Tomorrow Never Knows

My last opinion poll dealt with the motivation of people to purchase a home right now. The response was that downsizing was the number one motivator. I have put forth this idea in previous postings. All you have to do is look around you and you will see the "graying of America".

We are an aging bunch, we baby boomers born 1946-64. We are a product of post war parents coming home from WWII and the Korean War (they had a lot of catching up to do.)

We have always been a force to reckon with. We made rock and roll a permanent fixture; as hippies we almost changed the face of the nation, and at the very least we brought the morass that was the Viet Nam war into the fore. We attended college in record numbers and became the most formally educated group to date.

We became the "Pepsi Generation", we consumed, we became affluent, we had kids (we spoiled them terribly-oh generation "Y").

Then we started to retire. The first of our numbers just turned 60 last year. Our kids are grown and, hopefully, out of the nest. We've worked hard, been in the rat race and have come to the conclusion that we don't have to work as hard as we used to. We may still be working at our jobs but the idea of then coming home from work to work in our homes has become not so important anymore.

We want to downsize. Why do we need that big house now. Why do we need that big yard. Look at all that stuff we've accumulated. It's time to have a yard sale and buy a smaller home or condo.

So, too, are our kids' lives different. They get married later. They have kids later. Because we as parents have finally been in that unique situation of being able to provide so much more for our kids, those kids tend to mature a little slower.

They want to stay downsized. A sleeker, more active and fun lifestyle does not leave a lot of time to fix up a home or landscape a yard. Kids these days (okay, I said it) want condos or apartments with club houses, pools, gyms and other fun stuff.

Wait! Their parents want almost the same thing! The circle meets.

With all that said, Wilmington is finally catching up with the rest of the world. Bennett Realty is in the fore front of providing alternative housing for our downsized lifestyle.

We will be working closely with a developer to build a new subdivision, within walking distance of shopping, that will provide a variety of condominium configurations to accommodate our shifting demographics. (Try saying that ten times fast.)

I look forward to being a part of this and am breathing a sigh of relief. The 21st century has finally arrived!

Come Together

Who says realtors are boring!

Your's truly is the one in front with the broken foot propped up.

I Feel Fine

Cute condo, huh. Bigger than it looks, actually. Great big great room, dining room, breakfast room, galley style kitchen and 2 bedrooms larger than those in most "regular" homes.

I am showing this one and another in the same complex in the same evening. Not very exciting you say? Well, considering this is my first showing in over 3 months, its pretty exciting to me.

To have a live lead is actually unusual in real estate. Sure you get calls, but not many actually pan out. Here are the usual calls:

1) Someone is calling out of curiosity because they have driven by a $300,000 house and just wondered how much it is (I think they are hoping for a big bargain. How many times have you picked up something in a department store hoping it has been mis-tagged!)

2) Someone is calling to buy a house when they have no idea if they can afford one. When you ask them to go to a bank to get pre-approved, they bolt.

3) The call where you are told, "I'll talk it over with my wife/husband."

4) The one where they set up an appointment to see a home/meet you at the office/meet you at a house then call/don't call back and cancel/don't show up.

You get the picture.

It is also easy to get discouraged when you realize that 20% of realtors sell 90% of the homes. But instead, it should make you work all the harder to get noticed.

So, my live lead occurred at the end of the day. (I only hope that by tomorrow evening I am not doing CPR.) My day started, however, with the realization that my 1 full listing is expiring in 1 full day. My sellers told me from the beginning that if their home didn't sell during the summer that they would take it off the market for the cold months. I wasn't looking forward to calling them to ask if they would consider relisting but, armed with facts and figures, I made the call.

"I'll talk to my husband and call you back." Hummm..... But surprise! They relisted! (Oh crap. Now I have to figure out how to sell it.)

Speaking of CPR, I have kept one of my contracts on life support since April. April! It is the classic fixer-upper and is tied up in probate. I spoke to the attorney this morning and the prognosis is iffy; it is a wait and see situation. In the mean time, my buyer has agreed to sign an extension to keep it alive lest a buzzard swoop in through the loop hole and pull the plug. (That sounded better in my head.)

