Friday, August 27, 2010
Tuesday, August 10, 2010
Buy less house than you can afford - Inman News
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As a Realtor, and now as a sales rep with a title company, I have seen a lot of instances where people buy way more house than they need. People seem to think they need absolutely everything in their home, and plan as though they are going to make as much, or more, money as they do now for all eternity. Then one of the 3 D's hits, Death, Divorce, or Disaster. Now disaster can be defined by any number of events, but the most common these days are illness, getting laid off, or just plummeting income. Suddenly they can no longer afford their home, or any of their other bills for that matter, and usually have very little savings. This is the type of mentality that put the country in the situation we are in right now. If people would use a little sensibility when picking out a home, and be prepared for unforeseen problems, we’d be a lot better off. I think this is an article that should have been put out in 2005 or 2006. We’d be in a much better situation.
Buy less house than you can afford
Don't base decision on low interest rates alone
By Dian Hymer, Tuesday, August 10, 2010. Inman News
Unsettling economic news at the beginning of July caused some economists to fear a double-dip recession. The stock market sold off, pushing the Dow below 10,000. A weak employment report increased fears of a tepid jobs recovery. Manufacturing activity fell to its lowest level since December.
The National Association of Realtors' Pending Home Sales Index (PHSI) dropped a record 30 percent in May -- almost 16 percent below its 2009 level.
NAR's PHSI is an indicator of future home sales activity. The index is based on executed purchase contracts that have not yet closed. A drop in the May index was not unexpected. The federal homebuyer tax credits that were generally recognized as stimulating a struggling home-sale market expired on April 30.
The large drop in pending sales indicates a drop-off in buyer demand. It's impossible to know whether this will develop into a trend as buyers pull back in the face of worrisome economic news or until prices fall to a level they can't pass up. A certain number of buyers will retreat to the sidelines and wait until the news turns positive.
A big concern is the direction of home prices. At the end of 2009, it appeared that home prices were stabilizing. In some niche markets, home prices inched up a bit. However, David Blitzer, committee chairman of the Standard & Poor's/Case-Shiller Home Price Indices (a much-watched measure of U.S. home prices), reported in June that "consistent and sustained boosts to economic growth from housing may have to wait to next year."
It's impossible to generalize about a national housing market that is so fragmented in terms of location, price range and neighborhood. Prices at the low end of the market have dropped so far in some places that they may be good deals.
In areas with a lot of high-end inventory that's not selling, it may be difficult to find a good buy unless the sellers are motivated and are not in denial about the current market value of their home. Such a market provides a good opportunity for realistic sellers who prepare and price their home at or under market value.
Except for low interest rates, there's no urgency for most buyers to buy now. Buyers are content to wait for the right house at the right price. When one comes along, it can draw offers from multiple buyers who are also waiting for prime property. It's telling that the losing buyers don't snap up overpriced listings.
The question for many homebuyers and sellers is: How long do you wait for a better time to buy or sell? The herd phenomenon tends to apply to home sales. People feel more comfortable buying or selling when everyone else is. This approach turned into disaster for homebuyers during the recent bubble.
The contrarian strategy is to buy when others aren't and sell when the inventory is low. This buy-low, sell-high approach works well for investors. But, when you buy a home, your personal life limits your options. A death in the family, a divorce or job transfer could cause you to move in a down market.
Near record low interest rates are enticing, particularly if your home no longer suits your needs. But, you should only do so if you can live with the fact that the market value of your home could fall further before stabilizing. You should be financially secure and buy a home that will suit your long-term needs -- ideally at a price that is less than you can afford.
THE CLOSING: To cover the bases, buy an affordable house that will generate enough rental income to cover the carrying costs if you need to move during a down market.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."
Wednesday, August 4, 2010
Craigslist - There's always a catch!
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For those of you that have ever bought or sold something on Craigslist.org, you know there are a few quirks with nearly every sale. Personally, I have been a craigslist aficionado for years now, as I’ve found it to be the best way to do everything from selling, or giving away, stuff you don’t want, to posting all of my listings as a Realtor. One way or another, there always seems to be someone out there that wants what you have!
