Inside Real Estate

General articles about real estate.
There are 26 articles written on this subject. The most recent 10 are listed here:

Being upside down causes a rush of blood to the head A sad, sad, sad true story...help! Zillow sharpens its sword...challenges the status quo 2006 Remodeling Cost vs. Value Report Gen. Jubal A. Early grounded on the Potomac?

The joys of satisfied real estate clients Taking the mystery out of days on market Preparing to Sell: Part I Everyone feeling the pain and an industry gone wacko! Accredited Consultant in Real Estate Program Launched

You will find a complete Index of Articles by Category and by Month in the Archives.

October 10, 2007

Here's a note I received from a recent listing client that settled on their sale October 1st:

Dear Merv,
Many thanks for a job well done! From taking and editing excellent photos, creating an appealing virtual tour, maximizing the places our listing could be seen, through the negotiations, you made a significant difference in selling our house.

We were expecting to lose money, but are glad that didn't happen. It is a paradox to think that an average Realtor would have not even sold it yet, but would collect several thousand more when the house finally did sell. Your visionary sales/consulting model is a "win-win" for all of us.

Finally, the quick sale will most importantly allow us to be a family again - with Dad home at night and Mom keeping her sanity! For that we are most grateful.

Please accept a bottle of my favorite wine ever - I brought 4 boxes back from Germany and want you to have one as a token of our appreciation for your hard and smart work.

With gratitude,
The Davison family - Erin, Mark, John and Eleanor

To the Davison family: it was my pleasure serving you...

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April 19, 2007

Days On Market continues to be somewhat controversial in some areas of the country and widely misunderstood by many readers. The following is a quick tutorial of the meaning as it applies to our MLS (MRIS with a coverage area of the Washington Metro region):

MRIS tracks "days on the market" in two convenient and important ways. They are referred to as DOMM and DOMP:

1. DOMM: Defined as days on the market - MLS. This is the number of days on the market that a property is "active" from the list date of the current listing. Current listing you ask? Yes, current. A home can be withdrawn from the market, a listing may expire or it may be taken "temporarily" off the market for completely valid reasons. The MLS stops counting days (DOMM) for any of the these reasons in addition to a property changing status to "contract." If a property then comes back on the market (for instance: a contract is voided for some reason) with the SAME MLS ID number, counting days in DOMM resumes. In this case, DOMM and DOMP will be equal. Read on to see what happens if a property comes back on the market with a different MLS ID.
   
2. DOMP: Defined as total days on the market for this property. If a listing comes off the market for reasons stated above and then comes back on the market with a new MLS ID within 180 days of the last "off" date, DOMM is reset to zero BUT DOMP continues counting days from the first (original) list date. A property can go on and off the market many times but, as long as it is within 180 days of the last "off" date, DOMP continues counting.
   

DOMP is important because it gives the true picture of how long a property is "really" listed and is designed to keep agents from gaming the system (unfortunately some try) to make an old listing look new. Here are some common questions:

• How is DOMM/DOMP controlled? It is through the unique Tax ID that is assigned every property by the county in which it resides.
• Can a property have more than one MLS ID at the same time? Yes. Some are very valid. In fact, I had a listing in a community of townhouses that were also referred to as "patio homes." To be sure this property was recognized in distinct searches (town home and patio home) I listed it twice. But, because of the tax id, they were linked and both listings tracked the same DOMP even though the "list date was different." After settlement, I closed one with a status of SOLD and withdrew the duplicate. Can't close both with SOLD.
• Are there other ways to "game" the system? Probably. And, some may have figured it out.
• Are there penalties for being caught manipulating DOMM/DOMP? YES from a warning on the first discovery to several thousand dollars in penalties and/or suspension. An agent's broker can be fined too. The key word in the rules and regulations are "material." Days on the market is a material fact that both agents and consumers have a right to know to make an intelligent, informed real estate business decision.
• Are the rules and fines for violations made public? Yes. Here is the link to the MRIS Compliance section of the public Website.

I reacted to a comment made by one reader several months ago that inferred that RE/MAX taught their agents how to manipulate "days on the market." Logic tells me there is too much at risk to agents AND brokers to even think about it. After all, we are trying to make a living in this profession.