At the end of the day, I have had 3 positive experiences; now it is up to me to be one of the 20% to sell 90% of the homes. (Oh crap.)

She Said She Said

I wish that I could take all the credit for the postings on my blog. I guess I might actually qualify for the blame as opposed to the credit. (Credit, get it? Heh, heh)

My sister has become an avid reader of this blog, arguably the ONLY reader of this blog. As such, she has become my biggist fan as well as critic. Not critic as in "critical" but as in feedback and proof reading.

She recently, and thankfully, caught my biggest gaff so far; switching "righting" for "writing", a big mistake for a writer (righter?) to make. I fixed it so that no one else would feel my pain (pane).

The other side of the coin is that I have become a bit self-conscious knowing (noeing, noing?) that someone is out there (their, they're) actually reading this stuff instead of me just sitting here (hear) typing away. But it is a good lesson: yes, the internet will be still and let you put anything on it but that doesn't mean that you shouldn't show some responsibilty to your (you're) fellow creatures and strive to make it a better place for those of us who care (I s'pose there are some who don't, or maybe they do but just in different things, and that's okaaayyy.)

So (sew), she has sent me a great (grate) link for an article called "Dangerous Disconnect Between Home Prices and Fundamentals"; see my "Danger" link on the side bar. In short, it states that the cost of a home versus the money that you bring TO your home in the way (weigh) of a paycheck are not increasing at the same rate, hence causing a dangerous imbalance. But I'll leave that up to you (ewe) to (too, two) read.

Oh, by the way, she is older than me. (Heh, heh)

Yer Blues

Why did the chicken cross the road? Because it didn't have good enough credit to stay on its own side.

Okay, that didn't make much sense, But neither does a lease/purchase. Unless, of course, you can't get a mortgage any other way. And thereby hangs the tale.

So, if you can't get a mortgage through a bank because of bad credit, does it follow that you are a bad risk period? I don't think so, but a lease/purchase has different pit falls for all involved than just making or receiving payments.

First of all, from the seller's point of view, they don't have much to go on except someone's credit, rather like a bank. Even a personal recommendation can go wrong, speaking as an ex-landlord. (don't ask). However, they still retain the deed and all of the perks as mentioned before. And the people that would be most likely to give the lease/purchase would be an owner who doesn't owe their own mortgage. If THEY owe money to the bank and the purchaser defaults, the owner could also default, speaking as an ex-landlord. (It can scare the pants off of you.) On the plus side, in a soft market, as it is now, it may be the only way to sell a property since there is such a glut and young people in particular may have NO credit but may not necessarily be a big risk. If you are a seller, do not go lightly into that dark night. If it is not paramount to sell, don't lease/purchase if you like to sleep at night.

From the buyer's point of view, just read the above paragraph backwards. The only reason a buyer would be seeking a lease/purchase is because they can't get a loan any other way. Do they have bad credit or just no credit. Not quite the same thing, but the latter can lead to the former. Also, the buyer would not hold title to the property and therefore may have reduced rights as to how they can use the property as in altering, remodeling or even having a loud party. You may as well just rent if your home is not really your own. Then there is the question of writing off mortgage interest, taxes and insurance. Forget it. Remember the house is not your own.

And for both sides involved, the contract could be an absolute nightmare to hammer out. With a mortgage, the bank tells you what they can do and you do it or not. And when it comes to the purchase contract, you agree on a price and let your agents do all the fighting.

Where does the real estate agent fit into this picture? Way down in the left hand corner about where that water stain is. If, as an agent, you are lucky, there is money given up front as a down payment and your commission comes out of that. But if the buyer has a down payment, why are they going lease/purchase? You get the picture.

So what about the gentleman moving to Wilmington with DHL that was seeking a lease/purchase? He canceled his second appointment and disappeared.

And I had just started planning that vacation to Aruba.

Life doesn't always turn out the way you planned.

Money

Sometimes life just doesn't go the way you planned.

While on floor time last week, a gentleman called who was looking to move his family into Wilmington from Cincinnati due to a DHL transfer. The home that had spurred the phone call was vacant and had been on the market for quite sometime. During our phone conversation he told me that he still had a home to sell in Cincy so he was looking for a home for lease/purchase. I asked him why he would want to go that route because interest rates were low. He then told me that he could not afford 2 house payments and that he needed to learn more about Wilmington before he bought. I told him I would make a couple phone calls and call him back.

