Saturday, December 31, 2011

What does a Lockbox Matter?

A couple of weeks ago I spent literally all of one day and part of the next gathering up lockboxes off all my listings and then returning and installing the newest Supra iBox BT. I drove through Nampa, Caldwell, Wilder, Melba, Kuna, Meridian, Eagle and Boise. I made another trip yesterday exchanging a few more stragglers, the ones from Glenns Ferry and Kimberly as well the one hiding beneath my seat! I began to wonder if it was all worth it. Although I do like opening them using the bluetooth on my phone, instead of carrying another ekey for that function. Then I read this article on how the newer more sophisticated boxes impact marketing time and price. Imagine that.

Does the choice of a lockbox matter?  Do the older type lockbox systems influence the final transaction price or the marketing time of property?  These questions are often pondered by real estate professionals.  Older key and combination systems are low tech, easy to employ, and less costly to the broker.  Newer electronic lockboxes are often more complicated, provide additional information by way of technology, and are slightly more expensive than their low tech counterparts.  The trade-off is therefore between ease of use, information, and cost of operation.

If the different lockbox systems do not influence transaction outcomes (price and marketing time), then the choice of the lockbox system can be left up to the broker without costs to the sellers of property.  On the other hand, if one system produces either a pricing discount or extended marketing times, then brokers need to be aware of these differences in order to better serve their clients.


Recent research by Benefield and Morgan answer these questions.[1]  The researchers directly test for the impact of lockbox type (newer electronic versus older systems) on property price and property marketing time.  After controlling for other difference in listings such as location, age, size, seller motivation, and quality, Benefield and Morgan find that older lockbox systems, on average, do not influence the time it takes to market property.  Property pricing, however, is another matter.  Specifically, Benefield and Morgan find a negative impact on price from the use of the older lockbox system.  More to the point, older lockbox systems appear to not influence marketing time but result in lower selling prices.  The pricing discount was a staggering seven percent on average.[2]


There is now statistical evidence (not just professional speculation) that indicates the inferiority of the older lockbox systems.
Therefore, wherever financially practical, brokers should stop their use of older key and combination lockbox systems in favor of the newer electronic systems.  It now appears that these newer electronic lockboxes lead to a better sharing of information and feedback between listing and showing brokers resulting in better prices.


Friday, December 30, 2011

What's in Store for Boise Housing in 2012?


Looking Ahead in my Crystal Ball...

Wouldn't it be nice to have one! What are prices AND interest rates going to do? In the absence of the crystal ball I guess we turn to the experts, which sometimes are right on the mark and sometimes not so much. I have reprinted the article below, and although it is dealing with the national market and all real estate is local, there are still some valuable insights to be gained.

The article mentions how even with a single city more desirable neighborhoods will stabilize first, and we certainly are seeing that here in the Boise Housing Area. We are still seeing high levels of foreclosures and short sales, and again the concentrations varies greatly depending on location, whether in Nampa, Eagle, Kuna or Boise, and within micro units of those cities. I would be happy to discuss any particular area you are interested in buying or have a home to sell. Just send me an email Roger@lowesflatfee.com or call 208/602-0055.


The worst for the housing market may finally be over, according to housing experts in a recent article in Kiplinger. After median home price have dropped nearly 40 percent nationwide, a rebound is taking shape -- although, housing experts say, the market may stay flat for awhile before gradually ticking up.

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody's Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability -- the ratio of median home prices to median family income -- will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 -- at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication.

Sales increases: The National Association of REALTORS® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes.

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace.


Tuesday, December 20, 2011

Ada County Real Estate Sales Outpace 2010!

2011 November sales were 471 in Ada County, an increase of 7.3% over November 2010.

November sales YTD are 5,763; up 7.98% over 2010 YTD. In July of 2011, we exceeded YTD 2010 sales for the first time in 2011. In August we improved to +6.1%. In September our increase was 7.2%. In October it grew to 7.6%.

November sales decreased 10% from October 2011′s 520. Historically, November sales decrease from October.

Of our total sales in November… 47% were distressed….up 2% from October 2011. In January 2011, 57% of our sales were distressed.

For homes sold in November, the average number of “Days on Market” was 78. This is essentially unchanged from last month. Down from 90 days last year this time and down from 93 days in January 2011.

Pending sales at the end of November were 748; a decrease of 7% from the end of October. Looking back at pending sales from March 2011 to November 2011, we see an average between 800 and 900 at the end of each month. The percentage of pending sales in distress decreased 1% from October, totaling 48% overall. We are now at seven consecutive months below 50%.

At the end of November, we had 11% more sales pending than at the end of November 2010.

November median home price decreased 2% from October. Overall median price was $149,500; down 3.5% from November 2010.

New Homes median price for November 2011 was $207,900; an 17% increase from October 2011. Year-to-date new homes median is up 20% over 2010 to $215,000.

The number of houses available continues to decrease. At the end of November our total active inventory was 2,190 homes. This is down 4% from October and 13% less than last year at this time. We stand a very real chance of having our total active inventory going below 2,000 by year end.

At the same time, the percentage of distressed active inventory increased 3% from October to 36%. We have been hovering between 33% and 36% since May. We remain well below the 40% levels set last spring….when we were on the increase.

In Ada County we have 4.3 months of inventory on hand…historically this number defines a strong “seller’s market”. The price category in shortest supply is $100,000 to $119,000 with 2.5 months. This is closely followed by <$100,000 with 2.8 months available. In the range of $120,000 to $250,000 there is 4.5 months. $200,000 to $249,000 with 5 months. We continue to “benefit” from inventory levels much lower than national average.

Based on November sold data, our most desirable price point is $120,000 to $160,000 which made up 21% of total sales.


Monday, December 19, 2011

Save BIG bucks, Hire an Idaho Real Estate Professional!

Real estate commissions can take a huge chunk of your equity when selling a home, so many people decide to sell their homes on their own, which is a very understandable position.  But there is also compelling reasons to hire that real estate expert, to get your home sold for the best price AND get it closed. Lowes Flat Fee Realty offers you expert knowledgeable full service while saving you thousands in commissions.

Take a look at this recent article.

The Need for a True Real Estate Professional


The National Association of Realtors (NAR) explained in a recent Existing Sales Report that 18% of all contracts were cancelled in the previous. This compares to 16% the prior month and 9% in August of 2010.

The good news is homeowners have realized that attempting to sell their home on their own is an arduous process best left to an industry expert. According to NAR’s 2011 Profile of Home Buyers and Sellers, the percentage of sellers selling on their own, known as For Sale By Owners (FSBOs), has dropped almost in half over the last 20 years:

Bottom Line

If you are selling a home in today’s confusing real estate market, it is best to take on the services of a local real estate expert. He/she will guide you through each step of the transaction thereby increasing the likelihood that there will be fewer inconveniences for you and your family.

Hire Lowes Flat Fee Realty! You can pay more to sell your home but why would you want to?


Saturday, December 17, 2011

Idaho Mortgages After Foreclosure, Bankruptcy or Short Sale

Getting a mortgage after foreclosure (© Alex Stojanov/Alamy)

Buying a home is a challenging goal for most hopeful homeowners. But for those who have experienced a bankruptcy, foreclosure or short sale, the hurdles are even higher.

Still, it's not impossible to buy a home after financial difficulties, says Dan Keller, a mortgage banker with Hometown Lending in Everett, Wash. In fact, Keller says, people who have cleaned up their credit and are otherwise qualified to get a mortgage can buy a home as soon as they have outlasted a prescribed waiting period after the bankruptcy, foreclosure or short sale.

