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  • The New, Improved, (and extended) $8,000 Tax Credit

    November 22, 2009 /
    Dennis S. Pearce /

    By now you've probably heard: The $8,000 Tax Credit has been extended! And you're thinking, "I've been wanting to buy a home... maybe there's something to this procrastination thing, after all." In this case, you'd be right; The last go-round provided up to $8,000 to homebuyers who had not owned a home in the past 3 years, and whose income was $75,000 for single taxpayers and $150,000 for married taxpayers filing joint returns. In recognition of your patience and wisdom, you are now eligible for the Sweetened Deal: For home purchases occurring after November 6, 2009, the new income limits are $125,000 for single taxpayers and $225,000 for married couples filing jointly. Be prepared to prove it! Due to the very real potential for fraud, you will be required to prove that you have not owned a home in the last 3 years, however, the credit can be allocated to the person who has not owned previously, in cases where parents are assisting with a purchase, or where one member of an unmarried couple has previously owned. Saving for a downpayment? Another element of the new version is that it allows prospective home buyers who believe they qualify for the…Read more

  • Green Homes- Fad, Trend, or Future?

    November 5, 2009 /
    Dennis S. Pearce /

    Among the many contentious issues of our day, the concept of being 'environmentally conscious', certainly strikes a few hot buttons for some. This post isn't going to explore the politics of Al Gore, or Rush Limbaugh, because, controversial as that subject may be, there's just not enough space to do the topic justice, and frankly, I don't find it that interesting. My personal angle on the Green Movement tends to slant more toward the practicalities of implementation, and looking at the cost/benefit balance for long term value. Given the condition of our current economy, and the impact of rising energy prices, and prices overall, I don't think it's an overstatement to say everybody's looking for ways to save money. From that perspective, the question becomes one of whether it's more practical to save money now (which frequently means either making do with less, or doing nothing), or to take the preventive and holistic steps that provide for long term cost and resource savings through conservation, thoughtful design, and practical implementation of new home-building technologies. The Green Movement is really just a convenient handle for the overarching conversation that revolves around the management and distribution of resources within a given community, and attempts to…Read more

  • HVCC, HERA & other Bureaucratic Sausages

    August 19, 2009 /
    Dennis S. Pearce /

    The only thing that saves us from the bureaucracy is inefficiency. An efficient bureaucracy is the greatest threat to liberty." Eugene McCarthy In the spirit of an inefficient bureaucracy, and under the guise of "economic recovery", we've seen several new edicts handed down from the mountain lately. The 2 most onerous directives go by the handy handles of 'HVCC' & 'HERA'. Both attempt to right the wrongs perpetrated in this last housing runup, but from my perspective, they are relatively undisguised attempts by big banks to utilize the fear in the marketplace to have their way, creating legislation that does little to remedy the actual problems, while pushing the BIG BANKING agenda well down the road. The Home Value Code of Conduct (HVCC), enacted in April, puts severe restrictions on the lines of communication between lenders and appraisers, requiring the use of an automated online system to place appraisal orders, while keeping lenders and brokers from speaking directly, and purportedly preventing the collusion that took place in the dark ages between '04-'07. The fly in this ointment is the reality that quality work requires quality people. The new system requires lenders to draw anonymously from a predetermined pool of appraisers,…Read more

  • Housing: swimming in info, searching for the bottom

    July 14, 2009 /
    Dennis S. Pearce /

    The US Housing market officially hit bottom on Tuesday, June 16, 2009, according to Mad Money's Jim Cramer. Based on his analysis of better than expected housing starts, increasing sales, and decreasing inventory, Cramer argues that we've seen the worst of this housing debacle, and can begin the slow climb back to sanity. And yet, a month later, we're still seeing headlines that read like footnotes to the 4 horsemen's sightseeing tour. So, how can we have this extreme swing in opinion? We're all getting the same numbers, and existing on the same planet, correct? Yet I'd swear I've never seen more schizo info. There's nothing consistent, no standards of reporting, no BIG HOUSING CHART that we're all referring to- like the digital counter ticking up the national debt ( I think they ran out of slots on that one). Shouldn't there be some agency (job security!), or body of standards keepers (bureaucrats) who sift through all the info and disseminate it into neat little bite-sized, easily digestible (And Accurate) chunks so those of us with lives to lead can get our (Useful) news and still have a life? I'm sure this was the original thinking behind the current crop of infotainment/news…Read more

  • Building Green- Was Kermit Wrong?

