Recently, I've been running into folks who are not "in trouble" or "underwater" with their home.  The payments are current.  Income is good enough to keep the payments current.  Yet, they can't sell their home!  Or, at least, they can't sell it and make enough money to buy something else.

Why not?

Well, it seems that some folks saw the huge run up in home prices and decided to refinance and/or take some home equity lines out  so they could have some cash.  Lots of reasons for cash:

• vacations
• remodeling
• toys (of the adult and child variety)
• tuition for the kids
• medical bills

..all kinds of things.  I go into more detail in this post about the costs of selling a home even if you decide to do For Sale By Owner. You see, contrary to popular belief, the fee to the Realtor is not the only cost associated with selling you house.

The bottom line, though, is that if you've already taken your equity out of your home, chances are very good you can't do it twice. You may not be underwater but you're not going to be able to sell you home either.

Best to sit tight. Continue to pay your mortgage. Keep your credit good. Save.

A couple of posts back I wrote about a great end-of-year settlement for a nice Split Level in College Park Woods.  The house hadn't been on the market that long and the previous owner had kept it in good shape.

Now, just days after that one settled an offer cam in on another listing "across town" from College Park Woods near the Town of Berwyn Heights. We're really just talking a couple of miles here. Still a great neighborhood with great access to the University of MD and major employers as well as major commuter routes and METRO.

You can read more about the experience here.

I'm beginning to wonder if College Park is not undergoing some kind of renaissance or if it just so happens that there is a kind of "perfect storm" of circumstances: low mortgage rates, low home prices, and Sellers with equity in their home.

Right now we're in the home inspection phase.  We need to get past that and the appraisal.  Then it should be smooth sledding.

I have to admit that when I started getting serious about Active Rain I would visit it two, three times a day.  I would be eating and breathing blog post ideas.  I would get up early in the morning to write a post.  Then I would brush my teeth and take a shower.

Then I found Facebook.  Yeah.  Sure.  Facebook has been around for ages.  It wasn't until recently that it took on a whole new aura for "old" people.  You know.  Non-college students. People that are out in the work world and want to connect for business.

Yeah, I know.  There is LinkedIn for "professionals" but, truth be told, Facebook is a lot more fun and it really does put the "social" into social networking.  In fact, I kind of like Facebook.  It doesn't take a lot of time.  You can establish relationships, of a sort, by commenting on people's status updates, join affinity groups, start business pages, fan pages and all kinds of neat and groovy stuff.

It' isn't the same as Active Rain.  Probably apples and oranges.  But it's an interesting phenomenon.

So...what about you?  What's the first page you turn to when it's time to do a little online "socializing"?  Active Rain or Facebook?

I don't know if it's the interest rates, people getting tired of renting, a perception that home prices are pretty darn low (relative to recent home values) or what but homes are selling.  At least a couple of my listings.

I serve a community near the University of MD called College Park Woods.  It's a nice subdivision of single family homes built in the mid '60s.  Community pool. Community park. Close to METRO and some fairly big employers (USDA, NASA, Archives, to name a few).  So the location is good, the prices reasonable.

Yet, because of the "meltdown" and subsequent tightening of mortgage standards sales have slowed down pretty significantly and short sales have started to pop up.

Yet, if a Seller is not "in trouble" with their mortgage and actually have some equity they can sell their home.  I went to settlement with one of my Seller clients on December 30th.  It was a nice year-end gift that she was tickled to receive.  The home was in good condition, the price was right and the Seller was willing to make repairs and negotiate on financial terms. I wrote a little bit more about this on this post.

The Buyer made creative use of FHA financing.  It was a father/son deal where the owner occupant couldn't possibly qualify by himself but the co-signer (the father) was plenty qualified and FHA guidleines did not require him to actually live in the house. The buyers got a lot of the perks of FHA financing:

1. low rate
2. 30-year fixed
3. low down payment (3% in 2008)
4. the $7,500 first time home buyer credit (the son's first home)

 So it all worked out wel for all concerned.

Hey, it ain't over 'til the fat lady sings and she ain't close, yet.

I know this is the day I'm supposed to sit down and write out all my resolutions and turn the page on the old year (2008) and look anew at 2009.  I only wish I were resolute enough to make resolutions I can complete.

Yeah.  I need to lose weight.  I need to focus more on my business and attract more clients (of the 5 star variety).  I need to clean up my office and organize my garage.  There's a lot of stuff if I sit down and think about it.

This year I have one overriding resolution:

1. I resolve to remain committed - full time - to the real estate profession and all that entails: client service second to none, diligent research, empathetic consultation, creative marketing, and remaining civil with my fellow professionals.

OK.

Now I'm ready for a 2009 that will crush 2008!

In my previous post, "An Early Christmas present I could have done WITHOUT", I talked about getting caught unawares in a negotiation with one of my past clients over money.

I say was unaware because, truly, I didn't expect to be having a conversation two days before Christmas about a frenzied home search if I decided to rebate some of my commission and pay for a property management company to market my clients' home for a tenant and then screen them for the folks.

