Category: Real Estate

  • Scratch troubled, we are screwed as a country

    Scratch troubled, we are screwed as a country

    I read with great alarm on CFO.com that as the housing and mortgage crisis deepens, people are dipping into or even cashing out retirement funds.

    “In the last four or five months we have seen an absolute onslaught of people trying to do hardship withdrawals and loans out of 401(k)s,” Mark Anderson, CFO of Granite City Electric, told CFO magazine in October. “What has happened with housing and the economy has really blown up for people at the lower end of the spectrum.”

    When you cash out a retirement fund to pay down a mortgage, you take a double hit. First, you lose the money itself in a market that is declining rapidly, dumping good money after bad. Second, and most perilously, you create an enormous opportunity cost for yourself that you will in all likelihood never recoup in your lifetime.

    Let’s do the math. Let’s say you are an eager 21 year old college graduate, with a great outlook on life, a job that pays a salary of 2,000 a month before taxes, and 45 years in the workforce ahead of you. If you start saving today, 3% of your income with employers that match with a 3% contribution, and your investments give a safe return of 6% over your working lifetime, you’ll retire at the age of 66 with roughly330,000, give or take.

    Now, let’s say you, at the age of 50, make some bad choices and consider bailing yourself out of a mortgage problem with the 110,000 you’ve accrued so far in life. Boom, problem solved, right? Wrong. You’re now in incredible trouble. You will retire in 15 years with a grand total of only35,000 in the bank (at the same savings rate). To retire with the same amount of money as you would have had, you would need to save 30% of your income instead of 3%, have an employer that matched 6%, and hope for an 11% return over those 15 years. Otherwise, you have to depend on the government and HOPE that Social Security is still solvent when you retire – otherwise, you will not retire.

    What SHOULD you do if you find yourself in super-serious, no end in sight mortgage trouble? Walk away. Mail in the keys to your lender, declare bankruptcy, rent a nice apartment somewhere, and work off the bankruptcy. Does foreclosure look bad? Yes. Foreclosure and bankruptcy means you’ll be paying cash for a lot of things for a while. But it lasts 7 or 10 years at the most. 7 to 10 years of bad credit is easily survivable, and you may even develop good personal spending habits by only being able to spend what you have. Compare 7 to 10 years of conservative living with 30 years as an elderly man or woman trying to make ends meet with meager savings. Can’t declare bankruptcy? Leave the country. As long as you have useful skills, there are PLENTY of nations on this planet that are all very nice, and very few of them have credit bureaus connected to the United States.

    Truth: the United States is NOT the best country in the world. It’s one of many very good countries, and any flag-waving moron who blindly believes that one country is the best has probably never traveled more than 20 miles past his doorstep. LOTS of good countries in the world.

    Unfortunately, for a lot of people, they’ve already dived off the cliff, and that means a certain percentage of the population in the years to come will be gambling that social services and the government can assist them in their “golden years”.

    Is that a gamble you’d take?

    Like the old Willie Nelson song goes, know when to hold ’em, know when to fold ’em, know when to walk away, know when to RUN.

  • How to find an honest realtor

    Simple. Ask these two questions:

    Is now a good time to sell?

    Is now a good time to buy?

    If they answer yes to either of those questions and you’re in the United States of America, walk away.

    If a realtor says, “The party line is that it’s always a good time to buy, but honestly, I’d wait a year” take that person’s business card and don’t lose it.

  • How bad is the housing bubble burst? THIS bad.

    Just when you thought the real estate market couldn’t get any more desperate:
    Housing bubble bursting ad in Craiglist
    I don’t know who to feel more sorry for – the person posting the ad or the sucker who buys a house in metro Phoenix, Arizona, where prices are falling on average about 30%. I guess it depends on whether you think US citizenship is worth $595K.

  • Lessons in photography for realtors and people selling houses

    Lessons in photography for realtors and people selling houses. A few lessons from this weekend.

