Housing and Economic Recovery Act of 2008

We hear a lot in the news these days about the housing crisis and what government and financial institutions are doing to handle these challenges. The nice thing about home ownership is that we get to live in our homes and as long as we are current in our mortgages these problems really have little impact on us. However if a homeowner begins to fall behind in their loan payments there are some steps that need to be taken quickly. I was thinking that if that happened to me or someone I knew, I would want to know what to do and how to reach out for help. With that in mind here are some steps that could be taken.

• I would quickly call for help. A 24 hour hotline set up by Fannie Mae to provide mortgage counseling (in multiple languages) would be a good place to start. The number is 888 995 HOPE.


• I could call my lender directly and begin a dialogue with them to help explore my options.


• I would try to get my hands on some good information about these programs:
  
• 12 Things You Should Know When Calling Your Lender


• NY Times Article: Housing Bill Has Something for Nearly Everyone


• Housing and Recovery Act FAQs

It will take some time to work through this difficult period, but I applaud the government for at least doing something to help homeowners weather the storm and encourage new buyers. Make sure you know how this legislation applies to you and what help is available in case you know someone who might need some good information.

Thanks for helping me better serve our Real Estate Community.

Take A Deep Breath

I think I started blogging at a very interesting time. We are seeing some developments in our countries' financial markets that are history making – unfortunately not the kind of history that will be fondly remembered. Markets are in turmoil, financial institutions are going under or are being bought out, and speculation is rampant on which company will be the next to fail. In the middle of all this we were visited by Hurricane Ike! I guess this will be a September to remember.

I think it's time to take a deep breath and step back from all the hysteria. These problems are significant but the financial markets and the government will figure things out. There will be some continued adjustment and restructuring but at the end of the day our financial institutions will survive and some good will come of all this. In the meantime we will go to the grocery store and buy some milk and bread, which will send our economy on the road to recovery. This may sound a little simplistic, but in the end that is how things work. I buy the bread the baker makes and he purchases wheat from the farmer who buys equipment to operate his farm from manufacturers who convert raw materials into goods by the application of labor . . . well you get the idea. The economy is all interrelated and sooner or later everyone needs to eat - do the things of daily living. These things don't stop and this crisis will pass because we go on living and that will fuel the recovery.

When all this bad news is swirling around like Hurricane Ike it's hard to recognize that when the storm passes, the sun will shine. In fact the sun is already starting to shine. There are some really great opportunities out there, like interest rates dropping to the 5.5% range for a 30 year fixed loan and home prices dropping to levels that make buying even more attractive. We've not seen deals like this for quite a while. I invite you to take advantage of these opportunities. Years from now you'll look like a genius. Your friends and even your kids will be impressed.

Thanks for helping me better serve our Real Estate Community.

A Great Life Lesson

Years ago when I was young in my Real Estate career I had the opportunity to work with a family looking to purchase their first home. They had three children and a dog. The husband had a good job that paid a reasonable wage. Their budget was fairly modest so we were viewing homes that were in line with their purchasing ability – starter homes. Finally I found them a cute little rancher, and I mean little! It had three very small bedrooms and a tiny kitchen with barely enough room for a table. The living room was not much bigger but it did have a nice picture window. There was a full basement with a recroom and some storage under the stairs. The house was situated on a small lot but it had a fenced back yard large enough for the dog and children to play. They were so excited and decided this was the home for them.

I, however, did not share their excitement. In fact I had a difficult time recommending the home to them. I just couldn't see how they would ever make it work. The problem was I could not picture myself personally living in a home this small. Well, despite my lack of enthusiasm they decided to make an offer. After I prepared the paperwork I visited them at their apartment to sign the documents. As I entered, I saw a one-room apartment with a blanket strung across a rope to serve as a wall between the sleeping area and the kitchen and living room. I was taken aback because I had no idea of their current living circumstances when we were searching for homes. Immediately I could see why they were so excited. Who wouldn't be, moving from a one-room apartment with three kids and a dog into a 6 room home? That tiny home must have seemed like a mansion to them. Well, their offer was accepted and they bought the home. I learned a very important lesson that day – never judge other people based on my own limited frame of reference. I realized that no matter what experience I brought to a transaction I simply couldn't know enough about my client's situation to make decisions for them. Since that time my goal has been to provide good information to clients knowing that with good information they will be able to make good decisions that work best for them.

That family lived in their home for over 20 years. It served them well and I am very grateful I did not get in the way of their dreams.

