Monday, February 17, 2014

Advice for 1st time buyers (from a home inspector)


In my 17 years of experience, I have inspected homes for many first-time home buyers, some of whom are now on their 3rd home.  I have seen the pitfalls many home buyers fall into and I know the mistakes to avoid. 

From a home inspector’s point-of-view, my advice is to buy simple and buy smart.  Buy what you can afford, not what will make you look good to others.  Keeping up with Jones’” is not reasonable in real estate.  You can no longer expect a fast-rising market to bail you out of a purchasing mistake, as was often the case in the past.

For New Construction
When I say buy simple, I mean select a home of good, quality construction. When I say buy smart, I mean choose the features you need.  Do not be lured into closing by extravagant upgrades that you will not use anyway. Think Honda, not Jaguar.  Fancy trim on the outside = more painting and places for rot.  Lots of crown molding and fancy trim inside = more dusting, more painting, and more cracks as the trim shrinks. 

By all means, upgrade to the stone countertop, it will last.  Forego the Jacuzzi that you will use only until the novelty wears off.  If you do purchase a Jacuzzi, be sure to get the optional heater; otherwise, the water cools too quickly and you will likely only use it once a month.

Despite what the flooring representative claims, solid hardwood floors are always a better choice than pre-finished hardwood veneer. Most of the homes I inspect are not new.  I SEE what lasts and what does not.  Often you get flooring installed after you buy cheaper than the builder wants for the upgrade, but you will not be able to roll it into your mortgage, so there is trade off.

The fancy double oven is very appealing in theory.  In reality, however, most individuals spend very little time cooking. Restaurant sales in America prove this, as does my experience of seeing 4-year old homes with ratty microwaves, while the 2nd oven still has the Styrofoam factory shelf retainers.  Spend upgrade money on something you will use, such as better drawer closers, a better faucet/sprayer, or bigger sinks.

Get the garage door opener first, as you will likely be buying curtains and furniture for your new home after closing.  Besides, most people don’t have the tools, ladders and other things that you will eventually have to buy, even if you do not want to.

Here is the best advice I can give (though most individuals tend to ignore it): Opt for the most energy efficient furnace and a/c unit you can obtain.  Pay a bit more for extra attic insulation.  These items pay you back over time.  If you are really into energy efficiency, look at water heaters next.    Nothing else you can buy in the home can pay for itself and then put money in your pocket as these items can.   You do not see these items every day, so they don’t have show appeal, but to a smart person these are better use of money.
 

For Resale’s
Evaluate the outside of the home and the surrounding neighborhood.  This is what visitor’s see first and what buyers will look at when YOU go to sell.  I do not recommend the practice of buying a home in a bad neighborhood because it is cheap. It is cheap for a reason.  When it comes to buying in “up and coming” neighborhoods, be very careful.   Because of changes in how homes are financed, speculative “gentrification” of bad areas has all but stopped.  Renovation of bad homes in good neighborhoods is much safer financially for investor/renovators.

From a home maintenance point-of-view, water is the biggest concern.  Water will destroy your home far quicker than termites.  Leaks, rot, and mold go hand-in-hand.  Elaborate roof lines with valleys and gables cost more to re-roof and tend to leak more. Once again, simple is better. 

Siding is also a top home maintenance consideration.  Brick is best, followed by Hardiplank (cement), vinyl is ok, but it depends on the grade (vinyl is almost never painted, so if you do not like the color, walk away).  It is also important to note that starter homes were often built with cheaper (thinner) vinyl.  Stucco is a mixed bag.  There is hard stucco and EIFS.  Both can have problems if the original installation was poor.  Wood will require more frequent caulking and painting than any other siding. 

Homes with particleboard siding should be avoided.

Some homes (80’s and early 90’s) had polybutylene piping.  This piping develops leaks over time. It is best avoided.

Many realtors will tell you that homes with particleboard siding and polybutylene have that defect priced in, so the home is discounted to reflect it.  That may be true, but when the plumbing starts springing leaks, the 10 grand you saved on the front end won’t do you any good when you need $9000.00 cash NOW to pay the piper (or this case the re-piper).   

