An Example of why I love Sullivan County

This driving range is on a back dirt road. By the honor system you put the money in a box nailed to the tree, (three bucks for a bucket. I think it is a quarter a ball at Chelsea Piers), and hit the balls out into a hay field. The eldery farmer who is retired, does it as a hobby. Every time I am there, I am the only one. Try finding a spot like this in the Hamptons.

Short Sales and Bank Stupidity

I had a comment from a good friend the other day, that my blog posts have a tendency to be a bit negative. I took his constructive criticism, mulled it over, and decided that newspaper editors discovered long before my time that bad news sells, and who am I to mess with a winning formula?

But to temper this post a bit, I will start out with good news. I had two closings this month, weekends have been full of appointments, and the phone is ringing. Value and more value is still the mantra. Anything over 250K is approached with the same caution as a hornets nest, and on more than one occasion I have heard. "I just love the house, but I can't justify paying that much for it."

Anyway, on to the real reason for this post. The bubble bursting has brought short sales and foreclosures to the forefront of our industry. Although not so much as other parts of the country, they are still prevalent here, and any agent worth their salt has encountered one of these lovely little nuggets of frustration. Most attempt to muddle through with little or no idea what they are doing.

Dealing with either, (although I find short sales particularly challenging) it immediately becomes apparent why our banking system collapsed. There is absolutely no common sense or vested interest in anyone I come into contact with. Every colloquialism is true, they can't see the forest for the trees, penny rich and dollar poor, a bird in the hand...etc.

Every time you deal with a bank, it comes down to the magic "market value." That is what every one of them are stuck on. And you can see how they would be. They are numbers driven, and putting a number on their investments or in a foreclosure situation, their assets is paramount.

However, what they always seem to miss, is that market value is only what someone is willing to pay you in a free arms length transaction. Careful appraisals, or haphazard BPO's, makes no difference.

Case in point. I had a buyer make an offer. The home was listed as a short sale, for 109K. Offer was 90K. Offer was submitted Jan. 2. We wait, and wait. Negotiator appointed, negotiator transferred..yada yada. Finally last week I get a call from the listing agent. The BPO. (brokers price opinion) came back at 155K.

Now a brokers price opinion is a joke anyway. In the banks attempt to save a few dollars, they randomly ask brokers or agents from the area to do a BPO or a CMA (comparative market analysis.) All the agent does is drive by the house, take a few exterior pictures, go back to the mls, find three sold comps, and three active comps, with sort of the same lost size and square footage, and come up with a number they think is fair market value. They then send that to the bank. The bank pays them around 50 bucks, and that is how value is determined.

Using this formula, I could easily do two BPO's on the same house with a 40% difference. It is that inaccurate and subjective.

You might ask yourself why don't they hire an appraiser? A pre requisite to become an appraiser is much more stringent than a real estate agent. And an appraisal is a much exhaustive process, (although still subjective.) Well an appraiser charges quite a bit more. A bank does hire an appraiser when someone apples for a mortgage, but that cost is passed on to the borrower in application fees. Why pay an appraiser 400, when you can pay an agent 50?

Any agent who attempts to list a short sale should submit their own BPO. Often the bank will use it, or at least give it some credence in comparison to another that they order. In my case the agent did not, so we end up with a BPO of 155K. The sellers only owe. 130K on it. The house has sat on the market for over a year. The owners have not paid the mortgage for eight months.

Were the bank to take this deal, they would immediately stop the fiscal bleeding. But no, they will take this absurd opinion of value. Continue to lose money, let the house fall into foreclosure, have it sit as a blight on one of our streets, until it is finally bought for pennies on the dollar 18 to 24 months from now.

When did common sense become so rare?

Random Update

I am not sure what to call this blog spot, because I think it is kind of gong to be all over the place. (What a treat for the reader.) First off last weekend was chalk full of showings. I spent around twelve hours in my car driving all around this county on a nice spring, actually more like summer day.

Both days were spent around the Roscoe/Tennanah Lake/Livingston Manor area. Neither resulted in a quick offer, but they are interested in a few things, and I have a feeling will be buying something.

We did see a few really nice properties, that are (I believe) around 30% less than what they would be asking for a few years ago. Affordable nice houses on private acreage, in the $230,000 range. Second home ownership is affordable again, and that is what is going to sustain us.

I know the doom and gloomers will say I am crazy, and this downward spiral will continue for the next five years, until finally when we crawl from the pit of real estate slime, and dust ourselves off, only foreclosures under 100K will be dotting the landscape, but I think as soon as the numbers start to make sense, and the dream of a second home is comfortably doable, people will buy.

