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.

But . . . . since this is in all actuality the absolute nicest, best, most amazing house on the market in Perrysburg right now, it gets it’s own blog entry.

If you want to see what $795k will buy you should call me.

Here is the garage!  (Also known as the “Man Cave” or as my normal patter/joke goes the “Mother In Law Suite” . . . but in this case it REALLY IS!  With a full apartment upstairs.)

Want more details?  Pond? Check.  Fully finished lower level?  Check.  Fireplace in the den?  Check.  High/vaulted ceilings? Check.  Granite, tile, marble? Check.

To see it is to fall in love.

Call or email me for your tour.  24290 Sun Air in Perrysburg Township – $795,000.

“I can’t accept that price!”

“I NEED more money than what it will appraise for . . . ”

Or some variation of this.   Usually my putative seller clients owe more than the current appraisal value will come in at.   Or they want/need/have to have more than any rational buyer (again – the appraiser and appraiser manager and underwriter are checks on foolish buyers now . . . ) will ever pay in this current market.

So the seller comes up with the “let’s lease/purchase it” idea.

And we get a “buyer” who will “buy” the house in 3 or 5 or 8 years . . . . at the fantasy price.

The seller gets some income.  They assume that that the “buyer” will close.  And everyone is happy.

Except . . .

Except in this deflationary market the seller is not going to get their price in 3 or 5 or 8 years . . . unless it appraises.

And the buyer is not an idiot.  If the house is worth less than the agreed upon contract price, they will do the equivalent of short sale on the title holder and renegotiate the entire deal.

Or they will just walk away.

So – my suggestions are simple and easy to understand:

1. If you need more money and don’t need the house – just lease it.  It’s simpler, easier, more honest, and helps you to get a better end result.

2. If you need a house and can’t get a loan – just rent one.  Don’t chase after the ephemeral dream of a great priced lease purchase deal.

3. Don’t assume that the contract you get signed today will survive the vagaries of THIS real estate market.   It most likely won’t.

Not now.

Not when this: Local Plant Closes Due to Ohio EPA Rules is happening.

214 GREAT manufacturing jobs.

214 bread winners.

214 actual or potential homeowners.

214 new foreclosures?  214 destroyed families.

Why?  Because some Columbus-focused bureaucrats decided to close this plant.

Note this well:  There will be NO HOUSING RECOVERY while such decisions are being made.

The lifeblood of Northwest Ohio is being shipped off – factory by factory and line by line – to Indiana, Tennessee, Mexico, and China.

Your house just went down in value.

Your prorata share of taxes is going up.

Because 200+ jobs are leaving Wood County.

The people doing this need to be hounded from office.

The destruction of jobs is destroying real estate.

Indiana is CROWING about their new corporate addition.

We keep driving jobs out and raising taxes.

It’s now the best buyer search tool in town.

Enjoy!

Technically, the chemical composition of chlorophyll in each leaf is changing as they die and drop off.   But the result is a vivid explosion of reds, yellows, burnt umber, orange and more as the leaf dies after 8 months of growing.

You can extend your trip down State Route 65 all the way to Grand Rapids.  It’s not far.   (Note: the Grand Rapids downtown shopping/dining/etc. experience is not what it once was!)

There is one particular point where the trees over River Road become a tunnel of color.   With our Northwest Ohio topography and the lingering effects of the clear-cutting farmers from 100 years ago, it’s rare in this part of the country.  So you just have to drive to Willowbend and Carrington Woods to see the effect.

It’s worth a drive.

Now, being from table-flat Northwest Ohio, ANY trip to Denver is fun.  And I get to go there at least once a year since RE/MAX International has their HQ there in the “DTC” – the Denver Tech Center.

I took the Dear Wife with me.   We had a day or two to go to Pikes Peak, Ft. Collins, Boulder, Rocky Mountain National Park, the Broadmoor, and some other tourist things.  (Tip: Do the 13 mile, one-way, dirt road trail in RMNP – lots of fun in a rental car!)

But – and in all seriousness – I do not know where they get their oxygen from.   At 10,000 or 11,000 feet . . . that is thin, rare air.

So there are pros and cons of living at the bottom of the Black Swamp in Wood County.

Cons:  No vistas.  No mountains.  No way to see far away.

Pros:  Oxygen to breathe.  Humidity to lubricate your lungs, etc.

One of the most memorable exchanges was on the last day of the big mastermind meeting that I was attending.

