Perrysburg Blog

It’s too early (still 2011) to do a 2011 recap . . . or a 2011 statistical look at the numbers in the 43551 – you can be sure that those will be coming soon to this space.

But I was thinking about what was hard to do in Perrysburg real estate in 2011.  

So, I will try to “put lipstick on a pig” and share my problems with you in a positive and affirming manner!  

1. Getting or giving an accurate “quick sale value” was very hard to do in 2011.  In Perrysburg.  In Toledo.  The market was shifting and that made the guessing game of providing quick sale numbers very hard (you don’t want to know and you don’t ever want to need a “quick sale valuation” for your house!)

2. Real estate team management was hard.  My team?  Shifted.  One long time assistant retired.  One decided to, rather sensibly, take care of newborn twin boys!  And one just vanished!  New hires and new licensed team additions have made my team larger than ever.

3. Seeing people you sold a house to . . . . lose it to the bank.  Very, very hard.

4. Watch mold grow in great houses – very hard.  Sometimes the rules and regulations conspire to make a house sit in the shadow inventory of foreclosure-land.  And then bad things can happen.  It’s a dirty rotten shame.

5. Managing growth and the new market.   My team and I have never, ever sold more homes for more money.  And I have added several new lead systems.  Which has added a couple of thousand leads to manage.  Very hard.  

6. Telling buyer clients to be careful.  Just because rates are very, very low does not mean that you should spend all your income on that special house.  Not many people like to hear “no”.

7. Manage real estate deals.  Very, very hard.   Every part of every deal has changed in the past 4 years.  Financial rules.  Appraisal rules.  Valuation rules.  Stress levels are high.  Equity is low.  Jobs are under pressure if you are being transferred in or out.  When I have a “happy” closing – with neither the seller or the buyer under duress or stress or distress?  That’s actually notable today.

8. Telling the truth to sellers about the current and accurate value of their home.  Well . . . not hard.  But sometimes painful.  Or distressing.  But it has to be done.

9. Keeping up with the literature.   Never, ever been harder.  I maintain a few “professional designations” for my real estate career.  It’s a little inside industry inside real estate sales and management.  I have the ABR degree.  The CRP degree.  The CRS. The CDPE designation.  About 8 or 10 of them.  And they all take up biannual or triennial accreditation.  Plus my Ohio real estate broker’s license continuing education.  Plus the various real estate and sales and marketing books I love to read.  Too much in 2011.  For the first time ever I have not yet bought or even perused my favorite authors newest book – Seth Godin’s “We Are All Weird”

10. The iPad.  Love it.  Use it every day for real estate and reading (I did get tired of my dear wife hinting at me to “put that iPad down” . . . so I very cleverly bought her one!).  But it’s been a struggle to get forms and contract on it to work right.  Maybe my software engineer son can “make an app” for that in 2012.

I sell houses.  And I have been blessed to sell a lot of houses in 2011.  More, in fact, than any other Realtor in this market.

And I have sold some amazing mansions this year.  And some houses that should have been torn down.

But they all sell – at some point.  Given enough time and the right effort.

Many sellers/homeowners ask me “what can we do to get our house sold”?

Clutter matters.  Decluttering can help sell us sell your house.

Condition matters.   Fixing your houses’ problems can help us sell your house.

Location matters.  So . . . picking up or repairing your neighbors problems can help us sell your house.

And marketing matters.  Getting the word out about your house to the most potential buyers and then actually answering their inquiries really matters in selling your home.

But – in THIS market – the number one determining factor in selling your house is price.

Price can fix everything in selling your house.

It fixes clutter.

It fixes your bad basement.

It fixes your neighbors messed up garage and yard and gutters and weeds.

It fixes your current Realtors’ utter lack of marketing and salesmanship — like the house in Perrysburg without a for sale sign that I wrote an offer on this week (whose out of town owner has NO idea what her agent is up to . . .) to the listings with recorders and voice mail that “answer” every call that buyers make.

Price fixes ALL of those sins.

With mortgages at amazing levels . . .

With prices in Perrysburg leveling off . . .

With buyers always looking – even this Winter – for good listings to buy . . .

Pricing can fix your home.

Just one thought – work on the other factors first!

They are much cheaper and will put more money in your wallet.

You are buying a home.

It needs some “work” done on it.

It needs some home improvement . . .

You get it under contract and then either discover this fact or are made aware of it by your home inspector.

What NOT to do:

-Demand that the seller reduce the price or put a new roof on . . . if the seller is the bank that has foreclosed on the home and is offering it for sale.

-Go to the house before the closing and start putting your own new roof on.

BOTH of these two tactics have just been tried by “my” buyers.

All I can do after that has occurred is try to manage the triage of tragedy that will result.

A better idea:

1. Add the estimated repair costs onto your mortgage up front – when we are bidding on the house.

2. Add the repairs yourself – after the closing – with cash/credit/pop bottle money.

3. Ask, nicely, the nice seller to do the work before the closing, in a nice manner.   We all know that the buyer is “in charge” right now . . . but nice buyers get better houses.  With prettier things added.  My mother taught me that kindness is never out of style in the Midwest.

