Expect tightening from the FHA - washingtonpost.com

Expect tightening from the FHA - washingtonpost.com

HAPPY THANKSGIVING TO ALL !!

HAPPY THANKSGIVING TO YOU AND YOUR FAMILIES !!

Government Responds to Economic Woes by Making More Bad Mortgage Loans

Government Responds to Economic Woes by Making More Bad Mortgage Loans

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USDA Rural Development

Please contact me about this program if you are interested in a:
No Money Down, low interest rate loan for the purchase of a primary residence!
You DO NOT have to be a first time homebuyer.
With the inventory of homes on the market, the prices at the lowest level and GREAT rates---people are finding it easier than ever to qualify!

Work Every Deal

I was able to work a deal that was turned down by another bank/broker/lender. If we work though every deal we sometimes come up with a new solution. What a Great Feeling When That Happens!

Training for the January 1st RESPA changes

HUD has firmly stated that they will NOT delay the effective date of January 1, 2010 - BUT they will not enforce sanctions in the first 120 days, as long as the company has shown a "good faith effort" to comply with the "Good Faith Estimate" ;-)

We have scheduled an in-depth online training with two RESPA attorney experts. To get details, go to:

www.RESPA-Training.com

GFE and HUD-1

Some POSITIVE news to start our morning.!!!

HVCC over the next couple days and now this --- EVERYONE should keep an eye and hear out and please report any news you have and I can distribute it.

**** I will be looking into the validity and following the discussions on this but this NEW GFE AND HUD-1 EFFECTS EVERY TRANSACTION and a delay would be a start.

HAVE A GREAT DAY!

HVCC--IMPORTANT

HVCC -- There should be a segment on HVCC this Wed and possibly again Thurs morning on Fox news network ( more info on time will follow if I can get it). The petition that has been circulating and signed by several thousand to contest "Home Valuation Code of Conduct" is being presented to Mr. Cuomo on Wednesday afternoon. We hope to see a lot of news outlets covering these events in the coming days--it will be very interesting to see what happens.

HUD and the new RESPA Laws

HUD / FHA websites

HUD on FaceBook: http://www.facebook.com/HUD HUD on Flickr: http://www.flickr.com/photos/opahud/HUD on YouTube: http://www.youtube.com/HUDchannelHUD on Twitter: http://portal.hud.gov/portal/page/portal/FHA_Home/twitterFHA Wiki: http://en.wikipedia.org/wiki/Federal_Housing_Administration

Do you heat with Propane?

A customer who was purchasing a rural home asked me yesterday what the cost of propane is per gallon. Since I don't heat with propane I had no idea of the cost. I thought, no problem, I'll just google "cost of propane in Minnesota"

I was suprised how hard it was to find specific information. The attorney general's office made reference to a weekly table of current, average propane costs, but they made it hard to find and hid it at the bottom of a bunch of other figures that had nothing to do with propane -- at least from my point of view.

This is the link to the chart and below is what I learned.

The lowest price in Minnesota for propane on November 2nd, 2009 was $1.32 per gallon

The highest price was $2.51 per gallon.

The average price was $1.64 per gallon

I also learned:

If you own your propane tank you can shop around for fuel at the cheapest price.
If you rent your tank you might be charged more by your provider just because they know you can't shop around.

I was going to supply a link to the article that tells about this but I can't find it again even though I know exactly what I'm looking for - the state needs to spend a little effort on making it possible to find things -- good grief!

The AG makes it sounds like buying propane could be tricky business. They make a point of saying "shop around".

The two bedroom house that started me on this search has a 750 gallon tank. At the average of $1.64 per gallon you would think it would hold $1,230 worth of propane, but you can only fill a propane tank a little more than three quarters of the way which brings the value down to $1,155. I doubt you'd want to let your tank go empty so it seems to me $1,000 would be an expensive fill for a 750 Gallon tank.

The next question, which I can't answer, is how many times a year do you have to fill a 750 Gallon tank for a 1200 sq ft house? I know that natural gas is a little cheaper than propane to heat with and a lot of 1200 square foot houses average more than $100 per month for natural gas. I would bet that for this 1200 square foot house with a 750 Gallon propane tank, the gas man would come at least twice a year to fill the tank.

It would be nice if someone who uses propane in this part of the country would share what they know.