That being said, I have been looking at patio sets on craigslist for a good 4 months now. Now if I am being truthful, what I really wanted was the holy grail of patio sets that was at Costco earlier this summer. It was a 4 person table, with a gas fire pit in the middle, and was at pub / conversational height. For my patio, it would be perfect! However, as hard as I tried, I could not justify spending the money it was going to take to bring this little beauty home. So, on to craigslist to be a pilgrim and settle!
The search has been hot and cold and I have found many o’ patio sets out there. Most of which are the standard glass top table with some sort of metal tubing and plastic strips. While perfectly acceptable, I could not bring myself to buy one of those. Pub height was a must, and I couldn’t get the fire pit out of my head! So my search continued until yesterday and then it appeared! My holy grail was sitting on craigslist at 1/5 the cost of the one sitting in Costco! Like all reasonable people, my first question was, ‘what’s wrong with it’? So I called, and the lady on the phone assured me that there was nothing wrong. She just needed to sell it and it only came with 3 chairs instead of 4. After thinking about it for about .4 seconds I decided that 3 chairs were plenty at this price, so I got the address and was on my way. The great part about this arrangement is this lady only lived about 10 miles from my place. The bad part was that she lived on Hayden Island. I jumped in my car, and since I was going after work, I proceeded to cruise up I-405 and I-5 at a blistering 2mph. It was awesome!
After an hour of cursing, blasting tunes, and banging my head on the steering wheel, I finally pulled into the floating home development where this little craigslist gem was located. The woman instructed me to park, walk down the ramp, and then just go to the right until I got to 5xx. I half skipped, half walked down the ramp and arrived on the dock / sidewalk that accessed all of the homes to the right. I took a look around and noticed that I was at house number 300. I proceeded down the walkway and noticed the house numbers are only going up about 2 at a time. This is the longest dock I have ever seen! I must have walked 500 yards by the time I finally got to the right place! But I was determined so I knocked, ‘craigslist lady’ answered the door, and this is exactly how the conversation went,
Craigslist Lady: ‘You must be Aaron, the table is right this way. Are you a good swimmer?’
Me: ‘Uhhhh, I can swim if I need to?!?’
She then just walked down the little side path to the back of the house without any further explanation. Needless to say I was more than a little confused! However, I’d come this far and I was going to get the scoop with my holy grail of craigslist patio sets. I walk around the corner and there it is in all of its magical glory! It looked just like the picture, was exactly as described, and would be perfect for me. I was ecstatic! Then craigslist lady says, ‘So I advertised it with 3 chairs, but there is a 4th. It just fell off the dock and is now at the bottom of the river. So, if you can swim down and get it, you can have it too as a free bonus. That’s why I asked if you could swim.’
That’s when the wheels in my head started churning. I wanted this table but there were a few problems I was going to have to solve. First off, this giant thing was not going to fit in the ol’ hybrid that I drove around. Secondly, I would have to carry this table around a floating home with a 2 foot walkway and a 4 foot table top just to get to the 500 yard long sidewalk. Then I would have to find someone with a truck, haul it home during rush hour, get it up the elevator, through my door and onto my patio. No problem, I just need to figure out who to call.
Me: ‘Jason, I need you to help me pick up a patio set.’
Jason: ‘Ok, what’s the story?’
Me: ‘Hehe, you’re going to love this…’
Here’s a quick side note, if you’ve ever owned a truck, you know that it can be the biggest curse of all times. You always get called for hair brained plans such as this, and to help people move! You spend half a day and $100 in gas for a couple of slices of pizza and a couple of cold beverages. Good trade!
Now back to the story. After about a 10 minute conversation, my brother Jason had signed on for this adventure, and was going to shower and meet me at my place. I had gone round and round about the ‘bonus chair’ and decided it was at least worth a try. So, I was headed home to change into my swim trucks, grab my swim fins, and wait for my brother to arrive.
