Thanksgiving… Again…

I have a rather special connection to Thanksgiving. While my dear, sweet wife believes that connection may be that I can be a turkey, that’s not the connection I am thinking of… The connection that I’m thinking of is that I’m a Thanksgiving child. Again, this year my birthday falls on Thanksgiving Day. That only happens about once every 6 years (thanks to leap years) … but more than half the time my birthday falls during the long Thanksgiving weekend… And it always falls in that time of year when those of us in this country are reflecting on a season of thanksgiving.

As a part of that celebration of thanksgiving there are many traditions… Every family seems to have their own set of traditions that enrich their celebrations and the remembering of the things for which they are thankful. At the center of these traditions are of course the Thanksgiving meal, a gathering of family and a coming home … and for many an outreach to the hungry and the homeless.

So much of this American tradition centers around the home… and all that home means. There is no one meaning for home; but, it is certain that it almost always extends beyond the walls and roof that shelter us from weather.

Last night on the coldest night since last winter there was a fire in a rental home that we own… occupied by a friend and now neighbor… seemed that all of our city’s fire trucks were here… in the middle of the night for a couple of hours at least… another neighbor answering my wife’s call from Mississippi came over to awaken me to let me know about the fire. I am a sound sleeper! Everyone is ok… The neighbor that came over to wake me has given shelter to the single mom and two children. I’ll survey the damage in an hour or so… We are thankful for so much!

While writing these words, I took a break to go through my mail suddenly drawn to something that was obviously not a bill or another credit card offer or the typical slick piece of advertising inviting yet deeper connection to the material world … but a small note… A Thank You Note! A very personal thank you note from a client now friend for something that happened more than a year ago… something still remembered and having meant enough to take the time from the business of life to write a beautiful thank you note… a note that brought tears and a smile.

I believe in blessings. I believe saying thank you has great power. I hope that you find yourself thankful this Thanksgiving. Letting others know of your thankfulness is a way of keeping that power going.

I am thankful for being a Thanksgiving child.

May the Market be with you.

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Living Small (Step 2)…

William-Morris-Quote
Living Small (Step 2)…

Our rightsizing adventures continue… Closets fully behind us and now inspired, we moved to the attic: home of Christmas ornaments and things long forgotten. Do I still really need those tax returns from 1962? Not all things can be given or thrown away. Both shredding and burning are extremely time consuming… but sometimes necessary. But you do learn how to be selective. Not every page contains sensitive information.

Then there were the children’s things. What should be kept (at least a bit longer) and what do they need to come pickup. We’re still waiting! But they HAVE been warned. I think this is called sharing the pain.

Of course there are always those odd pieces of furniture that need to be dealt with. We’re not really using them… but they might come in handy down the line… or the kids may want them… We do have a way of coming up with what I’ll call in a tongue-and-check way: inanimate transference attachment.

Now on a house-cleaning tear, we are deciding all those nick-nacks… may not be real keep sakes! Long ago tired of yard sales… Joni spends time on Trussville Trading (Facebook) giving away or selling … I’m saying put it on the curb with a sign “FREE STUFF!”

Moving to the workshop, I have a bit of a tougher struggle. Broken chairs, broken tools, scraps of lumber… best suited for kindling… unattended projects. Time to fish-or-cut-bait! If you don’t see this project being attacked in the next 90 days, get rid of it. My tools are not included in the downsizing… period!

Back in the house… my wife asks Dave what about those books? Books I’ll have to admit are sacred to me. I really struggle here. Ok, all those technology books… I’ll let go of those… maybe find a soul that might be interested… no charge… just hate to recycle as waste paper. Non-technical books, non-fiction and fiction alike… out of over a thousand volumes… I think there were less than a dozen I was willing to part with… Joni thinks, I’m sick. You want it… I’ll buy you a copy but you can’t have the copy that I invested a part of my life in reading! Oh such attachment.

Living small is no small task… But, lightening the load of possession and attachment is… well… invigorating. A chance to look back and a chance to evaluate. A chance to look forward and begin anew with new or at least refreshed insight into what may be left.

