Blog : Business

Ugly Houses
David Curry

Ugly Houses

My cousin recently had a baby. I saw this baby at a different cousin’s wedding over the weekend and my suspicions were confirmed. It’s a cute baby. But what if it wasn’t? What if it was the ugliest baby anyone had ever seen? Would anything have been different? Would anyone have cringed at the first glimpse? Would anyone have opted out of the obligatory first hold? If the baby had been hideous, would the parent have even brought the baby to the wedding in the first place? Would the birth announcement cards have been sent sans baby photo, instead choosing a picture of tiny baby feet? After all, baby feet are undeniably cute, unlike, say, the baby itself. No matter the make or model of baby, we all must agree: that’s a cute baby.

But babies are not houses, and houses are not babies. This is the sort of news that only I can deliver. Babies are living, breathing, humans. They are valuable and they are, whether some teeter on the edge of this condition, cute. No one would, or should, suggest otherwise. But houses? We dance around the topic as it relates to houses, but houses, whether we admit it or not, can be ugly. Hideously ugly. Stomach turningly ugly. Disgusting, really. They can be so off-putting that one could wonder how someone could, indeed, sleep through the night in such a God-forsaken structure. We cannot pretend any longer: Lots of houses are ugly.

The initial OpenDoor, Zillow, et al, was the yellow sign in the median of the interstate that screamed “I BUY UGLY HOUSES”. This was thoughtfully engineered to appeal to those owners who own the ugly houses. And by admitting, at least internally, that you were the owner of one such ugly house, you would also, internally, recognize that your home is not as valuable as a pretty home. This is what the sign-maker wanted, and you played right into his ink-stained hands. If you own the ugly house, you admitted it’s indeed you who owns it, and this guy would be happy to buy it from you. Perhaps you should sell, after all, it is an immeasurable burden to be the owner of such a home, at such a time as this. Life is short and ugly houses make their inhabitants wish it were even shorter.

If you’re feeling picked on today, I assure you that your house is likely not as ugly as you think. A dated house in need of renovation is not, by rule, an ugly house. In fact, your older, dated house is likely beautiful, because older houses tended to have more of a pedigree than the homes that followed. Old does not equal ugly, by definition. I drive around this market and I see the ugly homes. The boring homes. The homes that lack symmetry and lack everything else, too. The danger in a summer-time market is that these homes come for sale, and these homes might be priced a bit cheaper than the similarly sized pretty home. The bait is placed, the trap is set, the ugly house awaits your weekend tendencies.

It’s cheaper, you say. I can fix this, you think. But the market today has these properties waiting for you. The ugly houses. You think you can fix them, but you can’t. The asymmetrical turrets cannot be fixed. The wall of windows, each one from a different sale at a different Home Depot cannot be replaced. The seven level interior, complete with two story spiral staircase, cannot be repaired. And even if it could, at what cost? Do you buy the Ugly because it’s cheap, and then, while desperately trying to eliminate the ugly, do you spend more than you could have spent to revitalize a pretty house? Yes. That’s why you shouldn’t buy it. Let someone else buy it. Let them work to not only update, but to pursue a fix that will prove eternally elusive. That’s because an ugly house is an ugly house, today, tomorrow, and always.

Williams Bay Property Taxes
David Curry

Williams Bay Property Taxes

Tis the season for dreading the mail. There’s something nice about the season, relating to the mail, I suppose. Each day, my mailbox is full to overflowing. Will there be Christmas cards?  Or will there only be pamphlets and magazines, newsletters and postcards, each hailing from a company that I’ve likely never heard of, telling me how their luggage, their sweater, their ski jacket, their fly rod, is indeed the thing that I never knew I needed. There’s more junk mail than ever, and it doesn’t bother me. But weed through that mail carefully because there’s a special Christmas surprise waiting for you:  Your property tax bill.

If you’re lucky enough to own property in the Village of Williams Bay you’ll be happy to see a 6.5% average increase in that property tax bill.  That, in an of itself, isn’t a tremendously difficult situation. It’s just some money, really. On average, I’d guess houses in the village have appreciated similar to that rate over the past year, which makes the tax increase easier to swallow. Plus, the state just voted for Tony Evers to be Governor, so obviously low-ish property taxes are not something that people really care about. Add to that the fact that any municipal spending bill on the November ballot passed, and you’ve got a populace that has sent one clear message to their town boards and capital building: Tax Us, Please.

Contrary to what you’re thinking, this isn’t a post about politics. It’s a post about taxes, and about a specific lie that municipalities repeatedly tell their citizens. Recently, the lie was told to get spending referendums across the state passed. It’s a lie told whenever a developer sets up an easel and turns the page to the first colorized map of a new, shiny development. It’s the lie the aldermen and trustees tell each other when they huddle in secret, or when they debate a proposed development with their community. The lie is complex but so very simple. If we add more residents, we’ll add more people to help pay for the burden of local government, and our taxes will go down.

If you’ve driven around Williams Bay lately, you’ve noticed a construction boom, of sorts. Along our lakefront, at least four new homes were added, with presumably,  fat tax bills. But that growth pales when compared to the growth along the Theatre Road corridor. This is where the growth has been, and this is where the growth makes some sense. These are primary homes, close to the fancy-paints new school, in neighborhoods where kids can ride their bikes and parents can enjoy their own version of small-town living. These neighborhoods sat relatively dormant over the past decade, but have been firing on all cylinders over the past 18-24 months. I confirmed with the village that there were 31 new home permits issued in 2018, with perhaps two more to be issued between now and January 1st.  That’s 31 new homes, paying an average of $4000+ in property taxes each. In an area where growth was once nonexistent. The village coffers should be overflowing with revenue.

But show me what that does for the town. Show me a tangible difference in a town that has growth and a town that doesn’t. In our downtown, we still have a vacant lot rotting on the marquee corner. We have For Rent signs keeping pace with Open signs. We have the same crappy Christmas decorations strung from our telephone poles. Tell me, exactly, what this growth has done to benefit the community? Along those lines, with this growth, shouldn’t our property taxes be kept in check? Isn’t that the sales pitch? Grow or die, they say.  We need more tax-payers to shoulder the municipal burden. This is the pitch you’ve been led to believe, but the results are in. Growth doesn’t mean your taxes go down, it just means your expenses go up.  Merry Christmas from the Village of Williams Bay. Now don’t forget to check your mail.

Traps
David Curry

Traps

There are things that I dislike about this business. You know this. I dislike the lack of respect that plagues this career, even while I understand it. I dislike the compensation model, as surprising as that might seem since that model continually supplies softened butter for my warmed bread. But mostly I dislike the markets themselves. I dislike the cycles, the ups and downs, the product that ebbs and flows, and the traps that it all creates.  The problem with these traps is that they always exist, in the good times and in bad. They exist here, there, and in every market in the world. I dislike these traps, and while I understand them I find extreme frustration in my inability to warn everyone against them. Perhaps when I do quit this job I’ll just write a blog wherein I identify market traps, because that would be fun. It would be like a devastating Zestimate, but instead of pushing a secret algorithm I’d actually explain the market and why that particular house, or condominium, or piece of dirt is nothing but a market trap.

Alas, I can’t do that now but I can do some further explaining of how to avoid these traps. I’ve written about this before, but after a couple of million words, at some point everything will be redundant. This morning I perused the new MLS listings and didn’t think much of them. A new ranch here, another condo there. But in the middle of it all, sticking out like a painfully sore thumb, there it was. The trap.  Do I possess some otherworldly knowledge of the real estate market? Of course I do, but that knowledge isn’t important when determining the location and description of these traps.

These traps exist on the lake, just as they exist in the country, but they are difficult to identify in those markets. Why? Because those are nuanced markets that fluctuate based on the whim of the wealthy. This is why you can see a lakefront house listed for a price that doesn’t make any sense, then a few months later you can watch it close. Then, while still in your befuddled state, you can see that house meet the wrecking ball. Lakefront markets often won’t make sense, just as high end off-water vacation home markets won’t.  In the same way, is a house in West Palm Beach worth $135,000,000? Is a spec house in Beverly Hills worth $200,000,000? The answer is not really, until someone buys it.

That’s why we’re ignoring the vacation home or otherwise wealth influenced markets and we’re focusing on neighborhoods where primary homeowners live. These neighborhoods can be in Williams Bay or Wheaton, Elkhorn or Elk Grove Village. For that matter they can be in  Toledo or Topeka. A primary home market that operates without the influence of extreme wealth typically follows the same rules, no matter the geography. The housing traps exist in hot and stagnant markets alike, but they’re far more likely in hot markets. There’s a simple reason for this.

Developers, be they professional or hobbyists, are increasingly challenged to find adequate inventory inside an accelerating market. Knowing this, they look to fringe locations, fringe neighborhoods, areas that aren’t quite there, but certainly might be next. In larger cities, this sort of thing does exist, it’s called gentrification. But in primary markets that are existing without the promise of Google or Amazon moving in down the road, these fringe areas are likely to remain fringe areas for lengthy periods of time. Developers know this, but they’re counting on low inventory to trick you into not knowing it.

There’s a neighborhood you like. There’s even a house you like. But after you looked at the house and before you could get your offer in, that house sold. You made the decision to move, to upgrade. Your loan approval was in place, and you started the mental exercise of moving, but then your house was no longer available. No worries, you’ll look around a bit more and find something else. After some time, there isn’t anything else. Nothing in that neighborhood, nothing nearby. But Zillow showed you a new idea, this one of a similar home in a different neighborhood. Sure, that neighborhood typically sells for $250k and this house is $450k, but in the good neighborhood that house would be $500k. You like the “discount”, and you pursue the new home. Congratulations, you’ve just fallen into a trap that is going to bury you when the markets calm, or worse, reverse.

Today in Walworth County, with limited inventory and a still-vibrant primary housing market, these traps exist in every single municipality. Want to walk into a huge mistake in Williams Bay? That’s possible.  Want to bury yourself in a terrible and lasting mistake in Linn Township? Welcome Home!  I’m guessing the situation is the same in your town, no matter where it might be. What to do to avoid these mistakes?  First off, work with an agent that wants you to find the right house more than he/she wants to make a sale. Once that’s done, question everything. Why should I pay $300k for this vinyl ranch when the three vinyl ranches down the road are $225k?  Most importantly, if you’re in the market for a primary home and you’ve been noticing a tempting home that appears to be overpriced for the neighborhood, just settle down and watch it. If it sells, congratulate the sucker who bought it. If it doesn’t sell, congratulate yourself for avoiding the trap.

Big Foot Referendum
David Curry

Big Foot Referendum

I went to high school in the basement of a church.  To be fair, not all classes were in the basement. Our homeroom was in the kitchen of Calvary Community Church, which was on the ground level. Even still, there were no windows. I’d like to think the lack of windows helped me focus on my studies, but it didn’t. Our gym was carpeted, and while that may seem like a disadvantage, can you imagine the superior grip? Even though I later learned that wood gym floors have some bounce to them that purportedly help an athlete jump higher, I never jumped as high as I did off of that carpeted concrete.

That little gym wasn’t much to talk about.  But a kid from our little school would later go on to become the all time collegiate scoring leader for the state of Michigan.  It seemed that practice was indeed the key to this whole sportsing thing, and that if you shot free throws every day for an hour after school while your school teacher parents were finishing up their days, you’d get pretty good at them. I’m reminded of the scene when little Hickory High walks into the state championship game. Coach Dale AKA Hackman instructs his players to measure the length of the court and the height of the basketball rim. Basketball, it seems, is the same sport whether played on a carpeted gym inside a high school or a massive arena.

With this in mind, you should understand why I have a hard time swallowing a $7.8MM athletic field for the Big Foot School District.  Currently, the fields look pretty nice to me. My kids attend Faith Christian School, which is the same school I attended. Today they have a fancier gym than we once had, but their soccer fields are still pitched awkwardly and the weeds maintain an easy advantage over the grass. In spite of this, every once in a while our little school puts together some mighty fine sports teams. The facilities currently enjoyed by Big Foot are leaps and bounds better than anything little FCS could ever hope for. Yet, the cry for bigger and better remains.

It’s easy for a plan like this to gain momentum. Coaches and teachers build up the improvements as though they are indeed necessary. Parents love the idea of their kids being part of such a superlative scene. People in town buy into the ignorant pitch that if you love the kids, you’ll love spending money to improve their education. But it’s easy for me to wish for these children to receive a fine education and at the same time realize that a $7.8MM sports facility is not crucial to that goal.   But what is the goal? Is the goal to turn out well-rounded children who will one day become well-adjusted, productive adults? Or is the goal to build a sports facility that the parents and coaches will feel tremendous pride over? These two goals are not the same.

That’s why I’ll be voting no next Tuesday. The referendum isn’t required, and I hope it fails. If Big Foot wants to attract more students, it should work on its academics first, and everything else a very distant second. The pitch from the school district is that taxes will go down no matter if you vote for this referendum or not. Ah, but there’s a trick in that math. Yes, they’ll go down either way, but do you know how much more they’ll go down if the referendum fails? The answer is: More.  Let’s stop abusing tax payer dollars on vanity projects, and let’s vote to keep our district fiscally responsible.

 

Compass, Et Al
David Curry

Compass, Et Al

It should come as no surprise that there’s a competition to be what’s next. In this context, we should capitalize What’s Next.  If you own a business that makes money, or you own a business that has a lot of customers but fails to make money, you know about private equity. You know they want to buy your business, to pay you a multiple that makes your head spin. Should you sell? Probably.  Those in this investment world that are tasked with finding the next big thing. Recently,  everyone has collectively decided that real estate is that thing.

There’s no debate that the business of real estate is big. The debate is over what that business is going to look like in the future. Will traditional brokerages and their traditional models continue to dominate the national landscape? Or will there be something new, something else, something more.  SoftBank’s Vision Fund recently invested $400MM each in two real estate “tech” companies. One is Opendoor, one is Compass. If you haven’t heard of these two companies, don’t feel bad about it. In time, no one will remember either of their names.

But I jest.  Compass is a rapidly growing real estate business.  The founder was on CNBC last week and talked about his “platform”. There’s all sorts of “tech”, apparently. But what is Compass? Well, it’s a real estate company. What do they do? They list your home for a fee and then they try to sell it. What’s their secret? Nothing, really. They have signs that light up at night, which is cutting edge, or so someone thought. They also have proprietary technology that enables their agents to better serve their customers, and to provide AI insights into markets. This sounds nice, and the fine folks at SoftBank really bought it, but is Compass revolutionizing the real estate business?

Headlines out of Chicago will claim it is. That’s why top teams of agents are leaving @Properties and Sotheby’s and the like to join this new, exciting, dynamic company with the signs that have lights on them. You know, so people can see them at night.  Consumers might assume there’s something here. Something unique, something rare. Something New. But what they don’t know is that agents are being bought. Brokerages are being paid handsome amounts of money to sell to Compass. Agents are typically happy with some free calendars from the title company. Heck, I don’t even get those anymore. Compass is paying them real money to join their company, and in the case of top agents and teams, that might mean signing bonuses of a million dollars or more.

Compass doesn’t want to talk about this, because they want the consumers and their target audience, the agents, to think there’s something here. @properties did the same thing over the past decade as they grew a real estate behemoth. They told the market that they’re something better. Something rare. Something unique. But really they were a traditional real estate model banking on a consumer who was looking for whatever was next. Something New, that’s all this game is about.

Compass is growing, Compass is moving into your neighborhood, but why? The answer, as with all answers relating to the growth of real estate companies, is that they’re simply poaching agents. There’s nothing new under the sun, especially in a business where the entire business lives and dies on one simple thing: a real estate agent.  Every real estate company that grows only does so by taking agents from other companies. These agents flee what’s old, and move to what’s next. They send out postcards. They issue a press release. I’m What’s Next!

