From Homescape

Despite a lucrative book deal, millions in endorsements and a brief stint on a reality show, former major league baseball player Jose Canseco still couldn’t save his home from a foreclosure strikeout.

The 43-year-old Canseco retired from the major leagues in 2001, but in recent years has been at the forefront of a media frenzy with his tell-all-book on steroid abuse in the league. On Thursday, Canseco landed himself in the headlines again with another startling admission. The Associated Press reported that Canseco told the celebrity TV show, Inside Edition, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.” Foreclosure documents show Canseco owed a bank more than $2.5 million on the 7,300-square-foot-home located in the Los Angeles suburb of Encino.

The poor house
While the former MVP may not be in the same financial mess as other working-class families currently facing foreclosure, Canseco says his dwindling finances are the cause behind his recent misfortune. He told Inside Edition, “You know my life, this financial thing, is a very complicated issue. Obviously, when you make all that money, people think, ‘OK, let’s assume it is $35 million.’ People have to understand that $35 million, you’re paying the government 41 percent. That leaves you with about $17 or $18 million, not even. Then you’re taking care of your whole family.”

With gas and food costs up, it sure must be tough raising a family off of a meager $17 million. Dining out at five-star restaurants and pumping fuel into a suped-up SUV will drive you to the poor house alone. No way Jose, no sympathy from this baseball fan. While there are a good number of hard-working families who have fallen on hard times and have lost their homes — in many cases, not by their own making — a part of me looks at Canseco’s attitude as symptomatic of the real causes behind the housing bust. People borrowed money they knew they couldn’t pay back, used the equity in their home like an ATM machine and bought property they really couldn’t afford.

Living the American Dream
Before I get accused of being an elitist, it’s important to note I spent most of my life with a plastic spoon in my mouth. While I may not have had to walk 14 miles up a hill to get to school, my parents did come to this country with $10 in their pocket. Our family of four lived in a tiny 1-bedroom apartment until I was 8 years old. My parents worked minimum-wage jobs as a janitor and waitress, but they saved every dime they earned, and eventually bought their own home and started their own business. We all want to live the American Dream, and I truly believe anyone can achieve it in this country. But before that dream can be lived, it has to be earned.

I’m not going to pretend that I’m the poster child for fiscal responsibility, but it blows my mind when I see people live a lifestyle way beyond their means. I have friends who have $15,000 in credit card debt, but still go out and by a $3,000 flat-screen television. And I’m sure I’m not the only person who knows people like this. We may not be able to predict the future, but we can sure try to prepare for it the best we can.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

My neighbor is currently selling her home. And the prospective buyer is going over the property with a fine-tooth comb. The buyer scheduled home, HVAC (heating, ventilation and air conditioning), plumbing and termite inspections. I personally felt conflicted over the matter, because I inspected her house not too long ago and found some major problem spots. But here is the real issue for me: None of the other inspectors reported what I found during their visits. Should the buyer know? Did his inspection go badly?

Freedom of information
The buyer should most definitely know about the problems, but I can’t be the one to tell him. Why you ask (you certainly are inquisitive this evening)? My neighbor hired me, so my findings belong to her, and I can’t share the information that she bought. Now technically, she should have reported my findings on the seller’s disclosure form — this paperwork exists in various forms in every state — but certain circumstances allow her to bypass reporting them. If she believes that the issue has been resolved or the problem has been fixed since the initial findings, she does not have to report it. If she is not sure of the cause of the problem, for example my report was not absolutely definitive, she does not have to report the findings. For this reason, inspectors lovingly refer to the seller’s disclosure form as the “pack of lies.” We read it when we need a laugh.

I watched the days pass as the different inspectors poked and prodded the property. One of the home inspectors the buyer hired has a reputation for being one of the best in Texas. But even he missed some of my findings, completely ignoring them in his report. My neighbor happily reported that they found nothing really wrong with the home, except the federal pacific panels (FPE panels are a story for another day). Does this mean his inspection was bad? Well, that is debatable.

In the eye of the beholder
Today, a Realtor was surprised when I told him that my inspections last for four hours. He thought it would be shorter. I try to ensure him that I see everything, but the fact of the matter is, no inspector does. Mainly we fall into two groups: inspectors who work hard to find everything and those who know they will not find everything, so they don’t worry about it. Hopefully, every major item will be uncovered, but your inspector’s experience may not guarantee his best performance.

There’s also the “deal killer inspector.” I’ll admit that sometimes even I can fall into this category. A couple of months ago, a client told me that if he wanted to get out of the contract, he would just have to show the seller my report. The home had problems, and I was going to report them, because I felt my client needed to know all the details. But I find most deal killers are the inspectors who want to overemphasize their reports. Because an inspector has a brief time to connect with his client, he may act dramatic or overzealous so that the client will feel convinced. But this approach frequently leaves the client frightened, so it’s not a good idea for inspectors to do that. If this happens to you, review the inspection report on your own and determine how important the findings are to you. Major problems with the structure should be a worry, but a torn window screen may be something that you can live with.

