New feature - follow by email

I've received many requests for an easy way to follow this blog, so I added a "Follow by Email" gadget at the top of the blog. As I understand it, once you click on that you'll be asked for an email address and you should start receiving emails whenever I post a new blog entry. I hope this helps those who want to follow along my life's journey in real estate (and other things in my life).

Now, I'll have to come up with some more intersting topics to write about. Today I also received notice of a new Blog by the Capital Title folks which I've signed up for at -  http://www.titleexperts.blogspot.com/

This should be a good source of information about real estate title issues and the changing face of real estate from that perspective.

By the way, I'll be posting the sales statistics for October for the 9 township markets that I track on my MoveToMilford Web site tomorrow. I actual already have it updated through Sunday, but with today being the last day of the month, I expect that there will be a flurry of closing activity today, which I'll add in tomorrow.

Here's a little bit that I wrote for my paper-based newsletter -

We appear to be experiencing what someone has dubbed to be a “Catfish Recovery” in the local housing market. We are bouncing along the bottom—up one week and down the next—however the general trend is in the upward direction.

A recent market study of the Village of Milford market for starter homes, done by local appraiser Glen Betts of 1st In Michigan Real Estate Appraisal Services—http://www.1stinmichigan.com/ looked at the sales data for starter homes in the Village over the last five years. What Glen’s research showed is a market that has had almost monthly ups and downs, but which has been on an upward trajectory since January of 2009.

You may recall that January of 2009 is the month that the First Time Buyer Tax Credit expired. It is also the month in which the bottom dropped out of the market for the last time in this recession. It was the low point, at least for the Village of Milford starter home market. Since that time the market has bumped up and down but always following a fairly traditional overall appreciation curve.

Thanks to Glen for his research on this and his study report. You can see his study at my http://www.movetomilford.com/ web site, under the Local Real Estate Statistics choice. His study confirms what we’ve been seeing in the market—ups and downs in the local townships markets, but generally trending in an upward direction. It may be an ugly recovery, but it’s a start back.

Investing in Detroit

The city of Detroit is ripe with opportunity. A current and momentary lack of liquidity in the mortgage market has created unprecedented market conditions. Investors are dictating acquisition prices while rent levels stay constant. The result of these factors is above average rental yields with the potential for long term capital appreciation. One can acquire a fully renovated property in this market for 25% of what it once traded for. A well informed investor will understand the phenomenal opportunity in this market because of a unified and strategic effort of revitalization of key neighborhoods by the city, state, and federal governments.




In Detroit's heyday it was second only to New York in terms of population growth, wealth, etc. Its infrastructure was built for a population at that time of 2MM people. There are only 800,000 people living in Detroit at this time. The population has slowly gravitated towards more stable neighborhood "pockets" however there are still many people who are living in areas where homes are boarded up, burnt out, or falling down. These are homes that were thrown up because of the city's significant growth in a short period of time due to an economy fueled by the automotive and manufacturing sectors creating a boom period in the areas like Detroit. Many of these "shotgun" homes were stick built; frame styled and only built to last 50 years or so. They are not viable anymore. These are the homes that you can find on an internet auction for $1k. Not worth buying though.


Many banks and institutional organizations who have been forced to become property owners do not see the differences in stable areas and not so stable areas. They see an address on a balance sheet and “write-off” great homes because of negative perceptions based on zip codes. By taking advantage of what you could say is a glitch in the banking world's accounting and strategically acquiring in the best neighborhoods, you are in essence insuring future capital appreciation because as the city's infrastructure shrinks around certain core neighborhoods, the values in the areas will only appreciate.


One company that is taking the lead in this area of investing in Detroit is Precise - Properties of Detroit. Visit their web site for more information about their investment programs for Detroit real estate.

MIchigan Treasurer says Fannie and Freddie must pay...

In Michigan , as I’m sure may be the case in many other states, the GSE’s Fannie Mae and Freddie Mac were exempt from paying some of the local taxes imposed by counties on the transfer of real estate properties. The GSE’s claimed the exemption under the widely held theory that Federal Governmental bodies cannot be subjected to local taxes.
In a recent ruling, the Michigan Department of Treasury was asked by certain registers of deeds whether particular entities, such as Fannie Mae, were subject to the county and state real estate transfer tax. On October 4, 2011, the Treasury advised the Emmet County Register of Deeds that the answer was yes – Fannie Mae and Freddie Mac, as sellers of real estate in Michigan, must pay county and state transfer tax.

Apparently, Fannie Mae and Freddie Mac had previously avoided paying both county and state transfer tax relying on an exemption in both those statutes for “written instruments which this state is prohibited from taxing under the constitution or statutes of the United States.” In its letter, Treasury indicated that federal law generally prohibits the taxation of these entities by state and local governments. However, Treasury has concluded that the real estate transfer tax is not a tax on real property, but instead is an excise tax on the instrument that is being recorded. Thus, the Treasury concludes that government sponsored entities, such as Fannie Mae and Freddie Mac are not exempt from real estate transfer tax.

The law provides that a seller is responsible for payment of county and state transfer taxes. However, a seller can contractually agree to have a buyer assume that obligation. Generally, Fannie Mae and Freddie Mac use addendums which impose all liability for transfer tax on buyers. Thus, in pending purchases for Fannie Mae and Freddie Mac, buyers most likely will now need to deal with a new obligation, i.e., payment of county and state transfer tax as reflected on the HUD-1.

This ruling does not apply to HUD, so sales of HUD-owned hoes will still be exempt from paying the transfer taxes.

Does every deal have to be a struggle?

I was so happy 45 days ago to finally get a “regular sale”, a sale that I even thought would be an easy sale. I have a buyer who has a great credit score and who is putting about ½ down on the property and I still am have headaches getting this sale through the ubiquitous and mysterious “underwriters.” I’m not even sure that we’ll close next week as planned.


What has happened to make this process so hard that even good buyers on good sales of good properties is a major pain in the behind? I know it drives the loan officers mad too and they end up tearing out their hair trying to meet all of the requirements of the dreaded underwriters. Underwriters must belong to the same secret society as the oft sited “investor” that sits behind the scenes in short sales and foreclosures.


I keep getting the story that all of the banks have dramatically increased the documentation requirements and have instituted multiple layers of review for everything. They have turned a process that a couple of years back could have been accomplished in 15-30 days into a 45-60 day nightmare. OK, so maybe mistakes made during the 15-30 day era also led to the home value meltdown debacle; however, that is no reason to clamp down so tight that would-be borrowers are strangled out of the market.

I suspect that part of the problem is educational – both for real estate reps and home buyers. Neither group has received much information about the new rules and requirements, so both are still operating under old assumptions about the process and the timetables involved. However, a bigger issue may be that the process has shifted from being customer service oriented (towards the borrower) to being protect-the-investor-at-all-costs oriented. Underlying all of that is an unspoken “buyer be damned” attitude. Apparently all buyers are now viewed as untrustworthy by the underwriters. If they have cash for a down payment they have to prove that it’s not from some money laundering scheme or, heaven forbid, a gift from mom or dad.



The new reality is apparently that 60 days is the new 30 days for non-distressed sales. For distressed sales – foreclosures and short sales – we all pretty much know that there are no rules – it could be 90 days, it could be 9 months. Patience beyond that required for Sainthood is the norm for them.

