Perrysburg Blog

I wrote an offer or two this week.  On Perrysburg properties.  Being sought after by investors.

It’s common.

And it’s getting to be more common.

Think about where you can invest your money:

1. Stocks.   Maybe smart.  Maybe painful.  Check out the history of FSLR, my favorite stock, and hold on.

2. Bonds.  The returns are not much though.  In fact, this week, large investors were willing to PAY money to invest in German government securities.  Imagine that strategy taken out enough years  – you will have NO money with a long enough investment.

3. Cash.

4. Gold.

5. Other investments.

6. Real estate.

I had to list a house in Toledo today – $12,000 or so.  My firm last sold it for $70,000.   Now there are some terrible facts and realities associated with such a market crash.

Ignore all of them.

Instead imagine you bought the house for $12,000.

What could you do with it?  What kind of rental income could you get? What is the upside?  What tools and skills would you need to make it into a great rental property?

Again – people are seeking out real property in this collapsed, depressed market.  To invest in.

Inventory is down by over 20%

Interest rates are at all time lows.

Rents are up and rising.

And multiple offers are hitting on good houses.

And I think fortunes may be made right now . . . in Perrysburg rental property.

The walkaway.

The “strategic default”.

The “jingle mail”.

You can look up the term on line.

But it happens when your personal life and your financial life have collided with your real estate life and the value of your real estate is smaller than the amount owed the bank.

The process is painful.  Traumatic. And fraught with risk.

Earlier today I went to a house, which shall remain hidden from identity for now (see description above . . . ), which was very nice.

Whose professional, educated owner had walked away from.

Gone.

Vanished.

Spurned our offer of “cash for keys”.

Turned off the water and the gas and the power – and vanished in the night.

Some thoughts:

1. Talk to your lawyer before you do this.  Seriously.  Just get a lawyer and get their opinion on what to do next.

2. Get help from ANYONE.  Family.  Friends. Charity.  Even the Federal Government has lots of programs.  And as worthless as HAMP or HEH! or HUH!? have been in the past 2 years – at least they often slow down the foreclosure train a little bit and give you time to recover.

3. Do not stop paying your food/gas/electricity/heat in order to make one more interest payment to the bank.  Sit down and think about what you have to have to live and survive.  Get some counsel.  Get some special help – but don’t lose everything in order to save an upside down, underwater house.

4. Get another legal opinion – lawyers are just like every other profession.  There are good ones, bad ones, and ones that do not know what they are talking about.   Get 2 opinions when you need brain surgery.  And 2 legal opinions when you are thinking about walking away.

5. At least call the broker/agent who was trying to talk to you.   This vanished owner lost $3000 simply by not calling me.  I bet he might have needed that money . . .

6. Put your families finances first – see #3 above.  I cannot stress this enough!

Many homeowners are being forced into this hard, cold calculus.  Banks might want to consider some very aggressive modifications to principal and not just kick the can down the road.   When upscale neighborhoods in Wood County are being hit and ravaged by strategic defaulters – it’s time to change the game plan.

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.

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!

Disclaimer:  no snarky comments or inferences in this post should be construed as anything but an endorsement for my Dentist – Dr. Christopher Clark.  I like him.  He is incredibly talented.  He knows the ins/outs and tools/tactics to do any dental procedure with elan and skill and care.

But . . . sometimes selling a house in Perrysburg today IS like going to your dentist and getting root canal.  Which I just did with Dr. Clark.

It takes time.

It takes multiple appointments.

It takes effort.

It takes reasonable skill and training.

The dentist has to have the right tools and facilities.

The dentist has to have the right support staff.

You want your dentist to be . . . actually working full time in and on dentistry.  

All of these things are similar in my pursuit of helping clients sell their real estate and my dentists skill and care at removing dental problems.

(But . . . I sadly note . . . that I cannot give you laughing gas or an anesthetic shot to make your pain fade for a couple of hours).

As with the average root canal . . . in selling a home today there is perhaps going to be some pain involved.

Some emotional conflict.

Some stress and or trepidation.

But . . . if it has to be done and needs to be done and the situation and circumstances tell you to get it done . . .  what else can you do?

You get it done.

The numbers are firming up . . .

The casino is hiring . . .

The sun is shining nice and warm in October . . .

And my team and I are selling lots of property . . .

So what do the numbers say?

Fewer Perrysburg houses on the market.

More houses in Perrysburg pending sale.

More houses in Perrysburg closed.

And fewer houses in Perrysburg failing to sell.

What’s not to like about these numbers as seen on this chart?  (you can click on it for a full size view . . . )

A recovery?  I think not.   Not until more and better things happen on the employment front.   We are seeing natural market forces balancing out a bloated inventory.   I am seeing cash investors moving in to buy good deals (I personally wrote 4 cash offers today, and negotiated a cash offer on a Perrysburg listing . . .).   I am seeing sellers who can’t afford to sell call the bank, or lease the house out and move to Florida or S. Carolina anyway.

No.   Not a recovery.   But something better than what we had last third quarter in 2010.

