Kathy Novak\’s Blog

I’ve said it before, and I’ll say it again (and again): Not all foreclosures are “deals.”

Too many first-time buyers think they have to buy a foreclosure in order to get a good deal.

Not so. In fact, not by a long shot. Sometimes those foreclosures are missing light fixtures, even kitchen sinks and/or furnaces and/or central air units that owners removed on their way out. “Sure, I can do that,” say the first-timers. But unless those first-timers are cash buyers, their lender will require that those repairs/replacements be made before closing. Catch 22 is 99.99% of the time foreclosing banks don’t allow anyone inside to make repairs before closing.

The vast (very vast) majority of sellers have priced their homes to be competitive in the current marketplace and understand that their homes will probably sell well below the current assessed values. Over the years, they’ve updated, upgraded, and kept up with maintenance, and with great pride.

With 30-year interest rates in the 4′s (good grief!), first-time buyers have true opportunities to buy a really really nice home at a really really excellent price and at an incredible interest rate.

So, what are you waiting for? The homes are out there; do it!

Let me start by saying that I am not the most organized person. Scratch that … anyone who has seen my desk knows this to be a misstatement, because honestly, I am not organized at all.

However, I did something pretty brilliant in my kitchen   if I say so myself.

When we moved into our new house, as I unpacked and put away the platters, oversized serving bowls, the yogurt maker and fondue pots I use once in a decade, rusting cookie cutters (I do NOT bake but you never know), etc. into those high cupboards, I used a fine-point marker to list everything on each shelf on each side of a cabinet. Then I attached the cards to the inside of the cupboard doors with a gentle bit of low-tack tape. Voila! No more digging for the bean pot, the chafing dish, or the beloved cut-crystal bowl that Bill’s Aunt Wanda gave us as a wedding present. I just look at the index cards and quickly find what I need ” and all the treasures that I forgot I had.

You don’t need to be moving into a new house to implement my superb idea … but if you’re interested in buying a house just so you can copy my index card trick, I can help!

Back to my desk … I may not be organized, but I sure can find stuff on it!

Every cloud, it’s said, has a silver lining, and I firmly believe the silver lining in the foreclosure freeze is that sellers have fewer homes in competition, at least temporarily until the robo-signings, etc. get straightened out.

The great majority of non-REO homes on the market right now are exceptionally well priced, usually (in our market at least) below assessed value and often below what the sellers paid just a few years ago.   In short, the deals are phenomenal. And, because REOs/foreclosures can be a challenge to get financed because they so often need repairs (i.e., scraping & painting, repair/replace a furnace). The seller/bank won’t allow repairs before closing, and closing can’t happen without the repairs. As I said in August, just because it’s a foreclosure, it doesn’t mean it’s a deal.

To sellers out there: Take heart and don’t give up.

To you buyers looking for a deal, get back shopping! Here’s the deal:   Homes are priced for a buyer’s market, so go pick your fruit. Interest rates are at levels not seen in generations.   Go for it!

So many buyers — especially first-timers — are out looking — not so much for a house, but for a house-that’s-a-real-deal. And many assume that a “deal” equals a foreclosure.

But not every foreclosure is a deal.

A foreclosure is not a deal when:

– the cost of repairs and the price of the house exceeds the home’s worth.

– you don’t have the cash, talent, and/or time to fix it up.

– the house doesn’t “fit” your needs; it’s not practical. It may be too small and/or not have space for your beloved hobby, whether it be beer-making or model trains or crafting or gardening. And do you really want to give up the hobby that gives you so much enjoyment?

– you just plain don’t like it. Remember the winter coat that was really UNflattering and downright ugly but you bought it because it was so cheap? You disliked it so much you never wore it … and what kind of deal was that?

– it’s such a good deal that you figure you’d better buy it NOW, before someone else does. (The Number One rule I tell every buyer I work with:   Don’t buy a house because someone else might; buy it because it’s right for you.)

There WILL be another deal, one that will fit your needs and wants and budget. And it may not even be a foreclosure: a ton of great houses at great prices are out there to fit practically every budget. Remember, this is the biggest purchase you’ve ever made, and that payment will be around for … well, about 30 years. Choose wisely.