Like any system that is still seeking a new equilibrium, the mortgage process has now overshot on the over cautious side and needs to come back towards some middle ground. That may not require abandoning any of the new documentation requirements, those are probably a good thing; however, the review and approval and move the paperwork along parts of the process need some attention, as does the lack of transparency in the entire process. It seems to me that he underwriters also need to be refocused upon customer service to the borrowers and not just concern for the interests of the investor.
 We need a process for regular sales that is more transparent, easier to understand and explain and closer to the old 30 days to close model. Otherwise, the underwriters are going to evolve to be the undertakers of our business.

Old institutions and ideas in our lives dying out...

It seems that all around us things that we (or at least I) grew up with and thought would last are withering away, losing influence or in some cases disappearing altogether. This includes institutions like the U.S. Postal Service and the original Big-3s of our youth – GM, Ford and Chrysler in the automotive world and CBS, NBC and ABC – the original Big-3 networks – in the entertainment world. Certainly Borders bookstores come to mind around here, as does the Summit Place Mall in Pontiac and home delivery of newspapers seven days a week.


Some would say that this is just progress – a natural progression of things in life – as new technologies and new lifestyles lead people to different products and different ways of spending their time. I guess that is true. Still one can miss some of the things that are gone or no longer hold sway in our lives. Do I miss the personal interaction with the teller inside the bank to stop using the drive-up or the ATM? I guess not and I seldom think about it any more.

One quaint idea from our past that I miss somewhat is the concept of retirement. I grew up in the era where you worked hard for 30-40-50 years and then you got to retire. They gave you the ceremonial gold watch, had a retirement party for you and off you went into your so-called Golden Years with your pension in hand; your comfort and security guaranteed by the company retirement plan.

Well that sure didn’t work out the way I thought it might. The companies that I worked for most of my career shifted everyone to a lump sum payout retirement plan and then ended up laying most off anyway when they were bought out by other companies that had no retirement plans either. So, now it appears that I’m in a fairly large group of somewhat older Americans for whom the concept of ever retiring is, as Ernie Harwell might have put it, “Long Gone.”

That’s a shame for several reasons, not the lease of which is that older workers having to hang on to their jobs longer means less opportunity for younger workers who are just starting out. It has also impacted the housing industry, with fewer people making the shift to retirement homes and the travel industry as fewer older people have the money to travel as they thought they might when they retired.

I suppose that the good news in all of this is that many older workers didn’t want to retire in the first place. It turned out to be really boring for many and they often returned to the workforce in some capacity after having burned themselves out on endless rounds of golf or on trips to places that didn’t turn out to all that great. I have often heard from really old people who are being interviewed about the secret to their long lives that continuing to work every day was what kept them going. I’ll have to admit that I’d be bored silly if I didn’t have the jobs that keep me occupied right now.

So, I guess I’ll just roll with the punches, jump on as many of the new technology bandwagons as I can and shift my focus from the old media to the new while I continue to get up and go to work everyday. The alternative, it seems to me, is much worse. I guess as life goes on one might be best served by remembering a recent popular motto attributed to the Navy Seals - Deal With It.

In the middle is good…

I get lots of real estate news feeds. There always seems to be stories about the Top 10 this or that. There’s usually at least one a week about the 10 worst real estate markets and maybe one about the Top-10 real estate recovery markets.


For the longest time the Detroit area market seemed to make every story about dismal markets. Then places in Nevada and California and Florida took over those positions. We haven’t consistently made the Top-10 good markets stories yet; but it feels good to be mired somewhere in the middle and not making as much news anymore.


Like many places, Michigan is seeing an inconsistent market right now. We have townships that are doing well right next to townships that are still seeing far too many short sales and foreclosure sales. Those sales are driving business volume and many companies like the one I work for are reporting strong year-over-year unit volume, albeit with lower dollar volumes in most cases.


Our inventory level is down and still dropping, which is an indicator that too many people are still underwater on their mortgages and don’t feel like they can afford to sell. The low-end category – under $100K – is still the best selling housing category; although the luxury end has held its own, too. Apparently the “trickle-down” economic theories don’t apply to real estate; because our mid-market is virtually frozen.


Still, it’s good to be in the middle and not being the subject of articles and press releases. We actually got some good press in the last Case-Schiller Report, with positive home value growth showing up for the Detroit-area market for first time in years.


Now if we can just get something good going on the jobs front (hint, hint Congress), we seem to be poised for a housing recovery locally. We appear to be in what someone dubbed a “catfish recovery” – bouncing along the bottom of this recession and bottom feeding on distressed home sales. We need to get the fish jumping out of the water again. Until then, being in the middle of the pack is good.

The two faces of a schizophrenic housing industry…

Four stories in last Friday’s Realtor Magazine Online news feed provided a somewhat schizophrenic view of the housing industry. The first reported that The national Association of Home Builders says that 23 major markets across the US showed improvements improvement in housing permits, employment, and housing prices over the last six months. Great News!


The second story reported that fixed, 30-year mortgage rates are now below 4% - the lowest that they’ve been in years. More good news for housing, right?


Story three however reported that fully 30% of all mortgage apps are being turned down these days. The last story reported (to no one’s surprise) that homeownership is sinking fast and is on a downward pace not seen since the great depression.


Of course, when one reads the stories one finds that housing improvements are taking place in some areas that have had near-death experiences. And even though the rates are low, mortgages are being rejected for reasons such as bad credit or no job – reasons that were not sufficient to reject mortgages just a short while ago. And as for home ownership, the story reports that young unemployed people are the least likely to own a home – well duh!


Home ownership hit its peak at about 70% during the Clinton and Bush years when home ownership programs by both of those Presidents encouraged the lending behavior that eventually led to the housing bubble and the bust. It is now down to 65.1% and falling fast, according to the latest census information.


The biggest issue right now seems to be the falling and/or low inventory in many areas, due in large part to so many current home mortgages being underwater. We are a long way from a balanced market, but not just due to tighter credit. The same would-be sellers who can’t afford to put their homes on the market used to be our move-up buyers or they are the boomers that we expected to be selling, so they could downsize in retirement.


Now those would-be sellers are stuck and even those with real stories of hardship are finding the road to short sales blocked by incompetent and understaffed lenders who are incapable of making simple selling decisions. Adding to the confusion is the back-end mess created by the pooling and selling of mortgages to investors, which could take decades to clear up or get off the books.


So are things good bad or just ugly right now. I’d vote for ugly. It’s a great time to buy a house, if you have a down payment and can get a mortgage and if there is something on the market that you might like. Those are big ifs right now. It’s actually also a good time to sell a house (due to the low inventory) if you aren’t underwater on it. Don’t even think about waiting until next year to see if the lost value will magically come back – it ain’t gonna happen. AS Dr. Phil might say to would be sellers, “It’s time to get real.”


And what about Realtors® in this market? I listen to them at social gatherings telling prospective clients that things are great, that they’ve never been busier. That’s true. Most Realtors in this area are working their tails off, many selling more homes than they’ve ever sold… and making less money at it that they ever made. It’s a schizophrenic business to be in and we’re all lovin’ it and hating it or both.

Thinking beyond the headlines and reading between the lines…

Today’s Realtor Magazine news feed had four headlines (among others) that caught my attention. On the surface they seem to be innocuous little articles, but when you read the stories and think about what is being said or suggested they bring some further thoughts to mind.


