Jim Kouns

It seems every news story we see has something about a bail out or stimulus package. Lots of ideas are floating around about how to re-start the housing market, yet I think there's one big factor missing, down payment assistance.

Anytime goverment gets involved in anything, it's like killing mosquitos with a Louisville Slugger. Yes, there were a lot of things that needed to be cleaned up in lending, but down payment assistance for credit-worhy buyers was not one of them. Most 100% or down payment assistance programs have gone away and FHA has just increased their requirements to 3.5%

Here's the result in our area. The low end buyers have been the most severely impacted. Home sales in the under $75,000 range decreased by 124 units, the largest drop of any segment of our market. Without these lower priced sales, the chain of buyers moving up is broken and the whole process comes to a halt.

I'm not saying we should return to the old days where anyone qualified and loans of 125% of value were common. However, the over-tightening of down payment assistance has had the effect of choking a market that's already battered as it is. I urge you to contact your legislators and urge them to consider responsible down payment assistance as a part of any stimulus or homeowner relief program.

I'm fortunate to have an office with a window looking out to a wooded area along a creek that runs by our building. We are in the city, but we get an amazing array of wildlife stopping by. Deer are regular visitors as are racoons, possums, coyotes, an ocassional fox. The birds run the gamut from Chickadees to very large hawks. I'm looking out my now at a beautiful snowscape, bright sunshine and blue skies.

When I went to the "Y" at noon (I try to go 3 x a week) it felt brisk and not too uncomfortable, that is until I looked at the thermometer in the car and saw the outside temperature was -2. Immediately I felt colder and that led me to think how much we are influenced by information and how often that information can lead to negative feelings.

I know information is important and it's silly to go around totally oblivious to what's going on. That being said, however, If I had looked at the thermometer before going out, I probably would have decided it was too cold and stayed in the office. I'd have missed the brisk air. the sunshine, the opportunity to network with others at the "Y" and ommitted a workout that burned around 400 calories.

We are constantly bombarded with negaive information about our industry, much of it from analysts who have never been in the real estate brokerage business. We hear that housing sales have hit new lows, median prices are tanking, buyers can't get financing and "blah, blah, blah." It's easy to listen to all that and think I need to stop doing anything until things turn around. "Maybe I'm wasting my time." Yet, the productive agents in our office are showing houses, taking listings and continuing to do all the things they woud be doing if business was great. The gal in the next office to mine has been a top agent for over 20 years and she had her second best year ever in 2008.

I'm going to keep watching the weather so I can prepare accordingly, but I'm going to quit listening to the analysts that tell me how bad things are going to be. In the same vein, I watch market statistics closely, but I'm not going to be influenced by some "expert." Buyers and sellers are out there and they need help, perhaps more than ever. I'm not going to let the "gloom & doom" folks keep me from reaching out to them and enjoying the sunshine and exhilaration that our business provides for a successful transaction.

One of the "Seven Habits of Highly Successful People" is to "sharpen the saw." In other words to work with the tools of your business and keep them sharp through maintenance and practice. Real estate is a mature business and there's not much that's dramatically new. In my 20+ years of practice, I've stayed abreast with technology, embraced Top Producer, stayed current with laptops, printers, phones and other hardware. Looking ahead to the challenges of our economic climate, I wonder what can I do to maintain and improve my business. I don't see any new blockbuster ideas or equipment.

I think the answer is to try to better utilize what I already have. The keystone of my business is my database of contacts and past customers, so I spent time during the slow period of Dec. reviewing and revising. It's amazing how many coincidental, deceased and non-productive contacts were in there. In weeding those out, I also discovered some valuable names that had gotten into incorrect categories and were being overlooked in mailings and other contact efforts.

The new 8i version of Top Producer is a powerful tool with many features. Though a TP user and certified trainer I was using only a portion of what was available. I did my contacts and follow-ups using a combination of automated and manual procedures. This year I've gone through the TP Action Plans and revised and customized them so I can employ them on a regular basis. It was a time-consuming chore, but I expect it to pay dividends from better follow-up. For example, I now have an automated quarterly market report with color graphics that will go out to my "A" list. Every contact on that "A" list will hear from me every month via letter, post card, email or phone. These folks will have a hard time not thinking of me when real estate is mentioned.