Here's a link to the energy web site: http://www.state.mn.us/portal/mn/jsp/home.do?agency=Energy

Here's another link to a report on some of the AG's actions related to propane:
http://www.state.mn.us/mn/externalDocs/Commerce/Propane_Prebuy_Program_Report_062708011030_PropanePreBuy.pdf

A message from Steve at SJD Mortgage

The legislature did extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30.
The Senate's bill also creates a $6,500 credit for those who buy a home after living in their current house at least five years. That measure would also apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. ( this information is coming from the cnn.money.com site ).

In this market- how long is reasonable to have our house listed?

Question:

"We're priced in our comp range - and have been told our home shows really well - so I think we've done all WE can to get our house ready. Our Realtor has done a great job advertising and having open houses, but property is just not moving. We really just want to upgrade while prices and interest rates are low, but don't HAVE to move/sell because of jobs or anything.
How long is reasonable to leave our house on the market these days? We won't lower our price because we're already at a pretty narrow profit margin and to go down $5K would not leave us with enough profit to make a down payment on a bigger house. Also, we don't want to live in limbo forever. We have a toddler, and keeping the house "show ready" all the time is a challenge. We had planned on taking our house off the market after 90 days (June 1st) - but I'm now wondering if that was reasonable. We've been listed since March 3 - have had several lookers, but no offers. What are your thoughts?"

Answer:

If you plan on moving to a more expensive home it may be a good time to make the move even if you take a loss. The more expensive home that you are looking at moving into is probably at a more discounted price than your house. When prices start to go up the price differential between your house and the more expensive one will likely increase.

The problem, as you mentioned, with discounting your current house is that the price drop will come directly from the equity you'd like to use for a down payment. So it may not be realistic for you to move now.

90 days is a pretty short list period in these times. If you are serious you might consider giving it longer. If you can put up with having your house on the market another 90 days might be a good idea.

The weather has finally warmed up, interest rates are low and there are signs of life in the real estate market. Give your agent a chance to get the job done.

Here's a link to a listing of homes on the market in your area, Rochester Minnesota

How long should I wait for a Short Sale

Question:

Here's a question that comes up frequently with regard to purchasing "Short Sale" properties:
"We have a signed purchase agreement to purchase a property from the bank..."

"it has been over 60 days I have not heard anything yet :( so far..the seller's agent was suppose to hear something a week ago..but no news yet..I am wondering if I should bail..we have to keep changing the close date :(..and also what if the condo going into foreclosure while I am waiting what will happen then?"

Answer:

You got further than a lot of people. Banks often take a long time just to repond to an offer. I discourage buyers from getting involved with short sales at all because what you are going through is common.
Don't assume that banks will behave logically or even in their own best interest. If this is the only house you are interested in and you have all of the time in the world you could wait and see what happens. Otherwise I would move on(assuming you are not legally bound by your contract) and avoid anything that is a short sale in the future.
Typically when a property is foreclosed in Minnesota tha bank hast to wait for the six month redemption period before they can sell the property. In some cases, if the property has been abandoned, the bank can get this time period accelerated, but other times banks seem to forget a property exists and it can just sit for over a year before anything happens.

We want to put a REALLY low offer on a home that has been in foreclosure for 2 years what is too low?

This question was posted on Trulia, Here is my response.

There are two ways you can look at a house when you make an offer on it. The first is as an investment. Your offer is based on the numbers. If things don't work out you move on to the next one and so on until you get an offer that works. With this approach you might be willing to make a very low offer because it's no big deal if you lose it. Make enough really low offers and you'll get lucky every once in a while. If a house is a really good buy at the list price it is probably obvious. In that case even an investor might make a full priced offer.
Most people, even investors, have an attachment of some sort to the house they are trying to buy. Once you put the effort into evaluating a house and making an offer its probably a waste of time to make a very low offer. You need to look at the market and decide if it's a good deal. If the house is priced right and if you would feel bad if someone else got it for a dollar more than your offer, make a higher offer.
Ask the agent what they think. If your agent is not the listing agent ask him/her to ask the listing agent for you. Just by asking the question you might find out things that will help in your negotiation.
Looking at the homes on the market in Robbinsdale I can see there are 28 homes under $100,000. There are also a lot of new listings. You should take into account the prices of other similar options.