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April 9, 2007

A recent article I published Preparing To Sell in the Spring Surge was about a strategic mindset as a seller (you know ... the 5 Bs). This article is about the tactical side of preparing to sell.

In my experience over the last couple of years, I've met few homes that didn't need some work before going on the market. I'd say conservatively 7 out of 10. The biggest problem with sellers is that they don't look at their home through a buyers eye. This one simple fact will prohibit a home for selling at its highest and best value, or worse, not at all.

Just a couple of years ago when the market was red hot, a seller could put a dog house on a 10 square foot lot on the market and it would attract multiple contracts in a matter of hours. Not so today. Buyers simply have too much to chose from. If your home is not in tip-top shape, ready for a buyer move in, you simply will not sell. Unless, of course, you make it a bargain. Even then, many buyers just don't want the headache of having to do spruce up work themselves. Here's what I see in many homes we examine before taking a listing:

• Dirt: Plain and simple, a dirty home is going to turn off buyers. Professional cleaning top to bottom is a low cost investment that returns many times over its cost. For a medium range home the cost could be several hundred dollars.
• Worn, stained carpets: Turn off number two. Occasionally professionally cleaning them will help but, cleaning won't change the wear factor. I recommend replacing all carpet with a medium grade, neutral color with the best pad money can buy. About $23 to $25 per square yard will be sufficient. We've done this many times on medium priced homes and it makes a world of difference. On a higher end home, a more expensive solution is in order to match the higher price range.

• Paint: This ranges from hideous color combinations to just looking worn out. This is true for both inside and out. A freshly painted home not only looks good but could get rid of many years worth of living smells at the same time. Again, neutral colors are best. Don't forget the ceilings. And, hire a professional. Very few of us will do a quality job if we try to skimp and do it ourselves. Don't forget to fix the wood rot outside too. If it doesn't look well maintained all kinds of red flags go up in a buyers mind leading to: "What other problems might there be that can't be seen?"
• Smells: Cooking, smoking and animal smells will cause a potential buyer to turn around at the front door and run away as fast as they can. In fact, I take a buyer client out of a smelly home before we even make it across the threshold. For gawds sake, don't smoke in the house (especially after replacing carpet and painting). Got dog hair floating everywhere? Gotta fix it (as in get rid of the hair and don't let it come back). Nothing, absolutely nothing, is worse than cat urine. It will destroy a home, not only carpets but wood floors as well; even the sub-flooring. There are several neutralizing agents available that may mitigate this issue but, I have found none are 100% effective. If it gets into the sub-floor, ouch! If it can't be totally mitigated you have just narrowed your buyer population to a minuscule number and your price must be adjusted significantly downward to compensate.
• Clutter: Any of us that have been in our homes for more than just a few years have more stuff laying and hanging around than we probably need or use. That neat warming tray gift from Aunt Grace is a keepsake but never used. Buyers want to imagine how they will live in your home. Your stuff falling out of the closets and kitchen cabinets that have not 1 square inch of space left will certainly discourage a potential buyer because the message you send is "there is not enough space in this home." Solution: get rid of it. Throw away as much as you can tolerate and pack and store somewhere else the things you can't (like the warming tray you never use).
• Landscape: Curb appeal. First impressions are everything. Mow, weed, trim and get some seasonal flower color for your home as seen from the street. In fact, sellers need to walk out to the street and look back at their home. Would you buy this home if you had lots of choices? You have to be brutally objective.

• The details: How about the outside metal fixtures? Are they discolored? Falling down? Tarnished? How much better would it be if you replaced those weathered brass fixtures and trim (like front door kick plates and door knockers) with bright shiny new ones? I say it is essential! Impression. Impression. Impression. Same with a weathered, worn wood deck. If it is beyond sanding, re-staining and/or sealing, it should be replaced. Garage doors? If you are like me, garage doors typically attract neglect. If they are rotting, the best thing to do is replace them. We have had good results with aluminum replacements painted to match the house trim. Short of total replacement, I have replaced just the bad panels if they are of a standard style. I've done this on my own home.
• The kitchen: Chances are that if your appliances are more than 10 or so years old, replacing them adds real value to a potential buyer. Especially, if you have cooked on grease and stains that cannot be removed. Those Formica or laminate counter tops? Synthetic or stone counters are expected, especially in newer homes that you may be competing with.

