Elise Livingston's McHenry County Illinois Blog

You Had Me At Mailbox

Elise Livingston (Remax) — Fri, 21 Nov 2008 17:00:16 -0600

Jerry Maquire walked in the room and their eyes locked. He said, "Hello". Their future was secured in that split second. Even though he babbled on, none of his subsequent words even registered with the girl. The famous film sequence is immortalized with the sentence, "You had me at ‘Hello". Highly emotional? Yes. Highly adrenaline charged? Likely.

Recent research by John Gottman of the Gottman Institute suggests that in periods of high adrenaline, parts of the brain actually shut down. His research discovered that the flooding of the brain with adrenaline during an emotional exchange can impair an individual's ability to reason rationally and can lead to confusion. On a less dramatic level, mini adrenaline flooding happens to each of us every day.

On a balmy, summer day I took my mother on a day trip to the Chicago Botanic Gardens. It would be her first time at the gardens and we planned on spending the day together walking, talking and enjoying the sunshine. We were chatting and laughing as we approached the entrance when she stopped to notice the overwhelming effect of the first gardens. Words could not express her impression of the experience - she just stood and cried at the sight of the deeply saturated beauty of the garden. Highly emotional? Surprisingly so! Highly adrenaline charged? Absolutely - we actually had to find a place for her to sit down for a while!

Could it be that first impressions are a function of surging adrenaline? It makes sense. I was horrified to read a Dear Abby column years ago where Abby advised a reader to pay for chin surgery to become more physically attractive instead of using the money for more lofty pursuits. Abby stated that first visual impressions must be taken seriously; she said it is a fact of nature.

Using the power of first impressions is one the most important tools to recognize when marketing your house. "Honey, stop the car.... This is the one" is what you want to hear echoing in your driveway when a potential buyer stops to write down the phone number on your For Sale sign. Now, that's a successful first impression. The happy surge of adrenaline just might carry the buyer joyfully through the entire transaction.

Create the best first impression possible by taking inventory of your home's visual impact starting at the curb. Look at the property as if you are the buyer, but if you think your own judgment is clouded, then get a trusted and outspoken friend to do it for you. Is the mailbox straight and clean? Is the driveway clear, freshly topped with sealer? If the buyer and her Realtor will park in front of the garage doors, then the garage doors are part of the first impression, too. The finish on the doors should be clean and even. What about the walkway to the front door? Are bushes crisply trimmed or are they flopping over the sidewalk making it appear narrow? If you are like me, we use our garage entryway more than our front door, so it's easy to ignore the cobwebs, leaves and grit that collect on the front porch. Spend a moment there just standing and staring. This is the time that the buyers will either notice the wasp nest growing in the corner of the porch ceiling or say to each other - "How lovely! Our swing will fit perfectly here."

If you've set the stage and they are giving each other lingering glances of hopeful expectation before their Realtor has even opened the door, you have properly created the environment of sales success. That's the confusing little adrenaline spark that plants the seed of hope in your buyer's hearts. Now they look forward to opening the door as if your house is a gift to them, wrapped with a glossy bow. What could be more promising for them as the buyer and for you as the seller than an expectant, slightly excited prickle of destiny-realized as they enter your foyer. Do you see what they will see?

Just in case this seems too schmaltzy for your practical side, here are a few real life examples:

A new house, still under construction, was on the market but getting little attention. The builder was advised to grade the front yard, remove the piles of debris and equipment, but before he could do it a snowstorm hit and covered all the imperfection in the front yard with a romantic blanket of rounding swirls of snow. A consumer drove by - fell in love with the house and bought it that day.

Two houses in the same neighborhood were entering the real estate market last year at the same price. House Number One was beautiful inside and out, but the outside entryway housed a nest of barn swallow hatchlings whose parents swooped and threatened potential buyers as they neared the front of the house. Adrenaline surges caused by attacking birds are not the kind of confusion that aids in sales. In addition, the waste from the nest as the birds grew older was obvious all over the porch. The owners of House Number Two installed a new front door, erected a new mailbox, planted flowers, scrubbed the front porch and topped the driveway with sealer. It's no surprise that house number two sold for a higher price in less time than house number one.

This spring, as you prepare to put your house on the market, set the stage. Use human nature as your tool to entice your future buyer from the curb on in. From the moment they see your house from the comfort of their Realtor's sedan, make them say, "You had me at mailbox."

Originally printed in McHenry County Woman Magazine

My House Smells Like Flowers

Elise Livingston (Remax) — Wed, 29 Oct 2008 10:50:18 -0500

My house smells like flowers

It was summertime 1986. My children were young at the time and we often had neighbor kids over for play dates. One of the big attractions at our house was cooking together. We made soups, cookies, shish ka bobs and home made bread. It's an unusual play date scenario, I know, but that is what the kids did at our house. My house was cooking central and I loved it.