If you want to buy a fixer upper, do it in a good neighborhood, and take a good inventory of your personal skills.  Many guys like to think they can do anything, when in reality they are very poor at renovation.  And buying the tools to get started will set you back a couple grand before you even really get going.   

Remember, if you do a poor job at renovation, it is worse than no renovation because a buyer will be told the work you did wrong (or poorly) will have to be torn out and that raises his cost for further upgrades.  Do what you can do WELL and do not cut corners on products you install or the installation itself. 

Once you buy, here is what you need to know: Homes are not throwaway items.

That statement seems simple and almost stupid to put in print, but you would be amazed how many new home buyers treat it as if it was.  Young people are the worst.  They have grown up in a throwaway world, and tend to think homes are built so well that no maintenance is needed for 10 years.  That is simply builders BS.  And do not be fooled by warranty claims.  A good warranty does not mean the item is well built.  It is a numbers game; they know few claims will ever have to be paid.

Simple repairs become big repairs if left for too long.  Some can even become a nightmare.  Clogged gutters can become a basement/crawlspace water problem, and if left even longer, this can cause a mold issue.

A little drip from the icemaker line can ruin floors, cause mold problems, and damage the floor on the other side of the wall.   Leaking drains underneath kitchen sinks will quickly ruin the cabinet bottom.  All cabinets are particleboard these days and can not withstand water exposure for extended periods of time.

Wet wood not only rots, but it draws termites.  So water problems can be a double whammy. 

Once per year, go around the outside of your home and touch-up any caulk that is cracked, hard or has peeled free.  Pay attention to window frames and sills.  Wood windows on all homes made after 1969 are probably soft pine that rots quickly so extra care must be paid to these.  Replacement vinyl windows are set in the original wood frames, so if you have newer replacement windows it is still important to keep the frames sealed.  

In addition, annually inspect the functionality of your downspouts during a fairly hard rain - check to see if the gutters are overflowing and note where the water runs.     

Physically look at your water heater every 6 months.  All water heaters get pinhole leaks that drip and re-seal themselves.  This process goes on for 6-10 months before the tank bursts with a large leak.  So simply looking for sign of small leaks (that might not be dripping the day you look at it) can save you from a disaster 6 month later.

In terms of the furnace and a/c unit, do not buy those 59 cent mesh filters with the flimsy cardboard frame. If you spend the extra money for the $5.00 pleated paper filter, your home will be cleaner, your a/c will work better, and you won’t be paying to have the a/c coil cleaned in 4 or 5 years.  Change a/c filters once per quarter, not every month.  Ensure you have the correct size; just because the old one in there is 16x20 does not mean that it is the right size.  You may need a 16x25.  Look inside the slot or furnace where the filter goes to determine the correct size.

Watch your garage door open and close from the inside.  Check for loose hinges, as this is common.  Does it go up crooked or jerky?  The track may be loose, bent, or the springs may be misadjusted.  Chain drive garage door openers often get loose and will cause jerking movements if the chain is left un-tightened.

In the bathroom, keep the shower curtain inside the tub and tight against the wall at the shower end of the tub.  Over time, water escaping from the shower will pop the floor tile loose, rot the floor, and create mold in the ceiling below.

Reseal wood decks at least every 2 years.   Wait a minimum of 4 days after preparatory pressure washing to give the wood sufficient time to dry before sealing. Double or triple coat the end grain of the lumber.  Darker wood preservatives have less protection and red has the least of all.  More color means less oil, and oil is the active protection in wood preservatives.  Unlike paint, preservatives are more like skin cream.  They seal by soaking in.   

Build up of pine straw and wood chips over the years will often give termites and water an entry point into a home.  Do not allow it build up to the siding above the level of the band joist or slab level.  Also do not allow it build up to the level of crawl space vents or around A/C units.  It will clog fin coils and reduce air flow, which reduces efficiency.   When mowing the lawn, keep grass clipping ejector chute facing away from the a/c unit. 

