that I've helped put bids in on have had multiple bids; while regular homes on the market sit idle, with little to no viewing activity. The other thing happening is that buyers are using the foreclosure prices as a guideline for all bid prices on houses, resulting in lots of "low-ball" offers on homes that aren't in foreclosure. It's hard to explain to a seller that he/she shouldn't be insulted by the offers at 80% of asking price - it's just how thew market is right now.

So, what's ahead? I've afraid that the frenzy so far was just the chum in the foreclosure waters. The biggest wave of ARM re-sets is just ahead and it is predicted by many economists that this wave will result in even higher levels of foreclosure. So the frenzy may just get worse, before it gets better. It's all part of the market mechanism, of course, so I'll just have to get used to showing foreclosures to buyers. Our company even has a dedicated Web site now just for foreclosed properties - http://www.ourforclosurehomes.com go there if you're looking for a foreclosed property. You can find a link to that property on my Web site -http://www.themilfordteam.com. I'll see you out there. I'll be the one in the shark cage with the chum bucket.

Don't talk to strangers

Don't talk to strangers. Don't get in a car with someone you don't know. Don't tell a stranger where you live. Those are all phrases we might use with our children to give them good advice. They are also good real estate advice. You’d be surprised how many people will get into a car and go see a house, or meet someone that they’ve talked to on the phone once or call on a sign and then meet the person who shows up. And in all these cases, the unsuspecting buyers make the assumption that they can trust the real estate person who shows up to protect their best interests—to work for them. WRONG!

Now, I’m not saying that the Realtor® who shows up is dishonest, untrustworthy or somehow out to do these buyers harm. In fact, the opposites are usually true and, in most cases, things work out OK. But, the buyers have made an erroneous assumption that, because they called the Realtor and that person agreed to show them a particular house, that, somehow, that Realtor has magically become “their agent”. In fact in almost all cases like those described, the agent who shows up to show them the house is, in fact, working for the sellers.

Why is this distinction important? Because human nature will inevitably lead the buyers to reveal information about themselves, their financial condition or their motivation for buying and/or liking the house that could work to their disadvantage. A real estate transaction involves quite a bit of negotiations between the buyers and sellers. The agents who work for one side or the other are constantly trying to find out anything about the other side that will help their side in those negotiations. And, you may have just jumped in the car with their negotiator and blurted out things that will come back to haunt you later.

So what should you do? For starters, know for whom the agent that you are with is working, before you go. If you do not have a contract with that agent, he/she cannot be working for you! By default, under Michigan’s real estate laws, that agent is working for the seller. Only the existence of a contract creates agency—the fiduciary responsibility between the real estate person and another party. If you don’t have a contract, you don’t have agency. Since the sellers do have a contract (the listing contract), the agency that they established with that contract extends to any other agent who might show the house (called sub-agency).

So that friendly, chatty, and inquisitive person sitting next to you in the car on the way to the house is an agent for the seller, if he/she isn’t signed up to be your agent. Watch what you say until you have a contract! That is why a good agent will inform you about agency and have you at least sign an agency disclosure that indicates that you understand for whom he/she is working.

For more on real estate agency, go to www.themilfordteam.com and click on the Real Estate Agency and You link.

Get SEV out of your head

A few years back we Realtors used the SEV number as one of the factors that we looked at to arrive at a homes market value. That was during the days when market values were fairly consistently running between 2.1 to 2.3 times the SEV. Life was good. The market was fairly balanced and stable. The economy was chugging along at a decent, if not spectacular pace, and the local assessors were still a little behind the market in terms of putting a value on homes for tax purposes.

Well, times certainly have changed. The economy, at least in Michigan, has been at best stagnant and at worse going south. Foreclosures are at record highs in the state and we've been in a "Buyers Market" for almost 3 years now. The assessors have not only caught up; they've actually shot right on by the market, which has been actually depreciating over the last 18 months. Yet, many homeowners cling to the old thoughts that a home's value in the market can be calculated by doubling the SEV and then adding a little to that figure.

Unfortunately, the only people who see the homes being worth that much are the assessors and the homeowners. I've just started calculating the current SEV to market value ratio's on sold homes in the market areas that I track - Milford, Highland and Commerce Townships in Oakland County, Michigan - see the Real Estate Statistics page on www.themilfordteam.com or www.movetomilford.com. What I've seeing so far would put the current formula at about 1.6 to 1.7 times SEV for the market value. The current SEV numbers are so off the mark that almost no one in the real estate business uses it to calculate a market value any more. In fact most of us hate to go back in the sold market data more than 3-4 months, because things have been so dynamic in this market. Even appraisals that more than 3-4 months old are useless.

So how can you determine what the market value of your house might be? The best way is to call a local Realtor and have them do a CMA (Comparative Market Analysis) on your home. Unless you really do want them to blow smoke at you to make yourself feel good, make sure to specify to them that you want a realistic price range for your home, based upon the current market. The results may not be what you had in mind; but, the market is what it is. The good news is that you'll also benefit from this market, if you're going to buy another home in Michigan. And, what about the taxes that you're paying on the inflated SEV? That's likely the topic for another post, but I don't feel like going into a rant this morning. Besides, I'm relatively sure that our politicians will find another way to "help us" with this mess. After all, they "helped us" get into it in the first place.

Foreclosure - the two-headed dragon

I had a customer who just lost his house to foreclosure. In the end he was resigned to the fact that the house was gone and he was just ready to get it over with. What he doesn’t realize is that it’s not over with, yet. This foreclosure dragon has two heads and the second one is waiting to bite him.

It’s bad enough that he lost the house and ruined his credit for the next 12 years. Later this year or next year, the other head of this dragon will come to bite him, when he gets his tax bill from the IRS.

For some time now, the IRS has been treating the amount that the mortgage company ends up losing on the house, and thus “forgiving” on the mortgage loan, as unearned income and thus taxable. The mortgage companies are required by law to report this “unearned income” to the IRS and they then come after the person who defaulted on the loan for the taxes due on that income.

Here’s an example of how it works. Say the home was mortgaged to the hilt and the mortgage was $300,000. When the home owner defaulted, maybe values had declined, or maybe he had let the home go and it’s market value fell. In either case, say the bank was only able to get $225,000 for it after they foreclosed. The remaining $75,000 they had to write off as “forgiven debt” on the loan and report that to the IRS. The IRS is now going to come after taxes on that amount from the ex-homeowner. If the person who defaulted is in the 24% tax bracket, that could amount to $18,000 that this person would owe. That is the second, and usually unexpected, consequence of the foreclosure.

There's also a chance that the bank will come after the ex-owner with a civil suit for the difference between what they get and the amount owed, but that's another head on an already ugly dragon. So the moral of this story is to try extra hard to avoid foreclosure, because it really is a two headed dragon that will burn you twice.

Call a Realtor if and when you get the first delinquent payment notice from the bank. He/she will likely advise you to try to contact the bank and try to work out some sort of payment plan with them. Banks really don't want to go through the foreclosure process and they really, really don't want or need more foreclosed inventory right now, so most will try to work out something with you to avoid foreclosure.