I do think there will be another dip. Interest rates will climb, the dollar is too weak to sustain right now, and that will be the equivalent of raising every home price by 5 to 10K, but that will be over come.

On a personal front, I have switched Re/Max brokerages. I am now with Re/Max Benchmark out of New Windsor NY. Just this past week I have been introduced to the way a large professional brokerage works, and it is like night and day. I know I have said it before, but because of our county's ruralness, people and real estate people in particular, can get away with a certain lack of professionalism, that would be swallowed up and destroyed in a more competitive market.

I am not saying all. There are some very good competent real estate people in the county that I have worked with, and those are the ones that will sustain, but this business pulls in some who see the lure of an easy buck, and are really not good at what they do, and make no bones about it. Those are the ones that give real estate agents a bad name, and that is why I don't mind the correction. Let the chips fall where they may, and let the strong survive. On the other side will be strong competent agents and brokers who can weather the storm, and are truly professional at what they do.

The Love Hate Between the Local and the Visitor

I suppose this strange dichotomy has existed for years here in Sullivan County, but I think like everything that makes SC different as a “tourist” spot , this relationship is a little strange, and sort of passive-aggressive. In comparison to locals in the Hamptons, or the Jersey Shore, or further up, where the hostility is a little more apparent, and such nicknames as Cidiots and Massholes, Full-timers here in SC, I think are a little more protected from the influx, so the annoyance is kept to a minimum.

Though, as the internet has made the world smaller, I think in some ways it has brought this clash a little more to the forefront. Most (much livelier blogs) have this undertone, and as issues like gas-drilling and property taxes are discussed, it becomes more apparent. Full-timers feel it is a necessary evil, and put up with a crowded Delaware, less parking, longer lines at the movie theatre in town, or the grocery store, because our sluggish economy is driven by the weekender. Right now estimates are between 30-40% of our money for public schools come from the pockets of people who do not claim SC as their primary residence. That is a huge portion, and really shows how dependent we are on the weekender.

On a whole other level, the Hasidic community is more openly frowned upon and muttered about. The rumors that they do not pay taxes, seem to pave the way for this dislike. (Which according to those in the know, simply isn’t true. The property that is off the tax roll is minimal.) At any rate, what is true is that their bungalow colonies do tend to be run down and in disrepair. Our townships need to do a better job of keeping those communities up to code. I also think that they simply stand out which makes them a target, and the influx, from Memorial Day to Labor Day is so apparent, it helps fuel the dislike.

Not sure where I am going with this, just an observation I had. I suppose neighborly resentments have been a staple of any community forever, and ours is no different.

But in some ways it is different, and mirrors the County. Even this sort of dispute you can enter into only when you want. Or, you can choose to just keep to yourself, and enjoy springtime in the Catskills.

Bad Blogger Once Again

It has been pretty busy the last few months. Being a new father of course adds to that, and takes some time away from such things as blogging, but I was updating my website, and wanted to update in here as well.

Spring is in the air, and it has brought buyers with it. My last post with the four lake access properties? Three currently are in contract, and the fourth has had a parade through it this weekend. (Listing agents words, it is not my listing.) This does prove that the right properties at the right price will go quick.

I think that is why in this market, it is more important than ever for a buyer to get hooked up with a broker who knows the market, and what is going on. There are so many over-priced-look-good-in-the-picture listings, that I think there are some buyers out there who, after going out hunting a few times, have given up. In my experience the magic number is three. If I can't find a motivated buyer what he or she wants in three trips, the invariably seem to shift gears. Not so much stop looking, but slow it down, start thinking about other areas, etc.

Everyone is different, so there is no way for me to guarantee that I can find a buyers something they will like, but it really doesn't take a rocket scientist to see a property, and know it is a good deal, and could potentially be attractive to quite a number of buyers. That is why when a good listing that is not mine goes into contract, I always get a little twinge. Missed opportunity. 726 North Branch Road comes to mind. Love that old boarding house. Heard just this weekend there is a deal on it.

But in someways, I think this malaise, and this general feeling that Sullivan real estate is crappy and overpriced, is the Realtor's fault. Although now, the under trained, and under motivated are dropping like flies, there is still the part-timer, seat of their pants agent out there, showing on weekends, without a good feel for the market.

I'm not putting anyone one down, I am addressing the possible buyers out there, agents get a healthy chunk of cash for selling a home. Just make sure they are qualified, and they are willing to work hard for the money. What would you pay for 3 to 4 thousand dollars? In no other business is there the possibility of getting paid so much for doing so little. That is what drove the NAR numbers to new records during our version of the gold rush. Well now the big nuggets are gone, but the fervent ones are still sifting through the sand for the smaller pieces. Those are the kind of agents you want.