You should flush the a/c coils with a garden hose every spring.  You should also perform annual Freon level checks. To do so, run the unit and check to see if the large diameter copper line going to it gets cold and forms condensation after 10 to 15 minutes.  If it does not, it is likely low on Freon. 

This quick test assumes the filter is changed and air flow is good (meaning filter is clean and fans are running) on the inside and outside unit.

Running an a/c unit with low Freon is the leading cause of compressor failure.  It is equivalent to running a car with insufficient water in the radiator.  If the unit is low on Freon, call an HVAC guy and get it topped off. 

Test the T&P (safety) valve on the water heater annually to ensure it does not get stuck closed.  If you are not sure what/where the T&P valve is; your home inspector can show you.  I take the time to show all of this and more to my clients.

There are a few more items that are more specific to certain homes and so I cannot hope to list every possible maintenance item, but most of the items above I often find were ignored.

Best wishes in your quest for a good home at a good price….

Thursday, June 30, 2011

Is 2012 the end ?


For all those who think the end is nigh, I inclined to say:  You’re late.  For the Real Estate market ended in 2008.  The market as we knew it is dead and gone and is not likely to return.  Oh, don’t get me wrong, this country is as stupid as it is bankrupt, so dumb policies will return. Perhaps 15 to 20 years from now, some sort of bubble will occur again. Washington and Wall Street are driven by greed not conscience or actual interest in doing the right thing.  

But in the meantime we have foreclosures out the wazoo, banks that do not want to lend (despite their advertisements to the contrary) and a moribund economy that is sinking for all but the top 2% of earners.  Things are great for Bill, Warren and the Donald, but for most others the going is getting rougher.  Real wages have been declining for 30 years in America. No one seems to care or has even noticed.  Few people realize the government now reports “household income” as opposed to per capita income, like it did back when I was young.  Why, because household income covers the real truth, with a fiction.  Sure income looks good, in comparison to the past, but it is with two earners, not one.  So in reality it is half of what it would be, if still reported the old way.

I am not a Democrat, nor am I liberal.  But I am not a fool and see what few others care to look at.  In a country more worried about Brittany Spears or some rapper or sports star, we get the shaft from big corporations, banks and government.  It was said by someone far wiser then me: People get the government they deserve. 

We deserve what we get, because no one cares and no one is watching.  If the herd (by that I mean the average idiot) was as concerned with the voting record of their congressman as they are the next Monday night football game, maybe we would have good government.  Until then, expect no real changes in Washington. 

I am not a Republican either, so I am not defending either side.  Both are despicable, in my mind.  The left has lost their mind and the right has lost their common sense.  I wish we could have a 3rd party, a middle of the road party.  But don’t hold your breath. The Tea party is not middle of the road, they don’t know what they want.  They define themselves by what they are against. 

Well, enough about politics.  People, who know me, know that I never really discuss politics, so this rant is not my norm.  (The beauty of a blog, I can spout off all I want).  But, back to my real reason for this blog, which is defined as a real estate related blog.

What does this all mean for REAL ESTATE?

Well, for one thing, house prices are not going to rise at anywhere near recent rates seen during the boom.  Except is a few select markets, the rise will be very slow if at all, for some time.  This is for five reasons. 
1.    Foreclosures inhibit prices and there are still millions of them that have to be sold for their effect to end.
2.    Banks do not want to lend and policies now in place have greatly changed who qualifies in terms of credit rating and income ratios.
3.    This is NOT a country of savers and with $4.00 gas, who can save up the down payments now required? 
4.    Demand is blunted also by the fact that people upside down in their homes have little desire to move up or downsize and take that beating in real (as opposed to paper) dollars.
5.    The economy. People who can buy; are afraid to take the plunge. 

Some economists and analysts still say further drops in prices are possible (or even likely) in many markets.  This scares potential buyers, with good cause.  I personally think further drops are likely in some areas and within any city, in some neighborhoods.  Homes are still being foreclosed at high rates and this can only prolong the agony. 

