Sunday, Dec 23, 2007

9:30 A.M.

Things All Buyers Should Know

The best homes sell first: Regardless of the market the best always sell first. If a home is priced in the correct price range and is in outstanding condition it will sell first and for the best price.

Length of stay: How long do they plan on staying in their new house? With buyers concerns about the market continuing to decline in value and by understanding their goals and dreams you are able to overcome this objection. Real estate markets go up and they go down, buying a home is an emotional purchase, understand what they want.

Buyers are looking for a deal: Ask them what does a deal look like to them, price, incentives, concessions. Narrow down what they are looking for and why. Most buyers don't even know what they are looking for.

Excellent time to buy: Since prices and interest rates remain low this continues to be a wonderful time to buy. There are no guarantees about the future but the present is opportunistic.

A Home First not only an Investment: Don't just look at buying a home for investment. They need to love what they have chosen to purchase. This is where their family will enjoy living.

Location: It is important to study the home's location to accommodate buyer's needs such as schools, driving, shopping and other unique family circumstances. There are plenty of choices.

Cost Associated with Waiting: Given that we cannot predict the bottom of the market an overly cautious may miss a golden opportunity. Prices may go up, inflation, taxes, political change and on and on.

One cannot sell a property over the Internet/phone: Properties sell themselves in person. Almost 100% of our home buyers visit properties to purchase. Dissuade them from being obsessive about making selective decisions through virtual touring. Yes, it is a phenomenal tool but we should never relinquish our responsibility to them to encourage the onsite viewing. This, of course, allows us to more adequately understand their wants and desires.

Be Ready to Decide: The best opportunities belong to those who can decide "now". Get your buyers to have all their 'ducks in a row' …. current house on the market competitively priced, financing in order and able and willing to buy 'today' not tomorrow or three months from now.

Saturday, Dec 22, 2007

3:40 P.M.

Things All Sellers Should Know

The Law of Supply and Demand: When inventory goes up and demand goes down, prices fall. It's a law…no exceptions. Sellers need to understand that the market is not what it was in 2005. Unfortunately, they will not see those two-year-old values when there is currently over 12 months of housing inventory on the market.

Market Value: …is what a buyers is willing to pay you for your home and what you are consequently willing to sell it for. Buyers are comparison shopping. They are looking for the house that offers the most benefits and features for the best price.

Sellers, who sell, Sell! Are you really motivated? There are a lot of motivated sellers in our market place; 1) Bank-owned Property (REO), 2) Pre-Foreclosure (short-sales), 3) Builders, 4) Divorces, 5) Bankruptcies, 6) Relocation for jobs, then everybody else. When there are a limited amount of buyers and you don't have to sell then you are better off not listing your house. Increased inventory on our market drives values down.

Accurate Pricing: Historically, under any market conditions an overpriced home seldom sells. Successful agents know that they have to be "in line" or better than the competition.

Staging the Home: Because most markets are filled with inventory, a home needs to look as presentable and immaculate as possible. There are just too many homes available for buyers to have to look past the unkempt, untidy and cluttered conditions. They will move on very quickly.

Pre-home Inspection: Oftentimes it is a good idea to perform a pre-home inspection to show potential buyers and also as a pre-emptive strike to discover any defects that need to be corrected.

An Accurate Price: Definitive pricing provides a true perspective on current market variables. It is most difficult for sellers in the early shifting of a market to be come willing to set a more competitive price. A successful agent is prepared with the "facts". It is so important not to be casual or cavalier but to demonstrate an abundance of market awareness while not being adversarial with the seller.

Timing: One of the confirming factual tolls successful agents use with power is the average length of time on the market statistic. It provides fair estimate on when the property will sell. It takes the "heat" off the agent. However, it is incumbent that the agent continue to stay in touch regularly.

Terms: Good terms are clearly significant influences for potential buyers and their selling agents to see and show the property. Terms are marketing tolls not merely facts about a listing.

Tuesday, Dec 18, 2007

7:40 P.M.

How Stuff Works

Subprime Mortgages Explained

by Charles W. Bryant, HowStuffWorks.com

If you've paid attention to the news over the past year, then you no doubt heard a great deal of talk about the housing boom and potential bust in the United States. There are many factors that helped give rise to the boom. One was the use of tricky lending programs that enable people with shaky credit ratings to secure home loans. This same practice has contributed equally to the bursting of the housing bubble.

The practice of lending money to people with a weak or limited credit history is called subprime lending. One misconception about the term "subprime" is that it refers to the interest rates attached to the loans. "Subprime" is actually a reference to the credit rating of the borrower. Subprime borrowers generally have a credit rating below 620 on a scale of roughly 300 to 900. Most consumers land in the mid- to high 600s and 700s [source: Bankrate.com].