One beautiful afternoon, I was at a shopping mall when, unknown to me, a neighbor parked her car in the same parking lot and walked toward the mall entrance with her four year old daughter. All of a sudden, the child stopped dead in her tracks in the middle of the parking lot and said, "Mommy, it smells like Elise's house right here!". They looked around and saw that they were standing just past my car. All my neighbors thought the scenario was crazily unlikely and the girl was immediately pronounced psychic. I, on the other hand, was horrified. How could my car smell so much like my house that a four year old could identify it out without even seeing it? Not to mention that the car was parked in open air on a sunny June day! What did my house smell like, anyway?

The kitchen stove's exhaust vent discharged into the garage in that house, so it made sense that the garage, and everything in it, smelled just like whatever was cooking. And there was ALWAYS something cooking. It turns out; my house smelled like garlic; yeasty, sweet bread dough and salty, smoky bacon. Yum. I love the fragrances of rich, strong foods. It is like my signature.

Our signatures on the things we own mark them as ours. When our homes are personalized we feel comfortable and when we graciously invite our friends and family into our signature place they feel cared for and welcome. Since all that feel good atmosphere makes for a beautiful home, it's a shock to find that the personalized home is not the house that easily sells.

When you sell your home, the challenge is to make it iresitable to the buyer with undeniable warmth, impeccible housekeeping and white glove cleanliness. All this while removing your personal signature from the home's presentation. Before listing your house, provide yourself a quiet time to walk through each room to savor the memories. Make the decision to detach your emotional connection with the place that has held your life for the past few years. This exercise will free you to stage your house effectively for sale and even help to justify removing some of those family photos from the walls. The classic cinema scene is one where the family is bundled into the sedan to follow the moving van away from the family home. The wife wistfully stares back at the empty house and blicks away a tear. This emotional inevitability better serves you when you first decide to put your home on the market. Detach. Then put your house on the market. Are you really ready to allow the next person to build their set of memories in what used to be your space?

The next step is to ask a trusted friend to tell you the truth about the condition of your house. Where is the paint dingy? Does it smell like dirty laundry, Fido's dog bed, Fluffy's litter box or (gulp!) strong cooking odors? Is there too much clutter in the closets or basement? If you just can't handle the frank observations of a friend, there are professional house stagers for hire and books in the library that will help you.

Selling a home is a practical matter and like all practical matters it can be mred and delayed by pychological components. Staging your house includes forcing the buyer to attend to the features of the home, not the details of your personal life. Buyers are distracted by big friendly dogs, noticable smells and family photos. Clear your home of the items that will focus a buyer's attention on anything but how easily they can plug their future into your house.

A real life house is not the same as an "on the market" house. If your house is going to be sold soon, create the mindset that your home is a nest you are preparing for someone else. Your life will continue to unfold in your next house, so pack up this place's clutter, clean like crazy and steel yourself to accept and even appreciate the honest comments of people who will help you stage your home for sale. Do you, like me, love fried fish dinners with garlic bread and hot shredded cabage? THAT will have to be a meal you serve in your next house! Make your house smell like flowers.

Originally printed in McHenry County Woman Magazine

Write Me A $20,000.00 Check

Elise Livingston (Remax) — Tue, 28 Oct 2008 15:26:30 -0500

If I asked you to write a check to me for $20,000 would you do it? Probably not. What if I offered to write a check to you for $50,000 in exchange for your $20,000 check? Would you do it? Now, that's a great offer and it's similar to what's on the table for "move-up" buyers in our real estate market.

As always, the flip side of trouble is opportunity and there is plenty of opportunity in McHenry County. We can enjoy the benefits of the present economic condition by making smart Real Estate purchases. The time to buy property has never been better.

Traditionally in the Midwest, we have been insulated from the volatile swings in Real Estate values that the coastal states experience. Our highs are lower and our lows are higher than in Washington DC or California. The fact that the Midwest has a long, stable economic history and the fact that our normalizing Real Estate values are making less drastic moves than in some other regions combine to ease the risk factor of Real Estate purchases. Our conservative history offers even more protection in our local markets (using the past performance of our local market as a guide) as our home prices have seen a relatively smaller adjustment compared with neighboring markets. Our local economic stability serves as encouragement to take advantage of financial opportunities like lower home prices while they last! In McHenry County the increase in home values remained modest through the 1990's. By 2005 the escalation of Real Estate pricing was at an all time high. I can think of three homes that each sold in 2002 and then again in 2005 with a 35% increase in price! As Judge Judy says, "that's just not rational!" Our market is normalizing - and that's OK - but it means that these low priced Real Estate opportunities will not be around forever.