OpenDoor wants to buy your home, I think. They also just bought a traditional brokerage in California, or maybe Arizona, so they want to be in the regular business of real estate as well. Maybe they’re hedging their own business model, assuming not everyone will want to sell their home for cash at a market discount.  This model has been around for ions, or at least a few years, and it’s working. Opendoor is reinventing the business of real estate, or so they think. They’re just like Amazon and Uber, the CEO says.  They’ve raised fortunes, led by a who’s who in the world of investing, including a big fat investment of $400MM by SoftBank. SoftBank knows one thing, they want in on whatever is next. Is it Opendoor?

Opendoor has a current valuation over $2B, yet they only operate in 19 cities more than five years after their launch. Why aren’t they in more cities? Why aren’t they everywhere? Well, because the model relies on algorithms to determine the current value of your home, as well as the value of your home in the coming weeks and months.  Opendoor will buy your home, without a pesky agent, and without that pesky market exposure, and then, once you’ve moved out and closed your deal with them, they’ll resell your house for a profit. That’s it. They’re the modern day tech company that has replaced the yellow signs on the side of the interstate that promise “I BUY HOUSES CASH”.

The model works as long as the market is appreciating. It also works as long as the market has a very tight pattern of sales. Would Opendoor work in Lake Geneva? Not in a million years. Will it work in Winnetka? Nope.  Will it work when the market falters? No.  The reason is simple. When a market stalls, consumers generally fail to recognize the slowdown for a reasonably long period of time. They are defiant. They are insistent. They are stubborn. If OpenDoor needs to buy your home for a 5% discount to actual value today (in an escalating market), what will they offer you in a declining market? 90% of the value? 80% of the value? Will consumers be willing to sign on for this initial, deep cut, without finding out if the market is indeed as poor as OpenDoor is telling them? No, they won’t.

Compass closed their last round at a $4.4B valuation. In 2017, Compass closed $17B in sales. There’s another real estate company in these United States, one called Realogy. Realogy owns some brokerages that you may have heard of. Some small companies like Century 21, Caldwell Banker, Sotheby’s, ERA, Better Homes and Gardens, among others. Realogy is a publicly traded company with total 2017 sales over $500B. Realogy’s market cap? $2.5B. The world, it seems, has gone mad.

As a small independent broker in a small Wisconsin town, I’m not immune to the changes in the real estate business. Competition increases every year, and much of that competition comes to my office to beg me to work with them. They want me to be part of What’s Next. But in that, there’s an admission, and I can already see What’s Next. They don’t believe in their own models. They don’t think they have anything proprietary. Not Compass, not @properties, not OpenDoor, not Realogy. The real estate business, at the end of every long day, is only about one thing: A Real Estate Agent.  No matter the broker names, no matter the affiliation, the agents will remain. They’ll just change their name tags and wear a different color jacket, but if you think they’re somehow different because their sign has a nightlight on it, then you haven’t been paying attention.

Discernment
David Curry

Discernment

A few weeks ago, I wrote an offer on a property on behalf of a buyer. This is no feat. There is no trick to this. It’s just a form written by a gaggle of attorneys and I’ll I’m charged with is the ability to fill in a few blanks. My son, at age 15, if given a few practice runs, could handle the document just fine. This buyer had looked at a few houses, decided he liked one of them, and we made the bid. Then we waited.

Sellers in 2018 are not uniquely motivated,  so this property that had sat on the market through the season now ended.  Our bid came in low, relative to the asking price, but high, relative to the actual lasting value of the house. We bid, we negotiated, the seller stalled, and in the midst of this another buyer materialized and purchased the home. My buyer was left out, in the cold. Disappointed, sure, but aware that other properties will, and must, exist.

There are brokers today feasting on the new market attitude. Many of these brokers are newly initiated, fresh to this game and racing to gobble any scraps that they find.  Some have held “clinics”, or so they’re called, to advise buyers on how to craft the winning bid. Others take the social media to explain how they maneuvered to get their buyer’s offer to be the one that the seller accepted. They are the victors, the capable and skilled sherpas who have led their buyers to the top of the heap and who will now rightly claim their commission based prize. All of this is fine, but it’s exactly what’s wrong with the business of real estate and the market of 2018.

We are programmed to want to win. My daughter wants to win her volleyball games. My son wants to be the valedictorian. I want to lead in the year end volume tallies (spoiler alert, I won’t win this year).  Buyers, well, they want to win, too. They want to win that house with the imperfect floor plan and the leaky basement. They want to win because they think the house will work for them, sort of. But mostly they want to win for the sake of winning.  Their agents prod them on, pushing them to bid higher, cleaner, quicker. The goal is the house, after all.

What house? Well, that doesn’t matter. Any house.  It’s just the pursuit that we find motivating. That brings us back to my failed bid and my buyer who very well might have felt great disappointment over not buying a house that they indeed liked.  Was it a big deal that we didn’t get this particular house? Not really. Would I have liked them to buy the house? Sure. But the market today isn’t separated by those agents who succeed in securing the house and by those who fall short, it’s separated by the agents who know the difference between a house worth pursuing and one worth leaving for the uninformed, undiscerning masses.

When the market was soft, discernment was key. Negotiating tactics were key. Timing was key. Today, with a heated market and throngs of buyers clamoring for lake homes, these prior skills are brushed aside in favor of urgency.  A few weeks ago, I wrote a contract on behalf of a different buyer and we were met once again with a stubborn, inflexible seller. We pushed forward and bought the house anyway. Why?  Because the house was worth the pursuit. The house will have lasting value in the market because it is unique, rare, both in setting and in style. Is it nice to win every bid? Of course it is. But there is contentment in knowing when to walk away and let someone else buy an overpriced house.

Lake Geneva Realtors
David Curry

Lake Geneva Realtors

There’s nothing that makes me hate my chosen profession more than leafing through a local glossy magazine. There are lots of glossies here, most notably that Summer Homes For City People glossy. That’s a heck of a magazine, but you knew I’d say that.  In spite of my magazine being the only magazine of importance and relevance, there are others that persist. I made the mistake of thumbing through one of these magazines over the weekend, and what I discovered left me weary for this business of real estate.

The issue isn’t Realtors, themselves. They’re fine, really. The issue is advertising. The issue is what we choose to say about ourselves in the hope that someone will believe us. The glossy I read through featured heaps and heaps of advertisements for brokers and their Realtors, and I thought I might lend a bit of MLS based fact checking to the advertised claims.  I’m all for self promotion (see: this blog, my magazine, my life, etc), but there’s a reason why my self promotion is heavy on specifics: I want to be taken seriously.

Without further ado and in no particular order, the ads I stumbled upon:

One claimed 33 reasons why a brokerage is super amazing. I did some research this morning and found that the Walworth County average closed sales (2018) for those 33 particular reasons was $1.67MM. For perspective and context, during 2016/2017 I averaged over $4MM in sales, per month.

Another ad, this one really fancy looking. The agent has been closing lakefront deals on Geneva, since quite a long time ago. Some MLS searching to provide background on the advertisement revealed that indeed this agent has put together single family lakefront deals on Geneva. Four of them, in total.  I, also have closed a few lakefronts on Geneva. 48 of them since 2010, and more before that, but alas, I don’t even have an ad in the magazine.

There’s some mention in other ads of agents winning awards from their companies. Watches, gold circles, platinum things. This is nice for these agents and their host companies. One such company gives away a watch the first year you sell $10MM with the company.  I sent an email to the company asking if I’d qualify for 4 watches for 2017 based on my production, of if I’d be capped at just one watch. (I jest)

Ooh, here’s another ad. This one is sleek. Super sleek.  This agent sells lots of houses that afford the lake lifestyle. To review the claim, let’s look through the MLS…. That agent has sold one home with lake access or lakefront on Geneva this year. One.  This does not make for a terrific year, but it does make for a great ad.

There’s no need to go on and on, as I think you have likely grasped my concern. As a consumer in the market you’ll need to figure out which agent you should use to represent you. Sadly, the lakefront market on Geneva is hot, which is attracting more and more agents to the lakefront fray. You can’t blame them, as it’s the biggest pie and everyone longs for a slice. Unfortunately, no matter what the ads say, not every agent is a lakefront specialist. Not every agent has success in specific market segments. If you’re an agent and you do a  terrific job selling in Geneva National, then put that in your ads.  I have a horse farm for sale (it’s amazing, really), near Clinton, Wisconsin. The fact that I have this farm for sale does not make me an Equestrian Property Expert.

This morning, it’s just another reminder, I suppose. If you need an attorney to help with your Last Will, please don’t hire a personal injury attorney. If you need a mechanic to replace your timing belt, don’t drop your car off at the bicycle repair shop. If you need a Lake Geneva area Realtor to help with your purchase or your sale, choose an agent with a pattern of success in the specific segment that has your attention. If you’re looking for a Realtor to assist you in Des Moines or Hinsdale, do the same.

Lake Geneva Buyers
David Curry

Lake Geneva Buyers

It’s summer of 2018 and you’re in Lake Geneva.  You’ve done several things right to make it here. You’ve made strategic decisions that have led to this point. You’ve endured difficulties and celebrated successes. You’ve made it, even if you don’t know it. You can’t find yourself along these shores in search of anything and not understand that simply by being here you’ve proven your success. To arrive here, now, to be in this market as an owner or a buyer, there’s something that must be said: I’m proud of you.

If you’re here and you decide that you’re going to be a summer 2018 seller, then you do several things. You set up some listing appointments with the agents that you feel will increase your chances of selling in an efficient and lucrative manner. You interview the guy with the blog, the guy with the magazine (spoiler, those are both me), you interview the lady who your neighbor plays Bingo with, and you interview the guy who your husband’s friend golfs with. That agent is always golfing, but alas, you interview him anyway.

What happens next is the issue. Agents, sensing the market and sensing the competition, battle against each other to drive your price up. You listen. You don’t like the agent who keeps on insisting on using facts to back up his opinions (that’s me), and you don’t like the agent who golfs all of the time because he has two score cards in his pocket next to his soft-edged business card. You really like the bingo player, because she’s super enthusiastic and happy and she thinks your pricing ideas are right on.  Name your price, she says. So bubbly and so positive. Never mind that she rarely sells houses, you list because there’s palpable enthusiasm here and her price is 20% over the one the reality based magazine guy gave you.

That’s what sellers do. But buyers?  They’re even worse. At least the seller interviews prospective agents. Buyers tend to follow a different path. They drive up to the lake, drive around the lake, stop in at open houses and call the names on signs.  Recently, Walworth County Realtors have sprung forward into the 1950s and decided that open houses are the key to success. Every weekend, open houses. Down this road! Open House!  Agents press their pleated khakis and affix their gold name tags. They shuffle their stack of brochures next to the sign in sheet. That sign in sheet is often what will do you in.

See, buyers don’t seem to know it, but the real estate business is built around the concept of procuring cause.  While I’m not an attorney, I know that this concept is what drives the commissions in real estate. And in case you are exceptionally naive, you should know that commission is what drives real estate agents to work on Saturday and Sunday while the rest of the free world is playing. If you stop in to an open house and give that agent your name and contact info, that agent is going to make a claim that you’re their buyer. If you call an agent off of their yard sign and give them your contact info so that you might receive info, that agent is going to make a claim that you’re theirs. If you so much as breathe in the general direction of an agent, there’s a good chance that agent thinks you’re their customer.

What I’d like you to do is something different. I don’t want you to work with another agent and consult me and this blog for advice. That’s sort of lame, and unfortunately quite common. Instead, I’d like you to determine if you’re a buyer in the Lake Geneva market. If the answer is yes, then I recommend you follow the model of the sellers. You need to interview agents. Pick a couple, interview them. Interact with them. It’ll take an hour of your time and save you considerable consternation in the future. Further, it’ll save you from possible financial errors that won’t only harm your pride. Why would you work with an agent whom you met by sheer chance? Why would you work with an agent who pays the most for your lead on Zillow? Stop doing this. It’s embarrassing.

If you are in the market, and you’re reading this,  Send me an email. Set up a time to meet with me. We’ll talk about the market. You’ll quickly learn there’s a significant difference between an agent who says they’re a market expert and one who actually is.  The market is hot. There are mistakes being made. I’ll try to help you avoid those, and we’ll have fun along the way.

Lake Geneva Lakefront Development Concern
David Curry

Lake Geneva Lakefront Development Concern

I have a very simple process when it comes to deciding whether or not a development should be approved. If the development is needed, and that need can be successfully articulated,  I’ll generally consider it. If it’s needed and said development is to be located around similar properties, where densities are similar and price ranges are similar, then I’ll consider it further. If the product looks nice enough to compliment those surroundings, I’ll keep considering it. And if it doesn’t impact the community in any negative way, I’ll consider supporting it. That’s the process. (Note it has nothing to do with what SEWRPC suggests, because I’m smarter than SEWRPC and so are you). Unfortunately, typical development fails on one or all of those criteria. Today it isn’t about generalities, it’s about a development and called Symphony Bay and its desire to become a lake access community.

This development is new. Like brand new. Like not yet ready to live in new. Like bulldozers new. It’s on the outskirts of a commercial district in Lake Geneva, so I’m generally okay with the location of it.  If I were a nearby or adjacent neighbor, I’m guessing I’d hate it. But still, it’s a development and it’s okay I suppose. The issue today is not this development, but rather its desire to transform this country-side development into a lake access development. See, the developer owns a small piece of lakefront near the Geneva Inn, and he’d like to build a clubhouse down there for the several hundred future residents of his development to have private access to the lake.  This is the issue. And this is why I’m writing today to voice my strong opposition to both this requested conditional use, and to the precedent that it would set.

I don’t know the nuances of this deal. I won’t pretend to understand exactly what rights Linn Township and Walworth County have to stop this sort of key-hole development access. I do know that if the developer needs a conditional use to build this structure, then the township and the county should deny that request, and quickly. The reasons for a denial are quite simple.  Any development that seeks to allow hundreds of additional owners a cramped chance at lake access is something that I’d oppose. Now, let’s say there was a condominium on a site and the condominium housed 10 owners. If they want to tear down that condominium to build ten houses, I’d be generally in favor of that.  Remember the South Shore Club development battle? The public won that battle, as a developer chose to build 40 high end homes instead of several hundred lake access cottages and condominiums.  If we care about this lake, we should seek to prioritize what happens along its shores.  Density is our enemy.

The location on the water, near the Geneva Inn, is a location primed for present and future trouble. The Geneva Inn itself is a potential development concern.  The adjacent farm fields are another concern. The area features a rare combination of commercial lakefront with large swaths of nearby vacant land.  That combination is rare on our shores, creating possible development opportunities both endless and extremely troubling. That’s why the Symphony Bay lake access proposal must be stopped in its tracks. Kill off any hope that this sort of development will be found acceptable to the community, and kill it quickly before these ideas spread.

I’m not sure the best way to formalize a resistance against this conditional use request, but for now it’s a good idea to contact the Town of Linn and urge them to vote against it. There’s a link below that will take you to a community group’s webpage there they’re seeking signatures on a petition. The Plan Commission meeting is March 20th, so please do share this post and encourage your friends and neighbors to do the same.  The precedent that the developer is seeking to set is one that this lake can not abide. The only reason we’re here is because of this lake. We have to protect it. We have to do what’s best not for a developer with visions of lake access profits, but for the community as a whole.

 

UPDATE:

This Plan Commission meeting also features a development attempt on the North Shore of Geneva Lake. The development would create a three lot Certified Survey Map out of the old Born Free Estate on North Lakeshore Drive near Pebble Point.  This sort of fancy plat map manipulation was stopped when it was attempted on the north shore of Fontana several years ago, and it should be stopped here as well.   The lot appears as though it could easily be split into two parcels, if that’s what the would-be owner would like to do, but three parcels is one too many. Tell the Township to turn this request down.

Sign the pledge.

(This link will take you off of Geneva Lakefront Realty’s website and to a third party site).

Email the Linn Township Planning Commission:

jweiss@townoflinn.com

Apalmer@townoflinn.com

clerk@townoflinn.com

(Disclaimer- I am not affiliated with either project in any way and am writing as a citizen of Walworth County and a concerned Geneva Lake lover).