I found out that, theoretically, the owners would be willing to do that except for one thing. They had already rented it. So I called him back and said that if he would come into the office, we could talk about his options and that I would run some homes and try to find ones that had been on the market for awhile. My theory being that if a home is hard to sell, the owners would be more responsive to a lease/purchase idea. We made an appointment for him to come in on Friday afternoon.

"But wait!" you cry. "If he can afford a house payment and rent, then he can afford 2 house payments." Exactomundo.

When life gives you lemons, make lemonade. Okay, so I have a non-buying buyer and I'm in a slump. You just have to work with what you got.

Friday afternoon rolls around and I get a message from my guy and he tells me that something has come up so he would like to reschedule. We set up another appointment.

In the mean time, I am running figures and looking for homes and scratching my head as to why someone would want to tie themselves to a lease/purchase but not tie themselves to a bona fide purchase. Hmmmm....

The way a lease purchase works is generally this: The home is rented but there is an agreed upon amount paid up front to the seller as "insurance" that the home will be purchased by the renter. This applies to the purchase price, just like a downpayment to a bank, and is non-refundable. The seller acts more or less as the bank with the loan amoritized and the rent/payment includes principle (money that is applied to the actual amount borrowed) and interest (usually about 2% more than a conventional loan). After an agreed upon amount of time (1-2 years), the renter finances the home thru the bank and the seller gets paid off. All of this has to be put into writing of course, either through a realtor or an attorney.

The alternate way that a lease/purchase works is that the rent does not apply to the purchase price but the contract states that the renter will purchase the home in a set amount of time (1-2 years). There is still money up front.

In both scenarios, the deed is still held by the seller and, even though the renter is responsible for taxes and insurance, all remain in the seller's name. The advantage to the seller is that he still gets the tax right off.

But why, you ask, would someone want to purchase a home in this fashion? What are the advantages and disadvantages of this transaction. And why would a realtor want to get caught up in such a strange situation? And whatever happened to that DHL transferee? Find out soon in the next installment...

The Long and Winding Road

Wilmington, Ohio, Clinton County, a unique little place. It sits in the center of the triangle which is Cincinnati, Dayton and Columbus, right off of I-71.

Wilmington is the county seat, and is centrally located within in the county. Other towns in the county are Blanchester - south west of Wimington, New Vienna - south east of Wilmington, Sabina - north east of Wilmington, Port William to the north and Lynchburg to the south.

Several state and US highways converge at the city center but which came first, the city or the highways I don't know.

Wilmington was founded by Quakers around 1807 so we are soon to celebrate our bi-centennial. Quakers also founded Wilmington College, a small private college.

Clinton County is also the home of Southern State Community College which is a great place to get your associates degree then transfer to a four year. Southen State also has a satellite in Hillsboro.

Clinton County, although still considered an agricultural county, has many industries, not least of these is the DHL hub. (Bright yellow bananas with wings soar to the sky day and night.)

Clinton County also has many industries. Huhtamki Plastics in New Vienna; New Sabina Industries in Sabina; Ferno Washington, AStar and Airborne Express are based in the Industrial Airpark, also home to DHL; Kautex, and several others.

The airport that houses all of the airfreight delivery services used to be a US Airforce Base which is the main reason that Wilmington started growing in the fifties and sixties (that good ol' Cold War era.)

It closed and lay dormant for awhile until a small puddle jumping airline needed a place to set up a business flying cancelled checks around Ohio. This little concern saved Wilmington from drying up and blowing away. From this little business grew Airborne Express and from that DHL came up from Cincinnati to move their hub to Wilmington, again saving Wilmington because ABX was sliding down the charts.

Wilmington and the surrounding areas have many name brand restaurants, fast food places, a Wal-Mart (of course) and lots of small privately owned businesses.

Lake Cowan State Park is one of Clinton County's main recreational draws with people coming from Cincinnati and other surrounding areas to camp, boat and swim. Caesar's Creek Lake is also close by and is another nice state park.