Let's get personal with this information - back to the $20,000 check. If your house has adjusted downward in price by about 10% - say from $205,000 to $185,000 in the past year or two you would be smart to PAY someone to buy your house now. Write that $20,000 check and then go buy a house for $500,000 that might have been listed last year for $550,000 or even $565,000. 10% of your existing house is a loss to you at about $20,000 - but 10% of your new house is a GAIN to you at over $50,000. That's a profit of $30,000 in money that only this type of Real Estate market can offer. Depersonalize the transaction and make it a smart business decision. You can move up now for less, but you have to be willing to sell your house at today's realistic price to get the advantage. In past times of stable or ascending prices, the move up buyer paid more. Are you squeezed into your house and you just need more room? Price your house to sell and move up! Especially if you have been thinking of a larger home, the time to buy is now.

Yes, there is good news in this market. Have you been reading the papers? Such stories of real estate desperation! Mortgage lenders closing their doors, all time high foreclosure rates and stories of price declines around the country. For the past few years, homeowners have depended on the rising value of their home to pay off credit card debt, buy cars and in general live beyond their means. In other words, instant gratification through mortgage refinance. Free money came in the form of Real Estate value margins to bail us out of the problems we caused ourselves by over spending. Well, free money is still available, but as a long-term investment benefit rather than instant gratification.

Elise Livingston is a Real Estate Broker in Illinois and Wisconsin, Treasurer for McHenry County Association of Realtors, Certified Real Estate Specialist, Accredited Buyer Representative, Graduate of Realtors Institute and McHCAR Member of Influence. She can be reached at 815-363-2834.

Originally Printed in McHenry County Woman Magazine

The Time to Buy is Now

Elise Livingston (Remax) — Sat, 06 Sep 2008 14:21:20 -0500

There is a surreal slice of life for each of us when timing and opportunity meet. You know the feeling; all of creation stands still - you can hear your own breath inside your body and you excite to the charge of adrenaline. For some it's stepping out onto the front porch just as a sparkling comet trails its green glow across the sky. For some it's perfectly executing the sneakiest surprise party. And for some it's knowing the time to buy a piece of Real Estate is now.

Of course you have heard the news reports. Across the country foreclosure files are piling up on the desks of Loss Mitigation clerks. Sellers are reducing prices on homes to breakeven or lower. But there is a winner in this real estate turn down... You. The Real Estate Investment Buyer.

The media is infamous for painting a picture of our nations economic condition as bleak, but every glass that is half empty is also half full. The Yin Yang truth of the situation is that there is always balance. Relief balances trouble, joy balances sorrow and opportunity balances loss. The balance for most people buying and selling now is that they are doing so in the same market condition. If they are taking a loss on their sale, they are likely also getting a great deal on their purchase. However, if you have been one of those rare and beautiful consumers who have tucked a penny or two away you are able to take advantage of buyer benefits without selling anything first.

There are two main indicators that show investment property purchases to be a sound idea:

Properties can be bought at low prices.
The number of people being refused mortgage loans is rising. Foreclosures drive the mortgage lenders to tighten loan qualification requirements. Consumers who could have been approved for a mortgage loan a year ago may now be denied. Responsible, employed people are looking for comfortable, respectable, clean and lovely homes to rent.

That's where you come in. There are two ways to make money as a real estate investor. One is to buy a distressed property, improve it and sell it for a profit. This scenario earns income. The second way is to buy a property at the low end of market value, fix it up if needed and rent it out. This scenario builds wealth. Using real estate as a wealth-building tool is not without risk. There are vacancy rates, property damage issues, late rent payments and 2 AM calls about flooding basements. Here we are back to balance, but now it's the balance between risk and reward, between effort and satisfaction and between careful planning and following your gut. Successful real estate investing requires a balance between these three continuums as well as the obvious balance between profit and loss.

We will explore just one wealth-building plan for the purpose of illustration. The premise of this scenario is to buy a residential property with a down payment large enough to insure a total monthly payment smaller than a potential rent amount, rent out the home to a qualified tenant until the house has appreciated enough to repay the down payment to you at a satisfactory rate.