If circumstances dictate that you need to sell, at least get your Realtor started and involved with the process well before you receive a notice that your home is going to Sheriff's Sale. You can authorize your Realtor to work with the bank to come up with a "short sale" plan to help market the house. Only you can get that permission. The banks won't work with your Realtor unless you've called or written and designated a Realtor as your agent. Call the bank and ask for the manager of the foreclosure department to get that process started. Don't wait for the foreclosure dragon to come breathing down your neck (twice).

Aging in Place

When I first heard the phrase "aging in place" I had the vision of a big wheel of cheddar cheese sitting in a warehouse somewhere slowly mellowing out. It turned out that this was referring to people who choose to stay in their homes as thet grow old, rather than moving into an assisted living facility. Atually it is those facilities that turn out to be the "new" idea. People always aged in place until the mid-20th Century when assisted-care facilities became popular.

This year I took courses and was certified by my company as a Senior Real Estate Specialist. Perhaps it was because I’ve now reached that stage myself that so much made sense to me. I recently added a section to my Web site - www.TheMilfordTeam.com - about aging in place and the impact that the phenomenon of the Baby Boomers reaching retirement age and beyond is having on real estate. I originally called the section “Moving On” and focused initially on retirement and downsizing. Now I call it "Life Stages". I had a section there already about assisted living facilities, too; but now the whole aging in place thing has taken off and a new section was needed.

The changes required to a home for aging in place is just as big of a factor for builders as is the new interest in “green living.” Likely you can have both and both start out talking about the changes that one can make (remodeling projects) to an existing home. Obviously the suggestions for aging in place focus upon making the home more accommodating to the needs of occupants who are feeling the affects of aging. While I’ve posted much more to my web site, here are a few of the suggestions:

- Adapt lower floor of home for possible one level living
- Increased incandescent general and specific task lighting
- Easy garage or parking access
- At least one entry is without steps
- Doorways 36" wide with off-set hinges on doors
- Levered door handles instead of knobs
- Electrical outlets at 18 inches instead of 12
- Easy to open or lock patio doors and screens
- Light switches at 42" instead of 48
- Lever faucets and faucet mixers with anti-scald valves
- Stall shower with a low threshold and shower seat
- Grab bars at back and sides of shower, tub and toilet or wall reinforcement for later installation
- Bathrooms with turn around and transfer space for walker or wheelchair (36" by 36")
- Kitchen cabinets with pull-out shelves and lazy susans
- Easy to grasp cabinet knobs or pulls
- Task lighting under counters
- Cooktop with front controls
- Side by side refrigerator

There are some great Web sites that address this topic and I’ve put links to them on my Web site. And remember, if you’re at that stage where you’re considering getting rid of the McMansion and downsizing into something a little more suited to your current and future needs, give me a call. I’ll probably suggest something in Milford first, just because I think it’s a great place to retire; but, I can help you find a new home to age in place anywhere in Michigan.

Sleepless nights

"Don't try to solve serious things in the middle of the night." (Phillip Dick) from the blog -JacksWinningWords.blogspot.com. That is certainly good advice, but oft times hard to follow. Who hasn't awakened in the middle of the night in some sort of panic about something that you forgot to do or thinking about something that is upcoming the next day. Laying there and letting your mind race is a sure formula for a sleepless night. Since it's dark, one can't stare at their green dot (see posting for August 12) either; so, something else is required.

I find that letting some mindless little ditty or song loose in my mind tends to crowd out the thoughts about whatever was keeping me aware and it works wonders in getting back to sleep. Now you really do have to combine this with at least one or two rational thoughts along the lines of the above saying by Phillip Dick. If it's truly a serious matter, then I find that a little time in prayer usually helps, too. The short phrase "Not my will, but Thy will be done" works wonders for me. You'll have to find a prayer that works for you.

Mostly, the things that keep us awake are just things that one could worry about, but, not do anything about until the business day starts anyway. If what's occupying my mind is really something that I fear I will forget about in the morning, I may get up and write it down. The real goal, of course, is to clear your mind of the thoughts that are keeping you awake and to get a good night's sleep. Lately, I've found that the theme song from the movie The Sound of Music has the desired affect of pushing out other things and putting me back to sleep. You'll have to choose your own song, too.

The other thing that I've noticed is that the great ideas I may have had while lying there awake at might seldom seem quite as great in the light of day. I suspect that the semi-asleep state that one is in while lying there contributes to flights of fantasy that seem like good ideas at the time. Of course, if the issue keeping me awake is anxiety over some pending event or confrontation, those things just seem to grow and become much more serious in the darkness, sort of like the closet of anxieties in the cartoon Opus.

We all have our own anxieties, insecurities and daily worries; but, if you can develop some simple little coping mechanisms to help you block them out and get back to sleep, then the hills really will be alive with the sounds of music (or maybe that's snoring).

First Impressions

What First Impression does your home give?

In the Chinese “science” of Feng Shui and the Indian “science” of Vaastu the front door of your home is a point of great importance—its orientation, materials and appearance worthy of great attention to details. Unfortunately in much of our society the front door has become so forgotten and unused (who doesn’t just pull into the garage and enter through that door or enter through a side or back door most of the time?) that it is often neglected as far as care and condition goes (see above picture).

When it comes time to sell the house; however, the front door is a major contributor to your home’s first impression upon buyers. They spend time standing there while the Realtor fumbles with the lock box to try to get to the key. A buyer standing on your front porch or stoop is likely to look at the door, the trim surrounding it, any windows that are near by, maybe the roof and certainly the landscaping around the front door. What will they see at your front door?

One of the easiest things to do to improve the first impression that your house makes is to either paint or replace the front door itself. A door with cracked and peeling paint or one that shows signs of rust or rot will immediately start the buyer’s internal “fix-up/repair calculator going. If the buyer sees curled or missing roof shingles they may conclude that the whole roof needs replacing (a project that costs big bucks) and may walk away right there.You should also look at the light fixtures that are near the door. Broken or shabby looking fixtures are an indication of lack of maintenance which buyers will start to look harder for inside, too.

Trees or bushes that have overgrown the walk or porch are also not inviting and show a lack of care. I’ve actually had to tell customers to trim back bushes that had overgrown the walk so badly that you couldn’t use it—they never used it anyway and so had forgotten about it. Look also at the walk and porch or stoop. Are there cracks that might cause someone to trip and fall? Are the steps secure or do they rock when you use them? Are there plants and weeds growing up through the cracks in the walk? If you have a screen door, are there tears or holes in the screening? If there are shutters around the door or nearby windows are they in good repair or do they need painting, too?