The Rise of FHA

Back in January of this year I wrote a post saying I didn't think there was a housing bubble. I pointed out that the cost of building a house had not dropped and that with the price of oil was going up which could only lead to an increase in the cost of raw materials.
Well, if a housing bubble is defined as rapidly dropping prices, I was wrong. Oil prices have dropped and the glut of foreclosed homes persists. We are at a moment in history that will be remembered for some time. With a recession in full bloom and a cascade of more bad financial news it seems the housing slump will never end. Credit is tight making it much harder to buy a home. A year ago a home buyer with less than perfect credit could finance 100% of the cost of a house and have the seller pay closing costs. It was just like a late night TV show, "get in with nothing down". FHA loans had fallen from popularity. Putting 3% down and paying mortgage insurance premiums was unattractive.
Today, if you have limited cash, you can hardly beat FHA. If you have 20% or more down payment FHA is not the way to go. Real Estate agents and Banks are boning up on FHA mortgages because in many cases they are the only way to get a house sold.
With this talk of doom and gloom comes a silver lining. Home prices are historically low(this is an understatement) and they are sure to increase at some point.
Because of the slow economy oil prices have dropped, factories have closed and demand for everything is unnaturally low. When the economy begins to swing oil prices will shoot up and inflation will start to rise. When all of the empty foreclosed houses are finally sold, people in middle and higher priced homes will suddenly be able to sell and move up or build.
Builders will not be able to respond to demand and prices will be driven up further. This is the next economic challenge. It seems like this whole scenario will lead to high inflation. Real Estate is a good investment in such a climate.
If I was a true believer I would be buying rental homes, but I'm not. This is the stuff of history, things could still get worse. If you can afford a house, need a house and have a steady job, I'm not sure how you could miss in today's market. Those who are speculating today could hit it big, but they are braver than me.

Saving money with Solar Power

There has been a lot of talk about energy lately. Most recently I heard a story about the residents of Juno Alaska who had their electric bills increase by 500% this summer.

I have a solar panel cost about $300 in 2005, and the specialized purpose I bought it for no longer exists. Why not put it into service and take a chunk of my electric bill?

There are technical problems to overcome. I won't spend much time on that except to say that to use my solar panel I also need deep cycle batteries, a charge controller, an inverter and some wiring at a minimum. The cost of all these items together is in the neighborhood of $1,000.

The good news is that I just need buy some wire, I already have the other stuff. In fact, I'm thinking maybe I should by some more solar panels to go with the one I already have.


I dug out the electricity bill. On the last bill we spent about ten cents per kilowatt hour. A 100 watt light bulb burning for ten hours will use about a kilowatt hour. A computer in use might use the same or slightly more electricty than the 100 watt bulb. If its sleeping, My Dell only uses a small percentage of this.

An energy pig is writing this . Our household uses 23 kilowatt hours per day, last month we used about 800 kilowatt hours for a bill of about $80.

Now comes the fun part. How much will I save?

On a clear Minnesota day in the summer I think my solar cell will run for 8 hours producing 64 watts of electricity. In a day that amounts to about half a kilowatt of electricity generated by my solar cell or five cents savings per day. In twenty days I'll save a buck, in twenty thousand days this setup will generate enough power to pay for itself. By my calculations thats about 54 years.

If I ship my solar equipment to Juno, Alaska where power is temporarily at fifty cents per kilowatt hour it will generate twenty five cents of power per day -- in the summer.



Another way to look at it is that I need 46 solar cells like the one I have and some really big batteries to take care of my energy needs.

Here is what I think it would take to make solar cells economically interesting to me. Electricity costs similar to those in Juno this summer, solar panels at one quarter the cost they are today. If an aditional solar panel cost $75 and could save me twenty five cents a day it would pay itself back in about a year. Batteries are expensive, they require mainteneance and they wear out. Fuel cells would provide strorage using hydrogen allowing energy to be stored more efficently.

While I wait for these things to happen conservation seems to be the best course of action. In fact, it seems that the secret of living off the grid depends more on conservation than cool energy technology. The technology provides a certain amount of energy, but most of the savings comes from limmiting the use of power to start with.

How Many Houses Should I Look At?