My advice

So if you want to buy, be careful, look at the market, and particularly, the area.  Don’t buy more than you can afford, the market rising will not buy you out at a profit, like it might have 4 years ago.

Buy a well built home, many pieces of shit were thrown up during the boom years.  80’s houses are the absolute worst. 

Seriously look at the homes energy costs.  Cheap electricity and gas rates are going fast.  Huge energy hogs with low efficiency furnaces and a/c units, single pane windows and poor insulation are to be avoided.   Replacing windows and complete HVAC systems is expensive and the payback is not there yet. Besides old homes can never be really properly insulated unless you are gutting it for a major rehab anyway.

Look at the long term trend for your city.  Is it destined to decline?  If so, rent. 
Better yet move to city that has better long term prospects and rent until you know the area. 

I am from Syracuse, NY originally, where real estate never took off during the boom; in fact it went backwards since the mid 80’s.  Why?  The city lost jobs and population.  You cannot sell in a shrinking market.  Homes there sell for 40 percent of their high in the early 80’s.  Again, even there, some areas held up well and did not decline, but never rose as well as other areas of the country.

Don’t buy something only because it is cheap.  What you do not know will hurt you, as the whole country found out.  If you find something that is almost free (relatively speaking) should you buy it?  That depends, on the city, the neighborhood, the home itself and your financial situation and life situation.  Owning a money pit never helped anyone, so look before you leap.  If the home needs repairs and you can do them yourself and have the cash to buy the needed supplies, then go ahead if the area is ok. 

I have seen many homes that are now valueless here in Atlanta.  Foreclosures that copper thieves have damaged so bad the cost of repair exceeds the value of the home if repaired.  The average selling price is less than 10 grand here in 3 different zip codes here, according to recent newspaper story.  You might have to sleep with a 12 gauge under the sheets, but they are out there.

Is the price right?  Not for me, but maybe you like life on the edge!  As a home inspector, I am not supposed to influence your decision just report facts. 

That is what I do and have been doing for some time.  Never buy a home without a good inspection by an inspector who has not performed at least 400 inspections.  I have inspected over 3000 homes and I can tell you that it took that many for the learning curve to start leveling off.  Even now I still occasionally see something weird that I have never seen before.  I love this because I get to learn something new. But I also would have missed some things if I did not have the vast experience of seeing so many screwed up things.  Defects do not always jump out and shake your hand, and crooked sellers are still out there, artfully hiding them, more than ever. 

People forced to sell at a loss have often foregone routine maintenance and have hidden defects that they are hoping your inspector will miss.  And about 40% of them will.  I once found over $40,000 (my estimate) in hidden damage on a stucco home.  The seller was a crooked realtor.  The eventual buyer paid over $62,000 for repairs.  I know because the later buyer (I advised mine to walk) hired me to testify against his dumb inspector.    

Ironically, I get calls all the time from buyers looking for a cheap inspector.  Some idiots just never learn. 

I am a middle of the road inspector in terms of my fees, not even near the most expensive here in Atlanta.  The highest priced ones are often not as good as I am, but like all endeavors in American business, he who advertises the most often gets a reputation that belies the truth.

Lastly, about inspectors; don’t assume an engineer is a better inspector than one who isn’t.  I know several and gone with them and seen them in the field.  The old saying; “Can’t see the forest for the trees” comes to mind.

Until the next one…

Monday, November 1, 2010

Home Security

Most articles about home security advise you to lock your doors and windows, and get an alarm.  How does this work out for you?

For many of you it is worthless advice. 

Most doors can be kicked open with one good kick by a kid weighing in at 155 pounds.  How do I know this? 

When I was a young kid, we went into an apartment building that was about to be torn down.  We locked a bunch of doors and tried to kick them open.  At the time I was about 14 and weighed about 135 pounds.  It took me one or two kicks after a bit of practice.  My neighbor weighed about twenty pounds more than me and he could consistently do in one kick.   