    April 17, 2009 /
    Dennis S. Pearce /

    With all the talk since January of inventive incentives to seemingly stimulate everything from hair growth to employment, never mind the pin-striped panhandlers on Wall Street (don't even get me started!), it's been interesting to watch the recent evolution of the environmental movement. From a tree-dwelling band of radical long-hairs with an agenda but little else, the cause has grown to encompass nearly every segment of our consumer-centric society. To paraphrase Chickenman, "It's Everywhere!" From Dr. Bronner's soaps (one of the true originals) to the Toyota Prius, there's been a sea change in perceptions of the impact our daily activities have on the planet. Few consumer products have escaped the scrutiny and benefit of an eco-makeover, with some being truly re-made, while others have received the marketing equivalent of a botox injection- also known as 'Green-washing'. Being green was once a tough sell due to the perception that it was 'difficult', and expensive. As green products and processes have slipped into the mainstream, that position has gradually become harder to defend; especially as the businesses who once protested have come to realize the economic benefits of waste prevention, thoughtful  materials utilization, and positive PR.  Green has become a critical component…Read more

  • What is Mark to Market?

    March 19, 2009 /
    Dennis S. Pearce /

    Warning: if Accounting isn't your language of choice, your eyes may be about to glaze over. However, as with many things arcane, mark-to-market accounting  may be having a huge impact on the world we live in right now, and according to many critics, could well be one of the root causes of the current financial crisis. Mark-to-Market accounting is a reporting rule that requires financial institutions to value their current investments at today's value, even if they have no intention of selling those assets now, or anytime in the foreseeable future. As an example, if you were to consider the current value of your own 401k, which most of us are already doing with some significant trepidation, you're  likely down about 50% from the highs of 2 years ago.  However, you're able to do the calculations and realize that so long as you don't sell today, you've still got a chance to recover on the long haul. Mark to Market doesn't allow banks that option, but instead forces them to report the values on their holdings at todays value, as if they were going to sell everything today. Because banks are not allowed to lend every dime they have access…Read more

  • Life is funny; chocolate fixes everything

    March 19, 2009 /
    Dennis S. Pearce /

    Sometimes it's necessary to just purge. Collecting stuff can be such a burden, and the mental space required to keep everything 'sacred' weighs so heavily that eventually the only sane option is starting over. And yes, this can be a metaphor for many stages of life. I just went through it in a minor way this weekend, as I was forced to deal with the assorted detritus of several years worth of projects. The last one, a bunk bed for my daughter, resulted in a fine coating of wood dust on every surface of the garage, and enough wood scraps to build a small barn. My parents have been in town for several weeks now and Grandpa, being retired and a restless woodworker, was 'inspired' by his granddaughter (my 7-year old) to ply his skills in her employ. They both got what they wanted; I got another project. Namely, the disassembly of the old bed, reassembly of the new one ( 2 flights of stairs, 2x6's, and MDF panels, anyone?), and the subsequent cleanup and disposal of said debris.   Both cars are  now back in the garage (a result of  the persistent voice in my head that sounds remarkably…Read more

  • Dual Agency- Sharks that swim on the land

    March 12, 2009 /
    Dennis S. Pearce /

    "Can't you feel 'em circlin' honey? Can't you feel 'em swimmin' around? You got fins to the left, fins to the right, and you're the only bait in town." - Jimmy Buffet, 'Fins' In an economy turned topsy turvy, with which-end-is-up news coming out daily, and a seemingly endless parade of graft, corruption, greed, and new stories daily turning up parasitic relationships where there should clearly be walls of propriety, it's hard to know which way to run. As many homebuyers know, buying a home can be a baffling task- and that's assuming everything goes well. Obviously, as millions of people now know, it doesn't always end in the American Dream. With a purchase as life-altering as your first home, it's absolutely essential that you place your trust in an agent who deserves it. Unfortunately, the desire to 'get a deal' often overrides the common sense priority of 'know whom you're dealing with'. In the state of Washington, every agent is required to present to a new client, preferably at the first meeting, a pamphlet labeled, "The Law of Real Estate Agency". It is a 4 page 8.5" x 11" (double-sided) masterpiece that lays out the various options for real estate…Read more

  • Searching for Bank Owned Properties?

