Vince's Northwoods Notes

Selling real estate --what you need to know about cost, price, and value

2010-03-06T17:16:00Z

It is conventional wisdom these days that selling and buying real estate is all about price, but that is an over simplification -- the property in question must offer price with value , and though often confused with each other, price and value are not the same thing -- they have a relationship. In a real estate transaction, price may be defined as what the buyer agrees to give up (in financial consideration) to obtain certain benefits (real estate, and the use thereof.) That price has nothing to...(read more)

The home inspection contingency -- a perennial favorite

2010-03-01T22:32:00Z

One of my posts on the home inspection contingency has received 1,458 views since written last August. I also covered the topic in May and December , but these posts, for whatever reason, have not been as popular. Apparently there is something about my August post that search engines like as questions about home inspection contingencies are matched to that particular writing. Courtesy of my website statistics section, here are actual search questions that brought visitors to my blog just this past...(read more)

My newest creations -- Buyer's and Seller's Flow Charts

2010-02-27T21:16:00Z

On occasion one of the parties to a real estate transaction finds him/herself wondering "What comes next?" Or it might be "What comes after next?" From the beginning of a transaction to the end there is a certain flow to the process, and I am always looking for ways to make explaining things easier, so, Voila! -- my Buyer's Flow Chart and my Seller's Flow Chart . Image only, links are above. Downloaded as PDF files. Of course, I had to combine steps here and there and...(read more)

Announcing my new YouTube Channel

2010-02-17T21:54:00Z

Today I have uploaded my first videos to my new YouTube channel featuring real estate related videos of (I hope) interest to buyers and sellers of real estate in Manitowish Waters, Presque Isle, Mercer, and surrounding communities. James Cameron and Martin Scorsese have nothing to fear from me -- shaky camera, poor lighting, badly performed voice-overs -- I have it all!

Producing one of these things is taking me way too long considering my time available; what I need is a 12 year old kid to do it for me -- he or she could probably do it in one-third the time with superior results. I intend on getting better with practice.

My first two productions are a short video of the hangar we have listed at the Manitowish Waters Airport and a video of a home I have listed on North Farming Road in Arbor Vitae. I am not real proud of my work, but I spent long enough on this project that I am danged sure going to make use of them.

Revisions to the Manitowish Waters UDC ordinance.

2010-02-13T17:18:00Z

The Town of Manitowish Waters is continuing to propose revisions to the town's Uniform Dwelling Code (UDC) and I am continuing to speak my mind about it. Last October the town board held a hearing to propose extending UDC inspection requirements to accessory buildings and garages over 200 square feet in size. I testified about what I thought of the proposal at the public hearing, as did several others. As a result of the hearing, the town board dropped the proposal, at least for now.

This past Tuesday the town board held another hearing on a different proposed revison to the UDC ordinance, which is Chapter 158 Article 1 of the town's Code Of Ordinances. Most of the proposal I had no problem with as it related to fines and forfeitures levied for violations and the Board of Appeal's role in the process. However, a separate part of the proposal was a giant step backwards.

I first became aware of the revision by reading the legal notice in the Lakeland Times. Right away I saw a problem, and at the public hearing, I was surprised that I was the only one to offer testimony about the language printed in the legal notice The "problem" was that the proposed revision replaced very specific language in the existing ordinance with language that was anything but specific and open to all sorts of different interpretations. The existing language is:

The scope of this article includes the following:

(1) Construction and inspection of all new one- and two-family dwellings built after the date of adoption of this article.
(2) Construction and inspection of habitable additions to all dwellings. For purposes of this article, habitable additions are those that add year-round conditioned space either horizontally or vertically to an existing dwelling.

The new language splits dwellings into two groups -- those built before, and those built after June 1, 1980. I understand why this was done -- it works better with the state's UDC language. However, the town's new proposed language muddied the waters by extending UDC inspection requirements to all alterations and additions. The proposed language did not define "alterations" or "additions" and I felt that this was a mistake, and I said so, offering examples of how the intent, whatever it actually was, could be whatever the reader of the ordinance wanted it to be. For instance, removing a portion of a non-structural wall in a 50 year old cottage could be considered an alteration requiring an inspection by the UDC inspector, which I would consider an unwarranted and ridiculous expansion of governmental intrusion. I suggested restriciting alterations and additions by using language similar to (2) above.

It appeared that the supervisors accepted my comments as reasonable and hopefully the proposed language will be revised with my suggestion in mind.

