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The Gene Molloy Real Estate Blog

Jun. 9, 2008 - Make And Model Revisited

Just like the different types of Community Associations, the laws that apply come all shapes and sizes too.  For instance, there are three different types of state laws, or statutes, that apply to Community Associations.  You have your general, your specific, and your uniform types.

A general statute applies to Community Associations as well as other types of organizations.  If your association is incorporated, which most are, then the corporate laws of you state apply to your association/corporation.

Specific statutes are association specific.  Mostly they exist to to provide for the establishment and operation of a community as a legal entity.  Some of them regulate development and sale.  Some provide protection for purchasers, owners, and tenants.  Some regulate operation.  The specific statutes are probably the most important type.  They take precedence over the declaration and bylaws.  Since they can be amended by the state legislature it is important to stay on top of them if you want to be a home owner who is in the know.

Only about one third of the states have adopted any uniform statues.  The National Conference on Uniform State Laws is attempting to get a standardized set of statutes going but there is some resistance.  For a person who moves around a lot, or owns properties in multiple states, the adoption of uniform laws regarding association living could be a real blessing.

So you see, there is a little more to community association living than just offer, acceptance, and move in.  An educated homeowner, is a happy homeowner, indeed.  

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Jun. 6, 2008 - What Makes Them Think They Can Do THAT?

Many a disgruntled new homeowner, having just moved into a community association with out being made aware of what they are getting into, has lamented over that question.  Hopefully there is someone around who can answer that, but if not, let me give it a try.

If a community is being run properly most of the decisions made by its Board of Directors are not as arbitrary as they may seem.  A community has certain legal obligations that are derived from many different sources.  First and foremost there are federal, state and local statues and regulations that must be adhered to.  There is a whole body of case law that attests to that.  If you do not want to take my word for it just google court decisions regarding community associations.  Then there are legal documents that are specific to each community association that bind the association and the owners.  These documents would include declarations and by laws, rules and regulations, board resolutions, etc, etc.

As if that was not enough, there are lender requirements to contend with.  Some lenders will balk at giving mortgages in a residential community that has too high of a percentage of non owner occupied, or investor owned unit.  Getting an FHA loan in a community that has a first right of refusal built in to the declaration can sometimes be problematic.

Sometimes the decisions are based around standards that are set by other professional associations, like the American Institute of Certified Public Accountants for instance.

There are many outside sources that define the existence, activities, and actions of a community association and that, my friends, is what makes them think they can do THAT. 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Jun. 5, 2008 - Checking Out The Make And Model

Basically, the are three different types residential community associations.  Some of them even have sub species.  Allow me to expound.

First you have your Planned Community.  In this type of community the homeowner owns their dwelling and the piece of land the dwelling is built on.  All of the common areas and usually the amenities such as swimming pools, roads, clubhouse, tennis courts, etc., are owned by the community.  If you live in, or are considering a community like this then you will be a member of either a Homeowners Association (HOA), an Owners Association, a Townhouse Association, a Property Owners Association (POA), or a Planned Unit Development (PUD).

The next model is the Condominium.  When you live in one of these you are the proud owner of your living unit and an undivided interest in, or a percentage of the common elements.  The common elements are everything except the actual living units.  They can include things like the pool, the lobby, the corridors, the garage area, etc.  The community association as a whole does not own any real estate.

That brings us to the third type, the Cooperative.  What you own if you live in one of these is stock in the cooperative and a proprietary lease, also know as an occupancy agreement for your living unit.  This lease defines your rights and obligations as they pertain to the living unit.  The community association, which is usually set up as a not for profit corporation, owns all of the real estate.

Any one of these three types of associations can be stand alone or clustered.  If they are clustered they are general either a Master or Umbrella Association, or a Mixed Use Development.  The former would consist of more than one residential community association and the latter would consist of a mixture of residential, commercial, and maybe industrial use properties.