Wait a while
The waiting period can last one to seven years, says Kirk Chivas, chief operating officer at First Commerce Financial in Wixom, Mich. The one-year requirement applies to buyers who complete a Chapter 13 bankruptcy, have a spotless subsequent credit history and want to get a new loan insured by the Federal Housing Administration or guaranteed by the U.S. Department of Veterans Affairs. The seven-year requirement applies to buyers who experienced a foreclosure and want to get a new conventional loan that can be sold to Fannie Mae or Freddie Mac.

In between are a number of two-, three- and four-year timelines based on similar criteria and other factors such as whether the buyer's previous mortgage was current at the time of a short sale or the size of the buyer's new down payment as a percentage of the home's purchase price.

Generally speaking, the waiting periods after a bankruptcy tend to be more black and white while the waits after a foreclosure or short sale have more gray areas, Keller says. And in some cases, a waiting period can be waived or shortened if the buyer's bankruptcy, foreclosure or short sale was due to extenuating circumstances or a hardship beyond his control.

Technically, it is possible for a buyer whose prior loan wasn't in default at the time of a short sale to get a new FHA-insured loan with no waiting period, Chivas says. But he adds that he's never encountered anyone in that situation.

Clean credit
Buyers must have very clean or perfect credit histories before they can buy homes after bankruptcy, foreclosure or short sale. A slip-up as small as one late credit card payment could disqualify a post-bankruptcy buyer from some loan programs, even if the waiting period has been completed, Keller says.

"Bankruptcy is a serious word," he says. "If you do it, it's a get-out-jail-free card. But once you get out of bankruptcy, you need to be flawless in your credit. Don't even drop a gum wrapper."

Credit dings can be difficult to sort out for buyers who experienced a loan modification or short sale, in part because, as Chivas says, there's "no consistency" in how lenders report those events to the credit bureaus. Buyers should review their credit reports and correct any errors or clarify the circumstances of adverse items.

Stable employment can be a plus, too, Keller says, noting that some loan programs are more lenient than others. "If there was a gap," he says, "it needs to be explained."

Consult a loan pro
Given these complexities, buyers are advised to consult a loan officer or mortgage broker early on for advice that applies to their situation.

"They may think they're fine, but if they're not talking to a professional, their hopes can get dashed or crushed," Chivas says. "That's why you want to speak to someone as soon as you start dreaming it up in your head" that you want to buy a home after a bankruptcy, foreclosure or short sale.

If you would like a recommendation of a great local loan professional contact me. roger@lowesflatfee.com.

Friday, December 16, 2011

Why don't you tell us something we don't already know!

Hey Boise-Nampa residents are you ready for a newsflash? Well sorry this isn't one. I always love it when I read how some major study, (taking lots of tax dollars,) now concludes what everyone already knew. Thus was the case yesterday in reading the Idaho Statesman about how real estate investors played a large roll in the real estate bust. If you paid attention to the Boise-Nampa real estate market during the price run up and subsequent bust the response is a great big, WELL DUH!  So we as taxpayers just paid how much to learn what we already knew?

Here you can read the article yourself.

LAS VEGAS — A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states. (IDAHO)

Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an "undocumented" dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.

More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time.

"This may have allowed the bubble to inflate further, which caused millions of owner-occupants to pay more if they wanted to buy a home for their family," the researchers noted.

Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida, and Nevada from 2007 to 2009.

As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed as people couldn't or refused to pay their underwater mortgages. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work.

The report concludes that lenders and regulators must limit speculative borrowing to avoid future housing busts. For example, in China, government officials are now requiring higher down-payments and mortgage rates on investment homes, according to the report.

In Nevada, which has the nation's highest foreclosure rate, the housing market remains weak, with home prices continuing to fall in the Las Vegas area, where most of the state lives.

Home prices were down 7.3 percent in November compared to a year before, according to the Greater Las Vegas Association of Realtors. That means the median price dropped from $134,900 to $125,000 in one year. More than half of all home sales were purchased with cash.

Paul Bell, president of the real estate association, said amateur investors were behind the soaring home values seen during the first half of the last decade, but noted those buyers were simply taking advantage of how easy it was to buy homes at the time because of questionable lending practices and government pressure on banks to promote home ownership.

"There was blame to go around for everybody," Bell said.

The market has now shifted so that cash investors are helping Las Vegas recover by buying multiple vacant homes, fixing them up and selling them, Bell said.

"If we did not have the serious investors in the market ... we would have many neighborhoods in a very run-down condition," he said.


Thursday, December 15, 2011

Common Sense Isn't So Common!

While the statement, common sense isn't so common, seems to be true in a great many aspects today, there are few places where it is less applicable than in today's world of mortgage lending.  At times it can defy all logic. I have reprinted today's article from KCM Blog.

It used to be that there was logic applied in the world of mortgage lending. An appraiser determined the value of a home by the axiom, “what a reasonable buyer would pay a reasonable seller”. An underwriter weighed the plusses and minuses of a file (after analyzing the income, the assets, the credit profile and the appraisal) and made a judgment call based on their experience.

Loans with sizable down payments used to be more flexible with how income was documented or what quality of credit was required. Even the decision of what made up “good credit” has been reduced to a FICO score. Determining the risk of a loan affected its approval or denial. Further, loans deemed riskier were given less favorable terms (higher rates and/or costs or larger down payments).

But today, everyone has tried to quantify everything and put everything into a matrix. Credit scores are numerical, and the number determines eligibility and cost. Gone is the concept of explaining why you have defects in your credit. We don’t care why, we just look at your score. Appraisers now are being scored and their data being scrutinized to a level most would find mind-boggling. Amenities that make a home worth more for a particular buyer (like a pool or upgraded basement) are virtually ignored. Underwriters have primarily become fact-checkers and quality control as a computer software program underwrites the vast majority of mortgages today.

Gone is common sense. It has been replaced by numerical formulas and a cover-my-behind, justify-everything-with-data mentality. Basically, the pendulum has swung too far. It used to be that lending was too easy (see the subprime debacle), but now we have eliminated too much of the human element. We need common sense back.

People who have saved 30% for a down payment know what they can afford monthly. Don’t they?

People who had a medical challenge two years ago that is not likely to reappear should not have a twenty year credit history destroyed. Should they?

People aren’t likely to overpay for a home with so much inventory and all the media exposure about falling prices. Are they?

Bring back some common sense when we need it most!


Wednesday, December 14, 2011

Real Estate, A Hedge Against Inflation.

We haven’t heard a lot about inflation recently. However, prices have started to creep upward over the last year. As examples, here are a few categories that increased from November 2010 to November 2011:

  • Food at home – up 6.2%

  • Housing fuels and utilities – up 3.5%

  • Transportation – up 9.2%

Today, we want to address the issue of inflation and the advantages of owning real estate. The National Association of Realtors (NAR) took an historic look at the impact of inflation. Here are some inflation numbers over the past 30 years:

We can see that real estate has fared very well. The most important number is the $0 increase in mortgage amount. The study assumed that the homeowner took a 30 year fixed rate mortgage thereby locking in the housing expense for the thirty years.

NAR then looked at inflation moving forward over the next thirty years. Obviously, if it remained the same as the last thirty years the percentage increase would be the same. They looked at a low inflation scenario and a high inflation scenario. The graph below shows the findings:

Bottom Line

We can lock in the housing costs of our primary residences and vacation homes at all time lows if we purchase today. Either would be a great hedge against future inflation.