Pricing Temptation
David Curry

Pricing Temptation

If you own a lakefront or lake access home in the Lake Geneva market, you’re well aware of the increased broker competition in our area. New agents, new brokers, new this and new that. The old ones, they’re here too.  Everyone is an expert. Everyone a top producer. Everyone won an award at their company party. They’ve got the photos to prove it. Facebook, photos. Instagram photos. Best Use Of Technology To Showcase Expertise. That’s a nice trophy, fella.

The state legislature is about to pass a bill to make it easier for developers to develop.  Life is hard on these developers, what with the annoyances of existing zoning laws. They should be easier. More homes, more agents, more of this and definitely more of that. The market is hot. So hot. Hot Hot Hot. That’s what the ad says. Name your price. I mean it.  Trust me,  I just won this Top Producer Award for Most Residential Sides On The South Side Of Main Street During The Second Half Of January.  Surprised you didn’t know that. Look for  picture of the trophy in my upcoming newspaper ad.

Name Your Price. You think I’m kidding?  Go ahead, seller. Name it. I’ll go get it. Your house is worth $2.8MM but you want $3MM but you’re not actually going to sell unless you get $4MM? Let’s list it! You must have seen my most recent press release, right? The one I wrote about myself and the incredible awards I won at the mid-February meeting? Well, trust me. Name your price and I’ll get it. I’ve been selling lots of houses for many, many months. I’m certain I can get that number for you. I’m super enthusiastic! Can’t you tell?  In 1992 my senior class voted me Most Bubbly.

It’s February now, but it feels like March. March feels like April, sort of. It might snow tomorrow, but that won’t matter. The market is hot and sellers know it. Buyers know it, too, and they lament the heat. But really they don’t. Because many of those buyers who are buyers now where buyers in 2013 when you could have bought anything anywhere and made money on it.  Except maybe Michigan. Buyers buy when they feel motivated by competition, and sellers list higher when they feel as though they have none.

Today, the market is full of promises. Brokers will sell your house for the highest possible dollar, guaranteed! Sellers enjoy this attention, and there’s nothing that makes a seller feel more pleased than encouraging a listing competition for their home. Here’s how that works. Invite three or four brokers to your house. Tell each of them that there are others coming after they’re done.   The brokers know this, and now they know there’s competition. Competition to list the house. Competition to come up with the highest list price possible. Any seller likes a competent, skilled broker. But you know what sellers like more?  Super high list prices.

The problem, of course, with the super high list price (SHLP) is that the SHLP is actually detrimental. Sure it’s tempting. Sure it seems like a wonderful windfall. Buy Bitcoin at $19,000 because it’ll be $50,000 by the end of the month! And certainly there’s a slim chance that the SHLP finds a sucker (Zillow buyer). If that happens, congratulations, you win. But what if that doesn’t happen? What if you list the house and many months later you’re still the owner? What then?

I’ll tell you what happens then. Your house sits. You reduce your price a bit. Then you reduce it some more. Then the market stops paying attention. So you reduce again. And again. Quickly you’re below the list price that was initially suggested by the skilled agent, the one who visited on that Saturday before the other agents. You’re below that price and yet the market doesn’t respond. What to do? Red carpet open house? Balloons on the yard sign? A second yard sign? A plea on Facebook?

The answer is another reduction. This is the cycle of the seller who chose to shoot for the moon. And this is the mistake. It’s so tempting to make it. The outcome has so much potential, yet when the dust settles and the lame agent has won your listing, the only thing left to do is wait. You’ve missed your window, and now the market is going to punish you. We manage risk in our investments. We manage risk when we drive down the road. Let’s manage risk when we list our houses as well. How?

Hire the agent with the best track record in your individual market segment. Demand a thorough market analysis. Understand your sold comps and current competition. Understand the drawbacks of your property, not just the benefits.  List the house for a price near the top end of the expected sales range.  Sell your house. Be happy.

Tax Time
David Curry

Tax Time

If you’re lucky enough to be a Lake Geneva vacation home owner, then you’re unlucky enough to be unwrapping Walworth County’s most untimely gift: Your property tax bill.  When I’m elected supreme ruler of Walworth County, I will change our fiscal year so that you receive your tax bill on July 6th.  While draped in young summer you’ll find the tax bill to be a worthy pittance. Something to be celebrated over brats and charcoal. Why yes, I will pay this ungodly sum of money today! That’s what you’ll say. And you’ll be happy, because you’ll look around and feel the scene and understand that it’s all worthwhile. In early Winter, summer is so very far away, and the tax bill now appears as one last and final insult to the heap that is our year end.

About those taxes. With legislation in Washington DC spiraling towards completion, there are potential changes afoot for the way we’re able to deduct our paid property taxes. It seems as though the bubble of DC has decided it’s in our best interests to pay tax on tax, and who are we, mere peasants, to complain (I’ve complained a lot, and you should, too). With possible changes coming, it might be best to pay those 2017 taxes while it’s still 2017, rather than in two parts during 2018 as the invoice allows. Of course I’m not an accountant, so you should consult with yours, but this year, perhaps more than any other, it’s important to be paying attention.

And along those lines of paying attention, every year owners of Lake Geneva vacation homes miss the deadline for paying their property taxes. This happens through many different circumstances, but typically it has to do with the tax bill being sent to an address other than that which the property owner had planned. Perhaps the bill is being sent to your attorney, to your lake house address, or to the house you used to live in before you moved. The County is very callous towards your reasons, so it’s best to look up your taxes every December and be certain you have the bill and plan to pay it on time (or this year, as I mentioned above). To look up your tax bill, go here. It might be painful, and for that, I’m sorry.

If you purchase a Lake Geneva property this year, there’s an outside chance that your tax bill will be mailed to the prior owner. This isn’t really anyones fault, but it is annoying.  Rather than count on the prior owner to look up your address and mail you that tax bill, it’s best that you use the search link above, or contact the municipality in which you own your home and ask them for the bill. Be proactive, be aware, and don’t count on anyone to help you in the process. If you have no time to deal with these things, tell your attorney or accountant to handle it for you. They’ll like that.

Other year end bits to be aware of. Disconnect your hoses from outside spigots. Don’t forget. Leave your heat on at 60 degrees or more. If you need to keep the heat at 50, I’d suggest that you’re just begging for a pipe to break. Don’t do this, it’s a terrible, awful idea. I believe it’s called being penny wise and pound foolish, but I’m not British. Leave your heat warm enough so that your pipes don’t break, but also so that your tile floors and shower surrounds don’t crack. Warmth is good, please embrace it. If you need help with this, install a Nest (or similar) camera in your house, and a Nest thermostat. You can watch your house and your heat on your app. I’m building a tiny cabin in the outskirts of Nowhere, Wisconsin, and I have done this. If I can, you can, too.

Make sure your irrigation system is winterized. Your pool and hot tub, too. Your pier might not be out by now, but this is the burden of the pier company, unless you’re my dad and you’re intent on saving $110.89 by removing the pier boards yourself. Turn an outside light or two on, not because we have crime like Harbor Country, but because it just looks better. You can spare the $.80 per month to leave a few exterior coach lights on. Your neighbors will appreciate your concern for the exterior mood lighting.

Can you see what I’ve done here? I’ve played right into your hands. I’ve given you a list of things to do under the supposition that you won’t be at your lake house this winter. And in that, I’ve caught you. Missing out on winter at the lake would be a most egregious sin, tantamount to willingly paying tax on tax, or leaving your heat on at 48 degrees. You should be here, no matter the month. Ski here. Rest here. Go to fish fry here. If you didn’t want to visit your vacation home in the winter you probably should have bought one in Michigan, or Door County.

 

Perspective Sadness
David Curry

Perspective Sadness

This very well could have been the Cubs Didn’t Get Swept But They’re Still Terrible Sadness post, but that wasn’t really bothering me this morning. The Cubs were beat by a vastly superior team.  Perhaps if our big hitters had hit and our decent pitchers were decent, then maybe things would have been different. But they weren’t different. They were awful. Just awful. Embarrassingly awful. And so for now my only Cubs memory from 2017 will be one of joy. Joy that I didn’t spend any money to attend a playoff loss.

Even this, though, is about perspective. The Cubs were bad in these playoffs. Really bad. Don’t forget they were also bad last year in some of those games. Super bad. But they still won a lot of games and we still were able to watch terrible baseball well into October, and so this is something good.  Perspective as it relates to baseball fandom is not really difficult. Just remember your team was better than most of the other teams, and in that there is some consolation. We could have been Brewers fans. Perspective in real estate transactions? It’s as rare as a Lackey fastball that doesn’t end up in the basket.

When real estate deals are small, every dollar really matters. If you’re a seller of a house listed at $119k your contract is for $114k,  your mortgage payoff is $105,989 and your closing costs total $8155, then numbers really, really matter.  The car needs rear brakes and there’s a final balloon payment past due on Timmy’s braces. These are difficult times and those are difficult circumstances.  Real estate transactions are all stressful, no matter the dollar amount or the location, but are all transactions created equal? Not at all.

And this is where the perspective comes in. The earlier example is indeed a stressful situation. It’s stressful because in that life, every single dollar matters. Every dollar is one to be stressed over. If a deal with that structure requires a $4,000 inspection repair to be made in order to keep the deal together, that $4k is the difference between solvency and insolvency. Not between life and death, but in that circumstance that’s likely how it feels.

Now, find another deal. Say one on Geneva Lake. One where the sales price isn’t $115,000, but $3,500,000. The mortgage is $1,700,000 and the closing costs are $150,000. Now add in the $4,000 inspection repair or credit. Does this matter? Is this something that means anything at all? Is this something to languish over? Is this something to dwell on? The answer is painfully obvious, but in this real world of high end real estate, many people still dwell on it like it’s the last $4,000 that was earmarked for paying past due medical bills. This is a shame.

This is where perspective is lost. Abandoned, willingly, routinely. Large real estate deals require large amounts of perspective, and this perspective comes in the form of not fighting over insignificant amounts of money. But David, every dollar counts! Yes, I understand that. But do I? When I sell a house that I personally own, I’ll make repairs to that house regardless of what was, or was not, found in an inspection report. I do this because I want the new buyer to be happy. I don’t want the new buyer to wander around the house the day after the closing and curse my name for the things I covered up.

But this isn’t just about sellers. This is also about buyers. Let’s say that the seller won’t make a repair. Let’s say they refuse to give you that $175 plumbing fix. Is this going to ruin your life? Is it really going to make the house you already decided you want to own somehow inhabitable? Is it going to matter at all? Does any of this actually matter?

Today, it’s just about simple perspective. Do what’s right. Today in Lake Geneva there are lots of deals. Lots of high end deals. Lots of lakefront sales for big dollars and off-water sales for big dollars. Sellers, please listen to me. If a buyer wants to give you $1,500,000 in cash and they expect you to fix two leaky faucets and a rotted windowsill, just go along with it. Be happy. Life is good. It’s short. And that plumber’s bill isn’t going to require your last $175.

Multiple Offer Sadness
David Curry

Multiple Offer Sadness

When I dream, I dream of the good old days. Of the days before these days. The days when things were worse.   I dream of anxious sellers and opportunistic buyers. Of numbers. Of $3.95MM asking prices that yielded $3.25MM sales prices. I dream of the days when agents were leaving the business instead of charging into it. I dream of aged inventory, of sellers begging. I dream of buyers who’d buy something as long as they were buying it cheap. What was that something? It didn’t matter. I dream of these days, of the days that everyone else thought were bad. There’s just something quaint about a poor market.  I’ll forever cherish the memory of those darker days.

But today there’s nothing dark at all. There’s only light. Bright, screaming lights. The market is hot, which you already know because I’ve told you too many times. There are plenty of dangers in this hot market, and unfortunately, those dangers are dismissed by buyers who either don’t know better, or by buyers working with agents who don’t know better. I can’t be certain which is the chicken and which is the egg. In this new era of hurried activity, the multiple offer situation has returned. Buyers bemoan this development. Sellers delight in it. Agents? Well, we hate it.

Over the past few months, I’ve been part of more multiple offer situations than I had been involved in over the previous several years. What’s a multiple offer situation? It’s just like it sounds. The house is listed. An offer is written. The seller starts negotiating that offer.   The agent, doing the agent’s job, tells some other agents that there’s an offer in on the property. Another agent writes an offer. Now there are two offers. The seller is thrilled, as his negotiating capital just increases dramatically. The buyers are anxious. Angry. Hurt. Hate-filled.  The agent is playing them, they think. The agent is taking advantage of the situation, they think. The agent is doing this to ruin their lives, they think.

Newsflash. Agents like selling houses. That’s because we chose this profession, if it can be called that, to make money. I sell real estate because I’m good at it, and because I’m good at it I make money to pay for such extravagances as a mortgage, and taxes. Also, groceries. Agents do this job because we make money at it. To assume we do it because we like “people” is to assume a hedge fund manager loves his job because he likes to create liquidity. We all do jobs to get paid. In the case of a multiple offer negotiation, agents will hopefully still get paid, but there’s a significant amount of work that accompanies this situation. Pop Quiz: If Jimmy the agent makes $100 for working one hour, or $100 for working two hours, which would Jimmy prefer?

Multiple offers are once again common in this market. There can be only one buyer for any given house. This means one buyer will be happy and another buyer will be sad. Did the agent contrive this situation to make someone angry and sad? Don’t be ridiculous. The agent, no matter how convenient it is to assume, is not the bad guy. Sure, there are awful agents. Terrible, horrible agents. But I’m writing this from my position, as an agent that isn’t either of those things.

The other condition that is increasingly prevalent is the secondary offer. This differs from the multiple offer situation, in that the secondary offer is only written after a primary offer is accepted. This is akin to walking into a furniture store and stumbling upon the most beautiful couch. This is the couch you’ve spent your whole life waiting for. Nothing else matters, except this couch.  You ask the sales lady for the price.  It’s within your budget! And for such a couch as this! But the sales lady notices the tag hanging next to the price. SOLD, the tag says. She tells you that sometimes these couch deals fall apart, and that if the buyer for whom the SOLD tag was written doesn’t make good on the purchase, then you, YES YOU, can buy that couch. You agree to these terms, and you wait by the phone.  Sleep is for those who have never laid eyes upon this couch.

A week goes by. You’ve heard nothing. You call the store. The sales lady is at lunch. You call later, and she says the couch is still in the store, and the primary buyer is supposed to come in tomorrow to pick the couch up. Not liking this answer, you lash out. You tell the sales lady how awful she is. How she must be lying to you. How this isn’t the way things work.  Ah, but this is the way things work. This is the way real estate works. The primary buyer is the primary buyer until he isn’t. If you’re a secondary buyer, please relax. The agent is not doing this to ruin your day. The agent, in fact, hates this almost as much as you do. Why? Because this creates extra work for the agent, and as our prior example states,  agents dislike extra work for the same pay.  Just like hedge fund managers and furniture store salespeople.

 

Above, my Basswood estate listing, offered at $9,750,000
Lake Geneva Agent Representation
David Curry

Lake Geneva Agent Representation

We know lots of things. We know that if we don’t cut our grass once a week it will grow too tall and too thick, and when we cut it after the week off we know that the cutting will be difficult. It would have been easier to mow it last week. Once in a while, it’s good to let it go and struggle through the off-week cutting, to remind oneself not to skip the lawn. In the same way, we know we should floss our teeth. It’s a good habit, this flossing. I floss, sure, but when sitting in the dentist chair I have to both admit it’s not twice a day and then endure the chastising reminder. Flossing, it’s good.

