Jerry Gardner

I saw an interesting segment on Fox and Friends this morning. I know, this isn't the hardest hitting news show on T.V. but once in a while they come up with something good.

John Geanakopolos, Economics professor at Yale University talked about how reducing interest rates for existing mortgages had little or no effect on the mousing crisis. His idea is that banks should lower the principle to incentivise homeowners to stay. In a nutshell, a home worth 160,000.00 is now worth 100,00.00. The home goes into foreclosure, takes 18 months or so to be sold again, is torn up and is a bight on the neighborhood. To top it off, the bank may sell the home for 40,000.00, if that.

His idea is to reduce the principle amount to 80,000.00. That gives the homeowner some equity and greater incentive to stay in the home or at least makes it sellable. The bank makes 40,000.00 more than they would have.

this is very simplistic and I've included a link to the full article.

http://www.nytimes.com/2009/03/05/opinion/05geanokoplos.html?_r=1&adxnnl=1&ref=opinion&adxnnlx=1258733274-DqeLXVXtah1yVkV0WBNcLg

While in principle I agree that it would have been a better move, I do have some reservations. I wouldn't want the government telling banks they have to do this. I'm fully for a free market and while it would be in the banks, as well as everyone elses, best interest to do this, it can't be forced.

Please give me your feedback.

Have you ever heard agents complain that they can't get deals done this time of year? "No one is looking, no one is selling," seem to be the mantra's of this season.

I thought I would share one of my best deals. It came at Halloween. i was going to post this a few weeks back but life got in the way. so anyway, here goes.

It was the day of Halloween. Our office was practically empty. Most agents had gone home or didn't come in at all. I had a buyer that was looking in a particular area of Northville Mi. They wanted a house in a sub known as Northville Commons. This is an area built in the '70's where some of the houses are located around, you guessed it, a common area.

There was nothing on the multi-list that met their needs and I wasn't sure what to do. They didn't want to sell until they found their new home. This was during the hot market and we knew we'd have no problem selling. Their home was located in an area of Livonia call Old Rosedale, a sub built , basically, by Henry Ford back in the 30"s and 40"s so he could house his middle management. They would sell quickly.

With all that going on I decided to take one of the silliest courses of action you could think of...I cold called Northville Commons.

The few agents that were left in the office snickered and laughed. "Who's going to pick up the phone? It's Halloween." Still, I called.

After about 15 calls I spoke to a lady that said, "Yes, they wanted to sell but were building and didn't want to move until their house was done in about 3 months." I asked them if they had the home sold and could rent until they move, would that work for them. They agreed to meet with me.

I'll cut the chase here. My buyers loved the house, bought it and rented to the owners for the time they needed to get their house built. They then put their home on the market. I got a call from a buyer who always wanted to live in Old Rosedale. They had a house to sell in Redford so we made the offer and listed their house. A young couple who lived in an apartment bought that house through a co-op agent (I didn't get every piece of the sale).

To top it off, a buyer I had met from a sign call on the Old Rosedale house who put their home in Redford on the market with me. They decided to buy in another area so I didn't get their sale but did sell the listing. We can't get them all.

Long story short, because I decided to cold call on Halloween, I got paid on 6 transaction sides as well as adding sign calls to my sphere that led to later sales.

Don't ever let anyone tell you that you can't sell through the Holidays. I'll write about a Thanksgiving sale in a later post. In the mean time, it's a great time to be on the phone.

Usually when people think of fall color they think of New England, especially Vermont or Connecticut. Every year though, northern Michigan, the Upper Peninsula and northern lower peninsula are inundated with tourists seeking the brilliant colors of fall. The fall color tours are one of Michigan's biggest seasons. Since I'm posting these so late in the year they may not do justice but at least you get the idea.

I wanted to let people know that Southeast Michiganhas its fair share of fabulous color itself. Quaint towns just outside of detroit like Plymouth and Northvillehave parks and downtowns that flash in an array of oranges, yellows, rusts and just about anything else you can think of.