Subprime rates can vary wildly. They're based on a variety of risk-based factors including:

• Credit score

• Size of down payment

• Number of delinquencies (credit hits)

• Type of delinquencies

The sharp rise in subprime mortgage lending began in the mid-1990s and accounted for roughly 20 percent of home loans in 2006 [source: Federal Reserve]. On the plus side, subprime mortgages allow people with poor credit a chance to get into a market previously unavailable to them with standard home loans. The downside of this scenario is that these loans are more likely to go into default, meaning that the borrower fails to make payments on the loan. The large number of foreclosures from subprime mortgages has had a drastic impact on the U.S. housing bust and overall economy. Lenders have also been hit hard, with many working in the red and some going under completely.

Subprime Specifics

Subprime mortgages come in all shapes and sizes. The one factor that's generally consistent across the board is that the interest rate will be higher than the prime rate established by the Federal Reserve. The prime rate is what lenders charge people with good credit ratings.

One of the more common subprime loans has an adjustable-rate mortgage (ARM) attached. ARMs have become increasingly popular in recent years due to their initial low monthly payments and low interest rates. Introductory rates for ARMS typically last two or three years. The rate is then adjusted every six to 12 months and can increase by as much as 50 percent or more [source: Bankrate.com]. If you hear about a 2/28 or a 3/27 ARM, the first number refers to the number of years at the introductory rate, the second to the remaining period of the loan with the fluctuating rate.

Interest-only options are also often attached to subprime ARMs. Let's look at a 2/28 interest-only ARM. This loan allows you to pay only on the interest during the two year introductory period at a lower set rate. After that, the full amount of the loan is recalculated over the remaining 28 years with a new rate. (Check out How Interest-only Loans Work for more information.)

According to Bankrate.com, the difference in the monthly payments on a 2/28 interest-only subprime ARM can be dramatic:

As you can see, it's likely when the introductory period runs out that you'll be in store for a much higher monthly payment. While it's possible to refinance after this period, the current leveling of appreciation values in the U.S. housing market has made it difficult to gain much ground. It's also important to remember that every time you refinance, you must pay a new set of closing costs to your lender.

Subprime loans often have a prepayment penalty included in the terms. This means that if you're able to pay the loan off early, you must pay extra fees.

They may also have a balloon payment attached. This is when the remainder of the loan is due after the introductory period in one lump sum. Borrowers generally plan on refinancing at this point, but this isn't always possible. Even if it is, you can end up with much higher rates.

There are other factors aside from your credit score that decide whether or not you fit into the category of subprime. According to MSN Money, your potential loan may be subprime if you have:

• Missed any credit payments in the past three years

• Declared bankruptcy in the last seven years

• Consistently overdrawn your bank account­

• Defaulted on any credit

• Previously been foreclosed on or have repossessions in your history

• Consistently been late on your bills or have had utilities shut off

It's also important to remember that your credit is affected by anything you have co-signed with another person. People who get divorced are often surprised to find out that their former ­spouse­ has defaulted on loans that ruin your credit score.

The large number of defaults and foreclosures on subprime mortgages since 2006 has led to what some call a subprime mortgage crisis: 2.2 million subprime loans in recent years have ended or will end in foreclosure at a loss of $164 million. And it's not over yet. An estimated one in five subprime mortgages will fail in the next two years [source: Federal Reserve].

The blame for the crisis is shared among several factors. Many mortgage brokers steered their clients toward loans they couldn't afford. Previously, when someone wanted a loan, he or she would go directly to the bank. More and more, people are going to mortgage brokers to act as the go-between. The result is an industry that isn't directly accountable when a loan goes bad. Mortgage brokers don't suffer any penalty when a loan they drafted is defaulted, so there isn't much incentive to turn down applicants in this commission-based industry.

The unemployment rate is also a factor in the crisis. Midwestern states hit hard by auto industry layoffs rank among the highest in foreclosures [source: Federal Reserve]. Many people were counting on being able to refinance to make their loan affordable, but slowing appreciation rates in the housing market have made it difficult or impossible. Once the introductory period on the subprime loans ran out, the new payments were more than many could handle.

The borrowers also must bear some responsibility. It's common for someone looking to get into the housing market to overstate his or her income to secure a loan.

Monday, Dec 17, 2007

6:40 P.M.

When Your Selling Price is too High, Beware!

By Terry Light and RealEstate ABC

Meeting With Realtors

So you've decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who've been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.

When you interview the third agent's figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

A Sales Practice Called "Buying a Listing"

If you're like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?

After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do some agents "buy" listings this way?

There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home's value. On the other hand, there are some agents who engage in this sales practice routinely.

What Happens Behind the Scenes

If you start out with too high a price on your home, you may have just added to your stress level -- and selling a home is stressful enough. There will be a lot of "behind the scenes" action taking place that you don't know about.

Contrary to popular opinion, the listing agent does not usually attempt to sell your home directly to a homebuyer. That would be inefficient.

Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer's agents coming to preview your home so they can sell it to their clients.

If the price is right.

If you and your agent have overpriced, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically.

Dropping Your Price...Too Late

If you start out with a high sales price, then drop it later -- your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.

Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won't appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen.

Your house could go "back on the market."

Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.

Friday, Dec 14, 2007

6:40 P.M.