Four panelists:  CEO of Prudential.  CEO of Coldwell Banker.  CEO of Keller Williams. (All large national franchises – think billions of dollars of solds).

Fourth panelist:  A producing Realtor from Philly – Allan Domb. (Sells A LOT of condos every year – think $100millions plus).

CEO’s all wanted more government help.  More tax credits.  Ban the banks from competing with us.  More stimulus.

One CEO told a funny story mocking Congressman Barney Frank.

I might want to “recalibrate” that strategy if I was him  . . .

The lone Realtor?  Told them off.  Market it not coming back.  Adapt of die.  Change or get gone.

Sellers are hurt.

Buyers are hunting.

The idea that a government program will “fix” things is foolish.

I found myself agreeing with my fellow Realtor.

One more thing . . . spent some time on Larimer Square.  In downtown Denver.  Great restaurants.  Great shops.  People strolling.  People enjoying the town.

Reminded me of downtown Perrysburg . . . but note the lights:

Now Perrysburg is not downtown Denver and we will never have pedicabs, and horse-drawn carriages, and Dianna Krall playing a gig.

But – note the lights!  What a great, simple idea.  The whole street was lit that way on Larimer Square.

Perrysburg ought to copy that.

There are 74.8 million dogs and
88.3 million cats in the US. 

Many people who have lost their homes have taken
their animals to shelters, or the less responsible ones let them lose, locked
them up in the backyard when they move away. 

People are to blame, not the
animals.

I know – the economy is in the tank.

I know – people are cutting back and cutting costs.

And some are even walking away from houses.  In the City and in the Township.

But don’t hurt your animals!

Sometimes THEY, the little innocent dogs and cats, get foreclosed too.

Some resources:

Toledo Humane Society.
http://www.toledohumanesociety.com/tahs/

Maumee Valley Save a Pet.
http://www.maumeevalleysaveapet.org/

Paws and Whiskers Cat Shelter
http://pawsandwhiskers.org/

Toledo Animal Shelter
http://toledoanimalshelter.com/

Wood County Animal Shelter
http://www.woodcountyhumanesociety.org/

These shelters are immune from the economy with more than enough space, money, and food.

RIGHT.

They are hurting too – and the pets they help are in more danger than ever.

You can help by adopting a stray (and by spaying and neutering your own pets).

One of RE/MAX Master’s REO/foreclosure listings recently generated this benefit:  a cute, nice, starving cat.  Renamed Hobbs by my daughter Hannah (I think Reo is a better name).  He was alone.  Starving.  And desperate for someone to love.

Shots and neutering were extra.  But we now have a great barn/outside cat.   

Somehow, and most amazingly, he has even won over Mr. Buster, our Maltepoo and the Jon Modene Team Mascot (he even has his own business cards!).   They are now friends.

Maybe some good will come out of the REO crisis . . .

Thanks for asking!

But I am having a great month . . .

Ouch.

Good homes?  They are still slowing.

Overpriced, underwhelming homes?  You can only imagine!

-44% drop in NUMBER of closed sales means that you need an agent who knows the market, knows how to market, and knows how to sell your home to a buyer, a bank, and an inspector.

The casino is coming . . . details here.

Why is that bad news?

Inevitably, after a 2 year latency period, the incidence of crime against people and crime against property increases.

Every time.

Everywhere a casino is built.

You can count on it.

Build one in Wood County?  Along the Maumee.  Or in the “Golden Triangle”.  And there will be negative, deleterious effects on the values of Perrysburg homes.

You can “BET” on it.

The scholarly  paper on this is interesting reading.  And sobering reading.

Here is the paper by Earl Grinols and David Mustard.

The casino lobby will never stop.  They will try and try and try – stopping only when they have fooled enough people.

Things will be great.  For a couple of years.

Then the neighborhoods closest to the “Crossroads Casino” will start to be negatively effected.

That negative trend will then metastisize and spread.   From Starbright to Belmont to Three Meadows and beyond.

Theory?  Supposition?  Hardly.  Read the literature.  (page 14 shows how MILLIONS in lost property values is the result of the “jobs creating casino”.

Bring on a casino I say.

But build it RIGHT NEXT to the Toledo Correctional Institution on East Central.

Crimes against people.

Crimes against property.

Visitor crimes.

Criminal gambling.

Costs of addiction to gambling.

Increased rapes.

Increased police costs.

We neither need nor want these things in Wood County.

The day they get their way is the day we start to pay.