So, whether or not you believe in either of the sciences of Feng Shui or Vaastu, at least believe this—your front door area provides the first impression for most buyers. It may well be the place that a potential buyer spends the most time standing still and just looking. Give yourself and your house a better chance of selling by focusing some of your home preparation time on that area. Otherwise, by the time they get to your spiffy new kitchen or wonderful finished basement, they will already have a bad impression of your house. For more on Feng Shui and Vaastu, go to my Web site - http://www.themilfordteam.com

Marketability Factors

I've developed a little chart that I use with prospective listing customers to help them understand the factors that go into making their homes marketable or which might hinder the marketing efforts. I call it the Marketability Factors chart. This isn't rocket science or even anything new to any good agent; but, much of it is new to home sellers; or, at least, things that they don't think about. So, this little chart provides a good visual aid for a discussion of these factors.

Location is, was and always will be the single most important factor in real estate and the one that no one can do anything about. If the house is located on a busy road it will be harder to sell. If the house is located next to a shopping strip mall, it will be harder to sell. If the house is in a run down neighborhood (no matter how nice it is) it will be hard to sell. Neither the seller nor the Realtor involved can do anything about any location issues.

Style - the architecture and features of a house are pretty well locked in, too. Several styles that were popular at one time have fallen out of favor with most buyers and, so, are harder to sell. These include tri- and quad-level houses, bi-level houses (sometimes called raised ranches) and many of the modernistic, flat-roofed ranches of the 60’s & 70's. Feature preferences have also changed, with buyers now looking for large kitchens and first floor master suites with walk-in closets and a master bath with separate shower and tub. You can have some impact on these factors by keeping your home updated over the time that you own it. You can't change the basic architecture of the house.

Price is what everyone looks for, after they’ve narrowed down the location and style choices. A low price won’t entice anybody to buy an out of style house in a crumby location, but it might lure in an investor looking for a rental property.

The 3-C’s – Condition, Clutter and Cleanliness come next on the marketability scale and they can be the biggest factors in differentiating between similar style and priced homes. A clean, uncluttered home in obviously good condition is the best thing a Realtor can ask for, especially in a crowded market.

Competition has certainly become a major factor in the current market. There are just so many houses to choose from that, if you don’t have the other factors above in order, there likely will be someone else who does and they will win. Of course, having no competition for the wrong reasons (like having the only house situated next to the city dump) isn't good either.

Ease of Showing – This is a factor that many sellers make much harder than it needs to be and which ends up affecting the ability of the listing agent to market the house. Once you’ve decided to sell the house you also need to decide that you’ve going to do everything that you can to assist in the process by making it easy to show. Real estate is often a spur of the moment things – “I’m sitting in front of your house and wondered if I can see it?” Within reason, the more you can accommodate the demands of the buyers for showings, the better your chance to sell. Owners that impose long showing lead-time requirements - "I need a 24 hour notice" - will likely cut the number of showings that they get by 50-60% (maybe more). Owners should plan for how to handle getting pets out of the way and should get into a routine of leaving home each day with the house in showing ready condition for that day. Owners who require the listing agent to be present for every showing also restrict the process too much and many showing agents will just by-pass such a listing, because there are just too many homes out there that are similar and easier to show.

As a Realtor it’s my job to do the best that I can to market the house, no matter how many of these factors may present problems. Like most Realtors, I’ll be focusing upon the factors that the owner and I can have some impact upon – Price, the 3-C’s and Ease of Showing. So, I advise owners who ask "How can I help?", to let me price the home to the market, keep the home show ready and then get out of the way and let the real estate process work.

What to do, what to do...

I get asked a lot by people looking to sell their homes what they should do to get it ready. For the most part my advice has to do with the 3-C's of real estate - Condition, Clutter and Cleanliness (See my June 28th posting about that). Occasionally I'll hit someone who is considering a major remodeling expense - a complete kitchen update or a bathroom update - in preparation for selling. I always console against that kind of expense. There's just no way to recoup the money of an major update like that in a short-term sale. In fact, there's likely no way to really recoup all of any major update, no matter when the sale. See the page on home improvement paybacks on my Web site - http://www.themilfordteam.com/home_improvement_paybacks.html - for more on that. I'd rather advise them to take that $10-20-30K off the listing price and leave the update to the new owners.

The fact is that you need to plan and implement updates and remodeling projects all along the way when you own a house. There needs to be some payback for you as an owner, some enjoyment that you get out of the improvement, in addition to any payback at the sale of the house. I tell homeowners that they should step back and take a good serious look at their homes at least every 5 years, with an eye towards updates that will keep the house more current. Get a local realtor to help you with that process, it you don't feel that you know what the current trends are in homes.

Many "improvements" that homeowners point to when they go to sell are, in fact, nothing more that expected home maintenance items. Replacing a worn out roof is not something that can be sold as a major update investment on your part - it's expected by buyers. The same with replacing old, leaky windows; although that can at least be pitched as an energy savings investment. Having an updated kitchen is a good thing, which hopefully was done correctly, with regards to counter tops and cabinets. Just refacing your original old, dark oak cabinets with new cabinet doors and putting a new Formica counter top in will not get you many points with buyers today. All new cabinets and granite tops are the expected replacements these days. Painting over your dark oak paneling is also not the answer when remodeling family rooms in 70's built homes. Painting over wall paper can be even worse in the "what where they thinking" category. Tear all of that old stuff out and paint everything a neutral shade. Note that taking down paneling will likely cause enough damage to require re-dry walling the room.

There are lots of things about a house that may be out of favor - the style (bi-levels and tri-levels for instance) or the features ( a small kitchen or only 1 or 1 1/2 baths) - but there are many things in most houses that can be easily "fixed" by a coat of paint or other, minor remodeling efforts. So, I advise that you don't do a major remodeling effort, like a kitchen or bath; but do put in the efforts to strip off wallpaper and repaint rooms to get the place looking fresh and neutral. You'd be surprised what $50-100 worth of paint can do for the value of your house. It is an old real estate saw that your house likely never looked better than the day you sell it. Maybe that's why it sold!

The sound of silence

Whenever we have guests; whether it be our kids, with their kids, or a house guess that may have been with us for a while, my wife and I almost always notice the sound of the silence when they've left. We have a historic home that is very, very quiet when just the two of us are there. even if one is watching TV or playing music on one floor, the other won't even hear it on the other floor. Old homes are that way, mainly due to the thick plaster walls. We don't even hear the traffic outside, when the windows are closed, even though we live on a fairly busy street.

So, today I'm pondering the sound and power of silence. In our modern world we seldom experience silence anymore. Even in my quiet home, if I'm in my home office I can usually hear the sounds being generated by 2-3 fans and motors - the bi-products of having my computer and laser printer turned on. On warm summer days, the window air conditioner will be going, with its fan and compressor noises. I've even gotten to the point where I sleep with a fan on just for the soothing noise. At night, the sound of silence is distracting. I've become addicted to sound. I know several other people who have reported the same thing to me about their need for a constant soothing sound at night. Nothing does it like a fan. I've tried the sound machines and the constant sound of waves breaking on the shore just causes other problems at night.

