Sunday, August 29, 2010

Which comes first? The chicken or the egg?

Just ran into a frustrating situation this past week on an appraisal where the value came in significantly lower than the contracted purchase price and tax value. Where as I have been preaching for years that tax value has little if anything to do with actual market value, I would hate to think that a seller/owner would pay close to 50k more than the home's "market" value as determined by one individual, in this case the appraiser, who is following a governmental set of guidelines. I say this because I in no way believe that the appraisal was the accurate indicator of the home's value. Real Estate 101 tells us that the value of a home in a given market is determined by the price that the buyer and seller can agree to on a particular day. It takes into account what is on the market during that period of time, the price the competition is available for and the overall thought that the buyer will choose what is best suited for them at the best price.

Well, how things have changed. As we are in the midst of "recovery" and the real estate market is taking a deep breathe as we enter what has been historically a slow period, it is now no longer good enough to bring said buyer and and seller together on price and terms, you now battle an unknown set of rules. Those rules are the ones determined by the lender or quasi-governmental entities such as Fannie Mae and Freddie Mac, as they throw down regulations depending on the loan program that the buyer is using, that will dictate which set of criteria will be used to determine the value of the home.

Buyers and sellers are spending unheard of amounts of time and money to find the "real" value of their home in a historically unique marketplace. As they are trying to discover and negotiate this value, the lack of comparable sales, due to the depressed market is being used as an excuse as to why values are not there. This is happening in markets that are considered to be somewhat "stable". Meaning that nothing has been sold in the past several years because nothing has been on the market, because folks actually LIKE to live there! That usually means high demand and a relatively safe investment. Banks say NOT SO FAST! No comps, no values or they will compare and adjust the subject home with homes of varying age, quality of construction and design...for instance comparing a one level home to a two story with a basement.

The moral of the story is to
1-be aware of these risks as you are searching for homes or trying to sell your home
2-have comparable homes in your back pocket should an appraiser ask for assistance in establishing value
3-use more traditional forms of lending when possible, such as conventional loans with lower LTVs that have fewer governmental strings attached
4-don't buy anything unique (just kidding, but it does present challenges on on Fannie Mae/Freddie Mac backed loans)

Have anymore questions? Don't forget to give me a call or post if you have had or heard of a similar experience.

Thursday, August 19, 2010

Arts for Life

Jake and I sat down the other day at lunch with the director/coordinator for Arts for Life. Based here in Winston-Salem, this organization is active at children's hospitals such as Brenner's and Duke. Not a new concept to have arts as a therapy, as Elizabeth Messick explained, but certainly one that lost luster and has recently come unto its own through hard work and donations by individuals and corporations.

Arts for Life in my simple terms, is a program designed to bring hope, self-confidence and purpose into the everyday hospital lives of critically ill children. From pre-packaged projects, such as mobiles, weaving, sculpting and textile crafts to artists coming in and reading, leading discussions or mentoring, this program injects life and possibility into what can feel like a pretty bleak situation. Elizabeth explained that though we could not actually be with these children one on one due to their compromised immune systems, that the packaged projects and donations to sustain this program would certainly contribute to their overall improvement. She went on to describe how some children are not even able to see their siblings for months on end due to the fragile nature of their condition during treatments. These projects allow them to occupy their time with more than a t.v. or medical treatments, it allows them the ability to nurture their creativity and to see that the completion of a task is a possibility and that positive outcomes DO exist in their world.

Jake and I met with Elizabeth because we wanted to know how we could help and how our daughter could begin developing her own character by serving the community. We are currently discussing the best way to assist this organization and some of the suggestions given to us or that we could come up with were:

*Host a party where participants make jewelry, magnets, etc. and sell them at the Arts for Life showcase.
*Donate money raised from a bake sale or lemonade stand to purchase supplies for packaged projects.
*Take up a love-offering at your church or Sunday school class to be given to Arts for Life.
*Assemble a class, scout troop or neighbors to assemble packages
*Collect donated art supplies for packages
*If you know an artist, ask them if they would donate their time to help

These are just a few of their suggestions and our family is looking forward to finding our place in this fabulous organization. There are so many groups in need currently and so many folks out there asking for funds, but this is one that often gets over-looked and can easily be contributed to with your time and talents, not just your dollars.