1. Housing Can Be 'Key Engine of Job Growth' – This story is basically about the National Association of Home Builders lamenting the fact that credit has tightened up so much that they aren’t build houses. They are claiming, as one might expect that if the current credit crunch were eased the housing industry might be able to lead the country out of its economic doldrums.


I’m not sure that this isn’t one of those chicken or egg conundrums and is certainly is a view that is way to simplistic. Even if there was credit available to build and maybe even to buy there is still a fear factor hovering over potential buyers that is driven more by job concerns.


It’s prophetic that the story that this Realtor Magazine article is based upon is titled “Do not harm…” and makes the argument that many of the Federal housing and homeowner bailout programs so far have not followed that caution. They have, in fact caused more problems (harm) than they have helped.


2. Bill May Help Home Owners Tap Retirement Accounts – This story really has some really bad possible future consequences that are not pointed out. On the surface it sounds initially like the right thing to do to let people use their retirement savings without a withdrawal penalty, which is its big benefit) to fund their current mortgage obligations. Sounds reasonable initially, but, you don’t have to think about it for long to see that allowing (even encouraging) them to strip retirement accounts now just means that they will be standing there a few years from now, hat in hand, asking what we’re going to do to help them out in retirement. It seems to me that it might be better to encourage distressed homeowners to bite the bullet now and downsize into a situation that they can afford, without decimating what little savings they have.


3. Lawsuit Accuses Banks of Cheating Veterans – This story is about practices that are so wrong on so many levels that these banks ought to have the book thrown at them. It is no surprise that the biggest three mentioned in the story were Bank of America, Chase and Wells Fargo. These are the same big-3 that are front and center in most of the other current cases and law suits over wrong doing and possible fraud.


Perhaps this time they’ve finally dug a hole that they can buy their way out of with political contributions. All 30 of the banks referenced in this investigation need to be punished big-time if these allegations are proven. No wrist slapping this time, get out the big paddle and head for the outhouse.


If there’s one thing that I don’t want to see it’s yet another Senate or Congressional committee hearing were the CEOs of the big banks are dragged in for a public flogging and then walk away whole. That is just political theater designed to give each political hack their 5-10 minutes of TV exposure. It would be appropriate if those hearings are held to just use cardboard cut-outs of the big bank CEOs sitting at the table.


4. More Kids Turn to Parents for Mortgage Help – This bank of mom and dad story would fall into the cute category if it weren’t for the same issue as the Retirement Accounts story above. In this case it’s the kids who are asking mom and dad to strip their savings (many times their retirement savings) so that they can get a house before they can really afford one. Obviously the same issues will eventually come up, except in this case at least mom and dad should be able to move into the nice home that they helped junior or princess buy with their retirement money. Just make sure they get that extra bedroom or in-laws suite.


This is something that retirement planners and financial advisors all usually advise against (unless mom and dad have lots and lots of money). It’s also something that, while well meaning, can add so much tension to the family situation that family breakups might result.


I’ve put the links below to the source stories upon which Realtor Magazine based their articles.


1. Based upon Do no harm…


2. Based upon an article at Housingwire…


3. Based upon a Washington Post article…


4. Based upon an article in USA Today…

OMG another dumb real estate euphemism…

In the land of euphemisms the new real estate term “Reverse Staging” may rank up there close to the top of the rankings of obfuscous language.
What is reverse staging and how does one do it? Well, it is a polite euphemism for destroying your own house to decrease its value. It basically means that some people de-content their own homes and possibly even cause physical damage to them in an attempt to lower the appraised value for purposes of supporting a short sale.

The reason why people do this is obvious to all, including the banks involved; so it is viewed (correctly) as a form of fraud. The reason why someone in the real estate business decided to come up with this term to somehow make what is happening sound less sinister is less obvious. It’s just people destroying their own homes, just like vandals would. Why call it anything else?
I suppose that one could legally reverse stage one’s own house by substituting lower value light fixtures or making other changes to try to lower the perceived value, without causing damage; however, good appraisers, or good BPO writers, will be able to see past those weak efforts.

So, add yet another obscure term to the real estate lexicon. I guess we need terms like reverse staging to impress the general public that we somehow know and understand things that are going on in real estate better than they do.

Channeling Houdini...

Well, it seems that my new dog Sadie is channeling Harry Houdini, the great escape artist. She managed to escape and disappear twice yesterday.



The first time she slipped out of her collar while on her dog run and, well, ran. We searched for over two hours and couldn’t find her. That’s because we live in a small town with friendly, helpful and well-meaning people. A lady on her way home from work found her wandering about two blocks from our house in the downtown Milford area and picked her up. The lady took her out to a local vet clinic that is about 4 miles north of town.


I would never have looked out there or thought to call there, but I did finally think to call the local police and asked if they had any lost dog sightings. Sure enough they had, since the vet had called them to report a found dog that fit Sadie’s description. We went to pick her up and had her “chipped” while we were there. Now she has a microchip that most vets have scanners to read. That chip will give them a number that will allow them to contact me. I suspect that this will be money well spent.


So, anyway, I next went out and bought one of those dog halters that look to be much harder to get out of and put it on her. Less than an hour later she slipped out of that while on her overhead run and was off again. This time my wife, while our looking for her, encountered a couple who were driving around looking for her someone who might be missing a dog. They had her in their van. She is so freindly that she'll hop in with anyone. Again she was picked up less than two blocks from home.


Now she has both the halter and a collar, both tightened up snuggly and attached to each other. If I did much more, she’d end up looking like Hannibal Lecter when they transported him from prison in the movie”Silence of the Lambs”. I don’t even know if they make little, doggy straight jackets or not; but, I’m resolved not to end up pushing Sadie around on a furniture dolly like Hannibal.


So, lesson learned today. Sadie is a cutie, but she’s also a hound and hounds like to escape and run away. They aren’t so much running away as just running – on a scent or just out of curiosity. We’ll have to watch her like a hawk when she’s out on her run.


She also showed her true (hound) colors when we encountered a particularly annoying squirrel today on one of our walks. I didn’t know that dogs could climb trees, but she sure tried. It didn’t

help that the squirrel took great sport in coming back down the tree a ways to taunt her. If I thought she’d come back I’d let her off to really chase some of the pesky squirrels that we have around here. I have no dou

bt that she fast enough to catch a few of them.

I guess we’ll need to schedule a few more trips to the bark park to let her run off some of this energy. Like a human baby, she’s at her cutest when she’s curled up asleep on the bed. So, Sadie, Sadie, Pretty Lady is now Sadie, Sadie, Houdini Lady. We can’t trust her anymore, but we can still love her.

Introducing JAMCO 7 – a new program for bank-owned homes

The market is full of foreclosed homes, many of which are bank owned and in need of repairs, sometimes before they can even be lived in. Until now, the only option for homebuyers was to try to get an FHA 203K loan. The 203K loan program is a great way to get the money needed for home repairs, but it has its own set of issues and fees/costs, plus many buyers just didn’t qualify. Click here to go to the HUD site and read about the 203K loan program. Now there is an alternative to explore if you want to buy a bank-owned house that needs some minor repairs, or maybe a new roof.


Introducing a new John Adams Mortgage program called The JAMCO 7. The JAMCO 7 allows you to close on a bank owned transaction, with John Adams, prior to some repairs being done! The repairs and our re-inspection need to be done within 7 days after closing. A roof, some painting (non lead based paint) and cracked windows are just a few of the items we will allow to be done after closing. John Adams will allow this to be done on FHA and Conventional deals.


