Sunday, May 31, 2009

Rust in Peace

After a crazy weekend last weekend, and a runaround day yesterday. I have no appointments today. It was a busy week, and possibly constructive. I have a few possibles. But today...nothing. I'm not complaining, it is a chance to catch up on some things, and relax a bit.

I have a new listing in Delaware County on the Beaverkill. Check it out on my website. I have decided not to really plug my listings on my blog, because it is a little gauche and not what this forum was intended for.

The only reason I bring it up, is I really have not explored that region along Old Route 17. It is a nice area, and it is not far from Roscoe, making it pretty accessible. If you are into trout fishing, I guess that is the spot to go. There were a ton of fisherman out and about, all dressed up in their angler finest. It is an area I plan on paying more attention to. Roscoe really is a cool little town, with Buffalo Zack's, and Live Bait and of course the Roscoe Diner (which is a great spot to meet customers, because everyone seems to know it.)

If you are currently looking, but are one of those leery about stepping over the magic 100 mile from NYC mark, I recommend checking out. It is a little further, but it may well be worth it in price and appeal.

I snapped this shot along Old Route 17. I think it shows the fun, hip feel of the area.

Would love the back story on this. Anyone know?

Tuesday, May 26, 2009

Listing Homes in Today's Market, and the Passive Aggressive Seller

As a broker that works with both buyers and sellers, it is sometimes a strange dichotomy being on both sides.

Sometimes I am jealous of, and contemplate being a buyers agent. It would seem to be simpler, have an us versus them attitude, and travel around with abject disdain at any and all over priced listings.

There is absolutely something pure and hopeful about meeting and working with a motivated buyer. Newness and discovery, and exploration.

On the other side, selling seems to be a sadder experience. Really the only thing that makes a prospective seller happy when meeting with a broker is the hope that the home is worth what they have heard it may be. Everyone has heard whispers about what it may be worth, but they always seem to cling to the highest. That is until John the Grinch comes along and shatters their illusions.

It reminds me of an incident that happened to me when I was around eighteen or nineteen. I was helping my then girlfriend's family clean out an old barn full of furniture. I discovered a Hank Aaron rookie baseball card from the Milwaukee Braves from 1954. Her family said I could keep it. I had a feeling it was worth some money. But I had no idea how much.

Now this was at around eight o'clock on a Sunday night, in the very early nineties, so there was no way to verify how much the card was worth. There was no google or yahoo or eBay or I had to wait until Monday to call a card dealer.

Now keep in mind that to me this was found money. But throughout that evening the worth of that card ballooned in my head. I spoke to a friend who told me his dad sold a Mickey Mantle rookie card for like $75,000. By the time I went to sleep that night I was a possible millionaire.

It turned out the card was worth around $800. $800 of found money, but by the time I spoke to the card dealer, I was disappointed.

It seems that this same thing happens to a lot of the possible sellers that I speak with. I have a very careful comparative market analyses that I follow, and when I present them with what I feel the home is worth, invariably I get the crestfallen look, and a stony silence.

Now the ones that protest, are easy. I am armed with comps. and reasons and explanations. As part of my listing process, I let the sellers know that if they want to hire a licensed appraiser to appraise the home, I will reimburse them that cost at closing from my commission.

Now I'm sure some of you know my feeling on the appraisal process, but having a house previously appraised makes it much easier once the bank appraiser comes in. Sort of the herd mentality, also it makes it easier during negotiations. "liscensed bank appraisal" sounds very official.

I guess finally I have gotten to the point of this post. Recently I have has sellers agree with me on the price I told them, make it seem as if they are ready to list, and then drop off the face of the earth.

I had one guy who called me to list his property. He had had it on the market for a year prior, with a few bites, but nothing real. I told him that I thought it was priced to high, lets drop it twenty percent, which is still high, considering the market, but we could guage the response. He agreed, I sent him the paperwork, and I never heard from him again. Voicemails went unanswered. Then last week I see it listed on the mls for twelve percent higher then it was originally for. Sorry I did not realize we were in a real estate boom.

I wish him luck. I just feel that agents should not be rewarded for over pricing listings, and then once a realtionship with the seller has been establsihed, massage a reduction. Believe me I have been guilty of taking over priced listings, and all you end up with is unhappy sellers.

I suppose for some it is easier to be passive, and list with a yes ma'am realtor. That way they can hold onto the dream of the big payday for a little longer, which in some cases may be comforting. All I can say to them is good luck.

Tuesday, May 19, 2009

Olympia Hotel Renovation

It appears as though the renovation on the old Olympia Hotel has slowed for a bit. They have all the new windows in, but the flurry of activity that began the endeavor has subsided a bit.

Perhaps I'm just anxious to see it finished. It really is a grand old building, and it deserves to stand proudly restored over the town. There is rumours of a dinner train that will take passengers from Port Jervis and back while enjoying dinner and drinks. I think that is a great idea, and hope it gets off the ground.