Thursday, December 8, 2011

Tips for Boise WInter Sellers.

Traditionally the winter months are the slowest times for selling homes in Idaho. Although in the past few years other forces have played a greater impact than season. Events such as the tax credit, falling prices, rock bottom interest rates and overall state of the economy have altered the normal ebb and flow to which we have become accustomed. The winter selling season still provides it's own set of selling challenges.

I have excerpted a few tips from an article produced by rismedia.

[1]If your home will be for sale this winter, it is important to master certain seasonal issues that are less significant or even non-existent at other times of the year. Here are bits of sage advice that can help put a “Sold” sticker on that yard sign.

Let Those Lights Shine: The best way to combat winter’s short and frequently cloudy days is to turn on your house lights. For a showing, every single light in the house must be on, even in the closets and utility/mechanical rooms, according to Marlene Granacki of RE/MAX Exclusive Properties, Chicago.

“Make sure all the bulbs are working, and stock up on all the right bulbs for lamps and fixtures so burned out bulbs can be replaced immediately,” she advises. “Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled. People are always driving past the house, and keeping it lighted makes it look happy and welcoming.”

She also advises opening the drapes and blinds during the day to let in light and let visitors enjoy the view.

Provide Convenient Parking: It’s vital that buyers have a convenient place to park. They won’t want to walk very far in cold weather or be forced to climb over a snow bank to exit their vehicle.

Keep Odors Under Control: Any home tends to be stuffy in winter when windows are opened rarely. That can allow odors to build up, which can be a turn-off to buyers.

“Pet odors can be especially worrisome in winter,” says Mike Mondello of RE/MAX Synergy in Orland Park, Ill. “Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often.” For example, change the cat litter daily, rather than every third or fourth day, or even consider using an air purifier.

If pets are in the house, consider setting the thermostat control so that the furnace fan runs constantly during the day to keep air moving through the house and dissipate odors. Also try to avoid strong cooking odors, especially if a showing is scheduled that day.

Cultivate a Festive Look: Appropriate decorations for Christmas and even St. Valentine’s Day help give a home a cheerful look during the winter months.

“I really believe that holiday decorations can help homes sell, but don’t go to excess,” suggests Starr Zook of RE/MAX On Track in Aledo, Ill.

Don’t Ignore the Outdoors: Make a good first impression on buyers with a neatly maintained yard. Walks and steps should be kept clear, especially of snow and ice.

Don’t Roast Buyers: We all tend to prefer a specific temperature for our homes during the winter, but don’t blast buyers with hot air. Keep the temperature at a comfortable 65 degrees for all showings. Remember, buyers are likely to be wearing their coats even as they walk through the house.

Keep Seasonal Clothing under Control: “One major challenge of selling a home during the winter months is the overabundance of cold weather gear that must be stored,” says Mike Mondello. “A buyer doesn’t want to find the mudroom filled with boots or the hall closet overflowing with heavy coats. Shift some winter coats to another closet and put anything not needed in the closet into storage.”

Encourage Day Time Showings: A home shows to its best advantage during daylight hours, which are relatively scarce in winter.

“Encourage your agent to show your home before 3 p.m. and have it ready to show by 9 a.m. if you want the best results,” Granacki recommends.

Despite the special challenges of marketing a home during winter, there also are benefits, notes Laura Ortoleva, a spokesperson for the RE/MAX Northern Illinois real estate network.

“Buyers out looking at homes in December or January are, as a group, quite serious about buying. Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property,” she said.


Wednesday, December 7, 2011

A bit of Christmas Goodwill.

Fannie Mae, banks halt foreclosures for the holidays

By Les Christie @CNNMoney December 1, 2011: 4:11 PM ET

NEW YORK (CNNMoney) -- Happy holidays struggling homeowners! Fannie Mae, Freddie Mac and several large mortgage lenders have pledged not to foreclose on delinquent borrowers during the Christmas season.

For homeowners with loans through Fannie Mae and Freddie Mac , the moratorium will run from Dec. 19 to Jan. 2. During this time, legal and administrative proceedings for evictions may continue, but families will be allowed to stay in their homes, Fannie said in a statement.

"No family should have to give up their home during this holiday season," said Terry Edwards, an executive vice president for Fannie Mae.

Among some of the major banks that offer mortgage loans, Chase Mortgage said it will not evict anyone between Dec. 22 and Jan. 2. Wells Fargo will also suspend evictions during that period, but will not shut down its eviction machinery entirely.

The bank said it will observe the moratorium on foreclosed properties in its own portfolio but for loans it services for other lenders "foreclosure-related actions may still occur."

Bank of America said that it would "avoid foreclosure sales or displacement of homeowners or tenants around the Thanksgiving and Christmas holidays."

However, that policy only applies to loans the bank itself owns. Like Wells Fargo, it will also honor the wishes of the owners of the loans it services, which could mean moving forward with certain foreclosures.

A holiday halt on foreclosures by the major mortgage lenders could affect tens of thousands of homeowners. An average of 89,000 foreclosure auctions a month have been scheduled this year, according to RealtyTrac. Once a home has gone through that process, eviction is the next step.

There could be a small handful of borrowers who might benefit permanently from the suspension, according to Daren Blomquist, a spokesman for RealtyTrac.

Sometimes, albeit very rarely, a Christmas miracle will occur where a borrower finds the cash to get current on their mortgage again and keep their home.

For the overwhelming majority of borrowers in default, however, "[i]t's a temporary reprieve, a symbolic gesture to help people out during the holidays," said Blomquist.

Then, come the New Year, everyone gets back to business, including mortgage lenders.  To top of page


Tuesday, December 6, 2011

Fire Safety Tips for Idaho Homeowners!

Fire safety tips to protect your family

(ARA) - House fires happen more frequently during the winter months each year due to holiday decorations, malfunctioning furnaces and increased use of cooking appliances and fireplaces, according to the U.S. Fire Administration.

As winter approaches, now is a good time for homeowners to make fire escape plans and take steps to prevent house. Every member of your family, from your youngest child to the oldest senior, can help to protect your home from fire and learn how to assist others in getting out in case a fire does occur.

Here are some actions you can take this fall to protect your house and family.

  • Replace the batteries in your smoke detectors and carbon monoxide detectors. Go through your entire house and make sure you put new Duracell CopperTop batteries in every detector. You should have a smoke detector on every floor in the house, as well as just outside of every bedroom.

    "Installing a smoke detector is one of the strongest defenses for a family to prevent devastating fires and ensure loved ones are alerted and escape a potentially dangerous situation," says Philip Stittleburg, chairman of the National Volunteer Fire Council. "A good habit to develop is to replace your batteries in your smoke detector every fall to ensure the detectors will work in the event there is a fire in your home."

  • Have your fireplace cleaned and inspected. Residue from previous fires can build up in the chimney, and if the conditions are right, catch on fire. Schedule a chimney cleaning every year if you plan to use your fireplace.

  • Unplug holiday decorations when you're away from the house or have gone to bed.

  • If using space heaters in your home or garage, keep them at least three feet away from any objects, and don't leave them running and unattended.

  • With all the holiday cooking you're bound to do, be sure to practice safe cooking methods. For instance, keep anything flammable away from the stove and oven, always roll up your sleeves when working around a hot range and never leave the kitchen unattended when cooking.

  • Store lighters and matches out of reach of children and pets, and never leave a burning candle unattended.

  • Establish escape routes for second story and higher rooms. You may need to purchase escape ladders that can be stored under the bed in case a family member would need to leave the house through the window.