So you see, because each of these different associations depend upon a different form of ownership, it is very important that you, and more importantly your REALTOR®, know what you are getting into before you decide to buy in.  Everybody will be happier if you know what you are getting into.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Jun. 3, 2008 - So Let Me Repeat Myself

Since I am pounding on the subject of Community Associations and the importance of what you should know before you consider moving into one, I feel a bit of review may be necessary.  Whether it be a Condominium, Townhouse, Co-op, or a detached single family home in a Home Owners Association, the primary reason people find association living attractive is that the association is looking out for the governance, the business, and the communal aspects of the associations members, the homeowners.  By the establishment of of a system of property rights, covenants and restrictions, and rules and regulations the association is administered, maintained, and enhanced for the best interest of it's members.  If you don't know anything about it, you need to research an association just like you would a new town that you might consider moving into.  In essence you are moving into a little government where the over all community is going to be run like a business.  If you are the kind of person that needs to be free to march to your own drummer a Community Association is probably not for you.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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May. 15, 2008 - A Rose By Any Other Name

Sometimes I tend to forget that all real estate is local and that the same thing has different names in different locals.  Also, the same thing might be referred to by different names in different circles.  Therefore when I posed the question "What exactly is a Community Association?" I seem to have caused some confusion.  Let me try to straighten that out.

The term Community Association is probably the most common moniker.  It is the term I use.  It is also the term used by The Community Association Institute and The Florida Bureau of Condominiums.  I am sure it is widely used by others as well.

If you are speaking to someone from The National Conference of Commissioners on Uniform State Laws you would hear them referring to a Community Association as a Common-Interest Community or CIC for short.

Then there is The American Institute of Certified Public Accountants who likes to refer to a Community Association as a Common Interest Realty Association or CIRA.

Once you get way out west The California Department of Real Estate refers to a Community Association as a Common Interest Development or CID.

Now that I have cleared that up, what do you call a Community Association?

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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May. 14, 2008 - What Exactly Is A Community Association?

I have long maintained that if you don't know what you are selling you should not be selling it.  The same thing goes for buyers, if you don't know what you are buying you should not be buying it.  There is a saving grace for buyers however, and that is a knowledgeable REALTOR®. 

If you, as a buyer, are considering moving into a Condominium, a Co-operative or a community with a Home Owners Association, you are considering moving into a Community Association and you need to ask your REALTOR® exactly what that means.  If he or she alludes to the fact that it is anything other than a group of owners who are bound together for the purpose of providing a communal basis of preserving, maintaining, and enhancing their homes and property you need to move on to another REALTOR®.  It doesn't have to be those exact words, but whatever they say should embrace the same spirit.  It is a group of owners whose property brings them together with a common cause.

You should also be told that there are three important points to consider.  When you buy into a Community Association membership in the Association is not optional.  You will be bound by certain documents that govern the Community Association.  The assessments that are levied in order to operate and maintain the Community Association are mandatory.  In other words, you are going to have to abide by the governing documents of the Community Association so you had better review them and make sure they are something you can live with before you make an offer to purchase.  Once the purchase of the property has closed you are an assessment paying member of the Association and that should be a beautiful and harmonious thing.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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May. 13, 2008 - Ain't Wasting Time No More

You may construe from the title of this entry that I think blogging is a waste of time, especially since I have not posted in a while.  Or perhaps you think that I feel as if the real estate lifestyle is a waste of time these days.  If either one of those thoughts have entered your mind you are way wrong.  While many other agents are flocking to classes and seminars on foreclosure and short sales I have been getting an education of a different sort.

I have been going a few rounds with The Florida Real Estate Commission trying to convince them that as an Illinois resident they should consider granting me permission to take the Florida Brokers License Exam.  I have sent so many of my "baby boomer" clients off to the Sunshine State it's not funny.  Don't get me wrong, referral fees are fine, but I am a hands on kind of guy.  Besides, as often as I find myself in Florida I figure I should make at least some of my trips tax deductible.

I really respect the fact that The State of Florida is so stringent when it comes to approving those folks that it would license.  That is very good for the consumer however, it has been rough on me.  It seems that whatever I had to prove to The State of Illinois regarding my good moral character has to be proven to Florida three times over.  Not to worry though my friends, I will prevail.

The other "education" I have been pursuing has resulted in me becoming a CMCA®.  For those of you not familiar with that acronym it stands for Certified Manager of Community Associations.  It is held and highly respected in the Property Management field.  As I am sure you may have noticed in the past, I have often ranted about some REALTORS® being less than astute when it comes to dealing with properties in Condominiums, Co-ops and Home Owner Associations.  Since I believe that Property Management (not to be confused with Asset Management) is an important part of "the real estate lifestyle" I will leave the foreclosures and short sales to those who can stand to deal in human misery and try to keep my focus on the kind of things that attracted me to this lifestyle to begin with, the enrichment of my clients and the enhancement of their property values.  