In real estate, we too often also don't like the sound of silence, so we fill it with our own voices. That is a mistake. In fact, we should welcome and use the sound of silence. Silence when used with customers means that we've stopped talking and started listening, and that's a good thing. Silence when used in negotiations can be the most powerful tool that you have. State your point or argument and then shut up. Wait for the other side to react and to break the silence with some counter-suggestion or question. It is a powerful position to be in. So, welcome and embrace the sound of silence. We get much too little of it and we waste it all too frequently. Silence can be an ally in negotiations and a calming respite from the hectic, noisy pace of everyday life. If you find yourself in a quiet place, sit and listen for a while. It may be more powerful than an energy drink to refresh you and get you going again.

Whose job was that?

I came into the real estate business the way many agents do - from a career in sales in another industry. In my case, it was the computer industry, where I had sales and marketing jobs for over 25 years with many of the big (and many now defunct) names in the computer industry - Burroughs, Digital Equipment Corp, Compaq, EMC and SGI. It took me quite a while to get reoriented into the role of being an independent contractor who sells real estate. I remember making lots of early mistakes (from which I learned - see post of August 14) or having things go wrong or not go at all. I*n the beginning I'd look around and likely blurt out, "Whose job was that anyway?"

You see, the large companies that I worked for had things pretty well compartmentalized. I did the selling and took the order. Someone else maintained the catalogs and pricing files, yet another person actually processed the order, still others were downstream in the delivery process and there was always someone at the end to go install and maintain he equipment. There was always someone else (most of the time many someone elses) in the value chain who had responsibility for things that I didn't have to worry about. It didn't always work smoothly, but that was the fault of someone else. Not so with real estate sales.

Now, I tell new agents coming in, especially those who have just left corporate jobs, to go out and buy a cheap hand held mirror. then, whenever the urge is there, out of whatever frustration about something going wrong, to yell out "Who's job was it to check on that or to do that?" I tell them to hold up the mirror and stare intently at the only person they have to blame. Maybe they should put a green dot on their mirror, too (see post of August 12). Sure, there are administrative people in the chain who do many of the clerical tasks; but, the only person who is overseeing the whole process, the one person who must catch any and all mistakes, and the only person that the clients can hold accountable is the person staring blankly back at you in that mirror.

Bambi Hunting

My wife, Carolyn, and I love to go Bambi hunting. Now, before you get all upset, that's just our little code word for going out in the countryside to look for deer to observe in the wild. That's really the ultimate catch and release program. we just look at them and enjoy them in the wild. Lately we've been able to enjoy many of the summer's fawn's (the real Bambi's) playing and chasing each other through the fields. They are fun to watch.

We are fortunate to live in Milford, Michigan, were one can go in almost any direction from the Village and be in a rural setting where there are deer. We used to go to nearby Kensington MetroPark, where we'd normally see a few deer, maybe 6-8. Then we "discovered"(isn't it great how humans have the egos to think they've discovered things that have been there forever) all of the great farm areas around Milford that really harbor the deer. I guess the deer were smart enough to move out of Kensington a few years back when the Park Department decided to start their culling program.

We don't just look at the deer, we count them to and keep track of how many we see and where. The summer months provide slimmer pickings that in the winter. Deer don't move around as much during the daylight hours in the heat of summer. A normal summer Bambi hunt might yield a count of 8-12 (we always feel good about getting into double digits). We rarely, but occasionally get skunked (no deer sightings at all), usually, when we go out too early. You have to go out right at dusk for the best results. A good night might yield 20 or more and the best we've ever done in a single outing was 43 (on a nice cold winter afternoon).

Now, we're not about to share our "secret places" for deer spotting (another ego trip...like no one else in the whole world has been down this particular public road where we see the deer) , but I will share with you that this pass time can be as relaxing and decompressing as staring at a green dot - See my August 12 posting - "Staring at my green dot". We all have our own coping mechanisms. I guess one of mine (and maybe the second best one that I have) is going Bambi hunting with Carolyn. I never seem to come back with the same knots in my neck or queasy feeling in my gut.

There's probably something really Zen or New Age in this whole thing, but I don't care to look for it. The ride out, the act of searching intently for deer, and then the pure joy of seeing something in nature that is so cute and so innocent is always enough to melt away the cares and pressures of the day, at least for for me, for a while. So, if you need a coping mechanism, try deer spotting. It doesn't cost anything and it can be very relaxing and rewarding. If you can't release that last little bit of competitiveness or anal need to be "doing something" ( I guess that explains a few things for me, too) then try keeping count and keeping track of where you see them. The Bambis are out there, let them help you, too.

The 3-P's of real estate

In an earlier post - June 28th - I wrote about the 3-C's of real estate - Condition, Clutter and Cleanliness. those are all about the house itself. Now, let's discuss the 3 P's of real estate - Price, Patience and Perseverance - all of which are more about dealing with the market and two of which are really about the sellers attitudes (your attitudes). Certainly, all three within the control of the sellers.

In the current market price is the king, it beats everything else except the one thing that can't be changed anyway and which will forever remain the ace in the real estate deck - location. You used to hear location, location, location. Now you are just as likely to hear price, price, price. If the price isn't right, even a great location will not get the job done but itself. So, it is extremely important to get a good realtor and then heed his/her advice on price. Setting the price too high initially will stretch the process out and will require lots more of the other two "P's".

The second "P" in the 3-p'S is patience. Even if priced correctly, in this market it may be months before you sell. I am advising clients to expect 9 to 12 months, longer as the price point goes up. The amount of current inventory is at an all time high, so buyers are somewhat overwhelmed by their choices and many just put off making a choice, while trying to see them all. Our company supplies us with a marketing inventory report that looks at the inventory by price band and by township and/or City/Village locations; and, it also looks at what has sold over the last three months in each area, in those price bands. The report then has a calculated number that equates to the number of months it would take to sell off the current inventory in that area based on the rate at which homes have been selling in each price band. In many of the reported areas and price bands the numbers are above 24 months. In the Birmingham area, for instance, in the price band for houses above $600,000 the inventory is enough for 5 years of sales. To view a complete set of those reports go to my Web site - http://www.themilfordteam.com and chose Real Estate Statistics from the left hand menus. Look for the County Market Reports. Obviously patience is going to required in most cases in this market.

The final "P" in the 3-P's of real estate is perseverance. While you could sit back and be patient in a rather passive way, the ongoing work that it takes to keep your house on the market and ready to show requires active participation and, often. lots of perseverance. Keeping the house ready to show every time you leave it can get old fairly fast. Dealing with pets and/or kids on short notice, so that the agent who is sitting out in front of your house and calling in a showing request takes lots and lots of perseverance. Rushing around to get the house ready to show, only to find out later that the buyers wouldn't even come in because they didn't like the color of the brick, takes an enormous amount of perseverance. Yet, persevere you must (sounds like Yoda doesn't it?), in order to sell in this market. Some definitions of perseverance might be paraphrased thus - " the struggles required to overcome all obstacles and achieve a goal." The goal is fairly clear here - sell the house. The obstacles may seem to get bigger as time goes on and the struggles can leave you feeling fairly tired of the whole process, but persevere and reach your goal.