To all of my downsizing clients… my hat is off to you and best wishes for a renewed journey.

May the market be with you.

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Living Small (Step 1)

Living Small… (Step 1)

After years in the acquisition mode, I have arrived, as have many, to a place where more is not better. As a matter of fact, I’ve spent considerable energy lately to consider next steps and invariably I return to the conclusion that there is much to be said for downsizing.

Now downsizing, I’ll tell you, isn’t nearly as simple as it may seem… Although, in the end it offers a simpler more focused existence, it is definitely a change in mindset and a departure from what those of my generation (Baby Boomers) have grown accustomed or based the measure of their life/success.

If I have followed any kind of normal approach to this process, it begins with the idea that I’ll just get rid of the stuff that I no longer use/need. Of course the devil is in the details and in this case that means defining what is needed and what is actually used. As you get into the effort a much more complicated set of evaluation processes arrive that over time get re-evaluated and re-defined.

In my particular case, I started in the closet… I am embarrassed to say that as I started the process, I had to come to terms with the fact that I had become a collector of clothing… Our master closet measures some 16’ x 5’ and is 12 feet high (meaning multiple tiers requiring the inclusion of an 6 ft steep ladder in the closet). Know that this closet houses not only my clothing (but only that which is hung on a hanger) but also that of my wife who has a shoe fetish, which often has me describing her a little Miss Imelda.

Oh how creative we had become in organizing and accommodating the collection of clothing. Much of which has not been worn in a long time and at my age that’s saying something. So where do you start? I tried the 12-month rule; but, too quickly wimped out! Last winter was mild, so went my thinking… I’m dropping a few pounds… another hopeful vision!

So ended round one of the closet wars… Friends, family and TEAM (Trussville Ecumenical Assistive Ministries) the beneficiaries… but the closet was still pretty full! With my wife holding the light of reality over me… I thinned out a bit more and decided I could celebrate an actual weight loss with a shopping spree accompanied with the displacement of an equal or greater amount of clothing from the remaining hoarder’s lode.

Not really through with the closet, we both tasked ourselves to likewise deal with the bounding or should I say boundless shoe inventory… Joni reminds me every once in a while that she is not the only collector of shoes in this house…. Usable (lightly worn) shoes to friends / family and some went directly to the trash. That was hard! No longer can, I truthfully say to my younger co-workers: “I have shoes older than you! ”

We really are now trying to hold ourselves to the 12-month rule… with a little leeway for sentimentality and tolerance of the other’s attachment. But arriving here did take some effort and letting go…. Confronting the frequent question: You’re keeping that? Really?

The good news is that following this initiation into downsizing (rightsizing becoming the favored term) we really seemed to start getting into the process and enjoying a lightening of the burden of clutter and were energized to move through the rest of the house and our lives putting things back into balance. It does actually get easier… but there do remain some challenges.

More on our rightsizing efforts and the rightsizing movement next time… Join me for Living Small – Step 2. Until then….

May the market be with you…

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Qualifying to buy your new home…

I have good credit… I’m ready to buy…

I realize that we have spoken about credit scores here before… however, with the post-crash lending standards, “good” credit or a “good” credit score doesn’t mean a buyer will be seen as credit-worthy or eligible for the advertised low mortgage rates… currently as low as 3.875% of a 30 Year Fix Rate FHA Loan (August 1,2014).

Buyers typically focus solely on the credit score or the achievement of a particular score level. With achievement of the desired score level, they think a home and those low advertised rates are as good as theirs. While the credit score is always a major focus in becoming pre-approved/pre-qualified for a mortgage loan, it certainly isn’t the only factor lenders will consider when determining a buyer’s ability to purchase.

Credit scores revisited…

Before proceeding further, let’s briefly review current credit score requirements. For the most part a credit score of 620 or 640 (the exact level varies from lender to lender) is seen as the standard lowest level credit score for which you will be considered for a mortgage loan. There are a few exceptions to this rule in that there are what we refer to as “Hard Money” Lenders that may consider applicants with credit scores as low as 580, currently seen as the basement floor for the possibility of a mortgage loan. But be prepared for much scrutiny and obviously higher interest rates. For the best rates you’ll generally need a credit score above 700. Scores higher than a 750 don’t seem to buy you any extra advantage.

