Gary Woltal's Blog

It always amazes me when interacting with buyers, sellers, mortgage lenders, Stagers, Inspectors, or title company folks how I learn something from all of them. It's a people business and life is nothing if not a big classroom.

Today's observation or lesson has to do with clarity. Seeing your way clearly through a problem to the steps to a solution seems to come down to a handful of elementary things. Whether you can't decide on which house, you can't figure out why your house is not selling, you don't know how to stage a house properly, you don't know which loan to choose, a little guidance is in order. This is what I see.

Clearly define the problem. If you don't know exactly what you need to fix how can you know what solution to apply to it.

Measure it in some way. How many houses do you need to see, before you should find the one perfect for you? What are your five must haves in features in a home? How many days on the market with no offers should you go before you lower the price? If you compare a conventional loan and an adjustable rate product what is the worst case payment when the adjustable rate adjusts? In staging a home, what SPECIFIC items must be stored to open up a room's space?

Break the problem down. Sometimes a problem is too big to look at in one chunk. How do you eat an elephant? One bite at a time. Say you are selling a house. This week is the open house. Next week is the Realtor tour. Then you will add in some print advertising, etc.

Finally, consult with the experts. Experts can be professionals like Inspectors, Realtors, Appraisers, Loan officers, but don't forget your own research on the Internet and books and even bouncing ideas off friends and family.

Clarity comes when you work at it. It doesn't magically happen. And in the end, weigh everything with slight more weight toward your intuition then your head, and above all, it's your life, YOU MAKE THE CALL. You're the referee, but there's no need to be blind one!

In talking to so many buyers and sellers and even mortgage professionals about the dilemmas of getting into or out of houses in today's marketplace, it dawned on me these people have pie chart problems.

From about fourth or fifth grade on, I knew I was strong in the math department and loved turning numbers into various graphs like line, bar, and pie charts. How fun is a pie chart? It represents the whole with the different fractional slices. How better to explain the percentages of the whole.

With buyers, sellers and even as business people in real estate or jobs in general, one big pie chart for you monthly or annually, is your EXPENSES pie chart. A little money going out or a lot of money going out may not be a key to happiness but too high expenses can add to your misery. So at this new part of the year, reflecting on your expenses, can you make changes to make your life better?

HOW'S YOUR PIE CHART DOING?

Is your expense for housing greater than 25% of your net income. If housing is too high, guess what? Less vacations, less meals out at restuarants, no fitness club, no extra money for Susie's dance lessons, or little Billy's little league uniforms. What about saving for those home improvements you want? In business, what is your marketing budget? 8%, 10%, or is 14% just too darn high? That phone bill seems way too high and isn't there an alternative carrier or Voice over IP? Do we need all these cell phones in the family? Do I have to water the grass five days a week in the hot summer? My point is, many people do not go back and re-examine their expense pie chart often enough to make life better. Whether you like it or not your pie slices ARE changing. Think of the bigger slice with higher gasoline prices. But then you could drive less or get a higher MPG car. Work on your pie slices to your benefit. Also, on the income side, how big a pie (market) is there for everyone to get a bite out of? It probably has shrunk in real estate over the last year. Also, what are the sources of your income? Two spouses, some retirement funds, multiple jobs? Figure it out.

For extra credit, after you master the Expenses pie, think of your Time pie. VERY CRITICAL TO YOUR LIFE! Where do you spend your 16 to 17 waking hours of your day? DO NOT PUT IT ALL INTO WORK! Put it into what is important to you and what you value most.

Become a Pie Master and I'll send you a big Chef hat. Now get back in the kitchen and create that masterpiece that is your life and we'll all come over to dinner with you and celebrate!

Today's sellers in many areas of the country are competing against those who have given up on the American Dream. That of owning their own home. It can be debated whether it was the fault of the homeowner in getting themselves into this situation or not (health issues, death of family member, divorce, financial straits, bankruptcy) or a group of unscrupulous lenders adding to the problem.

But in any event, this class of home is definite competition to both new home construction and "normal" pre-owned potential sales.

I checked in my backyard, for example (Denton County, TX) and heard anecdotal evidence of investors and buyers trolling for foreclosures. Some would say they looked at 80 to 100 homes and decide to make a bid or not. Sometimes the banks would get them other times the investor could get them. The number of foreclosed homes up for auction has been steadily increasing and my county is projected in 2008 to have the highest percentage increase in a 10-county area. Already in the past year the jump in homes posted was 17%. In 2007 for the entire region 43,000 homes were posted for foreclosure, a record, up 10% from 2006. The ratio of foreclosure postings is 1 out of every 580 housing units.

Looking nationally, analysts predict 2 million Americans could lose their homes to foreclosure during 2008 due mainly to adjusting sub prime mortgages with the recent Washington rescue plans not expected to help.

One thing to note if you are a buyer looking into foreclosures, short sales, or REOs. They ARE NOT always the best deals. Foreclosures are tricky to buy, sometimes without inspections and bags of cash brought to the courthouse steps. There can be equally as good a deals WITHOUT pursuing foreclosures with more safeguards.

A REALTOR that focuses on foreclosures can help the consumer sift through much of the conflicting information and subscribes to specialty services in this area.

This period of our rocky housing industry part of the economy will pass but be careful in assuming that everything that looks like a deal truly is one.

With a new year sellers want to know from their Realtor how within this market of higher inventory, fewer buyers, and negative media can you sell my home? While Realtors are always expected to work magic, there is a statement I ran across that is very true. Aside from location, pricing, marketing, competition, and condition,

THE HOUSE HAS TO SELL ITSELF.

What I mean by that is business wise, the house is a product to buy subject to the forces of the market. At some price point the house will sell.

