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Saturday, October 27, 2012

You haven't lived in MIlford until...

visted the Powerhouse.
The Pettibone Creek Powerhouse  is perhaps the only venue in the Village of Milford that’s harder to get to see than the Museum, so persistence isi n order. The museum is open two days a week for about 8 months of the year, but the Powerhouse is currently only open on special events and about 10-12 times total all year long. Hopefully that will change in the not too distant future and the Powerhouse will become more available for the citizens of the Village.

The Pettibone Creek Powerhouse is located in the north side of Central park, between the baseball field and the upper level parking lot. You can park in the upper lot and walk over or you can get to it off West Liberty St (which runs east and west off Cabinet St) and park in front of the building. That’s just about as close as you’ll get currently, since it is fenced off to prevent vandalism. It’s also fenced to prevent people from falling into the little waterfalls next to the Powerhouse, where the mill pond spills into a short creek run leading to the Huron River.

Henry Ford had the Powerhouse built in 1939 to provide electricity to the Ford Carburetor Plant in Milford. That plant was a part of his “Village Industries” initiative of that era. You can read more about the era and the Powerhouse itself at the Milford Historical Society Web site or at the site that the Friends of the Powerhouse have set up. The facility is known by several names. The Milford Historical Society uses the name Pettibone Creek Powerhouse  because the the water source for the generation of power is actually Lower Pettibone Lake to the north of the Village. A 48” diameter ½” thick pipe runs under the north side of Milford delivering water to the powerhouse. It does not take water from the mill pond right next to it.

When Henry Ford was building the various plants and infrastructure for them he often used a Detroit friend and architect Albert Kahn to design the buildings. The Pettibone Creek Powerhouse is an Albert Kahn design.  The Village of Milford had designated the building to be demolished when the Milford Historical Society stepped in and requested that they be allowed to save and restore it. A multi-year project, involving several grants and lots of local fund-raising resulted to the complete restoration of the exterior of the building and the cleanup of the interior. While the interior no longer has the turbines and control equipment that once generated power for the Ford plant, it is interesting to tour and you can still see the Lower Pettibone Lake water coursing thought the turbine housings.

Currently, a group has formed and preliminary work has been done to see if the Powerhouse can once again be made to generate power. Engineering feasibility studies have identified the types of new turbines that would be required, the flow rate and power generation rates that could be sustained and have explored the economics of the venture. It is estimated that the old Pettibone Creek Powerhouse, if refitted to generate power could generate enough power to supply the majority of the power required to operate Milford’s municipal water pumping, with the excess to be sold back into the power grid. It’s an exciting prospect that has a lot of local people pulling for it.

If you’d like to schedule a group through to see the Powerhouse or you’re interested in supporting the work to get the Powerhouse generating power again, contact Rich Harrison at 248-935-5556. If you’d like an idea about what you’ll see, there is a virtual tour at the Powerhouse Web site. Click here to view that tour.

Wednesday, October 24, 2012

When it is a valid short sale?

I own and operate a web site called MIShort which one can get to using .net or .com at the end. It is an informational site that explains the short sale process and hopefully answers a bunch of common questions. It has lots of links to very good articles on various topics, such as the impact on your credit of a short sale and comparisons of the consequences of a short sale vs. a foreclosure vs. a bankruptcy.  It also gives the reader a good idea of the timeline and processes that one must expect to go through in order to do a short sale.

One of the key ideas behind the short sale process is that of the “hardship” that the homeowner faces that has caused the need to sell. There are many valid reasons that will justify the lender granting the mortgage holder relief – a layoff, illness, divorce, and more. All of them somehow point back to a loss of income by one or both of the homeowners involved. I get those stories of life’s travails all the time. You can read a more complete list of justifiable reasons for a short sale at the web site. Something as common as a loss of overtime at work can become a hardship justification.

I also get a lot of calls from people who have already made other life decisions to move on, whether that was required or not, and who now just don’t want to continue paying for the mortgage on the old homestead that they’ve left. Some are retirees who’ve moved to their retirement home (usually in some warm clime) and just don’t want to keep paying for their old home. Some are people who’ve accepted new jobs somewhere else and moved, initially renting out the old home because they were underwater on it. Now they’ve tired of the whole absentee landlord routine and perhaps the monthly drain that the old home still has on their finances. They have very marginal cases (if any) for justifying a short sale. In many cases they have already been turned down for a short sale by their lenders.

In those cases, I have the would-be sellers talk to my short sale partners at Nationwide Loan Help. I don’t do the lender negotiation and legal side of the short sale, that’s what I use Nationwide for. They have a staff of negotiators and more importantly they have lawyers on staff. It’s my feeling (and the feeling of my company’s legal counsel) that short sale negotiations quite often cross into the territory of giving legal advice, which I am not qualified to render. It may well be that trying to negotiate a deed-in-lieu is the best path for some of those homeowners; or it may just be that they need to find a way to bring some money to closing. They really need to look at whether they are in a “I don’t want to” or “I can’t afford to” situation. We can explore the” I can’t afford to” cases for possible hardship justification. The “I don’t want to” situation just isn’t going to get any sympathy from the lender or from us.