  • Organize a family escape plan. Put the plan down on paper, and then run through it several times so everyone - including your youngest children - knows exactly how they're getting out of the house, and where they're supposed to meet outside. Review this plan yearly.

All members of your family can work together to prevent fires. With a fire safety plan in mind, you'll be able to enjoy the fall and winter months without worrying about your family's safety.

Courtesy of ARAcontent


Monday, December 5, 2011

Idaho Homes Are Affordable!

The silver lining for home buyers in this dark cloud for sellers is that homes are much more affordable. I included a report summarizing a national report.

Housing Affordability Hovers Near Record Levels

Ultra-low interest rates mixed with stabilizing home prices continued to push housing affordability in the third quarter near its highest levels in more than two decades, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.


For the third quarter, 72.9 percent of all homes sold were affordable to families earning the national median income of $64,200, according to the index. This marks the 11th consecutive quarter that the affordability measure was above 70 percent; prior to this it rarely was above 60 percent.

"With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households than it has been for nearly two decades," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, tough economic conditions - particularly in markets that experienced major changes in house prices and production - as well as extremely tight credit conditions confronting home buyers and builders continue to remain significant obstacles to many potential home sales."


The most affordable major housing market nationwide? Lakeland-Winter Haven, Fla., in which 92.5 percent of all homes sold were found to be affordable to households earning the median family income of $53,800 for the area. Other affordable major markets included Toledo, Ohio; Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; and Ogden-Clearfield, Utah. For smaller housing markets, Fairbanks, Alaska, ranked the highest, in which 97.8 percent of homes sold during the third quarter were found to be affordable to families earning the median income of $91,700.


Meanwhile, the least affordable major housing market continues to be New York-White Plains-Wayne, N.Y.-N.J., in which 23.3 percent of all homes sold were affordable to those earning the area's median income of $67,400.

Source: National Association of Home Builders
Daily Real Estate News


Thursday, December 1, 2011

Why You Need an Expert in Idaho.

I am proud to offer you a lower cost alternative to selling your home while still providing both the exposure and market knowledge you need. I am experienced and knowledgeable, both in representing buyers and sellers. I can help you avoid many pitfalls and assist in accomplishing what is best for you.

The following article from KCM Blog elaborates on the benefits of professional help.


Yesterday, we explained that having someone who truly knows the market was crucial if you were planning to buy or sell a home today. This expert should know what is happening in real estate, understand why it is happening and be able to simply and effectively explain each point to you and your family.  Today, we want to discuss the consequences if you don’t have a true industry professional on your side.

When families enter into a contract to buy or sell a house, two things are true:

  1. The buyer wants to own the home.

  2. The seller wants to sell the home.

In order for both these things to take place, the transaction must be completed. That is not an easy task in the current market.  The National Association of Realtors (NAR) released their Existing Homes Sales Report yesterday. In the report, NAR announced that one out of every three contracts to purchase a home in October never made it to a closing table.  How does that ratio stack up against previous numbers? Here is a graph showing previous rates of cancellations:

Cancellations have more than quadrupled in the last 14 months! According to NAR, cancellations are caused by:
“… declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.”

Bottom Line

No one can guarantee you won’t face challenges. However, the best agents and mortgage professionals know how to manage the expectations of all the parties involved thus dramatically increasing the chances your deal will close and you and your family will be able to move on with your lives. Hire that true professional!!

To hire me as your true professional,call 208-602-0055 or email me at Roger@LowesFlatFee.com


Wednesday, November 30, 2011

Idaho Home Sales JUMP!

Idaho home sales up 33.9% in the 3rd Quarter over last year!

The National Association of Realtors recently released their 2011 3rd Quarter Housing Report. In the report, they showed that combined sales of single family homes, condos and co-ops increased in EVERY state as compared to the 3rd quarter of last year. Here are the state-by-state numbers.  

The next time someone says houses aren’t selling, ask them which state they live in and show them the chart.


Tuesday, November 29, 2011

Great Value On This New Nampa Bank Owned Listing!

I finally got the go ahead to get this bank owned property on the market. It has a great location is Brandt's Landing  in north Nampa with easy access to shopping and the interstate, with well maintained neighbors. It features a sunken living room with decorative arched room dividers beneath the vaulted ceiling.  Laminate wood floors run from the entry through the eating area, kitchen and halls. Sits on a corner lot with fenced back yard. Needs some TLC but could easily be a showplace. For more information give me a call 208.602.0055 or go to my website LowesFlatFee.com.


Monday, November 28, 2011

More GOOD NEWS Idaho's Jobless Rate Falls!

October’s jobless rate dropped two-tenths of a point. The seasonally adjusted rate was 8.8 percent, the lowest in nearly two years. It was the second consecutive month that Idaho’s unemployment rate was below the nation’s.

Employers kept payrolls higher than usual for October, the Department of Labor said. It’s a strong sign for the state’s workforce, which suffered a record 9.7 percent unemployment rate earlier this year. The Idaho jobless rate fell six-tenths of a point in the last three months.

About 2,300 more Idahoans had jobs in October than in September — the second-largest one-month jump in five years, the department said. About 692,700 people worked last month. About 66,400 didn’t — more than 23,000 of whom collected $22.6 million in jobless benefits.

Don’t chalk it up to job creation. Almost all the 14,400 new hires in October filled vacancies.

Idaho and the Treasure Valley are recovering, Boise economist John Church said Friday at a Boise Metro Chamber of Commerce forum. True recovery will be slow; the recession killed 23,200 nonagricultural jobs in the Valley, or 51,500 statewide, he said.


Sunday, November 27, 2011

Boise makes TOP TEN Turnaround List!

  • 1116phoenix Top Ten Turnaround Towns: Midwest/West Edition

Today I am sharing a part of Realtor.com’s Top 10 Turnaround Town Report–a group of markets showing the greatest promise for growth and price appreciation despite the national economic situation.

Though the list was dominated by six Florida markets, the Midwest and West also had a strong showing on the report. The four additional markets include Phoenix, Mesa, AZ, Boise City, ID, Fort Wayne, IN, and Ann Arbor, MI.

Why did these four metros make this list? Not only did these markets have lower unemployment rates year-over-year in the third quarter of 2011, but also showed median list price appreciation and lower inventory counts and median age of inventory.

Here’s why each Midwest/West market made our top 10:

Phoenix, Mesa, AZ: Like many Florida markets, Phoenix-Mesa foreclosure activity hit high levels during the housing downturn. Now, foreclosures there have decreased 25 percent compared to the second quarter, and are down 40 percent compared to third quarter 2010. Ranked 4th on the turnaround list, inventory is also down close to 48 percent, while median age of inventory decreased more than 23 percent, according to Realtor.com’s October 2011 Real Estate Trend Data report.

Boise City, ID: Number eight on the turnaround report, Boise has seen a year-over-year inventory count decrease of more than 40 percent, according to Realtor.com October real estate data. Also, the market has experienced a median list price increase of more than 14 percent, and a more than 23 percent drop in median age of inventory. Further, new foreclosures counts have decreased since January.

Fort Wayne, IN: In Fort Wayne, ranked 9th on the turnaround report, foreclosures have decreased more than 13 percent in the third quarter of 2010 to just 183 units. Also, the total of newly listed foreclosures fell 19 percent compared to last year. Prices of foreclosure homes are up 6.5 percent here, compared to other cities’ overall 2.7 percent price decline, due to strong demand and falling supply.