So some tips for getting to the end of the rainbow with all those smiling faces and a SOLD sign:

1) Make a significant price reduction based on comparables.

2) Improve the condition dramatically, and think about new paint and carpet, and also removing wallpaper.

3) Offer good terms, reasonable timelines and even seller financing if that is doable.

4) Improve the way the home shows by decluttering and using the services of a Stager.

Are alarm companies for residential properties a waste of good money? Often utilized for mid to high end houses to protect us from the burglars, Realtors are often asked for their counsel on this subject by prospective home buyers.

Do you know that alarm and monitoring companies have a whopping 77% profit margin compared to the 10% margin most corporations have. I'm not saying they don't provide a service, but the prices are all over the map, mostly with homeowners being overcharged. THEN, think of the false alarms caused by homeowners (and Realtor showings), and the mother-in-law visit from out of town who doesn't know the code!

The other thing is local police have to respond to so many false alarms not letting them focus their resources on more important law enforcement activities. What do you think? Recommend these services for only certain categories of properties with extremely valuable contents, or peace of mind when the wife and kids are left home too often when hubbie is out of town? Or, use decoy signs and the panic button on your key fob for the car instead? How about a big dog, or a little yippe one that runs up to the door? What's your take on alarms for houses? How 'bout live in a safe neighborhood?

This short video was passed on to me produced by Tony Robbins, the motivational speaker and trainer. It contains many quotations that may give you food for thought for coming up with your own resolutions for the New Year.

I would suggest not only contemplating the points in your own life but passing it on for others to enjoy.

It's called, THE TWELVE TENETS.

May you have a productive and wonderful 2008!! And may all your dreams come true.

It is little known by the general public that as we head into December and then January many Realtors consider whether to stay put with their broker of choice due to fee changes, commissions resetting, evaluating one's career, chemistry with the office agents or broker, or just plateauing in production.

In real estate just like in many facets of life the illusion that the grass is greener on the other side of the fence and to jump ship is always tempting.

There are indeed valid reasons at points in a career to move to a new environment. I'll tell you one reason not to.

And that would be because you "want to be more like someone else." One way definitely to be miserable in life is to want to be like someone else. When you step out of your own skin and think about it for a moment you've always REALLY been in competition with yourself. Yes, someone may rank you on a board with sales figures with others, but if you are doing the best YOU can do with where you are in life, you know what?? It's ok. The competition for YOU has always been INSIDE.

Strive each year on building a better YOU! What a lovely goal that is. You can be content with it as well. And you know by focusing on YOU, you just may pass those others who keep looking to the side trying to be like you instead of them. But you know better. Good luck in winning YOUR race.

In a previous blog I talked about stepping away from stress whether in Real Estate circles or life in general and I suggested contemplative and reflective states. I came across a picture and a link that I thought I would share for anyone who might need to get off to a good start for the new year.

I've always liked great quotations and as you go through the brief slide show some quotes might strike a chord with you.

I love profound thinkers and some of their thoughts just amaze me. Where do they come up with pearls of wisdom such as these? You'll recognize some of the authors like Helen Keller, Mark Twain, and Mother Teresa. Soothing music can also set the mood for letting go of stress.

So enjoy, and let this year be your best ever!

The piece is entitled,

"Pathways to Peace."

Stress just seems to be unavoidable at many junctures in our lives. Information overload is prevalent. Realtors have demanding clients, Buyers of homes have pressures to find a house NOW with a relocation. Sellers need to have the house sold before they can move into the new one. Renters need to close on a house before their lease runs out. Not to mention life stressors of financial, health, relationship issues, emotional situations etc.

Stress can make some health problems worse like coronary heart disease, diabetes and asthma. It can lead to depression and performance problems. In the end, life can seem entirely out of control. So here are some tips for easing the stress levels:

Exercise - the value of exercise is vastly underestimated. In the area of weightlifting they say that it is the fountain of youth. Vigorous exercise gets your mind and body to disconnect from your stressed part of your life and includes great increased heart and lung action.

Writing - the act of putting things down on paper, in a journal, a letter, or a blog, allows you to express your thoughts and feelings. A blog a day keeps the doctor away.

Contemplative activities - this would include quiet time, meditation, listening to music, and humor. Carve out this part of your day and make it mandatory.

Enjoyable activities - when did we stop having fun? Probably when you grew up. Be child like. Have a healthy leisure life whether it is playing a game, reading or pursuing a hobby.

Relaxation that centers on the body -which would include deep breathing, aromatherapy, massage, yoga, tai chi, muscle relaxation exercises. Find your Zen zone. It may sound hokey but you have to concentrate on relaxing.

Express your feelings - do not remain a corked up bottle. Talk, laugh, cry, sing, get angry, scream, jump up and down, swing your arms wildly, make facial expressions. Those who let their hair down are emotionally healthy.

Learning to handle stress properly will give you a great immune system not only for your health but for life's challenges.

Many would be home sellers as well as prospective home buyers become junior appraisers at times and ask what an extra bedroom or that golf course lot really should add to the price of a home compared to a similar property down the street without one. The recent chart I found gives some clues:

While the chart primarily would be used in a comparables analysis it also would give some indication to those interested in recouping some of their investment in a home remodeling project as to what may be of greater value. While location is fixed and you can't add a waterfront behind your property perhaps adding an extra bath would be of some value to your overall price of your house. What I've found is houses with only one bath are typically viewed unfavorably in the market and a home needs to at least have 1 1/2 or 2 baths.

Every real estate market is different of course so consulting the local real estate professionals would give a more accurate picture of what the resale value of your home's special features really are worth.