4. Attempt to add a repair escrow to your mortgage loan and offer.   This is easy to do with the right credit/loan/lender/loan officer.   This is impossible to do with the wrong loan/hopes.  You want a new roof, new finished basement, and a $7000 appliance allowance?  On your FHA loan?  Not going to happen.  This is easier to do with a conventional loan.  It’s possible to do with an FHA loan . . . but that takes it to a “203k” loan product which would often be the basis of an entirely new offer on a house or condo.

5. Buying a HUD home with a loan?  HUD will usually have a “repair escrow” amount priced into the house.  That’s not money they are going to give you . . . rather it’s money that YOU can borrow and that HUD will loan you if you use an FHA mortgage.   It gets complicated . . . so see me if/when you want to try this.

Which, as I remember, used to be about 10 developments/projects/unit types that I could memorize/almost perfectly know, has transmogrified into a huge amount of property and property types.

Which is a good thing.

If you want a condo/zero lot line/downsized property.

But . . .

If you are a buyer you have to deal with a SUBSTANTIALLY reduced inventory.   There are 10 to 20 to 30% fewer condos on the market for sale than in the recent past, depending on how/when you measure it.

If you are a buyer you have to deal with SUBSTANTIALLY tougher loan regs and rules.   You cannot just waltz in with your FHA loan approval to pick any condo project.  It has to be “approved”.  And certified.  And the number of tenants known/capped.

If you are a buyer you are going to perhaps pay more too.  Because of the small sample size and the disparate values of condos in the 43551 a quick and dirty $/sq. foot analysis or median price analysis is not a good way to find value.  You really have to go unit vs. unit for comparable properties.   And it “seems” to me that some values have been seriously hit hard . . . in the lower end price range.  And some values have firmed up . . . paradoxically in the higher price range.

If you want a new condo you have a problem.  Only one or two projects are building – and you will most likely need to ink a contract for a custom property.  One of my clients who just did such a building contract “set a new record” in the Perrysburg condo project they are buying in . . . imagine that!

So . . . fewer properties on the market.

More properties selling (I think I sold 2 this week in Perrysburg. . . )

And weird, wonky prices.

The Perrysburg Condo Market.

The question is: “Are local city and county budgets going to get slammed by falling property values and the corresponding hit on property tax revenue?”

I say “yes”.

I told a couple of my friends/acquaintances who were/are 0n Perrysburg City Council a couple of years ago to be ready.  READY FOR THIS:

To plan now on having less tax revenue on hand.

The Cleveland branch of the Federal Reserve Bank has an opinion: it’s here.

I have made many crazy real estate predictions:

A. Houses are going to get smaller.

B. Brokerages are going to radically change.

C. Agents are going to go mobile and untethered.

D. The internet is going to rule real estate advertising.

E. Shag carpeting is coming back in style.

Most of them have come true!  Well, except for the carpeting one.

But the prediction on municipal revenue is very difficult to accept.  What if the Lucas County lost 25% or 35% of it’s tax base?

What if Wood County lost 20%?  What will happen to city services and infrastructure and jobs and pensions if 50% of our tax base melts away (travel to Detroit or Flint for a view of the future . . .)

Think I am being alarmist?  Read what they are saying in Rhode Island.

Hard choices result.  Put them off . . . . and your entire city can be destroyed (see Detroit, above, which is heading for total financial meltdown with state control of it’s entire budget).

If you add in the effects of the decline in valuation and the imputed number of properties NOT paying any property tax at all in Lucas County . . . it’s a huge problem.

Tax increases are not going to work – no one will vote for them to pass and if you target businesses instead of people, they and their jobs/employees will simply decamp for Tennessee or Indiana (or Mexic0 or China).

In Wood County the property tax provides about 20% of the county’s income/revenue.   And the 2009 tax valuations are fractionally lower than the 2005 total valuation.  2005 was the last of the “boom years”.   I think that the county numbers are going to adjust down – by 20%.    The residential component is 70% of the total – so even record setting farmland prices won’t help when valuations are “normalized to the market”.

From the City of Perrysburg’s point of view it’s not that bad – real estate taxes make up about 10% of the city’s revenue.   So it’s not catastrophic.   The hit comes when the county/state feels the pain and starts squeezing the municipalities.

It’s started – and it’s going to get worse.

Caveat Emptor?  It’s the Latin rendering of “let the buyer beware”.

Because buyers need to beware.   At least in Ohio they do!  A quick Google.com scan shows thousands of entries for “caveat emptor” in Ohio real estate.   It shields the real estate seller.  It protects the real estate agent.  It immunizes the real estate broker.  A good example, from a Realtor trade rag is here.

I had to put a house on the market that made this very painfully real.

The “buyers”, who shall remain nameless, simply relied on what the “seller” told them.   They trusted.  But did not verify.

Big mistake.

The “seller”?  He did not have real title to the property.  It was not his to sell.   There was a bank somewhere – not getting paid.   The “buyers” gave their rather sizable down payment to this Perrysburg-based con artist.   Their “down payment”?   Gone.  Scammed.   Stolen.

They were buyers – and they were not careful.

The damage to them – emotionally, financially, and more was and is terrible.

The seller/agent was neither a real seller or a real real estate agent.

Nothing was as it seemed.

I would trust . . . but then verify:

1. Who are you?

2. Why are we not using a title agency?

3. You allright with my lawyer looking at this?

4. Why isn’t your deed recorded?

5. Why don’t you have an office?

Just a few things to consider and learn to ask so that you can avoid some of the scams that are being done right now on innocent, trusting, unaware buyers!