Words of wisdom, some of which have some application to real estate

2010-02-11T22:43:00Z

Lately, for whatever reason, I have been collecting "sayings". If the quotation or anonymous saying strikes my fancy I write it down or simply rip it out of the printed page for later use. Following are the most recent additions to my collection. I can only wish to be so clever as to have come up with any one of them or to some day have my own "saying" worth remembering.

"It is the characteristic of the unlearned that they are forever proposing something which is old, and because it has recently come to their attention, supposing it to be new." -- Calvin Coolidge

That one I like for no other reason than it resonates with me, as does the following:

"There are no stupid questions, but there are a lot of inquisitive idiots."

I like the construction of the next one and how the addition or deletion of one word changes everything. It certainly applies to real estate agents.

"If you have integrity, nothing else matters. If you don't have integrity, nothing else matters." --Alan Simpson

Following is one that I stole, but I don't remember from whom. You get the irony in a guy using a quotation on integrity and in the next sentence stating that he stole a saying?

"When evaluating a real estate agent, effort is admirable. Achievement is even better."

I think that is good advice for evaluating much more than real estate agents. It is far from the whole story, though. Achievement obtained through dishonest or unethical means is but dust in the mouth. (Maybe that can be my quotation!)

My last saying also has an application in the practice of real estate. I printed it out, framed it up, and put it on my office wall as the "Thought For Today."

"Some things you have to see in order to believe. Some things you have to believe in order to see."

The application of this saying to real estate would be in attempting to reassure hesitant buyers that, yes indeed, this property is the right one for you, and yes indeed, it can be everything you want it to be if you believe that it can be, but first you have to make an offer or it will never happen.

Searchable database of foreclosed homes

2010-02-03T19:20:00Z

Considering investing in a foreclosed home? The Federal National Mortgage Association (Fannie Mae) has an online searchable database of residential properties that are currently owned by Fannie Mae. Fannie Mae had purchased the mortgages for these properties as part of its normal business practices and subsequently acquired full ownership via foreclosure, deed in lieu of foreclosure, and forfeiture. Fannie Mae, as you may know, is a stockholder-owned corporation (chartered by Congress in 1968) that, like Freddie Mac, is a government sponsored enterprise (GSE) that purchases and securitizes mortgages to ensure that funds remain available to lending institutions.

http://www.homepath.com/

You may search by state, county, city, zip code, MLS#, etc. For instance, as of this writing, a search of Vilas County returns 4 homes, Oneida County shows 12. Maybe there is a bargain there for you? (Don't forget what I do for a living -- I can be of assistance.) At this site one may also sign up for new property alerts delivered to you via email.

4th Quarter home sales statistics for Manitowish Waters, Mercer, and surrounding communities

2010-01-30T22:07:00Z

As graphical representation of data for a post on my Northwoods real estate outlook for 2010 earlier this month, I charted 4th quarter closings of the sale of single family homes in the years 2006-2009. This chart represented closings throughout the entire Greater Northwoods Multiple Listing Service. If one attempts to do this type of thing, one must choose a large enough geographical area to ensure that there will be enough data points to provide useful information, even more so if one is interested in trend information.

I tried a similar approach while limiting myself to western Vilas and eastern Iron Counties, specifically the communities of Manitowish Waters, Mercer, Winchester, Presque Isle, Boulder Junction, Lac du Flambeau, Oma, and Sherman. I have charted the sales in units of single family homes and sales in units of all types of listed real estate by month for the 4th quarter of each year from 2006 through 2009. The number of units for each category and time period is not huge, but I think large enough that we can learn something from the effort. Without further ado,

(If the green lines seems a bit sketchy, it is because I drew it in freehand -- I couldn't figure out how to make the program do it for me. Y-axis is units. X-axis is year. All means all types of real estate; SF means single family residences.)

Points I wish to emphasize:

The trend line is up for the 4th quarter of 2009, units are similar to 2007.
Single family home sales in units approached 2006, which was well before anyone realized what was coming (though we should have.)
From 2006 to 2008 the green lines are converging, which, in this instance, means that single family home sales were becoming a greater and greater portion of total sales in units; i.e., buyers were purchasing more improved properties and fewer vacant lots, relatively speaking. In 2009, the lines started diverging again, meaning more vacant parcels and fewer improved properties, relatively speaking. Part of the effect is due to the finalization in December of the sale of a number of vacant lots in Manitowish Waters that were auctioned off in November following a foreclosure.
Nation-wide the implementation and extension of the First Time Homebuyer Tax Credit had a large impact on the increase in home sales. I don't believe that had anything to do with the upturn experienced in our local market.