So, before you call about a shot sale, go read the material at the MI Short Sales Web site and take a good honest look at your situation. If life has dealt you an unexpected blow that has really left you unable to continue to make your payments, give us a call. I can help you.  However, if you’ve made conscious decisions to move on and abandon your obligations, because it just isn’t convenient to keep paying anymore, I probably can’t help.  Call your attorney and your financial advisor and get ready for the credit impact of a foreclosure.

Monday, October 22, 2012

An amusing little Monday post

I think of lots of little things that I find amusing, but which wouldn’t, in and of themselves, justify a blog post. So, today I collected a bunch of them under the heading of a bit of this and that.

An Andy Rooney/George Carlin kind of morning…

Two people now passed that I enjoyed were Andy Rooney and George Carlin. Both had fun with words and our language. Andy used to go off on those “Did you ever notice…” riffs and George could make a single word the subject of 3-5 minutes of a comedy routine, although later in his career he seemed obsessed with just dirty words.

So, recently I was having sort of and Andy & George moment and I wondered how does one re-gruntle someone who has become disgruntled? I mean you can work with someone who has become disenchanted and perhaps re-enchant them, maybe on some enchanted evening; perhaps when you see a stranger; but what do you do with a disgruntled person to re-gruntle them?

And did you ever notice that you can help someone who is disorganized regain control and get some organization back in their lives; and often when someone becomes disoriented it just a matter of helping them stop and take a breath and think about where they are to help them reorient themselves. But, what of someone who becomes discombobulated? How does one go about re-combobulating that poor individual and how would one gauge when the combobulation process was done.

Of course one wouldn’t just replace someone who had been displaced, because the original person might then become misplaced; but we won’t go there.

“There is no Someday in the calendar.” (Ignacio)  from the blog Jack’s Winning Words.

Jack went on to write about not putting off your dreams until Someday. I’d probably add that although there’s no Someday on the calendar it does have tomorrows aplenty and we all have a tendency to put off until tomorrow what we should do today. Do you have dreams that you’d like to get to someday but keep putting off until tomorrow?

The AARP-a-rtia…

We have a tequila bar & grill in town – Tequilaritas – which has many different kinds of tequila on display and which features lots of special margarita drinks. I was there last week and got to thinking that, since I’m a senior they ought to have a margarita that is specially made for seniors. So I suggest the AARP-a-rita.

The receipe is as follows:

1 shot of tequila (take you pick of the huge selection)

1 shot of lime juice

3 shots of Ensure Clear

And  a dash of Metamucil (just to be sure)

Rim the glass with crushed Zantac

Down a couple of these and you’ll be happy, healthy and regular again, with no worries about heartburn later.

Finally, there’s been an ad running on TV lately for one of those testosterone replacement products for men, the kind where they ward women and especially women who may become pregnant not to touch the area where the product is applied, because it might cause unwanted hair to grow on the person doing the touching or cause other bad health problems. The ad ends with a slow pan from the waist up of the actress who is playing the wife of the man, who has applied the product; who is now shown in the background as the epitome of a viral male. I always think when I see that ad that it would be a hoot to see a bearded lady when the camera pans up. Well, oops!

Saturday, October 20, 2012

Don't turn your errors into mistakes...

“An error doesn’t become a mistake until you refuse to correct it.” - Orlando A. Battista 1917 -1995, Canadian-American Chemist and Author.

I saw that quote in a post on, one of the real estate sites that I frequent and have a blog on. I’d probably add that you first have to acknowledge the error, which all too many of us have problems doing in the first place. You can’t move on to the correcting (or not) stage unless you first come to grips that you have made an error. In fact, it’s probably the refusal to admit the error that really turns it into a mistake. The refusal to correct the error just compounds the mistake.

It is human nature to have some trouble admitting to an error. Sometimes that can be as simple (and as obvious) as going in the wrong direction when trying to get somewhere. Of course, if you’re a man, admitting that you are lost and stopping to ask for directions is very hard. Another obvious error is “finishing” the assembly of something only to find that you still have some parts left over. Oops!

Sometimes the error may be very difficult to recognize. That happens a lot when human feelings are involved. Maybe the error was just a remark dropped innocently into a conversation. Maybe that remark was meant as a joke but wasn’t politically correct. It’s easy to miss that slight pause in the conversation or the flush on someone’s face as they react to something that you just said, but many times you’ll sense it.

You may not understand why something you said caused the reaction from the listener. It’s not always easy to figure out in the midst of the conversation how to recover or to correct the error. You may have to ask someone else, later, in order to find out what it is that you might have said that offended or caused the person that you were speaking with to react. Many times you’ll find that you’ve inadvertently hit a nerve that is still raw from some traumatic event in that person’s life, like a death or divorce or perhaps there are family things that you’ve somehow been insensitive to, like a having an autistic or special needs child in the family.

The key is not to let that error become a mistake, by refusing to acknowledge it and not trying to correct it. It may be hard to go back to someone with whom you had a conversation and made some remark that you later found was probably offensive or insensitive from their perspective; but it is important to do so. Otherwise they will forever have this little flag that says “jerk” in the back of their minds that is raised whenever they see you. Don’t let your error turn into an uncorrected mistake. You’ll feel better and so will they.