Affordable Lake Access

With spring right around the corner, and temperatures hitting around 55 today, people begin to think about summer, and summer getaways, and I anticipate the phone to begin ringing with people looking for that house with the magical "water."

So many prospective buyers have that on the list. Either a stream, the Delaware or a lake. Access to a spot to swim. Why? perhaps it conjours up childhood memories, thoughts of relaxation--who knows, I think mostly it just represents, "downtime"--lazy summer days on the water.

There are four I have on my list for this season. Now full disclosure, two are my listings, however I truly believe they are good deals. The other two are also excellent deals. All four are not lakefront, but have lake access, and on all, the lake is less than a mile away, and on one, you can see the lake from the deck.


Click Here For Listings


Two of these 27762 and 26543 have access to Lake Loch Ada, which is a little known lake down by Glen Spey. It is a quiet non-motorboat lake, About 250 acres. It is a really nice spot tucked in the mountains, and it is lower Sullivan County, so the drive is under two hours.

27762 needs some work, but it is closer to the lake. It can bee seen from the decks. 26543 has been fully renovated, and has a cool lake home feel. Both are priced under 200K, which you can't get a studio for in the Hamptons. Bot of these are really good value.

27941 is on York Lake, which is a little smaller than Loch Ada and it is a motor-boat lake. It is frankly my least favorite lake, but the home is big and impeccable. I don't think the pictures do it justice, everything is high end, and it sits on two acres. at $239,000 it is less than the owner paid for it, and in my opinion another great value. York Lake is again in lower Sullivan County, so the drive is less.

27611 is brand new construction, again great quality. It has access to Tennanah Lake which is a much bigger motorboat lake. This house is the furthest away from any of the lakes, but it has complete privacy on over five acres--were you to be on the lake, the homes are all tucked in together, as is the case with most Catskill lakes. Tennanah Lake is a great lake community, very lively in the summer. There is a 18 hole golf course, just off the lake, and Roscoe is just a few minutes away. Older, smaller homes on the lake do not go for less than half a million, so this is another one that in my opinion is a great value.

I know that there is something about being on the water, being able to wake up and see it, be next to it as you barbecue or have a glass of wine and read a book, and hear the water lapping, but at half the cost, these homes offer 90% of what you would get with a lakefront.

Bad Blogger

Haven't been blogging in a while, but I have been really super busy. Real estate is not moving so much, (although I have had showings every weekend.) But my concierge business over the past few months has sky-rocketed. Who knew that there were so many people concerned with their second homes.

Many of my customers do have high-tech gadgets where they can see from their web cams on their computers at home, what is going on in the house, low temperature alarms automatic lights etc. but the pure hassle and worry of what may be going on while they are away, is what I think drives this business. A home is a huge investment, and many times, (intentionally) the house is tucked away from anyone else. Being able to call someone like me, to make sure all is well, is a piece of mind, that is worth a couple of bucks to some folks.

I really enjoy it. Driving around the winter countryside, and inspecting different types of homes is a really a nice way to make a few extra bucks. And very often I come across real estate signs and listings I might have otherwise missed. A wise old real estate man once told me that an agent doesn't make money at home or in the office. He makes it in his car.

But today I am snow bound, with a wife who is four weeks away from our first. I was unceremoniously removed from the bedroom I was using as an office, (which is now blue with an oak crib also waiting for the little one's arrival.) and am now in the basement. Its pretty nice down here. I've got a little window watching the snow pile up. Life is good.

On the real estate front, I've got a few deals pending, but both are short sales, where if you let it, it will drive you crazy. Dealing with a bank loss mitigaion department is the equivalant of banging your head against the wall.

Prices continue to fall, and I think sellers some sellers have taken that deep sigh, and realized what kind of market we are in, and that it is here to stay.

"Big Bank" Rant

So I get an accepted offer on a foreclosed property through Wells Fargo. It is listed with another agent in Orange County, located sixty miles away from the property. They literally put a lock box on it, hung a sign, and put it on the mls. That's it.

It sits for a bit, and there are some price reductions. I finally get an accepted offer, after the obligatory hoops--pre approval letters not only from the bank they plan to use, but from Wells Fargo as well. Earnest money. Background checks through a "money laundering database." Really? We do as instructed. Follow the rules.

The listing agent has done everything but come out and say he doesn't care a bit about selling this property. I suppose Sullivan County is too far, and he has bigger fish to fry, anyway every correspondence is slow in being returned, and apathetic when finally reached.

So the Wells Fargo attorney sends the contracts to my attorney, twenty four hours after the accepted offer, (I know, finally some speed int this deal) however, it happens to be Christmas Eve. Their time stipulations are two days to review and sign. Five days for an inspection, and fourteen days for a mortgage commitment. There is a fifty dollar a day late charge if these are not met.