You have a good year.

You sell a lot of houses.

You build your team.

You get to meet and work with a lot of great families and buyers and sellers.

But you did not get there by yourself.   And you certainly do not get to take credit.  And you should not trumpet “I am number 1!”

No.

But I do want to thank my dad – Dave Modene.  He was and is my example for salesmanship, service, and integrity.   I hope that “the apple did not fall” too far from his tree.    He was the top salesman for his company – setting and breaking national sales records.   Then they changed the rules to make it tougher for him . . . he won again anyway.   Then they promoted him.  And promoted him.  And finally he said “NO” . . . “I am staying in Perrysburg”.   He likes it here.   He even turned down a new “mega agency” they put together for him in Minneapolis – which if you are selling products to Lutherans is the second best place in America to be!

So – when I found this old ad . . . It caused me to realize the you should not forget to be thankful for the help and training and examples your father provided.  If I ever sell you a home or help you sell yours – I had a great teacher.

N.B. – My brother Dave – he has carried on the tradition too!

The market is cloudy.

Like our local weather.

It seems like just yesterday it was sunny and bright and warm.   Then . . . BOOM . . .  Fall arrived.

What clouds do I see in the local market?

1. Fixed mortgage rates are low.   And addictive.  I wonder what will happen if rates return to a more “normal” 6 or 7%?   Low rates are a boon to buyers today.   Addictive.  Great tasting.  And will be a curse to sellers in the future.

2. FHA problems.   Loan limits are moving down tomorrow.  And that’s not a big deal here – but the future of the FHA program is now suddenly important to Perrysburg.   A majority of deals in and around Toledo are now FHA funded.   Take FHA away and the bottom will fall out of the market.

3. Appraisal problems.   One of my jobs now is managing appraisal issues.  Up front.  And after the debris of a wrecked deal.   The mortgage implosion has caused the REO explosion.   The shrapnel?   It flies over at supersonic speed and hurts your sale or purchase.

4. The Bifurcated Market.   There are really two markets now.  One for the wealthy.  One for everyone else.   I am certainly not interested in “social justice”.  But a healthy market has movement.  People moving up.  People moving laterally.  People aspiring to invest and save and gain.   Somehow in a diminished, “soft” America with an increasing stratification of incomes and assets we are losing that.

5. More delinquent mortgages in the 43551.   Big news – more and more nice houses in Perrysburg are going to be foreclosed.    I have never in my 23 year career been working on more distressed, big, nice houses in Perrysburg than right now.   And – it’s happening all over America.

6. Rentals.   There is a shortage of them right now in Perrysburg.  Markets hate imbalances.  So – if this continues you may see more rentals being developed here.  More houses being converted to rentals.  And higher rents (good if you are a landlord, bad if you are a renter).

7. Falling incomes.   Which is not something we are used to here.   We are used to wage increases.   Inflation.  Increasing prices. But wage drops?   Effects here are hard to predict.  This could, if it continues, lead to lower property values.  Lower prices for all assets.   And downward pressure on rents and taxes.  More market uncertainty.

8. Boomerang Kids.   What?  What is that??  Kids, done with college *(hopefully not with a degree in Ancient English Poetry or Integrative Social Work for Aleutians!) who are bereft of job opportunities.   Lots of my clients in Perrysburg have had to welcome their progeny back.   So if they are selling or need to sell or buying and need to buy – those extra bedrooms that were empty and contained old PHS trophies and Saturday Night Fever posters . . . are being used again.

These are some clouds on the real estate horizon in Perrysburg.   What clouds do you see?

1000 words.

1 picture.

Want to get values up?

Want to slow foreclosures?

Want to get the economy fixed?

It’s really simple!  Just fix this picture: (also note that for the past 20 years Wood County and Perrysburg have almost ALWAYS HAD LOWER and therefore BETTER unemployment numbers than other major counties.  Something big has switched and or changed . . . .)

I have some heretical thoughts (about real estate), offered in a random manner:

1. The interest rates are too low right now.

2. Low ball offers don’t work . . .

3. Except when they do.   You just don’t know when they will!

4. Mold (which we cannot call mold) is the new growth industry.

5. I would arrest and incarcerate anyone who buys copper pipes or tubes or wires – not the vandals and criminals who steal/filch/pilfer it . . . the owners of the scrap metal companies are costing Toledoans millions of dollars of easily prevented damage.

6. Prices in Perrysburg are rising.   They really are! (at least up thru last week . . . )

7. The old market is gone.  Dead.  It’s NEVER coming back.

8. Buyers are buying Perrysburg because it’s close, safe, quiet, and full of great houses and excellent schools.   That’s a great combination to offer to incoming buyers.

9. If I was starting a new business it would be to install and sell cast iron bolted on high strength security grates to cover exterior central air conditioner units.  Whole systems are being looted in Toledo right now – it’s a growing problem.

10. If I was a new Realtor getting into the market I would specialize in helping people who owe too much money to the bank.   Too many people owe way too much money.   There are lots of ways to not only help them but help the creditor and make a sale too.