    1. Use a tripod, always.

    Using a tripod will guarantee blur-free photos. My photos are NOT blur-free because I did not use a tripod.

    2. Learn to use white balance, and turn OFF your flash.

    Here’s the thing about most realtor photos. Most photos are bad, and the number one thing about them is that the lighting is wrong, wrong, wrong. Compare these two photos of the kitchen:

    Why realtors need photographers

    This is with no white balance and a flash. See how dark the cabinets look?

    Why realtors need photographers

    This is with white balance and NO flash.

    White balance is easy – point the lens at a white object in the room (a wall) and use it to set the lighting levels.

    If you use a tripod, you can avoid using a flash, and that’s a HUGE benefit because it shows the rooms as they’re actually lit, if not a little brighter. Using a flash also tends to throw photos towards the blue end of the lighting spectrum, which feels cold. Most of the time, in most house photos, you want to go for warm, and that means tripod, no flash.

    3. Learn the rule of thirds.

    Why realtors need photographers

    Simply put, if you shoot a room square on, you end up with flat, dimensionless photos that don’t give a feel or sense of space.

    The rule of thirds is well explained in this wikipedia article.

    Why realtors need photographers

    4. Shoot from hip level or non-traditional angles.

    Why realtors need photographers

    Nothing will make a house feel smaller than shooting from eye level, or higher. Shoot from hip level, low level, or unusual angles to capture more of a sense of space in the house. Sure, you’ll have to adjust your tripod and bend over to take the shot, but the result is WORTH it.

    Bottom line: more and more people are browsing on the Internet. Those few digital snaps you take can either entice a prospective buyer, or turn them off entirely. How many sales are you losing with bad photos and you don’t even know about it?

  • New Media Realty

    Two sets of people are selling their houses right now – my parents, and C.C. Chapman‘s family. Being the new media nerd I am, it got me thinking – how would we apply the tools of new media to real estate? I was going for a walk tonight with my wife, and we walked by a house that was for sale, as so many are these days. One thing that caught my eye was that instead of the traditional placard where a realtor’s name was, there was instead a domain name, which I thought was pretty clever.

    Of course, one look at the web site and it looks like Flickr had an accident on the way to the toilet, but the branding of the property as the domain name was a good idea.

    What tools do we have at our disposal for helping to sell a house when we really want to? Your average realtor, no slight on the profession, doesn’t have the time or history to be able to explore and understand a property beyond its most superficial characteristics, which is why the descriptions of real estate listings are repetitively bland and uninspiring.

    So let’s play a bit with some new media tools and a house listing. Since I don’t know if C.C.’s house is listed, nor do I have his permission to reveal where he lives, we’ll work with my parents’ house. I went out to GoDaddy and bought 15CambridgeDrive.com (use code HASH3 for $2 off) and will repoint it to this blog post tomorrow when DNS finishes updating.

    Suppose you want to know more about 15 Cambridge Drive, Annandale, NJ. A Google Map to get there might be nice. If you’re a Google Earth user, I might include a Google Earth KML bookmark.

    Without an appointment, obviously you’re constrained to just drive by, but you can schedule an appointment with realtor Beverly Attinson.

    Office: (908) 735-8140
    Fax: (908) 735-8372
    Mobile: (908) 578-3902
    Email: Link here

    To see the MLS listing, visit MLS Listing ID 2397426 in New Jersey.

    The house is for sale at $619,900. A quick check on Zillow shows not enough data beyond a tax assessor’s estimate, but that price is definitely in the ballpark for the area.

    Now, let’s get into some actual media. If I were still living there, I’d obviously go shoot some video, but we have to make do with the photos on the realtor web site. Where new media can shine is to tell the story behind the story. I’d probably create an MP3 that prospective buyers could listen to on an iPod as they walked through the house, but text will do for now. I’d also have key selections of podsafe music loaded up as interludes for people to listen to as well – probably a hefty dose of Rob Costlow, since it’s that kind of house.