It seems that my past client had run across an agent from a company that does rebates (or credits toward closing costs) as part of their service package.  It seems that this one particular agent also had a "friend" in the property management business that would find my clients a renter for their house FOR FREE.

While my client didn't come straight out and say it, things became pretty clear to me that he was asking me to do the same thing. He told me he had been "researching" houses and that he had narrowed the choices down to just a few.  He was very qualified, financially, to purchase.   Hmmmm.  What to do?

My thought process (in the evening, on the spur of the moment, with a "good" past client):

• "Sure, I could do something with my commission so that it would essentially have the same effect. I work for RE/MAX which gives me a lot of flexibility with my commission.  Heck, I could work for free, if I wanted."
• "Yeah, sure, the property management fee would be equal to one month's rent but I could probably swing that, too"
• "If this is truly a quick sale and the guy has his search down to a few houses, maybe this could be quick."
• "Business is slow. Something is better than nothing."

I told the guy, since he was a good client, someone on my A List and I would really want him to be represented well, I would like to work with him on those terms.  "Go ahead", I said, "Send me the MLS #s of the houses you want to see."

Then I spoke with my wife who is not in real estate but who knows these clients since we've eaten with them several times.  She was floored.

Then I slept on it,  My thoughts changed:

• "Is he working with another agent and he's pitting one against the other?  What are the ethical implications for me?"
• "Do I really want the liability for the rental part of the deal?  I don't work with rentals. Don't want to."
• "The relationship has already soured in my own mind? How would I relate to the guy after this clumsy attempt at getting me to work for a reduced fee?"

The I got the e-mail with his MLS #s.  My thoughts changed again:

• "27 MLS #s!  I thought this guy had narrowed down his search!!"
• "He noted the one he saw with the competitor who offered the sweet deal.  It was listed with another Broker entirely. He was/is working with another Realtor!" (I can't prove it. He has said "no" except to talk to her about this one house which he found on her company's website.  It doesn't look good.)
  
• I am being "played" big time.

So I e-mailed him back after looking at his 27 MLS #s in the MLS.  A ton were short sales. A few were outright REOs. Some were "plain vanilla". I mentioned that, if he was really in the market for a house, the short sales were probably off the list: the process takes too long.  I mentioned I had re-thought the rental part of the "deal" and decided I didn't want to do it so I wouldn't be doing it. 

What happened?  Well, he calls me back, says he really needs to look into renting his place because he doesn't want to carry multiple mortgages, yadda, yadda, yadda  He'll call when he has it more together.

Maybe. Maybe not. Maybe the competitor -- the  one with the sweet talk and sweet money deal -- will reel him in.  Maybe it'll work flawlessly for the guy, maybe he'll run into the "agent from hell" who will sell him a house and leave his "rental" out there hanging endlessly.

It was a real eye-opener for me. It taught me that no matter how "easy" something looks, it is never as "easy" as it looks. It taught me no matter how friendly me and my clients get that when the rubber hits the road and there is money involved, money wins.  It also taught me that there are a lot of wise and thoughtful real estate professionals on Active Rain that gave me a lot fo great encouragement and support.

Back in the day of the Seller's market frenzy when people were writing crazy offers to buy a house, back in the day when people were taking out interest-only, 3 year ARMs just to be able to afford the house, back in the day of Escalation Clauses, waived inspections and agreements to pay CASH for any amount above the appraised value of the home I was working with a client that was, shall we say, very motivated to buy a home.  They didn't like their little apartment, the neighborhood they lived in or the fact that everyone seemed to be getting rich just by owning real estate.

We worked hard together to find a house in a neighborhood they liked, in a price range they could afford.  We wrote offers on 11 different houses.  We commiserated and bonded over this shared experience of finding "just the right" home only to have someone else offer just $5,000 more.

We finally found a house.  The offer was accepted. The settlement took place. My clients were happy to own a new home that they liked.  After settlement, I kept in touch.  I sent them gifts at Christmas, my wife an I shared dinner with them several times, I donated to a charity of their choosing when they called and asked for money.  Time went by and they decided that the house was really a little too small and they wanted to buy a bigger place.  We went and looked and looked and looked.

Of course, by this time the Seller's market had turned into a Buyer's market and the credit standards were getting tighter and tighter. It didn't look like they would be able to sell their house and buy another one.  It looked like they would need to turn their house into an investment property and then buy another house.  So they step back from the house hunting for a variety of reasons.

Fast forward.....I get a call on the day before Christmas Eve.  It's my client - the one I send presents to, the one I share meals with -- who says they really, really want to get another, bigger place.  The guy's been looking (I guess Open Houses) and ran into some lady who works for [insert well know discount brokerage that rebates buyers/sellers a portion of the commission here].  Well, he got the skinny on this commission rebate thing and, guess what?  Not only is this lady going to do the rebate thing but if he buys with her she has this "friend" in the property management business who will rent his place out for him FOR FREE.  Part of the deal.