After about 45 minutes of Jason sitting in traffic, he finally arrives and we are on our way back up I-5. To our delight, it’s moving at 20mph now! Believe it or not, this made the trip go fairly quickly. We rolled up to the gate, and after about 10 minutes were able to follow behind another car into the parking lot, pull into the loading zone, and walk down the ramp. At the bottom of the ramp Jason and I see a couple of carts which might actually make this process a little easier. The first one is a great little plastic cart with bicycle tires and the second looks like a 100 year old Home Depot lumber cart with solid metal wheels. I proceed to grab the nice smooth bicycle tire cart and am nice enough to allow Jason to push the other one. It takes us about 5 feet to realize that this lumber cart is quite possibly the loudest thing we have ever heard. Oddly enough 6 inch metal wheels on a wooden dock sounds like a rattling freight train when all else is silent. However we were not to be denied and continued down the walkway, as house windows rattled, and neighbors poked their heads out to see what all the racket was about.
After a few minutes Jason and I make it to the house with craigslist lady, and my fancy new table. Jason turns to me and says, ‘Dude, that was not 200 yards!’ Then I remember that I might have said 200 yards not 500 yards when I was talking him into this. It was a slight stretch of the truth.
However we’re here now so let’s make this happen. Craigslist lady answers the door and walks us around to the back deck. At this point Jason and I are fully committed to finding this 4th bonus chair. The lady hands me a pool hook and Jason lays down on the deck and starts probing around. Within about 5 minutes we realized that there is now way we are going to just stab around with a stick and pull this chair out. Jason turns to me and says, ‘Bro, the water may be really deep here.’
To which craigslist lady replies, ‘I think it’s between 10’ and 15’ deep.’
Craigslist lady hands me a mask and snorkel, I throw on my fins and jump in the water. Now let me paint you a picture. This water is not the crystal clear tropical blue water you see in post cards, but instead a nice algae green color with visibility stuck at about 18”. So, I grab the pole, prod around a little more and realize this effort is futile! It’s time to fully commit to this. I take about 10 deep breaths, dunk my head and start kicking my fins like crazy to get down the 15 feet. I kick about 4 or 5 good times and suddenly my face slams straight into the bottom of the river! This isn’t 15’ deep, it’s about 8’ deep!!!! Thanks for all of your help craigslist lady! My mask now has mud on it, and since I splatted my face at mach 2, there’s a cloud in the water so I can barely see my hand in front of my face. This is going to be tricky!
Through all this mess, I did manage to hold my breath and decide to start swimming around like a catfish in order to stumble across the chair. I’m literally swimming around by brail with my hands in front of me as to not have another face smashing incident. This goes on for about 30 seconds and just as I start to run out of air I see something white. Like the Titanic, my ‘bonus chair’ is sitting right there in front of me! It was glorious! I proceed to grab it by the leg and kick like crazy to get back to the surface. Once I surfaced I was bobbing around like a cork trying to swim myself and my new found chair over to the back patio. Jason reaches down, grabs the chair out of the water, and I now have a table and 4 chairs! Jackpot!
At this point I am fully vested, but still feel obligated to haggle with the lady in true craigslist fashion. She replies back, ‘If I had the 4th chair it would have gone for $50 or more above what you’re paying.’ To which I thought, ‘But you didn’t and I had to get my butt in the river, swim around like a catfish, and hike that thing to the surface!’ Either way, it was a little late to bargain so I paid her price.
While it didn’t go perfectly smoothly, we got the table and 4 chairs loaded onto our 2 carts, and are ready to head back down the walkway toward the truck. This time, however, it is not just the rattling freight train cart making noise, but instead we’ve now got a rattling table, 4 rattling chairs, and a freight train cart going down the walkway! It’s now almost 8pm and the neighbors seem none to pleased to hear us chugging down the tracks! About 20 earth shaking minutes later we are carrying the table and chairs up and throwing it in the back of the truck. All we need to do now is bungee it down and we’re ready to go home.
Jason: ‘Crap, I forgot the bungees at home, I only have 2!’
Me: ‘Oh well, we’ll have to make due, just drive slow.’