Frank Schulte-Ladbeck, Professional Real Estate Inspector

I often receive inquires about home staging from sellers all over the country, asking: “Can you give me the scoop on how staging works and the costs behind it?” I thought it would be helpful to provide inquiring minds with the basic A-B-C’s of home staging.

A is for ABOUT home staging in general. Actually, if you are going to stage your property, you need to know that it’s ABOUT a two-step process. The first step is prepping the home, which involves cleaning and updating. The second step is ABOUT the “pretty visuals” that people think of when they think of home staging. This step has to do with the physical setting and arranging of the furnishings and accessories within a house. The combined goal of the two steps is to create a house that shows off its best assets and ultimately will draw the interest of the widest buying demographic possible.

B is for BASIC types of staging services. While there are six basic types of staging services, it’s important to note that not all stagers offer all of them. The more services a stager offers the better it is for you. Since you actually won’t know what you will need until the stager visits for the first time, a stager with multiple expertise is better equipped to guide you based on your needs and won’t be limited by the home’s staging possibilities.

The six basic staging services:

1. Consult staging: This type of staging solely taps into a stager’s knowledge. First focusing on the condition of a home, a stager visits a property to meticulously instruct on all that must be done to best prep and then set the property for the market.

2. Rearrange staging: This type of services relies on both the stager’s knowledge and their physical labor. Once a home’s conditional needs are met, a stager arranges the property by physically setting it using only the seller’s existing furniture and decorative accessories.

3. Enhance staging: Again, once conditional issues are addressed, the stager will then set the interior space. But not only are the existing furniture and accessories used, but the stager will bring and blend in decorative accessories and or furniture from their own inventory. These props can either be loaned or rented to the seller while the home is for sale.

4. Reseller vacant staging: When a preowned home is vacant, the property can be pretty bare bones. So while it is important that basic repairs need to be addressed, a stager should be hired to maximize the home’s visual appeal by fully setting it with the appropriate furnishings and accessories.

5. Rehab Vacant staging: Similar to a reseller vacant home, after the problem spots of an older property are repaired and updated, a stager should be hired to maximize the home’s visual appeal by fully setting it with the appropriate furnishings and accessories.

6. Model vacant staging: While conditional problems in a new construction building typically are not an issue, “life-styling” is. Models typically rely more on projecting a life-styled visual appeal. A good stager understands and designs within a specific lifestyle marketing concept when furnishing, accessorizing and setting a vacant model property.

C is for COST to hire a home stager. What hiring costs actually are depends on how much talent (knowledge), time (physical labor) and props a stager provides. If a seller has a limited amount to spend, then the best value a stager can provide is by consulting. For as little as $100 (in some markets), a stager can be hired to review a property and provide professional staging advice and guidance. From there, it’s realistic to expect to pay anywhere from $35 to $75 per hour for a stager’s services. As for props, the fees for renting these items will vary based on just what is being rented and the length of time the items are being rented for.

Sellers are not only realizing the cost of staging will pay off, but they actually ARE benefiting from making the investment. Let’s face it, if “time is money” then reduced market time is a great return on investment. So regardless of staging solution proposed, a good stager will do all they can to maximize the return on a seller’s staging budget so that the house sells as easy as 1, 2, 3.

Staging It Forward... Craig Schiller, founder of Real Estaging

In today’s highly competitive real estate market, home sellers can take some significant steps to ensure their home has the best chance of selling for the highest price the market will allow. Here are five steps to help you achieve that:

• Pricing: Pay special attention to these key points:

1. Homes comparable to yours that have sold most recently in your neighborhood or market area. This is a key indication of how to price your home. It also shows what actual buyers in the market have paid for homes similar to yours.
2. You may also want to tour listed homes in your market area and note their condition and how they compare with yours in amenities and square footage. These homes will be competing with yours for buyer attention.
3. Find out which listings in your market area have expired. These properties were essentially rejected by the market, and understanding why will keep you from making the same mistakes.