Looking for the rainbow

Sometimes it's hard in the midst of a storm to think about or look for the rainbow that you know will be there soon. But you know that there is a good chance that there will be a rainbow after the storm. We're in a real estate storm in Michigan right now, but the hint of the rainbow to come may already be there, at least I hope that's what I'm seeing.

Most of the news stories that you hear and see these days are all based upon trailing indicators - things that are caused by other things that took place some time ago. The tremendous rise in the number of foreclosures, for instance started at least six months ago, sometimes longer. It takes that long for the foreclosure process to play out in Michigan; so, the foreclosed homes entering the market now were in trouble back in the spring. It's just now that we're seeing them come onto the re-sale market at tremendously marked-down prices. So, they are hurting the regular sales some.

I've been looking for hints of the rainbow at the end of this storm and I think I've spotted a couple of leading indicators, or perhaps I just want to believe that I have. These are small things than may portend a better, more balanced market ahead. One is the number of fliers that are all of a sudden being taken at my homes. The increase isn't due to kids or neighbors in most cases, since I have some homes that are in fairly far out places. And the homes that have had increased flyer activity are in the $300-400 price range, which has been practically dead this year. I also have seen a slight uptick in showings lately; some of which I attribute to finally getting their prices right, but some again in that $300-400K band that has been quiet all summer.

The Web traffic on these homes has been fair consistent and may even be down a bit this last month, but perhaps that's because people are finally getting out from behind their computer screens and going to actually see the homes. I will admit that Open House traffic has been down for the last 2-3 months, but I attribute a lot of that to most people having better things to do on Sunday afternoons. We lost the tire kickers to Sunday picnics or other activities and a lot to vacations.

My wife jokes that she was always the Pollyanna in her family and perhaps some of that has rubbed off on me. I prefer to think that I have somehow discerned the coming rainbow amidst the current storm clouds. I'm certainly still cautioning sellers to hang on for the long run and be patient, but now at least we can discuss some indicators that are positive and together look for the rainbow after the current storm.

Learning from mistakes

"Failure should be a teacher, not an undertaker" (Denis Waitley). This little tidbit of wisdom came to me today from a blog that I get an email from every day - Jack's Winning Words. Jack is the retired pastor of my church - Jack Freed and his blog is
http://jackswinningwords.blogspot.com

You should bookmark that and go there daily for some good daily advice.

So, anyway, taking Pastor Freed's word to heart and applying them is essential in the real estate business. I used to get frustrated at how many little failures I'd encounter almost on a daily basis - things like not getting a listing or not getting a price reduction or not getting a bid accepted. Those things can mount up and start to depress you, unless you can find a way to look at all of them as learning experiences. Real estate sales is very much an OJT job. Everything that you really need to know you learn on the job.

The real estate course that you have to take to pass the test to get a license you quickly learn has almost no useful content, in terms of your day-to-day real estate job. Even the marketing courses that most companies have just provide a good framework for further OJT knowledge. I used to compare it to mine sweeping by stamping one foot out ahead of yourself. You'll know that you've hit a mine when you step on one and it blows up in your face. Likely, you'll learn from the experience and you won't step there again. It can be a painful process, but most companies (certainly ours does a good job of this) have mentoring programs and close management (broker) supervision of newer agents to try to guide them around the first few mines.

So, after a while, I stopped beating up on myself (after all there were already enough people standing in line to do that) and started trying to use every failure that I encountered as a learning experience. And I can report, without fear of contradiction, that in real estate sales provides lots of learning opportunities. I also learned that the worst thing you can do is not ask someone if you don't feel that you understand something or some nuance of the laws and and rules governing real estate sales. In real estate, as in most of life, there really aren't any dumb questions, just people too dumb to ask.

I still don't like failures and I doubt that I ever will; however, I'm a lot less hard on myself for not knowing the answer to every question or situation that comes up. There's always someone in our office who may have already stepped on that particular mine and who now knows the answer. Or, at least, I can go ask my manager without feeling that I'm somehow supposed to know everything already. In fact, I suspect that I'd be in more danger of really making a mistake if I thought I knew it all. So, bring on the failures. What doesn't kill me makes me stronger and I'll learn from every failure.

A bit of a rough landing

The power of positive thinking is a wonderful concept. I asked someone today how they respond to the oft-asked question, "How's the real estate market?" He replied that he usually says "Great, if you're priced right." Now, I try hard not to cross the line between being realistic and being pessimistic, but that's a little like asking someone who was on the Hindenburg, "How was the flight?" and having them respond, "Great, but the landing was a bit bumpy."

We are in the midst of a fairly major real estate correction - a polite term - not unlike the correction to the overheated stock market of the late 90's. I don't believe that we in Michigan had quite the investor frenzy that states like Florida and California and Colorado had, but we had our share of investors (house flippers) driving up the market and we certainly got used to double-digit home appreciation for a while in the late 90's and early 2000's. Many homeowners became convinced that that could continue refinancing every 2-3 years and taking more and more equity out of their homes each time. Of course the lenders were more than happy to encourage that behavior and they found lots of appraisers to go along with the charade. After the 9/11 terrorist incident, when the auto industry stumbled and things slowed down, all of a sudden people began to realize - "Gee, maybe I'm in a bit too far." But is was too late for many and the foreclosure rate that we see today is the result. It is a bit of a bumpy landing.

The amazing thing about the Hindenburg is that only 36 people of the 97 people on board died in that fiery crash. So, the optimistic view of that tragedy would be that "Hey, most people on board got out." Will most people in the current market make it out OK? Likely, they will. Many may be a bit disgruntled at what they ended up getting for their homes; but most, like the 61 people who made it off the Hindenburg, are in better shape to set an aggressive market price and jump than to stay on a burning ship (an overpriced house) and ride that puppy into the ground. We're in a bit of a bumpy landing right now, but we'll all make it. in aviation they say that any landing that you walk away from was a good landing. Maybe we need to take that viewpoint on this real estate market.

Staring at my green dot

Real estate sales can be a frustrating business, especially if you're like me and don't deal particularly well with rejection. Unfortunately, rejection is a big part of the landscape in the real estate scene. There are opportunities for rejection at every turn from the prospecting phase through listing or signing up buyers and certainly during the sales process itself.

It was because of the endless possibilities for rejection that a wise, older manager that I had at my first company tried to teach everyone who came into real estate to be able to just say "So What!" to every rejection. So, what! I'm still here; a FSBO slamming the door in my face (or the prospect hanging up on the phone) didn't kill me. So, what! That's not the last deal/listing/buyer in the world; there will be others. It was his way of coping with the daily rejections that come with the territory.

My new manager is more into the new age stuff - zen, yoga, the power of positive thinking and the like - so she had us all go through a yoga coping exercise recently, where we assumed a yoga position and stared intently at a small green dot on the wall. The idea is to focus on the dot and empty your mind of the things that are troubling you and causing stress, which could have to do with rejection or anything else in life.