Thursday, October 18, 2012

What don't you want?

“If you don’t get everything you want, think of the things that you don’t get that you don’t want.” (Oscar Wilde) - from the Jack’s Winning Words blog.

I’ll bet that most people reading this saying would immediately think of bad things that they don’t want, such and a disease or some disaster; yet there are many things in life that aren’t bad , but which are just things that we don’t want. At one time I thought that I wanted a motorcycle; but then I realized that I really don’t; it was just fun to think about for a while.

I suspect that most of us would immediately think of material things when reading a saying like the one above; although some with lingering illnesses might just wish for good health. Some might even have wished for world peace, but might have to be happy if we don’t get another war in some far-flung place.

The most common advice for what to do about not getting everything that you want is to be thankful for those things that you do have. You could also think about all of the things that you wanted and got that it turns out you don’t use or found that you really didn’t like. Our garages and basements are full of that kind of stuff. Wilde didn’t include need in his thought.

It’s relatively easy to just say “don’t waste time thinking about stuff that you can’t have”; but we all waste a little time doing that. Perhaps Oscar Wilde’s advice to spend time thinking instead about stuff that you don’t want anyway will work to distract us from dwelling on things that we don’t have. That we wanted.

And, if you just don’t get all of this, perhaps it’s because you just don’t want to.

Wednesday, October 17, 2012

Will you or won't decide

“The difference between perseverance and obstinacy is that one comes from a strong will and the other from a strong won’t.” – Henry Ward Beecher in the Monterey County California Herald.

Many times we tend to see ourselves as persevering in situations when in reality we are just being obstinate. I know that it was obstinacy rather than perseverance that kept me out of the foreclosed homes game. I was adamant (obstinate) about not getting dragged into some of the muck that was going on in the early days of the housing crisis.

By not being flexible and not allowing myself to find a way to work in a positive fashion with foreclosed homes, I missed that opportunity. Not all listing agents back then were sleazy, just enough that it made me cringe to think of joining their ranks. A few good agents held their noses and jumped in and eventually made the whole process better by bringing better practices to the process. Good for them.

I initially shied away from the short sale market, too; initially not willing (obstinate) to put up with the long delays and need to spend so much time in the frustrating process of negotiating with bank clerks who didn’t seem to care about anything. Fortunately I found a good short sale partner to handle the stuff that I really still don’t like and allow me to do the real estate parts and the interface with the sellers, which I enjoy.

In this area the opportunity to persevere, if you’re a Realtor, has been all too real. Many would-be Realtors got in and got out shortly thereafter, when they found that there were no quick and easy rewards to be had in real estate. Many had been laid off of other jobs and saw real estate as a potential new career with very low entry requirements. Many real estate companies with business models that depend upon agent fees and churn were offering encouragement to those people.

Let’s face it anyone with a couple of hundred bucks and a week’s worth of time can go through the licensing course and probably pass the test to get a real estate salesman’s license. What they didn’t understand is the time and perseverance that it takes to actually start making money as a Realtor. Many left after a few months, having spent hundreds on all of the start-up costs required to get into real estate. Many were not told about all of those costs on the front-end.

Those who remain in the business, as the current recession winds down, have had to demonstrate both perseverance and creativity. They have also had to deal with a great amount of obstinacy on the part of would-be sellers. The belief that waiting another month or two will somehow result in all of the lost value magically returning has been a very stubborn belief to overcome for many.

From time to time, I suppose it’s advisable to try to take as honest a look at your life as is possible (and maybe get a second opinion) and evaluate which of the things that you believe you’re being persistent about might just be cases of being obstinate. Ask yourself is if these are things about which you have a strong will to accomplish or a case where you just refusal to admit that your goal was wrong in the first place. Sometimes it’s better to let go and move on than to persevere towards the wrong goal. Let a strong will rule your life, not a strong won’t.

Monday, October 15, 2012

Where will you end up at the end of the day?

“The first step towards getting somewhere is to decide that you are not going to stay where you are.” (J.P.Morgan) - from the Jack’s Winning Words blog. Jack went on to say - I’ve read that we have 35 chances each day to change the direction of our life—not just one fork in the road, but 35. The same article said that intuition, hunches and gut-feelings should not be dismissed. They are the brain’s way of taking shortcuts. A significant decision probably put you where you are today.

Many people (and I fall into that category all too often) wake up in the morning without a plan and without having made the decision that they aren’t going to stay where they are in their careers or in life. The strategy of people like that is usually to wait and react to whatever happens during the day; in other words to wait for opportunities to come to them. It’s funny how often at the end of those days they are lamenting how nothing happened or about how little they feel they got done. Well, duh! You have to start the morning unhappy with where you are in order to end up the day somewhere else.