A typical window has poorly designed latches that can be pried open with a regular screwdriver in seconds with very little force.  Using a stick as a pivot and the principal of leverage, only a few pounds of downward force on the handle will lift the window, pulling the latch screws out of the wood or plastic frames.

Get an alarm.  This is fine in some towns and cities.  Here in Atlanta, Georgia it can be a joke.  At a restaurant in trendy Buckhead, an expensive area in town, the alarm was tripped at 3:00 am and the cops showed up at 8:30 the next morning, after a shift change of the police force.  Imagine if you were being robbed and beaten at that time.  After five hours you would be in rough shape.   Perhaps if the call was a residence the cops might have arrived in say, half an hour.  That still would not do.

My advice is: Keep the bums out.  An alarm is only as good as police response time.  Smash and grab artists know the response time.  They test it by breaking windows on a home nearby (or even yours) and setting off the alarm. Then they time when the police arrive.  If the response time is low they will soon be visiting your house again when you are not home.  They will be in and out in minutes and have a pretty good haul.  They know where to look and may have “cased” your home when you were not home, looking in windows and making a “to grab” list.   

Here are some ways to make your home secure. 

Add a deadbolt with a key on the inside.  Yeah, there is concern that in a fire you won’t find the key.  The answer to that is to have the key in a nearby spot where it is not easily seen and everyone in the house is taught where it is.  Have it in a ring so it is easy to find if dropped.  Fires are in fact less common than burglaries, so quit obsessing about rare events while inviting more common events.


Next toss away the strike plate that came with the deadbolt and the door latch.  Go buy a security strike.  These are large, heavier and have longer screws set to the back of the strike plate, not centered for looks over the latch/deadbolt opening in the plate.  Some of these are 18 inches long and have an opening for the deadbolt and latch.  At 18 inches the plate really strengthens the whole door frame.  The longer screws set back in the plate allow the screws to grab the 2x4 framing the doorway, not just the flimsy pine door frame. 

There is a company that makes a strike plate that goes from the floor to the top of the door frame (www.asafehome.net).   To kick it in requires splitting the studs that frame the doorway.  Not happening…

If the door has large windows, add bars or cover the glass with Plexiglass.  Bars can be made to look very decorative.  Plexiglass can also function as a heat loss reducer, turning the glass into triple pane glass.  This only needs to be done if the door is on the side or rear or your neighborhood tends to be vacant from 9-5 during the week.

If the frame is really weak or has a side panel of glass, either the aforementioned top to bottom strike is needed or add top and bottom latches that go into the floor and top frame. (But the screws must go into the header above the door, not just the frame)

 Double doors have these on the secondary door.  Add them on the inside of the primary door and the secondary door on all double doors.  For double doors there is a plate that screws to the floor that will block both doors.  The plate holds a slider that can bar one of both doors depending on where it is set.

About double doors: The latch on some of the secondary doors can be opened from the outside with a screwdriver.  If they have a slide in the jamb, a screwdriver can be slipped in and open the slide, rendering it USELESS.  The kind with a flip latch cannot be opened since the other door, when closed, stops the flip lever from being flipped.    
If you have the slide type of latch then the only thing to do is add additional latches on the inside of the door or the plate system, which come in different finishes so it does not look that bad.  I have also seen nice heavy brass plated latches that do not look bad.

A locked door is only as strong as the door itself, so if your door has a hollow core or jalousie windows, it has to go. 

Double pane (insulated glass) windows are the way to go for energy and security.  Breaking thru and climbing thru two sets of broken glass shards is a deterrent and slows down entry. 

The basic latch (so called lock) on most windows is fluff.  For real security pin the windows if they are wood framed or add stops if they are vinyl framed.  The way to pin a window is drill a hole thru the lower sash into (but not thru) the upper sash.  Insert a large nail in the hole and the lower sash is pinned down and the upper is pinned up.  Using a bolt cutter or saw be sure to cut the nail short so it is hard to grip with bare hands and pull out of the opening.  Then even if the window is broken, the sash with its broken glass edges must be climbed thru.