Later I got this idea to combine the two, sort of a yoga meets the old guru approach and I came up with my own little "So What" green dot. It works for me. You can try my dot or create you own, but it is important if your in the real estate business to have some coping mechanism to deal with the pressures and/or rejections that come with the territory. Let me know what you use to cope with issues in your life.

Are we ignoring or just don't care anymore

At the risk of coming across as an old curmudgeon, I'm more and more annoyed by the lack of respect for posted signs that almost everyone has these days. I live on a corner that has a four way stop, with signs and a flashing red light above the intersection, and yet most people don't really stop (unless on rare occasion a Milford policeman happens to be visible - likely writing a ticket for running that stop). On that same corner is a grade school with signs that read "No skateboarding" which are posted just in front of one of Milford's favorite skateboarding areas on the school grounds. And, although there is no sign on the street, I'm relatively sure that skateboarding down the Summit Street hill is not legal, even if it is a favorite pass time for the older boarders.

One of these days a car running the stop will meet a skateboarder doing the hill run and then everyone will get all upset about "why something wasn't done" to enforce the laws and protect people. That's why we have things like warning labels on lawnmowers now, telling you not to put your hand under the mower while it is running - someone did something stupid sometime back and the lawmakers and enforcers reacted with an even more stupid way to deal with it.

Now, in the midst of the Milford Memories weekend there are many more examples of people either ignoring the no parking signs or the signs in merchants' lots that clearly state "No Milford Memories Parking". The smarter merchants have set up rope lines and are charging for parking, since people are likely to ignore the no parking signs anyway. Have we become so much a "me first" nation that ignoring signs that may have content that would inconvenience us has just become the norm? There are "no pets please" signs at all of the entrances to the Milford Memories street festival, yet people still ignore them and think it's cute to walk their dogs (some quite large and hard to control) through the crowds. It's times like that that one wishes the Miller Lite can from the TV commercials would come crashing down on those idiot's heads. All around them would likely applaud.

I've pretty much ruled out ignorance - the inability to be able to read the signs or to understand what a stop sign or a no parking sign actually means. So, that really only leaves personal defiance as the cause - "to heck with that, I'll do what I want." If that is the case, it is a sad commentary on the state of our society. Societies can only exist and thrive if they live by a commonly accepted set of rules (laws). There is a place for the occasional use of civil disobedience as a means of protest as we have all seen in civil rights and anti-war demonstrations. Even that can go to far, as have some of the anti-globalization and anti-abortion actions. There is, however, no place for every citizen to make individual, on-the-spot decisions about whether to stop or not, whether to park somewhere or not and whether to ignore other posted signs. Allowing that behavior is the first step on the slippery slope to anarchy.

So, what can we as individuals do? I for one tend to point out to drivers, if I see them running the stop, that they just ignored a stop sign. Their normal reaction is to get angry at me for pointing that out,rather than saying "Oh, sorry". If I see other illegal activities I will occasionally call the local police and let them know. I've been cursed out by too many 12-15 year old skateboarders to try to ask them to observe the sign and leave the area. The police are sometimes helpful, but most of the time they just write it up as another call from some old curmudgeon and go about doing whatever it is they do. The local Ordinance officers are pretty good about enforcing parking violations and will react to calls about other potential violations - dogs running free around the neighborhood happens a lot, too. I guess the best thing we as individuals can do is to try to observe the law ourselves and teach our children to do the same and hope that setting an example rubs off on a few others. Until then, we can all imagine the giant beer can crushing down on the offenders and then let it go. What are your thought on this issue?

Are we there yet? Are we there yet?

The title line above is often used in reference to kids on a car trip, but lately it could also apply to sellers who are looking for the bottom of the current slide of home values. We likely aren't there yet. Prices haven't bottomed out quite yet and may not for some time. There are a variety of reasons, but right now the biggest contributor seems to be the overhang of foreclosed houses that banks are starting to unload.

For a while the banks held on to the hope that they could get their money out of these properties. Now they just seem to want out, at whatever price they can get. So, many are dumping houses at 60-70 cents on the dollar, some even less. I've shown a number of foreclosed houses lately that are in fairly good condition, some even brand new, that are selling for $60-80-even 100,000 less than they were on the market for less than a year ago. I'll admit that a number of the foreclosures that I've shown also need about that much work or repairs to them, especially if they've set empty for a year or more. But a number really needed nothing more than a few light fixtures or some touch-up painting.

This avalanche of cheap, foreclosed houses is starting to discourage regular home sellers who don't have the ability to absorb a loss like the banks do. That is having an unintended side effect that may temporarily contribute to a correction in the market. Discouraged regular home sellers who don't have to sell are starting to take their homes back off the market, determined to wait out this mess. If enough sellers do that the current inventory glut will be relieved a little bit. It looks like the current round of ARM resets, where the cheap Adjustable Rate Mortgages of a few years back adjust upward, will go on for the rest of this year and into next. It's those adjustments that are driving many home owners over the brink and into foreclosure. Unless the banks and/or the government do something to provide some relief, we'll likely be feeling this foreclosure issue and its impact on the real estate market well into next year.

So, are we there yet? No. In fact it's hard to even see that we're half way there yet. But, if you have one of those ARM time bombs ticking away in a desk drawer somewhere in your house, get it out and do something about it before it goes off. try working with your lender first. But, if that doesn't work and you can see that you're going to need to get out from under your house, get with your Realtor and get started on a plan to sell the place before the foreclosure process starts.

A great time...a pain in the a..

This weekend is the Milford Memories Weekend, which is our "big event" of the year. Thousands of people come into Milford from all over the area to attend this arts and crafts show. It draws hundreds of vendors from all over the country who come to display their wares. It starts setting up on Thursday night and runs Friday through Sunday. It is a wonderful weekend for the Village, a great fund raiser for the Chamber of Commerce and a good time for everyone who attends. And, yes, it can be a royal pain in the behind, if you are a Milford local.

I only live three blocks from downtown - only two blocks from N. Milford Road. I'm on the "detour" route for all of the closures of Main St. in Milford - all of the parades, the festivals and, yes, Milford Memories. What that means is that for the next three days, I'll barely be able to get out of my own driveway. I;ll have people walking all over my lawn and I'll have beer crowd returning from the beer tent until all hours of the morning. From a locale's perspective events like this can be a real pain. But, we still love them. they help make Milford what it is - a real-life incarnation of Andy Griffith's Mayberry. I'll bet you can even find Aunt Bea down on Main St somewhere selling her famous apple pies and one of the church booths.

So, we "townies" or "Villagers" as we might be called will put up with the three days of traffic jams and noisy crowds and rowdy drunks all for the sake of a good time for the Village. We can do that because we get to think about the other 45 or so weekends a year ( we do have lots of parades) when it's just the sleepy little Milford that we all love so much. So, enjoy this weekend if you're planning to come over for Milford Memories. And if you'd like to see what it is that we love about the place, come back next weekend and give me a call - we'll stroll around the peaceful little Village that we locals love to call home. In the mean time, visit my www.MoveToMilford.com Web site and look at some of the virtual tours that are there.