Now anyone that has ever moved knows these are famous last words! There is nothing we can do about it, so Jason and I strap the stuff down with our 2 cords and jump into the truck to head to my place. At this point we are now in a confined space and realize that we both smell like we’ve been rolling around in a tub full of salmon! This may come as a shock to you, but the algae green water I had been swimming in like a bottom feeder has an odor to it. It smells terrible! We have to roll down the windows and are now cruising down the freeway hoping all of this work doesn’t lead to my beautiful new patio set splayed out all over the freeway. We are cruising along nicely with no trouble to report until we get to the I-405 / HW 30 exit when suddenly there is a crash and all of the chairs and the table fall over in the back. Holy crap, the bungee gave out!!! Jason lets off the gas, veers over to the right, and we are watching the stuff sit in precariously the back with utter terror! Please don’t let it fall out!
We ease over to the right, take the first exit and pull over to the side of the road. There is nothing holding the stuff in and miraculously it all stayed in the truck! I still don’t know how it happened. I think this is karma giving me some love for all of the work I had put in to this point.
We pull to the side of the road, secure the cargo, and pull into my building. Saga over right? Not so fast! We carry the fish smelling chair and its 3 friends into the building and then bring the table to the elevators. However my eyeball calculation was a little off. The table is not only too big for my front door, it’s too wide for the elevator to even get upstairs! At this point we’re sitting in the lobby of my building trying to figure out how to take this thing apart, as a steady stream of my neighbors walk by and give me the head shaking, ‘you’re an idiot’ look. To be fair, the look is well deserved!
We finally figure out how to take the top off the table and we get it into the elevator and through my front door. However, the base is still too big to get through my sliding door and onto my patio. Ugh! So as it sits right now, I have a table top and chairs on my patio, and the base sitting in my living room. Tonight’s project, is to get the base out and re-assemble the table.
So what’s the moral of this story??? When buying things on craigslist, there is always an adventure and you ‘pay’ for what you get one way or another. It may be by dealing with flakey people, or simply just by driving 2 hours to save $5. Either way, you pay! Just like me though, you’ll get an adventure and at the end of the day you’ll be able to say, ‘Hey, I got the holy grail patio set that will eventually be in my patio, and all it cost was 1/5th the price, smelling like fish, 4 hours of driving, a swim in green water, and a little assembly.’ What a deal!!!
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For those of you that have ever bought or sold something on Craigslist.org, you know there are a few quirks with nearly every sale. Personally, I have been a craigslist aficionado for years now, as I’ve found it to be the best way to do everything from selling, or giving away, stuff you don’t want, to posting all of my listings as a Realtor. One way or another, there always seems to be someone out there that wants what you have!
That being said, I have been looking at patio sets on craigslist for a good 4 months now. Now if I am being truthful, what I really wanted was the holy grail of patio sets that was at Costco earlier this summer. It was a 4 person table, with a gas fire pit in the middle, and was at pub / conversational height. For my patio, it would be perfect! However, as hard as I tried, I could not justify spending the money it was going to take to bring this little beauty home. So, on to craigslist to be a pilgrim and settle!
The search has been hot and cold and I have found many o’ patio sets out there. Most of which are the standard glass top table with some sort of metal tubing and plastic strips. While perfectly acceptable, I could not bring myself to buy one of those. Pub height was a must, and I couldn’t get the fire pit out of my head! So my search continued until yesterday and then it appeared! My holy grail was sitting on craigslist at 1/5 the cost of the one sitting in Costco! Like all reasonable people, my first question was, ‘what’s wrong with it’? So I called, and the lady on the phone assured me that there was nothing wrong. She just needed to sell it and it only came with 3 chairs instead of 4. After thinking about it for about .4 seconds I decided that 3 chairs were plenty at this price, so I got the address and was on my way. The great part about this arrangement is this lady only lived about 10 miles from my place. The bad part was that she lived on Hayden Island. I jumped in my car, and since I was going after work, I proceeded to cruise up I-405 and I-5 at a blistering 2mph. It was awesome!
After an hour of cursing, blasting tunes, and banging my head on the steering wheel, I finally pulled into the floating home development where this little craigslist gem was located. The woman instructed me to park, walk down the ramp, and then just go to the right until I got to 5xx. I half skipped, half walked down the ramp and arrived on the dock / sidewalk that accessed all of the homes to the right. I took a look around and noticed that I was at house number 300. I proceeded down the walkway and noticed the house numbers are only going up about 2 at a time. This is the longest dock I have ever seen! I must have walked 500 yards by the time I finally got to the right place! But I was determined so I knocked, ‘craigslist lady’ answered the door, and this is exactly how the conversation went,
Craigslist Lady: ‘You must be Aaron, the table is right this way. Are you a good swimmer?’