Paid off home, now how to get title?
Reconveyence document from lender is key

By Ilyce R. Glink and Samuel J. Tamkin, Inman News

Q: I live in Southern California and paid off my home. I received "Substitution of Trustee and full reconveyance" that was recorded in my county in June 2007. Is there some other document that I should receive indicating title, deed or ownership of my property? I received an ad from a private company indicating they would assist for a fee to obtain an official document. Would this be a something like the title of a car?

By the way, I very much enjoy your column in my local paper.

A: When you purchased your home, your seller delivered to you a legal document that may have stated that it was a "warranty deed," "special warranty deed," "trustee's deed," or even a "quitclaim deed."

Any one of these documents is the one and only document that shows the conveyance of title from your seller to you. That document could be considered the "title" to your home and would be recorded in the appropriate county office in which your home is located. Once recorded, it would become part of the public record. After being recorded, the county office will mail the original document back to you, the homeowner.

That public record gives title companies and others the ability to look at a particular property and determine who has owned the property over the years and who owns the property today.

Unlike when you own a car, the state does not issue a document that would show you as the owner of the property.

Once you receive a deed to the home and it is recorded, you are the official owner of that home. However, if you obtained financing when you bought the home or if you took out a loan that was secured by the home, that lender holds a lien on the title to the home. If you attempted to sell the home, a subsequent buyer would take that title subject to the loan. The sale of the home would not get rid of the lender's rights against the property.

In some states, lenders take a mortgage on the property. In others, lenders take a deed of trust. The deed of trust effectively is a lien on the property for the loan amount but also puts a hold on what an owner of that property can do to the title of the home.

For most buyers, a mortgage and a deed of trust will work the same way. An owner will buy the home, take out financing, give the lender a mortgage or deed of trust, and pay off the loan over time. When the loan is paid in full, the mortgage is released, or the deed of trust is cancelled, and the title is reconveyed to the owner.

Sam Tamkin
If you have received a reconveyance document from your lender, and it has been properly recorded, you need do nothing more. If you have a copy of the deed to your home from when you purchased your home, you're all set.

For most people, having their original deed from when they purchased their property plus the release of mortgage or reconveyance document for the deed of trust will work in most situations.

If you ever need a copy of the deed to your home, you can always obtain a copy from the office that accepts documents for recording in the local county in which your property is located. You will generally be charged a fee for the copying the document.

In some cases, you can obtain a copy of the document from your county's Web site and pay a nominal fee. In some counties, the county office may charge one fee if you want a copy of the document and a much higher fee if you want that document certified by the county as an accurate copy of the original.

There are some companies that will assist homeowners in obtaining copies of documents for their records. These companies charge a fee for their services. Before you hire them, you should know what it would cost you to get a copy of these documents on your own and then what the service would charge you to determine whether you are better off getting the document yourself or having the service help you out.

Start with the Internet and use a search engine to see if your local office has a web site that allows you to view and print these documents. The best option would be to print them in the comfort of your own home.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

Thursday, Dec 13, 2007

7:40 P.M.

Lenders score points by keeping consumers up-to-date

Borrowers miffed when payments, closing costs don't match estimates

Inman News, Wednesday, December 12, 2007

Consumers ranked Wachovia, SunTrust and Bank of America as the best mortgage loan originators in terms of customer satisfaction, with First Franklin, Washington Mutual and American Home Mortgage Co. among those scoring below the industry average.

That's according to 4,378 consumers polled by J.D. Power and Associates for the firm's 2007 Primary Mortgage Origination Study.

The study measured customer satisfaction with four aspects of mortgage origination -- application approval; interaction with loan representatives; closing; and problem resolution.

Despite this year's turmoil in the lending industry, the industry average score -- 750 on a 1,000-point scale -- was consistent with last year's results, J.D. Power said in a press release.

The study found consumers were more satisfied and experienced fewer problems when they worked directly with a mortgage lender instead of a mortgage broker or online service.

Lenders scored points with consumers when they provided time frames for approvals and updates on the status of their loan. When applications were delayed because lenders requested more information from borrowers, overall customer satisfaction scores dropped an average of 95 points, the study found. Lenders asked for more information, such as bank statements, paycheck stubs, or tax forms on about one-third of applications.

Lenders also lost points when their initial estimates of monthly payments and closing costs didn't pan out. About 17 percent of borrowers said their monthly payments turned out to be more than expected, which led to a 159-point drop in overall satisfaction. Roughly 12 percent of customers were surprised to have additional closing fees, which resulted in an average 220-point reduction in satisfaction scores.

J.D. Power released the following scores for lenders: Wachovia (827); SunTrust Mortgage (818); Bank of America (760); National City Mortgage (759); CitiMortgage (753); Chase (752); Wells Fargo (749); Countrywide Home Loans (745); GMAC Mortgage (744); ABN AMRO Mortgage (740); American Home Mortgage Corp. (736); Washington Mutual (733); and First Franklin (595).

Tuesday, Dec 11, 2007

7:00 P.M.