If you are a self employed, commissioned or 1099 income based individual, you will again be faced with an extra burden of providing proof of the income reported to the IRS generally via tax transcripts for at least the last two years.

Debt-To-Income…

Income substantiated, the next step is to evaluate your debt to income ratio. The “debt-to-income ratio“, or “DTI ratio” as it’s known in the industry, is the way a lender determines the maximum mortgage payment you can afford. By dividing all of your monthly liabilities (including the estimated payment with taxes and insurance for your new home) by your gross monthly income, to develop a percentage. This number is known as your DTI, and must fall under a certain percent in order to qualify for a mortgage. The maximum debt-to-income ratio will vary by mortgage lender, loan program, and investor. While in the past the qualifying DTI ratio ranged between 40-50%, with the new Qualified Mortgage rule, most mortgages now have a maximum back-end DTI ratio of 43%.

Staying Approved/Qualified…Of course getting pre-approved or pre-qualified is just the beginning step. You must stay qualified throughout the process, as all the numbers will be checked again just before closing. So, avoid that temptation to go out and buy new furniture for that dream home or you just may be looking to rent a storage unit to store it in!

For more information on Pre-Qualification, Debt-to-income ratios, and loan programs look at my blog DavidParrishRealtor.com/myblog.

May the market be with you…

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Thinking About A Second Home…

Chairs on Deck Facing Ocean

Just returning from vacation… barely finished unpacking. While at the beach I couldn’t help myself… As I have frequently (almost always) done in the past, I found myself thinking wouldn’t it be great if we had a home here…

Do you dream of owning a second home? More and more people are turning to second homes for a variety of personal and financial reasons. Here are a few things you’ll want to consider to inform your second home strategy.

If you’ve ever dreamed of owning a second home, it’s never too early to begin planning how to make that dream a reality. Whether you’re ready to buy now or think it may be a little while before you make the move, there are several key considerations that will inform your “second home strategy.”

1. Identify why you want a second home. What role will this second home play in your life? Is it designed to be a family retreat? Are you hoping to supplement your income with a cash-flow positive rental? Is your second home going to be a retirement destination? It could be all three, of course, but you’ll want to understand the unique requirements each situation dictates. This will include location, tax impact, and the home’s amenities.

2. Begin with your location. Many second home purchases are made for seasonal reasons, with many flocking to the south and the west for winter months. This may be the norm, but it might not be so for you. Where do you want to be? Have you experienced the location first hand, or is a visit in order? If you imagine kids and grandkids making the journey to share this home, will it be conveniently located? It’s one thing to fly into Tampa, but quite another to reach remote parts of Arizona or Nevada.

3. Eyeball the upkeep. You may think you want a two acre lot with a big lawn, but imagine paying to keep that lawn in shape for all the time you’re not in your second home. The same goes for homes with large square footage, pools, and elaborate gardens. Mitigating your exposure to upkeep can be an important factor in holding your second home for the long-term.

4. Figure out financing. This is especially important if you don’t have the financial picture ironed out yet. Securing a mortgage for a second home can be tricky, and a number of buyers look for all-cash purchases of relatively inexpensive homes. Regardless of how you do it, financial planning is a must.

5. Talk taxes. How a second home impacts your tax picture is a vital part of a second home strategy. The tax implications can vary widely depending on how you choose to utilize the home, whether for personal residency or as a rental. Even how long you choose to rent out a second home each year can have unique tax implications. Laws change, so take the time to review your strategy periodically with your accountant.

May the market be with you… and enjoy your vacation!

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The New Room…

A recent survey by Realtor.com identified a trend that I have been noticing more and more lately… While the kitchen is still the room that frequently makes or breaks a deal, there is an increasing shift of focus to another “room” for making a sale.