If you would like more information please contact Arts for Life in downtown Winston-Salem or shoot me an email or post and I can put you in touch with Elizabeth and her group!

Know of any other cool service projects that are kid-friendly? Post here and let me know!

Thursday, August 05, 2010

a lot about nothing

Rainy mist out of sallow clouds that can't really decide what to do. It's a no yard work, kid at a friend's kinda day...

What to do if anything at all? That was the question that weighed on my mind early Saturday morning as sleep escaped me, as it always seems to do on those mornings that time doesn't bind you to. Of course, no one knows what it is that wakes you on these lazy mornings. A bird whistling to it's mate at 5 am for an early morning rendezvous or a teenager sneaking in during the wee hours of the morning before the sun has a chance to throw a beam their way and expose their misdeeds. Hell, whatever it was, it woke me and started chanting in my brain, WHAT ARE YOU GOING TO DO TODAY!?

I hate that question, as if our very existence hinges on the fact that we always have to be doing, producing, thinking, spending and yet, I fall victim most every time. Not this time I promised myself as Jake rolled over to grab the last couple of zzzz's before he woke to my staring at him full on. That always seems to do the trick, it's like I can use my eyes to pry his open, but it usually doesn't put him in a very good mood. I was careful this morning. I didn't want any of that nonsense to get in my way of having what was going to be a wonderful, relaxing, romantic, Mary Poppins crosses Dirty Dancing kinda day. I mean, I could already envision Jake and I dancing across the countless vineyards in the rain. Seriously, was I delusional? How could I work this to my advantage and NOT do anything, yet NOT waste this precious day with its hourly pockets of freedom from sun up to sun down? Carpe diem!

Well for starters, we both woke up starving. A late night Chick Fil A combo meal just didn't stick to our ribs, so food was on our brains. Rather than just "grabbing a quick bite" I wanted to work this to my advantage and into the master plan and that I did! Jake was so hungry that he agreed to drive 50 miles up Hwy 52 and Hwy 268 to Shelton Vineyards to have lunch at Harvest Grill, which we discovered had recently been featured in Our State. Our stomachs churning the entire way, we pointed the Honda north and between hallucinogenic moments due to lack of food and the hypnotic swack of the windshield wipers, we are certainly lucky to have made it in one piece. When we exited the car just steps away from the restaurant and entered the door, it was clear that we were just in time. We were the first ones there, which was perfect, because my food and beverage would take top priority, which it ultimately did. Jake was served a fresh cup of Starbucks and I enjoyed my first glass of a 2009 Savignon Blanc. We were seated in the patio area and the rain on the roof and the views of the vineyard started me to visualizing the romantic embrace of a slow dance, I thought I even heard Van Morrison in the background...maybe it was just the wine.

Fast forward, lunch was wonderful, the tour was lovely and we determined that the rest of our afternoon would be cemented with window shopping in Mt. Airy. Who was this man and why was he doing all of these things that I wanted to do? He even held my umbrella, parked close to the shops and didn't roll his eyes or stay outside when I wanted to look at boutiques and home furnishing stores. We strolled, we laughed, we took silly pictures and posted them on facebook. We people watched, we talked about the shops and restaurants our town needed and the differences in places and really, we did nothing. We didn't make phone calls or close million-dollar deals, we didn't talk politics or solve budgeting woes and we didn't spend gobs of cash on trinkets that would be hauled off to Goodwill or displayed in next year's yard sale.

After a few hours of hanging out in downtown, we hopped in the car looking like kids who just snuck out to play in mud puddles and found ourselves grinning and relaxed. We pointed the car south this time, popped in the grocery, grabbed two steaks and a bottle of wine, and headed home. Thoroughly satisfied with our day, the rain continued to intermittently hiss and mist and the wind cycled through the trees, we settled in to a couple of movies. Sure, it sounds like we did something. I know your brand of cynicism that wants to accurately define and categorize what something and nothing are. But we did nothing by our definition and I want more nothing and that in itself is saying something.