Now, I suppose that you could spent the day moping about where you are in life or your career; but you’d probably end up in the same place at the end of the day. Once you’ve decided that you’re not going to stay where you are another key is to start taking action to get somewhere else. Too many of us would spend a good part of that day trying to put together a complete plan of action. We’d convince ourselves that sitting there planning and maybe writing out an extensive roadmap for change is actually accomplishing something. In many cases detailed planning is just a very insidious way that we use to avoid taking the first steps towards a different place.

Like that TV health ad says a body at rest tends to stay at rest and a body in motion tends to stay in motion. Get up, get out and get going! Even if you’ve ended up going in the wrong direction for a short while, at least you’re not where you were and you’re moving somewhere. I’ve found that to be particularly true when cold calling for fund raising. It is very hard to overcome the inertia (you can read that as fear, too) that our brain builds up about cold calling; however, after that first call (successful or not) I’m pumped and ready for the next call – I’ve become a body in motion.

So, decide this morning that you’re not going to end the day in the same place in your life and your career and get moving!

Sunday, October 14, 2012

Dan Elsea's take on the real estate market...

Dan Elsea is President of Realty Operations for Real Estate One and a member of the founding (and still owners) Elsea family. He and his brother Stu basically run the company these days. Dan comments on the state of the market each month is a missive to agents who make up the Real Estate One team. Below are his most recent comments onthe current state of the real estate market in Michigan.

The best way to describe the current market seems to be "just enough". Both the economy and market values are rising just enough to bring just enough sellers into the market to satisfy just enough of the buyer demand to keep the market moving and prices rising.

There is a significant shortage of available homes for sale. We are at a low point for listing inventories as we come off a high point for sales, creating a depleted inventory going into the fall and winter. This is good news for Sellers with upward pricing pressure through the winter months (which is a rarity). For many Sellers, the spread between what is owed and current values is still wider than they would like. This means there is a chance the sales rate could slow through the winter simply because there are not enough homes to sell. We could see a strange phenomenon of the sales rate falling (compared to last winter, but still a good pace) while prices rise.

As the market recovers, it is interesting to note that most of the issues holding back a real explosion in real estate have been artificially created, as are many of the key factors fueling the recovery.

On the stimulus side:

  • The Federal Reserve buying Bonds (Quantitative easing) helps keep mortgage rates at record lows
  • Government entities, Fannie Mae, Freddie Mac and Gennie Mae (FHA) are the funding source for nearly 90% of all mortgages
  • Government refinance and short sale programs are helping reduce the foreclosure overhang

On the holding back demand side:

  • The concern over the potential lender restrictions under the Dodd-Frank act has banks holding back on lending
  • Government law suits against banks to buy back old loans have caused many to stop mortgage lending all together, restricting available credit
  • Uncertainty about what will be the underwriting standards imposed on lenders going forward causes lenders to be more cautious
  • Congressional inaction on extending the Rural Lending programs have reduced access to credit for many rural markets

Combined, they seem to cancel each other out, allowing for a steady real estate recovery. Both Presidential candidates are unclear as to how they will address any of these artificial issues, so we will have to wait until next year to get a clear direction. In the mean time, Buyers keep pushing to buy and Sellers are gaining more confidence, regardless of which way the political winds blow.

I've certainly seen the slowdown locally, with an inventory that is so low that we can't find houses for would-be buyers. There are just too many people who are still underwater on their mortgages. One thing that I thnk needs to happen is for those people who are holding back because of imagined rather then real loss of value to get on with life. Many people, most in my own age group, are sitting there with homes that they own free and clear, yet they can't seem to let go of the value that they thought was there at the peak of the market. Those are imagined losses, not real losses. They exist only on paper and in the imagination of the owners.
This is one instance in which a saying that I really don't like applies - it is what it is - so get on with life. If you are sitting on a home that you'd rather sell and that you own, because you are waiting for the "value" to return to 2005-6 levels, you could be in for a long wait - one that you might not get to the end of in time to enjoy the retired life that you've waited so long to enjoy. The market is begging for houses right now. You'll get top dollar at the current market value and get it quicker than if you wait. So call me and let's see what your home is worth in today's market. The market analysis is free and it might allow you to see how you can get on with life by selling your home now.

Saturday, October 13, 2012

Where do you draw your line?

Scofflaws and Crooks…

Webster’s dictionary defines these two terms thusly –

noun: A person who flouts the law, esp. by failing to comply with a law that is difficult to enforce effectively.

noun : a person who engages in fraudulent or criminal practices

As a society we seem to almost be at comfort with scofflaws; while, of course, we dislike crooks. In either case we have people who are breaking the law; it’s just that scofflaws are probably breaking laws that we all break at times. Many of the infractions that scofflaws commit have to do with traffic laws – stop signs that seem just to be there to slow us down and annoy us, so let’s roll through without stopping, or those really annoying no turns on red signs (and laws) when there is no cross-traffic in sight. Those are laws that it is hard for local police to enforce; but, where do you draw the line and where does being a scofflaw cross over into being a crook?

If you think about it the word scofflaw really defines the person well – someone who scoffs at the law; someone who believes themselves to be above the law. One could argue that the ex-mayor of Detroit started as a scofflaw. It certainly appears from the various trials and testimony involved that he came to think of himself as above the law. It’s interesting how many people who achieve positions of power and authority allow that to happen in their lives.