There are some restrictions with this program as follows:


1) The buyer would need to put up to 1.5x's the estimated repair amount in escrow (John Adams holds the money). When the repairs are done, we send the appraiser out to verify and reimburse the escrow to the buyer


2) Must be a bank owned property. (No redemption period)


3) FHA and conventional loans only.


4) No VA or MSHDA loans are allowed


5) "Major" repairs are not allowed, including foundation, mold and lead base paint issues.


John Adams underwriters and management holds the right to make the final decision. They have, however, done quite a few of these over the past 12 months and feel very comfortable in what they can, and can't, do. Bank owned homes are still a large part of this market. The JAMCO 7 may help more buyers with financing on homes that they otherwise just couldn’t buy.

In the Milford, Commerce, Highland, White Lake and West Bloomfield areas, call Agnes Miesch of John Adams Mortgage at 248-684-5581for more on this great new program.

If you can dream it, you can do it...

So, you want to be a Realtor®. Well, you’re in luck. Real Estate One is offering the 40-hour pre-licensing classes in the Brighton/Milford area to meet the classroom requirements by the State of MI to get your real estate license. This training will prepare you to take the Michigan Real Estate License test.
Classes will be October 3, 5, 6 in the Brighton office & October 10, 12, 13 in the Milford office – from 9:00 am to 4:30 pm. There is some flexibility in time for those people who may have to be home to pick up children after school, etc. The cost is $99.00 for the class & $30.00 for the book. The instructor will be Pat Bean, who started her career at Real Estate One. Pat has a high pass-rate for the test for those who have been through her training.
If you are interested and the schedule for these classes fit for you, call Mary Nicole at 1-800-370-5816 for details and to sign up. Call today!

A new member of the family...

Over the weekend Carolyn and I welcomed a new member to our family here is Milford - Sadie.

We went to the Pet-a-palooza at the Detroit Zoo. We left thinking maybe we'd find a male, lab puppy and came home with a 4 year old, female, German Short Hair Pointer - go figure. Actually she adopted us, or at least Carolyn, while we were looking around.

Sadie (our name for her) is a real sweetheart. She's basically pretty laid-back, but he does have lots of energy, which means lots of walks each day. I'll definitely get my exercise with her. We've taken her to the bark park a coupe of times and let her run. She runs herself out eventually and then sleeps really well that night.

Being a hound, she can be a hand full to walk. She's constantly finding scents to track or seeing squirrels that need to be reminded that they should be up in the trees. I got one of the new head halter leads for her and that solved the pulling issues immediately. I highly recommend them.

So, say hello to Sadie; the newest member of our little Milford family.

A wonderful trip to Canada...

My wife and I went to The Stratford Festival Theater on Tuesday for a matinee performance of Camelot and then spent the night in Woodstock. What a nice day. Stratford is a delightful little town about 20-30 minutes northeast of London, Ontario. The Stratford Festival is an annual series of plays – featuring the plays of Shakespeare and other plays. There are three theaters in Stratford, with varied play bills. The Stratford Festival repertory company is purportedly the largest permanent repertory company in the world.


The Festival Theater that we went to is set is a beautiful park and we resolved to bring a picnic lunch the next time that we come. It is an easy 4 hour drive from Milford, with only a few construction detours, mostly in Canada. We didn’t have time on this trip to spend time downtown in Stratford, but a quick drive-thru showed us that there appear to be lots of cute shops and restaurants, so that’s another thing on the to-do list for next time.

I can certainly recommend this as a great day trip. The season is almost over for this year, but next year we plan to go back to see several plays. There were bus-loads of seniors at the matinee, I suspect for the same reason as we chose it – it’s easier to stay awake for a matinee performance than for one at night. I also wanted to have daylight to drive to Woodstock in, since we were going cross country on back roads to get there. I’d have gotten lost for sure if it was dark.

One frustration for me was the consequence of me buying a cheap GPS years ago. The GPS that I have doesn’t work in Canada or at least I couldn’t figure it out. Apparently I only bought the maps for the U.S. Live and learn. I could have used my smart phone GPS, but the roaming charges in data mode add up quickly, so I had printed off a bunch of Google maps at home and used them. They worked fine.

The only complaint that I have about the Canadian experience is that I think I got ripped off at a gas station – the attendant charged me 10% to do the money exchange of my $20 US, turning it into $18 Canadian. The rate that we hit elsewhere was very close to a 1 to 1 ratio. I guess there those types of crooks in every country.

What a great weekend in Milford...

This past weekend was sort of a last Hurrah for Summer in Milford, Michigan. We had something for everybody going on over the weekend.

On Saturday and Sunday the 2011 Milford Home Tour provided access to five of our Village homes (four of them historic homes), plus visits to the Milford Historical Museum and the Log Cabin was open next to the fire station, with a display of how the original settlers lived in Milford. The Pettibone Creek Powerhouse was also open for tours visits both days and the Friends of Oak Grove Cemetery provided a cell phone based walking tour of the homes of some of Milford’s Civil war heroes, all of whom are buried in Oak Grove Cemetery.

Saturday evening the Milford Downtown Development Authority (DDA) held a reception in Center Street Park to launch the installation of several Detroit Institute of Arts (DIA) Old Masters art reproductions in locations around Milford. The DIA will leave the reproductions on display for a while and people may order reproductions for their homes at several locations around Milford. The DDA reception featured wine and food samples from Milford’s fine restaurants and a walking tour of the installation sites – all in downtown Milford. You can come take the walking tour of the DIA sites anytime for the next couple of months.

Then on Sunday, with all of the events mentioned above still gong on, there was the Tractor Show out at the Huron Valley State Bank and the huge Milford Car Show, which took up all of Main Street all the way through town. Awards were presented for cars voted best in several categories and for best in show. In addition the Rotary held their annual Duck Race fund raiser, with over a thousand little yellow rubber ducks racing down the Huron River. Prizes were awarded to duck ticket holders for the first few ducks to complete the race. My ducks must have pulled a hamstring or something – they finished out of the money.


So it was a great weekend in Milford, Michigan, with something for everyone to do. Start planning now to be a part of this great tradition next year. We’re already starting to plan for next year’s events. So, come on out to Milford and see why it is one of the greatest places in Michigan to live. I’ll even find you a new home while you are there.

A service worth looking into…

I hear about all sorts of services these says, some of which don’t make much sense to me or which seem to be pretty poor candidates for business success – the pooper scooper people come immediately to mind in that latter category. I mean, I know that people are busy these days, but give me break on that one. Do enough people really need someone to come to their home to scoop up pet poop to make that a viable business model? Maybe, maybe not.


I recently had a nice sit-down with a lady in one of my Chamber of Commerce groups that is with a nationwide outfit called The Fiscal Concierge, LLC. Their motto, “Live your life…We’ll pay the bills”, gives a fairly straightforward and easy to understand explanation about a key part of what they actually do for people and businesses. Basically they take over the responsibility of tracking and paying the monthly bills (the accounts payable) for people and businesses. In addition, for small to medium businesses, they also offer payroll services.


