Janna Rankin Scharf - Realtor Coeur d'Alene and North Idaho Homes

Idaho pays out record $504 million in regular, extended unemployment insurance benefits ~

Yikes, I saw that number and did a double take. Did you know that this number is already more than DOUBLE the total paid out for the entire year 2008?

From the Idaho Business Review:

Idaho's record amount of regular benefits paid broke the Idaho Trust Fund in June of 2009, when the state began to tap interest-free loans from the federal government. As of Oct. 6, Idaho has borrowed over $67 million in interest-free loans to continue to pay regular benefits to new claimants.

So much for the economic stimulus plan. As we wait for the next wave of foreclosures to hit when the option arm mortgages reset, this story made me shudder. Everyday I talk to distressed homeowners who are losing everything they have. EVERY DAY!

The article states that through September, more than 36,000 people in Idaho have exhausted regular unemployment insurance benefits and that number continues to climb at a pace of around 1,000 people each week.

We have a long row to hoe in our economic recovery.

There are plenty of homes for sale in the Coeur d'Alene real estate market as we prepare for a winter slowdown in activity. Many anxious sellers are scrambling to unload their homes before the snow flies and buyers retreat for a season.

Here come the PRICE REDUCTIONS!

A price reduction sends a message, in spite of whether it's true or not, that the home was most likely overpriced or that there is something wrong with it. Statistically, homes that have been reduced in price will ultimately sell for the even less.

Sometimes, a price reduction isn't the best way for anxious sellers to successfully attract the buyer they need.

With a price reduction, usually the seller will net less, the buyer will have a higher payment and the home values in the neighborhood will take a hit.

Assuming the home is priced correctly for our Coeur d'Alene market, there are smarter incentives that will make your home stand out among the throngs of sellers reducing their asking price.

Let's look at one example. We will use a home priced at $200,000 with a buyer putting down 10% with a 700 FICO score. FICO is the credit scoring system that banks use to determine the creditworthiness of borrowers on everything from buying cars and homes and determining what your insurance premium should be. Nationally the average FICO score is 720, and 58% of buyers have a score over 700.

In our example, the buyer ends up with a lower payment, the seller ends up netting more, and the neighborhood SOLD comparable for future appraisals is $10,000 higher! This is what you call a win-win-win situation!

The seller, rather than take a $10,000 price reduction, offers to prepay the buyer's mortgage insurance premium of $3,780 as part of closing costs. Final sales price: $200,000. Concession: $3,780. Loan amount: $180,000. 30 year fixed interest rate 6%. Monthly principal plus interest payment: $1,079.

Let's see the difference if a $10,000 price reduction had been made instead. Final sales price: $190,000. Concession: $10,000. Loan amount $171,000. 30 year fixed interest rate 6%. Monthly principal plus interest payment: $1,025. Add PMI (Private Mortgage Insurance) of $88/mo for a total payment of $1,113.

In our current mortgage climate, more and more innovative deals are being struck. It just takes some creative thinking and a willingness to think outside of the box. Trades and exchanges, interest rate buydowns, seller paid payments, and even tropical vacations are being offered as incentives. Just today I saw an ad for a "buy one, get one free" deal on a California estate. Buy the $1,600,000 home and get a $400,000 condo free. All of these incentives are perfectly legal, but you will want to make sure your particular deal isn't violating any housing or financing regulation.

With throngs of sellers putting up PRICE REDUCTION signs right now, your best chance for having your home stand out from the pack just may be to offer a savvy buyer's incentive.

Selling a vacant home in Coeur d'Alene?

The nature of my job as a real estate agent takes me into literally hundreds of homes every year. I participate in office tours, open houses, visit model homes, tour homes with buyers, work with sellers, preview properties and even visit FSBOs to add to my list of available inventory.

This is a critical part of my job - knowing the local market inside and out. I get to see homes in all price ranges and conditions - from good to better and from bad to worse. What I am seeing lately is a growing number of vacant homes on the market for various reasons.

There are some good reasons why sellers and real estate agents don't like to leave a home vacant while it is on the market. For starters, it's a target for vandalism. Just yesterday I read about a Realtor walking in on thief while showing a home. The thief was removing all the copper plumbing pipe in the basement. Another agent reported showing a vacant house and the peephole fixture on the front door had been stolen, leaving a hole in the front door.

Aside from theft and vandalism, a vacant house sends a signal to prospective buyers that the owner may be carrying two mortgages and is desperate for a lowball offer and quick sale. This is never the best negotiating position for you as a seller to be in!

What can you do? A vacant home presents certain challenges but it doesn't need to be difficult to sell and doesn't need to imply that the seller is desperate. Here are some strategies to employ that will breathe some life into your vacant home - to hasten the sale and protect it during the process.