There is another trait that seems to go hand-in-hand with scofflaw behavior – the loss of a moral compass (loss of character, if you will). Any reading about the events and people involved in things like the Enron meltdown or the recent real estate robo-signing scandal brings the term scofflaw (at a minimum) to mind; if not a complete breakdown of any morals that may have been involved and eventually criminal behavior as the subsequent trials proved.

I’ve written many times about the fact that I live on a corner that has four-way stop signs and a flashing red light above the intersection. Most people at least slow down quite a bit there and many even stop (but may do not, especially in the morning when kids are being dropped off at the Middle School). The next corner west of mine has four-way stop signs and no flashing light above and at least 2-3 times a week I witness people not even slowing down there. I suppose those are really scofflaws, they’re idiots; but that’s a theme for another post.

The point is that if you choose to roll through that corner or make the turn anyway at the light that has the sign stating “no turns on red”, what’s next for you? How do you stop yourself on the slippery slope leading towards crook (or do you)? Do you at least feel bad about it afterwards? That would be a start to getting your moral compass back to the forefront. Being a scofflaw is a bad thing, but the worst part is probably the damage it does to your character, whether you can see it or not. You are not just scoffing at the laws, but also thumbing your nose at all of the people who do comply with the laws that, after all, were put on the books by the representatives of the people. Shame on you!

Friday, October 12, 2012

“You may delay, but time will not.” (Ben Franklin) from the Jack’s Winning Words blog.

Procrastination is an all too common human tendency. The ability to convince ourselves that we’ll get to something later is way too easy and all too convenient. Unfortunately, so is the resulting cases of “coulda, woulda, shouldas” that tend to follow. You coulda taken the time to call that expired listing and you woulda gone and knocked on the door of that FSBO, ‘cause you know that you shoulda been doing more prospecting all along.

Procrastination is one of the biggest issues that I have to face every day. It is just so easy to convince myself that sitting here writing a blog post is a better use f my time than prospecting – or at least it feels better. And at the end of each day, there are things that I can look back and say to myself,” I shoulda gotten to that, maybe tomorrow.”  I’m gonna work on that tomorrow.

Some of the biggest regrets that many people have revolve around things they put off doing – visiting that sick relative or friend before they passed away or perhaps not taking some action to stop or prevent some neglect or abuse before it was too late. Many people look back over their lives and feel regret for not having been more generous or more involved with charitable works. Some feel remorse for relationships gone bad that might have been saved by timely action. Because of a fifty year celebration that I missed, I recently learned how many of my old classmates from high school are already gone and regretted not having made the effort to stay in touch somehow.

Time marches on with our without us in tow. Things don’t stop happening just because you hesitate or delay; they just happen without you. Potential clients will buy goods or services from someone else, whether you call on them or not. Not calling just assures you another coulda, woulda, shoulda moment. So don’t delay. Make the calls today and you’ll always have plenty of things to do tomorrow. And in your personal life, don’t wait to call that old friend or relative until you get word that it’s too late. You can’t really talk to a memory – call today.

Thursday, October 11, 2012

Running after isn't always best...

“If you want to catch something, running after it isn’t always the best way.”  (Lois McMaster Bujold) – from the blog Jack's Winning Words. In his blog post Jack went on to say  -   I remember reading about a cat named, Happy.  He would never come when called.  Then, when least expected, he would suddenly be your lap.  It’s often that way with happiness.  It’s elusive…and, then, suddenly, it’s in your lap.  Haven’t you found that some of the best things in your life have come unexpectedly?    ;-)  Jack

This is one of those sayings that probably evoke a lot of. “Yes, but” replies. Almost all of the management books and self-help books would likely have advice more along the lines of how to better prepare for the chase and how to best pursue what you want. I think what the author of the saying was going after is that sometimes you have to let what you’re trying to catch come to you. That’s how many of us get our clients – they come to us for various reasons. We’d like to assume that it’s because of something we did to promote ourselves and our services, but sometimes it’s for completely off-the-wall reasons.

The saying doesn’t say that running after something you’re trying to catch is always bad, just that it might not be the best way. I could probably sit here all day waiting for a FSBO or expired listing to crawl into my lap, but it ain’t gonna happen. Those are cases where running after what you’re trying to catch is almost required. It’s true that the “running after” part can just be effective advertising, but that too is a part of the chase.

I do a reasonable amount of what I would have to classify as “passive advertising” – running an informational web site on short sales, for instance, and running another web site that is focused upon local community events.  Those forms of advertising allow people to discover me and my services without being pushy about them (not running after them). Even blogging can be a good passive way to advertise your expertise, with some bloggers even pushing beyond passive using a more provocative approach. I also post to three blogs; two of them overtly focused upon my real estate business. I combine those passive efforts with the more pro-active techniques of advertising – mailings, newsletters, email campaigns, etc. You really need some of both, because some clients need more encouragement than others to take action.

People who fish and hunt know that you don’t go out and drop a line in the water or climb up into your blind and immediately catch a fish or see a deer. It takes patience and perseverance to fish or hunt. The same traits are required for the real estate business. So,  I’ll keep at it; even if I’m not running after clients. When you least expect it, someone will turn up in my lap wanting to sell their house – maybe you.