That room is the back yard! Yes, I said the back yard!

For those of you that have known me for a “lonnnng” time, you know that I have a little experience in this area as a former garden center and professional landscape design and construction operator. When in that business, we frequently talked about the landscape with our clients as an outdoor room… or rooms. In the 80’s that was a “newish” concept to the public… but a useful method for communicating key landscape design philosophies and concepts.

Outdoor Living SpacesThe selling of that concept done… In today’s world, we increasingly see homeowners making use of the outdoor space for more than a children’s play area. Today there are outdoor kitchens and living spaces that include TV’s, Wi-Fi, and other family attractions used to enhance and expand the family’s living area. The practice of using these spaces in such enhanced fashion is rapidly becoming mainstream to the point of impacting the desires and expectations of homebuyers.

For our market this is especially true in, but not limited to, homes in the above $200K price range.

Now as with most home improvements, such improvements do not return dollar-for-dollar invested when you go to sell. But, they can definitely impact the sale ability of your home. With that in mind and the arrival of summer you may want to take another look at that back yard and that unused swing set / play area and begin creating that new room that you can enjoy now that will also prepare your home for the market when the time comes to sell.

 May the market be with you.

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White Lies…

I was speaking with another Realtor the other day and we got on the subject of telling buyers and sellers the truth… versus what they want to hear… or in other words the use of white lies!

I don’t know about you, but as a kid I learned early on about lying and white lies. I’ll have to admit at first it was a little confusing. There was no doubt in our house that lying was a sin… But, “White Lies” were ok. So, where was the line between lying and telling a white lie? The most common definition of when a lie was a white lie seemed to be when we may not be saying the 100% truth, but we did so because we didn’t want to hurt the feelings of the other person.

Hurting someone’s feelings or making them unhappy seemed to be the bigger sin, so we fell into the habit of crafting our words and messages in a way that saved the feelings of others… It was kind of a “Southern” (polite and right) thing to do.

For example:  Who of us when asked the question: “Does this make me look fat?” answer the question 100% truthfully. Maybe your husband asks if it’s okay to invite his mother over for dinner. And your response was… Sure, even if that wasn’t 100% truthful. Or, perhaps your eight year old ask if they look really scary in their Halloween costume. And your response was… “Oh yes!”

In each of these cases your response may not have reflected your TRUE thoughts or opinions. To a large extent many of us have carried that understanding and habit of telling “White Lies” into our adult lives… and Realtors are no exception.

In each of these cases, the person telling the ‘white lie’ was saying what the other person wanted to hear. There was no harm in not telling the 100% truth…  it was a ‘white lie’. However, if we are not telling the 100% truth in order to save someone’s feelings AND IT HURTS THEM, we are lying.

What does this have to do with real estate?

We believe there are some in the real estate industry more worried about a homeowner’s feelings than they are about telling the truth about the current value of their home. These agents are not necessarily malicious. They just realize they may disappoint a seller at a listing appointment by telling the truth about what the house will sell for. They find it difficult to deliver tough news. To make sellers feel better, they lie.

Good agents can deliver good news. Great agents know how to deliver tough news.

In today’s real estate market, you need an agent that will tell you the truth, even when you don’t want to hear it. You need an agent more worried about your family than they are about your feelings. You need an agent who can get the house sold!

What this means to you

If you are interviewing potential listing agents, demand they tell you the truth. Don’t hire the agent that tells you what you want to hear. Hire the agent that tells you what you need to know. Reward their honesty.

May the market be with you.

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The First 8 Seconds…

It has long been known that first impressions are an essential ingredient to success or failure. Real estate is no exception. As a mater of fact that first 8 seconds of a prospective homeowner’s encounter with a prospective new home is the key to selling success.

So what happens in those first 8 seconds?

A decision is made. That decision is vital to success… It is the decision, although subconscious, as to how we will view everything else we see… Will we respond to what we see by saying: Well I can work with that or I don’t know about that!