So about two weeks ago here on my blog, I whined and worried about the local Sunday paper’s front-page headline ‘Clouds of uncertainty in economic skies.’ Yet the next day ” June 8 ” Manpower Inc. released its quarterly survey of employer expectations with quite a different outlook. Employers in the four-county Metro Milwaukee area “expect to hire at a solid pace” in the July-September period, according to Business writer John Schmid in the Milwaukee Journal Sentinel.

Schmid continues: “From July to September, 22% of the metro Milwaukee employers surveyed expect to add new hires, while 5% foresee a reduction in payrolls, resulting in a net employment outlook of 17%.”Another 70% of Milwaukee-area employers expect “no change” in staffing levels in the July-September period; 3% are not certain of their hiring plans.”

In the Milwaukee region, the report says “Manpower expects third-quarter job gains in construction, durable-goods manufacturing, transportation and utilities, wholesale and retail trade, information, professional and business services, education and health services, leisure and hospitality, and government.”

“If it bleeds, it reads … and it leads” is a common news media saying. But we’ve been bleeding for soooo long, and the prediction of better things to come is refreshing and appreciated. Thanks, John Schmid and the Milwaukee Journal Sentinel, for passing along Manpower’s promising survey.

To read the entire Journal Sentinel article (the headline of which begins with ‘Milwaukee-area jobs outlook among top in U.S.’) go to http://www.istockanalyst.com/article/viewiStockNews/articleid/4187633

Then go out and help the economy by buying something. I did.

I met the nicest lady at one of my Sunday Open Houses. As we were chatting, we somehow got onto the subject of squirrels and their penchant for bird seed and how to keep them away from bird feeders. She told me about Freddy, the squirrel who befriended their family many years ago and who would skirt around their legs and show up every morning for “breakfast” of a peanut butter sandwich that Mary would cut up into 8 or 10 pieces.

Freddy has long since gone up to squirrel heaven, but Mary and her husband still make those sandwiches for 13 hungry squirrels who show up every morning.

Mary reminded me of my late mom, who fed the squirrels too, in part to keep them out of the bird seed and probably more because she felt sorry for the much-maligned and very intelligent critters. She had my dad make a ladder (about 2 inches wide) so that the squirrels could scramble up, crawl through the shed window (which of course they left open) and fill their cheeks from a huge new garbage can just inside that was kept stocked to the brim with in-the-shell peanuts.

I like the pb sandwich idea, and I think I’ll try it. Squirrels are fascinating and smart and deserve to share the world with the rest of us.

And so does the wildlife in the Gulf. Two of the organizations helping oiled birds, turtles, and marine animals are Tri-State Bird Rescue & Research and the Audubon Nature Institute. If you want to help, here is some information from ABC News’ website:

Tri-State Bird Rescue & Research is the organization which treated the first oiled bird discovered in this spill.

To support their efforts with a donation, visit: www.tristatebird.org/donations

The New Orleans-based Audubon Nature Institute has positioned triage units in the affected areas to treat any affected sea turtles or marine mammals, such as sea otters.

You can support their efforts by making a donation at http://www.audubontransactions.org/support/fund1.php or calling 504-861-5107.

Together, we can make a difference.

It was a beautiful morning: Sun shining, mild temps, wonderful spicy scent from my shrub roses, birds welcoming the day when I walked out to get the Sunday paper. But my stomach turned and I had that familiar tinge of panic when I saw the front page proclaim ‘Clouds of uncertainty in economic skies.’

Oh no! I was going to splurge and buy a new rug for the deck on sale at Target for $50. Maybe I should take back the pillow protectors I got yesterday? Who needs protected pillows, anyway? I’m out of Prilosec; should I wean myself off? Hamburger for Sunday dinner instead of the steak that’s on sale.

My panic was palpable. Would we be living the fall of 2008 all over?? I finally talked myself down, put it all in perspective, and realized that yes, the economy is still in flux and I knew that, but that newspapers gurus’ job is to sell newspapers.