• Packaging: While pricing is very important, packaging the house is equally so. I call this the preparation and prevention stage of home selling, and if implemented correctly, it will save you time, money and frustration. Packaging can be broken out into three significant steps:

1. Pre-inspection and residential service contract: Most prudent buyers order an inspection on a home before they purchase it to ensure it doesn’t have any mechanical, structural or termite defects. Inspections can put the contract in jeopardy or cost the seller more money. Defects found during the inspection can either alarm a buyer enough to opt out of the contract or to ask the seller to pay for repairs (which will lower the net profit from the sale). This risk could have been avoided by simply conducting a pre-inspection and making any repairs before the buyer was found. Providing your buyer with a residential service contract, which is a warranty covering future repairs, gives you peace of mind when you sell your home.
2. Staging: Your home is customized personally for you. When you place it on the market, it needs to be transformed into a product with broad market appeal. Think of a well-appointed hotel room. It’s warm, inviting, and often features vignettes that evoke emotion or relieve stress. Fresh white linens, fluffy pillows, and maybe a decorative display of toiletries help set the scene. There are no personal items that make you feel like you are invading someone else’s territory. Declutter, depersonalize, make cosmetic repairs, and make it sparkling clean. These are the first steps to staging, and I highly recommend that you hire a professional stager or a Realtor with a staging experience. It may cost a little more, but a staged home nets a seller an average of 6 percent more than a non-staged home. Staging also plays a significant role in developing photos that make buyers on the Internet want to stop, drill down for more information and then make an appointment to view your home.
3. Multiphoto marketing: Consumer research shows that most buyers find multiple home photos in a listing extremely helpful. It is very important to display multiple photos that are bright and dynamic Multiphoto marketing along with staging improves a consumer’s online experience and attracts more buyers to your property.

• Promotion: Marketing is the engine that drives the automobile. Your home will not move if it is not properly marketed. About 84 percent of buyers used the Internet to search for a home in the first six months of 2007, according to the National Association of Realtors. That statistic has been climbing every year since 1995, and the Internet is likely to continue being a major resource for home buyers. Therefore, having a Web presence on high-traffic sites is a key factor in getting your home sold. Local print advertising should also market the Web site that lists your home’s property details.
• Market feedback: The market is constantly changing. New property listings in your area and shifting buyer demand, which rises and falls throughout the year, impact your chances of selling your home. So it is always prudent to keep a watchful eye on the local market. Check out Gary Greene’s blog to learn more about keeping abreast of your local market.
• Negotiation skills: Knowing the terms of the contract and what expenses can be negotiated to net more money at closing can make a big difference.

The sale price is not the whole story, especially if the seller is bearing more expenses than necessary in the terms of the contract. When hiring a Realtor, make sure they have a good command of contracts and will be a proactive negotiator for you. How do you know? The first sign of a good negotiator is that they show confidence in their own value, appear interested in getting the most dollar for your home and cover the important aspects of selling your home, which are mentioned above.

Selling a home is not easy or fun, but taking these five key steps will make a big difference in keeping market time to a minimum and generating more net proceeds at closing.

Prudential Gary Greene Blog

With more than 4,000 new condominium units expected to be completed in metro areas like Atlanta and Phoenix this year, cities across the country are bracing for a flood of new supplies. Many of these new units are a result of developments that were created during the height of the housing boom and are now coming to a completion. According toThe Wall Street Journal, developers in Miami and Fort Lauderdale, FL, “are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos.” San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real estate-research firm.

Supply and no demand
The U.S. finished 2007 with a supply of condos large enough to absorb 10 months of demand, the highest level since the National Association of Realtors began the tally in 1999, the Journal reported.

While developers may not be thrilled by the overstock, condo buyers fishing the market may have a wider net to cast with significant price cuts on the newer units. This latest flood of inventory will come at a hefty cost for most lenders across the country. Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months — between the third and fourth quarters of last year — the delinquency rate rose to 10 percent from 5.9 percent, according to the Oakland, CA, research firm.

While it may seem surprising that anyone would want to add supply to a market whose troubles have been well-publicized for several months now, the Journal reports that the economics of condo building encourage developers to bring half-finished projects to completion, even when prices and demand are plunging. Developers usually put up their own money for a project first, then spend borrowed funds. Once developers have spent their money and have commitments from lenders, they have a strong incentive to keep building to finish the project.

Going rental
Driving around Chicago, I’ve noticed some developers have turned their condos into rental units for the time being. They probably figure they could make more money selling the units after the inventory goes down and the housing market regains its footing. But going the rental route will only work if you’re smart about it.

When I was walking my dog this weekend, I noticed a condo down the street from me that had been on the market for over six months, now had a for rent sign posted outside. The condo was a for-sale-by-owner, and last time I checked, the owner had already reduced the price of the unit by $15,000 from the original asking price. But I guess the price cut failed to lure any buyers. The rental price for the 2-bed, 2-bath condo is $1,895 per month not including utilities. The average 2-bedroom, 1-bath apartment in my neighborhood is going for $1,200. I don’t know about you, but I’d rather share the single bathroom if it means saving me $700.

I’m sure the owner of the condo wants to earn enough money to pay for property taxes, condo assessments and possibly make some extra cash on the side, but his asking price in no way fits within the surrounding rental market. If you can afford $2,000 in rent a month in Chicago, you probably can afford to buy (or you’re renting a luxury high-rise apartment downtown that has a private doorman and gym). Know your market, do your homework and be realistic when you come up with your rental price, otherwise, it will just be another bad investment choice.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.