This sounds like a lot and maybe it is. If your home is in "like new" condition you will have a better chance of selling in a shorter time for the highest price possible. We are great at marketing our listings to attract buyers but, your home has to "sell" itself.

From our experience, a 2,000 square foot home that requires inside paint, outside trim, new carpets cleaning, decluttering and some landscape spruce up will cost in the $10,000 to $15,000 range. A 5,000 square foot home we listed required all of the same plus new medium grade appliances, new interior/exterior door hardware and hardwood floors refinished and the price tag came in at about $32,000. The questions: Is it worth it to do all this? Will I get my money back? The answer: What is your cost if it doesn't sell. A lot of this is what I call "deferred maintenance." If you are not maintaining while you own it, you will need to spend the money before you list to attract a buyer. The market is brutally competitive! As a seller, you want to be a "top seed" (like in tournament rankings).

These are only the major items to consider. There may be others. All homes are unique in some way and may require other work. An objective evaluation would be in your best interest. Preparing to Sell: Part II will be about the next step: Making the emotional connection with a buyer.

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February 4, 2007

Or, maybe it is always wacko. An article yesterday in the Washington Post has me shaking my head. A survey conducted reports that 90% of the appraisers surveyed indicated they were pressured to raise their appraised value. Here's the excerpt:

Appraisers Under Pressure To Inflate Values

By Kenneth R. Harney
Saturday, February 3, 2007; Page F01

With home prices softening and sales volume sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions.

A new survey of the national appraisal industry found that 90 percent of appraisers reported that mortgage brokers, real estate agents, lenders and even consumers have put pressure on them to raise property valuations to enable deals to go through. That percentage is up sharply from a parallel survey conducted in 2003, when 55 percent of appraisers reported attempts to influence their findings and 45 percent reported "never." Now the latter category is down to just 10 percent.

Read the full article.

Can appraisers be wrong? Probably. An appraisal is simply an estimate of market value. Appraisers live by an industry code of ethics and industry standards. Their work needs to stand up in court. The biggest offenders are mortgage brokers (the middle man) and real estate brokers. Both want the "deal" to close. Sellers are on this list too. Feeling the pain of sitting on the market a long time, they don't want their contract to go south because it didn't appraise and the buyer potentially walks away.

I have had less than desirable appraisals on a seller's listing under contract. We first ask to see the report. We have an opportunity to offer questions about the estimated value. We can even offer our own comps that the appraiser did not consider. But, in the end, a good appraiser will stand by his or her work and only modify an opinion on hard facts. Maybe asking questions and offering more data is interpretted as "pressure." Beyond that, here are the sellers and buyers options (notice "pressure the appraiser" is not in the list):

• Re-negotiate the selling price. I had one where the appraisal came in $20,000 low. The buyer and seller agreed to a new contract price $10,000 lower than the original offer. A win-win conclusion in this case. Of course, the buyer had to come up with the extra cash to purchase the home because the buyer was financing at 80% of the appraised value. Lender underwriters need a number to hang their hat on; the appraised value is that number.
• Seller may not be willing to negotiate risking the buyer walking away from the deal.
• The buyer simply walks away because of the low appraisal. Happens all the time.
• If the buyer and mortgage company agree, obtain a second opinion at the seller's expense. Then go back to the top of this list.
• Are there other options? I'd love to read your comments or real experiences.

Appraisers I know say that even an experienced appraiser's report may have a margin of error of +/- 5 to 6%. So on a $500,000 property that is +/- $25,000 at a 5% margin of error.

Are there dishonest appraisers? Sure, just like dishonest real estate agents, brokers, lenders, clergy, police and (fill in the blank) ________________. When there is money involved, many will go over the ethical and legal line (or maybe just straddle it which is just as bad). Harvey concludes his article by offering this view by an executive of a large appraisal firm:

Bottom line in Hummel's view: Congress needs to enact legislation making pressuring appraisers to distort their valuations, or interfering with appraisals in any way, a federal offense, subject to criminal penalties. And state regulators need to step up enforcement against fraudulent appraisals, pressure tactics and appraisers who give in.

I still can't get over the 90% figure from the survey. No wonder our industry has a bad reputation. I'm feeling a little dirty. I think I'll go wash my hands.