In the same way, there are certain real estate things that everyone needs to remember. This is your Monday reminder. In an attempt to make this exceptionally easy reading today, I’ll distill the reminders down to just one.  What I’m asking you, no, what I’m begging you to remember, is so simple. It’s nothing complicated. It’s not painful like mowing too-tall of grass, or annoying, like flossing stupid back teeth. It’s so easy, anyone can do it. Best of all, this thing you must do doesn’t cost you any money. In fact, it will likely save you money, and also save you from the heaps of shame that accompanies the forgetting of this thing.

In part, I blame the internet for the way it has made all real estate, and all markets, feel the same. When zooming over a map of a county on Zillow, all the consumer sees is a “market”. A house here for $4MM, a house over there for $400k. A house down the road for $1.1MM and one over here for $200k. The market, when viewed through the lens of a smartphone, looks small and quaint. In the same way, an agent in Middleton is the same as an agent in Madison, is the same as an agent in Milwaukee. It’s all one state, and it’s a midwestern state at that, which means it must be simple and it must be easy.  For the Zillow tells us so.

I’ll tell you a secret about Lake Geneva. When an agent has a listing that he or she knows is overpriced and/or a very difficult sale, guess what we hope happens? Of course we hope the listing sells. That’s our job, to work and to hope. But we really hope a buyer shows up who is tethered to an agent who isn’t from our market. Make it an agent from out of state and our eyes light up at the naivety of it all. A buyer working with an inexperienced agent, or one who isn’t from our market, is a buyer that will likely make mistakes. If we’re the listing side of a grossly overpriced property, we hope you make the mistake soon.

This is the problem, and this is the reminder. Stop working with agents that don’t know the market. It seems so obvious, so elementary. Yet the market is full of buyers working with agents who aren’t active in the particular segment they’re attempting to sell.  There’s a reason I don’t go to Door County and sell real estate on Thursdays. There’s a reason I don’t go to  Bayfield on Wednesdays and Elm Grove on Fridays. I’m pretty good at this real estate game, and I know my limitations. If I don’t know a market I’m not going to represent myself as an expert in that market. It’s just that easy.

If you’re a lakefront buyer seeking a Geneva Lake property, is it in your best interest to walk into a real estate office on a Saturday and sign up with the agent standing in front of you? Would you visit the walk-in clinic to have your kidney transplant performed? Real estate is not as complicated as surgery, but the analogy of a surgery taking place is indeed accurate in that real estate surgery involves removing too much money directly from your pocket. If you’re looking for a $3MM home in  Hinsdale, work with an agent who routinely sells $3MM homes in Hinsdale. If you’re looking for a $200k condo in Lake Geneva, work with an agent who routinely sells $200k condos in Lake Geneva. And if you’re looking for a $3MM lakefront home on Geneva, work with the agent who routinely sells $3MM homes on Geneva. And if you have a dentist appointment tomorrow, start flossing right now.

 

 

 

Of Agents and Inuendos
David Curry

Of Agents and Inuendos

This is serious. You’ve been having the pain in your knee for quite some time. It bothered you during your junior year, but what could really, truly bother you then? Some tylenol and a creatine laced protein shake is all you needed to make that slight twinge of pain fade into the background. It was the championship game, after all. The pain now is different than the pain then. It’s more permanent. More achy. Less a twang of pain and more a deep constant, like something has taken hold in that joint that cannot and will not give up.  You wait nervously in the doctor’s office. The smell of the receptionists microwaved lunch turns your stomach. Your knee is getting worse by the minute.

The doctor is friendly, you found him online. He has a billboard on the highway near the Walmart,  “satisfaction guaranteed”. The guarantee is figurative,  because there can be no guarantee with this sort of work. The knee doesn’t react the same each time. The doctor knows you know this, but his insurance company remains steadfast in their demands that he remove the writing from the billboard. He will, he says, but not until the contract is up. To change it now would be costly, and the state is behind in their payments for the elderly care he provides, and so things are tight.  Your knee offers some financial redemption. You hope he looks as he does on the billboard. Capable, confident, full of guarantees.

He enters the room. He’s confident. His office, he says, is among the best in the entire country. He’s number one in his group. The group over which he reigns is unclear, but he’s number one, that he’s sure of.  He’s been doing this for a while, years, in fact. How many is left out.  He does this all the time he says as he looks over the file. Nothing to be worried about. His knee is bouncing, nervously.  Your knee aches. He asks what the problem is. You tell him it’s your knee. He glances towards your leg. I see, he murmurs while furiously scribbling on his notepad, nodding the whole time as if asking himself questions and answering them quietly. Now let’s have a look at that knee.

His chair wheels over to you and he picks up your leg and rests it on his lap. His fingers prodding your achilles, pushing and waiting for your reaction.  He turns your ankle to the left and to the right, no reaction. He pushes your toes away from your heel, up and down, back and forth, all the while watching your face for any sign of discomfort. There is none. Satisfied with his work, he wheels away and looks toward his clipboard.  Good news, he says. It appears as though your knee is, as a point of fact, 100% healthy.

This may seem to be an absurd way to contrast a doctor with a Realtor, but it’s all I have for you this morning.  This market has me concerned, as buyers and sellers alike flock to agents who don’t know the difference between an ankle and a knee. Agents who see pictures of sunsets and ask if the house is on a shore of the lake that would never, under any circumstance, offer a sunset view. Agents who drive to listings and call for directions. Agents who ask if association frontage is private. Agents who don’t know the difference between a slip and a private pier. Agents who show on Powers Lake on Sunday and Geneva Lake on Monday and condominiums in Whitewater on Wednesday.  Incompetent, uneducated agents who find success because the work for a company that has some credibility.  This hot market has been a breeding ground for inexperienced agents, and sadly,  the market is falling for it.

In that, there is a real estate story.  Consumers see a brokerage, and they think the brokerage to be good. Or at least capable. They then approach the brokerage, looking for an agent. The assumption is that the agent, if aligned with a  large brokerage, is somehow an expert in their field. I would suggest to you that expert status is not attained by aligning oneself with a large firm. Now, if you’re in search of an attorney and you find one who is a partner at Kirkland and Ellis, you can reasonably assume that this partner is indeed a capable and competent attorney. But that’s because there’s a barrier to entry to such a firm. Only the best of the best gain membership. The barrier to entry to real estate is the ability to robustly fog a mirror, and if the test is completed without much difficulty, the agent is awarded a set of business cards and a gold jacket. You, the consumer, wander into the office the next day looking for a lake house. This is all a terrible, terrible mistake. Thankfully, there is a way to avoid the mistake. Looking for Lake Geneva real estate? Look with me.

 

Shameless
David Curry

Shameless

This feels gratuitous, but I have to do it anyway. I could babble on and on about being the underdog,  or tell you about how mightily I struggled for the first 14 years of my real estate career. Or how every day, every day, every quarter and year somehow remains an uphill battle. But those things all sound like either complaining or whining or sandbagging. So I won’t do it. For now,  just this.

Real Trends compiles the list of the top producers in each state. It’s the real estate industry’s Emmy award. Our Oscar. It’s all we have. And for 2016, I was the number one individual volume agent for the State of Wisconsin. That matters, and so I’m proud to share it with you. It wouldn’t have been possible without the trust that so many have placed in me, and I don’t take it for granted, not for a second.

Weekend Caller
David Curry

Weekend Caller

We need to have an honest discussion. It’s rare, in any business involving sales, to have such a conversation, but converse we must.  This is about me, sure, but it’s about you. It’s about people you don’t know and people I don’t know. It’s about regular, good people. People we’d go to church with or go to fish fry with. People we’d do both with. It’s about the sorts of people we all are at points in our life. It’s about the weekend real estate caller.

In real estate, it’s a generally understood concept that Realtors work on weekends. We do. We all do.  There are some Realtors who take days off for religious reasons, and I applaud them for their conviction. There are other Realtors who take certain hours off- no calls after 6 pm- that sort of thing. But the vast majority of Realtors will show you a house Sunday morning at 8 am and they’ll show you one Friday night at 9 pm. There are no bounds for most agents, no time when they aren’t hungry to sell you something. Would it surprise you now that I tell you this is a bad thing?

Last weekend I had several real estate calls at my office line (262-245-9000). That’s not abnormal. But this was a Holiday weekend and you’ll be somewhat shocked to find out that Realtors also like Holidays.  These days were not created purely for bankers and school teachers and financial analysts. These are the holidays for the people, and while there is some testing that has not been entirely vetted, Realtors are also people. The business expects Realtors to be available at all times, at the drop of a hat, because shouldn’t these blood-sucking sales people be available whenever the job calls. Can I say no?

Of course I can, but it’s taboo to admit it. Could you imagine that on Memorial Day weekend I, too, like the idea of a cookout? I was momentarily undertaking the world’s greatest physical transformation earlier this year, but it didn’t stick so I’m back to preferring my protein to be wrapped in carbs. Soft, pillowy, deliciously doughy carbs. And so I like the cook brats and burgers and steaks, just like every other red blooded American.   I was in my office Saturday morning for a couple of hours, which felt like a nice effort on a Holiday, and that was that.

I stopped back on Sunday evening, after having spent the day Sunday out tiling at the never-ending cabin project I’m embroiled in.  Last weekend,  calls came for me to my office number. Voicemails were left. The weekend calls had left a couple of messages, and I was too late in my reply. Both buyers had moved on without me, which is both slightly understandable and also disappointing. And that comes back to the concept of this business and what it is different agents can offer.

Let’s say you’re looking to have some estate work done and you were told by a friend that their attorney is the absolute best. He does estate work all of the time, and he’s without rival. So you call the attorney, let’s just say on a Sunday morning of Memorial Day Weekend. If the attorney didn’t call you back within a few hours would you have called another attorney? Or similarly, if you call this attorney on a Monday but he hasn’t called you back by Monday evening, would you waltz into the closest lawyer’s office, the one in the strip mall next to the Cinnabon, and have the junior attorney from Middle Appalachia Technical College draft your docs? Of course you wouldn’t. Why then is real estate so different?

I love phone calls from clients and would-be clients. I crave them.  So please, if you’re calling me on a weekend, call my cell phone (262-245-1993). Text me. Email me (dave@genevalakefrontrealty.com). Do all of these things, but I’m begging you not to leave a voicemail at my office for me if you’re expecting a Sunday morning return call. While real estate is a game built around endless availability, I’d prefer it be built around the concept that some agents are more valuable than others, and if you’d like a Sunday morning agent with an hour notice I’m pretty sure I know you’re not going to get the agent who can guide you towards the right property at the right price.

Here’s to the weekend, and to cell phone calls. Above, a pier shot from Thursday. It’s summer. Be here.

 

Descriptors
David Curry

Descriptors

I might have figured out what’s wrong with me. It’s not that I don’t want to write something every other morning, as I have for the past nine years. I do. I really, really do. I drive to this desk and I think along the way, what should I write about? I play through the usual suspects. Spring? Green Grass? Blooms? Wisconsin is the best but Lake Geneva is better?  Something sold? Something listed? My teeth? My back?  Dumb sellers? Dumb buyers? Foreclosures?  These are the common themes. But the first thing I do when I sit down is scroll through the new inventory. Sometimes it’s just a few listings, sometimes it’s thirty, or forty. I look at the pending and sold listings from the night before. I read the descriptions.

And that’s when everything goes dark. I read about immaculate ranches with dazzling backsplashes. I read about heaven, often. What it’s like, who is there, how it’ll all be. Apparently it’s going to be a raised ranch with new carpet in the lower level and stainless appliances.  Sometimes, I wonder about perfection. What is it, can we achieve it? Is there something we should be doing? The answer, after the morning scroll, is yes. It is achievable. It is something we can do. All we need is an above ground pool and a few freshly planted Impatiens. That’s it. Perfection, achieved.

This is what’s wrong with me, but it might be what’s wrong with everyone else. The real estate business wishes it could change. It really does. Like a drunk who just wants a little sip on a  Saturday, it doesn’t want to want this. But real estate can’t change, it won’t change. It’ll always be the same. And that’s not because of the real estate agent, it’s because of the consumer. If Joe Blow Realtor Guy can write about how elegant a house is just because it has white carpet in the dining room, how can we stand a chance?

Not just as real estate consumers, but as a civilization. If so many are having their breath taken away each and every day just because there’s a wood stove insert stuck into the failed chimney, can mass extinction be that far behind? If buyers are so readily interested what they might achieve in their life, can you blame a Realtor for saying, in all caps, ALL THIS CAN BE YOURS?  If that promise of delight doesn’t get to you, perhaps this one will work? It’s a ranch in Elkhorn, but what you don’t know: IRRESISTIBLE GOT TO BE SEEN RANCH.

I can’t, and so I won’t. But that’s what’s wrong today. It’s what’s wrong every day. The world is dumbing around us and the world of real estate is leading the exodus from intelligent dialogue.  En masse, buyers are looking for kitchens with decorative ceramic tile backsplashes, and if this is what they want, who are we to stop them? If I’m to be reminded of a  bygone era each time I walk into that vinyl sided colonial in that corn field subdivision, can you blame me for wearing these plowing boots and chewing on this large piece of field grass? How could I work, knowing this bygone era is waiting for me each and every time I go home? Why would I ever leave?

So I suppose that’s what’s bothering me. How can I play in this game when the whole game is reduced to a blithering mumble of absurd adjectives? I know lots of adjectives, but how could I use them to describe a kitchen with HotPoint appliances? Stainless Steel, I suppose. Or Shimmering Stainless Steel, because then I evoke emotion and alliteration, and what is one without the other?  Want immaculate perfection and an amazing mud room with mini fridge, for those moments you walk in the door after a long, multi-day cross Saraha hike?  Well then you’re in luck, it all exists in a $120k condo near Pell Lake.

These seemingly random examples of horrific real estate ad copy were not figments of my imagination. They were all culled from the new inventory this morning. This is why I will never understand how to effectively write ad copy, because most of these homes will sell, and right now someone is reading about that elegant white carpeted dining room and realizing that they’ve waited their whole life for such elegant, European sophistication.

Spring Break
David Curry

Spring Break

Well, it’s just me here now. Everyone else has left. The roads are quiet. The houses dark, excepting the one lamp left on to ward away any robbers.  But we don’t have robbers here, because it’s Lake Geneva, and everyone knows you’re gone anyway. The lamp tells us so. The gas station is closed, but there’s no one here to notice. The sign says GAS but the attendant is away, for a week, maybe more. The lamp in his window is neon, bright. There’s no one here because it’s spring break and I’m the only one in town. My kids have nothing to do now, no where to go, no friends to play with. They’re all gone and we’re the only ones here, but it doesn’t feel like spring anyway so what’s the point of a break?

Agents like to take spring break as well. They leave in the spring and they leave in the summer and in the winter they leave. They leave town for days, weeks, months. Some spend the whole winter someplace else, and they tell you that it’s fine because they have help. There’s someone to write the contracts for them and someone to show the houses for them. Someone will be there when you need them, they promise.  It’s spring break this week, but for many agents, this week is no different than many, many other weeks of the year. It’s just a break.

Saturday, I didn’t have any real reason to go to my office. I had appointments that I had already prepared for, and there was no need to sit at this desk and type anything on this computer. But on Saturday, late into the afternoon, I felt compelled to drive here and sit here and type something. I needed to review some deals, think about some people who are mad at me, think again about some deals that are close to be putting together. I needed to get out of my house and into this place, for no other reason than I hadn’t been here since the day before.

In the summer, and in the winter, and in the spring and fall, I like to fish. I fly fish in streams and I spend the day driving, fishing, and driving again. I do this in a singular day, sometimes a brief overnight, and I return to this desk when I return to this county. I make my absences seldom, not because I miss this desk and I have some desire to be here, but because the business of real estate and the market I serve is continually and constantly changing. This is the case on a daily, hourly basis, and in a market where inventory is sparse and buyers are many, being first in the know is something remarkably important. This is why I leave for a day, rarely more, unless it’s a family vacation that rarely, if ever, spans more than five days.