I firmly believe that headlines like this do hurt the economy further, at least when it comes to consumers’ personal spending and perhaps even further up the ‘food chain.’ For example, will that headline cause a small business owner to think twice about adding a new employee on Monday? That would be a terrible shame. What if that business person doesn’t turn to page 11 where the continued headline now reads ‘ECONOMY/Outlook varies.’ Job creation is vital to recovery and most especially to those without work.

So my plea to the media: I’m not asking you to sugar-coat the economy, but maybe you could put ‘Outlook varies’ on the front page instead of buried inside?

Time for me to get off my soapbox and get back to pouring over the sale flyers.

Okay, so for whatever reason, you missed out on the tax credit. Get over it, and get on with it!

Why #1? Because interest rates have gone DOWN since the beginning of May. Interest rates were great then, and now they’re even better. We don’t know how long this will last, since much of it seems to have to do with the financial pains abroad, so take advantage while you can. Whereas in April, fixed and FHA rates were around 5.25%, now they’re hovering at about 4.875%. (For a quick answer in how this relates to actual payments, go to the Mortgage Info tab on my website, www.novakhomes.com, then call your favorite lender for details.)

Why #2? Because the selection of homes is exceptional, and homes   ” for the most part, at least here in Racine, WI ” are priced for a Buyer’s Market.

Why #3? Because the market’s not as frenzied as it was toward the end of April, when some buyers seemed to be more interested in getting a tax credit than in getting the right house … not unlike when you absolutely NEED bread and milk and you’re almost out of gas, so you stop at the first store you see and spend more than you expected. Now you have the time to choose correctly, with less pressure.

Why #4? Because when you take into account #’s 1, 2, and 3, you’ll probably be ahead of the game.

So … Get preapproved for a mortgage and happy househunting!

You’re making the payments to your credit card, but even when you don’t charge anything, the balance never seems to go down.

And you’re correct: It barely moves. Here’s a relatively-painless method that has worked for me to whittle away at those balances. Look at your statement to see what the interest charges are. Add the interest to the minimum payment, and send in that amount.

Example: Your minimum payment is $39, and the interest for the month is $25. If you just pay that amount, your balance will only decrease by $14 (assuming of course that you’ve stopped using the credit card). But if instead you send in $64, you’ll see a $39 decrease in next month’s balance. It takes discipline and time, but it works.

If you have multiple revolving charges like this and can’t afford to use this technique on all, choose the one with highest interest rate and tackle that first. And above all, leave the plastic at home, hidden in a drawer!

Yes, you’d think everyone would know these common sense do’s of househunting, but you’d be surprised …

DO:
¢ look within your price range.
¢ be on time for your appointments. If you’re going to be more than a couple minutes late, have the courtesy to call the agent who will be meeting you. If you can’t be there, call the agent asap.
¢ leave your food and drink in the car. No one intends to spill their coffee or coke on the rug or sofa; that’s why they’re called “accidents,” not “intentions.”
¢ if you’re a smoker, leave your butts in the car … not on the home’s front porch or lawn.
¢ hold your children’s hands. Keep the family together, and go through the home with the agent. A good tip to keep little hands off the seller’s things: Tell them to keep their hands safely in their pockets!
¢ raining? snowing? Take off your shoes at the door. How would you like mud or snow tracked through YOUR house?
¢ hang up and look! Your cell phone can stay silent for 15 minutes!
¢ making an offer? Don’t ask for personal items like that desk you covet to be included. In the first place, most lenders don’t allow such inclusions except for appliances and window treatments; in the second place, the seller will probably and understandably be mightily ticked off.
¢ stay off beds. Sitting on chairs to chat about the house is okay, but not on beds.
¢ look at the yard after you’ve finished in the house. That way you won’t track grass, mud, or who-knows-what in the house.
¢ be polite and friendly. While most sellers leave for showings, others may have to stay home, for one reason or another. Don’t be rude. Whether you like or don’t like the house, certainly you can find something nice to say, plus “thank you.”

And one huge DON’T:   Don’t make private appointments to see houses just to get “decorating ideas.” Save that for magazines and HGTV!