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Feb. 6, 2008 - And The Survey Said.................

There are many reasons why people move into Community Associations.  In case you are not sure what a Community Association is, let me try to make it clear.  A Community Association is a place where all of the homes are loosely bound together for the common good.  It could be a community of townhouses, much like my buddy Steve lives in.  It could be a Condominium, much like I live in.  It could be a gated community of detached single family homes.  It could be a Cooperative like The Dakota in New York where John Lennon, God rest his soul, used to live.

The thing that all of these types of homes have in common is that they have governing documents, Declaration and By-laws and Rules and Regulations.  Sometimes, depending on what State you are in, there are also State Laws pertaining to this sort of living.  These documents are in place to bring order to the common good of the Association, the Association being made up of all of the home owners in the community.

People who do not live within an Association can pretty much do as they please with their property as long as they obey Federal, State and Local laws.  People who live within a Community Association need to obey these same laws plus the rules outlined in the governing documents of the Association.  Just like we elect our Federal, State and Local officials, Community Association are usually required to elect a Board of Directors.  They are also usually incorporated as a not for profit organization.  They need to run as both little governments and a little business'.

This is why I have repeatedly bemoaned the fact that there are real estate agents out there running around selling homes to people with out the benefit of educating them as to what they are getting into.  Here comes a client that says "We are pre-approved for $xxx,xxx".  The agent says "Hmmmmm, in this market maybe we should look at condominiums.  They are a real good place for first time home buyers.  They are affordable and the assessments include heat, water, garbage removal, landscaping and snow removal.  You won't have a back yard for your VietNamese Pot Bellied Pig to play in, but that's OK, I'm sure it will be able to enjoy some fresh air from the balcony".

These people turn out to be unhappy.  They never knew that there were pet restrictions in the rules.  Sure, the agent faxed the contract to the Attorney for review.  Sure the Attorney obtained a copy of the Declaration and By-laws, the Rules and Regulations and The current Budget and Financial Statement as per the contract.  The problem is that nobody took the time to read them.  Everybody figured that they were "boiler plate", you've seen one, you've seen them all.  That's a big mistake, especially for the buyers themselves, but they were probably not specifically told to read them. 

I believe that people who know what they are buying into are for the most part happy.  That brings me to the survey.  The Foundation for Community Association Research sponsored a National Survey which was designed to measure how residents perceived their Community Associations.  I only wish I had the funds to commission a firm as prestigious as Zogby International to survey the residents of Community Associations to see how they feel about the real estate agents that put residents who are under educated as to what they are buying into into their communities.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Jan. 31, 2008 - The State Of The Business

It's true, sometimes I ignore my blog.  I only seem to get back to it when I have something to rant about.  Sure, once I get on a roll and back to blogging I dispense a tidbit of useful information here and there before I get to busy to blog again, but sometimes my entries get far and in between.

This entry is a rant, to be sure.  Inspired by "The State of The Union", I have titled this "The State Of The Business".

I have been somewhat busy doing work on a deal over the last few days.  There were some issues with the buyers wanting their home inspector to do a roof inspection on the roof of a condominium.  The access hatch to the roof is locked.  Researching The American Society Of Home Inspectors' Standards of Practice, I found that under Section 13.2 General Exclusions Paragraph E. Line 6 it states that "Inspectors are NOT required to inspect common elements or common areas in multi-unit housing, such as condominium properties or cooperative housing".  I also found that their definition of inspect is: "To examine any system or component of a building in accordance with these Standards of Practice, using normal operating controls and opening readily openable access panels".  Add to that, the liability issue posed to the Condominium Association by having someone who was not required to be, and not really qualified to be up there, up there seven stories in the air on a windy, snowy, icy day, there was no way that this "roof inspection" was going to take place.

Then came the part were up until today, the last day of Attorney review, nobody had called the management company for the condo docs, the rules and regulations or the budget.  Fortunately, I happen to have copies of all of the needed documents so I was able to supply them at the last minute.  That's a good thing too, cause without that this deal might never get to the closing table.  After all, isn't that what we tell our clients our only mission is, to get them to the closing table?  Yes indeed, we tell our clients that by hiring us to represent them, they will have nothing to worry about.  We as their agents will dot the i's and cross the t's because we know what it takes to get it done.  At least that's what I tell my clients.