Me: ‘Uhhhh, I can swim if I need to?!?’
She then just walked down the little side path to the back of the house without any further explanation. Needless to say I was more than a little confused! However, I’d come this far and I was going to get the scoop with my holy grail of craigslist patio sets. I walk around the corner and there it is in all of its magical glory! It looked just like the picture, was exactly as described, and would be perfect for me. I was ecstatic! Then craigslist lady says, ‘So I advertised it with 3 chairs, but there is a 4th. It just fell off the dock and is now at the bottom of the river. So, if you can swim down and get it, you can have it too as a free bonus. That’s why I asked if you could swim.’
That’s when the wheels in my head started churning. I wanted this table but there were a few problems I was going to have to solve. First off, this giant thing was not going to fit in the ol’ hybrid that I drove around. Secondly, I would have to carry this table around a floating home with a 2 foot walkway and a 4 foot table top just to get to the 500 yard long sidewalk. Then I would have to find someone with a truck, haul it home during rush hour, get it up the elevator, through my door and onto my patio. No problem, I just need to figure out who to call.
Me: ‘Jason, I need you to help me pick up a patio set.’
Jason: ‘Ok, what’s the story?’
Me: ‘Hehe, you’re going to love this…’
Here’s a quick side note, if you’ve ever owned a truck, you know that it can be the biggest curse of all times. You always get called for hair brained plans such as this, and to help people move! You spend half a day and $100 in gas for a couple of slices of pizza and a couple of cold beverages. Good trade!
Now back to the story. After about a 10 minute conversation, my brother Jason had signed on for this adventure, and was going to shower and meet me at my place. I had gone round and round about the ‘bonus chair’ and decided it was at least worth a try. So, I was headed home to change into my swim trucks, grab my swim fins, and wait for my brother to arrive.
After about 45 minutes of Jason sitting in traffic, he finally arrives and we are on our way back up I-5. To our delight, it’s moving at 20mph now! Believe it or not, this made the trip go fairly quickly. We rolled up to the gate, and after about 10 minutes were able to follow behind another car into the parking lot, pull into the loading zone, and walk down the ramp. At the bottom of the ramp Jason and I see a couple of carts which might actually make this process a little easier. The first one is a great little plastic cart with bicycle tires and the second looks like a 100 year old Home Depot lumber cart with solid metal wheels. I proceed to grab the nice smooth bicycle tire cart and am nice enough to allow Jason to push the other one. It takes us about 5 feet to realize that this lumber cart is quite possibly the loudest thing we have ever heard. Oddly enough 6 inch metal wheels on a wooden dock sounds like a rattling freight train when all else is silent. However we were not to be denied and continued down the walkway, as house windows rattled, and neighbors poked their heads out to see what all the racket was about.
After a few minutes Jason and I make it to the house with craigslist lady, and my fancy new table. Jason turns to me and says, ‘Dude, that was not 200 yards!’ Then I remember that I might have said 200 yards not 500 yards when I was talking him into this. It was a slight stretch of the truth.
However we’re here now so let’s make this happen. Craigslist lady answers the door and walks us around to the back deck. At this point Jason and I are fully committed to finding this 4th bonus chair. The lady hands me a pool hook and Jason lays down on the deck and starts probing around. Within about 5 minutes we realized that there is now way we are going to just stab around with a stick and pull this chair out. Jason turns to me and says, ‘Bro, the water may be really deep here.’
To which craigslist lady replies, ‘I think it’s between 10’ and 15’ deep.’