Small bathroom? The solution is here.

2010-01-27T22:25:00Z

Everyone is aware of the "green" trend that has taken hold in most areas of American life, including building construction and how we make use of our homes. The number of new ideas to make our homes more environmentally-friendly seems to increase every day. Some of these ideas are very good ones, some are very good in theory but less than ideal in practice (composting toilets come to mind), some seem wacky (again, composting toilets come to mind), and some ideas seem so simultaneously simple and brilliant that it causes you to smack yourself on the head and say, "Why didn't I think of that!"

Well, I don't have any examples to illustrate the simple and brilliant, but I do have one to illustrate simple and thought-provoking. Take a look at the toilet in the photo.

Note that the bathroom sink is part of the toilet tank. How cool is that? Who thinks of these things? Saving water and saving space and saving resources simultaneously! How could you get more green?

Ghostblogging? None of that here.

2010-01-25T21:12:00Z

An article in the February 2010 issue of Entreprenuer details the rise of the phenomenon of ghostblogging in the business world -- the practice of hiring an individual to write posts and tweets for the busy executive or business owner in the name of the executive/business owner. The ghostblogger is tasked to write in the "voice" of the client so the world at large will be none the wiser and have no reason to suspect that the CEO's pearls of wisdom are ghostwritten. One estimate is that up to 25% of business blogs are ghostwritten, in effect creating a whole new industry for laid-off PR types and journalists.

So what, you say? I don't know about you, but I, for one, was shocked, shocked to find out that something on the internet is not what it purports to be. In light of this revelation, I suggest that you take everything you read or see on the internet with a large dose of salt -- except for this blog and vincehoehn.com, which I consider to be beacons of truth and light in a sometimes dark and dangerous world.

Urban agriculture? What's that got to do with the Northwoods?

2010-01-22T21:37:00Z

Bear with me on this one. I read an article in the January 18th issue of Fortune Magazine about a wildly intriguing new concept (wildly intriguing to me, as a result of my many years in agricuture.) And this wildly intriguing concept has a nexus (at least in spirit) to our Northwoods with its large concentrations of lakes, which I will get to in a moment.

The article is about a developer in Detroit who has the idea that agriculture within the city limits of Detroit will save the city. Detroit once had a population of about 2,000,000 people, with less than half that now, and is projected to drop to about 700,000 residents. Those 700,000 people will be located within a geography that could accommodate 3 times as many. Already 40 square miles (25,600 acres) of Detroit's 139 square miles (88,960 acres) is essentially abandoned. Real estate values throughout the city have plummeted.

Enter agriculture. Now we come to the genius of the whole idea. By buying up (on the cheap) and farming the excess acreage, scarcity is (eventually) created! And what does scarcity do? Drives up prices! Genius!

Now, just because it is genius doesn't mean it will be easy to put into effect, and the article indicates that there are many hurdles in the path to the realization of a green Detroit. And we are not talking farming in the traditional Midwestern sense of large fields of corn, soybeans, and cereal grains, and giant dairies and feedlots. This is were we get to the nexus I spoke of earlier.

The people working on this envision creating agricultural "lakes" -- that's the term that they use -- of perhaps 300 acres each, each surrounded by its own valuable frontage. See where I am going with this? We are talking lakes of apples, lakes of lettuce, lakes of peaches, berries, and other high-value commodities. Do you think people would be interested in developing around these lakes? I think it quite likely that they would, even before scarcity effects took hold. The area around the lakes would be very suitable for both residential and commercial development. And Detroit would be rejuvenated in a most unlikely fashion. Genius!

Northwoods real estate outlook for 2010

2010-01-22T17:58:00Z

It's time to make some predictions about how the real estate market will fare in Wisconsin's Northwoods in 2010. My crystal ball is just as murky as the ones belonging to all the other prognosticators, and my forecasts may be worth only what you are paying for it, but here goes:

Even though mortgage rates have trended down somewhat since the first of the year, they are once again going to turn upward soon, perhaps to about 6%, for the reasons I previously wrote about. I don't see the rise in rates to be enough to severely impact our market, though it certainly won't help.
Most sales will remain in the lower end of the market, price-wise, and the upper end of the market will remain very slow, except in the instances wherein sellers have really and sincerely priced their high-end properties to sell.
The three most important things about real estate? In 2010 it will not be location, location, location, but rather location, price, price. I predict that 2010 will bring more buyers to the market than we have seen the last 2-3 years, and the primary motivation of many of these buyers will be the hope of purchasing a bargain property. I further predict a fair amount of success for buyers in 2010.