Also, Majestic Springs is a nice privately owned golf course. Then there is the YMCA, Curves and a new locally owned and operated fitness club.

Wilmington,Ohio is the place you oughta be so load up your truck and move to our Counteee!!

With a Little Help From My Friends

If you are a fortunate realtor, you gain more than money during your career. You gain friends.

I have been blessed with (for the most part) very good clients. I get to know them fairly well during the few months that we work together. That is why, in some ways, a closing can be a bit of a let down. You know that that family with those cute kids are going to be on their way and not look back. Or that young gal who is striking out on her own will not give you a backward glance.

That is why most of my closings have ended with a hug. I initiate it and my people reciprocate because they appreciate the fact that we have worked together as a team and that I have taken a genuine interest in their family and their needs.

That first hug came quite spontaneously. I really don't know from whence it came. So because of that, I knew at that moment that I truly cared for my people and that I would always carry that with me. Sometimes a handshake is more appropriate, but it is still very much heart felt.

The above pictured book was a gift from that young gal that was striking out on her own. She was seeking to buy her first home; an endeavor that she knew she could do on her own without the aid of a husband or boyfriend. She was a very strong, very centered young woman working in the local publishing company, Orange Frazer Press, which her mother had started years ago. This was the first gift I had ever received from a client. (As a realtor, we are the ones that give gifts to the client.) We have even talked on the phone on occasion. As a result of this gift, we are now giving them as closing gifts.

Another friend that I have picked up along the way is the fellow that buys dumps to fix up and rent. Over the last couple years we have learned that we have a lot in common such as attending Ohio University and having a background in art. He is now renovating my bathroom.

I have also struck up an aquaintance with another renovator that bought a dump from me and will have me list it to sell when it is finished. (I just drove by there and it looks great!) His siding company is working on my front porch.

You might think that all of this is just simple networking but I see it as more than that. I see my clients as people, not dollar signs. Okay, I am not so altruistic as to say, "I don't care about making money, I just love to sell houses." But we all should be aware of how we affect other's lives and how fortunate we are when other's lives affect ours.

Yellow Submarine

Keeping motivated in a slow market is difficult to say the least. Any realtor knows that the housing market is a bit like the stock market. It has its ups and downs but for the most part it is a good investment.

One of my big bug-a-boos when it comes to news about the stock market is when it takes a plummet, you hear that so-in-so lost a million dollars last week. Well, so-in-so did not lose anything. You can only lose something if you actually are in possesion of it. Stock, unlike houses, is a paper commodity. On paper, your stock is worth a lot but unless you sell high all you have is a piece of paper.

Houses, on the other hand are real. I guess that's why they call it real estate. A house is the biggest investment that the majority of Americans make. (Don't let the pundits tell you that the majority of Americans own stock. Poppy cock! Whatever stock they own is probably tied up in a 401K in which they may or may not ever get fully vested. Fully vested means that after a period of time, the money that their employer has "matched" actually becomes theirs. In the mean time it belongs to their employer.)

With that said, your home is your biggest investment. So when the housing market drops it hurts. It hurts you, it hurts the bank, it hurts inspectors, it hurts any company that has anything to do with real estate and that is a lot. Therefore, keeping your home is very important as I have written about in a previous posting.

I am not a big listing realtor. It used to bother me but these days it is a blessing. It is hard to explain to your client why their home is not selling. Even if you go through the blah blah of the housing market it doesn't do them any good; their house still hasn't sold.

I have 1 1/2 listings right now. One is all mine; the "half" is a co-listing - the home is listed by both myself and another realtor in the office. (Co-listing is a strange critter. Why co-list when it means you have to split your commission with someone else? It works both ways. The seller gets 2 for the price of one which hopefully means better service and communication. The agents benefit because one may be able to actually get more listings but the other may have more time to service them. In my case of the "half" listing, I had made the initial contact, did the comparative market analysis, made the presentation, and discussed with the homeowner all the things that needed to be done to make the home look its best. Then the owner called a co-worker to list the home. My good co-worker was gracious enough to include me; for that I am very grateful.)