When I do leave, it’s a mess. Travel disrupts everything and leaves me scrambling to figure out what I’m missing and what I’ve already missed. Vacation is needed and it’s wonderful, but today isn’t about the merits of letting a mind rest for a while under the same sun in a different place, today is about choosing a Realtor that’s present.  More simply put, it’s about choosing an agent that is so wrought with anxiety when they leave their desk that they tend to rapidly return to it. Today is about picking an agent that doesn’t winter in another place, that doesn’t leave their work to assistants and fill-in cubicle-next-door-agents. Today is  just about making sure your agent is full time, present, and ready to work even when everyone else is on vacation.

 

Photo Courtesy Colleen Abrahamovich
Lake Geneva Home Inspections
David Curry

Lake Geneva Home Inspections

I feel as though I’ve been writing more admonitions than entertainment lately. It must be the time of year; the swelling of interest and enthusiasm in the housing markets has me seeing things that I really don’t like.  I don’t like sellers who are pricing their homes as though they’ve uncovered a patch of ground with air rights adjacent Central Park, and I don’t like the general attitude that I’m seeing in the market. While buyers are making mistakes aplenty, it’s the sellers who are working overtime to make a mess of the market.

That brings us to the home inspection contingency as written into a standard Wisconsin Offer to Purchase.  I’ll add here that I’m not an attorney, not even close, so if you’d like legal advice please consult your attorney. Even though I’m not a lawyer, I do understand a few basic conditions of the offer to purchase. This is good, since I’m a Realtor, and I’m supposed to understand what it is that I’m asking you to sign. The inspection contingency, as written into most offers, is a contingency designed to allow a contracted buyer time to look over the house they’re buying, just to make sure there aren’t any skeletons, figurative or literal, hiding in any closets.

The inspection is well intentioned, and it’s necessary, and I’m glad that there are home inspectors to shine flashlights into crawl spaces and jiggle the handles on toilets. Some home inspections do turn up serious conditions- like a moldy attic (I’ve seen one in 21 years at this desk), or a moldy bit in the back corner of a carpeted basement. These are things that are not obvious and they are important to uncover. But the inspection contingency has become something different, something worse. The inspection contingency has become a license to concoct a wish-list.

That stove, it’s 8 years old. Did you know the average life of a stove in these United States is only 8 or 9 years? Neither did I, except that some inspectors will make notes of that on an inspection report and the notes cause a buyer to seek a credit for a stove that is, quite obviously, nearly dead. Or is it? If the stove works, is it worthy of replacement? Or a furnace that is 11 years old, and looks shiny and new. Whoops, don’t get ahead of yourself, that furnace is designed to only last 12-13 years, so a new furnace purchase is something the buyer must budget for. Or is it? The buyer finds a list of aging or dated appliances and mechanicals and combines that with a list of outlets that need $17 GFI’s installed, a drip leak under a bathroom vanity, three lightbulbs missing from the attic (possible sabotage by the seller??), and throws a wish list at their agent, and into the lap of the seller. I want a new furnace, a new stove, and all those GFI’s replaced. The inspection contingency, engineered to find faults that aren’t so easily noticeable, has become a weapon against a seller, and in turn, has become a weapon against the deal itself.

Sellers everywhere are cheering now, happy that someone has finally pointed out the flaw in the way this contingency is being used. But there’s admonition here for both buyer and seller. If you’re a seller, and a buyer sends you a ridiculous inspection repair list, it will likely contain some actual defects. The furnace has a cracked heat exchanger, and it’s leaking carbon monoxide. This explains those long naps you’ve been taking, and it’s also an issue. A seller would be wise to repair this for a buyer. In the same way, a stove that is 11 years old and has therefore outlived its usefulness according to Mr. Serious Building Inspector Guy, this is not a condition worthy of a credit. The key to any successful inspection and subsequent negotiation is to be reasonable. That’s it. Reason. Is that so difficult?

Buyers are taking advantage of inspections, and sellers are being unecessarily disagreeable. Both reactions are caused by the market. Buyers are feeling like they may be paying a premium of some sort, and so they’re looking for credits to offset their purchase price. They feel that they gave in on the sales price, so the seller should give back in the inspection. Sellers feel like the market is so hot that they’ve likely undersold their property, and so they dig in their heels on any inspection requests and assume that the buyer will accept the house without repair or credits offered, and if the buyer doesn’t, who cares!? The market is so hot they’ll just line up another buyer, likely for more money. This is the error being made every day in every healthy market across America.

Buyers, stop being so ridiculous. The purchase decision makes sense if the market value makes sense, and if the property you’re purchasing suits your needs. A $3000 furnace replacement doesn’t change the fundamental nature of the value. In the same way, sellers should stop being so absurd. You have a contract to sell your home for $2MM. The buyer wants a $5000 credit to cover all the stuff you’ve been hoping would just fix themselves.  You should play ball, stop being so stubborn, because the risk of losing a buyer is far greater than some potential reward of finding another one somewhere down the road.

Summer Homes For City People 2017
David Curry

Summer Homes For City People 2017

January bothers me. It’s a month of clean starts, of new pledges and attempted changes. It’s a month where things seem possible, sure. But it’s also a month where the pressure to perform is the greatest. If the year recently ended was a bad year, January is a terrific thing. We can wipe the slate clean, start over, act like this year will be different, better, clean. But if the year recently ended was a great year, January just feels like anxiety. It feels like a month where things must start fresh, even though we don’t want them to.  January is a busy month for me, and as I plot and plan I have another problem that starts in January. January is magazine month.

Summer Homes For City People should be credited with at least one award. The award should be titled “The Magazine That Made The Other Lake Geneva Magazines Try Harder”. The trophy is large, to fit all the text. In 2010, the world of Lake Geneva real estate magazines was one where the magazine was printed with thumbnail sized images of each home that the company had for sale. Headers like “Lakefront” and “Vacant Land” jazzed up the content. The magazines were boring. Then Summer Homes For City People was printed and everyone else decided that content was more important. Other Magazines, you’re welcome.

But this magazine thing isn’t easy, and I don’t enjoy it. It’s a grind, a chore, a labor of love, sure, but mostly of dread. I dread the inevitable errors that will make it through multiple proofs and into print. Did you notice the binding of the last issue? I did. It said SUMMER 2015. Strange, because that’s what the SUMMER 2015 issue said, too, except this was on the SUMMER 2016 issue. I printed the address of a large lakefront listing wrong. I printed the address wrong. I must have read the address more than 100 times before print, but I only noticed the error once there were  15,000 copies of that error in the spare room at my office. The magazine is difficult, but important.

It’s important because it showcases the best of Lake Geneva. I sell ads to make the money work, but the ads aren’t open to just anyone. In fact, every year I turn down would be advertisers because their product or service doesn’t align with lakefront market. The magazine features some of the finest properties to ever come to market here, and I’m proud of that. And yes, each year the magazine features some nonsensical writings of mine that many readers say are “too wordy”.  Too wordy, indeed.

But this year will be different and better but also the same. That’s why I need inventory, and I need it soon. If you’re a lakefront owner and you’re thinking of selling this year, please let me know. I want to work for you. I want to showcase your lakefront home. I want to write nice things about it and make you proud to own it, and then secretly sad when I sell it. I want to work for you, and if you want your home in the 2017 issue of Summer Homes For City People, we really need to start talking about this soon. The magazine is underway, and I don’t want to run out of room before I gush all over your property.

If you’re a business owner with a high end product or service, perhaps a magazine ad should be discussed.  Chicago companies with high end products would do well to contact me, as there’s no better way to put that product in front of the affluent Lake Geneva set than through a simple ad in my publication.  If you operate a bowling alley in Niles, please don’t ask me to place an ad. But if you own a high end something-or-other in a similar market, I’m all ears. For now, please excuse me, as I have some ads to sell.

 

Above, the magazine cover by Neal Aspinall from the 2016 issue.
Ready For Sale
David Curry

Ready For Sale

I’d like to think, after twenty years in this chair, that I’ve seen it all. I’ve seen sellers and buyers of all makes and models, the good, the bad, and the ugly. I’ve seen outliers and trends, typical things and odd things. I’ve seen mostly all of it and at this time I think it’s easy to group sellers into two different categories. Those who view the transaction as a game, and those who view the transaction as a personal matter.  Neither of these viewpoints is correct, neither is wrong, both considerations are present during any transaction.

That didn’t clear anything up, I’m aware.  The thing is, once the game is over and the transaction is readied for closing, there is something that I wish all sellers would do. There is one way for a seller to make every transaction close without ill will, because there is almost always some level of ill will involved in a transaction.  Sellers are under contractual obligation to deliver their property to the buyer in “broom swept” condition.  This statement is intentionally vague, because a broom in my hand will yield a slightly more thorough outcome than a broom in the hand of my 10 year old daughter. Broom Swept. Sounds nice, sounds sort of clean. But that’s really all it is.

I have sold several of my own, personal homes. Each time I sell a home, I move my family out of the house a week or more before closing. I do this because I know I need time. I need time to fix everything that I know ails the house. At the last house, I had a burned spot not the size of a nickel on my basement carpet. A burn that was the result of an overambitious fireplace ember. The buyer had certainly noticed that burn when he was touring the house. If he hadn’t, would he care? Probably not. But I found a carpet repair man in Clinton who came out to patch that small blemish. After he patched the blemish, I had the carpets cleaned, but only after I touched up every paint nick and every bent or dinged piece of that house. Did I have to do these things? Did these things fall under my “broom swept” requirement? No, but I wanted the buyer to be happy with his purchase.

This isn’t to say I’m the worlds greatest homeseller, because once a buyer of one of my homes told me after the fact that he had to clean up some broken glass that he found under the oven. Obviously, in my focus on the obvious I neglected to properly clean under the oven.  My selling behavior isn’t unique to me, but sadly it is unique in the world of real estate. Sellers tend to feel rushed at the end of a contracted closing, and when they feel rushed they tend to feel frustrated and when they feel frustrated they tend to feel that the buyer is getting a terrific deal on their home.  They tend to feel that they’re “giving their house away”, and if you feel that way then you tend to leave the burned mark in the carpet and the broken glass under the range. You tend to walk from your house and leave the problems to the buyer.

This, as you’ve now suspected, is terrible behavior. Yet it’s common. Sellers leave a house at the minimum, and buyers walk in to a house that’s less than clean.  This, dear sellers, is a mistake. A buyer who hates you because you left a trillion nail holes in the drywall is a buyer who’s more likely to get seriously mad when a pipe breaks one month after closing. A buyer who feels slighted is a buyer who’s more likely to walk through the house they just bought and pick apart all of the deficiencies of that house. A buyer who doesn’t feel valued is a buyer who is more likely to cause the seller trouble post closing. And for what? Because the seller was too lazy to properly clean the house and do a few hundred dollars worth of unexpected, but appreciated, repairs?

Today isn’t about Lake Geneva, necessarily. Today is about being a seller of any house or condo anywhere.  Be a good seller. Value your buyer. Take some pride in what you’re selling. Make the buyer feel good about their decision to pay you the money that they’ve worked hard to earn.  Odds are, if that buyer finds something later that they don’t like, they’ll cut you some slack because you had the carpets cleaned and left that bottle of champagne in the fridge.

Lake Geneva Appraisals
David Curry

Lake Geneva Appraisals

You write an offer on a property. You negotiate the offer. You convince the seller to take your counter offer, or the seller convinces you to take his. Your offer was written in a standard fashion, with contingencies for inspections and a new survey and title work. You didn’t write in a financing contingency, because you didn’t really need one, but you did include an appraisal contingency. You know, just to make sure you weren’t over paying. You complete the first few steps of your contract, the inspections went okay. There are some issues, but houses are structures in some continual state of decay, so this is not unexpected. You receive the title and excepting the deed restriction from 1919 that allows the neighbor to observe every other Harvest Moon from your driveway, it’s fine. The last thing to be completed is the appraisal.  What’s taking so long?

The appraiser was out to view the property weeks ago, but the appraisal isn’t yet complete. More comps, she says, she needs more comps. But it’s a Lake Geneva property so comps don’t always exist, which means existing, imperfect comps must be manipulated and adjusted to fit the appraiser’s uniform criteria. Your property has 100′ of frontage, and the comparable on the street has 50′.   The appraiser doesn’t get to double the value of your home as a result. But the appraiser works and works and after a long wait the appraisal comes back. You’re nervous, wondering if you overpaid or secured a fantastic deal. Your contract price on those 100′ is $1,950,000. You open the appraisal and squint, to lesson either the blow to your fragile psyche or to prepare for a most boisterous celebration. The appraised value: $1,950,000.

You’re satisfied, but somewhat disheartened. You thought you had negotiated a better deal than that. You thought the appraisal would come in at $2,000,000, at the very least. But it didn’t and now you’re sad, but you’ll close anyway in spite of your disappointment. Appraisal letdown is real. Appraisal letdown is worse when it kills a deal, but all sorts of appraisal deficiencies are sad.  The problem is they shouldn’t be. And that’s because appraisals are essentially worthless in their ability to predict value. This makes people everywhere rather upset. But I have a $1,500,000 appraisal on my house that you think I should sell for just $1,400,000!!

The American consumer doesn’t understand the appraisal. It doesn’t understand what it really is, how it’s really formulated, and what it really means. The real estate transaction has put so much onus on the appraisal, obviously due to the lender requirements of justifying value for the dollars their about to lend. And in that is the actual truth of the appraisal. It doesn’t come up with a fair market value, it simply seeks to justify the value that it has already been given. An appraisal is about as subjective as a HuffPo editorial. It seeks not to inform, but to use the means as a way to justify the end.  The modern day appraisal is really no different than a rubber stamp of approval, and that’s exactly what it should be.

See, the marketing process of any given property is what actually sets the price. If a home is listed for $2MM and it receives three offers of $2MM within one day of being listed, we are all smart enough to know that the home was worth more than $2MM. If, however, a home is listed for $2.95MM and it doesn’t sell after the first year and then after subsequent price reductions it ultimately sells for $2.25MM, we can assume that the $2.25MM is a fair and accurate, market tested price for that home. When the appraiser comes along, her only job is to coerce that same number out of the comparable properties that have sold in recent months. There’s no fact finding to an appraisal process, no market forecasting. There is only the formulated justification of the price that the market already agreed to. Nothing more, nothing less.

Next time you’re waiting on an appraisal, do me a favor and stay calm. Don’t pin your hopes on it. If it comes in 10% over the price you’re paying, don’t be happy. And assuming your loan isn’t riding on the outcome, if the appraisal comes in at 10% below the price you’re paying, don’t be that upset. The appraisal isn’t there to tell you if you’re paying the right price. It’s there to justify the price you’re paying.

The Rent
David Curry

The Rent

I’m staring out my office window at an automotive repair shop. This shop just opened, even though the sign says Opening Soon. Will that sign be replaced with a Now Open sign? It’s too early to know, but I’m not going to make a wager of any sort. I don’t know these people, I don’t know that shop. I wish them well, I suppose. The rumble of a diesel engine has been bothering me all morning, it’s coming from that shop. The shop shouldn’t be there, after all, but the Village of Williams Bay wanted something there, anything there. So they let someone build an automotive repair shop even when the town doesn’t need one. I told the village that to allow an automotive repair shop would be a bad idea, I said it wasn’t what the town needs, and it isn’t what the town wants. They didn’t listen.  Opening Soon, the sign is still up.

This sort of thing plagues resort towns everywhere. We need business, but where can we find it? There are only so many coffee shops that one town can have, in fact there are usually too many. Boxed and Burlap is a nice coffee shop in Williams Bay and I’d suggest we needn’t any more. We have two auto repair shops, one pushing out the steady rumble of a diesel engine that is now, at this moment, grating on my nerves and ruining my focus. Opening Soon, I’ll bet. But the business of small town business isn’t easy, and that’s why the Lake Geneva market, in spite of its fabulous vacation home market, struggles to attract, and keep, ideal businesses.