Some banks will allow 10% of the purchase price for down payment on an investment piece, while most still require the traditional 20% down. Manipulate the amount you use for a down payment to create a positive cash flow every month. For instance, a home purchased for $170,000.00 with 20% down at 7.5% mortgaged over 30 years has a monthly principle, interest, tax and insurance payment of $1,200.00. Rent must cover this amount. If the house can rent for $1,250.00 per month your costs are covered and your down payment will accrue value at the rate the real estate appreciates. 20% of $170,000.00 is $34,000.00, so in this example you can double your down payment investment when the real estate is worth $204,000.00. At a modest annual appreciate estimate of 4%, the property will be worth more than $204,000.00 in less than 5 years. In this example, it will take less than 5 years to double your $34,000.00 down payment. That's a 15% annual return on your down payment. Reality rarely follows a neat example and anything can happen. There in lies the risk. If property values fall, like they have been in California and Florida (and to a lesser extent - even here!) it may take longer to achieve profit

This investment is not for the faint of heart. Study the market. Explore every possible risk factor and all costs involved before you decide to invest your hard earned money into real estate or into any investment vehicle. If the balance you seek is between hard work and reward, then take a look a property that needs some fixing up and study the pros and cons of buying it for rental income. Contact your accountant for more information on the tax risks and benefits and your attorney for more information about the different ways to take title.

Originally printed in McHenry County Woman Magazine

McHenry County Real Estate

Elise Livingston (Remax) — Tue, 22 Jul 2008 11:48:39 -0500

It’s an odd tendency in our society to revere those stoic folk who smile and nod through crisis, never giving a clue to the worry in their lives. Although there are many times when a stiff upper lip is the most prudent public face; if you suspect that warding off a foreclosure sale of your home is in your future now is not the time to keep your concerns to yourself.

Would you be surprised to learn that in one small McHenry County Village 20% of November, 2006’s Real Estate transactions were in some way related to a foreclosure or pre-foreclosure process? This information is from the MLSNI database only and does not include private transactions or sheriff sales at the county courthouse, so the actual number could be higher.

A true foreclosure damages credit scores for years and delays financial opportunity for the victim. With such dire outcomes, wouldn’t you expect that we homeowners would rush to get help to avoid such drastic, crippling consequences? Such is the cruel irony. Most homeowners are so worried about admitting their financial trouble that the process goes too far before any remedy is sought.

Armchair economists are quick to theorize why more and more homeowners in McHenry County find themselves facing some sort of financial crisis involving delinquency in their mortgage payments. In spite of kernels of truth in the dangers of credit card debt, interest-only mortgages and the financial difficulty of divorce, the contributing factors fade to the background once you are faced with the terrifying prospect of losing your home. If you are struggling with job loss, poor health or a death in the family the crisis is more personal and more painful than a purely financial situation. It is easy to see how this complex web of practical and emotional factors distorts the ability to face what feels like a lonely economic quandary.

First come the letters from the mortgage holder and then come the wakeful nights. Now is the time to face the difficult task of trusting someone with the truth of your situation. Don’t let the embarrassment of this admission prevent you from getting help. Take a deep breath and decide who to trust! Sharing the problem with an ethical professional is the first step toward resolution and you will be surprised at the tools available to craft your credit recovery. It will not be easy, but the sooner you get help, the better your chances of getting back on your feet. Professional Real Estate Brokers or attorneys who have experience dealing with mortgages and pre-foreclosures can negotiate directly with the bank on your behalf to work out a short sale and are good starting points if you think that a sale of your property will be the outcome. Otherwise, meet with your mortgage company or credit counselor to create a payment plan as a first step.

If the property must be sold, but there is not quite enough equity to pay back the mortgage, penalties and late fees, the lender may agree to a “short sale”. The short sale benefits you because you are able to sell the home, leave the property and the high payments behind to start over in a more affordable house. The bank agrees to accept less than full payment to release the mortgage; thus the name “short” sale. Your home will be placed on the market and once under contract with a buyer the negotiation with the bank begins. A patient buyer will wait out the transaction – and it can take months. It is an arduous process in which you may be asked to submit and resubmit current financial documents to the bank. Here is where you will benefit from the expertise of a professional who has worked through the details of a short sale before. A negotiated sale reduces your credit rating, but a few years of responsible bill paying will improve your standing. In many cases, the amount of debt left unpaid by the short sale is paid back by signing deficiency papers. The payments are manageable and stretched out over time. Beware of the hidden costs of a “forgiven” amount of debt. This amount becomes taxable gain in the eyes of Uncle Sam. After all, you did actually borrow this money and if it is not repaid the government considers it income to you. Make arrangements with the IRS to handle the tax event connected with the short sale. As difficult as it can be, avoiding foreclosure by working through a pre-foreclosure sale will benefit your long-term financial standing.

For more information or for a good starting point contact the not for profit agency in Woodstock: Consumer Credit Counseling Service of McHenry County, Inc.

Elise Livingston is a Real Estate Broker in McHenry County, Certified Residential Specialist, Accredited Buyer’s Representative, Graduate of the Real Estate Institute and a director for the McHenry County Association of Realtors.

Originally printed in McHenry County Woman Magazine