Comment on Everyone feeling the pain and an industry gone wacko!. Follow this article is off. More articles like this one filed in: Buying & Selling Real Estate , Market Value , Opinions , REALTORS® , Real Estate

January 15, 2007

Mollie Wasserman and Paula Bean launched a new program at the recent NAR convention in New Orleans called the Accredited Consultant in Real Estate (ACRE™). Both have practiced successful real estate consulting for several years and Mollie is considered a pioneer in the consulting approach and fee for service business models. Mollie was my inspiration to enter this business with my own approach to consulting and fee schedules. Mollie recently finished the manuscript for her new book "Ripping the Roof Off Real Estate" about "consulting with" not "selling to" clients and the implementation of fee based services. It will hit the bookstores and online at Amazon or Barnes & Noble in early February.

In addition, they developed a course for agents to become skilled in this business approach with a followup coaching program that is rather unique in the industry. Learn more about the course at www.acrealestate.info. The Coaching Program will use an online Forum approach that is currently under construction. The Forum will be available to ACRE™ graduates when it is launched later this month (it will be closed to the general public).

More about Mollie at MetroWest Real Estate: The Home Consultants Realty Team, and at My Real Estate Consultants.

More about Paula at www.HomeOrlando.com and www.carib-gulf.com.

Here is an excerpt from Mollie's book:

REAL ESTATE CONSULTING

What IS It? How Does It Differ From the Real Estate Sales?

What IS Real Estate Consulting? Is it just a fancy new catch phrase that means the same way of doing business? Well, we can't speak for some agents who call themselves "consultants" but still remain salespeople in practice, but we can tell you that TRUE consulting is a totally different model - a whole new approach in Real Estate.

Let's look at the differences:

• The Real Estate Consultant is compensated for their expertise, time and/or the task. If they're paid contingent on a guaranteed outcome (a traditional commission), it is understood by the consumer that will be paying a premium to have this guarantee.
  
  The Real Estate Salesperson is only paid for a guaranteed outcome (one they can influence but not control).
• The Consultant is often retained and compensated the way other professionals providing a service are, such as CPA's or most Attorney's.
  
  The Salesperson is compensated the way other salespeople selling a product are. (By the way: this doesn't mean that a consultant can't offer commissions if that's what right for their client - the essence of consulting is providing choices. It's just essential that the consumer understand what it is they're paying for).
• Consulting covers a variety of skills and can be used to reach a variety of outcomes.
  
  Selling has one single focus - to SELL something.
• Sometimes the best choice for a consumer is not to buy or sell at all! (Or not now). The Consultant is retained to provide the counsel to help them reach that decision.
  
  A Salesperson, when there's no transaction, has nothing to offer (and no way to get paid).

The real estate salesperson usually has only one way of being paid: a contingent-on-a-sale commission. Consultants, on the other hand, can offer a variety of compensation alternatives such as hourly consulting, a flat fee, as well as traditional commissions, so that the consultant can tailor their services based on what the consumer needs to reach their goals. By the way, consultative service is not limited to transactions. As an example, wouldn't it be great to be able to receive (and pay for) just a couple of hours of objective counsel on the real estate market when you're not sure what you want to do?

Who might be interested in Real Estate Consulting?

• Any homeowner who's trying to decide whether to "move or improve" and wishes they could get objective counsel...
• Any buyer who isn't sure they're ready to buy but would like some guidance on the market...
• Any consumer who really doesn't WANT to play Realtor but feels forced to go it alone if they need to save money...
• Any consumer who's ever resorted to a Discount Broker or a Discount Commission and found out too late that they got Discount Service which didn't get the job done, or didn't get it done right - thus losing money and valuable market time.

This page is an excerpt from Mollie Wasserman's book:
"Ripping The Roof Off Real Estate"
It's Not What You Save, It's What You Keep
© Copyright 2006 Mollie W. Wasserman All rights reserved
Reproduced here by permission.

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January 2, 2007

I've had discussions with two potential clients in the last two weeks and both are upside down. Definition: they most likely will have to bring money to the table when they sell. The underlying problem is the same in both cases but with different circumstances. Here is part one of a two part series:

Seller 1: Enjoyed living in a 20 year old colonial on a good lot in a desirable neighborhood for nearly 19 years. They made several improvements in that time including an addition on the back of the home expanding the living area and finishing the basement. Seller 1 made the decision to "move up" to a larger new construction home in early 2005 (the beginning of the market turn) and took out a "line of credit" second to make the deposit. The appraisal on the existing home came in high as comps were those sold in the later part of 2004.

