What kind of shape is our Recession in?

I don't mean what kind of financial or economic shape this big boy looks like. I mean what kind of shape it is making on the charts.

Brian Summerfield over at REALTOR® Magazine is following this interesting debate about our economic downturn - what letter of the alphabet it will most resemble on a chart. Here are his current best options:

• The V-Shaped Recession: The best possible scenario right now, the “V” recession would be characterized by a short economic bottoming out, followed by a sharp upturn.

• The U-Shaped Recession: This would be tougher, but still manageable. The difference between “U” and “V” recoveries is that the former has a longer period of economic stagnation and a slower recovery.

• The W-Shaped Recession: In this scenario, businesses and consumers are tantalized with a budding resurgence, but the economy collapses again before it truly improves for the long term.

• The L-Shaped Recession: This would be the worst of all of these options. An “L” recession means that following a drop, the economy essentially would not grow significantly for a sustained period.

Brian says, "While these models are perhaps oversimplifications of the macroeconomic picture and have obvious limitations, they point to another, more important question: What will the nature of a recovery be? Will it be quick? Smooth? Bumpy? Sluggish?"

Que sera. Time will tell. With the government printing money as fast as they can, many economists are expecting major inflation as the economy rebounds - which will be good for home sales. During times of inflation, real estate is usually a good investment.

Brian thinks the current consensus from the experts on both the general economy and the housing market will be that we should expect something like a “U” recession.

Wonder what Generations Y and X think about that?

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The Birds Are Coming

... to Preston Hollow. We're talkin' crows and grackles.

Patti Cody with the Preston Hollow North Homeowners Association reports:

"Starting June 1st, the Preston Royal Shopping Center is expecting birds to again roost in the trees and wires over their parking lot. They have employed a group of professionals to discourage the birds from roosting there. They are doing so because when thousands of birds roost, they make a mess of the parking lot, any cars parked there, and anyone walking through it. The discouragement may start before the main roost so that advance birds that sometimes scout, etc. do not roost and draw in other birds.

The center has asked that we warn the neighborhood because their means of discouraging the birds will be lights and noise at about sunset. The noises could possibly be confused for backfires or gunshots. They have told us that they do not intend to use mists to discourage the birds."

Better than gunshots I guess.

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Almost through my remodel

WooHoo! We're in the home stretch of my current kitchen update and soon it will be back open for business. As in the past, it will still be a self-serve kitchen with no waitress on duty.

We kept the wood-mode cabinetry and the tin ceiling and just gave the room a haircut and a shave - floors, paint, counters, backsplash and hardware. Since my home is almost 80 years old, the 1970s geometric backsplash and fake blue marble needed to give way for a more traditional look that suits the rest of the house. And the worn tile and grout counters made me fear for salmonella every time I cooked.

I'm pretty proud of myself for getting this entire project done in under 3 weeks (even with a holiday weekend). However, doing this while the teenagers are taking final exams and during the height of my 'busy season' was probably not the best timing. But I've learned that when you want the best tradesmen at the best price, sometimes you have to work with their schedules.

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Memorial Day

By taking time to remember our heroes, we honor the sacrifices made for the dreams of every American. May we never forget their courage and willingness to defend their fellow Americans.

My family's first US soldier was my ancestor Abraham Trostle (1740-1819). The last family soldier to give his life for our country was my uncle Philip Trostel. Thankfully, many of my family members have returned home safely after serving our country.

May this important holiday find you and your family safe and well. [where: 75230]

Getting a Mortgage just got harder - or was that easier?

Utah Realtor Jennifer Bunker writes:

REALTORS get this: Today Wells Fargo made a buyer prove that she has a fiancee before they would fund her loan (WTH?). So, she took a picture of her hand w/ the ring on it and emailed it as proof and ... they took it! Seriously, what are bank people ingesting these days? Can it get any more bazaar?

All I can say is, try to buy a short sale. Because they prove that it can get more bazaar.

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Opportunity & Difficulty

"The pessimist sees difficulty in every opportunity.

The optimist sees the opportunity in very difficulty."

Winston Churchill

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after glow - furniture - life after dark

If you're enjoying our pleasant spring evenings in your backyard, you might enjoy these chairs as well. They sure are cool.

Designed by Douglas Homer, this series of classic adirondack chairs are made from post-consumer recycled plastic. The line is called Afterglow and they're made of recycled milk jugs. Gives a whole new meaning to life after dark.

Why Sellers hate short sales

A short sale is designed to help a homeowner sell their home and prevent foreclosure. Basically, their lender agrees to accept an amount from a buyer that is 'short' the amount owed for the home. After closing costs, the seller walks away with nothing - but salvages some of their credit and dignity.