With 20 yrs. experience, most of my business comes from referrals and past customers. I haven't aggressively prospected in years, but this year I'm going to resume doing so. I get older every year and, unfortunately, so does my contact list. Many past friends and past customers have raised their families and their housing needs probably won't change until they're well into retirement. To connect with young people, I've begun using social networking sites such as Active Rain and Facebook. Apartment prospecting is relatively easy and inexpensive with post cards and the new custom postcards in Top Producer can be sent to one or hundreds at the same cost per unit, no more than it costs to have the cards printed and mail them myself. They also use my contacts so they're completely current.

None of this is new or exciting, it's just basic "stuff." I'm a TP user but if you like something else, the same principles apply and the important thing is to increase your utilization. There may be fewer units involved, but there are going to homes sold, regardless of economic conditions. I believe that "sharpening my saw" will help me get my share of those sales and maybe somebody else's share as well.

After several years of bucking national trends, the slow down in real estate activity hit home in 2008 with unit sales off by 26.6%. Our market began contracting in the late 3rd quarter of 2007 when the effects of increased property taxes were felt. There was a temporary return to normal activity in the 2nd quarter of 2008, but it was short lived and by year end, the general state of the economy, the lack of consumer confidence and the arrival of long-delayed property tax bills severely depressed sales.

The largest reductions were felt in the heart of our market, especially below $75,000, as a result of curtailed or eliminated programs for low down payments and down payment assistance. Lack of activity at this end, served as a bottleneck to restrict new buyers and move-up families. Since we don't have an influx of newcomers, many of the folks who would like to sell and move up futher are unable to do so.

In the midst of all this gloom, there are some bright spots. For buyers, interest rates have fallen to near historic lows and it appears they will remain below 6% for the forseeable future. For sellers, the inventory of homes for sale has dropped below 700 for the first time in many years, meaning less competition and less downward pressure on pricing. Average sale prices actually increased by 2.8% in 2008 as compared to an 18% decrease nationally.

What's in store for 2009? The 4 legs of the residential real estate table are sales price, interest rate, property tax and consumer confidence. Sales prices have remained stable, interest rates are very attractive, the State's property tax reduction measures began to be felt in the 4th quarter of 2008 and will have an even more positive effect in 2009. All that remains is consumer confidence. The various stimulus packages are currently at work and Pres.-Elect Obama will have his own programs for economic recovery. Hopefully the combination of these factors will result in a restoration of confidence and a return to an active real estate market.

Seems like every publication lately, features some kind of advice for home sellers in today's challenging market. The interesting thing is that nearly all the advice is pretty consistent, but it seems like those who want to sell their homes aren't listening.

Let's reconsider the most common suggestions.

1. Price the home properly. Buyers have educated themselves by looking at current inventory. If your home is priced based on last summer or last year, you're out of touch. If you can't afford to sell at today's prices, change your palns and hold on until prices improve. You could consider renting, but then you lose capital gains protection when you do sell.

2. Stage both the inside and outside. Buyers' decisions begin with a drive-by or a drive-up. If the landscaping is non existant or looks ragged, the lawn is full of unraked leaves and the walk and drive hasn't been cleared, the negative feelings have already begun. Inside, excess furniture should be removed and remaining items rearranged to make it look as spacious as possible. Lights should be on and blinds open, especially in the dark days of winter. Dated carpet should be replaced and as much wallpaper as possible should be removed. Dated counter tops should also be replaced.

3. Cleanliness is a must. The house needs to be "squeeky clean", walls should be touched up or repainted, carpets cleaned and absolutely no pet, cooking or smoking odor. The bathrooms should have fresh towels and unused soap. Closets (buyers will look) and kitchen cabinets should be organized and very neat. It goes without saying that beds should be made and clutter removed.

These three points seem fairly simple, yet it's amazing how many homes I show where the sellers seem totally oblivious. A former manager once told me that you succeed by doing what the competition won't do. When there is roughly a years', worth of homes on the market and stiff competition for a limited number of buyers, a seller who prepares properly will stand out way above the competition.