Peet’s Coffee arrived in Lake Geneva a couple of years ago. Peet’s Coffee is now closed. In fact, they closed early this year, or was it last year? I’m not sure, but there’s nothing in that corner space now, nothing but a For Rent sign that tells business owners to call the number for details.  Williams Bay has an empty corner where the Keg Room once offered eggs and toast and nighttime beers. The corner is vacant, still vacant, not even Opening Soon. It’s a nice corner, the one that an Illinois developer thought should host a tenement style condo building. But that development didn’t gain approvals because the Village of Williams Bay is smart, smart enough to keep that corner for something else, something better.  The corner opposite is where I ate french fries off of the plates that came from Charley O’s dining room, the plates that stacked up at my dishwasher station.

I did eat the fries, but not the ones smeared with ketchup. I’d like to think I became a connoisseur of almost eaten fries. Shrimp cocktail, those I’d eat as well. If six shrimp were served on that cocktail sauced glass, why would I not eat the fifth and sixth shrimp that weren’t eaten by he who ordered them?  But enough about my work habits, I was young then, barely 14, and I didn’t like seeing things go to waste. After Charley O sold, the restaurant was the Public House, then The Lighthouse. Then, the Shore Club. They’ve all failed, or been otherwise temporary, and now the building is empty. For Rent it says, across from the For Sale.

The problem here is simple. The real estate is desirable, the locations visible.  The businesses who have occupied these locations were okay. Peet’s served coffee in that marbled space. The Shore Club served a taco trio for $17 or so, and it wasn’t the worst thing even if it was too expensive by half. The problem is, to quote someone who said this once, the rent is too damn high.  You can’t sell burgers for $10 and pay massive rents, especially in a resort market where winter traffic is significant, but less than summer traffic. You cannot sell $3 coffees and pay for all that exposure, when all that exposure still doesn’t equal very many patrons on a Tuesday in January. The rents are simply too damn high.

What’s the fix? Where do we go from here? How do we stop this revolving door in some of our most prominent locations? I don’t know. I’m not a commercial guy. I’m just a residential guy who wishes he could count on the corner restaurant to serve a salad for $11 on Wednesdays in February. For now, I’ll go back to listening to the steady droll of this diesel engine. I think the mechanic has the issue almost solved, but I can’t be certain.

 

About Your Agent
David Curry

About Your Agent

The business of listing homes is a curious one. If we were going about this business of finding a broker and an agent, we’d assume we’d look at our options objectively, hoping to secure the best agent to represent our property. But this isn’t what happens, because real estate isn’t really about results, it’s about friendships and loyalties even when those friendships and loyalties hurt the chance of a sale. I can’t list with this guy because he’s the best, I have to list with this guy because he’s also my son’s baseball coach and my cousin.  Objectivity is for more serious matters, not for real estate, or so it seems.

Every homeowner who is considering a sale knows how to go about searching for the agent that will represent the subject property. It’s typically a mix of internet searching, newspaper perusing, and lastly, checking the refrigerator, assuming it’s not stainless, to see who sent the most recent football calendar. Then, once the list is compiled, it’s time to interview these assorted agents. Some are from large offices, some small offices, some work out of Starbucks, mostly. Some are successful some are sweet, some are your son’s baseball coach who is also your cousin but we know he’s a second cousin, so that’s something to take into consideration.

Once the interviews occur, some agents are smug, some smell, others show up too early or too late. But there’s one agent who showed up on time and had a nice little suit on, and he spoke politely and he drove a car that didn’t have his name tattooed on the passenger and driver side doors. His name was Frank, and he seemed to be a good agent. His firm has some signs around the area, so you know he must be competent. Frank has a nice folder and some really cool brochures with incredible pie charts, also graphs. He has a separate folder, bound with rings, titled “HOW TO SELL YOUR HOUSE”. His picture is on the bottom left of the cover. He’s the one.

He hasn’t necessarily sold a lot of homes in your neighborhood, nor has he sold all that many outside of your neighborhood. But he returns your calls very quickly and he says yes ma’am and no ma’am and that’s enough. He’s hired and the sign goes up, Frank is the man. Your man. The best man, because he wasn’t smug and he wasn’t rude and he wasn’t really upset that your price was super high. He’s a good man, Frank. Things are looking up.

As a homeowner, you’ve done your homework. You vetted his company, you met him in person. You asked him questions. You determined he wasn’t a derelict. You’ve read his blog, “101 THINGS TO DO BEFORE YOUR FIRST OPEN HOUSE”. Frank, for all of these clues, seems to be a fine choice. But there’s one thing in choosing a listing agent that you haven’t yet considered. In fact, no one considers it, yet it’s the single most important factor in choosing representation. Do the other agents think your agent is going to sell your house?

Strange that this would be the question that matters most, right? Not really. It’s not something people talk about, and it’s not written on park benches. But the most important thing in choosing an agent is determining if your agent has credibility amongst the other agents in the market. Note I didn’t say that you agent had to be adored by the other agents, because that’s not it at all. Of course your agent shouldn’t be perceived as one who is difficult to work with, even there are plenty of agents like that. But this is about whether or not other agents think your agent is an effective agent.

The reason this matters is in terms of how quickly other agents will motivate their buyers to see your house. How quickly will they write an offer?  When the listing agent tells the buying agent that there are other interested parties, is your agent one who can be trusted? Not by you, remember, but by the other agents. This is the most important aspect of choosing a listing agent.  Hire the agent who the other agents worry about. Hire the one they know to be effective and clean. Does the market perceive your agent as an agent who is supremely capable of selling your home quickly? If so, hire that guy, or gal. If not,  don’t hire the guy you know because he’s your kids soccer coach. He might not even be your real cousin.

 

Regrets
David Curry

Regrets

I like to brag about certain things. For instance, I have a black SuperJet and there’s very little chance that you do as well. I have one, you don’t. It’s not that I’m better than you, but my SuperJet is better than yours, because you don’t even have one, which is embarrassing. For you, not for me, because my SuperJet is black and it’s custom, because it has an Uff Da sticker on it, which is something that only makes sense if your grandmother spoke some gibberish that she insisted was Norwegian. See, I’m bragging now, and there’s very little you can do about it.  Ah, but you say that it’s October and what good does a SuperJet do a Wisconsin boy in October?  Even that statement proves your SuperJet inferiority, because October is to SuperJetting what April is to showers. See? Bragging.

But I don’t intend to brag when I speak of my past personal real estate dealings. I don’t brag about profit or of market beating performance, though it has dawned on me that some of my anecdotal housing stories might be construed as less than humble tales. If you went to a foot doctor because you had something wrong with your foot, would you prefer the doctor tell you about what he learned in books, or would you prefer he tell you that last week he handled this same condition and fixed it? In fact, he saw the same condition three months ago and three years ago and he fixed those, too. Personal experience should lend some credibility to the expected outcome.

Back to those personal dealings of mine, they all have one common theme. No matter the house, no matter the price, no matter my personal confidence of lack thereof in the housing market, I have always left the closing table feeling as though I sold for too little. Buyers regret is a common affliction, in fact I also suffer from that each time I buy something, but that’s not specific to housing- I feel regret when I buy anything, including when I order a chicken wrap and everyone knows I should have ordered the brisket. But seller regret is just as real, and I’ve felt it each and every time I’ve been the one signing the deed. I left money on the table, I sold too cheap, I blew it. That’s how I feel  after every personal sale. Deflated, poor, taken.

The thing is, each personal deal I’ve closed is just a distant memory. They mean nothing to my life today. I look back at the progression of housing, to the first purchase and to the last one, and I think of how I caved in one way or another. I caved on the buy, and then I caved on the sale, I’m a professional caver, the farthest thing from shrewd, a sucker, really. But that’s how people who like to over think real estate might feel, that’s not how I feel. Because today I’m not holding any house that I no longer wish to own. I’m not stuck with a property that doesn’t serve a purpose in my life. I’m not beholden to something that erodes my personal finances just because I was unwilling to give in to a buyer’s last minute demands of a $1000 credit. I’m not stuck at my station because I couldn’t get that last 3% that I desperately wanted out of the buyer. I’m here now because I let the 3% go, because I know that moving forward is far more valuable than getting stuck.

Stop getting stuck. If you’re a seller, and a buyer won’t pay your “bottom” number, don’t be so stubborn. Meet the bid and move on. Often times a seller here is selling because she’s buying more house, or he’s buying less house, but he’s not removing himself from the market entirely. It’s just movement, up or down, but still here. And so owners buyer something new, hanging on to what they already own, because they don’t need to sell it. I can hold this forever, they say.  Never mind the financial bleed of an unnecessary, uninterested carry,  consider instead the emotional drain that accompanies this sort of prolonged ownership. When you wake up, do you think only about your new house and your job and your spouse and your children and that achy left hip, or do you think also of that house that you used to live in that you still own? It’s there, decaying, eating away at your finances and your mental-health. It’s there with you at all times,  serving no purpose, stuck in your thoughts.

This is why there is regret in real estate. Regret on the buy side, regret on the sale side. Did you sell your last home for too little? Did you end up taking the first offer and later beat yourself up for selling too quickly, for too little? Good, because I probably did the same, but here we both are, worrying about today and thinking about tomorrow, forgetting about yesterday and the houses we used to own.

The Business Of This
David Curry

The Business Of This

This is, after all, a business. It’s not hard to think of real estate as a business. The business of the business has an office and a phone and some computers and in this, it’s just like all of the other businesses. We all understand that, the business of real estate. But it’s harder to think of Realtors themselves as businessmen and businesswomen. This is because I’m wearing jeans right now and there are some holes in them, and I’ve only discovered these slight oil spots in my t-shirt now that I’ve left my house and am at my office. These oil spots vex, because I haven’t been spilling oil on myself, nor have I been rubbing shoulders with those who might have done so. Still, jeans with holes and oily t-shirts and yet I’m at an office that appears to be functioning as a proper business. But I’m here, at this office and it’s seven something and the majority of the real estate world is still in their pajamas, sipping their coffee, cracking open their laptops on their breakfast room tables. You could argue that pajamas without oil spots are superior to t-shirts with, but that’s not the point.

In this business there are wins and there are losses. I’ve been fortunate to win a bit this year, quite a bit, really, and in that there is comfort. Not comfort that I’ll always be okay but comfort in knowing I’ve successfully pushed off failure for another year. There’s some struggle now, knowing that I must either keep producing or whither away, but there is mostly gratitude for this incredible base of clients that have chosen to trust me with their Lake Geneva maneuvering. This trust is important, in fact it’s everything, and trust placed in a guy with oil spots on his black t-shirt is a meaningful level of trust. But still, this business and this life and the facts of real estate. I continue to feel that there are misconceptions revolving around Realtors and this life, and while most of the cliches are actually true and damning, there are some things I think you should know. Consider the curtain drawn back:

When I interview with a potential seller for their potential listing, I usually want the business. In the event that I don’t get that business, and instead another agent does, I can admit to you now that I wish bad things to happen to that listing. I actively hope it doesn’t sell. I aggressively root against the success. Now, now, don’t assume that means I won’t bring in a buyer and sell that property, because I will in order to drive home the point that the seller made an egregious mistake in listing with anyone other than me, but I do wish ill for the property in general. Petty? Absolutely.  This is a confession, but it’s not unique to me. Every Realtor everywhere feels the same, and now you know.

When I push a seller to take an offer that might be lower than what the seller wants, I’m not doing that because I want to get paid. I like getting paid, as does everyone who works at any sort of job, but when I urge a seller to accept a price I do so without any particular regard for a future paycheck. I do so because for every seller that refuses an offer and then, soon thereafter, ends up getting his price, I’ve seen 500 sellers who refuse an offer and are later filled with deep regret over their missed opportunity. Do I like making commissions so that my children might be able to eat their dinners of chicken, rice and corn? Of course. But do I tell a seller to take the money and run because I’m thinking about what I’ll get out of it? Absolutely not. The business is structured in such a way that compensation only occurs in conjunction with a closing, which leaves the interests of the agents subjected to conflicted scrutiny, but I assure you that I only push a seller because I know the seller needs that buyer far more than the buyer could ever need that seller. To put it more succinctly: Don’t hate the player, hate the game.

Agents are not always busy. They’re not. No matter what their Facebook or Twitter feeds tell you, they aren’t always on showings when they aren’t at closings. In fact, most of them are at home. That’s why I built this office to feel like a house, so that when the middle of winter comes and with it cold and dark and snowy, I can simply stoke a fire and work without feeling the need to drive home and do the same. Most agents work from home a shocking percentage of the time. So when you call them and they’re busy, they may be napping or sipping tea or they may be binging on House Of Cards because they assume it’s about real estate. I’m hardly ever at home, but that doesn’t mean I’m working 18 hour days, either. In fact, about once every 7-10 days I’ll go fishing and take that day mostly off, even though the cadence of my cast is continually disrupted by cellular notifications. And when I take a Monday or a Tuesday off and that’s the day you call me, don’t be upset, because on Sunday when you were playing I was showing houses to someone from Palatine.

The business is far more stressful than you might imagine. That’s because the agent is the cog that seems unnecessary and overpaid, but if the agent is doing this correctly the agent is also the glue that holds a transaction together. Being the glue is stressful, and it creates significant tension for the agent.  The world loves to view agents as overpaid cheeseballs, because in fact we often are, but successful agents are often so because they feel the burden of knowing the deal rests of their shoulders, and without them, the deal would often fall apart. Bad agents know this but they don’t care, good agents know this and it causes them to wake up at 2 am because they’ve had a nightmare that your deal fell apart and it was their fault, even though it wasn’t actually their fault. Good agents are stressed agents, and I’ve often done my best work when scrambling and stressing, especially when I’ve already forgotten that I have oil spots on this shirt and I’m already late for my first appointment.

Walworth County
David Curry

Walworth County

There’s a problem in Walworth County. It isn’t that our fields are lush and our lakes wet.  It’s not that our towns are busy and our streets are clean and our schools are new. Walworth County, in spite of all the good, has a serious problem.   Walworth County should, at its very heart, know what it is. It should know what it means. It should know why it is successful and why it is desirable. Walworth County should know it is a rural county intermixed with lakes that bring significant resort business to our towns on the weekends. Walworth County should know exactly what it is, but the problem these days is that Walworth County is suffering through a full blown identity crisis.

The South Eastern Wisconsin Regional Planning Commission is an organization that claims to act on the best interests of the seven Wisconsin counties that fall under its jurisdiction. This is the group that put together the 2035 Plan, which reads like a developer handbook. Develop these fields, make small lots so people can pass sugar between their windows without needing to toil through the effort of outstretching their arms fully, but give those suckers (residents) the ability to walk to a community park.  Put that park near a high speed transit line, and you’ll have completed the liberal dream for these United States. Cram residents into tight corridors, reducing theoretical congestion on roadways, make it easy for the government to shuttle them to and from work, and then let them all mingle together after work at a community provided playground. This is what SEWRPC wants, and this is what it wants for Walworth County.

The problem with SEWRPC is that it applies agendas for Kenosha County and Waukesha County with the same heavy hand that it applies those concepts in Walworth County. There’s a significant difference between these counties, as one is an affluent collar county to Milwaukee (Waukesha) and one is an industrialized county (Kenosha) with immediate and easy interstate access to Milwaukee and Chicago.  Walworth County, on the other hand, doesn’t have a primary interstate bisecting it, nor does it have a high full-time population of affluent professionals. Walworth County, much to the chagrin of SEWRPC, is an affluent county due mostly to its high influx of vacation home owners and vacationing tourists, which is something that the other counties under their domain can not claim. Walworth County isn’t at all like these other counties, and yet we align with SEWRPC and we ask them to give us our development and land use goals, and then we let developers run rampant over our farm fields based on some blessing from an organization that has such amazing land-planning skills that they consider Kenosha and Walworth counties to be the same.