Now keep in mind the holiday. Does it matter? Nope. My buyers happened to be out of the country. They countered with seven days to review and sign the contracts. Fifteen days for the inspection, and thirty for the mortgage commitment. What was the banks response? Unacceptable, The deal is off. "We are going to entertain other offers."

Meanwhile, the apathetic agent has allowed the property to expire off the mls.--currently not listed anywhere. There are no other offers. The house sits empty, and in disrepair. Lets kill the deal over fourteen days. This is such an example of big bank stupidity.

Now you are probably thinking, that surely there is someone along this chain of he-said-she-said that selling agents have to follow, that will have a bit of common sense, and believe me I have tried. The bank's attorney? Not my call. Listing agent? Not my call, (and I don't give a crap.) Trying to find that nameless person in Wells Fargo who does make the "call" is maddening. I get switched from department to department, and finally to a voice mail, that might as well not be recording, because no-one gets back to me.

I have heard many similar complaints about foreclosures and short sales from other agents. Now I know that this is my little world here in Sullivan County, but lets be really conservative, and assume that this is happening a fifty times a day across the country. My deal was for $200,000. Times that by fifty. That is ten million a day in bank lost revenue.

Stupidity at it's highest form. Take the bailout money banks, I can see why you needed it.

Year in Review

Well, as 2009 winds down, I suppose it is only natural to look back on the year and reflect on things good and bad, personally and professionally.

On the personal side, we are expecting in March. It is our first, and cautious optimism would be the best way to describe how I feel about that. She is excited, and since she is such a saint. (she puts up with me) I have no fear that she will be a great mother, and together we can be pretty good parents.

But this is a real estate blog, and although my personal life is important to me, I'm sure it is pretty mundane to someone who is trying to gather information on buying a home in Sullivan County.

Professionally I had my best year in my short (four year) real estate career. Now most of that I can attribute to switching brokerages, where my opportunities increased expediently, and also putting it in perspective, "best year" does not by any means put me up there with the Rockefeller's, but in a year of global groaning and gnashing of teeth, I would say professionally it is an accomplishment.

I had some really great clients this year, and met some wonderful, and wonderfully different people. I would like to thank all those who bought, and who's homes I sold in '09. You are the only reason I am in business.

My mission statement for 2010 is simple. "Be there for my clients." I would like to think that I succeeded in that in '09, and I would like to wish everyone a healthy and happy 2010.

Now if I could just get my concierge service business off the ground. It is a great idea, but I have had little response.

“I am not judged by the number of times I fail, but by the number of times I succeed: and the number of times I succeed is in direct proportion to the number of times I fail and keep trying.”

--Hopkins

Holidays Approaching--Slow Weekend

First weekend in probably about two months where I don't have a full schedule. I do have to accompany a co-broke on one of my listings on Sat. but that is it. I'm sure it is the holidays. People are busy with Christmas stuff. I certainly don't mind. I'll take a weekend at home.

The problem with my "busyness" is that it is not translating into offers and sales. I have a half dozen people I am actively working with, and although I feel we are close on a few, all seem hesitant. There is a prevailing idea that any asking price can be automatically discounted by 20 to 30 percent, many refuse to make compromises, and then even when it all seems like it has come together, there is that nagging fear that if the market declines further, they will have overpaid.

They are not tire kickers. I have been in this business long enough to sniff out the ones who are just looking for a nice day to view houses in the country, but there is just no such thing as an easy sale.

An example I have is the property link I listed below. I showed this property three or four times. It is a nice big farmhouse on seven acres with a few huge outbuildings. Bank owned. It was bought at the height of the insanity for $450,000. Bank started it at $239,000 dropped it to $220,000, (at which time I got an offer for $180,000) I urged my people to come up just $10,000 more. No dice. They "moved on."

The price was just dropped last week again to $199,000. I called back my customers and told them. They said, put in an offer of $182,500. When I presented it...to late. In the course of two days, there had been an accepted offer, and contracts were out

Believe me this is a steal at $199,000, (and it probably went for around $190,000.) But this is my point. For $7,500 (less then the total commission.) Buyers are willing to walk. I can lead a horse to water, and yet this pervasive attitude that unless the property is a steal, it is not worth it. And it is not until the media starts telling everyone that the market is rebounding before this attitude changes.

I know I have told this story before, but I had an economics professor in college who would say. "When do the cliff divers of Acapulco jump? When they see water? or when they see rocks?

7858 State Route 52 (a/k/a CR 111) Narrowsburg, NY 12764