Better Than A Tax Credit?

 Posted by at 8:36 am
Jun 292010

Here’s an article you’ll find interesting if you are buying or selling property… I’ll give you a short version. The article suggests buyers who did not take advantage of the recent tax credit may actually come out ahead.

Why? There are at least two reasons.

First, sellers are taking increasing numbers (and amounts) of price reductions on their listed property simply because buyers are harder to find since the tax credit expired.

Second, interest rates are continuing to drop–nearly half a point since the end of April. Frankly, this one suprised me, you won’t have to go back too far to find posts where I predicted a rise. But my inability to predict this one accurately is the buyer’s gain! A half point difference on a $175,000 loan amounts to a $15,000 savings on a thirty year mortgage.

Of course we must add the disclaimer that “all markets are local” and all generalities are false, but this still can be a very good time to buy. Don’t fret over missing the tax credit, chalk up some even bigger and better savings!


The Silent Victims

 Posted by at 4:33 am
Jun 212010

Most clients discover fairly quickly that I spend a fair amount of my available volunteer hours working with children… second and third graders. So it goes without saying that a recent headline caught my eye. “Housing Crisis Wreaks Havoc On Children” It’s not an article for the faint of heart.

It’s a fairly long article filled with statistics… some that are frightening. One of the lead paragraphs points out that a large number of Americans are spending nearly half of their income for housing, leaving very little for other basic necessities. “Middle and lower income households with children are dedicating more than half their outlays to housing, leaving less than $600 per month left for all other necessities… Similarly burdened elderly and single person households had even less (under $500) left over after housing expenses…”

A gross over-simplification is that housing costs (remember to include taxes and utilities) are out pacing income growth. We hear it in town meetings. “I haven’t had a raise for three years but my taxes keep going up!” I hear it from first time homebuyers who are rightfully often buying “less” home than the numbers say they can afford. The real estate industry used to encourage people to stretch their limits. I’m not sure that’s a wise move in today’s economy.

If you are thinking about a home purchase or relocation, an objective analysis of housing costs goes along with applying for a mortgage. But remember, your “mortgagability” is a snapshot in time. The current foreclosure crisis is built in part on people who are now living in homes they simply can no longer afford.

Beyond that, if you have some stability in your life, how about considering a helping hand to those who do not? There are lots of programs that do not require a major commitment of time and money. One of those here in Piscataquis County is called Smart Starts for Students.

The campaign represents a school supply assistance program for the greater Piscataquis area by providing starter packs of new school supplies for families in need throughout MSAD #4, #41, #46, #68 and Union #60. Last year nearly 250 kids benefitted from the program and there’s every reason to believe the need will be even bigger this coming school year. Penquis is looking for donors to help empower our kids.

Donations can be money or specific items. There are lots of options! You can “back to school” shop for a specific starter kit or just some items… you can pick which district your donation will go to and even decide whether you want to help at the elementary, middle or high school level. Penquis is working really hard to make it easy for us to help. Look for drop boxes around the area where you can leave items. You can find details regarding the program at the Penquis web site or call the office at 207 564-8196 564-7116 (see comment).  Parents may use the same resources to register their children for the program.

Maybe if we help some of these kids get through school they’ll be able to figure out how to get us out of the mess we got ourselves in!

Jun 012010

I recently attended a Financial Literacy Summit and had the opportunity to sit in a class conducted by an extremely energizing and engaging teacher. One of the things she said that stuck with me was, “The way you do anything is the way you do everything.” She was talking about personal finances but she could have been talking about almost anything. She also said “It’s better to tell your money where to go than to ask where it went.”

So much of our success is dependent on planning. It’s no secret these past few years have been challenging financially for individuals and organizations. Those challenges also include opportunities to rethink what we do and how we do it. Maine Choice Realty is no exception.

As a company, we are in the process of “telling our money where to go” in the sense that we are refocusing our approach to the business. We are looking at ways to increase our visibility while at the same time decreasing our overhead. This will include taking advantage of technology to improve how we handle routine office tasks.

One advantage we’ve enjoyed during these difficult times is that we have a good foundation. We’ve known for some time that most of our clients come as a referral; that certainly hasn’t changed.  Our ongoing analysis reveals that print advertising continues to decline as a source of qualified buyers. So we are refocusing our marketing efforts to leverage those things that work.

The business of real estate is certainly changing and we know that if we don’t create change, change will create us. So we are creating some change!

For the most part, you won’t notice much change from the Maine Choice Realty you’ve known. We have provided you with service you can trust and we will continue to do just that.

On a more personal level, these changes are providing an opportunity for me to rethink my approach and strategy.
Thanks to my teaching background and current associations I’ve been in a bit of a “good news/bad news” situation. I’ve enjoyed the synergy – my real estate practice makes me a better teacher and my teaching makes me a better real estate practitioner.  I believe the business of real estate suggests that buyers and sellers will benefit greatly being represented by someone who can both teach and learn. The good news is I can do that!

The bad news is that the demands of a “dual career” are at times difficult to manage. There are times when phone calls don’t get returned quickly enough and appointments have to be scheduled too far in advance. I do appreciate clients who understand the “laws of service” and view our relationship as a partnership. (I’d encourage you to take a look at the reprinted article, “The Immutable Laws of Service.”)

With all of that as background, like Maine Choice Realty, I too am refocusing. Also like Maine Choice Realty, I’m not sure there will be a very visible difference to most people. One reason for that is simply that many of the changes will be gradual. Here are just two areas of consideration:

  • My “boomsmaonline” blog will undergo some major upgrades and adjustments. I expect this will be time consuming and difficult, but anticipate a good return on those investments. The blog will continue to be information based and more about the process than listings, but I anticipate adding a search for property feature and will increase the amount of information regarding courses and teaching.
  • Central Maine real estate has a number of unique challenges when it comes to marketing. I’ve worked from Bangor to Skowhegan to Greenville—not because I enjoy driving but because that’s where “the business” has been. Keeping abreast of those communities and markets is a real challenge—not to mention expensive. Refocusing will include a hard look at those marketing challenges and some redefining of how far I travel.

Much of the management consulting I did in the past was done during the days when “putting the customer first” was fashionable to the point of being faddish. Tom Peters was preaching “In Search of Excellence.” Quality improvement programs were a dime a dozen. One of the missing components in many of those programs was a very simple truth: a business’s first obligation to its customers and clients is to operate efficiently and profitably. I kept that truth at the core of my work then and now.

There is a balance in this that is difficult but not impossible to achieve. As evidence of how difficult it is, a recent article by Mike Parker (a well known authority on the subject of online marketing services for real estate professionals) cited a statistic showing that only 22% of home buyers are happy with their agent. Does that imply we are sacrificing “customer service” during the hard times while we chase profit?

Of perhaps even greater interest is the fact that this client satisfaction number has declined over 70% from 2004 when nearly 80% were at least satisfied with their agent. Unfortunately, my own observations and experiences support this statistic. I’m happy to be an exception to the trend.  I think it’s easier and more effective to decide where client satisfaction is going to go than it is to analyze where it went!

So while things are happening in the market that are making the business increasingly difficult, at Maine Choice Realty and with my own practice, my objective is as always: to be in that percentage of buyers (and sellers) who are happy with their agent.

Thanks for your continued confidence!