    March 4, 2009 /
    Dennis S. Pearce /

    Opportunity takes many forms. In fact, once you've spent a little time on the planet, you realize that many of the laws governing science also apply in large part to the rest of life: there's rarely a negative without a positive, and for every action, there's usually an equal and opposite reaction. Our current financial trauma is offering up further proof, as heavily leveraged howmeowners who purchased at or near the top of the real estate  boom cycle are contributing to the dramatic increase in foreclosures. Typically, a bank-owned home is one that has been through a foreclosure proceeding, and is now offered for sale by the mortgage holding lender who is keen to get the property off their books to reduce their holdings. Banks are in the business of lending, and are not well-suited to property ownership or management, so it's in the best interests of everyone - the bank, new homebuyers, the economy, and the community, for these homes to be occupied as soon as possible, before the effects of long-term neglect can begin to impact the value of the structure. It's important to note that the timeframe leading up to a foreclosure can take anywhere from several…Read more

  • Why We Do What We Do

    February 11, 2009 /
    Dennis S. Pearce /

    Tonight saw the end of a purchase transaction that is at once a cautionary tale, and a laser bright light in the darkness of a struggling economy. To really tell the story, we have to go all the way back to August 26th,  2008, when the offer on this short sale home was written. That's right - six months from writing an offer until closing! Knowing we were writing on a short sale, there was an explicit understanding that we were on the extended timeframe plan. As the seller's lienholder was Countrywide (who takes longer than any lien holder to even look at an offer), we even knew to expect the unexpected. However, saying that and experiencing it are frequently two very different things. Due to the fact that our clients had some very specific needs, including active young children and an unpredictable work schedule, it was decided early on that Jesse and I would work in tandem on this one. One of the benefits of partnering in this business is the ability to share the load, and we have found it adds a dimension to the relationships we develop that we both cherish. There were several twists and turns…Read more

  • Reverse Mortgage Psychology

    December 17, 2008 /
    Dennis S. Pearce /

    Remember when interest rates were bouncing around the 6-7% mark, and homes were flying off the shelves? And remember how buyers in that wild market would forgo inspections, write offers on the hoods of their cars, and painstakingly draft impassioned letters of introduction to sellers, pleading for clemency in the life-sentence of homelessness the market was imposing on them? We've all watched the steady deflation of the confidence that accompanied those times, to be replaced by the looming grey cloud of indecision and angst. However, the reality is that rates have fluctuated less than 3 points in the past 8 years (2000-2007)- all the way back as far as 2000, when we reached a high that year of 8.52%, right around the time the DotBombs were imploding, and the country was talking recession. The lowest we've seen since then was June of 2003, when rates briefly bottomed at 5.23%. Throughout the next 4 years, the lowest point was a short stop at 5.45% in March of 2004. The remainder of that timespan was spent hovering between the high 5's, to the high 6's. On the surface of it, there are a few obvious reasons for the mental shift; the subprime collapse, Wall Street's subsequent malaise, an…Read more

  • Risk & Reward

    December 11, 2008 /
    Dennis S. Pearce /

    As 2008 winds to a close, I feel compelled to do a little reflection and projection. From a Real Estate perspective, it has been a challenging year. Historically, we've not seen such froth in the economy as a whole as we've witnessed in the past 12 months, since the Great Depression.  This hyperbole has become a staple for 6 o'clock news reports; in fact, if there has been any consistent theme to sum up the year, I'd think a heading along the lines of "Great Depression: the Sequel", would encapsulate the general media mood, and the extent of most reporting on the subject. However, there are a few key points that have gotten lost in the rush to spill red ink on the headlines. Just this past week, I finally saw a new piece in the PI that touched on the opportunities this market presents for first-time buyers. Another point that's frequently forgotten in all the talk of recession is the amazing fact that we've never seen the unique set of factors currently in place: low interest rates paired with a buyer's market. Recession typically is accompanied by high interest rates- the last big one in the eighties saw rates over 18%! We're looking at a realistic…Read more