If the window is vinyl, some can be pinned but most cannot. These can be blocked shut with a dowel cut to fit snugly between the top of the bottom sash and the top of the window frame.  Another way is to screw a stop block to the side of the window track. 

By having the deadbolt with a key on the inside, thieves can only grab what they put out thru the broken window, so this acts a deterrent against a 2nd theft, although not perhaps a first attempt.  By the way, 2nd thefts are very common, because the thieves know your insurance has replaced everything with brand new items.

If you live a marginal (gentrifying) neighborhood, do not think by being friendly and open you will avoid being targeted.  The opposite is true; more people will KNOW what you have.  Using neighborhood kids to cut grass, babysit, etc, invites theft.  Most theft is committed by people 15 to 25. 

If you think your lack of prejudice is a badge of honor and will protect you from theft, harm or rape; you are delusional. 

Bottom line, security is a way of thinking and living, not something you just address once and forget about. 

A big dog is still one of the best deterrents.  Better than a gun, which has its place, but only if you know how to use it, and more importantly, are willing to use it.  If you are not, it will get taken away from you, and will be used against you. 

If you are willing to shoot someone, kill them inside your house.  Then there is only one version of the tale to tell police and to be used against you by lawyers who will (inevitably) sue you later.  Never follow anyone outside and shoot them or you will spend about 8-10 fending off jailhouse thugs.     

This advice is not politically correct, which is your assurance it is good advice…


Saturday, August 21, 2010

Can your trust your agent's referral of a Home Inspector

It is often a concern with buyer’s that the Home Inspector referred by their Realtor is going to “rubberstamp” the home they are inspecting. As an Inspector for many years I have run into this concern, since many inspections are referred to us by Realtors.


I have never done this, although I have been asked to make a change in a report before. I send my reports via email simultaneously to buyer and realtor, so I have an automatic out on this request. I would not do it anyway, since my fee is paid by the buyer, I am loyal to that person. Besides, I could get sued for thousands, so there is no incentive on my part. My reputation is worth more than any one Realtor’s business.

But is that the case for you? It depends more on your Realtor than anyone else. Here in Georgia, real estate agents are required by their brokers to give out 3 names of inspectors. Some will give out 3 and say hire this guy, he is the best. That is what most agents who refer business to me do. Some even say flat out, hire Kevin or find your own guy, I don’t recommend anyone else.

The agent could be saying that because I am crooked; At least from your point of view.

So you have to ask yourself; Do I really like and trust my agent?

Does he/she seem ethical, honest and open? Did their other recommendations seem honest and knowledgeable, say the mortgage broker, or a remodeler, if they referred you one. If the answer is yes, you can probably trust their recommendation for an inspector.

Agents can and do “shop” inspectors. If they find a stumble bum who is cheap and misses stuff and glosses over stuff, they will latch on to this person, IF THEY ARE UNETHICAL. Unethical agents and half blind inspectors abound. Do not be fooled by certifications, some of these (for inspectors in particular) are not worth the paper they are written on. Note: There are agents and Realtors, the latter being a copywrited term.  I use them interchangably, which tells you what I think of paying fees to organizations to use their logo.

When I started in the home inspection business, there was ONE national home inspector certification (ASHI) and now there are several. On a more local level there are state associations that may be okay or may not. Here in Georgia there was only one (GAHI) and now there is another.

Since I never looked into these “newbie” organizations, I cannot say one way or the other how good they really are. I assume you are an astute enough user of the English language to detect the pejorative use of newbie.

So look at your agent to really decide if your trust their recommendation. I know many of my clients were glad they did trust their agent and hired me.

Good agents want a good inspection. If the house does not meet the grade, they want to know now, and will find you another. That way, they keep getting referrals from you. If you think you got a bad house, it reflects on the agent as much as the inspector. Good agents know this!