Ann Arbor, MI: With prices up and inventory down, the No. 10-ranked Ann Arbor fills the last spot on the turnaround report. According to Realtor.com’s October data, median list prices increased more than 8 percent year-over-year, while total inventory is down almost 25 percent. Home sale prices are also steadily increasing, and rose 4.4 percent for the year. The supply of homes is now considered balanced, with a months’ supply at 6.8 percent, a decrease of 11 percent.

Realtor.com’s Top Ten Turnaround Town Report is compiled using a formula based on price appreciation, changes in inventory, median age of inventory, searches by Realtor.com visitors, and unemployment data.


The Price is the Same, but the COST is Less!

There is more and more research coming out showing that it makes great financial sense to purchase a home today . Whether it be rent vs. buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now we want to look at the COST of a home today compared to pre-peak prices.

According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 1Q PRICEs. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? On a home purchased for $250,000, here is the difference in monthly cost:

That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.

Bottom Line

This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home.


Saturday, November 26, 2011

Appreciation vs. Depreciation

A informative graphic on how appreciation and depreciation has done nationally in the real estate value arena.


Friday, November 25, 2011

How Much Should You Put As Downpayment?

From the folks at KCM Blog, a discussion on the amount of down payment you should consider when buying a house.

Like most questions, the answer is “it depends”. Today, I thought I’d give you some things to consider.

Let’s begin the discussion with loans that don’t require Mortgage Insurance. The suggestion is to borrow as much as you can afford. As an example, borrowing $310,000, as opposed to $300,000, will increase your mortgage payment by about $51 at 4.5%. Recognize that by doing so, you will have $10,000 in the bank. It is my experience that it is easier to find $50 more every month than it is to save $10,000. Even if you had the discipline to set aside the $50 monthly, it would take you 200 months to re-accumulate the $10,000 in principal (longer with lost interest).

Understand too, that the interest paid on the extra money borrowed is tax-deductible. In a 25% tax bracket the $51 additional has a real cost of about $38!


Having the $10,000 liquid has other potential advantages as well:

  1. If rates go up in the future, you could potentially make more interest than you are spending.

  2. If you can avoid using credit cards for furniture, home improvements, etc., you can save a bundle on those non-tax deductible interest rate costs.

  3. In a world where home values have declined, the more you borrow, the less you have at risk. You transfer the risk of the future value of the home to the lender.

Now, many borrowers today will need some sort of Mortgage Insurance, whether it’s a Conventional Loan with less than 20% down or an FHA Mortgage. These borrowers should sit with their loan officer and run the numbers because the cost of the Mortgage Insurance can vary based on loan-to-value and other factors. Examine the costs and the relative benefits.


Thursday, November 24, 2011

Thanksgiving Day 2011

On this Thanksgiving Day I pause to express my thankfulness to my Heavenly Father for my life, my darling wife, my children and spouses and the grandchildren. My family has richly blessed my life. I am also so very grateful for the plenty I enjoy, this free and glorious land along with the sacrifices of so many that ensured those freedoms. I am also thankful for this Treasure Valley for the peace and prosperity it provides. I am so eternally grateful for my Heavenly Father and his gospel.

I, like many I believe, often get so caught up in what I don't have and the difficulties that life often throws my way, that I do take the time to adequately recognize and thank God for the abundant blessings that are mine.

I am also thankful for friends, clients and associates. Happy Thanksgiving to you all!

Wednesday, November 23, 2011

Short Sales Fall from Grace

As the Nampa-Boise real estate market continues to struggle with short sales, I thought about how some things have changed.

Do you remember all the short sale rider signs on the real estate signs in all the neighborhoods? It was used as an attraction for buyers, with the assumption that a good deal could be had. Now in reviewing listings I see in bold print the following words shouting: NOT A SHORT SALE! So what has changed?

Is it YEA a short sale, or short sale, NO WAY!?!

The answer? It depends. Can short sales still be good values? Yes, they can, not automatically so however.  Can they be a frustrating experience of unknown duration and outcome? Yes, they can, also not automatically so. Under almost all short sale conditions it is not as smooth of transaction as a traditional non short sale purchase. Values can be had both in and out of the short sale scenario. I have had many buyers begin their search stating: I don't want to look at short sales, only after seeing some of the prices change their tune.

The key is finding the right property for you at the best price that fits your budget as well as time and emotional restraints. Using a experienced agent can help in navigating both the perils and positives of short sales,  and help in finding the overall best deal for you. That deal may be in the form of a short sale, bank repo or from a traditional seller. There is not an direction that fits all buyers, give me a call for your personal consultation. Roger @ 208/602-0055 OR roger@lowesflatfee.com.

Tuesday, November 22, 2011

Options Discussed for Underwater Idaho Home Owners.

Nearly 11 million homeowners are underwater — meaning they owe more on their mortgage than the property is worth — according to the most recent data from CoreLogic. For those homeowners, there are no easy answers. Should they keep paying and hope the market improves? Try for a loan modification? Cut their losses and walk away?

Gerri Detweiler, personal-finance expert for Credit.com, explains the pros and cons of several options.

1. Stay and pay. People feel attached to their homes, so Detweiler says their first impulse is often to stay put and keep sending in mortgage checks, even if it doesn't make financial sense in the long run. "Is it realistic for you for a while?" she asks. "Not just the next few months, but can you afford to stay and pay for the next several years? You may still be underwater at that point." Maintenance fees are another consideration. For instance, if you know you'll need a new roof or the heating system is on its way out, those repairs can add up. Of course, if the value of your home has declined, you may be able to get it reassessed and pay lower property taxes.

2. Refinance. A traditional refinance may not be an option for homeowners with negative equity. But those with loans owned by Fannie Mae or Freddie Mac who have not made late payments in the past six months and have no more than one late payment in the past 12 months may qualify for a refinance under the Home Affordable Refinance Program, which was recently extended through the end of 2013. If your loan hasn't been sold to Freddie or Fannie, Detweiler says you may be able to work directly with your lender on a refinance. Your credit score should not be affected if you refinance, although you could still lose your home if your situation changes and you can't afford the mortgage payments.

4. Short sale. If your lender agrees to a short sale, you're allowed to sell your house for less than you owe on the mortgage. "One couple I interviewed got … $120,000 wiped out by their lenders," Detweiler says. "Depending on where you live and your financial circumstances, there are some amazingly good deals. But you could be one of the unlucky ones who has a lender who doesn't want to play ball." Before you close on a short sale, be sure to consult a tax professional, who can explain if you will owe any taxes on the forgiven debt, and a real-estate lawyer with experience in short sales to make sure the agreement relieves you of the deficiency.

5. Foreclosure or walking away."Walking away from your mortgage is essentially the same as foreclosure," Detweiler says. "It's one of the most serious items on your credit report, in the same category with bankruptcy and repossessions." But the impact on your credit score shouldn't be the only consideration, Detweiler says. "Focus on 'How am I gonna come out of this financially?'" If you do decide to walk away, your biggest challenge could be getting the bank to take back the house. "The bank doesn't actually foreclose on that, so you're still legally responsible," Detweiler says. "The city may bill for trash pickup; you could be on the hook for insurance issues that arise." She suggests staying on the property as long as possible to make sure it's properly maintained leading up to the foreclosure.

6. Bankruptcy. Filing for bankruptcy won't erase mortgage debt. "What you're doing in a bankruptcy is you're trying to give yourself a reprieve," Detweiler says. Eliminating other debts could free up money to cover your mortgage, and a Chapter 13 bankruptcy could allow you to catch up on payments for five years without interest. But it doesn't allow you to stop paying the mortgage altogether. "In some areas of the country, you are able to wipe out a second loan that has become unsecured because the value of your property has dropped," Detweiler says. "Unfortunately, our current bankruptcy codes let borrowers negotiate any kind of debt but mortgages."