What to expect at home inspection

Despite what some agents say, buyers are welcome

By Barry Stone, Inman News

Dear Barry,

We've never hired a home inspector and have questions about the protocol for an inspection. Some inspectors, we're told, prefer to work alone, and some agents, they say, discourage buyers from attending. Who typically attends a home inspection, and who decides who can attend? --Jill

Dear Jill,

The variables that affect home inspection attendance are numerous. The bottom line, however, is that buyers, in most cases, hire the inspector as their private consultant. In that light, the buyers should have the first and last word regarding their own attendance. But your questions address a broader range of attendance issues that also need answers.

There are home inspectors who prefer to work alone, but their exclusion of clients is highly unprofessional and should be reconsidered. They should abandon this solitary practice or find another line of work. A consultant cannot consult when no one is there to listen. And mailing a report after the inspection does not provide adequate explanation of inspection findings.

Attendance arrangements are usually handled by real estate agents, but circumstances often override their preferences. In some cases, buyers cannot attend because they live out of the area or are unable to get time off from work. In those instances, inspectors may be accompanied by one or both agents or may simply be left alone.

In most cases, buyers attend all or part of the inspection. This may occur with or without the sellers and agents present, or it may include an entourage of buyers, sellers, agents and contractors -- and possibly relatives and friends of all or some of the above.

The question of seller attendance is one that involves numerous answers and complexities. Although buyers have the right to insist on their own presence at the inspection, they cannot forbid sellers from remaining in their own home when the inspection is taking place. Some sellers willingly leave for a few hours; some remain home without involving themselves in the inspection; and still others become actively involved in the process, engaging the buyers in lengthy conversations or shadowing the inspector every step of the way.

A priority of many agents is to prevent direct communications between buyers and sellers, especially during the home inspection. This is done to prevent emotional exchanges that might adversely affect the outcome of the sale. In some cases, the oppositional chemistries of buyers and sellers make this a wise precaution. Often, however, full attendance at the inspection promotes amicable exchanges and fosters goodwill among all parties. Each case is distinct and hinges on individual personalities, rather than strict protocol.

When reviewing the findings at the end of the inspection, buyers often prefer a private consultation with the inspector, without the sellers being present. In some instances, sellers instinctively understand this and offer the buyers and their inspector a private meeting environment in some area of the house. In other cases, the buyers might meet the inspector and agent at a local restaurant or real estate office for a review of the report. Occasionally, sellers will attend the review, and this arrangement can be productive or otherwise, depending on the temperaments involved.

The worst of all arrangements is when agents advise their buyers not to attend the inspection and appoint themselves as emissaries between buyers and home inspectors. Agents who even suggest such arrangements are not acting in the best interests of their clients. Buyers who have such agents should seek better representation.

As a buyer, keep in mind that the inspector is your private consulting advocate. The home inspection is your show, paid for by you, and presented for your exclusive benefit. Find a home inspector with a reputation for thoroughness, and don't let anyone else set the rules of engagement.

Sunday, Dec 9, 2007

8:00 A.M.

Where to Cut Your Own Christmas Tree in Northeast Ohio

Saturday, Dec 8, 2007

8:00 P.M.

Is a point really a point?

Chris writes:

Hey Mikey,

One positive action you can take is to watch interest rates as they are falling then refinance your loan at a lower interest rate. There are several things to consider when refinancing including how long you will stay in the home, cost associated with getting the new loan and if you have a pre-payment penalty on your current loan. If you are in a higher interest loan now this may be something to look into.

Tuesday, Dec 4, 2007

8:00 P.M.

Common Real Estate Terms

In real estate, it's important you understand the terms I will discuss with you through your buying or selling process. Understanding key real estate terms will help you save on interest costs, fees and will help you get a lot more home for your money. So what if all you see in terms of ARM, LVT and PITI is alphabet soup? Here, I'll explain to you some common real estate terms so you won't be left in the dark.

Adjustable rate mortgage: An ARM is a mortgage rate that changes over time as the interest rate changes.

Title Insurance: Guarantees a return if your investment if a title problem arises after you've taken possession. There are two types of title insurance: 1) Fee title policy — insures owner's title. 2) Mortgage title policy insures the lender for the mortgaged amount. These policies will fluctuate depending on the mortgage amount

Monday, Dec 3, 2007

6:45 P.M.

Ask the HOA Expert  (Home Owner's Association)

by Richard Thompson

Question: Our board would like to evaluate our management company's effectiveness by way of a member survey. What questions do you recommend?

Answer: Since the vast majority of members are disconnected from day to day HOA operations and have little first hand knowledge of the manager's contract obligations, few have an informed basis for evaluating the manager's effectiveness. A suggestion form might be more appropriate. List the various categories of tasks the HOA is responsible to perform like General Maintenance, Landscaping, Pool, Janitorial, Communications, Newsletters, Rules Enforcement, Financial Reporting etc. and ask for specific recommendations for improvement. Don't be surprised if the recommendations are tied directly to a member's critique of service quality.