Coping with “Paper Loses”

One of the interesting phenomena in the real estate market lately is the “paper loss” in equity for many home owners. I run into it all the time, especially with older home owners who’ve owned their homes for 20-30 years. Many of these people bought their homes in the 70’s and 80’s and have lived there ever since. Many bought nice 3-4 bedroom colonial homes in nice subs for $60-70K in those years, some for even less. For years they’ve been watching the assessed values go up, and most have realized appreciation that they believed now values their house at 200 or 300% of the original value. “Believed” is the operable word and it’s all about “paper values.”

I’ve been reporting for some time now that the only people who though that property values have continued to rise over the last few years are the assessors and the home owners. Township assessors have a vested interest in continuing to raise the value of the properties in their townships. After all, that’s how the township raises its money. And the Headlee amendment did allow for the assessed values to continue to rise 5% or the rate of inflation each year, so why not continue to do 5% each year, even if the real estate market wasn’t staying with the program.

In reality we haven’t had significant appreciation since the 9-11 terrorist incident and have had actual depreciation over the last two years. Don’t tell the assessors—they're still acting as if everything is appreciating 5% a year. But, home owners who now need to sell are discovering the truth. Their homes are worth far less than the assessor and they thought, sometimes 10-15% less. This disparity isn’t all the depreciation that has been in the news lately, although that is very real. Much of it is the paper losses that have mounted up as the homeowners and assessors got further an further out of line with the market. Since most homeowners didn’t do a yearly market analysis with a Realtor, most never realized what was happening. The few that may have done an appraisal to help with a refinancing or equity loan likely hit the appraisers in that happy mood before the Feds got on their cases about their optimistic appraisals (I’m giving them a break there). So appraisal numbers that are more than 3-4 months old are useless and most often way too high.

The truth is now coming home to roost for many of these homeowners, who are trying to cash out for retirement. They are now seeing that the values they thought was there is not as great as they thought or had been led to believe. They are taking “paper loses,” at least in their minds. For some this is very tough, because their homes were their retirement piggy banks. For the most this is just another disappointment in a landscape full of stock losses in the early 2000’s and the loss of company-paid benefits that most had counted on being there.

What everyone needs to come to grips with is that these are just paper losses. The house that cost $60-70,000 in 1978 is now worth only $260,000 and not the $300,000 that your thought it was worth. But, look at the good news—you bought something 30+ years ago and got lots and lots of use out of it and now its worth 370% more than you paid for it. Wow! What other physical asset do you have that you can say that about? Maybe if you bought just the right “muscle car” in that same era and kept it stored in pristine condition, it would now be worth more than your house. But, if you bought it and drove it for 30 years, what would it be worth today?

So, be happy. And if you resisted the temptations to take equity out along the way, you should be in great shape. Have you taken a loss? Only if you let yourself think that way. You made out pretty

Putting lipstcik on a pig

Some Realtors have become masters of the art of putting lipstick on a pig to dress it up - specifically putting great sounding write-ups in the MLS descriptions to try to attract buyers. I showed a "stunning bungalow" last week and the main thing stunning about this dumpster queen was the smell when one waked in. I've seldom seen real, honest descriptions used when the house is a bowser. One that I did see recently was for a lakefront cabin and the description stated "house likely a tear down, but great lakefront lot". that turned out to be a very accurate description of the place and both the customers and I appreciated the honesty. It's a disgusting waste of time to go to a listing and see that the "beautiful ranch waterfront" is actually a ramshackle mess on a pond, but that happens a lot.

Another favorite trick of the less scrupulous real estate agents is to list the Sq Ft of the finished basement as part of the overall Sq Ft for the house. In general, even if the basement is a walkout, the Sq Ft there should never be added in to the total Sq Ft of the house and is as close to truly deceptive advertising as on e can get. It's OK to list the Sq Ft of the finished part of the basement in the comments as additional living space. It's also OK to list all of the finished space on the lower level of a bi-level or raised ranch home, since that space is finished to the same level as the upper level and was designed to be part of the living space.

The brings up the subject of when a "finished basement" is really finished. One of my office acquaintances is also an appraiser and he tells me that from an appraiser's point of view, if the basement isn't finished using materials and techniques that are the same as the rest of the house, then it really isn't "finished". He said the dropped ceilings and painted concrete walls just don't cut it as far as being finished. I agree. You can't just throw down some carpet and put in a dropped ceiling and call the basement finished. That's just putting lipstick on the pig.

Creating our own monsters

Dr Frankenstein created a monster that he eventually couldn't control and perhaps we Realtors are doing the same with today's buyers. Buyers today are becoming more and more aggressive, often to the point of becoming ridiculous in their offers and much of it is our fault. Certainly buyers, like everyone else read all of the articles in the papers and see the stories on the news about how bad the market is in Michigan and how desperate some sellers are to get out from under their homes. then they see all of the foreclosures and that the banks are starting got dump some of those properties f0r extremely low prices, often just 30-40 cents on the dollar. So I guess it's hard to blame them for being aggressive. But it isn't that hard to point a big finger at the Realtors who are advising some of these buyers.

Realtors should feel some sense of obligation, whether they represent the buyers or the sellers, to create deals that make sense and that is not always happening. Now, I'm not saying that a buyer's agent shouldn't try to get the best deal for his/her client, far from it, that is their obligation. But when their own CMA evidence points to a 90 or 95% offer, they should have a little backbone with clients who want to offer 75-80%, just because of some article that they read in the paper. Deals need to be a win-win for both parties and that means that sellers (having already swallowed their pride of ownership and given up on what they thought the pace was worth) shouldn't have their noses shoved into a pile of dung offer, just to satisfy the whim of some speculative "buyer" who is just trying to steal a house. Somehow an "Offer Rejected" doesn't seem strong enough and perhaps there should be a "take your offer and shove it" reply form.

But, I guess there will always be sleazy buyers, out to take advantage of anyone that they can find and there will seemingly always be a ready supply of equally sleazy real estate agents and brokers, out to make their buck any way they can. Nature has a way of filling a void, even if it is occasionally with scum. So, if you're a seller, expect to run into a few of these low-life's. and, if your a buyer, try to hook up with an agent who will protect your interests; but, not one who will recommend that you low-ball every offer, just to see how desperate the sellers are right now. Remember in a win-win situation, you have still won!

Staring out into the audience

For any of you who have appeared on stage as I have, you know what's it's like to try to see the audience - you literally can't see anyone because of the stage lighting and the darkened house. That's why actors will ask for the house lights to be turned on, so they can see the audience.

In blogging, one is "on stage", in a manner of speaking, but there are no house lights. The only way that I can "see" who's out there is for you to post a comment. I've chosen to moderate any comments, which means that I have to see them first and then release them to be posted. There are obvious reasons for taking that precaution, but I encourage you to use the comment function to let me know that you're out there. If you don't want your comment posted just say so and I'll make sure it doesn't go up on the blog. Another way is to go to any of my Web sites - http://www.themilfordteam.com/ or http://www.mihomebuyer.com/ or http://www.movetomilford.com/ and send me an email (send it to the Webmaster, which is me on all three sites). I'd just appreciate knowing that you're out there. I've heard from several fellow Realtors in the area that read my blog and say that they enjoy it. It helps to keep the effort going to hear from you.