It took me a few minutes to realize that this client who I thought I had a great relationship with was gaming me. He wanted me to rebate part of my commission back to him and then market his place (or have it marketed by a property management company) on my dime.

One of my weaknesses is that I like to see the good in people.  I like to think that what they are telling me is true and I can take it at face value.  It really took me awhile to realize I was, all of a sudden, on the day before Christmas Eve, negotiating with my own past client over money.

I'm going to try not to let this get to me. I'm going to try and remember that establishing trust and respect is key to maintaining good personal and business relationships.  It'll be just a little harder.  That's all.

Yes, it's Christmas morning and I'm here on Active Rain posting to my blog.  You'd think I'd have something better to do.  Like open all my presents!  Well, like every kid, I got up bright and early to see what Santa bought and I was ecstatic!

• a promise for a new iPhone so I can be cool and connected and
• a GPS so I can find my way around once I find someone who wants to buy a home :-)

Whatever happened to those poor ADC map books?  I still see them in stores but I have to guess they won't be around too much longer.

Anyway....Merry Christmas to all and a very Prosperous New 2009.

BTW, you can see both my Letter to Santa for the housing market and my Predictions for 2009. It'll be interesting how they turn out.

is is one of those things passed from friend to firend and from family member to family member....and now, from Rainer to Rainer.

1. Avoid carrot sticks. Anyone who puts carrots on a holiday buffet table
knows nothing of the Christmas spirit. In fact, if you see carrots, leave
immediately. Go next door, where they're serving rum balls.

2. Drink as much eggnog as you can. And quickly. It's rare...You cannot
find it any other time of year but now. So drink up! Who cares that it has
10,000 calories in every sip? It's not as if you're going to turn into an
eggnog-alcoholic or something. It's a treat. Enjoy it. Have one for me.
Have two. It's Christmas!

3. If something comes with gravy, use it. That's the whole point of gravy.
Gravy does not stand alone. Pour it on. Make a volcano out of your mashed
potatoes. Fill it with gravy. Eat the volcano. Repeat.

4. As for mashed potatoes, always ask if they're made with skim milk or
whole milk. If it's skim, pass. Why bother? It's like buying a sports car
with an automatic transmission.

5. Do not have a snack before going to a party in an effort to control your
eating. The whole point of going to a Christmas party is to eat other
people's food for free. Lots of it. Hello?

6. Under no circumstances should you exercise between now and New Year's.
You can do that in January when you have nothing else to do. This is the
time for long naps, which you'll need after circling the buffet table while
carrying a 10-pound plate of food and that vat of eggnog.

7. If you come across something really good at a buffet table, like frosted
Christmas cookies in the shape and size of Santa, position yourself near
them and don't budge. Have as many as you can before becoming the center of
attention. They're like a beautiful pair of shoes. If you leave them behind,
you're never going to see them again.

8. Same for pies. Apple, Pumpkin, Mincemeat. Have a slice of each. Or if you
don't like mincemeat, have two apples and one pumpkin. Always have three.
When else do you get to have more than one dessert? Labor Day?

9. Did someone mention fruitcake? Granted, it's loaded with the mandatory
celebratory calories, but avoid it at all cost. I mean, have some standards.

10. One final tip: If you don't feel terrible when you leave the party or
get up from the table, you haven't been paying attention. Re-read tips;
start over, but hurry, January is just around the corner. Remember this
motto to live by:

"Life should NOT be a journey to the grave with the intention of arriving
safely in an attractive and well preserved body, but rather to skid in
sideways, chocolate in one hand, wine in the other, body thoroughly used up,
totally worn out and screaming "WOO HOO what a ride!"

You wouldn't know that a year ago I didn't know Pat Kennedy from, er, thousands of of Realtors everywhere in the country.  Then I started hanging out on Active Rain. To this day, I have no idea how I stumbled across her blog...but I'm sure glad I did.

I started reading her posts and liked what I saw.  More to the point, I could tell that she knew real estate and knew what she was doing.  So when I had a referral in DC for a Buyer client of mine in a neighboring jurisdiction in the MD Suburbs of DC who had a house to sell in DC itself (where I am not licensed), I knew who to call.  Pat took the listing.

Meanwhile, I had a Buyer client who was selling his house in the MD Suburbs of DC and I referred again! (this particular transaction involved all kinds of Rainers either directly or through very close degrees of separation).

The buyer client who sold his house in MD went pretty quickly.  After all, it's a "buyer's market" and the meltdown hadn't happened yet.  The seller client went a little more slowly but, hey, it just settled! The Seller is happy, the Buyer is happy, the Realtors are happy and the referring Realtor is jumping for joy (that would be me).  No lump of coal this year!

Now I might be able to buy my wife something more than a pair of socks and an umbrella!

Thank you Pat Kennedy for making it happen.  Thank you Active Rain for putting us together!