The problem here is, I don't have any clients in this deal.  The sellers interviewed me.  They didn't like my market analysis.  They thought I wanted to list their condo too low.  They hired another agent who ultimately, in the 335 days that the unit was on the market, lowered the list price to what I wanted to list it for on day one.  That same agent thought nothing of calling me up to bail her out because I list a lot at this particular property and I have a splendid relationship with "management".

This my friends, is a fine example of The State of The Business.  No wonder the housing market is so shaky.  Some of the people who were supposed to be looking out for their clients probably didn't have good hearted professionals like myself looking out for them.

Do me favor would you?  You don't really need to understand what this means, just pray for the thinning of the herd. 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Jan. 5, 2008 - What's It Worth?

It took a while to get some of my investor type clients properly trained.  I have told them time and time again to call me before they install a $3,200 gold plated toilet bowl, complete with a bidet, in a $230,000 house.

First of all, not every buyer wants or needs a bidet.  The wow factor is just not that great.  I guess you could say that they are literally flushing their money down the toilet.

I know what sells.  That is my area of expertise.  I know what the houses in a given area are worth.  That is my area of expertise.  I am not a construction estimator, but I have a pretty good idea what any given upgrade job should cost.  I also have a sense of what value would be added by doing some remodeling and upgrading.  Some of it comes by way of experience, but most of it comes by way of research.

I have found a pretty good research tool. It's Remodeling Online.  It's a pretty spiffy cost vs. value site that let you chose the area of the country and gives you the average return on investment for whatever job it is you are thinking of doing.

I love to browse the value of different jobs done in different parts of the country.  It's proof positive to the old adage that all real estate is local. 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Jan. 4, 2008 - Loss Mitigation

First and foremost, since I have ignored my blog for about a month, let me take this opportunity to say that I hope your Holidays (whatever it is you celebrate) were everything you were hoping they would be.  Fortunately I am back here in time to wish you health, happiness and prosperity in 2008.

On Christmas Eve some dastardly evil doer stole the table out of the lobby of the Condominium in which I live.  Since I am the President of the Board of Directors it fell to me to file the police report.  Des Plaines Police Officer Mike Meyers (honest) showed up and asked the usual questions. "Any signs of forced entry"?  "No sir".  "Anybody report any suspicious characters on the premises"?  "No sir".

There was no forced entry because no one has to force their way in.  As much as you harp on the fact that there are rules and regulations that need to be adhered to when you live in a Condominium environment, many people apparently think that they do not apply to them.  There is a reason you are asked to wait until the garage door closes behind you before you pull off.  There is a reason you are required to greet the delivery man, the pizza man and anybody else you don't personally know in the lobby.  That reason is security, loss mitigation if you will.

Thieves are wily enough without a member of the association giving them free access to the building.  They have been know to follow the mailman into the building or come in the garage door while the waste hauler is rolling the dumpster to the garbage truck.  There isn't too much you can do about that.

That's why, as a part of Condominium living, you, the resident of a Condominium, have to do everything in your power to help secure your environment.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Dec. 7, 2007 - Feeling The Crunch?

I posted yesterday that I would be doing some verifying and evaluating. If I found anything that I thought might be beneficial to anyone who was headed into foreclosure troubles, I promised I would post it. My research has yielded a lot more than I expected. I found a site for a nonprofit organization, the Homeownership Preservation Foundation, that not only speaks to helping people who are facing foreclosure, it also has links to other nonprofits that help people who are overburdened with credit card debt.

My research also uncovered some statistics from a 2007 survey by default counselors in the Chicago area. According to the survey 45% of the defaults and foreclosures can be attributed to JOB LOSS. That's right, job loss. ARM resets account for 28% and fraudulent loans account for only 9%. All real estate facts are local and those numbers could be different in other areas of the country.

I realize that that adds up to only 82%, and I really don't know what the other 18% is caused by, but the interesting thing here is that if you listen to the news media on a daily basis, you get the impression that every foreclosure is caused by sub-prime lending. It scares me that the average person gets only the spin that the media wants to put on a subject. I understand that in a 30 second segment they can not read a three page press release, but come on, don't just pick out and regurgitate the scariest couple of words.