Whether you're planning to stay and pay or you're considering bankruptcy, Detweiler stresses that it's a good idea to consult an attorney early on. "Don't make that your last resort," she says. "Specifically, a bankruptcy attorney could help you decide if you can afford to stay in your home."


Monday, November 21, 2011

How a financial pro lost his house.

I read this story on MSN, relating one man's story of his struggle with near financial ruin. It is longer than I normally include here but it is so close to many people's experiences and struggles that I felt it worthwhile.

NEW YORK — ONE night a few years ago, when the value of our home had collapsed, our debt was out of control and my financial planning business was shaky, I went to take out the trash.

There was this enormous window that looked right in on the kitchen table, and through it I could see my wife, Cori, and our four children eating dinner. It was dark outside, so they couldn’t see me, and I just stood there looking at them.

After a while, I pulled up a bucket and I sat on it, just watching my children eat. I found myself wishing that I could get back there, connected to the simple ordinary stuff of my family’s life. And as I sat and watched, filled with longing and guilt, two questions kept arising:

How did I get here?

And how am I going to get out of this?

There are many stories these days of people who lost their financial bearings during the housing boom and the crisis that followed, but my story is a bit different from most.

The thing that few people know, though, is that I learned a lot of this from experience. I made a bunch of mistakes, the very same ones that I now go around warning people to avoid.I’m a financial adviser. I get paid to help people make smart financial choices, and I speak and write aboutpersonal finance issues for this publication and others. My first book comes out in January, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money” (Portfolio, a Penguin imprint).

So this is the story of how I lost my home, the profound ethical questions that arose along the way, and what my wife and I learned from the mistakes that led us to that point. It made me better at what I do, but it wasn’t much fun getting there.

Like most financial stories, this one is personal. It starts with me getting into the financial services industry more or less by accident. I answered an ad in 1995 that I thought was for a job related to “security” (as in security guard) but was in fact related to “securities.” That’s how little I knew about the stock market. A few months later I found myself working a phone at a Fidelity Investments call center.

Things went well, and by 1999 I was a Merrill Lynch financial adviser and a certified financial planner. By then, we also owned a house in Salt Lake City. We’d bought it two years earlier, with a $25,000 down payment.

A few years later, an opportunity arose to form a partnership with a successful Merrill adviser in Las Vegas. The place was on our top 10 list of never-move-to cities because we had always associated it with the Strip. But Cori and I were looking for an opportunity to have an experience somewhere else, and we met some great people when we visited the city. I took the job, and we moved down there.

That was May 2003. Housing prices were already crazy, so we rented. But our neighborhood had zero character and lots of cookie-cutter houses. Within a few weeks, we were looking for a place to buy.

A gold Jaguar
I felt we could afford around $350,000. We called a real estate agent named Mitch, who had signs on all the bus stops: Talk to Mitch! He picked us up in a gold Jaguar, and suddenly we were looking at houses that listed at $500,000 or more.

It felt a little crazy to be shopping for houses that cost half a million dollars, but my income was growing rapidly. Everywhere I looked, people were being rewarded for buying as much house as they could possibly afford, and then some. There was this excitement in the air, almost like static. I started to think that if I didn’t buy a house right then, I would never be able to afford one.

At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s — younger than we were — waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?

But prices just kept rising, and when people kept buying, that made it seem safer. I knew from my work as a financial adviser that following the crowd could be costly. But like everyone else, I felt safer in a crowd.

We didn’t find anything we liked with Mitch, but one day in September 2003 Cori spotted a for-sale-by-owner sign in a really nice neighborhood. We ended up buying the house and paid the asking price of $575,000. (When we tried to negotiate on price, the owners were amused; it just wasn’t that kind of market.)

We borrowed 100 percent of the purchase price. In fact, I was told I could borrow even more if I wanted. I had perfect credit and a solid income that was growing. But even so, when the lender approved us at 100 percent, it was more than I had expected. I remember thinking something like “Wow. I guess if they’re willing to lend it to us it must be O.K.”

I should have known better. No matter how well things are going, borrowing 100 percent of the purchase price of a home is not a good idea. I shouldn’t have relied on someone else to make that calculation, let alone the guy who was making money putting me in the loan. I was a financial adviser, and I never sat down to figure out what it would take to make this work. I just wanted to believe him. And it was so easy to believe he had been right, at least at first. We loved living there. The children went to an awesome public school, and we made some great friends. I could ride my bike to Red Rocks, the wilderness area outside of town. And for a time, the real estate market erased any doubt I may have had. It just kept going up.

One evening in 2006 comes to mind. My sister-in-law was thinking of moving to Las Vegas, and a real estate agent told me about an open house for a new Toll Brothers community. This wasn’t a come-by-for-cookies type of open house; it was held at a Las Vegas hotel ballroom. I arrived to find a line that led down a flight of stairs and out of the front door. Before I got to the front of the line, they stopped admitting people. Then people rushed the door, like it was a rock concert.

Borrowing more

The market’s continued strength meant we could borrow even more. It was easy. In late 2004, a year after buying the house, we refinanced our mortgage with World Savings Bank, which later ended up in the hands of Wells Fargo, using one of the pick-a-payment loans that let you choose your own payment each month.

We picked the lowest possible payment, the one that added to our balance each month instead of subtracting from it. And we added a line of credit with Wells Fargo.

The extra borrowing power was important, because while my income was growing rapidly it wasn’t enough to support all our expenses. Around that time, I left Merrill Lynch to become an independent financial adviser, so it was easy enough to convince ourselves that we were borrowing to pay for the start-up costs.

There was some truth to that, but we were also borrowing against the house to finance our lifestyle. The line between business expenses and personal ones is sometimes hard to draw when you run your own business, and during those heady times it seemed even harder. But in hindsight it is clear that we were spending more than we should have on things like recreational gear and family trips for ourselves and our four children.

It was extravagant, but it seemed modest compared to what some of our neighbors were doing. Our house was the smallest model in the neighborhood (though at 3,500 square feet it was hardly tiny), and we drove a Chevy and a VW. Cori and I and some of our friends had a lot of conversations comparing our spending habits to those around us. How can so-and-so afford a boat? How are people buying new trucks and four-wheelers and 5,000-square-foot homes? Do they know something we don’t know?

At times, it seemed as if maybe they did. I knew a builder of custom homes who urged me to buy one of his houses for close to $2 million. I told him there were at least a million reasons why I couldn’t do that. He looked at me like I just didn’t get it. He assured me the house was appraised for $200,000 more than the asking price, and that after I lived there I could take out a line of credit to live on while the house went up even further.

The crazy thing is, he was right. The place eventually sold for more than $3 million. When I heard that, I felt a little silly that we hadn’t taken that risk.

As for our spending, we told each other that we’d catch up later, as my income and the value of our home continued to rise. As late as February 2006, a comparable home in our neighborhood sold for $998,000. We made the classic mistake of projecting recent trends — even extreme ones — into the future.

But slowly — and then increasingly — we began to have a different kind of conversation, “When are we going to stop and just get on top of this?” The solution was always making more money, not cutting back. The fact is, it’s much easier to set a goal of making more money in the future than it is to buckle down and cut back today.

We never really worried that things would go to pieces the way they ultimately did. But then came the collapse in the stock market. I had clients calling in tears and breaking down in my office. People who had never worried about their portfolios were calling me from their vacations. It was like talking people in off a ledge virtually every day, maybe three times a day, for maybe 90 days in a row.