They were on the market in the spring at an optimistic asking price (aka: greedy price). One month after the initial listing, they closed on their new home and moved out. The listed home was now empty revealing all of the ugly blemishes. Two agents and 9 months later, the home has not sold. They lowered their price several times but always too late. They were following the market down, not leading it.

Upon visiting the home, we discovered several deficiencies. Deficiencies that would perhaps be overlooked in a strong sellers market but not now. Carpeting was badly worn and stained, the hardwood floors were awful and the interior paint was OK but not fresh. Using a buyer's eye, all I saw was work that would have to be done if I otherwise would consider this home. There are too many homes on the market that do not require "freshening."

The painful "blood rush" headache came when we advised that the work required on the home to be competitive is at least $5,000, the probable list price was $20,000 less than what they owed, and selling costs would most likely be in the $25,000 range and it might take a long time to sell. The rub: neither prior listing agents did them any favors. The first agent collected the "new home" commission with a reduced listing fee on the resale. The second agent did not advise their client on "freshening" to be competitive and continued the inflated asking price in a downward market. This is not to say that this client didn't have a hand in the greed price. (See Egocentric influences on pricing a home.)

It's always hard to be the bearer of bad news. I would rather not have the business than to mislead a potential client. I even advised them to get a second opinion from a reputable agent (like consulting before major surgery).

Furthermore, the seller's mindset at this point is to try and sell in the next few months and then go to plan B: list it for rent hoping the market will turn sometime in the future. The rental market is not all that great either.

Here's where a fee for service arrangement helps this potential client while paying us for our expenses: (A) client pays up front marketing costs (all the things we do to list and market the home) and then (B) pays a success fee if we are lucky enough to get a ratified contract that goes to close. The success fee pays for the contract to closing activities we perform. The total fee is much less since we are sharing risk.

The bottom line: There are many, many more of these stories...and they are being created as we speak (or write, as the case may be). Make sure you are getting the very best advice, you have all the data to make an informed decision and DO NOT over commit!

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December 20, 2006

I debated writing this for a couple of weeks now. This is a true story. It should cause outrage. I have changed the names, places, and specifics of the story to protect the participants and to avoid jeopardizing any legal action that may emerge.

This story starts several years ago with the dream of an immigrant that life can be better, fairer and more fulfilling in this place we call America. A family with three young daughters pursuing their dream in Northern Virginia. A christian family of high moral values. Parents are hard working. Maria is a supervisor at a nursing home and the proprietor of a licensed handyman business. Jose, her husband runs the handyman business. Handyman is a bit of a misnomer. Jose is a skilled craftsman. A master at custom woodworking and a superb painter. Jose and his few employees are in constant demand because of the quality of work, reasonable rates and untarnished honesty. Many of his clients give him "the keys to the house" as they trust him like part of the family. Jose never works on Sundays and is known to give sermons at his church. Maria speaks a little english and often needs someone to translate. Jose communicates in english well enough to get by but is often misunderstood.

This family was able to purchase a very modest home with their hard earned savings 3 years ago. A good price with an attractive interest rate based on good credit. Based on their hard work and desire to own a bigger home, Maria and Jose started their search for a "new home." They found the perfect potential home in a new development. We will place the time in late spring/early summer of this year. The plan was to pull equity out of their current home that enjoyed significant appreciation to make the deposit on their new dream home. In come the sharks for the kill.
Here are the facts to set the stage for a financial disaster:

• Spring of 2006 inventory of homes for sale was rising rapidly and sales were dramatically slower.
• New construction home priced in the $550,000 range with closing within 6 to 9 months.
• Jose and Maria hooked up with a lender by referral to refinance their current home, extracting equity to make the deposit on their new one.
• Lender advertises a 1.25% interest rate.
• Current home was appraised at $420,000 by the lender.
• They refinance for about $340,000 taking just enough out to make their $50,000 deposit and pay lender and closing fees.
• Maria and Jose close on the loan, make their deposit and are happy to have met their objective.
• Their first month payment was in the $1,400 range, well within their budget.
• Their second month payment was a shocking $2,800 with a note on the payment notice that the interest rate was 8.75% and the loan was "sold" to a national lender.