I suppose I am breaking the cardinal rule in the sneaky salesman's handbook by giving you a link to a place where you can find some relief if you are feeling the credit crunch. I have been to seminars and training sessions where they pound home the fact that I am only supposed to give you just enough information to make you want to call me for more. That way I can share a tidbit of information with you that will make me look like the smartest man in the world. It also gets me access to your contact information so I can periodically hound you to use me as your REALTOR® if you ever have a real estate need. I figure that if your in trouble financially right now, you sure don't need me ringing your telephone or filling your inbox. You have enough people doing that. My guess is that if anyone should ever benefit from the information I dispense, I'll hear from them sooner or later.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Dec. 6, 2007 - I Hate My New Category

As distasteful as I find it, I had to create a new category for foreclosures. It seems like that is the one topic on everybody's real estate mind these days. It is the thing that has inventory up and buyers down. Even folks that are nowhere near being in foreclosure seem to want to talk about it.

If you happen to be staring it in it's ugly face my heart goes out to you, especially if it is due to a circumstance beyond your control. If it is your own doing I am still saddened, but not as much. Somehow my heart doesn't bleed as much for the folks who were fully advised about buying above their means and yet proceeded with the purchase any way.

It is the duty of REALTORS® like myself, who are claiming to be full service, to get educated and up to speed on how they can assist these unfortunate souls. There are people out there who are looking to us for help and we need to be there for them. We certainly need to know more than whoever it was that ill advised them in the first place.

If you are in trouble you should seek the counsel of a trusted professional REALTOR®. Most forms of government, Federal, State and Local, are now offering financial assistance of some kind. There are even some nonprofit organizations out there that are trying to help. As I verify and evaluate some of these offerings I will be posting links. In the mean time if you need help feel free to contact me. It doesn't matter where you are. I have a network of trusted colleagues throughout the country and I would be more than happy to put you in touch with the appropriate REALTOR®.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Nov. 20, 2007 - A New Form Of Poacher

You can't see this everywhere, because many Condominium Associations don't allow for sale signs on their property. Being the President of the Board of Directors of my Association I can't say as I blame them either. When you drive by a complex where there is a multitude of for sale signs you really have to wonder if something isn't wrong with the association. Why, you ask yourself, do so many people want to leave this place?

Recently, however, I have noticed that in places that do allow for sale signs there is a new form of poacher rising up. There amid the signs of the Real Estate Companies is the little red and white For Sale By Owner signs that you get at the hardware store. Not that there hasn't always been plenty of FSBO signs around. The brave and the daring have been trying to go it alone for as long as I have been in the business. This is different though.

These are opportunists who figures that there is plenty of traffic being drawn by the real estate agents who are marketing the listed properties so why pay a commission? Simply put out a sign and the people who are coming to view the listed properties will surely be curious. Some of them might even ditch their agents and call us directly later on.

It's my personal opinion that this type of poacher is a real thief. Not only are they poaching off of the marketing dollars the listing agents are spending to draw traffic, but they are also trying to poach the buyers agents clients as well. In a market as soft as this one is I call this Felony Theft. The problem is, the only ones the Code of Ethics, the laws, and the rules and regulations apply to is the licensed real estate professionals.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.
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Nov. 14, 2007 - The Winning Hand

Don't you just love those situations where everybody wins? It's even better when you are the person who pulls it all together.

My last post was about playing the hand your dealt. Actually it was a teaser post that was leading up to this one. I just had to make sure that the deal I was brokering would work out. Work out it did and I am sooooooo proud. I mean, if you can't boast and brag in your own blog them why bother?

So here we are faced with an slowly declining market. Most of the REALTORS® I know, including myself, have a pretty good inventory of listings. That's because the buyers seem to be hiding out somewhere waiting for the market to bottom out. They listen to the regurgitated crap that the shallow thinkers are blathering about not buying on the downward slide because you will probably lose your life savings. Because of this the market times on our great inventory of listings is slowly building up making us look bad.

When one of my clients changed jobs and had to move out of town, I suggested that he put the possibility of leasing with an option to buy on his listing and also list the home as a rental under a separate MLS number. I pointed out that the average rents in the area were high enough to cover his carrying expenses on the house and he would even be able to pocket a few dollars a month. He agreed.

Because Internet marketing really does work, I got a call one day from someone who had seen the rental listing on a website. With two children, a boy and a girl, they needed more room and were looking to rent a detached single family home so they could get out their cramped little two bedroom apartment. We made an appointment.

