Category — Heard 'Round the Block

OVER 1400 REAL ESTATE & MORTGAGE professionals were arrested today.  Bear Sterns hedge fund managers were taken away in handcuffs.  FBI special agents are the guys that carry guns.  They actually arrest people for mortgage and real estate fraud.

I used to remind mortgage agents that when their client (my clients too) sign a deed of  trust there is bold ten point print that points out that not occupying the property on a owner occupant loan, is a felony.  I’ve even had people (not my clients) actually ask me “do we really have to move in?”  Ya.  Otherwise the guys with the guns show up.  And now you know.  They do arrest borrowers.

There are a variety of mortgage scams, but the most common one is the investor who applies for and gets an owner occupied loan, and never intends to move in.  Bye Bye Puddin’ Pie.

McMurdie’s Real Estate Rule No. 26: Don’t be a Puddin’ Pie.  Tell the truth.

FUEL PRICES WILL AFFECT home prices.  The US has been through this before in the early 1970s when fuel was not available, or very expensive.  Sustained high gas and fuel prices DO affect home values.  This is what you can expect:

The further people commute to central work locations the lower the price of the home.  Homes within a 20 to 25 minute drive to central work locations, like downtown central cities, or central industrial areas will expect to pay slightly less for a home.  Home prices are really impacted in areas where there is a 45 minute or longer commute time to central work locations.  Bedroom communities for example like Tracy and Gilroy Silicon Valley or El Cajon in the San Diego area, these bedroom communities will be impacted the most by high fuel prices.  During the 1970s fuel crisis home prices fell 10% where homebuyers expected a 45 minute drive to and from work.

Second, home prices very near central work areas will go up, again, as much as 10%.  It is nice to walk to work, ride a bike, or take public transit a short hop to work.  Urban cities like Boston, Salt Lake, and San Francisco will benefit, and people will move to central cities.  It is more energy efficient!  May urban areas like New York it is possible to give up a car completely!  Nice.

These price adjustments due to driving time will begin to occur almost immediately.

The bad part of this is bedroom communities have already been hit hard with declining prices with the mortgage crisis, and the fuel crisis will exacerbate the price declines.

Over the long term there will be additional impacts of energy costs on home prices.  Energy sources compete with each other.  Natural gas, for instance, can be converted to LNG to burn in cars and trucks.  It is cheaper than diesel fuel or gas and people will convert their cars and trucks to LNG as well as veg oil, palm oil, and other bio fuels.  Your home energy costs will go up too!  And food.

Home energy audits are just around the corner for home buyers and sellers.

Ha!  I’m going Green.  I’m already Green!  Here are some tips.

It is healthy to buy a bike and use it.  Bikes burn calories.  I need to burn calories, so I’m pedaling to work.  Walk when you can.  Buy a motor bike or Vespa for personal mid-distance transportation.  Right now my Ford gets 26 mpg.  Not bad, but not good either. The ultimate vehicle is a hybrid getting 50 mpg or better, or something like Volkswagon Rabbit Diesel… 50 miles per gallon then burn veg oil which you can get free!  I win!!!

Ha!  Win going Green!

I’ll keep you posted at Realestateblocks.com.  Subscribe today!

I’VE NEVER HAD A SLITHER PUP.  The Montana “Newton” Pup Dog likes to really stretch out and “slither” along the carpet.

Never have I seen a dog slither.  Now I have a “Slither” dog.  Maybe the slithering will scare intruders?

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PHOTOS OR THE LACK THEREOF ARE IMPORTANT home listing data as this post at 3 Oceans by Cindy Lin in this great post. Read the whole thing.

What I’ve noticed on Craigslist homes for sale listings is that many agents simply place an ad on Craigslist as an afterthought, and don’t take the time to import one or more photos.

Buyers use home photos to eliminate homes from their tour list. This was the point of Cindy’s post. The lack of photos puts the buyer and buyer’s agent in the position of needing to tour a home to eliminate it as a possible buy. Experienced agents understand.

I’ve noticed that experienced agents deliberately leave photos out of listing information. Where the home has some major defect, like front elevation, interior, or other major defect experienced agents leave photos out of listing information to pull in the best buyer’s brokers who know that they must see every listing that might fit their buyer clients needs, and so must tour the home without photos. I’ve toured hundreds of homes on behalf of buyers precisely because there were no photos. Diligent agents do tour these homes just to make sure the home does not meet their buyer’s criteria.

The lack of photos tells a buyer out shopping that either the listing agent is lazy, or more likely there is a major defect or defects with the home.

Sellers should also be aware that buyers and buyers agents particularly use photos negatively to eliminate home from their tour list. Photos should show the homes features, not just a beautiful photo so buyers will tour the home.

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I love when three of my favorite interests combine to feature recent news for us all to read. Many people have heard by now of the Bronx construction worker who planted a Red Sox jersey before pouring concrete over it in the Yankees’ new stadium. It’s humorous to see how deep a rivalry can go. And since I’m a mafia movie fan, I loved this quote by Yankees President Randy Levine,

It’s never a good thing to be buried in cement in New York, so we thought about just pouring more cement on it.

Val always teaches me to factor in contingency costs when I’m setting up a cost estimate sheet. He always says, “You just never know what’s inside those walls when you start tearin’ ‘em down.” Do you think the Yankees organization factored that into their budget considering it was new construction? [Read more →]