What are the chances the first house you look at is going to be the one you want? There is always a chance that could happen. No matter how many houses you look at, how do you know the next one is not going to be just a little better? You don't know.
If you really like the first house you see, go see some more as soon as possible. If the first one is still your favorite arrange to see it again. There are always new things you notice the second time around.

Make a list of questions and get them answered. If you are ready to buy don't delay just because you found something good right away. Among the motivated buyers I work with, people who are ready to go right now, it's very common for them to see fewer than eight houses before they make an offer. In some markets there aren't even eight homes of a particular type and price range to look at.

Foreclosures & Multiple Offers

I've seen this twice in the last month and I'm sure there are at least a couple of people out there who could have used this little note before they started negotiating on a foreclosed property.
Here's what I'm talking about. Buyers go looking for a good deal on a house. They decide they really like a foreclosed property. The home is listed at a very reasonable price. Knowing that the mortgage company is anxious to sell they throw a low offer. The mortgage company won't drop that much, but the buyer still likes the house and doesn't move on to something else. Thinking they are the only game in town they sit tight.
While the buyer plays tough and sticks to their guns another buyer swoops in. The mortgage company requests competitive offers and the house ends up selling for thousands more than the mortgage company's last counter offer to the original buyer.
The original buyer may or may not end up with the house.
If you like a house and you would feel bad if someone else bought it, don't ever delay in signing papers unless you must. This holds true with any real estate transaction. The larger the time frame involved, the larger the chance something can come along to make it fall apart. Get the papers signed, sealed delivered, earnest money deposited and inspections done and the house off MLS and off the market.
Close on it as soon as you can.
I'm not suggesting you plunge forward willy nilly. Understanding what you are getting into and having an inspection are important, but when there is a delay, ask yourself why and whether it is to your advantage. Introducing delays is introducing unknowns. Gambling on those unknowns is more risky than the casino.

Foreclosures & Multiple Offers

I've seen this twice in the last month and I'm sure there are at least a couple of people out there who could have used this little note before they started negotiating on a foreclosed property.
Here's what I'm talking about. Buyers go looking for a good deal on a house. They decide they really like a foreclosed property. The home is listed at a very good price. Knowing that the mortgage company is anxious to sell they throw a very low offer. The mortgage company won't drop that much, but the buyer still likes the house and doesn't move on. Thinking they are the only game in town they sit tight.
While the buyer plays tough and sticks to their guns another buyer swoops in. The mortgage company requests competitive offers and the house ends up selling for thousands more than the mortgage companies last counter.
The original buyer may or may not end up with the house.
If you like a house and you would feel bad if someone else bought it, don't ever delay in signing papers unless you must. This holds true with any real estate transaction. The larger the time frame involved, the larger the chance something can come along to make it fall apart. Get the papers signed, sealed delivered, earnest money deposited and inspections done and the house off MLS and off the market.
Close on it as soon as you can.
I'm not suggesting you plunge forward willy nilly. Understanding what you are getting into and having an inspection are important, but when there is a delay, ask yourself why and if it is to your advantage. Introducing delays is introducing unknowns and gambling on those unknowns is more risky than the casino.

Wet Basements

The days have gotten longer and Spring can't be far away. With Spring there is running water. With all of that running water around some of it is going to end up in people's basements. A wet basement is not the end of the world, but it would be a good idea to know how wet and where its wet before you purchase a house that has had water in the basement.
With all of the disclosure laws these days it seems that we have fewer water in the basement disputes. As a buyer water in the basement still could still cause a problem for you. When the little box on the Seller's disclosure next to "wet basement" is checked, yes, you should look carefully and ask a few extra questions. Where exactly did the water come in? What exactly was done to correct the problem? Did water come in after corrections where made? Did the previous owner disclose water probelms to the current owners when they purchased the house?
Many wet basements can be dried out with simple landscaping changes, some can not. I once sold a commercial building that had an access panel in the basement floor. Under the panel there was a constant flow of water. A few blocks south there was a home that always had water in the basement. I've learned that both the commercial building and the house were built over a creek that was filled in way back in the 1800's. The creek is still there, it's just underground. Those basements will never be dry.
Homes built on clay soil or in areas with a high water table are more likely to have wet basements. If you ask around you will find people from the area are generally aware of these situations. Somone in the city engineering department should certainly know about problem areas in town.
I have been in old homes with seemingly dry basements, but when it rains a rivlet of water runs in and harmlessly down the drain. Harmless as long as the basement isn't finished or as long as no one stores anything in the path of the water.
When you are looking at homes pay attention to things like mops and buckets in the basement, boxes stored on pallets or areas where nothing is stored. Look for powdery white "efforvesence" on the walls or stains on the floors.
Outside look for plants growing out of gutters, downspouts that are off or that empty inside of landscape edging. Take note of if the ground slopes away from the house. If there is concrete near the house does it slope away? Has somebody caulked cracks in the concrete near the foundation?
These situations are all common in older homes, but they are flags to be on the lookout for a basement with water problems. Asking a few extra questions so that you know what you are getting could save you a lot of future grief.

