Greetings from Owls Head, Maine

I just realized that it's been 12 days from my last post and couldn't let the Blog continue for any more days with that old date on the top post.

I'm on a driving vacation from Chicago to Maine, spending the majority of the week in Maine. This home is in Owls Head, Maine, near Camden.

To give this post a real estate angle, this house is a four bedroom, five-and-a-half bath home built in 1997. There's a three-car garage with a studio apartment above. The basement features a full game room and home theater. The photo above was taken with the Atlantic Ocean to my back. I'd estimate the price of the home at $2-million.

As an investment property, this house rents for $3,400 a week plus an additional $700 a week if you want to use the studio apartment upstairs from the garage. So, let's see... At 50% occupancy - 26 weeks times $3,400 is $88,400 a year. I'd estimate that the expenses are around $5,000 to $6,000 a month. So, the house brings in a net of $16,000 a year, but has also more than doubled in value from just under a million to today's price of near two-million.

So, who's up for some coastline property in Maine???

Slight rise in web traffic to listings online

After several weeks of flat website traffic to listing data, the first full week of September brought more eyeballs to listing data on our websites. The week ending September 9 also included the Memorial Day Holiday weekend. The week ending September 16 is incomplete as this report was delivered overnight between September 14 and 15.

Keep in mind that this level is down from a high of nearly 1,500 views per week recorded the week ending May 27.

Tour historic homes of Edgewater this Sunday

Eight homes in West Andersonville will be open for viewing on Sunday during a housewalk in the Edgewater neighborhood.

The West Andersonville nighborhood is located just north of the original settlement that the community got its name from. The original Andersonville settlement was located just north of Foster and west of Bryn Mawr.

Brush up on your history and get info on the Edgewater tour at the Edgewater Historical Society at 5358 N. Ashland Ave.

www.edgewaterhistory.org.

Sshhh... It's a secret...

You'd never know this house in our neighborhood was for sale.

We wish we didn't have to tell sellers this over and over again: Yes, the sign in front of your house actually helps! The neighborhood this home is located in was recently named one of Chicago's hottest neighborhoods. It is filled with new developments with sales offices that drive tremendous traffic into their cars and those prospects spend their Sundays driving up and down the major streets that define the neighborhood. This house is nearly on one of the busiest corners in the area.

Other sales efforts undertaken read like a beginners course in "How Not To Sell Your Home in Today's Market"

• No additional photos in the MLS. Our local MLS can host up to 8 photos. Our local MLS also pushes all those photos to the national databases and other real estate websites.
• No virtual tour. Our local MLS will even link to an external virtual tour as well as include this link when the property info is sent to other Realtors' clients via email.
• No additional photos or virtual tour on the listing data at Realtor.com. It makes me wonder why the agent bothered to enhance the Realtor.com listing at all. It does have a headline and custom description.
• Originally listed $400,000 too high. Recently reduced $200,000 - now only $200,000 too high.
• Too low a co-operative commission to buyers' Realtors for our market. It's tough to entice Realtors to bring buyers to your listing when what you're offering is 20% less than they could earn elsewhere. There are 329 other houses for sale over $1-million to choose from in this area and the surrounding neighborhoods. A brief survey of these listings shows that only 3% of these homes are offering a lower than expected co-op to buyers' Realtors. In other words - there's plenty of others to choose from.

This transaction is being squeezed in all the wrong directions. From the choice of listing company to the sub-par co-op and the lackluster marketing materials, it's clear that these sellers had their eye on making the most amount of money on this sale as possible. The goal is completely understandable.

But all the cut-corners and choices on the cheap could actually be driving traffic to other homes in the neighborhood.

For a house of this caliber, the marketing materials needs to be first rate not half-hearted. Whether marketed by owner or listed with a Realtor, some inexpensive changes could make all the difference.

• A professional photographer should take a photo of every room in this home.
• A professional videographer should shoot a virtual tour of the major living spaces and two of the largest bedrooms in the home. Some companies here in Chicago will shoot the video tour and pro photos at the same time. This should cost less than $300!
• The photos and virtual tour should be promoted in as many online avenues as possible.
• This home calls out for a custom home web page. Go Daddy web hosting can walk you through a do-it-yourself website and do it all for under $100!
• A professional brochure should be available for prospects when they visit.
• A professionally produced sign (not a FSBO sign from the hardware store) should advertise the availability of this home!

The nicest home on the block shouldn't be such a well-kept secret.

Sub-prime mortgage crisis explained

I'm sure you are a ware of the recent turmoil in the mortgage segment of the real estate market and are concerned how it will affect you.

A bit of recent history... Delinquencies on the sub-prime segment of the mortgage market have been rising nationally over the past nine months. This had been a slow progression and growing concern in the lending community. Bank regulatory guidance on sub-prime lending had been issued to most lending institutions and the sub-prime sector seemed to be contained. However, delinquencies on "Alt-A" production have also been rising more than investors anticipated, and in the last month several headline events have occurred and the markets reacted very negatively. This has created a "liquidity crunch," specifically for lenders that need to sell loans that are not saleable to Fannie Mae, Freddie Mac or Ginnie Mae.

Residential mortgages ultimately go to one of three primary places:

• Quasi-government agencies such as Fannie Mae, Freddie Mac or Ginnie Mae
• Bank portfolios
• Private institutional investors, primarily as securities sold on Wall Street.

We have seen almost no changes for mortgages that fall into the first two categories, either in underwriting guidelines or in pricing. It is the private "Wall Street" market that has changed dramatically. Investors have lost confidence in the credit performance of all sub-prime, and more recently, "Alt-A' and even prime Jumbo loans, and have stopped buying them. Many mortgage lenders rely exclusively on this portion of the market to sell their mortgage loans so they can reinvest (lend) additional funds to the next borrower. Because that market has virtually stopped, most non-bank lenders have been forced to raise rates to uncompetitive levels and some have already gone out of business.

The major areas of negative impact are with sub-prime, "Alt-A," stated-income, and low-doc loans. The market for fully documented jumbo mortgages (loans over $417,000) has seen prices deteriorating as well, i.e., interest rates to the borrower rising and closing costs going up. In addition, the low down-payment programs (80% first mortgage & 10% or 15% second) are no longer available through most brokers and n0n-bank originators. The reason for this is that in order to offer a competitive price, the second mortgage must be placed in portfolio - a capability that generally only banks enjoy.

What should you be doing?

Review your loan information (if you're a borrower) or your pipeline of pending sales (if a Realtor or Mortgage Broker) and re-confirm your mortgage commitments. A loan that was approved a month ago may not be approved today. If a loan was not locked-in several weeks ago, the price may be significantly higher, potentially jeopardizing the approval and ability to close the transaction. Obviously, knowing this sooner rather than later, before a deal falls apart at the closing table, gives you options.