Merry Christmas!

 Posted by at 7:06 am
Dec 222011
 

Greetings of the Season!

While it has become traditional, it is not habitual! The holidays are a great time to say “thank you” and to recap the past year.

About this time last year I announced that I was “moving to Mallett” and I’m pleased to say that decision has proven even wiser and better than I thought. The move has allowed me to focus my brokerage business and become more localized while working with some great folks. I certainly do not miss the commutes to Newport!

This no doubt contributed to the fact that I’m having a fairly busy year in spite of the market situation. But I still believe that my fundamental focus drives my success. Diagnosing problems and understanding clients’ needs has always been important; given the increasing complexity surrounding the buying and selling of real estate, now it is vital. More than ever you need a partner who knows how to learn and who knows how to teach.

And speaking of teaching, I am now teaching at least six real estate pre-licensing courses every year. Those of you who know me well know that teaching is my first love. This year also saw growth in enrollments in the courses I’ve offered through the Piscataquis Valley Adult Education Cooperative. Next year will include a “solopreneur” series for folks who want to start a business on a very individual and fundamental basis. A collaboration between the Cooperative and Piscataquis County Extension will create a “You Can” series of classes for folks interested in traditional skills (agricultural, homesteading, domestic). I’m working on a course called “Cash as a Crop” that will look at ways to raise and save money in this difficult economy. (It probably won’t include investing in real estate!)

Because of this increased emphasis on training and education, I’ve redesigned a second website that includes “brain leaks and musings” as well as information about courses I’m teaching. You can even sign up for email announcements of future courses.

My “work” with the kids continues… every so often someone will decide that being around the kids is keeping me young. I’m not so sure about that, but I do know that being with them is rewarding and I learn a lot from them. And they are definitely good for an occasional laugh. I enjoy their problem solving abilities and their view of the world.

I still believe that the real estate market shouldn’t control us; we should look ahead and consider what we need and want to accomplish. If you follow this blog you know that I firmly believe the statistics do not control us; we create the statistics by the actions we take and the skills we apply. That is also true of life. These are times when it’s easy to feel discouraged and uncertain. But just a slight shift of focus and we can look ahead and find opportunities all around us.

Thanks for your confidence and the opportunity to work with you. Do let me hear from you… and have a meaningful holiday and a new year filled with health, happiness and prosperity. The video below just might help with some Christmas Spirit.



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Dec 132011
 

Wikipedia defines fair as “in accordance with the rules or standards; legitimate.” One of the more memorable definitions I’ve encountered was offered by a student a few years ago. He said that whenever his kids whined “Dad, that’s not fair,” he would remind them that a fair was actually a place where pigs go to compete for ribbons.

In real estate classes, I “force” students to memorize the definition of fair market value, but we also want to be sure we understand that definition because it’s a pretty important term to sellers and buyers. It’s a lengthy definition, but the core of it is “that price… which a ready, willing, and able buyer will pay…”

Arriving at the fair market value for a property involves both science and art. I’ve brought the topic up because according to a recent survey nearly three-quarters of home sellers think their homes are worth more than the price the agent determines. Where it gets really interesting is that the same survey indicates that 68% of all home buyers believe homes are overpriced. And, yes, it’s possible for both of those things to be true at the same time.

In the article I read, one professional suggests that the problem is “fixing the credit system.” There’s a leap I really do not understand. (The suggestion is that would bring more qualified buyers to the market and increase demand.)

The law of supply and demand is still at work. In general, we are currently working with high inventory (supply) and low demand. That low demand is not totally the fault of the credit system. There are many qualified buyers who are sitting on the sideline for lots of reasons. Most of those reasons fall into the category of “fear” and they are all about the future and mostly about the economy.

This all gets simpler when we recognize that homes are bought and sold one at a time. Things would get really simple if we could remove the emotion from that process. We might then be able to get those sellers who think they aren’t getting enough and those buyers who think they are paying too much together. This means we have to get price into perspective–hard to do for sellers who are faced with a mortgage payoff that exceeds the current market value.  But let’s not forget that it’s also hard for buyers who want to buy more home than they can afford.

(One concern I have that I hesitate to raise–the cost of home ownership is about a lot more than the sales price. I’m afraid that the current situation is making it very possible for buyers to buy homes they cannot ultimately afford. That’s probably a different topic. For today, buyer alert: don’t let low pricing lure you into making a bad purchase.)

 The talking heads will probably continue to over-simplify things. In truth, there’s always been a tendency for sellers to over value and buyers to under value. What makes the current situation unique is the disparity. We might do well to worry a bit less about blame and “fair” and more about buying and selling. Simple, really. Not easy.

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No Whining!

 Posted by at 5:25 am
Dec 052011
 

As if to reinforce my previous post, I read a news item this morning pointing out that pending sales are up but along with that REALTORS are reporting a signficant number of “settlement failures.” (A settlement failure happens when a buyer and seller agree to a “deal,” but something happens and the sale doesn’t actually take place.) The talking heads are of course blaming this on the lenders. (By the way, the statistics on the failures are not hard numbers-they are based on a survey of REALTORS who are reporting they are experiencing the problem.)

One comment posted to the story by a REALTOR included the observation that the “entire industry is being held hostage to ridiculous underwriting standards.” I confess to chuckling a bit.

I have an idea for her. I think she should start making $100,000 plus loans, asking herself just how much assurance she wants that her borrowers are going to pay her back. My guess is she’ll want some underwriting standards, documentation, and won’t be making loans to just everybody. If she can come up with enough money, she can turn an entire industry around.

 (Just to put the lending risk into perspective, a separate article notes that in cases where the lender or federal government modified mortgages to assist the borrower nearly half are in foreclosure again anyway.)

There’s no doubt that mortgages are a lot harder to get now than a couple of years ago. Personally, I’m not sure that’s a bad thing. But to those who are whining, I would suggest that unless we are going to start opening our own banks, “it is what it is” and we (REALTORS) need to start dealing with it. Whining about it isn’t going to help one bit.

We can’t continue to shout, “It’s a great time to buy!” because it’s only a great time to buy for those who can and not everyone can.

My personal experience is that it’s not THAT difficult–there are lenders with money to loan who have reasonable expectations. Buyers (and agents) who are looking for the slam dunk are going to be disappointed. You do have to work for the mortgage and the sale. Sorry.

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