As I was showing them the home it became pretty clear to me that the only reason they were renters was because their debt to income ratio was just a bit to tight. They would have no trouble making the mortgage sized monthly rent payment and if it was this time last year they probably could have gotten qualified for a loan irregardless. They had ample funds to buy out their lease at their current apartment complex, pay the security deposit and the first months rent, and still have some monies left that, according to their budget, they were saving for a future down payment. They even laid out the plan of action they had already implemented as far as paying down their debt was concerned. I mentioned that they looked like really good candidates for a lease with an option to purchase. They agreed.

The long and short of it is that they liked the place, liked me, and liked the idea of having a percentage of their rent paying down the purchase price of the house. The owner liked the fact that the proposal called for them to pay more per month than he was asking, they were willing to use their saved future down payment funds to secure the option to purchase, credited to the purchase price of the house of course, and the fact that they offered to pay the full list price of the house minus the agreed upon portion of the monthly rental, the security deposit and the monies used to secure the option.

And so, the consent to dual agency was signed, the lease was signed and the option to purchase agreement was signed. They will be moving in tomorrow. Everybody got what they wanted, including me. I now have another set of happy past clients because we all played the hand we were dealt.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Nov. 1, 2007 - Playing The Hand You Are Dealt

I keep hearing people say we are in desperate times and desperate times call for desperate measures. The buzz on the street, according to the media that is, is that the entire country is headed for financial ruin. The Chicken Little's of this world are having a field day. When it comes time to pay Association dues and MLS fees dozens of fair weather real estate agents are quitting the business. Hundreds of others who can still afford to try and stay in business for a while longer, without doing a deal, are allowing the johnny come lately guru's of foreclosures and short sales to entice them to free "seminars" where they proceed to spend the last of last years profits on "the course".

I say keep it up kids. I want you all desperately chasing the distressed sellers. It puts a big grin on my face knowing that, at least in my market, those poor unfortunates are still a small segment of the market. Just like in a hotter market where some agents believe they are going to make a living off of expired listings, only to find that twenty five other guys beat them to the door, the poor distressed seller of today has to put up a force field to ward off the invading hoard of new guru trained "experts". If these poor distressed people really knew what was happening they would have to double up on their Prozac.

Personally I am finding that a majority of the people in today's market are simply bruised, not totally beaten. Those are the folks I choose to deal with. Those are the people who are going to appreciate what I do for them and tell their family and friends about what a wonderful REALTOR® I am. When I can take a person with a little less than stellar credit history and help them put a roof over their head by creating a win win situation for buyer and seller alike, I sleep like a baby. Creating win win situations is what makes me who I am.

How do I do it? By creating terms and then going the extra mile. I play the hand that I'm dealt.

Still confused? Maybe I should have a teaser seminar where I can proceed to sell you my secrets.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Oct. 17, 2007 - The Government To The Rescue

You may or may not know this, but if you should happen to lose your home for any reason and you come up short of what you owe your lender, you will be taxed on the amount of the debt that was forgiven. You can go over that sentence again if you wish, but you read it right the first time. The current tax code is written as such that if a lender forgives a portion of your mortgage debt they have to supply the IRS with a Form 1099 telling the tax man how much they let you off the hook for.


Believe you me, in these trying times there are plenty of people in trouble. The news media is talking about it every day. Adjustable rate mortgages resetting, homes mortgaged to the hilt with equity loans and lines of credit, one hundred percent financing with interest only loans that can't be refinanced due to property value fluctuations and on and on and on. To people in these situation, this "Phantom Tax" is a real slap in the face.


These situations came about in several ways. Some of it was every day bad occurrences like job loss, divorce, illness, etc. Some of it was bad guidance from bad Real Estate Agents. Some of it was fast talking mumbo jumbo from get it done at any cost lenders. Mostly it was just financially under educated people who wanted what they wanted and they wanted it now. Damn the torpedoes.


I regress, however, because what I am really talking about here is The Mortgage Cancellation Tax Relief Act, H. R. 3648. This piece of legislation will effectively wipe out the "Phantom Tax". That's a good thing too, because a person who couldn't pay their mortgage and just got their lenders hooks out of them sure doesn't need the IRS replacing their burden.


So if you or someone near and dear to you is staring into the face of foreclosure I suggest you cozy on up to your elected officials and remind them to get H. R. 3648 onto the Presidents desk for his signature so that the "Phantom Tax" will disappear from the IRS Tax Code. Then call a good, reputable REALTOR® (not the one who gave you bad advice in the first place) and get this thing nipped in the bud.

