I hear a lot of talk that our country is in decline or we don't compete as well as we used to. My career takes me to some questionable neighborhoods in the city of Cleveland that really makes me question that myself. But what I found in this East Cleveland apartment building made me think about what made our country great: A 'can do', entreprenurial, survival despite the odds situation actions taken by 'John'!
I recently met 'John' while sizing up a recently foreclosed property. He was one of the tenants that had assisted the absentee owner over the last few years. In the past few months, communication with the owner had ceased and he was faced with the prospect that utilities might be shut off at his home, the building.
This tenant, acting as the manager, negotiated with the local service people to not shut things off and give him some time to pay. He collected what rents he could and paid it to the companies, setting up a payment plan with them. He further managed the hallway lights shutting them off first thing in the morning and only turning them off at the end of daylight to minimize the costs. Finally, he performed the ongoing maintenance as needed and as the available rents would cover.
He explained it to me this way: 1) I don't want to move, this is my home and works for me for a variety of reasons 2) I and the people around me shouldn't have to live less comfortably because the 'owner' didn't live up to his responsibility 3) He was quite capable of taking care of himself in the interim so why shouldn't he?
How many other buidlings and homes were just let go because of apathy. I salute John and all of the other hard working Americans that just keep coming together in the face of adversity to make this the greatest country in the world. I hope I can find him a new, compassionate, concerned owner for the building that shows him (and all of the residents) the respect they deserve...
Sunday, October 4, 2009
Friday, September 11, 2009
What if you had a passion for your job?
Labor Day is the celebration of the tireless labor that has made our country exceptional from tradesmen all the way up to executives. For me, it was a time to ponder as I drove my family home from vacation.
Labor Day also marks the end of summer - it means it is back to work For most people Monday morning (or Tuesday in this case) is a sad event. But what if you really liked your job? What if you had a passion for what you do?
I can assure you that I do not dread the start of the workweek. I took a hobby and made it a career. What could be better? (Okay, yes - being a pro golfer would be better but consistently shooting over 100 per outing isn't going to get me on the circuit) Don't misunderstand, not every day is a good day. Rather it is just that every day has the potential to be fulfilling (and lucrative).
There are few people that are able to combine something they enjoy with the ability to make a living from it. Make no mistake, it is not a case that some people can't but it is a risk that they won't take. Talk to Social Workers or Pro Athlete or a Craft Store owner or even a talented Chef - they will all talk about their 'job' in a way that shows their passion.
If you ever have the chance, you might just want to take it. Don't listen to what people say - they could just be jealous! You may not being monetarily wealthy but your richness will come in your fulfillment. If you are passionate, you will be successful!
Labor Day also marks the end of summer - it means it is back to work For most people Monday morning (or Tuesday in this case) is a sad event. But what if you really liked your job? What if you had a passion for what you do?
I can assure you that I do not dread the start of the workweek. I took a hobby and made it a career. What could be better? (Okay, yes - being a pro golfer would be better but consistently shooting over 100 per outing isn't going to get me on the circuit) Don't misunderstand, not every day is a good day. Rather it is just that every day has the potential to be fulfilling (and lucrative).
There are few people that are able to combine something they enjoy with the ability to make a living from it. Make no mistake, it is not a case that some people can't but it is a risk that they won't take. Talk to Social Workers or Pro Athlete or a Craft Store owner or even a talented Chef - they will all talk about their 'job' in a way that shows their passion.
If you ever have the chance, you might just want to take it. Don't listen to what people say - they could just be jealous! You may not being monetarily wealthy but your richness will come in your fulfillment. If you are passionate, you will be successful!
Tuesday, September 1, 2009
Is FHA the new Subprime Mortgage
It hasn't been too long since the 'Mortgage Meltdown' when the 'Foreclosure Crisis' started, so you will remember Subprime Loans. Luckily, we learned our lesson as a society and mortgage companies are issuing these products anymore, right?
WRONG, they still exist we changed their name to FHA loans. Nearly 1/3 of loans today are FHA loans, the new subprime.
Let's remeber the definition of Sub Prime - It simple means that the borrower did not qualify for the best rates & programs available. It is often confused with meaning exotic loan programs like Option Arms and Interest Only but those were simply programs available under the Sub Prime category.
FHA has lower standards for approval than conventional loans. It is not credit score driven (really it is, but we pretend it isn't - long story), qualifying ratios are much easier to achieve and it requires a very low downpayment (sometimes $0 in association with other programs). These are the exact criteria that defined Sub Prime. I should note that the exotic variations do not exist so we are in a little better shape.
There is one drastic difference between Sub Prime and FHA: FHA is provided by our benevolent government while Sub Prime was concocted by the rich bankers. This is important to remember. This time, if we have another meltdown, there will be no question that the taxpayers are funding the bailout.
Do I have something against FHA? Of course not. I recommend it to my clients, am likely to use it for my next purchase and believe it is an excellent alternative for certain people (just like Option Arms were good for a very few select people). I just want everyone to be aware that just because the names change, the underlying reality continues to exist.