So if your clients want a fun vacation in late September or October, they wont go wrong coming to Southeast Michigan.

O.K. maybe not all of them. There is an agent in my office who does a lot of bank owned transactions and she's upright, honest and helpful. I can think of two or three others around the Western Wayne, Oakland County area of Southeast mi that are the same way.

Isn't that sad? Only a handful of agents who do work for the banks are actually solid, honest agents. The rest are, in my opinion, well....read the title again.

Someone may be upset by this post. If you are, you can reply with a disagreement as long as it's a cogent argument against my points. If you flame me, I'll just figure you're part of the problem and I cut too close.

Some may ask why I'm posting this for all to see as opposed to members only. It's just that I feel that clients and the public in general should know how these agents are treating other agents. If agents are being treated unfairly so are the clients they work with.

As you may be able to tell, I've been burned a few times over the last few weeks. Here's the senario. It may sound familiar.

A client calls to see a home that came on the market that day. We get in that day. I call the agent with an offer that day. Low and behold he already has three offers, all cash. He tells me there's no reason to put in another offer. Then I ask if these offers were asking or above. One of the offers is close to asking, he replies. I then say we're coming in over asking and I hear the panic in his voice. "Hurry and get it in because the other offers have already been submitted!"

I send the offer in but it suddenly is PENDING in the system. When I call the listing agent, he has an offer 1,000.00 higher than ours, so we're out. Later when the sold report comes up, sure enough, it's the lisitng agents buyer who had a conveniently higher offer than ours. No highest and best, no call to compete.

I don't know about other states but this is a very common around the Detroit area. And it needs to end.

Does it seem strange to anyone that most REO agents are the lowest of the dregs of our business? Someone who wasn't even in Real Estate 2 years ago and won't be when the market turns around? Or someone who was a marginal agent for years and suddenly gets in with a bank?

My broker recently attended the Michigan Association of Realtors (MAR)convention and you may be surprised at the number one item that MAR was concerned with. No it wasn't the economy. It was the sudden and profound drop in professionalism in our business. MAR and NAR are aware of the problem but what are they doing about it.

My next entry will discuss who's to blame for this and, hopefully, what we can do about it.

Since it's the beginning of a new week, I thought we'd start off with some good news. Plenty of time for the junk later on.

As I've mentioned a couple of times, inventory in the local Detroit market seems to have leveled off. For those of you who have been following my blogs this will be old news but for newbies here's a quick refresher.

Inventory is the leading indicator of the Real Estate market. Prices are the lagging indicator, simply meaning that prices follow the market. Prices indicate where the market was, not where it is. This is why it's so hard to time a purchase by looking at current prices. By the time prices rise, the market has been in recovery for some time and you missed the bottom.

O.K., since this isn't an economics lesson I'll get on to Real Estate. We look at 3-6 months of inventory as a "normal market". This is where there is enough inventory to allow buyers a choice but not so much that they don't have to buy. Prices should stay relatively stable at this level. More than six months and we have a buyers market. There are a glut of homes and buyers can pick and choose what they want. Less than six months is just the opposite. Buyers have to jump on the first house they see and there will probably be multiple offers. They more than likely have to offer more than asking price. There! That takes care of that.

In recent studies I've conducted of the market show that inventory levels in the Detroit area stabalizing. That means prices should stabalize as well. Here're some examples. The City of Detroit is showing an inventory supply of 5.81 months in June of '09. Contrast that with 20.14 in march of '08 and the difference is amazing. Other towns have had similar stabalization. Livonia showed 15.60 in March of '08 and 6.65 in June of '09. I also have levels for Troy, Novi, Northville Plymouth and other cities, so if you want more detail, give me a call or e-mail and I'll get you the stats.

What all this means to us as consumers is there may be good news on the horizon. It's too early to party in the streets but a small private "whoo-hoo" maybe appropriate. A little hope is a good thing.