As I’ve written about before, SEWRPC dictates growth to our rural county, and they do so largely on population projections. The theory states that if a county is growing, it needs new, cheap housing so that the people who wish to move to the county can afford to live there. Nice concept, even if it’s ridiculous because it assumes people only move to a county if they can find a $219k vinyl ranch on a quarter-acre lot near the highway (plus playground!). Because of these population projections, SEWRPC tells Walworth County which fields are primed for development, because develop we must if we wish to thrive. How on earth will we get a multi-billion dollar high-speed rail subsidized by the Federal Government if not for mass development?  And so SEWRPC tells us of their growth plans and Walworth County, desperately wishing to please their multi-county overlords, obliges.

Earlier this week there was an article in a local paper written by Walworth County Administrator David Bretl. The article discussed population growth in Walworth County, and much to the dismay of Bretl he delivered the “bad” news. Walworth County has only grown by 365 new residents since the year 2010. Worse yet, 305 of those residents were added to Whitewater, which is about as non-Walworth County as a municipality can get. So excepting Whitewater, the entirety of Walworth County has added 60 new residents in six years.  This summer the suits at SEWRPC held open meetings wherein they pushed their newest agenda for Walworth County- the 2050 Plan. I argued against their agenda based on market factors, population growth, and demographics, but I was quickly rebuffed. Now the Administrator of our county has told us that our population growth is anemic, which might be giving it too much credit. Meanwhile, SEWPRC swung and missed wildly on their projected growth estimates for Walworth County, and yet we continue to be led by them like so many sheep.

Here’s an idea. Walworth County, remove yourself from the SEWRPC fold. Why would we agree to be under the authority of an organization that doesn’t understand us, particularly one who has proven, heretofore, to be completely and amazingly inaccurate in their predictions?  Why would we let some outside organization tell us that our county, with its mix of agriculture and tourism, isn’t up to their standard? Why on earth do we listen to these suits from Milwaukee who push their agendas for high-speed transit, when Walworth County doesn’t even have regular old fashioned transit? Why are we letting SEWRPC give us a crisis of identity? We are acting like we don’t know who we are, but we know full well who we are. We’re a rural county with recreational lakes, and that mix is what makes our county so much more attractive than the neighboring counties. Let’s remind ourselves of that, and let’s stop having SEWRPC tell us what they’d like us to be and start embracing what we already are.

Last night, another development denial  in Walworth County. The Town of Walworth board yet again told a Kane County developer that he’s not going to build a couple hundred homes on the farm fields of North Walworth Road. Another win for the people, another win for the corn and the beans, and another defeat for a Kane County developer. Why does this development keep coming back? In large part because SEWRPC shaded an area of this land in yellow ink and said it might be a good spot for future development. Who will the homes be occupied by? SEWRPC isn’t exactly sure, but growth!

 

Home Improvement
David Curry

Home Improvement

The seller had a tree in her yard that had died many years ago. The tree first lost its leaves. Then it lost some branches, and then, some bark. The leaves were cleaned and hauled away and the branches, too. The bark was mowed over and made into mulch, and no one much cared. But the tree was there in the yard near the lake and it was dead. When I came along, the tree had been dead for some time. The owner was going to have that tree removed. And so after several months of discussion the tree was removed. The owner was pleased with her new view, and touted the tree removal as a feat of great success, one that would surely lead to a most immediate sale, now that the tree was gone and the view improved.

Another owner replaced his formica countertops with ones of granite. The granite was $3100, and what a lofty sum that was. The crew arrived on time and with little effort had removed the offending, 28 year old countertops. Soon after, the new tops were carried in and glued into place. They shone with the light of a thousand candles, the proud owner’s face reflecting the glow. The house had lagged on the market for some time, but now, with these countertops, who could resist the over-market price tag? That night, the counters were wiped clean with the wipes the granite company left. The owner turned off the kitchen lights and felt the deep satisfaction of a home improvement well done.

The problem with these scenarios is that neither represent an actual improvement to a house. This is going to come as a shock to some, but cutting down a dead tree does not enhance the value of ones home. The tree, you see, should have been cut down as a matter of course, not as a special capital improvement project. In the same way, a new furnace and hot water heater don’t matter when pricing a home for sale.  Will a new hot water heater and furnace help a buyer out and perhaps encourage them to make an offer if they are considering a similar home that doesn’t have these new mechanicals? Of course, but improvements they are not. This revelation runs contrary to everything every home seller has ever thought, or will ever think.

The tree example is a true story. The countertop story, true also. The hot water heater and furnace, I hear that all the time.  The roof was old and so it needed replacing, improving. The bill was $8500. That’s a lot of money, after all.  A new roof is nice, but it’s not an improvement. Neither is the furnace. Neither are the countertops. Neither is the dead tree that you removed. That’s all maintenance. Maintenance is not capital improvement, it’s just something that everyone who owns a home has to do. The tricky part is what exactly constitutes regular maintenance and what might veer off into the actual improvement category. But I joke, because that’s not tricky either.

New countertops on top of your existing cabinets, maintenance. New countertops, cabinets, appliances? Improvement.  New appliances? Maintenance. A new hot water heater? Maintenance.  Replacing an asphalt composition roof with an asphalt composition roof? Maintenance. Replacing a three tab composition roof with an architectural shingle, still maintenance.  Replacing that roof with a cedar shingle or slate? Improvement. Fixing your deck posts because they were rotted? Maintenance. Replacing your entire deck with Ipe, improvement.  You can see how this isn’t all that difficult, but it’s a concept completely lost on the modern day seller.

So when you tell me that you’ve painted your windows and fixed your leaky roof, please don’t expect me to be thrilled. It’s just maintenance. It’s no different than if you go to trade your car in. What a beautiful shiny car it is! But it’s old and it has 180,000 miles on it, and there’s a tear in the driver’s seat. When you bring it to the dealer and he offers you $3500 on trade, you should then interject that you recently had the oil changed and you ran it through the car wash. He’ll be thrilled and then he’ll give you $4000. Just kidding, he’ll give you $3500, because oil changes, like new roofs, are just part of life.

 

(Above, the front door on my house after I put a fresh coat of varnish on it. The process made the door look better, but it wasn’t an improvement. It was just maintenance.)
Trust Fall
David Curry

Trust Fall

A sudden twinge of pain. A shallow breath. A pain here, another there. The symptoms of something, but of what? A quick google search reveals what you already suspected. You’re dying. Classical symptoms, classical profile, soon it’ll all be over but the weeping, and there’s a very significant doubt that more than a few will weep. Maybe your mother, but that’s about it. Your kids, sure. They’ll be sad for a while, at least one could hope. The funk sets in, the languid life lived as one who will soon depart from it. The world will go on, and you don’t find encouragement in that fact. It’ll go on, all right, the same as it did today the same as it did the day before, but you won’t be there. The absence won’t be noticed, no one will care. The car passing outside your window right now won’t know if you’re in that office or not. Soon, no one will remember you, unless your friends hold a golf outing in your memory. But that, like all things, will slowly fade and everyone will move on and they’ll be happy that your wife found a new husband, and so quickly and she’s so happy! It’ll be just fine, and the pain comes again and the breath feels shallow and so you nap a tortured nap. Death, soon.

But you don’t do this for long, because you go to the doctor who studied about your pain and your breath and he says you’ll be fine. He says you have anxiety and you’re not really dying at all. For the advice, you’ll owe him money. If you have Humana, you’ll think your insurance will pay for the visit, but they won’t. You take your family to Chili’s. Another year, another near miss. And when your car sputters and the light comes on, you google and find yourself on a message board. The members use words you don’t really know, but you’re smart and you can figure things out. The member forum contributors have names like TieRod (everyone assumes his name is Rod). Others are Sparky (and they assume his nickname is Sparky, but it might only be for this forum, no one knows for sure). The moderator doesn’t even use a name, just V-10. We assume he has one of those BMWs with that size engine. You search for others that have discussed what it is that your car has. You search for the positive, something like, yeah, my car did this and then I did that and now it’s fine.

But after some time you don’t find anything and that sputter persists and the black tape you stuck to the dash glass over the shining cartoon image of the engine has begun to peel and sag. You take the car in to a mechanic named JEFF, the cursive signature stitched into his shirt a reassuring endorsement. He’s been there long enough to have the personalized shirt. The mechanic says your car has a this and a that, something serious, but not fatal. You agree to have him fix it, for a price. When you return to the dealer two days later your car is ready, it’s been washed, the invoice is $870.54. Good, you think, because you had feared it might be over a thousand but it wasn’t. You take your family to Chili’s in your car, the one newly fixed.

You’ll need to sell your house soon. You’re looking to upgrade, to improve, because your health is okay and your car is fixed and it seems like the time is right. You’ll need to sell the house. A Realtor is summoned, the one with her name on the city bus bench. She arrives, a yellow Hummer with her name emblazoned on the side and her face, too. She looks nothing like the photos, but that’s okay because you don’t look like you did 20 years ago, either. You ask for her advice, what’s the house worth? She tells you $375k. Maybe $385k, but certainly not $395k. Your list should be $389k. Start soon, clean the clutter, fix those holes in the drywall, clean up the oil stains in your garage, the drips that dropped from your car before you had it fixed by Jeff. You thank her for her time, for the sweet brochures, and you tell her you’ll let her know.

You toss and turn that night, not because of the shortness of breath and the slight wheeze that the doctor said was nothing, but because you question the advice. Why would this agent tell you $389k? The neighbor once asked $429k for his house. He’s not better than you. The agent must have just wanted to get your house sold immediately, so she under priced it. She wants her commission, that’s really all she wants. Yeah, that’s what’s going on here. You get it. You’re not dumb. You weren’t born yesterday. In fact, when you fill out online things where your birthdate is required you have to scroll way, way down the list. This isn’t your first time. You’re not to be trifled with. Nice try, Realtor lady, but that’s not going to work with you. Those four comps she showed you on your street, and her lifetime of sales and experience, those aren’t going to just steal money from you. When you wake up tomorrow you’re going to find a Realtor with the right number, because that Realtor knows you, and your house, and they know that you once replaced the water heater just because. It wasn’t even leaking!

I get it. Realtors aren’t doctors. We aren’t even mechanics, though shamefully, some Realtors do wear name tags. Realtors aren’t really motivated by a desire to help you with your housing goals, just as a mechanic isn’t motivated to help you with your tie-rod assembly. The mechanic fixes your tie-rod because he wants to make a living. A Realtor works on Sunday mornings and Wednesday nights because she wants to make money. She puts pictures on Facebook of a kid running through some lakeside lawn with the title “WELCOME HOME”, because she wants to make money off the emotion. You’re working at your desk today and not laying in bed because today you want to make money. You didn’t buy that stock because you want the company to usher in world peace, you just bought the stock because you liked the dividend and think the stock will appreciate- because you want to make money. Realtors are greedy, you say, they just want to sell your house or sell you that house to make money, you say. Guess what? You’re right. There’s never been a successful Realtor who wasn’t motivated to make the wage that can accompany success in this business. Is that an indictment on the real estate business? That depends, does a printing press operate because they love the thought of people reading the instruction manual that comes tucked into a package of a a wireless router, or does the printing press print those manuals because they are trying to make money?

The real estate business is clouded by the thought that Realtors are representing their financial interests, rather than those interests of their clients. This, in the presence of agents who have not proven themselves honest and effective, can be the case. But this can be the case with the printer, and with Jeff, and with your doctor who prescribed you some medicine that you might not have needed, even though it might help if you actually have that thing you think you have, the thing that makes your breath shallow when you’re nervous. Want to find a Realtor who isn’t very good at their job? Find one that doesn’t find motivation in the promise of wages for success. All this is to say you can’t discount a broker’s advice just because you’re afraid he’s going to make money if you listen to him. That’s the way the business has been structured. If you’d rather pay me hourly for my time, I’m happy to discuss a fee-based arrangement. But you know what would happen then? You’d assume that open house I’m doing is just a ploy to bill you for my time.

Summer Homes For City People
David Curry

Summer Homes For City People

When I first hatched this idea to write and print a self aggrandizing magazine, I ran the concept past my father. I told him what I’d do, and as he sat in his chair watching the news in the distance, I could tell that he didn’t get it. When he said, I don’t get it, I was certain it was a good idea. Later, I told a friend of the idea. This wasn’t an old friend, but a new friend, which was good, because an old friend might find cause to support a new idea purely out of kindness. The new friend asked what would be in the magazine. Stories that I’ve written, I replied. He laughed and mocked, which is likely what I would have done if someone told me the same. Still, I printed that first magazine that was more like a pamphlet, and seven years later, I’m about to print that magazine again.

Much like this blog, the magazine has become a blessing and a burden. The magazine helps me, it helps the properties I represent, and it helps the area. It showcases the best of what we have to offer, and without any other market allegiances vying for attention, I’m able to produce a Lake Geneva magazine focused solely on Lake Geneva. There is no other magazine in the market that does what my magazine does. Yes, that’s congratulatory, but when you work in an office by yourself, self congratulation is a necessary action.  The magazine is also a burden, because when you have 84 pages to fill and no one to help fill them, it becomes a task of herculean proportions. Soon, though, the magazine will be complete and then it will print and then I’ll hand it out and only then will I find out just how many accidental grammatical and spelling errors fill the pages. Somewhere, just somewhere, like finding Waldo in a clouded picture, you’ll find where I’ve written THE when I had intended to write THIS. Proof reading only works when your brain doesn’t automatically fix read mistakes.

The magazine, as of this morning, is nearly complete. Bruce Thompson has elevated the photo game, an example of his fine work is below. There are last minute photos to add, on account of too many winter listings and an intense desire to leave wintery things out of a summer magazine. There are still ads to finish and at least one ad to sell. By the way, do you know anyone that might want to buy an ad from me? @Properties and Keefe aren’t allowed and neither are bowling alleys in Burlington, or theaters in Whitewater. Speaking of other magazines and promotional bits, stock photography of Maine and of sandy Lake Superior beaches have no place in my glossy. But everything else might be fair game at this point. The cover of the new issue is above, and yes, it looks like the other covers. That’s sort of the point. No one has ever picked up a copy of Gray’s Sporting Journal and bemoaned the cover looking similar to the last.  For sellers, there might be one spot open to have your home featured in this new issue, alongside some of the most beautiful and impressive properties to ever hit the market here. If you want to have your Lake Geneva home positioned near other Lake Geneva homes, my magazine is your only option. Other magazines feature Lake Geneva next to Lauderdale, which leads me to ask the next obvious question. Lauderdale who?

But the magazine hasn’t just been important for me and for the market, it’s been important for other magazines, too. For instance, did you catch my story in last year’s issue about  Morel hunting? If you missed it, no matter, because another Lake Geneva real estate magazine just ran a similar story.  If you miss something in my 2016 magazine, don’t worry, because if you wait long enough you just might find the same article, minus the good parts, in another local glossy. For now, a sample of the new issue, and a promise that I’ll do my best to make it a terrific issue.  Look for it by Memorial Day Weekend on newsstands around Lake Geneva or wherever cool things are found.

2016 SHFCP sample

 

Sellers, Wake Up
David Curry

Sellers, Wake Up

I suppose we all pick and choose. We pick the data that supports our positions, whether the decisions involve personal choices or business decisions. We pick the favorable bits, discard the rest, and apply what we like to our situation.  Religion follows this path as well, and many pick and choose the parts of a doctrine that fit their particular version of a particular belief system.  In real estate, buyers pick the data they like, and sellers pick from another pile. In the middle of these two positions lies the truth, but many times a side subscribes to a belief, whether it’s backed by data or not, and they hold solid.

Sellers in this market are making mistakes. They are missing opportunities. They have been fed the words of an increasing market, and they have latched on to a promise. The promise is that the days are now good, but better days are sure to follow. They are walking from deals they should be taking now, because of something that might be waiting for them in the future.  Their behavior is foolish.

If someone walked into your office this morning and offered you a $20 bill, this would be nice of them. If, perhaps 8 years ago, another person had walked into your office and offered you $22 dollars, that was nice of them to do so at that time. You spent all of the years in between looking for that person to come back to bring you $22. The day they brought you those dollars, you feasted like a king at lunch. You ordered the soup AND the salad, and you ordered a lemonade because it was summer and you were thirsty, but also because you had those $22. You were pleased with your $22, but no one had walked up to you with a handful of dollars since.