Don’t think for a minute (or 8 seconds) that this is a non-consequential decision! It’s a harsh reality, but one you would be wise to accept… First impressions matter! Once this impression is formed, it’s extraordinarily difficult to change, which is why it’s so important to put your best foot forward.

When working with my Sellers, I spend a considerable amount of time focusing on how to make those first eight seconds work for them. How to speak to the prospective buyer in terms of three of their five senses… Sight, Smell, Sound!

Sight: We’ve all heard over-and-over about curb appeal. Without it you are reduced to being a commodity. Curb appeal of course started to enter your buyer’s mind on the way to your home… what all did they pass to get here? While it may be out of your control… that doesn’t mean you are unaffected by those things. Overcoming a poor approach is difficult. But, let’s say the approach is at least not a problem. What can you do that makes your home shine from the road… that invites someone inside?

You may not be a Master Gardner… And a substantial investment in the landscape at this late date won’t usually make sense (operative word here is usually)… Like so many other home improvements… you want to do those while living in the home so that you can benefit from the expenditure, as they rarely return dollar-for-dollar. Even so, attend to the details of keeping the grass cut, shrubs trimmed, weeds under control. The house needs to absolutely shine from the road… Paint the front door or do whatever is required to make it look brand new and inviting. A new front door actually has one of the strongest returns on investment a whopping 97% ROI. A little potted seasonal color at the front door is a relatively inexpensive way of saying welcome!

Be cognizant of which door the purchaser will be entering and make that first experience entering the home the most powerful possible. De-clutter, de-clutter, de-clutter and then de-clutter some more.

Look at your paint colors with a different eye. I know you love Crimson or perhaps orange on the walls… But a move toward a more neutral palette invites the prospective homeowner to see the home in ways that are more likely to reflect their preferences and begin to see the home as their own. You would be surprised at how many buyers see the need to paint a room as a big deal!

If you’ve got any deferred maintenance items… carpets that need to be cleaned or walls that need to be painted, do it now! Deferred maintenance can be a deal killer at worst and an invitation for lower offers for sure… generally, much lower (by a factor of three) than the cost to address.

Keep it lighted! Make your windows sparkle! Don’t turn your home into a cave… have the window treatments set to allow the rooms to be flooded with natural light! Leave the some lamps on… find the right light balance. Avoid overly harsh artificial light.

Smell: Be aware of smells. Smoke is a killer, followed quickly by pet odors! If needed, invest in an ozone machine (rent it) and remove those odors and stop the source! Now may be a great time to quit smoking or at least switch to an e-cigarette. Avoid over powering scents… Those cover up scents may be taken as a sign you are trying to hide something. The best scent is no scent!

Finally, think about sound. Many people are auditory sensitive. Perhaps some really inviting wind chimes on the back deck. Or perhaps your cable service has a music channel that provides a soothing music channel that can offer a calming stay-a-while sound ambiance … perfect for talking over writing an offer.

May the market be with you.

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So… How are the mortgage rates?

Saying that Mortgage rates are good doesn’t seem to resonate with the public… for a better understanding of just how good they are take a look at Mortgage Rates Through the Years…

Here’s an overview of mortgage rates in the past four decades, as well as the approximate payment on a $200,000 mortgage and how it changes with the rise and fall of rates, according to Freddie Mac.

1970s
Average 30-year fixed-rate mortgage: 8.86%
Approximate payment on a $200,000 mortgage: $1,589

1980s
Average 30-year fixed-rate mortgage: 12.70%
Approximate payment on a $200,000 mortgage: $2,166

1990s
Average 30-year fixed-rate mortgage: 8.12%
Approximate payment on a $200,000 mortgage: $1,484

2000s
Average 30-year fixed-rate mortgage: 6.29%
Approximate payment on a $200,000 mortgage: $1,237

2014
Average 30-year fixed-rate mortgage: 4.36%
Approximate payment on a $200,000 mortgage: $997

Source: “Mortgage Rates: From Dirt Cheap, to Cheap,” Freddie Mac (March 24, 2014)

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So, how’s the market?

A recent talk given at Cahaba Toastmasters

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