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?

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 howmuchisthiscardwoth.com. 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.

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

http://www.sc-democrat.com/news/001January/20/olympia.htm

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.

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.

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...

The Land Crave

As a reluctant salesman I try to consider my self more of a novice therapist. As a matter of fact, I always considered the term salesman to be somewhat derogatory and the occupation rather derisive. It evokes images of door to door encyclopedia peddlers with felt hats and slumped shoulders. Or even worse fast talking car dealers, teetering on the edge of morality.

I have met the hard sell real estate salesman, and frankly I can't stand those types. If you had to come up with a list of noble professions, I'm sure you would pick doctor, teacher, foster home worker, caregiver, etc. Real estate agent would be pretty far down on the list. And rightly so. There are much more noble professions than mine, but every once in a while I feel like I am really helping someone fulfill a dream.

This has happened a few times with land buyers. I was out with a couple last week. He is looking for land, at least twenty acres, and the only real requirement for him for the house is that it has a roof and four walls. She is a little bit more picky on the house, but not much.

Getting him out in the woods was like taking a kid to Disneyland. Owning space to roam. I think for some it is a primal need. I showed him four properties, and he loved every one.

I have had three or four such buyers over my real estate career. They are a joy to work with, not because they are easy buyers, some can be hesitant, but because there is a certain lack of suspicion and a real genuineness. They are acting on a dream.

Invariably it seems to come from a childhood memory. Everyone, when telling me what they are looking for, has a control, whether it be a big parcel that their grandparents owned that they used to roam as kids, or a summer camp they would attend. There was something that fostered this dream to own land.

But just watching this man this weekend, I realized that he has thought and planned and worked hard for this. This is his dream, and I am helping him achieve it. Noble? Not open heart surgery with a ball point pen noble, but it gives me a feeling of satisfaction that I think we all need.

Foreclosures

As the media continues to spell doom to the entire housing market, I am getting more calls from second home buyers looking for foreclosures. Invariably even if the prospective buyer doesn't begin with that topic, as we chat about what they are looking for, the subject always comes up.

It seems that some have this vision of finding the deal of a lifetime, and snatching up a wonderful little country getaway for a fraction of the cost.

Its like the urban myth of the "friend" who is subletting their grandmothers duplex in Chelsea, and paying only $600 a month. When I lived in Manhattan, everyone sort of knew somebody like that, but not really firsthand but they were spoken about with awe and reverence, and a bit of jealousy.

The problem with the foreclosure market in Sullivan County, is that that side of the housing market is very different than what most of the people I deal with are looking for. I attached a link to a typical foreclosed property here. Believe me this type of house is a dime a dozen.

Click Here

Most are in the south eastern part of the county, around Monticello, Fallsburgh area. Like the rest of the country, they are mostly primary homes, taken over by the bank after the owners have stopped paying. The houses are often in disrepair, and have been on the market at various prices throughout the foreclosure process. Contrary to what some might think, a home typically goes into foreclosure only when every other avenue has been tried. Banks do not like to lose money, and will not give a house away.

Now I am sure that there are some very nice second home style properties out there right now, where the owner is in a tough financial situation, but being upside down, or even attempting a short sale, does not automatically turn a deal into a steal.

I just heard of a house that is going to auction this week. It had been on the market for almost two years, the price dropping to 70% less than what was originally asked. The problem is that it is in a flood plain, with major water damage, and even at these low prices, buyers do not want to deal with that headache. I am curious to see what it sells for, but like anything else in life, if it sounds to good to be true, it probably is.

Froelich Road Houses

I posted last month about the three houses on the hill above Callicoon. Well the lower house finally closed last week. Price was $250,00o. Originally listed at $399,000--it is a nice house with some good views. I attached the picture below. The only downside is the driveway, which is quite steep. But I suppose at that price it still becomes worth it.

The upper house, however just came back as active on the mls. I am not sure why the deal fell through, but after sitting with signed contracts for almost two months, something happened to kill the deal.

I attached pictures below. This property has the driveway to contend with as well. But it is a nice big house, and the views are the best of any house on the market in the county. Hands down. It is listed at $329,000. Originally it was close to six..

I really believe that this house is one of the best deals on the market right now in this county. Any offer in the mid to high two's would probably get accepted. ( I do not know for sure, as I am not the listing agent.) But browse some listings in that price range. They don't even begin to compare.

Now couple that with a very low interest rate. Is this Apple stock pre ipod/iphone? Not quite, but three years from now, this house will not be worth less than $260,000. And interest rates will be higher.

If anyone is interested in viewing this home give me a shout.

The Gaffken-Barriger fund wins first round

Interesting article in the River Reporter about the latest on Barriger. The link is below.

For those of you who aren't familiar with Gaffken-Barriger, they are a private investment company here in Sullivan County, that specialized in higher risk loans, with a high interest rate.

Well, when the market began to tank, numerous mortgagers defaulted, including a Florida based company, which had borrowed over ten million.

Those who had invested in the fund are insisting that they were "guaranteed" an eight percent return, and are quite upset, that not only are they not getting a return, the principle is gone as well. An investigation continues, but no criminal charges have been filed, and from what I hear, they are not expected.

It is rather sad. I met with an older couple last month, who must sell their house and move in with their daughter because they invested their life savings with the fund.

But I suppose this is a prime example of caveat emptor. With all the fast talking that I'm sure went on to convince people to invest, there must have been some fine print somewhere that this was a possibility. This was no Ponzi scheme, although I'm sure that is little solace for those who have lost their shirts.

http://www.riverreporter.com/issues/09-04-02/head2-invest.html