Real Estate Investing

I don’t believe 2008 will go down in history as a great year for real estate.  We saw the market continue to struggle, even as interest rates and home values shrank - usually something that would spur more interest in housing.  We’ve seen foreclosures throughout the country sink families - up close and personal.  My friend Mary is still hanging on by a thread, but a look around sees homes that used to be filled with laughter now sitting vacant. 

I started writing here at Banks.com in May of 2008, replacing our friend Hayli Morrison who continued to write on other sites for some time.  Here are some of my favorite posts since I started here.

A laughable sales tactic by one agent - block the door to prevent the buyer from leaving!

Top 10 signs of when a builder goes bad - I’ve seen even more craziness from some builders since this post. One finally put some screens in the windows of a home he sold a year ago when he needed his former buyer to sign off on an easement mistake. She refused to sign until he brought her some screens.  Now the bugs stay out when her windows are open!

Who knows what market lurks in the hearts of real estate?  The DENTIST knows! (The buyer never did buy…) (Oh! And I recently heard that Ed McMahon gets to continue living in his home).

Oops… why Realtors cannot conduct home auctions on eBay (you must have an auctioneer’s license!).

The ups and downs of living in a mobile home.  I’ll sum it up… tornadoes = bad and affordable = good.

Can you find another place to live after foreclosure?

People either love Realtors or they hate them.  Me?  I love them.

Pets are abandoned when homes are foreclosed.  This still makes me really sad.

Look out!  Spy cams and hidden mics can be anywhere!

Outgoing referrals are a good thing - when the client is just not ready to buy/sell! Or if they’re a jerk.

It’s lollipops and gum drops out there, people.

Different types of agents:  Lions and Tigers and Bears, oh my!

A Real Ghost Story … and you do have to disclose ghosts in California.

Unemployed Should Get an Automatic Stay on Mortgage Payments: An Editorial Opinion

I’m still mad about this … mortgage companies won’t sell if they only break even (but I’ll bet they’ll get some bail out money!)

At Thanksgiving, everyone gets thankful.  This post say why I am thankful to be a Realtor.

Safety Tips when Decorating for the Holidays

How One Salesman was a Real Jerk

Building Green

Happy New Year!  Again, may tomorrow’s dawn bring much joy to your life.

One of my favorite title companies closed its doors for good several months ago because of the real estate slowdown.  The owner was retirement age and she’d begun working part-time.  When we had a mini-surge in business, she found herself at the office full-time again and decided she much preferred her leisurely spend-the-day-in-the-sun lifestyle. She made the decision to permanently close and became another example of how the housing market has an across-the-board affect on other businesses.

However, at closings she’d clearly explain the 20-page form that reviewed the legalese that would lead to foreclosure.  She’d tidily sum it up by saying, “It took an entire tree to tell you ‘You don’t pay, you don’t stay.’”

I’ve seen people lose jobs and go into foreclosure.  I’ve seen foreclosures due to ARM interest loans where the home becomes unaffordable.  But perhaps the worst type of foreclosure I see are those due to medical reasons.  One of my best friends is a stay-at-home Mom.  She and her husband have two children: daughter is 7 and son is 1. Her husband had surgery and his anticipated 6-weeks off work dragged into 3-months.  I don’t know how they held on to their home, but they’ve somehow managed.  I know they’ve had to apply for food stamps and have gone into bankruptcy.  Because of surgery.

I read this morning that Johnny Carson’s former sidekick Ed McMahan is fighting foreclosure on his home at this time.  According to the article, after Mr. McMahan broke his neck 18-months ago he was unable to work as a commercial pitchman.  Perhaps like the rest of us, without regular paychecks, he couldn’t make regular mortgage payments.  He and his wife are now working with their lender to hold on to their home.  When the threat of foreclosure happens to prominent people (Michael Jackson, NBA Player Latrell Sprewell, Major League Player Jose Canseco), we’re reminded that managing our budgets is not something to take lightly.

As Douglas Glenn Clark said in an Ezine article about Canseco, “Money management matters.”  It matters to all of us.

Living large becomes a loser’s game when lack of cash flow results in too many scoreless innings. In a sense, the subprime loan crisis is the story of minor leagues players - all those good people who technically could not qualify for loans - suddenly being allowed to join The Big Game, the majors. No one seemed to care that they lacked the skills to hit one out of the park: i.e., their income was basically fixed and not substantial enough to cover all the bases.

I’m not a licensed financial advisor, but this advice should be common sense.  Here’s how I prioritize my bills:

1. When you get paid, pay your mortgage first.
2. Pay your utilities second.
3. Feed your children third (use coupons, eat beans, eat veggies if you must).
4. Make your car payment (you have to be able to get around unless you’re fortunate enough to have a good public transit system).
5. Pay your medical bills.  You don’t want your doctor’s office to cut you off if you have a serious health problem.
6. If you have credit card debt, pay a little more on the cards with higher interest so you can put those money-eating pieces of plastic to rest more quickly.
7. Go for your other bills.
8. STOP SPENDING MONEY.  Don’t eat out, put down that extra pair of shoes or purse you must have.  STOP SPENDING MONEY.

I know my “Stop spending money” message isn’t healthy for our economy, but you have to consider your financial well-being.  In this case, the needs of the individual (You) outweigh the needs of the many.  If you want to learn more about frugal living, visit my friends at Home Ec 101.

Photo from here.

While the real estate market in all parts of America isn’t necessarily as grim as many would have us believe, it is certainly a buyer’s market. However, there are many homeowners looking to sell their property who refuse to acknowledge this. If you do not price your property fairly (in accordance with the housing market, the area’s crime and poverty level, and the property values of surrounding homes), you can be in for grave disappointment.

You will get fewer looks. You will find that responses to your advertising will be fewer and farther between. This means your property could stay on the market longer, and property that has stalled on the market is a definite deterrent to buyers.

You will attract the wrong buyers. For a sale to proceed, the buyer’s wishes and the home’s features must agree. An overpriced home will entice buyers shopping in a certain price bracket, but with far higher expectations than your property can meet.

It’s not good starting ground for negotiations. Prospective buyers will be less enthused to negotiate because, by talking the buyer down on the price, they are not necessarily getting a deal. They are probably just getting a home at full market value. They expect a deal, especially with the current buyer’s market.

It could mess up your closing If your house is priced above the appraiser’s estimate, it could prevent the buyers from successfully getting the mortgage loan they need.

The comparison factor An overpriced home makes a great comparison for less expensive homes with more features. There’s plenty of great deals out there, so do your research before determining your price. It’s better for you, not your buyers, to be first to identify the great deals offered by the competition.