Water Bills

Unpaid water bills are an issue that is coming up more frequently because of the number of foreclosure homes that are being sold. Water bills are different from other utility bills. Water is typically provided by the city rather than a utility company. The city always collects water bills, they never get "stuck". This is because the city has a tool that other utilities don't have. They can assess outstanding water bills against the property just like taxes. If you refuse to pay a water bill it will eventually be assessed to the taxes for the property. If you don't pay your real estate taxes you lose your house. The city doesn't care who used the water, they just want payment.
When you purchase a foreclosure, the bank should have paid the water bill, but it doesn't always happen that way. If the previous owner had their water shut off for non-payment and no one ever turned the water back on it's likely there is a water bill out there somewhere.
The title company might find it when they do a title search if its been attached to the taxes, but it could easily be missed. The only way to know for sure is to talk to the water department and verify all water bills have been paid for the property before closing.

You Walk Away?

I have heard a couple of news stories about a web site called YouWalkAway.com.

The aim of the website and the subject matter do not make me feel warm and fuzzy. The subject is walking away from your mortgage and minimizing the damage.

After listening on MPR I had to visit the site. I feel anyone who walks away from an obligation or anyone who encourgages others to do so had better check their moral compass.

I went to the web site and it was not quite as sleasy as I expected. You see the thing is what the web site seems to be offering is information on legal rights of those being foreclosed.

Before the whole foreclosure situation was recoginized by anyone I had a single guy come to me asking for help selling his house. He had lost his job and could not make payments or get a loan.

He said the mortgage company was making harrassing calls and played one on his answering machine for me. He had equity in his house, but no way to access it. We knew there was a six month redemption period and thought it was reasonable we could get the home sold in that time.

He borrowed a little money from a relative and did some minor fixup to the house and we put it on the market. He was offered a job out of town, which for survival, he had to accept. He turned off the utilities in the house and notified the mortgage company he was working on getting the property sold even though he was just living in it on weekends.

The mortage company immediatly filed for an acceleration of the redemption period because of "abandonment" which they proved by showing the utilities had been shut off.

They changed the locks, listed the property and sold it, taking the owners equity.

This is a case where the mortgage company knew the law and their rights and exercised them fully, Maybe even a little more than fully. No one from the mortgage company expressed remorse or bad feeling about what they did.

If this is the attitude taken by the mortgage company, should it be any great suprise that individuals would want to use the law to do the best they can? The Lending industry has set the tone.

I do not think it is right to "just walk away" from an obligation. On the other hand it doesn't surprise me even a little bit that people who are facing foreclosure might take steps to minimize the financial damage.