As I discussed this service with Debbie Stroup, the local rep for The Fiscal Concierge (click on the name to go to their corporate web site) it became clear why the family caregivers for an older person might want to use this service to make sure that bills get paid on time. The caregiver role can be overwhelming and taking this duty off of their plate helps immensely. It also makes sense for active seniors who might be off fulfilling life long dreams of travel not to have to worry about the bills going unpaid back home.


Unlike having automated bill paying set up through a bank, this concierge service pays all of your bills, not just those that offer automated payment and the concierge assigned monitors your bank account to make sure that there is enough money in the account to make the payments. Your concierge takes action to alert you or your caregivers when additional funds may need to be transferred into your account to cover the bills.


In addition Debbie mentioned that users of this service receive free identity theft protection from Lifelock (click here for more on the Lifelock identity protection services). These services end up providing great peace of mind to either group of seniors (and caregivers). Identity theft is a huge problem for all and especially for seniors.


Debbie also explained that many small to medium sized businesses find their Accounts Payable service to be a God-send and go on to also use their payroll services, which they offer through ADP Payroll. Small business owners have enough o worry about without having to spend time dealing with accounts payable and payroll issues. Maintaining a good record for making on-time payments is key to establishing the credit worthiness of any business. The Fiscal Concierge has also teamed up with Guardian to provide alarm services for small businesses at a very good rate to further protect your business. They could also provide the Guardian health monitoring services for homebound seniors.


So, as services go, The Fiscal Concierge seems to have very real value and is worth looking into if you are a caregiver for a senior or if you are an active, on-the-go senior. It also makes sense if you are a small to medium business owner. Give Debbie Stroup a call at (248) 366-4811 or email her at dstroup@thefiscon.com and tell her that you read about it on this blog. You won’t get any special discount, but Debbie will be happy to hear that her time spent explaining this all to me was worthwhile. I’m sure you’ll enjoy meeting Debbie, too and discussing your bill paying/accounts payable needs and maybe your payroll needs, if you are a small to medium business.

Singing in the lifeboats of life...

From Voltaire comes today’s advice ditty: "Life is a shipwreck but we must not forget to sing in the lifeboats."



Don’t forget to sing in the lifeboats was the title of a recent little book by Ross & Kathryn Petras that provided advice taken from the sayings and writings of great people through the ages about dealing with hardships. The main theme running through the book appears to be keeping a positive attitude and a sense of humor in the face of adversity.


We can all certainly use both in the midst of the economic shipwreck that we are living through right now. I often find it comforting to sing (if only in my head) some of the little songs that are a part of the church service at my church. Many of them are little 2-4 line songs used to introduce some part of the service, so they stick in your head quite easily. Sometimes snippets of other, more popular and secular songs seem to help.


What songs do you sing in the lifeboat?

We’ve all fallen down the rabbit hole…

A bunch of us were discussing the current real estate market in the office the other day, when it hit me that we’ve all fallen down the rabbit hole and are now wandering around in Wonderland with Alice. That would seem to be the only logical explanation for the madness that is real estate these days. Surely the insanity that we face each day in the realm of short sales defies any other explanation.


For a while, I was using the analogy of the man behind the curtain from The Wizard of Oz to explain the great and powerful Investor – the man behind the curtain to whom everyone bowed and scraped and whose actions and pronouncements no one understood.

But, perhaps the richer set of characters in Alice in Wonderland would provide more opportunities to give face to the various banks and characters that we encounter in our real estate lives today – the Cheshire Fat Cat and the Mad Hatter would seem to be especially appropriate to represent some of the short sale bankers and negotiators that I’ve hit.

The sad conclusion that we all came to in our discussion is that this is no longer an anomaly, but rather represents the new reality of our market. I suppose the sooner that one comes to grips with that the better. As one who is naturally a bit of a cynic and can appreciate the absurd this Dali-esk landscape s beginning to look natural – “Look is that a clock melting over the side of that table? No, it’s a clock measuring the time passing on a short sale!”

What did the bank say about our offer? They said to lower the offer and resubmit it. OK, which way to the tea party, Mr. Hatter?

Post Irene - what was really covered?

One major aftershock of Hurricane Irene (See you didn’t know that hurricanes can have aftershocks, too, did you?) is that homeowners are discovering that much of the real damage caused by Irene is not covered by their homeowners insurance policies.


While those who took a direct hit by the high winds that Irene packed will likely be covered (but not necessarily); the majority of Irene’s damage was caused by flooding (either tidal surges or rain-swollen streams and rivers) and that is almost never covered (unless you have flood insurance or a flood rider on your policy). Those in land locked Vermont, who were ravaged by swollen rivers, are particularly out of luck. Most did not have flood insurance, since they did not live in normal flood zones.

The other thing that sometimes comes into play is where a possession is when the damage occurs. If your car is sitting out in the driveway and the flooding from Irene’s rains inundates it, ruining it and causing a total loss, then your car insurance policy will likely cover the replacement. However, it you parked it in the garage to avoid any possibility of hail damage and that same flood water inundated it in your garage, it would fall under the homeowners’ policy and may not be covered since you didn’t have flood insurance. There was a good article in the Sacramento Bee about the gaps in insurance coverage that are letting insurance companies off the hook for most of Irene’s damage.

Irene is one of hundred-year events that we’ve been seeing a lot of lately. If nothing else it should cause all of us to question what is covered and not covered when big natural disasters hit. If my car is in the driveway when the tornado goes through uprooting a big tree that falls on it is it my car insurance or my homeowners policy that I should turn to for coverage and a replacement? What about if it was in the garage at the time and the tree crushed both the garage and my car?

Most of us probably suffer from the FDH syndrome when it comes to insurance – Fat, Dumb and Happy. We really don’t know what is covered and what’s not. Perhaps we don’t really want to know. But, in this case; what we don’t know can hurt us. Check your coverage before it’s time to try to file a claim.

Another miracle of real estate…

I had the opportunity to hear all about yet another miracle of real estate. It seems that the property that I visited recently on a potential listing appointment was somehow overlooked by the angry gods of real estate and spared any apparent loss in value. Nestled in a neighborhood that was ravaged by those same angry gods to the tune of 45% value losses over the last few years, this property was somehow passed over and has retained its peak value, according to the homeowner.

Not only have the gods of home devaluation smiled upon this house, but many of the minions that associate with those gods have also decided that this house will be the exception. The god of home mechanicals has determined that the 30 year old furnace probably has another 30 years in it, so there is no need to replace it, nor the water heater which is after all on 15 years old. The goddess of roofs has decreed that 30 years have not diminished the sturdy shingles that make it up and indeed she has directed many of the shingles to curl up in smiles in celebration. The goddess of the galley kitchen has joined the celebration by assuring the owners that retro-look vinyl countertops are back in favor and that Harvest Gold appliances are again all the rage in kitchen design.

The owners also took offense at my suggestion that replacements for their old aluminum framed windows might add value. They have been assured by the window spirits that aluminum is much sturdier than those new-fangled vinyl windows. They also assured me that air conditioning is not required, since it only gets hot a few weeks each year and the goddess of comfort is perfectly happy with just opening the windows during those warm stretches.

Needless to say, we could not arrive at an agreement on a listing price. They certainly felt sympathy for the unfortunate other homeowners in their sub whom the gods had not passed over and who have sold in the last 2-3 months for so much less than their home is worth; but they opined that they certainly aren’t going to give their home away, so they’ll find someone else who will appreciate its value more than I did.