Craigslist lady hands me a mask and snorkel, I throw on my fins and jump in the water. Now let me paint you a picture. This water is not the crystal clear tropical blue water you see in post cards, but instead a nice algae green color with visibility stuck at about 18”. So, I grab the pole, prod around a little more and realize this effort is futile! It’s time to fully commit to this. I take about 10 deep breaths, dunk my head and start kicking my fins like crazy to get down the 15 feet. I kick about 4 or 5 good times and suddenly my face slams straight into the bottom of the river! This isn’t 15’ deep, it’s about 8’ deep!!!! Thanks for all of your help craigslist lady! My mask now has mud on it, and since I splatted my face at mach 2, there’s a cloud in the water so I can barely see my hand in front of my face. This is going to be tricky!
Through all this mess, I did manage to hold my breath and decide to start swimming around like a catfish in order to stumble across the chair. I’m literally swimming around by brail with my hands in front of me as to not have another face smashing incident. This goes on for about 30 seconds and just as I start to run out of air I see something white. Like the Titanic, my ‘bonus chair’ is sitting right there in front of me! It was glorious! I proceed to grab it by the leg and kick like crazy to get back to the surface. Once I surfaced I was bobbing around like a cork trying to swim myself and my new found chair over to the back patio. Jason reaches down, grabs the chair out of the water, and I now have a table and 4 chairs! Jackpot!
At this point I am fully vested, but still feel obligated to haggle with the lady in true craigslist fashion. She replies back, ‘If I had the 4th chair it would have gone for $50 or more above what you’re paying.’ To which I thought, ‘But you didn’t and I had to get my butt in the river, swim around like a catfish, and hike that thing to the surface!’ Either way, it was a little late to bargain so I paid her price.
While it didn’t go perfectly smoothly, we got the table and 4 chairs loaded onto our 2 carts, and are ready to head back down the walkway toward the truck. This time, however, it is not just the rattling freight train cart making noise, but instead we’ve now got a rattling table, 4 rattling chairs, and a freight train cart going down the walkway! It’s now almost 8pm and the neighbors seem none to pleased to hear us chugging down the tracks! About 20 earth shaking minutes later we are carrying the table and chairs up and throwing it in the back of the truck. All we need to do now is bungee it down and we’re ready to go home.
Jason: ‘Crap, I forgot the bungees at home, I only have 2!’
Me: ‘Oh well, we’ll have to make due, just drive slow.’
Now anyone that has ever moved knows these are famous last words! There is nothing we can do about it, so Jason and I strap the stuff down with our 2 cords and jump into the truck to head to my place. At this point we are now in a confined space and realize that we both smell like we’ve been rolling around in a tub full of salmon! This may come as a shock to you, but the algae green water I had been swimming in like a bottom feeder has an odor to it. It smells terrible! We have to roll down the windows and are now cruising down the freeway hoping all of this work doesn’t lead to my beautiful new patio set splayed out all over the freeway. We are cruising along nicely with no trouble to report until we get to the I-405 / HW 30 exit when suddenly there is a crash and all of the chairs and the table fall over in the back. Holy crap, the bungee gave out!!! Jason lets off the gas, veers over to the right, and we are watching the stuff sit in precariously the back with utter terror! Please don’t let it fall out!
We ease over to the right, take the first exit and pull over to the side of the road. There is nothing holding the stuff in and miraculously it all stayed in the truck! I still don’t know how it happened. I think this is karma giving me some love for all of the work I had put in to this point.
We pull to the side of the road, secure the cargo, and pull into my building. Saga over right? Not so fast! We carry the fish smelling chair and its 3 friends into the building and then bring the table to the elevators. However my eyeball calculation was a little off. The table is not only too big for my front door, it’s too wide for the elevator to even get upstairs! At this point we’re sitting in the lobby of my building trying to figure out how to take this thing apart, as a steady stream of my neighbors walk by and give me the head shaking, ‘you’re an idiot’ look. To be fair, the look is well deserved!
So what’s the moral of this story??? When buying things on craigslist, there is always an adventure and you ‘pay’ for what you get one way or another. It may be by dealing with flakey people, or simply just by driving 2 hours to save $5. Either way, you pay! Just like me though, you’ll get an adventure and at the end of the day you’ll be able to say, ‘Hey, I got the holy grail patio set that will eventually be in my patio, and all it cost was 1/5th the price, smelling like fish, 4 hours of driving, a swim in green water, and a little assembly.’ What a deal!!!
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