To prove that I am not merely blowing smoke with my predictions, I have done a little research using data from the Greater Northwoods Multiple Listing Service. The following chart represents total 4th quarter closings MLS-wide for the last 4 years for single family dwellings. Note that the trend line is up for all three months of the last quarter for 2009.

Y-axis is units of single family dwellings, not anything to do with dollars. I chose to chart units as my predictions have to do with numbers of buyers and not with dollar value of sales (though I could chart that, too.)

New for 2010 - I'm on Facebook

2010-01-02T17:57:00Z

I read it over and over in real estate and business trade publications and on the web -- gotta change, gotta adapt, gotta do this, gotta do that. One thing I apparently have to do is to embrace "social media". Well, maybe I do, and maybe I don't. I'm picky about such things, especially activities that can turn into tremendous time-sucks.

I believe that this blog is worth the time and effort, and now I have gone one step further. I have created a Facebook page called Vince Hoehn, GRI for the purpose of providing another place to publish my blog posts. (Pages are for organizations and businesses, Profiles are for individuals. You probably know more about this than I do. I have not also created an individual Profile for the simple reason that my kids would most certainly find it uncool if their Old Man tried to "friend" them, and I would be mightily tempted to do that, if only to annoy them.)

As I said, my Facebook page exists mostly as a platform for my blog posts, but over time, perhaps I will do a few things that I cannot do here. One thing a Facebook page can do is attract "fans." So far I have exactly zero fans, and it may stay that way forever, for all I know.

So, I have a proposition for my readers -- the first one to become a fan of my Facebook page wins $10. Fan #2 will be awarded $5, and Fan #3 gets a very nice likeness of George Washington. Fan #4 gets nothing, sorry -- three fans is all I can afford to buy.

Come to think of it, that's another reason not to create a Facebook Profile -- I wouldn't want to put myself in the position of having to buy my friends, also.

Freddie Sees Mortgage Rates Hitting 6 Percent in 2010

2010-01-02T16:14:00Z

"Freddie Sees Mortgage Rates Hitting 6 Percent in 2010"
Washington Post (12/26/09) P. A12; ElBoghdady, Dina

As reported in the Washington Post, mortgage rates could increase to six percent by the end of 2010, or even sooner, according to Freddie Mac. (Freddie Mac is a GSE, or government sposored enterprise, that purchases mortgages on the secondary market, pools them, and then sells them as mortgage-backed securities.) Interest rates for 30 year fixed rate mortgages have been rising in recent weeks, a process that is expected to continue. The Federal Reserve has been buying mortgage-backed securities issued by firms such as Fannie Mae and Freddie Mac, which has helped keep mortgage rates at low levels, but the central bank plans to wind down the program by March. Federal Reserve economists believe that the gradual tapering of purchases will draw private investors back to the market for the mortgage-backed securites and moderate the pressure on rate increases. However, according to the Post, Amy Crews Cutts, deputy chief economist at Freddie Mac, believes private investors will require a higher rate of return on the securities than the Fed has been willing to accept, and, as a result, mortgage originators may have to raise the rates they charge to consumers. "Anything we get at or below 5 percent is a gift at this point," says Crews Cutts.

(An aside: I found the name Crews Cutts so unlikely that I took the time to use Google to confirm that, yes indeed, that is her name.)

(Image only, see website for functioning widget)

Diary of a snow shoveler

2009-12-19T16:50:00Z

I came across this humorous piece on another blog; the author is unknown to me. It made me laugh (even though I knew what was coming), I hope that you enjoy it, too. It's a bit crude, so don't continue if you are easily offended.

Diary of a snow shoveler

December 8 - 6:00 PM

It started to snow.

It’s the first snow of the season and the wife and I took our cocktails and sat for hours by the window watching the huge soft flakes drift down from heaven.
It looked like a Grandma Moses Print.
So romantic we felt like newlyweds again.
I love snow!

December 9

We awoke to a beautiful blanket of crystal white snow covering every inch of the landscape.
What a fantastic sight!
Could there be a lovelier place in the whole world?
Moving here was the best idea we have ever had!
I shoveled for the first time in years and felt like a boy again.
I did both our driveway and the sidewalks.
This afternoon the snowplow came along and covered up the sidewalks and closed in the driveway, so I got to shovel again.
What a perfect life!