Wednesday, October 10, 2012

Go simple and go small...

How small of a space could your family live in? That question was sort of asked and certainly answered in a recent web site article at HouseLogic .com about a family that built and is living in a 320 Sq Ft home in Virginia.

Now this is no one man-one women “family”; this is a family of four with a 90 lb dog all sharing 320 Sq Ft of living space – About the size of a modern master bedroom. The 8 foot by 21 foot home has a loft for sleeping, but everything else is in the 8 by 21 main floor. There is a nice outdoor patio area that they make extensive use of during the warmer months that helps a bit. The whole thing is heated by a 60” electric baseboard heater in the winter.

OK, so maybe this is an extreme example of downsizing; however, it does demonstrate that we can probably all simplify and downsize a bit. The couple that lives in this house with their children lost everything in the recession in Florida, so they were beyond just motivated to downsize. They made up their minds that they were not going to get into another deep debt situation on a home. The husband also had a reasonable set of building skills, so he did most of the work. They made extensive use of Craigslist to get cheap building materials.

Go read the story to see what they live in. It’s sort of like living in a camper trailer all the time. The family in the story already has plans to expand their lifestyle a bit by building a second tiny home of 16 X 24 foot, with a stand-up loft space (their current loft has only 3 foot of headroom).

So what’s the point of any of this for the rest of us? I think if you read the story and think about it you may start to think about all of the room and how much “stuff” that you have crammed into that space and how much you really need. Many of us probably live in much bigger spaces than we really need and all of us have more stuff than we know what to do with. I know that I do.

I’ve met people in my real estate business who’ve made the conscientious decision to simplify their lives, which included dramatically restricting their possessions. These are not people who are attempting to live in 320 Sq. Ft. tiny homes, but they are folks who don’t buy more space that they really need and who are also very deliberate and careful about what “stuff” they have. Not surprisingly they are also people who are in great financial shape. They do not have huge mortgages or maxed out credit cards; in fact, some have no credit cards at all and live on a cash basis.

People who live simple lives do not live the lives of hermits; in fact the ones that I know are very active and engaged in activities like kayaking, hiking and other outdoor activities. What they don’t have are closets full of clothes that they don’t actually wear or basements and garages full of other stuff that they don’t use. They have simplifies their lives.

Lots of retirees end up having to simplify when they finally decide to give up their McMansion and move to a condo.  Nothing forces simplification like giving up a few thousand Sq. Ft. of space. Those moves make for great garage sales. I would say that we all should probably hold a garage sale every 2-3 years and sell off anything that we haven’t used during the last year – that would make our lives simpler right away. You’d be amazed how much of your stuff falls into the garage sale category, if you do that. Once your excess stuff is gone I suspect you’ll be surprised that you don’t really miss any of it.

So I guess the moral of this post is that you can simplify your life and go small without having to live in a tiny house. Of course, if you do a good job of simplifying and getting rid of stuff you might be tempted to downsize from whatever size home you’re in now. I don’t have any 320 Sq. Ft. homes that I could show you right now, but there are some nice condos around 1,200 Sq. Ft. that might fit.

Tuesday, October 9, 2012

What to do about underwater homes...

One of the key issues in real estate locally is the current shortage of homes on the market. There are several factors involved in that problem, not the least of which is FUD – Fear Uncertainty and Doubt – about the economy and the future. Another big factor is that so many homes are underwater; but how many? That depends upon where you live, but Zillow has an interesting interactive map that you can access to see what their data says about your area (at least to the county level).

According to the Zillow data 42% of homes in Oakland County are worth less than the homeowners current owe on their mortgages – they are underwater. Macomb County is worse at 50% but Livingston County fares better at only 39%. All three Counties are in  a dubious group called the highest 20% in the country of underwater homes, with Oakland County in the highest 10% and Macomb in the highest 5% (along with Detroit, I might add). To see all of the data and other counties in the area, visit the Zillow map.

Since this issue alone has stalled out a significant portion of the local real estate market, the question of what to do about it has been uppermost on many minds for a while. At least one company in California has figured out one way to resolve the issue while making money doing so. Mortgage Resolution Partners (MRP) is a company founded in California, but now operating in several of the hardest hit areas of the country.

What MRP does is to work with local government entities to establish a program that it calls C.A.R.E.S. -  Community Action to Restore Equity and Stability. (You always have to have a catchy acronym for these programs – ed.) The program is based upon the simple principal in law that allows governmental bodies to exercise the right of eminent domain over properties (and apparently mortgages) in the community, for the overall good of the community. MRP makes money by charging a flat fee to facilitate the transaction. I’m sure that the “no government is good government” foes of this process are having apoplectic fits about this whole thing. You can read more about MRP and the program from an article at the RealtyTimes web site by clicking here. There is a link to the MRP web site there too.