I thanked then for their time and wished them luck and stood outside for a while looking for any visible sign that the gods may have used to mark this house for the various miracles that have occurred for it. I couldn’t see any through the overgrown bushes that completely obscure the front of the house.

Reading market reports can give yo a headache...

Every week starts off with reports issued by various groups like the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) and others trying to analyze and report what it going on in the real estate market. Reading those reports can leave you scratching your head and wondering, “What did they just say?” That is especially true if you read any of the compilation reports where the Arthur combines 2-3 of the other reports.
This morning’s RealtyTimes report had one such article in which the author, Carla Hill juxtapositioned bits and pieces from some of the official releases of various learned groups. Reading any two sentences in a row almost makes your head spin. Delinquency rates are up, but they are also down (new delinquencies vs. 90+ day delinquencies). Home affordability is the best it’s ever been, but no one can afford to buy a house. Huh?


Both NAR economist Lawrence Yun and MBA chairman Bob Nielson agreed that tight credit requirements by banks, in addition to continued economic weakness are the major culprits. Overall sales of existing homes declined by 3.5% in July from June in the U.S. Of course there are some bright spots – a couple of the regions that both groups track are in positive territory – the Midwest with a 1% growth in existing home sales and the Northeast with 2.7% growth. The Midwest even saw 31.3% year-over-year growth in existing home sales.


I guess it’s best just to ignore all of these higher level reports and focus upon the market that’s right in front o me. I report on it every week on my Web sites. Even in my little patch, which covers only 9 townships in Southeastern Michigan there is great variability. A few of the townships – West Bloomfield, Highland and White Lake – are still mired in foreclosures. A few are just putzing along with relatively low sales activity even if their homes are more affordable that ever – Milford, Green Oak and Hartland. A couple are doing OK, with reasonable sales activity – Commerce and Brighton – and one is doing fairly well by today’s standards with new build home sales driving its market – South Lyon. You can see all of the statistics that I report about those markets at www.movetomilford.com.


Home prices nationally are still declining and that is generally true in my little patch too; although, the rate of decline has dropped into the low single digits, which is a good thing. I also seeing more and more homes sell for well above their assessed value, which is an indication more than anything that the assessors may have overshot the mark on lowering home values for tax purposes. Low bank appraisals also continue to be a major issue in my market and that issue is not helped by the lower assessed values. Both assessors and appraisers are now using distressed home sales as comps, which has created sort of a downward spiral effect.


Low inventory is becoming a real issue here, too; especially in our traditional market sweet spot of $200-400K. The people who own those homes now are under water on them and reluctant to put them on the market. So, what “move-up” buyers we have out looking are finding pretty bare shelves in this market. The lease market inventory has also almost dried up, since so many displaced people have been renting while they try to rebuild their credit. It’s very tough to find anything in the lower end of the rental market (under $1,500) that is suitable for a family to live in.


As a Realtor, I guess I benefit from one of the bad news-good news statistics, too. The bad news is that many licensed agents have left the business (especially the part timers). The good news is that I get more of what little business is left. That seems to be true across the country too, with the number of Realtors down considerably and fewer coming into the business. Of course brokers don’t like that, since there are fewer agents to collect monthly fees from to sustain the broker business model. Maybe that will force some changes to that whole model.


So, that’s my report from the hinterlands. Things are good. Things are bad. Things are up and things are down. Everybody knows why, but nobody knows how to change anything. Blame the banks. Blame the government. Blame anybody but me.

Getting ahead of the email from Libya…

I thought that I would post this to allow fellow Realtors to get ahead of the curve on he next big eMail fraud campaign that you can expect.

“Hello fellow Realtor. I need your help. I was a very successful Realtor in Tripoli, Libya until just recently. My major clients – the Qadafi family – were major property owners; however, an unexpected change of fortune made it necessary for them to liquidate their holdings recently. I was able to get short sale approvals pushed through rather quickly during the changes that recently overtook the country and was successful in selling over $50 Million worth of prime Tripoli properties to advancing rebel investor groups.

In the ensuing chaos of the rebellion, the Qaddafi family assets and my commission of some $5 Million dollars U.S. was frozen by The United States and other NATO countries. I am assured by the bank that my commission is safe and that it will be released to me within a few months, if I post a 10% surety bond - $500,000. U.S. .

I am hoping that you can help me with that bond. Since I had to flee the fighting in my country I have no current access to my own bank accounts in Libya, which I assure you would be sufficient to past the surety bond. I am prepared to offer a large premium for your support. I have arranged with four other Realtors in various locations around the world for loans of $100,000 each for a period not to exceed 6 months, with a payback of $200,000 at the end of that period.

As you can tell, I am a very generous man and more than willing to reward those who assist me through this unfortunate time in my life. If you can help, please let me know via return email and I will forward instructions on how to wire your funds to my transfer agent, the firm of Dewey, Cheatum and Howe, in London. Thank you for your support.”

A nation hunkered down...

In today’s Bloomberg News there is a story about homebuyers “hunkering down” in today’s economy instead of buying homes. The story used the definition of hunkering down as hiding in fear. The reporter sited instances where buyers even pulled back offers, based upon the turmoil in the stock market and the resulting uncertainty overall with the economy. People are hunkering rather than buying.


I guess the news is bad. NAR reported that July sales fell to the lowest point this year and Karl Case of the Case-Shiller report even was quoted in the Bloomberg article as stating that another recession may happen if the housing segment continues its swoon.

Indications of the malaise included the fact that applications for mortgages to buy homes dropped to a 13-month low in the week ended Aug. 12, even with rates at historic low levels, according to the Mortgage Bankers Association. The article reported that Bloomberg Consumer Comfort Index sank to the lowest since the official recession. In addition the stock market has been down for 4-5 weeks, so many people have seen their down payment nest eggs disappear. Even with low mortgage rates there has also been a huge increase in cancelled deals due to low appraisals according to the story.

The result of all of this gloomy news is a nation hunkered down, doing nothing until this all blows over. However, this is one of those chicken or egg situations. In the past, the economy has always been led out of recessions by the housing industry. Improvements n home buying led to increases in building which led to better employment and on and on. This time no one is buying, so few builders are building and the whole mess is feeding upon itself.

Even attempts by the government to encourage home buying by keeping rates low and promoting program after program to encourage lenders to loosen up have not worked. The encouraging news that foreclosures were down the last couple of months was driven as much as anything by the lenders’ reaction to the various robo-signing investigations into foreclosure irregularities, not by shifts in the fundamentals of the housing market.

So, what’s a Realtor to do in this hunkered down world? In my area at least, there are still sales happening – they are just low-end sales to investors and first time buyers. So I focus upon them. There are few move-up buyers (those in the move-up sweet spot in this market of $200-400K) out looking, but I do get an occasional one or two. They are usually very finicky and are really looking to steal a move-in ready house at “destroyed foreclosure” prices. It’s just the nature of the market.

Many of the buyers in the move-up price range in this area aren’t the classic move-up buyer with a house to sell or who just sold; they are the people who lost their own homes to foreclosure 3-4 years ago and now have repaired their credit enough to start looking top buy a home again. They have to be vetted carefully with a good mortgage person, so that I don’t waste a lot of time with wishful thinkers instead of real buyers. More than once my mortgage person has had to tell them that they still have work to do on their credit before they should be out looking.