Shocked and in disbelief, Jose calls me to see if I could help him understand what had happened. Although I had a hunch at what they got into, I referred Jose to a reputable lender friend to review his loan documents. The result was as I suspected. They signed on to an option-arm loan program. Here is an overview as I understand it:

• Loan amount: $340,000
• Option Arm at 1.25% start rate with an adjustment after one month.
• Fully amortized 30 year rate at 8.75%
• Payment Options: $2,800 fully amortized, $2,300 interest only, $1,400 minimum payment with negative amortization.
• A $9,000 PREPAYMENT PENALTY if paid in the first year! Tha't right. They hope to sell their home and close on the new one in 9 months!
• The closing documents show the original lender/broker received a huge commission for closing the loan

At this point in time, Maria and Jose need to sell their home. It appears their new home will be ready in about 60 to 90 days. I visited their home and found that it was nicely cared for, on a good lot and has an addition off the entire back of the house adding about 500 to 600 square feet of living space. It was originally built in the mid 1950's. Some quick research reveals that there are 20 homes active in the neighborhood at an average of 97 days on the market with a maximum of 217 days. There is one under contract at 375,000 and was on the market 341 days. 43 have sold since the first of the year at an average price of $335,000 with a maximum of $385,000. Sales are running about 2 homes per month since August. Average seller subsidy is $10,000.

Doing an estimated net sheet at an "optimistic" sale price of $380,000 and sold in 90 days yields:

Sale Price	$380,000
Mortgage	$352,000	Includes negative amortization
Gross Equity	$28,000
Listing Commission	$0	If I do it for free
Selling Commission	$11,400	3% to get agents to show it
Seller Subsidy	$10,000	Based on averages to date
Misc Closing Costs	$900	Escrow, title, recording, termite
Grantor Tax	$380
Prepayment Penalty	$9,000	Robbery!
Seller Prorations	$3,400	Taxes, Interest, etc.
Total Selling Expense	$35,080	Taxes, Interest, etc.
Net proceeds	-$7,080	Estimate

Closing cost estimate on new home (cash required): ~$13,000. They are not going to have it.

Now, this is the question: Would a reasonable person make the decision to accept these terms with a short term objective knowing the negative consequences? I say not. Are they naive? Maybe. I believe they were taken advantage of, as in FRAUDULENT and PREDATORY lending.
They have consulted other lenders after realizing what they had done and have been offered a refinance package in the low 6% range based on their stated income and good credit. So, I don't believe the loan they got themselves into was sub-prime. Refinancing again now is NOT the answer. Doing nothing is NOT the answer. Investigating the broker/lender practice IS the answer. The optimistic selling picture painted above is just that, optimistic. I believe it will be several thousand dollars worse.

If you are equally outraged and believe you can help, call me, email me, meet with me. We need to get this disaster fixed for these good people. People that wanted to be in America, living freer, a place that is fairer, with rewards going to those with high values, that play by the rules and are not afraid of hard work. They deserve better. We all do.

I keep asking myself why he didn't talk to someone he knows and trusts before making this decision...........................

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December 7, 2006

The Blogging world is buZZing this morning about Zillow's announcement last night offering free listings tied to your homes tax and sales history in their gargantuan data base. And, it is up and running. Zillow is taking aim with their sharp, swift sword at the heart of the real estate industry. Every real estate blogger on the planet is reporting and offering opinions on the significance of this announcement and capability. My favorite commentary can be found at

• the BloodhoundBlog (Greg actually had advance notice),
• sellsius,
• Ardell and Galen at the Rain City Guide,
• Kris Berg at The San Diego Home Blog,
• Inman News and
• Jim at Real Central Virginia.

The significance of this might well be to make every MLS obsolete, realtor.com irrelevant, Google Base old fashioned, Craig's list history and significantly transform the role of a real estate agent as a central figure in the transaction to one of a real estate transaction advisor as buyers search for homes and sellers are empowered to market their own homes on a massive scale. The difference between Zillow and the rest of the world is the integration of "free" listings to the tax and sales records of nearly every property in the US. Will there be kinks? Sure, but these guys can figure out how to smooth them out. Incredible!

