It's Time To Act!

If you have a chance to pick up the latest Time Magazine read the article by Dan Kadlec on page 54, titled "Ignore the Headlines!", the author makes the point in this piece that waiting until you think the market has bottomed out may actually cost you money in the long run. He says, "...let's say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It's time to get serious--before an inevitable rise in interst rates (italics mine)wipes out your advantage"

Did you notice the "inevitable rise in interest rates" part of that statement? The Fed has to raise interest rates. They are artificially low and they will go up. Kadlec goes on to point that even if the house you were interested in buying goes down in price a simple 1/2 point rise in interest rates will wipe out any gain in a lower price. John D. Rockefeller said, "The way to make money is to buy when blood is running in the streets"

Some parts of the country are feeling this "blood running" but in the upper mid-west we are not seeing the downturn to this degree. Personally I think we hit bottom last fall and are now starting to move out of that position. We have seen a retreat of sellers to just give in to buyer demands and buyers are now realizing that a "wholesale" purchase price is no longer available. The worst thing a buyer can do now is to wait. The inventory levels are receeding and I think we will see rates begin to creep up. That creep up may not be next month, but it is on its way.

HEY GLEN!

This past Thursday evening House Hunters, HGTV's leading show, featured yours truly as the agent assisting a young couple find their first home. Erin and Jon, the buyers, were fantastic and very camera friendly. We had a great time shooting this show.

What I found interesting is how long it takes to make a reality show. We were in one home and I made a comment about the color of a bathroom. Everyone laughed and then the producer said, "Let's do that again, say the same thing." Well we re-shot that scene 5 or 6 times. For this 30 minute episode the filming consisted of a day in May, a full day in August and then another full day in October. They actually filmed this episode in 2006! I thought that our little show would never be aired, but then one day in late January I received a call from California and they said that we would be on air next week--that was exciting.

When you live in a city and then see it on TV it appears slightly different. The film crew did a fantastic job of showcasing Oconomowoc and all of its beauty. What an experience!

How Do I know If This is a Good Offer?

I was asked the above question just the other day and I would like to share with you what I told my client. Any offer that you receive on your home, in a good market or bad market, must be assessed based on the current market. If a seller makes a decision to accept or reject the offer that is before them based on; what they want for the house, what the house cost to build, or what the seller has 'into' the house then those decisions generally result in lower net prices for the seller. Let me explain. The emotions of selling can run high, but as a seller you have to remember that the buyer is not that emotionally involved in your home--yet. The buyer has seen literally dozens of homes and has compared them to yours. By the time they make the offer they have done some research and have come up with a fairly good estimate of what they think the home is worth. I liken this to the stock market. If you buy a good stock at $30/share and for some reason, out of your control, that stock goes down to $25/share, just because you think it is a great stock does not change the value. Real Estate is a little more complicated than that but the same principles apply. Your home is only what it is worth in the current market. The hard part of all of this is when the market is in decline, you can not accept the new value or market price of your home. But conversely when the market is accelerating I rather doubt you would have a hard time accepting the accelerated value of your home. It works both ways.

Have One Of These?

Yikes! If your electrical service looks like this you should consider upgrading your service to breakers. Currently real estate contracts do not forbide selling homes with old fuses, but insurance companies will not issue an home owners policy with the old style fuses; bottom line--you can't sell with fuses. With today's electronics, microwaves and hair dryers, the old fuses just can not handle the electrical load. So if you have this in your basement and you are thinking about selling, it will be a good idea to contact your electrician and have them install a circuit breaker panel--minimum of 100 amps. Taking care of this issue now will save you some greenbacks later when you have an offer on the table. What might cost you $500 now could literally cost you the deal later. So why wait? If you have fuses, currently in service, and are not thinking about selling why not change it out anyway. From a safety perspective it would be a great idea. Just a thought from HEY GLEN!

Tchotchke

What?? Tchotchke (pronounced chotskee)... you know nick nacks around the house; like the greens around this lamp. You may or may not have heard of the term, it is used often when decorating a house. A designer or decorator may say "We need some more Tchotchke to finish off this space." When I first heard that I thought not on your life will I do that to a room. But then my lack of a good vocabulary didn't allow me to know what the decorator was talking about. Now that I know the word I feel like a big shot. But try working that into a conversation--it's not that easy. Just remember when selling your home. Let's have some good Tchotchke around the house, after all who likes lousy Tchotchke anyway.

Will We See Rates Drop?

Now that the FED cut the Fed Funds rate for the second time this month down to 3% the question on the consumers mind is will we actually see lower rates for home mortgages. The answer is a likely--'Yes'. But wait a minute Glenn--You just wrote in the blog below that the interest rates will not go down, what gives? While it is true that some banks will not reduce rates we operate in a competitive business climate and some lenders will price their 15/30 mortgages accordingly to capture more business. But with all predictions I can be wrong. Interst rates have been hovering below the 6% mark now for quite some time--a historic low. We can and should anticipate that 15yr and 30yr rates will be in the low 5% range. There is a current pent up demand for housing, despite the negative media accounts. Families still plan moves and corporations still relocate people so there is demand out there. With this drop I think we will see more and more buyers get into the market. Time will tell.