• Remember first impressions. Its appeal from the street is critical in making a positive impact with potential buyers. Don't underestimate how important this is!
• Consider hiring a professional home staging company. They will have a menu of services and can supply furniture, artwork and other decor to accentuate the positive features of your home.
• Give the house a lived-in look. Put lamps on timers and enlist a neighbor to park a car in the driveway and check the house regularly for junk mail.
• Hire someone to keep the grass and flowerbeds trimmed and the leaves raked. In the winter make sure to have someone shovel snow from the driveway and walks so it won't be obvious every time it snows that no one is living there.
• If you've taken the furniture with you, have the house deep cleaned and freshly painted. Furniture, rugs and decor hide or minimize imperfections. Once removed, every blemish becomes accentuated. Faded paint and wallpaper become more noticeable and nicks and scratches stand out.
• Repaint bright, bold colored rooms to a neutral. What was an eye-popping room when fully finished may appear stark and small when empty.
• Make sure the thermostat is set to a comfortable temperature year round. You don't want a potential buyer to be uncomfortable and rush through your home because it is too sweltering hot, or freezing cold.
• Arrange with a maid service to keep the home free of dust, cobwebs and dead bugs. You don't want your home to look abandoned and tired. (Translation: I give up, I'm desperate.)
• If possible, leave behind the window coverings and a few strategic pieces of furniture. Empty rooms tend to look smaller than a furnished room. A chair with a small table and a lamp will offer a sense of scale and help potential buyers gauge whether their furniture will fit the space.
• Consider employing a house sitter, or home manager. Having someone living on site discourages vandalism and may even reduce insurance costs. (Talk to your insurance agent to review your homeowner's insurance policy to find out what the coverage is for your vacant home.)

Find a real estate professional with experience selling vacant homes. If you're in the Coeur d'Alene or Kootenai County Idaho real estate market please call me if I can be of assistance. I have successfully marketed and sold many vacant homes. I can tell you from personal experience that they require significant more attention and willingness for hands on management than the typical listing with homeowners on site keeping the house in order.

Properly presented, your vacant home can successfully compete with any other property on the market.

I had a WEIRD encounter with a buyer yesterday. I received a call from a guy I had spoken with on the phone a couple of times in the past few months. He has had his eye on one of my vacant listings. A retiree, recently married, looking for a new nest. It's a darling bungalow on the 6th fairway Avondale Golf course and very competitively priced. In fact, at $184,900, it is by far the most affordable home available on the golf course. You can check it out here.

So yesterday about 1:00 I got a call from my guy. Could I meet him out at the house for another look? He wanted to make a cash offer. My mind raced through everything on my plate, including paperwork I needed to prepare and forward to my Do what you say you will do, when you say you will do it client. I told him I could meet him at 3:45, all the while my mind was racing as I wondered how I would get everything that needed doing done in time. He responded that I had better make it 3:00 because I was going to need to write up a cash offer and it was going to take more time.

Huh? Whether we start at 3:00 or 3:45, it will take the exact amount of time to write up an offer! I quickly decided that biting my tongue and going along with him was in the best interest of my Seller client. Just so happens that is the litmus test I use when faced with the quandary of what should I do?

He brought his new wife along and together they went through the house with a fine tooth comb. He announced that he wanted to make a ridiculously low offer (his words) of $150,00 but it was cash and he would close quickly. He wrote out an earnest money check for $1000.

Now my first thought is that although $150,000 was certainly LOW, it wasn't RIDICULOUSLY low as are so many offers that we receive on a lot of our listings these days. He wanted a response by 5:00 the next day. I talked him into 7:00 since my Seller was out of town on business. He reluctantly agreed.

I called him the next day to say that I had presented his offer and she was considering it. She was on the road and wouldn't be home until after 6:00 so it would probably be close to that 7:00 deadline before he received a response. He barked that he needed to know AS SOON AS POSSIBLE and hung up abruptly.

Here is our conversation, verbatim, when I called him at 6:45 to present the counter:

Me: Hi Larry, it's Janna. We have a counter of $1XX,000.
Larry: We're gonna pass.
Me: (I opened my mouth to start to speak and he cut me off)
Larry: Tear up my check.
Me: Um, I would be happy to put your check in the...
Larry: Tear up my check.
Me: Okay, as soon as I get in the office in the morning I will put your check through the shredder.
Larry: No, JUST TEAR UP MY CHECK! (Click)

What bad behavior. I thought to myself that if I had ever caught any of my children behaving so uncivily to anyone, they would have been corrected and "convinced" to apologize. And although it WOULDN'T be in the best interest of my client, I would have liked to give Larry a spanking for his bad behavior.

When I called my Seller to give her the news, she laughed out loud and put it all into perspective. She said, "Good luck to his new wife!"