WRONG, they still exist we changed their name to FHA loans. Nearly 1/3 of loans today are FHA loans, the new subprime.
Let's remeber the definition of Sub Prime - It simple means that the borrower did not qualify for the best rates & programs available. It is often confused with meaning exotic loan programs like Option Arms and Interest Only but those were simply programs available under the Sub Prime category.
FHA has lower standards for approval than conventional loans. It is not credit score driven (really it is, but we pretend it isn't - long story), qualifying ratios are much easier to achieve and it requires a very low downpayment (sometimes $0 in association with other programs). These are the exact criteria that defined Sub Prime. I should note that the exotic variations do not exist so we are in a little better shape.
There is one drastic difference between Sub Prime and FHA: FHA is provided by our benevolent government while Sub Prime was concocted by the rich bankers. This is important to remember. This time, if we have another meltdown, there will be no question that the taxpayers are funding the bailout.
Do I have something against FHA? Of course not. I recommend it to my clients, am likely to use it for my next purchase and believe it is an excellent alternative for certain people (just like Option Arms were good for a very few select people). I just want everyone to be aware that just because the names change, the underlying reality continues to exist.
Thursday, August 27, 2009
Do Appraisers know best?
If you are an appraiser reading this just read the whole post before you react...
Appraisals have always been to me an interesting part of the real estate cycle. The job is to place a value on something (a piece of real property in our conversation) based on an organized set of rules and processes to obtain that value. In other words, they make a guess or state an opinion. I don't say that to devalue the profession but what if 2 appraisers value the same property and have different opinions of value - does that mean one of the guesses/opinions is wrong?
As a Realtor, I would suggest that the true value of a property is determined when 2 educated parties come to agreement on a value in an arms length transaction.
So why is this important to the public? If you are buying a house or commercial property, you may have done your due diligence. Each party may have employed a real estate professional but the appraiser doesn't appraise the value high enough for the mortgage company to fund the loan. NO DEAL without a mortgage.
We've established the best way to determine value (2 parties agree) and we know that 2 appraisers could come up with 2 different values on a property - why does an appraiser have the ability to save or kill a deal?
Independence! Once upon a time, some unscrupolous appraisers helped to artificially inflate prices and were complicit in mortgage fraud schemes (along with Realtors, title companies loan officers, etc.). As an industry we tried to avoid this again by making the appraisers independent - a good idea on the surface. But when does the pendelum swing too far? When Realtors & Loan Originators aren't even allowed to converse with the appraiser or suggest additional information that might change the value opinion.
Appraisers have a very difficult job to do and provide a much needed point of view on real estate deals. However, as an industry we need a feedback mechanism that ensures that they are dilligent and accountable. No single person or entity in the transaction should have the ability to approve or deny the deal - Well, except the buyers and sellers!!
Appraisals have always been to me an interesting part of the real estate cycle. The job is to place a value on something (a piece of real property in our conversation) based on an organized set of rules and processes to obtain that value. In other words, they make a guess or state an opinion. I don't say that to devalue the profession but what if 2 appraisers value the same property and have different opinions of value - does that mean one of the guesses/opinions is wrong?
As a Realtor, I would suggest that the true value of a property is determined when 2 educated parties come to agreement on a value in an arms length transaction.
So why is this important to the public? If you are buying a house or commercial property, you may have done your due diligence. Each party may have employed a real estate professional but the appraiser doesn't appraise the value high enough for the mortgage company to fund the loan. NO DEAL without a mortgage.
We've established the best way to determine value (2 parties agree) and we know that 2 appraisers could come up with 2 different values on a property - why does an appraiser have the ability to save or kill a deal?
Independence! Once upon a time, some unscrupolous appraisers helped to artificially inflate prices and were complicit in mortgage fraud schemes (along with Realtors, title companies loan officers, etc.). As an industry we tried to avoid this again by making the appraisers independent - a good idea on the surface. But when does the pendelum swing too far? When Realtors & Loan Originators aren't even allowed to converse with the appraiser or suggest additional information that might change the value opinion.
Appraisers have a very difficult job to do and provide a much needed point of view on real estate deals. However, as an industry we need a feedback mechanism that ensures that they are dilligent and accountable. No single person or entity in the transaction should have the ability to approve or deny the deal - Well, except the buyers and sellers!!
Sunday, August 9, 2009
5 month increase for pending sales
An AP article citing the a National Association of Realtors report. Finally some good news, the pending sales have risen 5 months in a row! The Northeast Ohio market may be lagging a bit but any recovery is a good start.
Click here-->
http://issuu.com/Spurbeck/docs/cnbc_-_pending_home_sales_up_for_5th_straight_mont
Click here-->
http://issuu.com/Spurbeck/docs/cnbc_-_pending_home_sales_up_for_5th_straight_mont
Friday, August 7, 2009
Short Sale Success!
I just got approval on a Short Sale for one of my clients. The bank originally said it would take 60 days but we got it back in 3 weeks.
If you are in the unfortunate situation that you must sell your home, for more than its worth, use a Certified Distressed Property Expert (CDPE). Data suggests that short sales are successful 20% of the time overall. That rate jumps to 80% for CDPE's.