In short (okay, when I start writing, keeping it short is a struggle), motivation is key. Many aspects hang on many factors. Helping your clients through a difficult market is part of the job but the other part of the job is helping to keep the other agents in your office motivated, too. When I first got started in real estate I would get really discouraged; it is hard to make your presence known. But I had people behind me saying, "Hang in there! You can do it!" And I did.

So right now, I am helping to put together a motivational program. Nothing so cheesy as those dips you see on TV. This will be fun as it is built around a luau theme. (Okay, cheesy is a relative concept). Why help your potential rivals? Because when the tide rises, all the boats rise with it. And when the tide falls, all the boats fall, too. We all live in a........

Live and Let Die

Fridays can get a little crazy at Bennett Realty. Not that there is a lot going on, especially in this dead market, but we tend to loosen up a bit and even the broker starts getting a little giddy. I hear him on the phone with a prospect and his cackle can be heard down the halls.

One of the many hats that I wear around hear is that of the official virtual tour taker. Virtual tours are fun little things that we put on our website and on the MLS so people can see what a house looks like without actually going to look at it. Some brokerages have balked at this idea, but at Bennett Realty we like our technology. The argument against virtual tours is, by not having physical contact with a human being, one cannot sell a home. Sell as in "Hey, wanna buy this house?"

However, if you are reading this, you know that technology is here, get used to it. Once you get over that hurdle you begin to treat the internet and all of its treasures as just another tool to help you do business, like a telephone or advertising.

So what about these virtual tours? For me personally, it gives me the chance to see just about every home we have on the market, the better for me to answer questions from potential clients. For other realtors it saves time, gas and shoe leather because you are not toting people around to look at houses that they won't like. For the potential client it saves time and shoe leather because they are not being toted around to look at houses they won't like. Hummmmm...sounds like it works both ways.

Virtual tours are just an overlapping series of pictures that software puts together to give the illusion that you are walking through a house.

So in this dead market, when all you can hear is the cackle of co-workers down the halls of the office, don't let this unusual time give you the illusion that nothing is happening. Be comforted knowing that, after we are all long gone, we may not really be gone, but only lurking in a dark hallway waiting to scare some lame realtor's client. BOO!!

Fixing a Hole

The real estate world can be a cold and lonely place. Okay, not so lonely, but our fellow realtors can be cold.

Unfortunately, my latest deal with Dumpster has ended up there, in the dumpster. Our back-up offer was tossed away like so much waste paper. I found out by accident that the first offer had closed already. I hate having to tell people bad news. I try to mitigate it with something a little positive, in this case with the hopes of looking at something else to invest in. Hopefully, (there's another word you'll be seeing often), I can find something else in the "crappy" category for my client. It's becoming more of a fixer-upper world out there and competition for pieces of crap is getting tough.

Speaking of which, the glut of fixer-uppers and foreclosures out there are bringing the sharks in, circling like blood sniffing flesh-eaters.

How do you keep from being devoured and plug the hole that is your sinking ship?

The mortgage industry is being persuaded (by a rather large stick) to throw a life preserver to homeowners that are going down for the last time. Part of that big stick is made up by the mortgage industry themselves because they do not and I repeat do not want to foreclose on a home. The other part of that big stick is the National Association of Realtors. Realtors have a lot of sway in their states through lobbyists (okay, that can be a dirty word) and by the fact that there is a realtor on every corner; we are a prolific lot.

Realtors are also taught, advised and asked to take a working interest in their communities for the betterment of us all. Some do it better than others (obviously), but the good ones not only want to see you get into a good home but they want to see you keep it. (Really!)

Even in better market times, the bank will work with you when you get behind on payments. The worst thing you can do is nothing. The more you ignore the threatening letters, the madder the bank will get.

Another thing to remember is that the bank does NOT want your house. Believe it or not, that is the last thing they want. In order to foreclose on your house, they have to pay lawyers to do a lot of research and draw up a lot of papers. They have to pay someone to go to the foreclosed upon house and weatherize it, winter or summer, so pipes don't burst or a leak doesn't develope. They have to pay someone to cut the grass. They have to pay a real estate agent to sell the house. At every turn, it takes money out of the banks pocket to own a house.