Basically what this program is designed to do in California and elsewhere is to encourage local governments to declare that underwater mortgages are harmful to the community and thus need to be taken through eminent domain and the homeowner be allowed to refinance at the current value. The justification used is that many underwater properties will eventually fall into foreclosure and the high potential for further deterioration of the property and the neighborhood values will hurt the whole community.

The process works by the governmental body taking the mortgage under eminent domain and paying the mortgage holder the current market value of the property (a requirement under eminent domain) and then helping the homeowner regain ownership by remortgaging at the current value and at current mortgage rates. The primary target for this process has so far been homes for which the mortgage is held by private investors or investment pools and not the mortgages held by banks or entities like Fannie Mae or Freddie Mac. Those mortgage holders, the program organizers say, have the power to reduce the principal on the mortgage that they hold, if they choose to do so.

The need to find a way to reduce the huge overhang of principal that was lost in the current recession has been sitting there like the proverbial elephant in the room since day one, with no viable alternative programs suggested by the lender, so far. It was almost always going to have to come down to some mandate of some sort to get the lenders to do something. It is worthy of note that the California Association of Realtors is backing legislation to ban this practice (read about that here). C.A.R. says its worries are based upon concerns about misuse of government powers and the potential for wholesale devaluation of neighborhoods. C.A.R. sees no reason to seize what are basically performing loans, just because the property is underwater.

So, is this the answer to the biggest issue that we face? Perhaps, perhaps not. One always has to be leery about any program that involves government trying to save us from ourselves; however, the lenders have certainly shown no empathy for the mess that they got us into with their lax and even aggressive lending practices, nor any real creativity in helping people get out from under the questionable loans that they made during the real estate bubble run-up.

It would likely help everyone if the lenders would just allow underwater homeowners to refinance at the current low mortgage rates, even if they had to refinance an amount that no longer reflects the current value of the home. That might have been possible until the advent of the securitization of mortgages into vast pools that are no longer owned or controlled by the lenders themselves. Now it’s the bondholders that would have to eat the reduced return on those mortgages. No easy sale; but, perhaps there is enough self-interest at stake there for consideration.

My suspicion is that all of these so-called “private investors” are waiting for some sort of federal bailout on the losses that they need to take. The Fed is already taking some action on the loans held by the quasi-governmental entities, but is unlikely to extend those programs to the private sector. What are your ideas for a solution to this mess?

Monday, October 8, 2012

If you gotta lose...

“You gotta lose ‘em some of the time. When you do, lose ‘em right.” (Casey Stengel) from Jack’s Winning Words.

Casey was talking about baseball games of course; however, his words ring true in business, too. We don’t always win, whether it’s a multiple-bid situation or competition for a listing. Don’t you just hate it when you hear someone whining or bad-mouthing over a lost sale or listing? Stuff happens and it does no good to try to bad-mouth the competition or whine that you got cheated out of a sale. Rather that you should use the incident to try to learn what you could do differently or better the next time.

The ability to look back over a losing situation and see what you did and didn’t do that might have affected the outcome is not necessarily an easy skill to develop. Human nature licks in right after a loss and the tendency to find someone or something else to blame is a strong human protection reflex (at least it protects the human ego, which often refused to believe that you could have done anything wrong yourself).

Eventually logic kicks in, along the realization that if you didn’t do anything wrong and yet you lost, there must be something else you could have done (or done better) to win. One very consistent characteristic that you’ll often hear about winners in sports (no matter what sport) is that they are “students of the game.” Sports greats like Michael Jordan and Tiger Woods have often been called students of the game. They study the history of the game and learn what things impact success or failure. Quite often athletes like that go on to become coaches in their sports.

In business (including real estate) there are lots of books and courses available to help students of the game better understand every aspect. Even people who are naturally outgoing and friendly need to understand the nuances of the business game that they are in; otherwise they just become that great fellow that everyone loves, but who never seems to succeed.

So, listen to Casey’s advice and when you lose one, lose it right – learn from it. Discuss it with someone; preferably someone who can help coach you through the process of learning from it and making changes in your approach the next time. If you are just starting out, seek out a mentor in your office – someone who will work with you to learn the ropes and develop your skill at learning from mistakes or losses.  It does no good to beat yourself up over loses. Turn them around into teaching moments and benefit from them.

Thursday, October 4, 2012

When is your credit score not THE credit score?

Everyone has credits scores – multiples of them because there are multiple different credit rating companies, each with their own credit scoring approach. Now a report from the Consumer Financial Protection Bureau (CFPB) states that consumers may also have different credit scores from the same rater, depending upon who pays for the report. A story on the RealtyTimes Web site reports on a recent study done by the CFPB.

 Lots of people use credit scores for a great variety of reasons, obviously usually having to do with extending credit; however, in real estate they are also used as a part of the vetting process for would-be renters. Usually I advise people looking ot lease to go to one of the free credit report sites and pull their free credit report. Those reports don’t usually include a credit score, which the sites charge extra for; however, they do provide documentation of the current state of the credit of the would-be renter. Most landlords will accept just the report and not demand a credit score.