There is no better time for every real estate agent to figure out how to transform their business from sales agent to consultant. It may take awhile but, I truly believe this may be the single event that will force the industry to change. It is serendipitous that Pam and I had the vision to establish our business on a consulting business model with a complete, transparent fee schedule.

Watch for the mark of Zillow coming from the tip of their long sword of innovation on everything real estate. I love it! See Zillow now.

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December 5, 2006

The annual Cost vs Value report was published December 1st by REALTOR® Magazine in cooperation with Remodeling Magazine. The report covers 25 popular projects in 60 cities.

Prices for most remodeling projects continue to climb, while the recoup value of improvements at resale is declining to levels last seen in 2002. These are the findings of Remodeling magazine's 19th annual "Cost vs. Value Report-the eighth prepared in cooperation with REALTOR® Magazine. None of this should come as much of a surprise to you: This year's recoup values confirm the housing slowdown many parts of the country are experiencing.

With both home-sale and remodeling activity at record levels in the last five to six years, some cooling is inevitable. Indications are that the current downturn represents a return to "normal levels. (See "No cause for alarm")

Read the REALTOR® Magazine overview at Making Home Improvements Pay. Summary data is included for major regions of the country.

The Washington area is one of the 60 cities/metro areas covered. Down-loadable PDF reports for each of the 60 cities can be purchased for a nominal fee at Remodeling Online.

In the DC Metro area, a two-story addition returns a whopping 105% and a fiber cement siding replacement for tired vinyl or aluminum returns nearly 99%. A home office remodel returns the least at 83%. On average, The DC Metro area has higher returns than national averages. These are taken from the purchased Washington report.

It is often more beneficial to remodel and/or upgrade an existing home instead of trying to sell and buying into the features you desire. Especially if you otherwise love your house and neighborhood. The only caution is to be careful not to over do it compared to the surrounding area. You may have a hard time selling and get even less when and if you ever do want to sell.

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September 20, 2006

CROSSING THE POTOMAC

Mutinous Ferry Roils the Waters
Boat Owner Entangled in Licensing Dispute Ignores Coast Guard's Order to Shut Down

By Fredrick Kunkle
Washington Post Staff Writer
Friday, September 15, 2006; Page B03

True to its Confederate namesake, the Gen. Jubal A. Early ferryboat yesterday defied orders by the federal government to halt operations because of a licensing dispute and instead kept chugging back and forth across the Potomac River carrying hundreds of commuters.

More to this story...with photos.

White's Ferry is somewhat of a historical landmark on the Potomac River carrying commuters back and forth between Loudoun County and Montgomery County, Maryland. It's a great alternative to the long commutes to the beltway or north across the bridge at Point of Rocks on Route 15 (a two-lane historical byway that has become the de facto "outer beltway"). I know. I used the ferry for almost four years in my corporate life.

The ferry transports about 500 vehicles a day. That's 500 less on the major commute corridors out of Loudoun County. But, the Coast Guard doesn't seem to care. On the other hand, safety and a knowledgeable, licensed captain are extremely important. I've experienced many "hard landings" on the ramps, one that damaged my car.

The owner has run the ferry since he purchased it in 1946. He is well aware of the rules. Mr. Brown: get it inspected and keep your "captains" licensed. We need you. We need the ferry. We need it to be safe.

Coast Guard: This isn't an ocean going vessel. It's a raft on a cable. Don't be so punitive. Be part of the solution. Reasonable people will act reasonably.

In case you are interested you can...read more.
The ferry carries about 21 average sized vehicles and makes a round trip in about 15 minutes, loading and unloading at each end. It is basically a metal raft guided by cable across the river. As a maritime vessel, the Coast Guard has vessel inspection authority and requires a licensed captain to operate it.

Seems as though the Coast Guard performed a recent check and found the vessel did not have a required inspection certificate and was operating without a licensed captain. The Gen. Jubal A. Early was ordered to cease operations, and threatened with significant fines. The owner who has run the ferry since 1946 defied the order and continued operation. The ferry carries about 21 average sized vehicles and makes a round trip in about 15 minutes, loading and unloading at each end. It is basically a metal raft guided by cable across the river. As a maritime vessel, the Coast Guard has vessel inspection authority and requires a licensed captain to operate it.

PS: As of this writing the ferry is still operating.

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