For that reason, it is in the bank's best interest to help to keep you in your home.

The first thing to do when you get behind is call the mortgage company or bank. If at all possible, talk to your old loan officer. They are nice people (most of them are anyway) and very knowledgeable about how banks work and what services they offer. If you can't talk to that person, ask for someone that has information on how to help you get back on a payment schedule.

At this time, there are several programs available through banks that are designed to either help you set up a payment schedule to get back on track or, in some cases if you qualify, actually funds on hand to pay your shortfall.

Hard times can fall on anyone at anytime. Most households in this country are one paycheck away from disaster and once you get behind on your bills, it is hard to get caught up. But you would be surprised at how many companies, from the utility company to your credit card company to your mortgage company, are willing to help if you just call at the first sign of trouble.

So, grab hold of that life preserver, put an arm through the hole and hold on. There may be a hole in the ship but it doesn't mean you have to go down.

She's Leaving Home

There should be no problems. Sounds like a line from "Westworld", remember the 70's sci fi movie where the promo said "Where nothing can go wrong"?

Well if something sounds too good to be true, it usually is. In our little scenario where Mr and Mrs Jones wants to buy a house, there was really nothing wrong with each response they received - "no problems". But the cumulative effect can be devastating.

First of all, the bank is willing to make a sub-prime loan. Sub-prime means that it doesn't meet the minimum requirements set so that a loan may be federally insured. In theory, there is nothing wrong with that. But what is happening now is the high default rate because the whole economy is slowing and people's living expenses are going up or they are losing their jobs so they can't make their mortgage payment because the bank had to charge a huge interest rate in order to insure that they make some money incase someone defaults so the bank forecloses but they have lent more than what the home is worth because the price is inflated due to the added closing costs and the previously hot market so the bank can't sell the house and get their money back so the bank loses money so they tighten their lending practices so the little guy can no longer get a loan and the big guy is trying to get out from under their big balloon payment which is a large sum of money due all at once but no one is buying a McMansion because they cost too much to heat because fuel prices have gone up and the baby boomers are downsizing because they are empty nesters and want smaller homes so the big houses are sitting so the people that are trying to sell them are having to take a loss because of the glut on the market of large homes and the new mid-priced homes are sitting because of all the new subdivisions that popped up due to farmers not being able to make a living so they sell off road frontage or whole farms and investors sucked them up because the land was so cheap then they have to make a profit so they sell lots to builders and the builders build until there are too many new houses so the builders stop building and their construction crews get laid off and everyone is selling and no one is buying so there is a glut on the market so a buyer has an advantage because if one person won't come down on their price someone else will so prices start to drop what with the law of supply and demand and with all the empty foreclosed homes on the market seasoned investors and first time investors are looking for a bargain to fix up to sell or rent then everyone thinks that houses are out there for the taking and they don't want to pay anything close to what a home is worth but people still have to sell so they end up owing more than what they can sell the house for which results in negative equity also known as being upside down so the seller actually has to bring money to closing which amounts to almost paying someone to take your house and with fewer sales the title companies don't have closings so they end up closing their doors and the mortgage broker has no mortgages to broker so he goes out of business and realtors can't sell houses because of the afforementioned conditions and you wonder why the housing bubble burst?

But now the banks are getting real and have started putting programs together to help people stay in their homes because it is expensive to foreclose..........

HELP! is really on the way, I promise.

Because

Whose idea was it to call August "the dog days of summer." Obviously this dog is doing quite well, thank you.

The transaction that I am putting together for Dumpster, which involves the commercial property, has taken a leap forward. It appears as though the buyer who had a back up offer and got first offer when we couldn't obtain financing in time may also be having problems with financing because it hasn't closed yet. I had advised my people to continue pursuing their financing and by Jove they got it. So we may yet be able to bump the usurper off the top of the heap, darn him (or her)! Sometimes it is a dog eat dog world (there's that "dog" comparison again) and the one with the milk bone shorts gets the short end of the stick. (I can't seem to get away from all these cliches so I think I'll move on........)