Open Houses

An open house is a way for you to see the inside of a home without a formal appointment. You can also meet different Realtors and get an idea of what they are like. If the open house is not too busy you can chat with the Realtor and get questions answered face to face.
In any given area there is usually a time most open houses are held. When I worked in Saint Paul and Minneapolis most open houses were held on Sunday afternoon. Usually I would do two open house of about two hours each.
Occasionally I would do open houses on Thursday evening.
In Red Wing most open houses are held on Saturday afternoons. In Saint Paul and Minneapolis open Houses are advertised in the Sunday paper while in the Red Wing area you'll need to look at the real estate insert in the Thursday Red Wing paper to see open house advertisements. Sometimes the only advertisement for an open house is the signs with arrows at the time of the open house.
Here is why a Realtor does an open house. The obvious reason is to try and sell the house, but few homes actually sell as a result of the open house. The more productive reason for a Realtor to do an open house is the potential of finding new customers.
Most Realtors will have a guest register for you to sign. Some people are not anxious to sign a guest register because they don't know what it is for. I request that everyone through an open house signs in. Of course, I like to have the names of those I meet especially if it turns out there is some reason to contact them, but just as important is the need to know who has been in a person's home.
You are a stranger entering someone's private home. If they are letting people off the street walk into their home, it is reasonable there should be some record of who these people are.
If you are working with a Realtor already they may have told you not to go through any open houses. Sometimes visiting an open house can cause confusion between Realtors regarding who you are working with. Avoiding all open houses is the easiest scenario for your Realtor, but may be an unreasonable request if you like going to them.
Sometimes another Realtor will call me before an open house and ask if its okay to send a customer through. I always say yes. More frequently someone will mention that they are working with another Realtor by saying something or just making a note on the guest register.
The confusion could come if the Realtor holding the open house doesn't know that you are working with another agent and you show interest in that property or ask for information on other properties.
Just as its a professional courtesy for the Realtor in the open house to welcome customers of another Realtor, it is a courtesy to inform the Realtor if you are working with another agent.
In general, open houses are a low key, informal way to get a look at the inside of a house. Its a good way to gather information on homes and Realtors. The Realtor will be happy to see you come through the door.

One way Mn Real Estate Taxes have Changed

I got into real estate shortly after getting out of school. Bright eyed and bushy tailed, I wanted to get started investing.

I bought a duplex near Macalester College on Ashland Avenue in Merriam Park, Saint Paul. I paid $86,000, assumed a mortgage used my commission for a downpayment,financed the balance with a contract for deed with no interest for a year.

It was a big investment for me. One reason I could finance essentially 100% of the purchase and still bring in enough rent to make the payments was that I had a financial advantage.

I was going to live there. For that reason my taxes would be homestead, one third of what a non owner occupant would pay. That financial break allowed me to repaint inside and out, refinish floors and do some minor renovation in the first couple of years.

I enjoyed the fact that I had that break and used that same scenario to sell run-down homes to owner occupants who would fix them up.

Through the years the Realtor Association, of which I am a member, has sucessfully lobbied against the homestead/non-homstead system arguing that it discourages investors from buying single family homes. Today the difference between homestead and non-homestead taxes is so minor it hardly even matters.

I beleive that single family homes and duplexes are not well suited to absentee ownership. The maintenance is high and they can become run-down very quickly. Some people do a very good job renting single family homes, but its not an easy gig.

The event of a home switching from homestead to non-homestead status used to be feared by the owner of a home who had moved out. Owners would say, "If we can't sell it we'll just rent it." Upon finding out what would happen to the taxes that plan would change and the house would get sold.

Non-homestead taxes were an easy thing to hate, but they helped to keep the quality of all neighborhoods up. Think of the social costs of neighborhoods full of run-down rentals verses the advantages of having a part of the rental market being duplex, triplex and fourplex owners who live in their property and manage it.

It's hard to imagine that system ever coming back.

Housing Bubble Burst? I think not.

We've heard all about the housing "bubble", how homes were over priced and prices were bound to fall. It certainly seems something has popped.

Its not a housing bubble, homes were not over-priced. At least not in the long term. While the cost of buying a house has dropped the cost of what is in a house has not. Talk to a builder, electrician or plumber. They will tell you material prices have gone through the roof. The cost of replacing your existing home has not dropped and existing homes are certainly less expensive than new.

Our current situation has been caused by loose lending practice, not over priced homes. People who could not reasonably expect to repay loans bought homes. Most of those homes are on the low end of the market and the banks have to take them back. Now the market is temporarily flooded with them. Until that huge inventory of homes is sold, the market will be depressed.

There are many people out there in the middle and upper segments of the market who would like to move or build, but they are sitting out because they need to sell their homes before they can do anything. When we finally sell the current inventory of foreclosure homes the market will start to heat up.

Material prices are up, fuel prices are up. Builders will not be able to offer homes that compete with the existing home market.

There will be a housing market with multiple offers and rising home prices. The effect of higher oil prices will have worked its way into the economy and there will be high inflation. Home owners will have instant equity. Real Estate will be the best hedge against inflation which will add to the escaltion of home prices.