I guess that Realtors need to use the other definition of “hunkered down” that I found on-line in the Urban Dictionary – “to get to work, to focus on the job at hand.” We have to hunker down to the basics and work harder at sales that return less in order to get through this mess. If there is any good news to come out of all of this it’s the exit from the real estate business of the marginal, would-be Realtors and part-timers. That has concentrated what little business there is out there to the Realtors who have hunkered down to ride this thing out. So, hunker down fellow Realtors and let’s work our way through this recession. And for all of you would be home buyers, I'd say, "Get out there and do the patriotic thing - buy a house and help America get out of this recession."

The good ole days were always that good...

“How easy it is to think that the good old days were only good.” (Herb Chilstrom), from the Jack’s Winning Word blog.


Herb had a good point. We hear a lot about the good ole days in real estate and we tend to think about and mention only the fond memories; however, all was not always good in the old days. Those who have been in the business for longer than the last 8-10 years can tell stories that will make you cringe at the thought of going through what they went through in some of those old days, especially the days of hyper-inflation when mortgage rates were well above 10%.

I’m not sure that I can point back to good ole days, since I‘ve only been doing real estate for 10 years. It seems to me that I’ve been in what has consistently been described as a buyers market for all of that time, although certainly not as bad as it has been for the last few years. I’ve heard stories about the days when there were sellers markets and how frenetic the pace was back then, with bidding wars for almost every house. The Realtors who lived through that era don’t make it sound all that good either.

I suppose the best that one can hope for, in terms of perhaps a rational market, would be a “normal” market, whatever that it. I’ve seen differing definitions of what a “normal” market might look like, usually expressed in terms of inventory levels, days on market levels, mortgage rate levels, a balance between buyers and sellers and other factors. It must be a rather elusive mix because I haven’t seen it in 10 years. Perhaps the balanced market is like Bigfoot, often talked about but seldom, if ever, seen.

I suspect that people describing the “normal market” are actually reminiscing about some time in their personal lives that they remember as happy times and they associate those times with the real estate market. You really can’t turn back the clock, so longing for the good ole days is really a waste of time. Better that you should put that energy into figuring out how to deal with the days that are in front of you – for some, these are the “good ole days” that we’ll all tell our grandchildren about some day.

Hello, I’m an experienced Realtor and you’re an idiot…

Did you ever hit one of those long-term Realtors who thinks that everyone else in real estate is an idiot because they don’t all do it the way he/she does? It’s particularly maddening when they are also the type that starts most sentences with “I’m not going to let my buyer(seller) do that… or maybe I won’t even show my buyer (seller) your ridiculous offer, unless… or maybe I would never let my buyer (seller) use that type of mortgage company, I’m going to require them to get pre-approved by…


Some of the Realtors that I’ve hit lately, especially in the short sale market have been condescending to the point of being just plain rude. It’s certainly true that I don’t know everything about short sales, but I do think I know right from wrong and how to advise my clients to do what’s right – for them. Perhaps that is the issue; it may not be “right” for these old timers’s clients, at least not in their minds.

This is really a form of bullying, which many Realtors use as what they believe is a negotiating tactic. It’s as tiresome as the agent who whines their way through a litany of issues large and small that they have with the property that you represent as preparation for some low-ball offer that they may have advised their client to thrown in. Both waste time and both are really ego-driven attempts at misdirection to see if they can get the other side to blink or tire out and capitulate.

I’ve even had one of these prima donnas dress me down in front of her client because I didn’t have my client offer the best home warranty for her client – not the one that she always offers her clients. HELLO. I represented the other side, honey. I did the best I could for my client. You saw the warranty well ahead of closing, why didn’t you advise your client to upgrade it, if it wasn’t what you would have offered.

I guess it’s all just human nature. There will always be people in any profession who see it as a zero sum game – in order for them to win, you have to lose. I hope that I try to play the game such that everybody can feel like they won.

I’ve only been at it for 10 years, so I guess that old school agent with 20-30 years in the business will always see me as an idiot who doesn’t know what he’s doing or who is doing it wrong. So, I smile and try to stay calm and let them rant and rage and vent until they’ve run out of steam…and they always run out of steam, because once the hot air is gone, so is the steam. There. See, I feel better already.

Homeowners are just collateral damage in this fight...

The Sunday Detroit News had a front page story in the Sunday paper with the headline Homeowners Forced Out While Seeking Relief, with the sub-headline – Fannie Mae Pressures Banks To Foreclose, Contrary To Promises To Keep Families In Homes, Preserve Neighborhoods. The story took up three pages inside the paper, including lots of back story information about Fannie Mae and Freddie Mac and FHA and all of the other government organizations with fingers in this pot.


Newspapers love to take potshots at large government organizations, even if they are easy targets. There is usually enough ineptitude to flesh out the story. Throw in an All-America family with a hard luck story and you have the makings of what passes for journalism these days.

The gist of the story was that this local family fell on hard times and got a year behind on their mortgage. They were in the process of negotiating a HAMP loan modification when the bank foreclosed on their home, supposedly under pressure to do so by Fannie Mae. There’s a lot of fuzziness in the story and everyone who might have had really good first hand information refused to be interviewed for the story. One telling comment that was captured in the story was made by a Fannie Mae official who said that Fannie Mae needs to keep pressure on the banks to speed up their HAMP processing, so they push for foreclosures to motivate the banks. Notice that no mention was made of the families who are in those homes.

The truth is that all of these bureaucrats, whether with the banks or the GSE’s or other government organizations, just see these cases in the abstract. These are assets to them, not people’s homes. They have rules that need to be blindly followed, not individual situations that need to be evaluated on a case-by-case basis. I’m absolutely sure that the bureaucrat who made the decision to foreclosed on the home that was featured had (and has) no idea about the family that lives there, what they when through to get into that situation and what they were trying to do to make things right.

The bureaucrat at Fannie Mae doesn’t care. It’s not their job. They just know that the bank had requested yet another extension to the foreclosure process - one too many in their estimation – so, it was time to show the bank who’s boss and force the foreclosure. Nor did the guy or gal at the bank care. To them, it was just another asset that went into foreclosure. After all those people out there (whoever they are) would have probably just defaulted on the new loan, too.

So, “those people” out here sued. They sued the bank. They sued Fannie Mae. They sued anyone that they thought might be part of the giant conspiracy to throw them out of their home. And they made noise locally, which the local newspaper picked up on and decided would make a good story.

Will they get to keep their home? Will the bank, Fannie Mae, Freddie Mac and others be held accountable for actually following the rules of HAMP? Will pigs fly? We’ll probably never know. The story has run and the paper is on to tomorrow’s headlines.

The bureaucrats involved are used to shrugging off pesky people and lawsuits like this. After all the Federal Government can’t really be sued no mater how stupidly or egregiously it behaves. And, the bank is too big to fail and has pockets that are too deep to really try to win a lawsuit against. So we have the Don Quixote homeowners tilting against the bureaucratic windmill. Little do they realize that they are but collateral damage in the real fight between the Washington bureaucrats and the bank bureaucrats. That fight is not about the homeowners anyway – they are just assets to both sides – it’s about power, who has it and who can make whom blink.

Stinking up the place...

Today’s issue of RealtyTimes contains an article titles “Short Sales Still Irritate” by Bob Hunt. It cites a recent survey by the California Association of Realtors (CAR) that not surprisingly showed continued and growing frustration on the part of Realtors with the short sale process and the banks involved with them. I suspect that “Short Sales Still Infuriate” would have been a more apropos title.