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Sep. 25, 2007 - Buying Into A Little Government

The other day, when I was visiting one of the many forums I read daily, a real estate agent asked a question about a Condominium Association that changed the rental rules for the association.  The agent's clients had asked the question.  That prompted the agent to ask other agents.  I was in one of my replying moods and it went like this:

 

"As a REALTOR® and the President of the Board of Directors of my Condominium Association I see countless REALTORS® indulging in the listing and sales of condominiums before they are able to answer condominium specific questions. Not only should they familiarize themselves with The Illinois Condominium Property Act, but they need to go over the Declaration and Bylaws and the Rules and Regulations of each specific Association in which they wish to do business. They would also be doing themselves and their clients a favor if they read Article 11 of the NAR Code of Ethics.
 
Many residents in condominiums do not realize the importance of attending association meetings, checking the bulletin board, reading the association newsletters, etc. This is partly due to the fact that they are never educated to the fact that they will be buying into a small government, not just a dwelling place. They are given a copy (or should be) of the Declaration and Bylaws, Rules and Regulations, and the budget, for perusal during attorney review.
 
Unfortunately, some Associations are run by a Board of Dictators as opposed to a Board of Directors. If this is the case, and they do not operate in accordance with the Declaration and Bylaws as laid out in The Illinois Condominium Property Act, then your client most definitely can appeal with the help of a competent Attorney who is well versed in Condominium Law (Robert Nesbit comes to mind, look him up). However, if the Declaration and Bylaws was legally amended and your client just wasn't paying attention then the rules are the rules and there isn't much they do.
 
The best way to avoid all of this distress is, as a REALTOR®, know what you are selling and only sell what you know."

 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Sep. 14, 2007 - For Sale Or Rent

Do you remember the old Roger Whatshisname tune that goes "Trailers for sale or rent"?  Well in today's market some perfectly good home sellers have raised the bar and are singing that tune about their perfectly good houses.  Some perfectly good REALTORS® are singing along with Roger as well: "Dang me, dang me, they oughta take a rope and hang me".  Rental listing are practically a free services as far as the REALTOR® is concerned but the fact is, if you are truly going to serve your clients best interest, and put them first, sometimes you just have to bite the bullet.

 

It doesn't do anyone any good to let a perfectly good house sit on the market, empty and unloved.  After all of the homework and analysis has been done you can pretty well determine that no one is buying houses in a certain market.  In a subdivision of similar homes it's pretty easy to see that price and condition are not the reasons houses are not selling.  Even with price reductions, staging and repairs, they sit there racking up market time.  Not just some of them, but all of them.

 

Could it be the location?  I doubt it.  The particular home I am talking about is in one of the most desirable school districts in the Northwest Suburbs.  It's not for lack of marketing either.  Buyers are just not active at this time.

 

And so, 7914 Kingsbury Drive in Hanover Park is now for sale or rent.  Not only have the terms been extended to include Lease/Purchase and Rent with Option, it is also available as a straight rental.  For just $1,450 a month some lucky family can sign a one year lease and live the good life in this beautiful 3 bedroom 1.1 bath tri-level.  Take a look at the virtual tour and call me.

 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Sep. 12, 2007 - Illinois To The Rescue

The good news is that The State of Illinois Department of Human Services will be handing out $1,700,000 in $2,000 increments to help some lucky first time home buyers buy houses.  The bad news is that only 850 people will be able to get that money.  It's not a windfall either.  Moderate income folks are going to have to save some of their own money once they are accepted into the program.  You will have to go through some credit counseling as well.  As far as I can tell the whole thing is going to take about eighteen months.

 

The program is called Assets Illinois.  If you, or anyone you know, have been dreaming of home ownership and could use a little boost from the government, just follow that link.  Once there you can get all of the details of the plan and you will be able to download the required application to get started.  Since only 850 folks are going to be empowered with a $2,000 grant and since it is going to take eighteen months to get the money, I wouldn't be dragging my feet.

 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

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Here you will find thoughts, opinions, rantings, ravings, news, views and other things I think you may find useful. I will publicly answer questions here, so that many may benefit from the curiosity of my visitors, community created content if you will. I am trying to attract "experts" in various fields to comment on different topics of interest, we will see.

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