So, the firey dragon of foreclosure is breathing down your neck. How did you get here and how can you get out? Well, if the bank is after you I would place odds that you bought your home sometime within the last 4-5 years. Money was cheap, plentiful and easy to get. And even though previously I stated that the housing "boom" was not the same as inflation, it bears a keen resemblance. Lots of flowing money causes prices to go up.

Here's an example: Because you want to buy a home, you go to the bank of your choosing. While you are sitting there, they pull your credit. Because you had an illness a couple years back and hadn't adequate insurance, you have some outstanding bills. Also, during that illness, because you got behind on your credit card payments, you incurred several late fees. Mr. Banker, "I see you have some credit issues, but if you write down the reasons for me I will submit them with your application. There should be no problems."

"Great!" you say. "Where do I sign!"

"Well, there is something else......."

"You mean I can't get a loan?" you ask.

"Oh, but of course," answers Mr. Banker. "But we have to charge you 8.5% interest instead of the regular 5.85% and the seller will have to give you some money towards closing costs, but I'm sure there should be no problems."

And because you and your wife and baby so desperately need to get out of that tiny apartment, you sign on the dotted line.

So, you walk into the neighborhood real estate office.

"Hello, may I help you?"

"Hello. We would like to buy a new home."

With dollar signs shining in Ms Realtor's eyes, she says, "Please have a seat. Now, Mr. and Mrs. Jones, are you pre-approved for a loan?"

"Why yes!" you both answer in unison, beaming. "Here is our letter right here!"

Ms Realtor glances over it. Everything looks in order but the seller will have to put some money towards closing costs. Mr and Mrs Jones obviously don't have any savings account. And because Ms Realtor needs to pay her own bills, she smiles and says, "There should be no problems. Let's get started!"

And the big day arrives! Mr. and Mrs. Jones close on their new home. They paid $150,000 for it but because the seller had to pay some of the closing costs that would normally be the responsibility of the buyer, they had to add $5000 to the purchase price now making it $155,000. And the high interest rate makes the payment, $1200, a stretch.

Stay tuned.......

Help!

Unless you are living in a hole, you are aware that there are a record number of foreclosures across the country. If you are living in a hole, it might be because you have been foreclosed upon. And if your head is stuck in a hole in the sand, you might very well end up in foreclosure.

The state of Ohio has the dubious distinction of being number one in the nation in foreclosures. There are many factors; stating that the housing bubble has burst is putting it much too simply. What caused the bubble to burst.

Banks, realtors, bankers, home buyers, home sellers, bankers, mortgage companies, government regulations, lack of government regulation. Oh, did I mention bankers and mortgage companies?

In other words, we all had a small part in it if you have been involved with buying or selling a home in the last 3 years.

Realtors:
Hindsight is 20/20. If someone walked into our offices and wanted to buy a house, we didn't care how or why the mortgage company lent them money, we just sold them a house. I have been guilty of this and have even gone so far as to tell young couples that money was so easy to come by that their dog could get a loan. Half in jest, full in earnest.

Banks, bankers, mortgage companies:
Come on guys! Did you really think that someone making $40,000 a year could afford a $300,000 house?! During the last 3 years, banks seldom looked at ratios (your income in relation to your debts). All they wanted to see was your credit score also knows as your FICA. [Credit scores are based on your ability to pay back money, ie make monthly payments on time. So theoretically, if you owed a million dollars, the bank didn't care as long as you made your payments on time.]

Also, the banking industry came up with all kinds of "creative financing" designed to get you into just about any house your little heart desired. Interest only, balloon, adjustable rate, no payment for an extended amount of time (then they hit you big). More on all of these terms later......

Buyers and sellers:
Okay, so its natural for everyone to want a place to call their own. It is also natural that if someone is willing to give you money, you will take it. So if a buyer can give a seller money, the seller will stand there with their hand open. And the more money to spend, the more was charged. (Do NOT confuse this with inflation.) This phenomenon caused a little condition known as "getting upside down." Sound uncomfortable? It is, especially if it involves your pants pockets being open whilst you are being hoisted into the air by your ankles. More on this condition later.......

Bank regulators vs de-regulators:
Think about the Savings and Loans scandals of 20 years ago and make up your own mind. If you are less than 2o years old, ask a grown up.