The Hunt article discusses the work that CAR (supported by NAR) has done to try to get changes mandated to the banks, thus far to no avail; and their recent spate of advertising imploring the lenders to get their act together. It also gives statistics from the CAR survey that indicate that the overwhelming majority of survey respondents have had unsuccessful or unsatisfying experiences trying to do short sales. At the end it also cites that the survey says that the vast majority of the Realtors surveyed said that they would never recommend the lenders that they’ve had to deal with on short sales – as if the lenders cared.

Therein lies a part of the problem – the lenders just don’t care. They don’t care if Realtors don’t like them or their process. They don’t care if their own clients don’t like them or their process. The only people they care about are the politicians that they buy to make sure that they are kept whole in the current economic mess. The article pointed out that legislation backed by CAR to mandate specific decision timelines for short sales - H.R. 1498, "Prompt Decision for Qualification of Short Sale Act of 2011" - is bottled up in some House sub-committee in Congress, where undoubtedly some loyal lender-sponsored toady will probably keep it off the agenda until it dies.

So, being dissatisfied and unhappy with short sales is, and will be, a fact of life for Realtors and their clients on both sides of the deal for the foreseeable future. I guess we need to get over it and get on with things.

For Realtors who just don’t want to deal with them directly, short sales will be like the skunk that walks around your house at night. You may not have dealt with it directly, but the smell is always there and it stinks up the whole area. Short sale lenders are our skunks as Realtors. Some Realtors will figure out ways to work with them without getting sprayed. Some will try and back off after getting sprayed a time or two and many will just have to continue to do business in the area surrounded by the smell of the skunks that they don’t deal with directly. It stinks, but it is reality.

A reasonable alternative...please!

I saw an article yesterday in some news feed that I get from somewhere (it may have even been a blog) that had the headline "When did America become so cautious?" The article was lamenting the lack of out-of-the-box thinking in American politics. Of course, it was focused upon the recent debit-ceiling crisis and the lack of original ideas and their rigidity of the approaches of the two sides in the debate.


I would submit that this is because all of the money and lobbying influence has lined up behind the extreme wings of the two parties. Members of either party who stray from the party hard-line are reigned in or threatened with the loss of committee assignments and campaign support. There is little room left for compromise or common sense.

I do believe that we are in a technology environment right now that would allow the creation and the success of a more moderate, centrist party. The ability of the Internet to support massive crowd sourcing, as evidenced in the recent uprisings in Egypt and elsewhere in the Middle East, could be used to bypass the need for as much on-the-ground party apparatus as has been required in the past. If Ashton Kutcher can get over a million people to sign up to follow him on Twitter in just as few weeks, I can imagine a charismatic politician being able to do even more.

What we have lacked is that intelligent and charismatic person who is willing and able to take on the established parties. Ross Perot tried it years ago with some success. He was eventually undone by his lack of the necessary political and communications skills to express a clear and credible alternative. He became a caricature.

So, we just need to find that independently wealthy, reasonably intelligent and charismatic person who sees personal value in serving his/her country to form the nucleus of a new centrist party and rally around him/her.

I'd sign up to follow him/her on Twitter and help them get other rational and moderate people elected to Congress.. Heaven knows we need someone better to follow that the clowns that we have in Washington now.

“Ignorance is innocence - stupidity comes with experience”

What a great quote to follow up yesterday’s post about short sales. As I look back on things, I think I can claim innocent ignorance in my first couple of short sale experiences. Now that I’ve had a few short sales, I must now admit to the stupidity that comes with experience. That’s one reason that I sought out a partner for the negotiation portion of the short sale business. The more that I experience what goes on in short sales, the more stupid the whole process appears to me.


The main speaker at the recent ConEd class that I attended on short sales made the point early in his presentation that one must leave common sense out of the process. He had great stories about the nonsense that his company runs into all the time in dealing with the lenders on short sales. There is little place for logic or common sense in the process.

Perhaps the most telling indicator that common sense might not prevail is the classification of all of these homes by the lender as “assets.” They are not someone’s home, they are assets. They are not a lovingly cared for family treasures, they are assets. They are not the single most expensive and important possession in someone’s life. They are assets. Once they are abstracted to the status of assets and then lumped with other assets into investment instruments that become the possessions of investors, all connection with reality and common sense is lost.

Assets, after all, must be dealt with using rules and computer models and their fates be decided by committees. Asset managers must be assigned. Committees must meet. Databases of the assets must be created and reports must be generated. Decisions cannot be made in haste with assets. And decisions must be made in an orderly fashion and with the consent of the investors in these assets. An organizational structure must be created to deal with these assets, perhaps even special Web sites created. Why, an entire industry could grow up around these assets – and has.

Meanwhile out in the asset in question it’s been two months and no one has heard anything back from the lender about the short sale offer. Dad still hasn’t found work and the old family asset is starting to deteriorate. The family is innocently ignorant of the stupidity that is going on in the experienced land of asset management.

And yet that is our world of real estate. We do the best that we can to counsel patience and persistence to the people living in the assets. We hold hands with them. We commiserate with them. Sometimes we may cry or pray with them. Out at our end these assets are still someone’s home.

Short Sales are with us for a while...

I took a Real Estate Continuing Education class last week that was put on by the owner of a company that does short sales negotiations. He had lots of interesting statistics and stories about short sales, both the horror stories and the good ones. The thing that I took away more than anything else is that this issue will be with us for many years to come. I guess that was pretty obvious because of how far home values have fallen (at least in this area). Locally we are at about 1995 home value levels, which is about 40% lower than the 2006 peak values. So almost everyone who bought in the late 1990's and early 2000's is pretty much guaranteed to be under water. The presenter at this training opined that short sales will be with us (and probably will represent the majority of our business) until at least 2020. I have no reason to doubt that prediction.



I'm not a big fan of short sales. Let's face it, they are a pain in the rear; however, they are also a fact of life in real estate and so much better than a foreclosure. So, after checking them out further, I decided to partner up with this short sale negotiations outfit and re-institute my short sale Web site as a way to generate some business. I own some interesting URL's oriented around short sales and they tend to generate leads. I had turned off ny short sale web sites because the last set of short sale negotiator partners that I had turned out to be sleazy operators, even though they were attorneys (maybe that shouldn't have come as such a surprise).


I'm also theorizing that an improving economy will increase short sales, since there has to be lots of pent-up demand to sell in the Baby Boomer segment that is at, or near, retirement. They need to downsize for retirement and their loss of job income may qualify as their hardship. Certainly many have put themselves in untenable mortgage positions, with most believing when they did so that property values would continue to rise. There also has to be a huge group that needs to move somewhere to take advantage of work opportunities that should start opening up in an improving economy. They'll need to sell here in order to move for jobs.


It's possible that the programs that are being experimented with by some of the big banks to reset loans amounts as part of a loan restructuring will catch on. So far those are aimed at letting the people with toxic ARMs refinance and I'm sure the banks are not real big fans of them either. The banks used to offer a deed-in-lieu option too; but, that has largely fallen out of favor.


So, if you are in Michigan, go to mishortsales.com and check out our short sales program. Doing a short sale certainly beats letting the place go into foreclosure or being really stupid and just walking away.