I have heard it said that, suprisingly, we haven't seen much inflation as a result of the increase in oil prices.

If oil prices are up and not coming down, then the inflation has already happened. We just haven't measured it yet. It hasen't made its way through the system yet.

If everyone who drives a car or truck or airplane is paying $50 for a fill when they used to pay $30, how can there not be inflation? If rubber and plastic use petrolium in their manufacture, if steel uses energy in its manufacture, how can there not be inflation? If countries like China are growing, as they are, and consuming natural resources, how can there not be inflation? Lots of it.

If you run all of your credit cards to the limit, you might not see the bill for a month, but you know it is coming. Similarly, we should know that big inflation is lurking out there somewhere.

I'm not suggesting everyone should run out and buy a house. And I'm not rubbing my hands with glee at the prospect of a hot real estate market.

The housing market won't swing tomorrow, but I feel strongly that it will happen. The point of this post, that the real estate market is going to bounce hard, seems obvious, but no one is talking about it.

I wonder what others think. It would be interesting to get a comment on this.

J.T.

Phantom Smells Part B

Here's one I haven't seen discussed anywhere. We bought a nice area rug on sale. It looked really good on the hardwood floor in our living room. Over time I noticed a sulpher-ish smell in the livng room. I unfairly began to suspect our dogs.
Eventually I got down on my hands and knees and sniffed the rug. Sure enough, the oder was in our new rug - Gosh darned dogs!
We rented a rug cleaner and gave it the once over. The rug was certainly clean. It still smelled. We suspected something in the manufacture of our rug, perhaps a dye? We thought as time went on maybe it would go away.
Getting impatient, we sent the rugh of to a rug cleaner in Saint Paul. When we went to pick it up he gave us a little nugget of information. Heat is used in the manufacture of some rugs. If the rug gets too hot synthetic materials in the rug backing actually get burnt. You can't see it, but you can smell it. He told us we could never wash the smell out. Sometimes, that's the price you pay for a bargain.

Whats that Smell? Part A

Someone could write an entire blog about smells. Here's one that comes up now and again when I'm showing houses. It came up for me the other day and had me stumped until I thought about it.
The smell is sewer gas. All drains in your home should have a trap. A trap is a curve in the drain that collects water. Gas from the sewer or your septic system is prevented from coming up through the drain into your house.
If you smell a bad smell in a strange place and you can't locate its source, think sewer gas. The smell might come and go and it could be worse on a windy day.
It may be coming from an uncapped pipe without a trap, but its usually from a drain that doesn't get much use. In time the water in the trap dries out and the gas finds its way into your home. Its an easy fix. Just pour a few cups of water down the suspected drain.
Worst offenders are basement drains. Do you have one covered by a rug? Having a water softener or furnace condensate line in a basement drain assures the trap never dries out.
Here's something related that has appeared several times on inspection reports for older homes. In an older home floor drains sometimes have a clean out plug in the throat of the drain. The clean out hole bypasses the trap so that a plumber can run a plumbing snake down it.
If the plug has been removed or lost sewer gas can come out of the drain even if there is water in the trap.
Old drains rust and sometimes you can't get a replacement plug to fit. Your local hardware store will have a metal and rubber expansion plug, similar to the drain plug in a boat, that will do the trick.
I can think of other sources of phantom smells. I'll save that for another Post.

J.T.

Memories of Old Blue

In this short life there are mundane tasks that we do on a daily basis without even thinking. And sometimes we build relationships not even knowing it. I have come to realize we should acknowledge these relationships while they are in full bloom rather than waiting until the blossom shrivels and falls from the flower.

There is one that has been in my life for a long time. Always there with unwavering loyalty. The one I speak of is often present at family gatherings and I shamefully admit to excluding her from photos even cropping those in which she might unexpectedly appear. I admit to being embarrassed at times when seen in public with her.


She is not outwardly beautiful, the years have not been kind to her. I sense that her end may be drawing near so I must get this out while I still have the chance. By admitting my shortcomings and acknowledging her importance in this post, perhaps I can begin to undo some of the injustice the years have heaped upon her. To this point she has not had a proper name.


On this day I name her "Old Blue". With temperatures at 14 below outside I will not ask her to rise to duty. She has in past similar circumstances heeded my call without question and for that she deserves respect.


