FOR SALE: Elegant Resort Escape 5,000 SQFT

Here is a very cool home in the Wolf Creek area of Eden. Excellent finishes...



If you would like to take a look at this home, give me a call.

VIDEO: North Ogden REO

I took this video a few days ago while working in North Ogden:

Bargain: 10,000 SQFT Mountain Resort Fixer-Upper

For those of you looking for an interesting fixer upper and a great value in the resort community of Huntsville, I present:



Call me to take a look in person.  Post-fixup value is around $1M conservatively.

Photo of the Day: Visions of Grandeur

I was up working in Ogden Valley this weekend and caught this photo.  It should be big enough to make a good desktop background.  Click to enlarge.  Enjoy!

The Case for MLS FSBO Disclosure

 
Back in January of this year I had a listing that was priced at the very top of its market.  Based on comparable sales, I estimated that our listing could very well be overpriced by about $25,000 which in this market was quite detrimental.  When discussing this problem with the owners, they pointed out that a friend owned a similar home a block away and had sold it for our asking price.  I searched the MLS and could not find this home.

The problem was that even though this comparable sale existed in the real world, nobody that mattered (i.e. appraisers and real estate agents) knew about it because it was not in our MLS system.  To help the marketplace understand the value of our listing and to help us get it appraised when a buyer eventually agreed to our price, I instructed my client to have his friend's real estate agent place that sale on the MLS as a comparable sale.

Surprisingly, I received an email from my client's friend with a copy of the settlement statement and express permission to use the statement to support our valuation.  With that authorization, I placed the home on the MLS as a FSBO comparable.  To make a long story short, the friend of my client, for reasons unknown, did not want the home reported on the MLS and ultimately had it removed.

That leads me to my very interesting chat with an investigator at the Utah Division of Real Estate this week.  The MLS did remove the comparable sale but not before an appraiser was able to use it to support the value of a home close by in the neighborhood.  Apparently, two appraisals were completed for the subject property.  One for $120K and one for $175K!  The higher appraisal cited the comparable I entered in the MLS.  However, because there was such a discrepancy in the values, a complaint was lodged at the Division  (likely because of the low appriasal) and finding a red flag they instead began to question the higher appraisal.

The Division could not see the comparable in the MLS and was very concerned about a fraud being perpetrated by the appraiser.  Ultimately, after a lengthy conversation, I was able to clarify the situation and illustrate that the appraiser was acting honestly.

The irony of this whole situation is that the friend that wanted his comparable sale pulled off the MLS has done so to the detriment of the market.  Any more appraisals conducted on similar homes will likely be lower in value since appraisers can't rely on his sale as a legitimate comp.  This is remarkable because this gentleman has several homes in the same neighborhood for sale.  Go figure.

When market volume is down like it is now, FSBO sales are helpful to appraisers and real estate professionals in establishing market value for other homes.  This is why I make it a practice to report FSBO sales as often as possible on the MLS.  Even though we can't capture market times with FSBO MLS entries, we can capture price points and concessions.  I believe that its better for the market to have more information than less.  The transparency helps everyone in the marketplace.

Are You On The 7-Year Blacklist?

It looks like "strategic" defaulting on loans is starting to plague Fannie Mae.  Here is an excerpt from a press release yesterday:

Fannie Mae (FNM/NYSE) announced today policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure. Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure.

 That is some pretty strong medicine from Fannie Mae.  It looks like short sales and deeds in lieu of foreclosure will soon be more agreeable alternatives to Fannie Mae borrowers instead of just abandoning their property to the bank.  

Tenant Turnover Sticky

For the first time in my experience as a landlord (6 years), over 57% of my tenants have opted to renew leases for another year.  This is up from a record high of 33% in previous years.   This is surprising to me.  I have some possible theories as to why:

1.  Job Turnover/Volatility is Low - Many people move because of job transfers.  Many of my previous tenants moved because of changes in employment.  Since there is little job growth, this tends to reduce mobility and keep people where they are.

2.  Wage/Earnings Stagnate or Decline - it is possible that my tenants are feeling a pinch in the pocket book.  Moving is expensive and the cost/reward ratio is high if your income is the same or lower than it was before.

3.  Credit Declining - it may be possible that my tenants' credit condition have worsened and therefore they may not qualify for another rental unit.  I hope this is not the case since it puts me in a higher risk position in the event that they damage the units.   

4.  Rent Appreciation - I have held my rents steady for the past year and it is possible that rents have risen for comparable units in the marketplace. 

5.  Superstar Landlord - It could be that I am such an awesome landlord that my tenants feel compelled to rent from me even though they could move out in a heartbeat and buy the home of their dreams.  On second thought...nah.

I have spoken to other landlords and their situations are a bit different do to the different nature of their units and their business models.  Nevertheless, their experience is likely dictated by what is going on with the first four of these market factors.  If you are a landlord, chime in and let us know your experience lately.

Photo of the Day: Ruins of Righteousness

Yesterday I was showing a home in Porterville, Utah. For those of you unfamiliar with Porterville, it is about six miles south of Morgan on the way to East Canyon State Park. Its a very pretty and pastoral place. While there, I stumbled upon this interesting site:

I did some research and it turns out to be an old LDS chapel built in 1898.  A fire in 2000 gutted the building.
Here is what the gothic structure looked like in 1920:

FOR SALE: Secluded South Ogden Ramber

Give me a call if you are interested in viewing this property.

FOR SALE: Remodeled Clearfield Starter Home

Cute starter home just listed for $118,500. Call me if you want to see it in person.