If you have real estate to sell in the Cleveland area and you have a qualified hardship, I can help.
If you are in the unfortunate situation that you must sell your home, for more than its worth, use a Certified Distressed Property Expert (CDPE). Data suggests that short sales are successful 20% of the time overall. That rate jumps to 80% for CDPE's.
If you have real estate to sell in the Cleveland area and you have a qualified hardship, I can help.
Thursday, August 6, 2009
Social networking panic - Twitter was down this morning. I haven't started to Tweet yet but it is amazing how many people's lives seem to be disrupted by this single event. The good news is that we survived before so we will move on. In fact, that is one of the best things about this country, we overcome adversity.
So even though you may see the real estate market down, don't worry - it will be back stronger and better than before.
So even though you may see the real estate market down, don't worry - it will be back stronger and better than before.
Friday, July 31, 2009
I can't believe a brick, 12-suite building has little or no value but that is the propblem. This East Cleveland property just needs a full rehab. The lender just wants to get whatever they can get at this point. We could ask how the property got to this point but the better question might be, Where do we go from here?
Interesting, taxes are 2 1/2 years overdue but the county has not filed a tax foreclosure. There is a notice on the door from the city asking the owner to care for the lawn but the weeds are over waist high.
What do we do with this property? Economics theory suggests that we need to allow the market to reclaim this property and return it to it's Highest and Best use. Easier said than done...
If you are interested in this foreclosed, commercial property, let me know. It is a great question what will happen here.
Interesting, taxes are 2 1/2 years overdue but the county has not filed a tax foreclosure. There is a notice on the door from the city asking the owner to care for the lawn but the weeds are over waist high.
What do we do with this property? Economics theory suggests that we need to allow the market to reclaim this property and return it to it's Highest and Best use. Easier said than done...
If you are interested in this foreclosed, commercial property, let me know. It is a great question what will happen here.
Sunday, July 19, 2009
Tax Credit as Downpayment
HUD has been privately and publicly discussing how to use the tax credit, not just as a tax credit to lower taxes therefore effectively increasing homebuyer's income but also as a way to use the credit to directly buy a home. Well, it is official, qualified buyers can now obtain a second mortgage/bridge loan to 'borrow' the tax credit to be used as their down payment. Effectively, you can buy a home up to a little over $200,000 using an FHA loan with no down payment.
Further information is available at HUD's website: http://www.hud.gov/news/release.cfm?content=pr09-072.cfm
Of course:
FHA loans are infamous for being non credit driven and now they can be had with no 'skin in the game'. I'm guessing that most politicians won't claim that this is irresponsible & predatory lending when the government is sponsoring it. I should note, however, this was one of (along with many others) the many actions that caused the current real estate meltdown.
Further information is available at HUD's website: http://www.hud.gov/news/release.cfm?content=pr09-072.cfm
Of course:
FHA loans are infamous for being non credit driven and now they can be had with no 'skin in the game'. I'm guessing that most politicians won't claim that this is irresponsible & predatory lending when the government is sponsoring it. I should note, however, this was one of (along with many others) the many actions that caused the current real estate meltdown.
Friday, July 3, 2009
Cap and trade to kill real estate
Like many ideas, on the surface the Cap and Trade bill in congress sounds like a great idea. Who doesn't want to be Green, Save the Planet, etc.
But don't try to sell your home if it passes. You may need to bring your home up to current efficiency standards. This could be $20, 30, 50,000+ just to sell your home. And you thought the commission and closing costs were a lot...
In the Cleveland area, many suburbs have a Point of Sale (POS) inspection. The property must be repaired prior to sale to comply with the inspection. If not, the tedious, expensive process can be bourne by a buyer. Sure there is a stated goal of maintaining the neihgborhoods but the unintended consequences include lower values and more vacant homes for longer periods.
The Waxman-Markey Cap and Trade bill will make these detremental POS inspections look like a minor cough compared to the crippling pneumonia with which the real estate market will be plagued.
On the surface, this may seem like a good idea but the consequences will be far reaching and will further hamper the already deteriorated real estate market. Many Realtors are leaving the industry now, this will escalate the problem. Just think about the cause and effect before you cheer this plan...
But don't try to sell your home if it passes. You may need to bring your home up to current efficiency standards. This could be $20, 30, 50,000+ just to sell your home. And you thought the commission and closing costs were a lot...
In the Cleveland area, many suburbs have a Point of Sale (POS) inspection. The property must be repaired prior to sale to comply with the inspection. If not, the tedious, expensive process can be bourne by a buyer. Sure there is a stated goal of maintaining the neihgborhoods but the unintended consequences include lower values and more vacant homes for longer periods.
The Waxman-Markey Cap and Trade bill will make these detremental POS inspections look like a minor cough compared to the crippling pneumonia with which the real estate market will be plagued.
On the surface, this may seem like a good idea but the consequences will be far reaching and will further hamper the already deteriorated real estate market. Many Realtors are leaving the industry now, this will escalate the problem. Just think about the cause and effect before you cheer this plan...
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