So, this would make two postings in a row that were more about me than about real estate in the Milford area if I don't put in something about real estate. So, let me just comment briefly on showing feedback. Sellers are always interested (sometimes desperate) to hear what people who came through their home thought. Unfortunately, not all agents are conscientious enough to provide feedback. In my company's case, we send out an email to the agent each time a showing is scheduled. You would think that would be enough, since it allows the agent to respond in their own time and without having to talk to the listing agent. But, No! Many agents these days just ignore those emails. In fact, they also ignore voice mails message after voicemail message asking for feedback. Only if you happen to catch them by having them answer their cell phone can you hope to get anything from these slackers, and then you can tell that they feel put out.

I have zero respect for these lazy louts. They know how important it is to be able to report something back to the home sellers. They just don't care. They don't care about the sellers. They don't care about their fellow agents. They don't care about anything but themselves and that makes them big time losers. Eventually that "don't care" attitude will permeate everything that they do and they will turn off buyers and well as sellers and their fellow agents. Their lame excuses about being too busy to get back to the listing agent don't hold any water in the current market. They are just lazy and inconsiderate. So there you have a real estate rant to go along with my earlier computer problems rant.

Wasting time because someone else updated

OK, I'll admit that this is a rant. But, after all if I can't rant here, where can I blow off steam? I've been wasting time on a couple of fronts yesterday and today just because someone, somewhere updated something and now what worked on my computer yesterday doesn't work today. What a waste of time.

Yesterday I struggled for hours because my FTP program stopped working. It has worked flawlessly for 4 years as a means to get files up to my Internet host. Yesterday it wouldn't work. And do you think that I could get any help from "Technical Support" at my hosting site - Lowesthosting.com? No! They just blamed it on me or something at my end. After several hours of back and forth with them and with them telling me all was well on their end, I tried a change on my end. Mind you this was something that had worked "as is" for 4 years. All of a sudden things worked again! And the clowns on the other end still wouldn't admit that they had anything to do with anything. This certainly appears to be a case where their end had gone for years not checking a particular parameter setting from my end and then (likely due to some version change or maintenance update at their end) they started checking this parameter and blocked things from my end. Stuff like that happens all the time. I just wish that everyone in the loop would take responsibility for actions that they take that result in unintended consequences. I've certainly fallen on my sword a number of times with tech support people when I've discovered that some problem that I was having was something that I had caused. I called it pilot error, which is the number one reason that planes fly into the ground or that computers crash. The techs at Lowesthosting just congratulated me for fixing the problem on my end. No admission that maybe something changed there and no concern (seemingly) that others may also be affected by whatever they did.

Today it was Microsoft's turn to give me fits (Not and unusual scenario for those who have owned a PC for any length of time). Both the Microsoft XP operating system and Internet Explorer occasionally update themselves and the results are often that things don't work afterwards. Today IE somehow decided that it no longer liked Javascript (not unusual given the history between Microsoft and SUN) and that it no longer wanted to accept cookies. It took a while to get that mess straightened out so that I could even sign on here today. But does Microsoft care. Not at all. After all, they would opine, if I weren't such a dumbie I'd have upgraded to Vista by now. Yeah, right! The way real estate is selling right now I'm lucky to even be on XP.

So, there. I feel much better. I'm still not happy about the wasted time, but getting that out, with raspberries to the offenders (at least as I believe them to be). I'll get back to more real estate-y things tomorrow.

What's the walkability score of your area?

I live in the Village of Milford in Michigan. The Village is only about 6,400 people in about 2,500 homes and probably covers not much more than a mile square. It has a well planned downtown area and development has been contained to two major roads - the Milford Road/GM Road corridor and the Commerce Rd corridor. One of the best features of Milford is that is a very walkable place to live. I've always known that and use it in all of my ads for Village homes that I sell. But, I wasn't sure how to compare it with other areas or how to measure just how walkable it was until today.

Based upon a story in one of the real estate news feeds that I get, I went to a site call http://www.walkscore.com/. I've already put links to it on all of my Web sites. This wonderful and free little site let's you put in your address or any address and then it returns a score of the "walkability" of that area. It uses Google Maps to find the things that you could walk to from the address that you gave it and then, using some highly complex algorithm it calculates the walkability score. Of course I used my Milford address first and got a score of 80 (out of the 100 possible top score). That's pretty good. I put in my old address over in Orchard Lake and got back a score of 11 - not good, which I knew already. Try it with your address to see what the walkability of your area is.

Walking is important for people of all ages, but as I get older it becomes more important for me, since it is one of the things left that I can still do. Of course I still play golf, but that is getting to more about the walking and less about the golf these days. Most people who come to Milford looking for a retirement place do so because they like the idea of being able to walk downtown. I must admit that I only live two blocks from downtown and yet I seldom walk there. I can, but I've chosen to limit my walking to trips out with the dog and maybe down to the drug store and back. My wife and I have walked downtown for dinner with friends a few times (they insisted). I've even walked to my doctors office, which is only three blocks away. Perhaps if I walked to more places in the Village I wouldn't have to walk to my doctor's office so often. I'll give that some thought! So, anyway, visit the walkscore site and let me know what you think of it. And if you're looking for a great place to live that is very walkable, give me a call and I'll find you a place in Milford.

Women are from Venus, men are from Mars

I was reminded again of that book title while we were on "tour" yesterday. We tour the newly listed homes after our sale meetings on Tuesday mornings. At the end of each visit, as we're driving to eh next house, we record our comments about the home we've just visited. That's where this phrase comes in. Our car yesterday happened to have two women agents and two men agents in it. The contrast between what we "see" in a home is interesting.

The women apparently have much better noses than the men, because they can detect when they walk in whether a pet has ever lived in the house. The men don't smell much unless the homeowner cooked breakfast with garlic that morning. It's really not that stark of a contrast, but the women do seem to be able to pick up on more subtle odors than the men.

When they leave the house, the men can tell you if the electrical panel was updated and how the mechanicals looked, but they can't remember the subtle touches in the kitchen or the color of certain rooms (unless it was ugly of course). The women can tell you which rooms had soiled or worn carpets, while the men may not even remember which rooms had carpeting, but can tell you the size and condition of the garage. Both might comment on the nice deck out back, with the men evaluating when it might need re-staining again. The men will notice granite tops on the counters but are as critical about the cabinets; whereas, the women will note the layout and everything good or bad about the kitchen.

Now I know that these are broad generalizations and not true of all women or men agents. We get trained over time to look for all of the things that might impact the marketability of the homes, but it is interesting how a set of people can walk through a home and "see" so different a picture. I guess that book title was right for Realtors too.