So, if the foreclosure dragon is breathing down your neck, HELP! is on the way.........

I'm Only Sleeping

ZZZZZZZzzzzzzzzzzz!!!!!!!!!!!!!

As the mercury rises outside, people's energy drops. This must be the reason why it has been so quiet today.

I made some follow up phone calls to prospective clients to touch base with them and see what they thought about the last bit of free information I gave them. Sorry, it's amazing how fast you get discouraged after even just one day of "not much happenin'". I spoke to a woman this morning that I have been corresponding with since March; we have never met. I thought I had found her the perfect home; location, price and setting. She was to talk to her banker about taking out a bridge loan since they did not want to put their home on the market until some work was done.

[A bridge loan is a special type of mortgage where your old home and your new home is financed together. Therefore, you do not have 2 mortgage payments. You basically end up with 1 1/2. It is one solution to getting your dream home before it gets away while you sell your current home. Then in the near future after you have sold the old home you can refinance and have just one normal payment. The pitfalls are that you are saddled with a rather large mortgage payment and there is always the chance that the old house will not sell in a comfortable amount of time. Please talk to your banker for specifics.]

Well, she decided that a bridge loan was not for them even though the house was perfect, etc. She was concerned that the amount that they could afford to offer the seller would not be fair to the seller. Boy, you don't meet such nice people too often! Most potential buyers want to get the home for the lowest price possible; that's the name of the game. I will follow up again soon to see if she would want to reconsider since the sellers are very motivated.

I also spoke to a gentleman interested in some new construction he had seen in a new subdivision. Again, the seller who is also the builder is very motivated and is willing to come down quite a bit. Hopefully we can get them together and I can get the buyer pre-qualified quickly. (Yes, I know. I should do this before even getting started, but different situations call for different approaches. As the saying goes, "The definition of insanity is 'doing the same thing over and over again and expecting different results.' ")

The reason I say this is because a young couple came into my office who were looking to buy their first home. I sent them to several banks to get a pre-approval letter and I haven't heard from them in 2 days. First time home buyers can get scared when cold reality sets in. This is a balancing act that takes a bit of discernment and there really are no pat answers as far as I am concerned. You just have to be gentle and understanding and give everyone the amount of space they require. And remember, this is not a contest; so please, no wagering.

When I'm Sixty-Four

Old houses have always been my thing. You would think that after

almost 30 years of dealing with these monstrosities I would have learned my lesson. But nooooooo!

Take this home to the right, for example, at 283 N. Mulberry St in Wilmington. This home has a story to tell. It is about 100 years old. It most probably started out as a four room house, which was not unusual in those days. The woodwork in the front of the house is quite ornate and the front window has leaded glass at the top.

As you move back through the house, you can see that it has "add-on-itis". As the family grew, so did the house. Room after room after room, to the point where you can't tell which room should be used for what. The kitchen as been "updated" so unfortunately not much is left of its original character except the huge windows and some beadboard. The original kitchen may have started its life with a hand pump then quickly moved to a huge deep porcelain coated cast iron sink. No cabinetry, of course, but the walls would have been lined with large pieces of furniture full of dishes, food and cooking pans. The "Hoosier" cupboard was the first leap in kitchen conveniences. It featured a huge flour bin in the top portion and little inside wire shelves to organize all your baking needs.

There is also a walk-up attic. Homes that were added onto frequently would finally come to the point where the current roofs just didn't make sense anymore. At that point, a complete new roof would be added to encompass the whole house. Look closely at this house and you can tell that the large pyramid style roof almost dwarfs the house. The result is the huge attic; more space for the family to grow.

But as so often happens somewhere along the way, for reasons unknown, the home falls into disrepair and it becomes a rental property and its rich history of all the families that have lived and loved there is lost.

I guess I have just answered my own question. THAT is why I love old houses and that is why I still live in an old house.

So when it comes time for you to buy your next home, don't just automatically think "new". Think about all the wonderful qualities of older homes, from rich wood floors to soaring attics. Sure, it might take a little "sweat equity" but you will be doing something nice for your home town; keeping it beautiful. And you will also be lending your own rich family history to that of your "new" old house.