December 12
The sun has melted all our lovely snow.
Such a disappointment!
My neighbor tells me not to worry- we'll definitely have a white Christmas.
No snow on Christmas would be awful!
Bob says we'll have so much snow by the end of winter, that I'll never want to see snow again
I don't think that's possible.
Bob is such a nice man, I'm glad he's our neighbor.

December 14
Snow, lovely snow! 8 inches last night.
The temperature dropped to -20.
The cold makes everything sparkle so.
The wind took my breath away, but I warmed up by shoveling the driveway and sidewalks.
This is the life!
The snowplow came back this afternoon and buried everything again.
I didn't realize I would have to do quite this much shoveling, but I'll certainly get back in shape this way.
I just wish l didn’t huff and puff so.

December 15
20 inches forecast.
Sold my van and bought a 4x4 Blazer.
Bought snow tires for the wife's car and 2 extra shovels.
Stocked the freezer.
The wife wants a wood stove in case the electricity goes out.
I think that's silly.
We aren't in Alaska, after all.

December 16
Ice storm this morning.
Fell on my ass on the ice in the driveway putting down salt.
Hurt like hell.
The wife laughed for an hour, which I think was very cruel.

December 17
Still way below freezing.
Roads are too icy to go anywhere.
Electricity was off for 5 hours.
I had to pile the blankets on to stay warm.
Nothing to do but stare at the wife and try not to irritate her.
Guess I should've bought a wood stove, but won't admit it to her.
God, I hate it when she's right.
I can't believe I'm freezing to death in my own living room.

December 20
Electricity's back on, but had another 14 inches of the damn stuff last night.
More shoveling!
Took all day.
The damn snowplow came by twice.
Tried to find a neighbor kid to shovel, but they said they're too busy playing hockey.
I think they're lying.
Called the only hardware store around to see about buying a snow blower and they're out.
Might have another shipment in March.
I think they're lying.
Bob says I have to shovel or the city will have it done and bill me.
I think he's lying.

December 22
Bob was right about a white Christmas because 13 more inches of the white s**t fell today, and it's so cold, it probably won't melt till August.
Took me 45 minutes to get all dressed up to go out to shovel and then I had to piss.
By the time I got undressed, pissed and dressed again. I was too tired to shovel.
Tried to hire Bob who has a plow on his truck for the rest of the winter, but he says he's too busy. I think the a**hole is lying.

December 23
Only 2 inches of snow today
and it warmed up to 0.
The wife wanted me to decorate the front of the house this morning.
What is she, nuts?!!
Why didn't she tell me to do that a month ago?
She says she did but I think she's lying.

December 24
6 inches - Snow packed so hard by snowplow, l broke the shovel.
Thought I was having a heart attack.
If I ever catch the son of a b**** who drives that snow plow, I'll drag him through the snow by his balls and beat him to death with my broken shovel.
I know he hides around the corner and waits for me to finish shoveling and then he comes down the street at 100 miles an hour and throws snow all over where I've just been!
Tonight the wife wanted me to sing Christmas carols with her and open our presents, but I was too busy watching for the damn snowplow.

December 25
Merry freaking Christmas!
20 more inches of the damn s**t tonight -Snowed in.
The idea of shoveling makes my blood boil.
God, I hate the snow!
Then the snowplow driver got stuck up the road and the *** came to my door asking to borrow a shovel -- I hit him over the head with it and broke another one.
The wife says I have a bad attitude.
I think she's an idiot.
If I have to watch "It's A Wonderful Life" one more time, I'm going to stuff her into the microwave.

December 26
Still snowed in.
Why the hell did I ever move here?
It was all HER idea.
She's really getting on my nerves.

December 27
Temperature dropped to -30 and the pipes froze; plumber came after 14 hours of waiting for him, he only charged me $1,400 to replace all my pipes.

December 28
Warmed up to above -20.
Still snowed in.
The B***H is driving me crazy!!!

December 29
10 more inches.
Bob says I have to shovel the roof or it could cave in.
That's the stupidest thing I ever heard. How dumb does he think I am?

December 30
Roof caved in.
I beat up the snow plow driver, and now he is suing me for a million dollars, not only the beating I gave him, but also for trying to shove the broken snow shovel up his ass.
The wife went home to her mother.
Nine more inches predicted.

December 31
I set fire to what's left of the house.
No more shoveling.

January 8
Feel so good.
I just love those little white pills they keep giving me.
Why am I tied to the bed?