Thanks for helping me better serve our Real Estate Community.

Helping Our Clients with Big and Small Things

At the McGinn Real Estate Group we work hard to assist our clients with the big and small things related to home ownership. The big things obviously involve the home purchase itself. Since a home is probably one of the most expensive things most people will ever purchase, we want to make sure we offer world class systems and service during the process. I always felt that buying a home should be accompanied by the highest level of service and professionalism. At the same time even small services such as plumbing emergencies require a high level of service and professionalism as well.

A while back one of our clients needed some plumbing work done following a home inspection. The plumber came out, looked at the job and noted that there was actually no leak in the pipes and instead showed the client where to tighten the fitting so water stayed where it was supposed to. This plumber could have taken unfair advantage very easily but did not; in fact he never even charged for the visit. That level of service is not often found.

The Service Providers List on our website is one of the small things we offer but it can be pretty big when you need it. This is a list of service people in all fields such as plumbers, electricians, dentists, carpet cleaners - even accountants and tax planners. We have developed this list from personal experience and the referrals of our clients. Feel free to use their services and if you know of anyone we could add to the list, let us know. Finding good people who are trustworthy and do good work is not always easy. I would love to hear about any of your favorite service providers.

Thanks for helping me better serve our Real Estate Community.

Market Opportunities

I found an interesting quote referencing Warren Buffett’s plan to seize opportunities due to the current downturn.

“That opportunistic view of the worst housing recession in seven decades is 'classic Buffett,' said Charles Hamilton, an analyst at FTN Midwest Securities Corp. in Nashville, Tennessee.” ( Bloomberg.com September 2, 2008)

I don’t know if this is the worst housing recession in seven decades but it is a pretty significant downturn. Buffett is looking for opportunities because he realizes this down market won’t last forever. Home prices in our area have not been immune from downward pressure, but let me explain why I think there are some good home buying opportunities out there.

1) This buyer’s market won’t last forever and a bottoming out may have already occurred. I will leave forecasting the bottom to those who have more information than I do, but it feels to me like we might be pretty close now.

2) Our local and regional economies are very strong. Government is a large area employer which lends stability to the job market. We have actually added jobs in 2008. (MRIS Trends In Housing Q2 2008)

3) Interest rates are still close to historic lows which make new home loans very attractive. First time buyer programs are available now where they did not exist a few years back.

4) Home values in our area are probably lower than they should be because of drag created by economic problems in other areas of our country and across the world. Ours is an area where employment opportunities bring in more people, and people always need a place to live.

This means that taking advantage of current low prices and low interest rates is good strategy. It is a great time for first time buyers to get into the market. The lending end has tightened a little but there are lots of first time home buyer assistance programs available. Sellers are more willing to help as well. For move-up buyers it is a good time to sell and buy a larger home whose value may have fallen to a point where it is now affordable.

Warren Buffett has enjoyed a pretty successful track record. Following his example, home buyers can also take advantage of the current market to get into a home of their dreams. Years from now people will look back and say it was a great time to buy.

Thanks for helping me better serve our Real Estate Community.

Welcome to the Inaugural Edition of My Weekly Blog

Human interaction and communication in today’s society is very interesting and complex.

When I was a little boy things were different and simpler. Frequently my parents would take me and my sister, get in the car, and go visit various family friends. We would drop by their homes unannounced (almost always everybody was home back then) and have a great visit. There was not much planning involved and nobody was expected to “put on the dog.” The adults would visit, get caught up on the latest and the kids would play with each other. At some point some sodas (pop in Canada) and potato chips or cookies would be provided and after everyone had a great time we would all go home. When was the last time you did something like that?

Well, my daughter started blogging a couple of years back and has really discovered an interesting and effective way to communicate (visit) in today’s busy world. Blogs allow you to visit with people. You can always visit a blog unannounced. You can also post comments and share ideas – open a discussion. More and more people are blogging these days. Blogs seem to fulfill an inner need for humans to communicate and share life’s adventures – the ups and downs.

I hope to create that same experience for our Real Estate Community and others who wish to visit. There will be lots of discussion about real estate of course. The current home market is a hot topic these days but not all of it is negative. In fact there are some very positive things happening in a pretty challenging market. I will also try to share interesting information that will be helpful for happy living. Some of it will be financial, and some health related; I plan to provide information that will help with the stuff of daily living and home needs. Most of it will include some humor along with the practical. I hope you enjoy my blog. Feel free to invite others to visit.

Thanks for helping me better serve our Real Estate Community.