I am wary though. It seems that every year or so, there is some big "happening" in Sullivan County that will put us on the map, and enable us to rival the Berkshires, or the Hampton's. Something that will turn the tide of haphazard dilapidation that seems to dot our landscape.

Now this is on a smaller scale than Cappelli or six giant Indian casinos, or any other scheme that has been bandied about, but it some ways I think it may be more effective in maximizing this areas draw.

I know this has been discussed on other forums, but part of the Sullivan County appeal, is that it is not the Hampton's. A middle class "blue collar" (whatever that term really means) family can afford to buy a second home here. I was just out two weeks ago with a family where the father is a NYC fireman, and last year I sold a little place to a teacher and a toll collector. Sullivan still is affordable enough so that if one saves, a second home is doable.

I seem to have gotten of target, but I guess my point is that if the Olympia is successful, I think that it will enhance the Sullivan experience, and show what this area has been for over a hundred years. A playground for the not so rich and famous. What better way to illustrate that then with a restored old hotel and train station?

Below is an old picture of Callicoon in the early 1900's the Olympia is on the right. I also included the original link to the Democrat article

Wednesday, May 13, 2009

Bald Eagle Nest in Narrowsburg

On Sunday my wife and I ate at the Main Street Cafe in Narrowsburg, one of our favorite spots. If you haven't gone, I really recommend it. Anyway, when we were leaving, we stopped for a minute at the observation deck next door that looks out onto Narrowsburg Eddy. I spotted a bald eagle way off in the pines across the eddy. Of course I didn't have my camera, so I couldn't take a picture, but through that binocular thingy that they have set up there, you could see there was actually two.

Well I went back this morning, and I managed to get this picture. I believe they are making a nest. The tree they are building it in is the big pine straight across from the observation deck. It is really too far to take a good picture, but I drove down a little closer and managed this shot. I believe it is the male.

Next time you are in Narrowsburg, check it out. Through the binoculars you get a pretty good look, and they really are spectacular creatures.

Tuesday, May 12, 2009

Amendment of Post Below

I feel I must update my rather harsh post below. The appraiser in question called me, and we spoke at length. He agrees with me that the house was priced well, but he said he just couldn't find comps to support it.

We went back and forth a bit, and I dug up a comparison that was not on the mls., which he used, and lo and behold, the $4,000 gap was bridged, and all is well in real estate land.

I am still convinced that the comparison format to define value is flawed. How can a property ever appreciate if it is only compared to recent sales? It is sort of the chicken or the egg scenario, but there must be a price jump somewhere, to start the ball rolling. Does it begin with someone willing to pay cash to bridge a gap? Then once that property joins the comparison pool, the next buyer doesn't have to come up with as much cash.

And in the reverse, what we are seeing now is the foreclosures dragging down the comp. pool, and deflating value.

Who knows...What I do know is that this time it worked out, but I'm sure I will be in this predicament again. It is just very important to get all parties (broker, appraiser and lender) all on the same page, then at least there is a possibility to work it out.

Tuesday, May 5, 2009

Appraisal Gaps...A Rant, and Perhaps some Insight

Once again I have an appraisal gap on one of the deals I am involved in. It is a $4,000 difference. I have had a few of these before, but this is the first since the inception of my blog, so now I can rant here, instead of pacing and muttering in my office.

An appraiser is hired by the lender to determine "market value", and to ensure that the collateral is equal to the loan. However, in my opinion, the appraisal process is flawed, and very often the appraiser is clueless, for lack of a better term

The definition of "market value" is: "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."

Now to me that means that "market value" has been determined before the appraiser ever sets foot on the property. A competent real estate broker (i.e. myself) has already evaluated the home, set an estimated sale price, produced a willing buyer, and procured an offer. The value of the property becomes what someone is willing to pay for it.

Now some will argue that it could be a nutcase who is willing to pay much more than the home is worth, so that is where the appraiser comes in, and I agree, but when the appraisal comes in less than 2% below the asking price, are you serious? Can you really believe that the appraisal process is that specific? Of course not, it is a joke.

The first thing the appraisal company asks for is a signed copy of the contracts. So they know the price before they ever look at the house. To me that is ridiculous. If you are so confident in your ability to determine fair value, go in blind. Give me a real opinion, not one carefully crafted around a pre-determined number.

So over $4,000 the deal comes to a screeching halt--1.82% In this unstable market, some would argue that home values could change that much in a few weeks. But rigid banks, and clueless appraisers, cannot see the big picture. It is frustrating.

Now let me say that I have worked with some good appraisers, who get it. And believe me an appraiser who gets it would never turn in an appraisal this close to the price.

It reminds of the type of people who say they can only have Grey Goose in their vodka tonics, and yet in a blind taste test, you know that they will not tell the difference between that and Smirnoff. Self importance to me is one of the most distasteful characteristics, and an appraisal, at 1.82% below ask, screams of self importance.

All right, I feel a little better...