Question: Can HOA governing documents be amended to allow compensation to directors for their services as board members? It stands to reason that they could be held more accountable if they received compensation for performance.

Answer: Most governing document stipulate that board members serve without compensation. There is a very good reason for this. Boards are comprised of elected members who rarely have the expertise or training to manage an HOA. They are elected to hire qualified people to do this work (management companies, landscape contractors, maintenance contractors, etc.). When this is done effectively, the board job is relatively simple. When it is done poorly, the board can devote endless time at it and supposedly justify the need for compensation. Paying for poor performance is hardly in the HOA's best interest.

Also, the board has an unavoidable conflict of interest. Since contracts and other expenditures are approved by the board, so would board compensation. The board is elected to safeguard the interests of all members. It's best done when the directors serve as unpaid and unconflicted volunteers.

Question: Our board is in the process of drafting an Architectural Design Policy. We are thinking about recording the policy with the county.

Answer: Architectural design standards can be complex and subject to change as taste and technology change. It is appropriate for the governing documents to state that an Architectural Design Policy exists, that construction and renovation must conform to it. The specific policy should not be recorded but be easily available upon request or posted on the HOA's website. As with any policy, the board should have it reviewed for comment by the members and by a knowledgeable attorney prior to implementation. A sample Architectural Design Policy is available at Regenesis.net in the Policy Samples section.

For more Ask the HOA Expert, see Regenesis.net.

Published: November 29, 2007

Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues.

Friday, Nov 30, 2007

6:45 P.M.

What's In, What's Out with Home Buyers in 2008

RISMEDIA, Nov. 30, 2007-Mark Nash, author of four real estate books including 1001 Tips for Buying and Selling a Home has completed his annual survey of 886 real estate agents in all fifty states in the U.S. and the eight provinces of Canada. What's in, What's out with Homebuyers illuminates what's popular with home buyers, and what can sour them. Compiled annually from-the-trenches, it offers a spectrum of tips that cover deal and design no-no's for home sellers and buyer must-haves.

What's In

- Home buyers. What goes around comes around. Relegated during the boom years to bidding wars, over-full-price offers and new construction lotteries, buyers rule in 2008, and know it. With swelling inventories, they are looking for newly updated kitchens and baths, pristine conditions, and a perception of value.

- Destination bathrooms. The master bath has evolved into the home getaway with multiple task areas. Freestanding or 'throne' bathtubs (bath thrones) in the center of a soaking room, multiple flat screens TV's and wireless Internet so you don't miss anything as you move from bathing to grooming to lounging. Outfitted with serving bars featuring wine coolers, espresso machines, and grazing snacks. And, a burgeoning need for in-home hair salons.

- Short Sales. Home owners who have over-extended themselves financially are increasingly looking to their mortgage holder to accept less than is owed on their property. Some mortgagee's will accept less than is owed through a short sale, in place of taking ownership of a home back through foreclosure.

- Pet showers. The kitchen or work sink is out for the dog bath. Dedicated dog showers are an emerging trend. Be it in a mud or utility room, garage corner or basement, dog lovers want a place to clean their favored pooch after a visit to the neighborhood dog park. Common dog showers feature a 3′ x 3′ shower base, surrounded by ceramic tile 4′ up the wall. Pet showers are all about the convenience for Fido to step in, and eliminate the master's need to lift.

- Home elevators. The boomers want their vertical palaces with elegant min-elevators. No more unsightly and very 1970s chair-on-the-rail-system for these financially flush, forward-thinking home buyers.

- Outdoor living spaces that look interior. Massive, soaring 'statement' fireplaces of cut stone, heated (think bathroom floors) flooring and walkways, entertaining sized custom kitchens, and indoor-looking artwork, fabrics, and finishes, but ones that can stand up to the elements.

- Down payments. Sexy home mortgages are out. Those who underwrite home loans are looking for substance from potential home buyers. Substance equates into disciplined savings and credit scores.

- A home's carbon footprint. Manufactured homes, reused construction materials, and energy-friendly mechanical systems and appliances all reduce the need for fossil fuels. Home buyers are asking about how their potential new home can save the planet. It's more than a trend, it's a convenient truth.

- Monitoring and controlling with hand-held devices. Forgot to turn off the coffee maker, close/open the blinds, and turn the heat down or the air conditioning up? The latest in technology that utilize hand-held devices to open or close the blinds, turn on or off lights, or let Fido out the electronic pet door, around the corner or across the country.

- Floating Homes. Not just in Sausalito. If your hood has calm protected waters, you'll soon have floating homes, those that look like conventional, soil-situated structures. From Louisiana to Vancouver, floating homes are at the top of must-have lists for those looking for a primary home to be lifestyle oriented. Plus, watching sunsets are a more enjoyable and greener alternative to lawn mowing.

- Concealed appliances. Buyers bypass matching cabinet panels that are used to disguise the ubiquitous refrigerator and dishwasher. Hinged and pocket doors are the latest way to integrate visually those boxy necessities and make the kitchen more non-traditional and less functional looking.