The range of potential outcomes had gotten so broad in people’s minds that it now included the end of the world. What they wanted and needed more than anything was reassurance that things would be O.K. and that they should stick with the investment plans we had created together. Providing that reassurance had been my job for 10 years or more, but this was the first time that I really wondered if my advice was right.

It was my job to assist them, but I found it incredibly stressful. It didn’t help that we were in increasingly dire straits ourselves. My income fell about 20 percent because my take-home pay depended on the amount of money I managed. At the same time, our cost for health insurance and property taxes kept increasing, and the payment on our mortgage reset higher as well.

By then, housing prices in Las Vegas were falling quickly, and the bank had cut off our home equity line of credit. We quickly got rid of a car and stopped taking trips. I moved into a smaller workspace and cut back on my administrative and marketing costs. Even so, we found ourselves using credit cards as emergency stopgaps.

Then, the sickness set in. The pain would start in my stomach, and then I’d spend six hours vomiting. It happened once, then three months later it happened again, then one month later it happened yet again. Eventually, it was happening every couple of weeks. The doctors couldn’t find a physical cause.

Right around that time, it became clear that we might need to get back to Utah, where 90 percent of my (still nervous) clients lived. We spent the summer of 2009 living in my in-laws’ basement in Salt Lake City, while I tried to stabilize my financial planning business. By that fall, I was convinced we had to move back permanently to save the business. But that meant we faced the question of what to do about the house.

By then, we owed over $200,000 more than our original loan balance.

Borrowing that much had seemed to make sense when the value of the home was still rising substantially every year, taking our net worth higher with it. But at that point, there was no way we could sell the home for anywhere near what we owed. Some of my friends were already doing short sales, where the bank agrees to let you sell the house for less than your loan balance. I was also aware you had to be three months behind in your payments before the bank would talk to you about the possibility.

At first, I dismissed the idea of a short sale. Late that summer, I sat down with a really close friend in Las Vegas, someone I looked up to. He cut to the heart of the matter right away: Why, he wanted to know, were we still making the payments?

You pay your debts
Because I have a moral obligation, I said. You pay your debts.

He proceeded to explain that I didn’t have a moral obligation to the bank. I had a moral obligation to my family. I had a contractual obligation to the bank, along with a clear moral obligation to be honest in my dealings. What he was asking was this: Which is more important? Your contractual obligation to the bank or your obligation to your family to preserve your ability to make a living?

I had never thought of it that way. But it made sense. I summed it up to myself like this: I have a contractual obligation to the bank (as well as a moral obligation not to skirt the consequences of breaking it: losing my house and wrecking my credit score). But my moral obligation to my family trumps the contractual obligation to the bank.

Cori and I thought about this for months, but we finally decided to let the house go and stop making payments so we could pursue a mortgage modification or a short sale. The fact was, we didn’t have a choice. We simply couldn’t afford it.

I remained troubled by the ethical implications of what I was doing, but I soon started seeing some of my friend’s arguments echoed in the work of Brent T. White, a law professor at the University of Arizona. He and others were arguing that homeowners should act more like companies — taking into account legal and economic reasons for stopping a regular payment rather than “perceived moral obligations.”

That was reassuring in the dead of night while I sat in front of the computer trying to make sense of the world financial markets and my own personal situation. I remember being relieved at discovering a way to frame my decision.

But we didn’t know what would happen in the harsh light of day, and we were scared to death. Would we be kicked out of our house? What would the neighbors think? What would the children think? We worried about the stress on our relationship and even the survival of our marriage. I felt like a complete failure.

We looked into a mortgage modification, thinking it might let us keep the house and rent it out after we moved. But the offer from Wells Fargo, which owned our loans by then, was too modest. That meant we could either walk away from the house or work with the bank to do an orderly short sale.

A bank representative came to the house and met with us. He was such a nice guy. Cori had treated it like an open house, and the place was spotless. The guy said he’d never met anyone more qualified for their short sale program.

Somehow, even in that horrid market, we sold the home for $531,000. That was in late August 2010. In exchange, the lender released us from both our first and second mortgages. Today, Zillow estimates the home’s value at $505,000.

We were pretty low when we packed up to leave. We hadn’t told anyone about the short sale — not family and only one or two friends. But we sensed that people knew anyway.

We borrowed a truck from a friend who owns a wood mill to move our belongings. Back in Utah, we found a house to rent— much to my relief and after months of being terrified that we’d never be able to find a landlord willing to take a chance on us. I had to tell the owner what had happened. He looked at our personal references and let us lease the house anyway.

We love where we live now. Still, there are consequences. We lost our home. It’s not clear when we’ll be in a position to become homeowners again.

But the worst thing was my sense of complete failure and powerlessness when I realized that things were out of control and that it was my fault. These days, there is still a sense of genuine regret that I screwed up and hurt myself and other people. I still worry about what others think of my behavior, which is one reason I haven’t shared this story with many people until recently.

We have a friend who is under water on his mortgage even though he has lived within his means and done everything right. He’s sticking with his mortgage for as long as he can.

Someone recently asked me what I’d say to people like him. I guess I’m saying it now. As I was writing this article, I pulled behind a truck with a bumper sticker, “Honk if I’m paying your mortgage.”

I thought about that for a while. I guess one of the ideas behind that bumper sticker is that people like Cori and me who couldn’t afford to pay off our mortgages are to blame for the financial crisis and the bank bailouts that followed. This isn’t the place to explain the causes of the economic slump, and I’m not the guy to do it.

Questions linger
Still, the questions linger. As I ponder all this — and I think about it a lot — it occurs to me that we are a nation of risk-takers. Some of us were overoptimistic; some were ignorant; some were deluded; some were greedy; some just had bad timing. We erred to different degrees. Our experiences varied; each story is different. Now you know mine.

The experience has changed just about everything about how I do financial planning and the advice I give in public. For one thing, I am less quick to judge other people’s financial behavior. I’m also more inclined to take into account personal factors that determine how people behave around money.

I have a friend who is going through a tough time financially. He has a high income, but is burdened by debt from a few real estate deals that went south. He continues to take fairly expensive ski trips. That would seem irresponsible in his situation, and maybe they are.

But I now realize that it is not that simple. Maybe those trips are keeping the guy alive, or saving his marriage or keeping him sane enough to work.

I have another good friend who borrowed against his house to pay for a therapist. Unless you were walking in his shoes you might think that was stupid, but it saved his life and changed his career. It ended up being one of the best investments he ever made.

The process of making financial decisions is about more than building a spreadsheet to calculate the answer, because life rarely fits cleanly into a spreadsheet. Our decisions often appear irrational until we understand the whole story.

I’ve also learned some things about risk. Risk is an arbitrary concept, until you experience it. And I’ve noticed myself focusing more on the consequences of something going wrong than just the probability of that happening. As a result, I tend to urge my clients to make decisions that err on the side of caution.

As for Cori and me, things are much better now. Moving back to Utah clearly was the right choice. The business is doing well, and we’ve managed to pay down most of our debt. It would be easy to say that we’ve learned our lesson, that we’ll never screw up again.

But it’s not that simple. At times I’m absolutely clear about what makes sense. Then ordinary life choices arise, and things can get cloudy. Should our children play sports that cost money? What kind of family vacation is O.K.? How much is enough?

We’re still working on that last one. But we are asking the question, repeatedly. And the temptation to overspend, to go for it, to tell ourselves that things will work out in the long run, is tempered by a feeling that something big is at stake.

