Real Estate, Homes & Fixers

Although it has been several weeks since my last post, I’ve been constantly thinking and reviewing what information, beyond what is provided daily in the newspaper or other media, would be useful and meaningful. Quite honestly, I’ve actually been overwhelmed with all of the various alternatives.

To begin with, what is commonly referred to as “fixers”, I want to relate a conversation I had with a former builder who now purchases homes in poor condition and gives them a facelift. What this particular former builder told me was that he no longer had the insurance required to be a builder but, by buying “fixer” homes and giving them a ‘like new’ appearance, insurance wasn’t required. Obviously not all people engaging in “fixers” are former builders. Yet, when looking at a home that has been rehab’d, does anyone ever know the level of knowledge or skill the person had who completed the work? Were permits required? Was there electrical or plumbing work completed that is now hidden behind nicely textured and painted walls? The point here is not to belittle or defame “fixers” as bad. It’s simply to caution the public to take care in knowing what they are buying. Until the recent slowdown of appreciation, “fixers” supposedly made a lot of money for what seemed like little risk. Granted, they seemed to fill a need for housing that looked perfect and therefore became more appealing to home buyers who wanted a cute house which didn’t require any work. However, buyer beware, a superficial facelift doesn’t make a new home or condo. What happened to sweat equity?

Regarding credit scoring, which I believe was originally intended to make our society color blind, it is now being extended to real estate home loans. Of course it has always been applicable to real estate loans. Except now, home buyers with lower credit scores will pay an additional quarter percent, possibly more, than buyers with higher credit scores. Also I learned yesterday that private banking, in addition to dealing with high asset clients, is able to continue lending to high profile borrowers with larger than typical debt regardless of their credit score. I guess the point here is the public, especially the average people, needs to be more aware that greater opportunities will be available to those who are able to accumulate assets while retaining a higher credit score.

And that brings me to my next point. What is a home and why buy it? Obviously is home is somewhere to live and a lot more. This question has been a concern of mine for some time. Too many people seemed to be buying homes with the overriding expectation that prices would continue to rise at unprecedented rates forever. Plus many buyers were relying on 100 financing in order to complete the purchase. Of course when home prices stopped accelerating and a move or relocation was required, it isn’t too difficult to see what drama would occur with the home buyer who is now a seller. I hope that seller has deep pockets. Oh yes, there could maybe be a “Short Sale” in their future. But that’s an entirely different topic that will be considered another day.

Getting back to my point about a home, it would seem to me that a home is a place which offers security and protection to the home buyer. It is also a place where asset growth can occur. Short-term, no! Long-term, the answer has to be yes. Thirty-five years ago we counseled home buyers that, in order to break even on their home purchase, they needed to stay or keep a property at least 2-to-3 years. We’re likely at that point again. Yet the advantages of owning rather than buying are staggering. As a homeowner, if you don’t like the color of a room, you can change it without consulting with a rental management company or a landlord. If a faucet begins to leak, no problem, just go to Home Depot, get the parts and fix it yourself. If you want to remodel and add a room so you don’t have to move, do the work yourself or hire a contractor to assist you. Perhaps we need to be more concerned about the advantages of home ownership rather than whether prices are up or down on any particular day, month or year. Believe me, as a homeowner, despite period of slowdowns and low appreciation rates, the long-term prices of real estate has always grown. And it always will. You see, there is only so much land.

Anyway, I’ll try to be more diligent about writing to my blog and I won’t let things build up inside where I feel so overwhelmed. Thanks for reading and do have a great day. Speaking of having a great day, I sense that too few of us ever get the encouragement we need in order to fully have a great day. I hope that each of you will come to recognize the great potential that lies within you and decide to fully and completely use it to make your day great. In working toward your goal, please remember to:

Do Good ….. BE GREAT ….. And always give 110% in all that you do …..

Now, go out and have a “Great Day!”