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Archive for June, 2008

Home Inspections

Lashawn Norden asks another intriguing question: are home inspections worth our time? That they are needed is obvious. Any agent that dissuades a buyer from doing an inspection invites peril down the road. But as a listing agent, is it worth my time to be present when another agent and their client inspects my listing? Seldom. Unless I have reason to believe that I should be there, such as an older home, a shaky buyer, or a fixer upper, my presence is unproductive. If I am going to answer my voicemail and plan my week out I’d rather be at my desk.

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This blogpost asks an intriguing question:

Have you ever been asked by a SELLER to pay for repairs or improvements to THIER property prior to it being listed for sale? If so, have you paid for them? If so, have you always gotten paid back, even if the property did not sell?

My mentor in this business loaned clients money. He was burned sometimes, but overall it worked. It separated him from other agents.

I have loaned clients money as well, and I only did so when there was sufficient equity for me to be repaid at closing. Once, I paid a client’s mortgage for 10 months until the house sold. I was paid back when the sale closed. I certainly didn’t expect to pay for so long, but the sub prime crisis hit right after I listed the home and that locality was severely affected.

In this market, we run across sellers in bad shape. Dozens of my clients are facing foreclosure. Some have equity; most don’t. If the circumstances are right, I would do it again. Sometimes you have to do what most other agents cannot or will not do to separate yourself. I view it as putting my money where my mouth is.

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Via the Westchester Real Estate Market blog: Manhattan is showing signs of slowing down, and the median prices in places like Chappaqua and Bedford are declining. This news contradicts the perception that wealthier communities are insulated from the problems in the economy. They are to a degree, but they are not in a vacuum.

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WCI Communities, known for their uber-subdivisions with custom built homes, community pools and  clubhouses, is in dire financial shape.   I sold one of their homes last year, and it was one of the most frustrating experiences of my career. These guys are the poster child of inept, top-heavy middle management. Nobody there seems to have the authority, ability or desire to handle a problem.

Consequently, in our case, nothing got done in a timely fashion, and what was done to address issues was mediocre. Worse, management turned over so regularly that we were always explaining our problem to a new person. We closed a year later than originally scheduled. I still have a bogus 1099  that hasn’t been rescinded for a closing that never happened. Even after the closing, when my client had to hire landscapers to address an erosion issue WCI never got around to, these bozos had the gall to send him a letter asking for feedback on the work that they never did.

The company has been in business since 1946 and should be a model of efficiency and customer service. They are anything but. This is what happens when a company loses sight of the core principles it is built upon. Their latest circumstances come as no surprise to me.

Sooner or later, the suits come in and ruin everything.

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In California, agents are hoping it will. Here in New York, the prospects for gay marriage are far better with the retirement of state senate majority leader Joe Bruno. If that happens, New York licensees will be in the same boat as their California colleagues.

But will same-sex marriage help the market? I say yes. How could it not? Married people buy homes together. They also buy cars, washing machines, vacations, insurance, lawnmowers, and a zillion other things in higher volume than single folks do. Marriage causes money to circulate. It is good for the economy, and regardless of your politics or religious views, you wouldn’t object to a stronger economy, would you?

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While I have no political agenda in my commentary I aim to be straight. Paul Krugman has always bugged me. I cannot decide if the heart of the matter is either his love of the Syllogistic Fallacy, his appalling elitism or his galling intellectual dishonesty. Here is my outline of a typical Krugman column:

  • I am Paul Krugman. I have won some awards for my scholarship.
  • I am going to twist data around with impunity, and habitually omit important things which might even contradict my premise, to assert my far left world view.
  • If anything bad happens in the world, it is the fault of conservatives.
  • I am credentialed in economics, therefore I am a credible commentator on the subject of my screed.

That is the gameplan.

For instance, in his column Monday, he refers to the years 2005-2007 as “the peak of the housing bubble.” If the housing bubble peak lasted three years I’d be typing this blogpost on my yacht. This is like saying the stock market peak before FDR was from 1929-1931. Balderdash. The real estate market slowed down severely in 2006 and the 2007 sub prime crisis exacerbated the decline from June 2007 onward. 2005 was the peak. By 2006 it was over and everyone knew it.

Here’s another gem from the column where he laments the ownership gains and losses in the current administration:

While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it’s a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.

But here’s a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

People are already praising him for asking this question, but I say it’s only value is novelty, not intellectual merit. How many people should own homes anyway? Who decides? Why should we encourage home ownership? Because it stabilizes the hell out of the economy, Paul. It gives families more economic traction. It is an asset that funds retirement. That’s why. He goes on:

 

Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner. “If you own something,” Mr. Bush once declared, “you have a vital stake in the future of our country.” Presumably, then, citizens who live in rented housing, and therefore lack that “vital stake,” can’t be properly patriotic. Bring back property qualifications for voting!

Sure Paul. Whatever you say. Let’s tether home ownership initiatives to Jim Crow. Yet more pap:

Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

We should deduct rent from our taxes. Or, we shouldn’t allow for any deduction. The ripple effect of each would be disastrous. Some award-winning economist this guy is.

I commented on this KipEsquire post on the same article which was more charitable.

It should be known that Paul Krugman lives in a 5000 square foot home in Princeton. So he’s really qualified to blather about nanny state nonsense.

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It may be hard for the MTV generation to believe this, but when I was a kid in the 70’s, the most risque things in my life included Mad Magazine, Don Imus in the morning on WNBC radio, and cassette tapes of George Carlin. I saw him live in Rochester in the 90’s and he had evolved from a whimsical observer to an edgier, more cynical comic. In both cases, he made me laugh. And even when you read about his heart surgery, he never seemed old.

In light of his passing, many are remembering their favorite routine or album, and mine will always be the Wonderful WINO bit and the Class Clown record. If a cassette could get a callous, our copy of Class Clown would have a huge one.

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