    New Media Realty 1

    The front of the property is a nice, well manicured lawn. Realtors will call it well cared for, and I will call it 45 minutes to an hour to mow with a push mower. The front lawn is fun to play on, and the street, Cambridge Drive, is really quiet, quiet enough that it’d be mostly safe for your kids to play on the lawn safely except maybe during rush hour. The house is located in suburbia, so most everyone commutes to other parts of New Jersey or New York City.

    New Media Realty 2

    The living room. My parents have always kept this room as a more formal sitting room – there’s an equally large family room on the other side of the wall, just past the stairs, where we’ve always had the TV and sofa set that us kids were allowed to sit on. The living room is BRIGHT in the mornings – full southern sun, so if you want a warm place to sit and read, this is the place.

    New Media Realty 3

    This picture of the kitchen kind of sucks. It shows the eat in kitchen, but it doesn’t show the tremendous amount of cabinet and countertop space. Growing up, we’d always sit on the counters and get yelled at for the same, but the kitchen food prep area itself is really fantastic. The table in the background there is where we had dinner every night without fail, for as long as I can remember living in the house until I left home for good. It was and still is the hub of the house, as it’s centrally located on the first floor and almost every room opens into the kitchen area. I truly believe that one of the reasons we had such a social family growing up was the fact that the kitchen made it easy for us to always run into each other, sometimes literally. (of course, when you were a teenager who was in trouble, trying to avoid your parents, it’s not so optimal…)

    New Media Realty 4

    This is the sun porch, probably the crown jewel of the downstairs. This is a three season porch that is fully glassed in – if you wanted to make it four season, you could by opening the kitchen ducts to it, but we never saw the need to do that. The sun porch, which we always called the deck, looks out on the heavily wooded backyard, where we have several birdfeeders hanging from trees. My brother and I would have legos and Construx scattered across the floor from as soon as it was warm enough to open the room for good (usually April) until it got really cold (right after Halloween), and we’d play in there all the time. The deck is right off the kitchen, which also made it easy for my mom to keep tabs on us and make sure we weren’t getting into too much trouble. There’s a sliding glass door behind the camera’s point of view that opens to the rear of the house, so we could run outside if we wanted to.

    New Media Realty 5

    Another less than perfect realtor picture of the master bedroom. I rarely spent time in there, since it was mom and dad’s bedroom, but it’s big. Really, really big. Cathedral ceilings with exposed beams, and room for just about anything. There’s also a walk in closet and full bath you can’t see behind the camera. When we got older, we always took showers in the bathroom in the master bedroom, because it was the nicest shower – glass with the massage showerhead and all that.

    New Media Realty 6

    Another weird picture. This is above the garage. Used to be a walk in attic until I was… I think maybe 10 years old. I can’t remember. My parents had the walk in attic converted to a sort of home office, but this room was more than that. Two skylights and those oversize, overstuffed recliners meant the perfect place in the house to read, relax, and more often than not, fall asleep in the middle of the afternoon. The best time, actually, was when it was raining – the sound of rain on the glass skylights inevitably meant nap time. Even when I was home from college, visiting, I’d fall asleep in the attic room.

    Where realty often falls short is that it doesn’t tell the story behind the house. Realtors try to make a house as generic as possible, to create as much broad appeal as possible, but when you think about it, that also makes it difficult to emotionally connect to it. As Ze Frank says, which has stronger appeal – Grandma’s cookies, or old people’s cookies?

    I honestly look forward to seeing what C.C. Chapman does to sell his house, as he has so many new media tools at his disposal. This blog post is really a pale imitation of what you can do with new media, as it’s just words and static photos. Ultimately, I think new media has the potential to transform realty from just a mere transaction to an emotional experience, and that may help to sell houses in a tough market.

    C.C., what do you think?

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