When dealing with the Loss Mitigation area of the lending company, there are so many things (beyond the seller's control) that can delay a short sale to the point that the buyer gives up and walks away and the home ends up in foreclosure. This is one reason why sellers often hate the short sale process.

Here are a few other reasons why the short sale process doesn't work out very often for the homeowner:

• You must complete the short sale package with the lender. Every single little detail must be complete. It is up to you to make sure it is complete. If it isn't completed, you won't progress toward a short sale. You need everything from bank statements and collection letters to tax returns and financial statements. Until the lender tells you that your short sale package is complete, it may not be and you won't know it. It is up to you to make contact, stay in contact and do the legwork.
• A seller must prove to their lender that they deserve to qualify as a short sale. Its kind of like getting a loan pre-approval letter - but in reverse. You must document why you are in a financial hardship and cannot meet your financial obligations - loss of job, health issues, catastrophic event, etc. Basically, you'll need to prove that you have no assets to tap into to help pay the mortgage or apply to the sale of this property. Unless you can prove that you have no other resources, they will assume that you are able, but just unwilling, to pay the debt. If you can't document your dire financial situation, you are out of luck.

• You need a Realtor's price opinion or an appraisal. Make sure it is accurate. Every lender has their own criteria for price considerations. They will only sell the property for what they feel it is worth. This is tricky since most lenders are in different states and rely on different appraisal criteria and formulas - that may or may not be relevant to our area.

• If the lender agrees to the short sale and the sale actually takes place, they may issue you a 1099 tax form for the shorted difference. This gives the IRS the amount of debt forgiveness and you will owe taxes on the amount. The IRS is pretty good at collecting tax debt, so be prepared.

• Your credit report will reflect significant loss. While the damage isn't quite as bad as a foreclosure, the drop in your FICO score is almost identical to a foreclosure reporting. However, instead of showing bad debt of the full amount of a mortgage, you'll only show bad debt for the 'short' amount difference of what the lender sold the house for and what you owed. Still, the ramifications are almost the same as foreclosure.

• You will have no control of the transaction. Forget about deadlines or making plans. The short sale process takes an indefinite amount of time. Your lender will call the shots - not you, not the buyer and not the agents.

• Lenders are not required to negotiate discounted payoffs (short sales). There is no guarantee that your lender will complete the sale. They may renege at the last minute and can opt to foreclose in the end. Lender last minute demands are not uncommon. They can request changes to any terms of the contract (including price, conditions, dates, ...) if they find any new information, they feel the market has changed, new laws are passed, etc.

• Not too many buyers are open to those kinds of terms. Would you be? And even if you get a buyer willing to wait out the process and to agree to last minute changes to the contract, their own lender must agree as well. What a nightmare.

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Thats Madam President to you

You're looking at the newly elected President of the Jesuit Ursuline Band Booster Club. As a former twirler and xylophone player, I've come full circle. This should be a fun job - except for the chaperoning. But what a great bunch of kids.

So, looks like I'm in charge - right after the Band Directors, Assist Band Directors, Drum Major, First Chair Trumpet, ...

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Dallas Duplex - before and after

Like a lot of people, I love before and after photos. Check out this redo of a Preston Hollow duplex that my clients recently completed. Gotta love it. This place just needed a haircut & a shave. She cleaned up well.

All of the changes were cosmetic. What a difference a couple of months and some remodeling talent can make.

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Toughest Real Estate Agents in the world

This is one reason why I'd never pass the licensing exam in Korea.

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Why Buyers hate short sales

Short sales are a pain. They are complex, take an unreasonably long amount of time and are frustrating for everyone.

I've been working with a ready, willing and able buyer on a short sale since January. That's right, we made the offer in January! And we still don't have a closing date. I should start by noting that the bank involved is Countrywide - the worst bank when it comes to short sales.

If you're thinking of buying a short sale, here are a few reasons why you may hate the process too:

• You will be negotiating with the seller and the bank that holds the loan on the house. Lenders are in the business of lending money and collecting money. They are not in the business of selling homes. Thus, they aren't very good at it.
• They do not have to respond to your offer. They may say yes, they may say no, they may counter or they may just not respond. There is no set time in which they must respond because there are no standard rules for lenders in the short sale process.
• In order to get to first base, the seller must have complied with all lender requirements, such as documenting the reason they can not meet their mortgage obligation. If the seller's file is not 'complete' the lender will not move forward with the deal. Of course, they don't disclose the reason for the delay. You'll just have to wait ... and wait ... and wait. If the seller doesn't participate in helping the process move forward, you are out of luck. The seller may be using the short sale process just to stall a foreclosure.
• You must be extremely patient. They work on their own timeline. However, you must be ready to respond and move quickly. Have either cash or a lender who can close quickly.
• You may get to inspect the property but they probably won't fix anything. You can modify your offer after inspections, but nothing is guaranteed.
• Your offer may be rejected even if the price is right. They can only handle a certain number of short sales each month.
• Just because its a short sale, doesn't necessarily mean you will get a 'great deal'. Buying a property for less than what is owed on it doesn't mean its a bargain. What the seller paid or owes now has nothing to do with what it is worth today.
• Threatening to walk away won't help. Neither will begging, cajoling or intimidating. They are overwhelmed with tens of thousands of files. If you go away, that's fine with them.
• The lender may withdraw their cooperation at any point and not sell you the house. The loss mitigation departments can be fickle. This can happen up until the day of closing.
• Beware of second or third mortgages, tax liens, mechanic's lien, state liens, etc. Purchasing from the lender does not necessarily take care of these other liens.
• Be aware that few short sales are successfully processed. Buyers usually succumb to the frustration and find something else.

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Creativity

Before you can be creative,

you must be courageous.

Creativity is the destination,

but courage is the journey.

Happy Mother's Day

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Buy a House, Get a Car

That's right. Buy this $1,299,000 home at 6465 Mimosa Lane in Preston Hollow and we'll throw in a red convertible. You just need to purchase at list price by June 15th. The house is already a bargain and this deal just makes it too irresistible to pass up.

Or if you'd prefer this $875,000 home on a private, gated cul de sac in North Dallas, we'll pay the moving company for you. Just buy the house for $875,000 by June 1st and live within 50 miles of Dallas.

Or how about this $550,000 home near Preston Hollow? Purchase it by June 1st and we'll give you a $500 Robb & Stucky gift card.

These homes are all wonderful properties and will probably sell with or without these incentives. But we decided to sweeten the pot anyway.

Today's Dallas Morning News features a nice story about perks to home buyers today. http://www.dallasnews.com/sharedcontent/dws/bus/stories/0508dnbusfreebies.3cce5f4.html

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Mother's Day shopping

How nice that our local merchants want to help us remember mom on her special day. This local liquor store sure put me in the shopping spirit.

Nothing says 'love ya mom' like a bottle of booze.

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Glad I already voted early ...

... for his opponent. And I'll be glad when our city council elections are over this weekend. This letter arrived in my mailbox yesterday in an envelope with Ursuline Academy's name on the front. I was kind of surprised that this candidate used the Ursuline Academy parent list to make political promises that he can't necessarily keep. This zoning issue is addressed by the city's Planning & Zoning Commission - and they typically side with taxpaying residents.

It seems like I've gotten at least 10 phone calls and week and 4 mailers a week - for months - regarding this weekend's elections. Enough all ready.

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Jones Soda & Realtors

Have you seen Jones Sodas? They're the drinks that come in unusual flavors and sell in stores like Target and Starbucks. Founder Peter van Stolk decided that the world didn't need need just another soda. He purposely stepped outside the box to embrace a different product and marketing strategy.

His story begs the question, does the world need another real estate agent? another restaurateur? another book store?

We don't need more of the same. This year I'm purposefully embracing what makes me unique. So what make me special?

Marketing! My marketing skills are different. I go the extra 2 miles to sell every home I list. While I'm not giving away my secrets or strategies, I'm stepping outside the box to market homes in a way that works. I think of it as the Jones Soda approach to selling real estate. Not for everyone, but it works for me.

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Dallas Area Home Prices Up - Number of Sales Down

First American CoreLogic reports that Dallas area home prices recently increased. U.S. home prices have fallen for the last 24 months and are back to 2004 levels, according to the study reported recently in The Dallas Morning News. However, the same report shows that the Dallas area continues to see small price increases.

The Dallas area was one of only three U.S. housing markets that had an increase in home prices at the end of February compared with a year ago, the California-based housing and mortgage research company said. Prices here were up just over 1 percent from February 2008.

The number of homes sales in the Dallas are down from 2008. All the figures make for some confusing headlines. Locally, prices are up, but sale are down. Nationally, prices and sales are down.

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What should you look for in a Realtor?

There are several things. But here is an important one -

Get a Realtor who places lots of SOLD signs on properties that they have listed.

You'll need to watch carefully because the 'for sale' sign usually stays up for months. The 'sold' sign is typically there only a day or so.

Often a homeowners will tell me the reason they listed their home for sale with a particular agent is because that agents sells a lot of homes in their neighborhood. When in reality, that agent lists a lot of homes. Listing a home for sale and actually selling it are very different things.

In my neighborhood, I'm the #1 Realtor this year in terms of actual sales. While I don't have the most homes listed for sale, I believe the more important statistic is actual sales. If you are thinking of selling your home, look for the agent who is placing the SOLD signs on properties.