- Non-smoking Homeowners Associations. Who knew that some Homeowner Associations are rewriting by-laws and declarations to include those unit owners are not allowed to smoke inside their homes? Smoke-free common areas in addition to building-code-required ventilation systems and fresh-smelling hallways have taken precedence over individual's rights to light up in their recliner.

- Off-grid homes. Solar panels, windmills and inverters are here to stay, in a big way. With brown-outs and power line-damaging storms on the increase, buyers in 2008 will ask for hybrid home-energy options, even being partially off-grid beats getting expensive power from coal-fired utilities, to these eco-energy users.

What's Out

- Unrealistic home sellers. These relics of another time and market missed the cocktail party chat and water cooler angst by the transitional sellers of 2007. Cautions included: pricing their home right, consider home-sale contingencies, and offer closing cost givebacks. Hear-no-evil-sellers were overlooked by buyers who pined for reality minded ones. Because if sellers were flexible with buyers needs, buyers bought.

- Living rooms. The great room has replaced the living room in American residential culture. Informal lifestyles with eating, cooking and living spaces combined so family members and visiting friends can congregate together through various activities has conquered the forced museum. In viewing homes with buyers I see the ex-museum used as work-out spaces, home offices, craft or hobby places, and I've seen more than once, the coveted living room with nothing more than a pool table as its solitary focus.

- Empty for sale homes. Buyers thought people 'lived' in houses, but after seeing one-quarter of the homes they viewed empty, they wondered. Even though staging was the buzzword, getting that right was prickly in 2007. Those leftover silk flowers, the left behind mis-matched furniture, and the one-off design-show decorating scheme were buyer no-no's. Neutral palettes, personal objects, thoughtful furniture rental, and something in the refrigerator says to buyers, maybe a person lives here.

- Double-digit home value appreciation. For now, the home as 'get-rich-quick' investment is over. We're back to pre-boom norm of housing or shelter. Flat or low single-digit appreciation in most markets in 2008.

- 'Order-taking' real estate agents. The hive during the boom years was real estate, and multitudes of the dot-com-busted became the worker-bees of real estate sales. Everyone and anyone got licensed and into the frenzy. Little did they know that seasoned (pre-boom), full-time, professional agents possessed ready, willing and able buyers, knew how to sooth seller's anxieties, and produced the fifth highest year in real estate sales, in 2007.

- McMansions. Size doesn't matter if it's not well finished. A large voluminous home whose best attribute is the square-footage is waning. Home buyers are looking for quality, not quantity in 2008. After all, who has the money to replace the faux-hardwood floors, builder grade carpet and fiberglass bathtubs?

- Obese ceiling heights. It's cheaper to go up than out. That's been the thinking anyway as of late in residential design. Buyers have finally said enough, they prefer ceilings between nine and eleven feet. Anything more, especially in a smallish (under 10′ x 12′) room is waste. If you can't add a loft in a soaring room, 'down size me' height-wise, buyers say.

- Pioneering locations. Buyers have moved away from take-a-chance-hoods. Pioneering or off the beaten path areas were once the hot bed of potential appreciation. However, buyers in 2008 have returned to the tried-and-true address, keeping resale desirability firmly in mind when making a purchase.

- Balconies as a marketing gimmick. Functional outdoor space, not the anorexic appendage hanging off the building, is what buyers crave in outdoor space for 2008. Real balconies have room for a grill and a comfortable table and chairs. People love the outdoors and want to use it, but not only as a solo experience.

- Option ARMS (Adjustable Rate Mortgage). Buyers have heard that these loans usually have only one option; foreclosure. Used by the rich for short-term financing, they were re-packaged to buyers who wanted to qualify for the highest loan amount. Negative amortization is the harsh reality of Option ARMS. Home buyers should run, not walk if these words are proposed as a financing option.

- Pre-construction pricing on new construction. Builders who are plunging ahead with new projects in 2008 will be better off with one pricing model from beginning to end, and eliminating their 'everything's an upgrade' mentality.

What's on the Way Out

- Mosaic tile. Once deemed the ultimate in tile, now considered a very personal design commitment to the previous owner. The cost and waste to remove intricate mosaic is over-whelming to buyers, especially if it is has been recently installed. Even the most expensive but not agreeable tile could kill an otherwise acceptable property.

- Retro-1970s chic. Trend-obsolescence by buyers in 2007 was rampant. Loving the retro-seventies was easy, but hearing horror stories from would-be sellers about the market's hesitance to buy a design white-elephant, made more main stream kitchens and baths a sensible decision. As one Gen X buyer said to me; 'I love the dark espresso colored shag carpeting, but, I know my decorating needs will change, I want an interior that will transcend trends.' I replied, 'You're looking for a 'transcendent look' and her response: 'exactly.'

Thursday, Nov 29, 2007

7:35 P.M.

October home sales plummet, inventory soars

NAR: Supply of single-family resale homes at 22-year high

Wednesday, November 28, 2007

The U.S. sales rate for previously owned homes fell for the eighth consecutive month in October, the National Association of Realtors reported today, while inventory levels climbed for the ninth consecutive month.