To my knowledge, since her birth in 1985 she has not spent a single night inside. She has been loaded to the gills time and again with plaster, lath and nails. She has pulled stumps and hauled firewood. Now she is rarely on the roads, but trundles through the fields. She still keeps our driveway clear of snow.


She taught my children what a crank window is and just recently, she managed to teach my eldest to appreciate the cost of gas in less than a week.


Old blue, I fear the years weigh too heavily upon you. I can replace your aged battery, but the signs of a possible leaking head gasket could be the last blow. This winter, in the autumn of your life, I will treat you kindly so that perhaps you will make it to spring.

I hope that once more I may drive with you down field roads and that at least one more time you may feel the caress of the long field grasses across your under carriage and summer breeze in your grill.

Your Custodian,

J.T.

Frozen Pipes

It's another cold day. My faith in winter has been restored. It's refreshing to have a real winter where there is snow and cold. I was beginning to worry my kids would grow up knowing winter as something old folks tell stories about.

Yesterday one of my agents got a call that water was gushing from a foreclosed house. As I tried hard to ignore the conversation that was none of my business... yet, I wondered how he could have overlooked something as important as winterizing an empty house.

I showed a house once where the water was knee deep in the basement from a broken pipe. Another house as the story goes had comnpletely filled with water to the point that when the agent opened the front door to do the walk through before closing, water came gushing out the front door and ran into the street. That closing didn't happen.

I became familiar with that property upon selling it after the renovation.

If you have a vacant house, regardless of the season, shut the water off. If you don't fully winterise the house, at least open the highest faucet and the lowest faucet to let most of the water run out of the pipes. Its cheap and easy to pour some RV antifeeze into the toilets.

This won't save you if the heat goes out and you don't discover it for a while. Companies that winterize homes have a check list and sometimes even they screw up. If you have a pipe burst with lots of water, you will probably have to tear out any wet area down to the studs.

Through the years I have owned several older rental properties. It's in a cold snap like this that you learn things. Like the house with the crawl space and the access cover removed. It's summer when you replace it. It might not occur to you that all of the pipes will freeze when the temperature drops.

Once I stuffed insulation around a pipe in a bathroom to keep cold air from coming into the vanity not appreciating I was causing the pipe in the wall to freeze.

Don't ever use a torch or paint burner to thaw frozen pipes. Presented with a frozen pipe and having a plumbing torch you might be tempted. The wood in an old house is very dry and can light up quicker than you imagine. Hair dryers work or even better just a fan directed to the area of freeze up will do the trick.

I should say the frozen foreclosure with the gushing water turned out not to be ours. Maybe a bank lost track of one.

Looking at Houses

Since the beginning of the new year there has been an uptick in activity. The web site is showing more hits, we are getting more phone calls and most importantly, showings and offers.

For me, as a Realtor, there are different "modes" for showing homes. There are the buyers that are out there, calling occasionally when they see something of interest. There is the buyer "out of the blue" who calls and just wants to see one listing and there are the folks who have decided they are seriously looking. We go out and see everything that could fit their needs.

Occasionally there are those, usually transferring from another town, who want to see everything at once, 10, 15 maybe even twenty homes in a day. This is not the best approach unless you are forced by circumstances.

More commonly I set up five or six homes at a time. Sometimes people prefer to see fewer. If we are starting at 10 am I set the first showing for 10 am to 11 am, the second is set to overlap for 10:15 am to 11:15 am and so on. I adjust the overlap depending on drive times. This way we can spend more or less time at any given house. If one house cancels it doesn't screw up the whole schedule.

Everyone is different. Some folks will spend a lot of time in every house while others breeze through almost like they aren't even looking. Its just a personality thing.

There is a question that often comes up, regardless of the type of buyer. How do I keep track of these? After a while it might be hard to remember which house had the new roof or which kitchen didn't have a dishwasher.

Here's a helpful idea that you might like even if you are the type who takes written notes on every house.

As you leave each house give it a rank in your head. Compare everything to your favorite. Always have a favorite even if you don't like the first house, call it your favorite. If you don't like the second house, still choose a "favorite" between the two you don't like.

I think you will find if you consciously decide which is the best when you walk out the door of every house you look at, you will remember more details about all of them. You will certainly remember the top two or three in more detail.

J. T.