I never had opinions of real estate agents until I became an inspector. I did not lump them with used car salesmen the way some do with all sales people. I can tell you that since I have had one on one interaction with thousands of them (I have performed 3000 inspections and almost every deal has two agents involved), I now have very strong opinions of them as a group.

Some are genuinely nice people, but dumb. Some are the shrewd ***holes. Some are lazy. Many are dumb and lazy. Then there are the ones that just don’t care about anyone else, but themselves and their commission.

I know a few of you might say: I will take the shrewd person. That person is probably a hard bargainer, which is perceived as being an ass. That person might do OK.
But the selling realtor and the property seller will not like them, which often ensures that YOU will not get concessions from them that you might have otherwise. I have seen deals fall apart because of agent’s having antagonized the seller or seller’s agent.

But there are the ones that are nice, honest and smart and have your best interest at heart. You hear about them from referrals, they rarely buy billboard ads or spend too much time/money on mass marketing. Get one of these realtors. They will steer you to a good inspector, a good lender, good contractors, etc.

So choose your agent well. Get recommendations from people that have used an agent, or know them well. Meet them for coffee, ask questions that you know the answer too, and see how they reply. I always like a person who admits what they do NOT know, and says: I’ll find out, over one who bluffs.

Even a new agent is better than a bad agent. New agents often have good mentors back at the office that they work with.

Take my advice or don't, it's your money !

Wednesday, August 18, 2010

My First Post

What do I say? This blog is supposed to be about real estate in general and home/building inspections in specific. Like the show “Car Talk” on NPR radio (Saturday @10am here in Atlanta, I love those two wops on the show. I can say wops because I am one so don’t go all pc on me) which goes off topic all the time, I expect I will do that also.


I will make this first post short. It will be on topic. Having performed over 3000 inspections over a 14 year period, I think I am qualified to talk about real estate and inspections.

I can also talk about the real estate bust, what it has done and what it means as well as any other pundit out there, many of whom have never been in real estate but went to school for journalism, which should be changed to “sensationalism”, which all today’s media seems to do.

So I will talk about the bust. For some people, it just was something that happened to others. For many of you it means you have a home worth less than you owe on it, and for some of you that difference is more than a year’s gross salary or even two years!

For those of us who get their daily bread from real estate sales, this was a disaster. Many of my personal friends and business acquaintances have gone bankrupt, lost homes, lost their savings and all of the net worth. On top of that their income is way down.

I too lost my rear in the downturn. Unlike some, I am not doing things the way I always did. I used to market to realtors for business referrals. Now I am also marketing directly to buyers. In the future, selling agents will be more like transaction expediters. Listing agents (who post the real estate to the Internet) will have more clout. A realtor told me this a few years ago, and I thought he was wrong, but now I see what he meant.

Most buyers know all they need to know about the homes they are looking at, the schools and the neighborhood, from the internet. So now I am going online with this blog, a new webpage and soon a Facebook business page.

For you the potential buyer, what can you gain from this real estate meltdown?

You can get a home cheaper today (in real dollars) than you could have for 6 or 7 years. If you are a first time buyer, this means you can get a home priced like they were when you were in high school.

What should you watch out for?

Stay away from so called “upcoming” neighborhoods. Gentrification of these neighborhoods is driven by investors, who take a risk and go in first and renovate and sell to you, the end buyer. Investors cannot easily get loans anymore for these ventures, and if they can, they are more nervous about being stuck holding it too long. So they are sticking to safer, less risky ventures/neighborhoods.

So the hood, is likely to be the hood for some time. So unless you want to buy in a neighborhood that is a bit unsafe, and may not “Gentrify” for many years be careful.

These neighborhoods tend to have more vacant foreclosures (read that as potential crack houses) so resale prices may stay low for the foreseeable future. Some will say; A dump at half off is not such a dump. True, but from an investor view point; half off on house I can’t sell later is half off of on a losing proposition.

Look for low priced homes in good neighborhood. You can never do wrong on the lowest price home in the best neighborhood.

All foreclosures are as is; so get a good inspector!

Ttyl