For-sale inventory of previously owned single-family homes reached a supply of 10.5 months in October, the highest level since July 1985. The months' supply statistic is a measure of the time it would take to sell the total inventory of for-sale homes at that month's sales rate.

The supply of for-sale condominiums and cooperatives reached 13.1 months in October, bringing the total supply for all resale homes to 10.8 months -- up 45.9 percent compared to October 2006.

Home prices tumbled, too, in October. The median resale home price dropped 5.1 percent in October compared to the same month last year, falling to $207,800, and the average price dropped 3.4 percent to $255,500.

For single-family resale homes, the median price sank 6.3 percent in October compared to October 2006, while the median condo and co-op price rose 4.9 percent.

A separate gauge of prices, the Standard & Poor's/Case-Shiller U.S. National Home Price Index, found that U.S. new- and resale-home prices dropped 4.5 percent in the third quarter compared to the same quarter last year. And another index released this week by the National Association of Home Builders and Wells Fargo found that the national median prices of new and resale homes sold in the third quarter dropped 3.6 percent compared to the same quarter last year.

The seasonally adjusted annual rate of sales for all resale homes was 4.97 million in October, down 20.7 percent compared to that month last year.

This rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.

It was the lowest total sales rate since the association combined single-family home sales with condo and co-op sales in 1999.

The sales rate for single-family previously owned homes dropped to 4.37 million in October, which ties the September rate -- the lowest since January 1998 when it hit 4.18 million.

Lawrence Yun, NAR chief economist, said in a statement that mortgage availability has improved, though, "We continue to see the biggest impact in high-cost markets that rely on jumbo loans."

While Federal Housing Administration loans are becoming more popular as the subprime market has dried up, "it will take some time for the change to yield a measurably higher closed sales volume in the aftermath of the subprime collapse," Yun also said.

Freddie Mac reported that the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38 percent in October, unchanged from September, which compares with a rate of 6.36 percent in October 2006. Last week, Freddie Mac reported the 30-year fixed rate fell to 6.2 percent, according to the Realtor group's announcement.

Regionally, the rate of previously owned home sales dropped 12.6 percent in the Northeast compared to October 2006, with the median price rising 1.3 percent.

The sales rate fell 19.4 percent in the South, while the median price slipped 6.7 percent. In the Midwest, the sales rate dropped 16.9 percent compared to October 2006, and the median price dropped 1.6 percent.

And in the West, the rate of all resale home sales fell 33.1 percent compared to October 2006, with the median price falling 6.9 percent.

Tuesday, Nov 27, 2007

7:45 P.M.

WHAT'S THE DEAL WITH . . . The War Memorial Fountain?

For the brave men and women who served their country and lost their lives in time of war - we honor them with this living memorial.

Monday, November 26, 2007

It is a monument, a sculpture and a memorial. And as long as soldiers from Cuyahoga County fight in wars, it will never be finished.

It is most commonly called the War Memorial Fountain at Veterans Memorial Plaza (formerly Mall A). You've probably glanced at the sculpture's centerpiece, a 35-foot bronze figure, covered in green patina, reaching toward the sky. You've noticed the flames licking his legs and the globe beneath him. But what does the rest of the sculpture mean?

It is intricate public art created by Cleveland native and sculptor Marshall M. Fredericks, who called it "Cleveland War Memorial: Fountain of Eternal Life." It symbolizes man escaping the flames of war and reaching skyward for eternal peace.

In 1945, the city commissioned Fredericks to create a peace memorial to honor those killed in World War II. The Cleveland Press raised $250,000 from people and businesses to launch the project.

Fredericks had to change his original design; the male figure he called "Peace" was too nude. He draped the lower portion of the man in the "flames of war" and the installation was dedicated on Memorial Day 1964.

The figure rises from a huge bronze sphere. The swirl of creatures, winged horses, rays of sun, and things that crawl and fly, are supposed to depict mankind's legends and superstitions.

Surrounding the bronze central sculpture are four 12-by-4-foot granite sculptures that represent the four corners of the Earth: the Eastern, Western, Southern and Nordic civilizations. The surrounding granite rim of the fountain originally held bronze plaques engraved with the names of 4,000 Greater Clevelanders who died in World War II and the Korean War.

The fountain faced neglect and vandalism, especially during the Vietnam War. It was restored in the late 1980s and, in 1991, was rededicated on the remodeled plaza, which is the roof of the Cleveland Convention Center's underground parking garage.

A group called the Greater Cleveland Veterans Memorial Inc. embarked on a project to include the names of Cuyahoga County's Vietnam War casualties on the memorial.

Then the group took the project further to include the names of all Greater Cleveland's war casualties, starting with a single name in 1899 from the Spanish American War leading up to 2004, said Patrick McLaughlin, the organization's president.

Sixteen years later, the group finished with a total of 5,516 confirmed names, including an additional 103 from WWII and 25 from the Korean War that had been overlooked. In 2004, the group unveiled the new bronze plaques embedded in the granite wall that surrounds the fountain.