All I have to do to remind myself of that is to remember what it felt like to stand outside the kitchen window two years ago, looking in on my life, and thinking I might not get it back.

This story, "How a Financial Pro Lost His House," originally appeared in The New York Times. Carl Richards’s book, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money,” will be released on Jan. 3.


Saturday, November 19, 2011

Have you ever been to Huston? Huston,Idaho?

I have often driven on highway 55 west of Nampa towards Marsing, and just a bit before the highway makes the turn through the Sunny Slope area, I pass a small looking building sharing a driveway and parking with a farm house. On this building was the large sign stating  US Post Office Huston Idaho 83630. At the risk of alienating all the residents, or make that resident, of Huston, I send an open letter to the US Postal Service that perhaps this might be a place to start on their post office closing mission.

Good grief there is no town, no reason that I can see for having a post office out here amidst the farm ground.

I decided to stop in and purchase some stamps I was needing, and I was curious as to what the interior of this tiny post office looked like. Unfortunately, I came at lunchtime so the counter was closed, the postmaster presumably next door having her lunch.

I did snap a picture of the of the entire bank of post office boxes, perhaps more numerous than I expected.

I was then curious about this mysterious town of Huston, I had noticed previously the remains of Huston School, located about 1 mile north of the post office.


There is not a great deal of the school still standing, the exterior brick walls, minus the roof and interior walls.So now my interest was peaked as to this place called Huston. I had driven a number of times by a small cluster of houses and perhaps what had been a store but had never turned down through the four short streets that comprised what I now assume was the Huston town site. I am not sure why the post office moved 1/2 mile down the road, perhaps for the traffic of highway 55 or maybe more likely it went to where the post master lived.

Here is what the fading sign states is the Deerflat Merc. Next to it stands a building that may also have been some kind of commercial building at some time.


In front of it was parked this cute Huston fire truck.


All in all, there appeared to be approximately 15 houses clustered in this small former town.

So now I can say I too have been to Huston. I guess it is true what they say, everything really IS bigger in Texas!



Thursday, November 17, 2011

October PTC Index-Great News!

Pioneer Title Company compiles and publishes this PTC index monthly, it provides a concise way of judging the Ada and Canyon County combined real estate market's vibrancy. It is the highest it has been since June of 2009.

Based on a custom weighted algorithm, it combines nine critical measurements of the real estate market into a single, useful number: the PTC Index. To give you some perspective, when the market was at its most active point in 2005, the PTC Index average would have been 225. In January of 2010 we reached a low of 28. Though times have changed, the need for this data is greater than ever.

October 2011

Building Permits116
New Home Sales91
Existing Home Sales688
Average Sales Price138973.5
Financial-Bond Market(10-yr Treasury)2.15
Days on Market77
Distressed(Short Sales and REO)3248
Notices of Default421
PTC Index132

For reference sake, last month was 120 with a year ago at 121, with the interceding months all having lower numbers.

October brought great news overall within the Treasure Valley real estate market! Notably, refinances were up nearly 32% compared to September most within Ada County. Across the county line, Canyon County experienced a gain of 50% in new home sales while Ada's numbers (79) remained flat. Building permits made a cumulative gain of 10% in the valley with existing home sales falling slightly by roughly 4% from the month prior. Days on market, distressed properties (short sales and REO) fell slightly from 84 to 77 and 3,442 to 3,248, respectively. As expected, Notices of default were the rise, up nearly 30% from September possible due to the fruition of bank-owned, shadow inventories. We expect a sustain uptick in refinances in the coming months with new legislation aimed at helping consumers with underwater mortgages.


October Take My Breath Away Winner.

Here is a manufactured home on foundation in Caldwell that made my head snap and look as I drove by, so it is the October winner.

Wednesday, November 16, 2011

Idaho Home Sellers-Incentives or Price?

I sometimes see various incentives to sell a house, perhaps a car or vacation and I have sellers ask if they should think about doing something similar.  Occasionally, I have sellers ask whether to offer a higher commission to a buyer's agent. My response has always been no, let's just price it correctly for today's market and not worry about the other fluff. In reading a MSN article my thoughts are validated.

Home sellers in markets around the country these days are sometimes eager enough to get their property sold that they will offer buyers a BMW, a personal watercraft or even a pet to sweeten the deal. Real-estate agents say that while these enticements create buzz, buyers today are more attracted by the right asking price than a gimmick.

"We're in a price war and a beauty contest," says Tony Vehon, broker and owner of Weichert Realtors — Lake Realty in Gold Canyon, Ariz. "Every home has to be priced right and look perfect. After that, a special incentive might drive traffic, especially if you offer something that grabs attention, something a little beyond the norm."

Over-the-top incentives
Vehon says one of his agents worked with a seller of a high-end house in a vacation-home area.

"The client decided to make the home move-in ready, selling it with brand-new furniture, linens and kitchen gadgets and even a car in the garage," Vehon says. "The house sold, but the people who bought it didn't actually want the car. They asked for a credit on the price instead."

Orhan Tolu, broker for Century 21 Realty Alliance in San Francisco and San Mateo, Calif., says that in high-end homes, buying new furniture for the listing or giving buyers a gift card for $2,000 or $3,000 at an interior design studio can attract attention.

"In order to create some news, the sellers sometimes throw in a Mercedes or a boat if the home sits on waterfront property," Tolu says.

Martha Thorn, a sales agent with The Thorn Collection at Coldwell Banker Residential Brokerage near Tampa, Fla., says sellers in her area have offered personal watercraft along with a property, and one offered a custom-made fishing cart to buyers.

"The house was a $4.9 million mansion on a bluff overlooking the water, and the homeowner had someone make an electric cart that looked a bit like a cross between a wheelbarrow and a lawn mower that made it easy to get fishing equipment from the house to the water," Thorn says.

Not all incentives go along with high-end property. Thorn says one seller included season tickets to the Tampa Bay Buccaneers' football games on a home priced at less than $200,000.

"The buyers were thrilled with the tickets, but that certainly wasn't the reason they bought the house," Thorn says. "The most important thing is always the price."

Linda O'Koniewski, broker/owner of Re/Max Heritage in Melrose, Mass., says she has heard of sellers offering a cat or a dog along with their home.

"The sellers see it as an enticement, but I've never actually seen someone successfully pass on their pet to a buyer," she says.

Seller incentives that work
O'Koniewski says that besides having a home priced to sell and perfectly staged, cash is usually the most effective seller incentive.

"An offer to pay condo fees for a year or so will definitely create some buzz, and at least get a buyer to take a second look at a property," O'Koniewski says.

"Another option is for the sellers to offer their own financing," Tolu says. "Most sellers cannot offer this, but sometimes someone who is retiring and has a lot of equity in their home will be willing to offer financing because they get a decent return on their money."

Price is key

O'Koniewski says sellers need to realize that, "no amount of marketing will make a dent if the price is not right. If you are not competitive on the price, you cannot sell your house."

Beyond price, O'Koniewski says sellers should have great photos online and a truthful description of the property.

Vehon says sellers should focus on identifying the appropriate price for their property first, and then work on curb appeal and staging.

"Sometimes clients won't even get out of the car if the house doesn't look good from the outside," Vehon says. "Buyers need a reason to take the next step and go inside the house."

Once inside, buyers expect to see a home in excellent condition that has been staged to show off its advantages, Vehon says.

"The most important thing to remember is that if a house is priced correctly, it can even get multiple offers," Thorn says.