Clients form plans that work

Despite this week’s up and down, round and around economic news from D.C and Wall Street, clients appear to be forming their own plans.

Keeping it simple, seems to be their way of finding a home and affording it: Just enough room, best neighborhood possible and conveniently located. Making long-term plans for any purchase, these folks are serious and savvy enough to know quick appreciation is not on their “must haves” list. They have friends whose short term views have led to misery and hopes of someday just getting back to “square one”. No, today’s clients seem to be looking for homes, not mere “financial instruments”.

Maybe my clients still recall the tortoise and hare from childhood bedtime stories; or, was it the Three Little Pigs? ( 3 Little Pigs)

Buying Multi-family properties...

These past few months I've been paying particular mind to the inventory of multi-family homes on the market. It's becoming a far different market for investors than it was during the 1999 -2006 years. In 2005 I advised all of my clients holding onto these properties, hoping to achieve further gains, to get out - sell them immediately. Keep in mind that most of these properties were speculative "investments": the monthly incomes were less than the carrying costs. The clients balked at first, feeling that the longer they held on the higher they could sell the properties for. They finally saw the wisdom of not living in a house of cards and sold to other speculators who were not so well advised. The market still went up…for a few months… and then the bottom fell out. My clients still thank me.

Now, we are entering different times. Speculative properties have been sitting vacant or only partly rented for some time and often have fallen into disrepair. But, a new wave of investors are now coming back. Not looking for quick turnarounds or "Flips", these are serious buyers looking for a return on their investment and making sure the cash flow is enough to also improve and maintain the properties.

With inventories high, interest rates lowering and more folks considering renting for various reasons, today's investment buyer is looking for it all: location, price and return. They also want to know where their money is - unlike putting it into some investment fund operated by "Uncle Bernie".

It's time, again, to call some of those old investors… Are you there?

Zombie Marketing

Usually, when we say someone has "expired", we mean dead. Done. Fortunately, for a great many folks hoping to sell their homes and properties, that is not the case. The trick, though, is bringing the dead back to life.

Let's face it, this is one tough market in which to sell a home. Buyers are not plentiful and the competition is strong. Tell me, then, why are some homes being marketed just as they were back in the bad old days. Back then, when Buyers would kill to buy an overpriced property, agents often would only have to stick a sign in the ground and both they and their Sellers would sit back waiting for offers. Hello, 2009.

Most agents are again practicing their craft and conducting business as it should: Determining the real market value of a home, getting it prepared for the market and then launching the marketing campaign. The market value of a property has nothing to do with how much was paid for it, how much a Seller wants to get for it or how much it means in sentimental value. Once a house is placed for sale… it is a commodity. The market determines the value just as it does with stocks, cars or bread. Agents are there to interpret and anticipate what the market is doing and act accordingly to sell the commodity they represent.

Yet, many homeowners - the Sellers - are still not getting it. They continue to place their properties for sale with an agent that will tell them what they want to hear. The agents then hope the Sellers adjust the price as time goes by and that the marketing takes care of itself. Thus, the "Expireds".

In approaching homeowners whose homes had been on the market but did not sell - Expired - as it were, there is one and only one question I initially ask: Do you really want your property sold. If the answer is, "Yes", we proceed further. For then only do we both know that whatever needs to be done, will be done. Then begins my "Zombie Marketing" - bringing the dead back to life.

Goodnight Babsie

Last night Aunt Faigela and I decided to not cook but to get a bite to eat at a nearby restaurant. Nothing extravagant, just a simple meal - not even desert, thanks to our latest diet. Having these very occasional no-frills nights out gives us both a break from the routine and a chance to just talk. What promised to be a nice night out almost turned into something else: panic.

Babsie, the waitress, took our order. Babsie is a long time member of the staff at this restaurant and we've gotten used to her rather dour manner. Half-way through our meal she came to our table and asked how everything was. Fine, we answered. Then Babsie started talking about the economy, how no one could afford a house (music to my ears you can be sure). As a matter of fact, said Babsie, even eating out in her restaurant was a luxury no one should or could afford anymore. But, said Faigela, we felt the value we received was good: very decent food at a moderate cost. Yes, countered Babsie, but it's still too expensive, no one can afford it anymore.

After finishing our meal - yes, we did enjoy it - we paid up. Before leaving, I glanced around at all the other waitresses. Each was counting on the paycheck and tips generated by folks like us that, while being sensible and frugal, still chose to ignore the Babsies of this world.

Thank goodness Babsie doesn't have a television audience. But, then again, maybe she does.