The site offers much to see and consider. A vast splay of smooth unmarred granite is reserved for the at-least 18 more names that eventually will be added to the bronze Honor Roll.

- Allison Carey, Plain Dealer reporter

Mikey's link to this memorial: My dad, Nicholas J. Pallendino, served in World War II in the Pacific Theater and the Korean War. His first cousin, Michael H. Placentino, served in the European theater and gave the ultimate sacrifice for his country and our freedom. He was killed in action August 29, 1944 in France. We all share the love of this greatest nation on God's green earth. I'm honored to share the same initials as my second cousin and cherish the legacy my dad gave me decades ago, his cousin's gold watch chain with the initials MP.

It's been more that a few years since I've been at the memorial; but each time I go I make certain to find my second cousin's name.

Check out The Greater Cleveland Veterans Memorial web site for history of the monument and thank a Vet for your freedom!

Friday, Nov 23, 2007

3:15 P.M.

Realtors become own media to sustain market optimism Negative news scares off clients

By Bernice Ross, Inman News

Are we going to let the negativity in the media continue to create irrational fears in our clients? Or are we going to fight back and tell the truth about all the good things that are happening in today's real estate market?

There are more than 1 million Realtors in the United States and approximately 2 million people who hold real estate licenses. What can we do to counteract the flood of negative press?

1. Stage a frontal attack

Whenever you read or hear a piece of news that uses a percentage, remember there are two ways to view that percentage. Take these two examples:

Negative Media: Twenty-five percent of the subprime mortgages in the U.S. are not performing.

Positive Realtor Response: Subprime mortgages represent 25 percent of all mortgages in the U.S. Of these, 75 percent are performing. This means that only 6.25 percent of the total loans are NOT performing (25 percent of total loans that are subprime) X (25 percent not performing) = 6.25 percent.

Negative Media: Prices are down in 15 states.

Positive Realtor Response: Prices are stable or increasing in 35 states.

I find examples like these daily. Take the negative example and make it positive. To do this with percentages, simply subtract the negative percentage from 100 percent. Using the example above, if prices are down in 15 states, the percentage of states with a decrease is 30 percent. To find the percentage where property values are flat or unchanging, subtract 100 percent minus 30 percent. In the example above, prices are stable or are increasing in 70 percent of the states.

Once you calculate this number, share it in your blog, in your marketing materials, and talk about it at every possible opportunity. Not only will you help stem the tide of negative news, but you will also attract more clients.

2. Go Long Term, Not Short Term

There's no doubt that many areas are experiencing a slowing market. We have been doing business in a paradise of exceptionally low interest rates, easy lending, amazingly high demand, and a flood of money created by the strong economy and lower tax rates. These factors lead to unprecedented numbers of sales as well as extraordinary appreciation in some areas.

For example, my father died in 1998 when his house in Los Angeles was worth $168,000. According to the comparable sales data, it was worth $600,000 at the beginning of 2007. Based upon current sales data, it's currently worth about $575,000. Thus, the value is down $25,000 from Jan. 1, 2007. Here's how the negative media would spin this versus the more accurate long-term assessment of the situation:

Negative Media: "Owners Face Massive Losses As Values Plunge By Over 4 Percent In Just 10 Months."

Positive Realtor Response: "Property Values Soar 300 Percent Over The Last Nine Years."

With the exception of a few states that have experienced massive job losses in the manufacturing sector, most areas have seen a substantial increase in property values. All markets go up and down. The larger and quicker the run-up, the more likely it is that there will be a downturn. Nevertheless, real estate continues to be a fabulous investment, especially when it comes to the difference between owning and renting. At the National Association of Realtors' mid-year meeting in May, Lawrence Yun, the chief economist for NAR, shared the following data from the Federal Reserve: "The median wealth accumulation for renters from 1995 to 2004 was $4,000. The median wealth accumulation of a homeowner was $184,000."

3. Record years are always followed by declines

One of the negative media's favorite ways to tell us negative things about the real estate market is to quote how much sales are down from 2004, 2005 and 2006. We had the lowest interest rates in more than 30 years, which in turn, triggered massive numbers of sales and price appreciation. For example, the $400,000 mortgage on my house in 1986 had payments of $4,220 per month. That same $4,220 today buys a $670,000 mortgage at 6.5 percent. When I started in the business in 1978, interest rates were 9.75 percent for fixed rates. They climbed to 13 percent in late 1979. No one ever envisioned the low rates we have today.

The negative media hammer the fact that the volume of sales is down. In most markets, if you compare the volume of sales today with what it was five or 10 years ago, the sales numbers look quite good. In fact, with the Federal Reserve cutting its target interest rate to 4.5 percent, we can look for an improvement in sales, provided we get the word out to our clients.

Negative Media: "Real Estate Sales Slip 20 Percent From 2006."

Positive Realtor Response: "2007 Real Estate Sales: Fourth Best Performance Since 1997."

We can win the war against the negative media by sharing how much price