It is a bit disturbing to read that a potential creditor might get a different credit score if he/she pays for it than you would get if you paid for it yourself. The CFPB report puts the chances of that at up to 19 to 24% of the time. So, almost a quarter of the time a creditor might see you in a different risk category that you saw yourself in when you pulled the report – usually towards the low side, by the way. That’s disturbing. You may still get rejected for credit and not even know why.

So, what is a good credit score? I guess that depends a little on who is asking and what criteria they are using. At the site a poor credit score is shown as between 340 – 619, a fair credit score is between 620 – 659, a good score in the range of 660- 749 and an excellent credit score between 750 – 840.   


Here’s another credit score range from

    Between 700 & 850 = Very good or excellent credit score

    Between 680 & 699 = Good credit score  The Average American Credit Score = 682       

    Between 620 & 679 = Average or OK score.

    Between 580 & 619 = Low credit score

    Between 500 & 579 = Poor credit score

    Between 300 & 499 = Bad credit score

I think it’s valuable to see that the U.S. Credit Score Average is 682. So, if you are above that you should be in good shape. Below it, watch out!  What credit score do you need to buy a house? Most lenders want to see a 620 credit score or better for an FHA, VA or USDA loan. For a “conventional loan”, not backed by one of the government bodies, at least a 650 score is what the lenders want to see.

The advice for consumers that came with this article was fairly consistent with past advice – consumers should check their credit reports at least once a year and should aggressively work to clear up any mistakes or old issues that have lingered on the report after the issues were cleared up.  It is probably worth the $10-15 once a year to pay to see what the company is reporting as your credit score, even if it might be a little off compared to what they would report to a potential creditor.

Wednesday, October 3, 2012

Local Business Referrals...why should you care?

I have a section on my Move to Milford web site that is dedicated to giving referrals to local businesses. Why should you care?

Well, lots of people who might be moving into the area (hence the name) might not know who to call for a plumbing problem or what is a good bank or credit union or where to go to get their hair done. Let’s face it, when you move to a new area you don’t know anybody or anything about the area. It’s like starting over again. Maybe you’ll have a helpful and friendly neighbor to advise you on a few things; but, for the most part you’re on your own.

I’d like to think that my Move To Milford web site can provide you with some help. I don’t have recommendations for everything that you might need. But I do have quite a few categories to look at and the locals who are highlighted there are people that I either use myself or would use if I needed their services.

These are all businessmen and women that I have met through the Chamber of Commerce, either the Huron Valley Chamber or the Lakes Area Chamber;  which is one thing in their favor already. They are people with good reputations and with lots of satisfied local customers. I don’t keep businesses on that list if I’ve been unhappy or I hear of unresolved issues with unhappy clients.

So go to and click on the Local Business Referrals button at the top (it’s the Recommended local businesses choice on the index page, if you’re on the mobile version of the site) and choose from the various categories of businesses that are there. You’ll generally find 1-2 recommended business in each category, some times more.

If you don’t find what you need, send me an email from the site – Go to the About Me Page and send me an email from there. I’ll see if there’s someone that I can recommend locally for that need.

Monday, October 1, 2012

With 2012 now ¾ over it’s time to see how we’re doing so far in terms of the housing market locally. The stats for September and the year-to-date are now posted for September on my Move To Milford Web site.

I wouldn’t call the stats bad, but there are things to be disappointed about – mainly the slowing pace of sales and average sales values that have started to decline again. We are also literally running out of houses to sell. Many people who would like to sell and move on can’t, because they are underwater on their mortgages and many people who would like to move up are still scared by the current economy.

Here’s the chart from Altos Research showing the Milford Market’s average home values and inventory levels. This chart was as of October 1.

You can clearly see the nice run-up that we had this summer in average home prices. You can also see that when the inventory level didn’t follow prices up, we stalled out and the market turned down again.

Almost the same thing has happened in the Commerce market, althought the Commerce market peaked a bit later than the Milford market. Distressed sales in the Commerce market have stayed above 40% for much of the year, while Milford and some other markets dipped down below 20% –

The Highland market followed a different path, with inventory initially trailing and then overtaking the sales average but both eventually declining dramatically. Highland sort of peaked out early, back in June; while both Milford and Commerce continued strong into August.

Finally there’s the White Lake market, which trailed all of the other markets but which is still on a roll. You can see the beginning of the same pattern with that market thought, since inventory remains stubbornly down.

I’ll do some further analysis of the data that I’m collecting and report more on any other trends that are apparent. In the meantime to see all of the sales data for the year go to

One interesting stat that I watch quite closely is the average sale price cost per square foot. In the depths of the recession almost all of the local markets had fallen well below $100/Sq Ft, some as low as the mid $70’s/Sq Ft. That was mostly driven by low foreclosure prices, but it impacted all prices. Now several of the markets that I track are back above $100/Sq Ft. with Milford leading the way with an average of $103/Sq Ft and a Median of $111/Sq Ft  in September. Good homes in excellent condition in Milford can now command prices in the $110 –  $115/Sq Ft range.

There has also been a dramatic increase in New Build sales as builders have jumped back into the market to fill the void left by owners who can’t, or are reluctant to, sell right now. It’s a good time to be a builder, if you can put a product on the market in the $200 - $300K price range – the sweet spot in our local market.