But this day, you have a new benevolent visitor in front of you, and they have a $20 bill. They are offering it to you.  Their hand holds the crisp bill, their arm outstretched to you. But you waive it off. You say that once someone offered you $22, and if they don’t offer you $22, or perhaps $23 because of inflation being what it is, then you have no interest in their offering. The visitor is confused, and insists, but you are staunch and principled and you decline. The visitor leaves, with their $20. You sit back, content to wait for the next $22 offering.

This is an absurd example, but this is how absurd sellers are behaving in this market. They are making market mistakes. They are missing opportunities. They are taking solid, market rates and turning them away because they believe, based on some news story they read in some newspaper once, the markets are better. In fact, they might even get better next month, too. The demographics, they say. The stock market, they insist. The rising tide is at work lifting all ships, they remind. But they’re wrong. And they’re losing deals left and right because of a stubbornness that will prove to be their undoing.  Certain properties are hot, and they will sell because the market supports their sale but aged inventory is no longer in a position to refuse offers because of a few percentage points worth of argument.

Some would suggest that a bird in the hand is worth two in the bush. I’m not sure I agree. I’d so much rather have two birds, because if I’m super hungry and all I have is one bird, and I have guests coming over for dinner and I know that there is a certain time of the afternoon when I’ll see two birds in that bush, then I’d wait until that time. But a bird in the hand is always worth 1.05 birds in the bush. Sellers have lost their perspective, and as a result, there’s a good chance they’re going to spend much of this year regretting the decisions they made when the year was still young.

Ban Words
David Curry

Ban Words

Apparently, BAE means “Before Anyone Else”. All this time I just thought it meant Babe, but without the B. I thought it was just a time saver that gained popularity with the younger crowd.  Whatever it means, it was recently put on a list of words that we shouldn’t use anymore.  As someone who is nearly always ahead of the curve, I never started using BAE,  so to stop should be rather easy.   Another word we’re no longer supposed to use, according to the anonymous group of pizza eaters who came up with this list, is Nation. It’s not really the word we’re not supposed to use, it’s a particular context.  Cubby Nation, for example, should never be written or spoken, ever again. Badger Nation, Irish Nation, etc. Never again.

It’s nice of people to put these lists together for us. Some people use the lists annually to scrub their resumes, or their LinkedIn page. Others ignore the list and are Tweeting, right now.

Picking up BAE heading to opening day! #RedSoxNation

But we’re not these people, and so we learn and we adjust and we stop using stupid words that should have never been used in the first place. But one group loves using words in strange ways, and that group will never, ever, stop using them. Realtors love words. We love them.  But we only really love the same words, a handful of them, and we’ll use them until the day we die or someone takes our gold blazer from us, whichever comes first.

I have several sellers who hire me because they like the way I write real estate descriptions. They hire me to write something, then I write it, and then they correct it as if it were an 11th grade English assignment.  I had one seller tell me to remove the word “charming” from any description of their home. The home was boring, basic, not old and not new, it was just a house that I thought might do well to aspire to be charming. The seller said that charming was a word used to describe old cottages, and of course we know cottages are always, always, old and rickety, without plumbing, heat, and with the Daily News from 1922 serving as the only insulation. Charming was scrubbed. The home never sold.

And so with that, this: The short list of words we either have to straight away ban, or limit their use to the appropriate context. Bad real estate descriptions must be disallowed.  First up, BREATHTAKING.

Breathtaking Instagram

 

We can’t be doing this anymore. There was no further explanation of how this taking of the breath worked. Did the Colonial seize your breath and then give it back before taking it away again? It wasn’t clear. What was clear was that the property was a $200k type old house without any character or appeal on a lot that you’d never be able to remember if you actually did go see it. I have never had my breath taken away, never. I see kids on TV fall off skateboard ramps and they appear to have had their breath taken away, but none of them would feel the same upon seeing real estate, no matter the estate. So let’s stop using that word, forever.

HISTORICAL. What does this even mean? Is something historical just because it’s old? Is Black Point historical because it’s a point, and we named it black? What does historical mean?  It means, “of, or concerning history”, or “belonging to the past”. Does Black Point belong to the past? In this context, I suppose a super old, super vintage home could be considered historical. But can’t we just call it charming? If General Patton camped in a house before taking the adjacent city, I’ll allow historical to be used. Similarly, if a home was build in the mid 1800s or earlier, I’ll allow it. But a 1984 raised ranch? It can’t be breathtaking or historical, no matter what.

 

Above, a beautiful Lake Geneva sunset. Really nice? Yes. But if it took your breath away please consult your physician, immediately. 

 

For Sale Lake Geneva
David Curry

For Sale Lake Geneva

When you sell a car, you can sell it one of two ways. You can either sell it because you’ve already bought another car, one that you now love very much. When you have a new car, the old car is no longer important. Who could want two cars unless one is a truck and another is a go-fast sports car? Or perhaps if one is a bumbling SUV and the other a sedan, that might be okay. But for this purpose we have one car that’s older and another one that’s newer, and they’re the same sort of car. No one needs two Dodge Intrepids. No one.

And so one is sold. It’s put out at the road with a sign in the window, or it’s put online, with some pictures and a short description:  I bought a new Intrepid. This is the old Intrepid. No further explanation would be needed. Everyone would understand. And so, because you have tow Intrepids and one is new, you sell the old one. $4200. You let it sit at the road or online for a few weeks. Someone who doesn’t even own one Intrepid offers you $3500. It’s less than you want, but you sell it because you have two and one is old.  This is one of the ways to sell a car.

The other way is to sell a car that you don’t really want to sell. It seems odd, but this sort of sale happens all the time. The car is worth $4500, but you list it for $5900 thinking that if someone is silly enough to buy it, you’ll sell it. And so that car sits and sits but your price stays firm. $5900 OBO. The OBO is only out of habit, because only serial killers write FIRM next on a car window sign. No one bites. No one looks. Your car sits at the road and it rots online, but it doesn’t matter anyway, because you like that car and you’ve decided that it might be nice to have two Intrepids, in case one is in the shop and you have to go out to dinner.

People sell houses in the same manner. They set imagined targets based on once believed values, or based on nothing at all. They wait for someone to call, to drive by, to look in the windows and like what they see.  These are the sellers that we’ve become accustomed to, but these are not the sellers that we wish to find. We want to find the seller who has two of the same thing, the seller who genuinely wishes to no longer own one of them. As the market improves and inventory dwindles, this is our charge. We must find the seller who has what we want, yes, but we must find the seller who has decided to sell because she has to, not just because she sort of wants to.

 

Have a wonderful Easter Weekend.

Lake Geneva Negotiations
David Curry

Lake Geneva Negotiations

I could have negotiated this deal in 10 minutes if you had put me in a room with him. This is what I hear. I hear it often. This is the refrain of those negotiating pros who buy and sell real estate through a broker. When a deal comes together, I hear this. When a deal falls apart, I hear it then, too. I hear it so much I hear it when I close my eyes and I hear it again when I open them.  That one kid heard dead people, I hear this.

Many buyers and sellers feel that the deals could come together if only they had a chance to handle the deal directly. This might often be the case- that the deal would come together in spite of a broker, not because of one. But this assumes that the deal was an easy one to put together, that neither side needing the convincing that can only come from a market backed perspective. This also assumes that both sides are in a hurry to make a deal, which is generally far from the case.  Consider, some of the best deals I’ve put together have come together only as a result of long enduring negotiations. Time might heal most wounds, but it also bridges many negotiations that might have failed if they were on the clock.

In 2010, I negotiated the purchase side of 1014 South Lakeshore Drive, Fontana. That deal started slowly, as many do, and after a few months of negotiations, we had an accepted contract. Then we negotiated throughout the deal, over another three months, and finally closed on the transaction. What a fantastic deal that was. And many more like it have come about the same way- only through buy side patience, as a seller is worn down through a recognition that his or her property is just not quite as desirable as originally thought.

The problem with this, of course, is that 2010 was a year void of an abundance of buyers and 2016, though the year has started ominously with indices in an funk, has an abundance of such vacation home buyers. Long enduring negotiations only work in the absence of a competing bid. Lately, there have been competing bids.

Two weeks ago I was going to show a listing on Bonnie Brae to a buyer of mine. We set up the showing, we were ready to pounce on a property that was purported to be able to be bought right. We ended up canceling our showing, because the property sold earlier that week to a buyer that had just a bit more motivation, or schedule flexibility, than we did.  A year ago this month I negotiated an offer on a lakefront listing I had on Oriole Lane. That humble, odd home, didn’t sell in 2015, but throughout the year my buyer reaffirmed their earlier offer. The sellers didn’t bite.

Then, a couple of weeks ago, a change in seller sentiment, and our deal was ready to be locked. On Friday, we had a deal in principle, on Saturday, the seller took a bid from another buyer.  I had negotiated patiently with a lakefront buyer for exactly 12 months, and when victory was nearly ours, the property sold to another buyer. Sniped, again.

This week, a deal on an off-water home in Glenwood Springs was apparently nearly complete. A buyer of mine who had seen that home in the summer of 2015, inquired of the property. It was available, I told him, but nearly under contract. He jumped, we offered, we have the property under contract and the other buyer, the one who was patiently working the seller to his favor, is on the outside looking in. This is the trouble with negotiating slowly. It leaves open too many variables beyond the negotiator’s control.

Of course, the most important aspect of any negotiation is in sensing the direction of the market and its response to that particular property. That’s not quite as easy as it might sound. In the case of the Oriole Lane property, I wrongly assumed that time was on my side. I assumed that a property that had languished on the open market for years would not sell in the dead of a Wisconsin winter, on the heels of a volatile week in the markets. I was wrong. So today,  a quick admonition. If you like a property, watch it with me, and we’ll work to strangle the seller together (figuratively, of course). If you love a property, buy it, before someone else does.

The Hunt
David Curry

The Hunt

How I wish I were a doctor. When you’re a doctor and you travel, you get to tell people what you do. You’re a doctor. That’s what you do. It doesn’t matter what sort of doctor, because if you’re a doctor that’s really all that matters. In the same way that if you’re a mechanic and you work on cars, no one cars that you’re a BMW mechanic, with some credintials abbreviated below where your stitched name adorns your company provided shirt. You might as well be a small town garage mechanic where you specialize in tire changing because you’re not any good at anything else, and you don’t own one of those plug in car doctors that they advertise on television and in trade magazines. Doctors are doctors and mechanics are mechanics and Realtors, well, we’re Realtors.

That’s why when I visit an open house in a far away land, I feel obligated to tell the Realtor that I, too, am a Realtor. I don’t want them thinking I’m a doctor, or something otherwise noble, so I tell them early enough and I remind them often. I’m just a Realtor. But I listen when these other Realtors talk, and I try to learn what it’s like to be a consumer, which is why I only tell the host Realtor that I’m also a Realtor after they’ve given me some information. How else can I learn if I don’t subject myself to the Realtor schtick?

And learn I do. I learned on Sunday that there are three distinct markets on this island, three different places where everyone wants to be. I found that I’m skeptical of this direction. I’m skeptical because I don’t know if this Realtor who just so happened to be holding open this house is any good. How could I know? I see their car, I see their sign, I see their face. I see these things but I have no idea if they’re good or not, and so I ask questions and look for clues. One guy I met on Sunday seemed nice, but I wouldn’t ever work with him. One lady seemed nice, but I wouldn’t work with her either. How could I work with someone whom I had just met on a lark because the day was too cold to do anything else but explore houses I have no intention of buying?

It dawned on me today that what a Realtor needs to do is be present. They just, really, have to be there. This is generally enough. But there should be more to this game, more than just showing up and hoping. The more should be the aptitude that only comes with experience. The knowledge that can only be gleaned from the day to day, from the work that must be done. I traveled an island full of open houses, full of Realtors, full of expectations and hopes and whims and I wonder what it’s all about. Is real estate really this unsophisticated? Is this business really still just this?

At the end of day I decided that, yes, that’s exactly what this business is. That’s why success is fleeting, and that’s why someone else who desires to be present longer can, and will, be as successful as someone who knows why they’re present. Skill in real estate is measured by the ability to be present, to be there when the phone rings on floor and to be there when a buyer in a sports car pulls up to tour houses that he only thought about on the drive up.  From my perspective as a veteran of this game, how can I best express to you, to the buyer that I haven’t yet met, that I am in your best interests?

That’s the question of real estate. Some choose to ask and answer the question in full page newspaper ads, with a smiling or pouty face and a promise of glittery success. Some answer it by simply being, by hoping that if they  exist long enough, they’ll find success. Some, like me, hope to prove worth over time, by being discerning in all things, by pointing out the positive and the negative, the good and the bad, no matter who it might offend. By doing that and mixing it with a track record of unrivaled success.  At the end of this and every day, each approach is the right one. Each approach will have some success. Just like the guy at the open house today who will, after some number of more Sunday’s, sell that house to someone who drove onto the island on a whim. This is real estate, and I don’t have to like it.

These Things I’ve Learned: SEWRPC
David Curry

These Things I’ve Learned: SEWRPC

There are things in life that you must learn. Most of these must learn items are things you must indeed learn to survive, or at least to thrive. You learn at a young age that water can drown you. You learn that stoves are hot, though mostly that’s for a prior generation to have learned and taught us. Our stoves were already insulated by the time we were old enough to wobble over to them. You learn that girls are sweet but that girls are mean, and that if Becky really, truly, loved you she wouldn’t have gone out for pizza with Billy. You learn, later, that reply all is a function best left unused, though Jim in accounting learned that lesson later than most.

I have, at this ripe age, learned most of the things I needed to learn. But I’m not yet done learning, of course. Now the things I learn are things that I must learn to further success, or to further knowledge. Some things must be learned simply for the sake of learning them.  Ever since I was poked in the eye by the blight of development that threatens to invade my rural back yard I have been learning. I’ve been learning about subdivisions and approvals and the process through which town board members are elected, indeed the process through which they will soon be recalled. I’ve learned more than I thought I would, and in this process I have stumbled into a subject that I never desired to know about before: Regional Planning Commissions.

I am still a novice on this subject, but I am now educated enough to be dangerous, to take this figurative pen and paper and relay my knowledge to those who have yet reason to learn about this topic. Regional Planning Commissions exist all over this great country of ours, or at least in the urbanized regions. I’m not sure if north central Montana boasts an oddly powerful board of this variety, but they might. I assume out there the commission is tasked with preserving beauty and nature, whereas planning commissions in urbanized areas are tasked with the opposite. Their goal is to develop counties.

In this they are both the judge and jury, both the plaintiff and the defendant. Walworth County is “governed” by an organization called the Southeastern Wisconsin Regional Planning Commission, or SEWRPC (pronounced SewerPack). Here’s the way this works. The commission was founded in 1960. It is comprised of an appointed board, with “representatives” from each county in its district.  SEWRPC will be quick to point out that the appointed committee members are generally elected officials from their county, but this is a generality intended to make it appear as though SEWRPC is somehow representative of a county’s best interests.

But about being both judge and jury, both parties to a suit, everything to everyone. SEWRPC funds its $7.5MM annual budget through Federal Grants and Regional Tax Levies, which means it’s your tax dollars funding this organization. SEWRPC formulates growth and transportation plans for districts, and in this case, they are the group behind the Walworth County 2035 Master Plan.  This is the plan that arbitrarily assigns growth corridors. The plan is meant to be a guideline for growth, based on suppositions and estimates and assumptions, but in the county and township hands this arbitrary document becomes the Gospel.  If a particular farm field was designated by SEWRPC through the 2035 Plan as being fit for future development, a developer proposes a development and the county, reflecting on the Holy 2035 Plan, approves it. The issue here is that the subjective plan was put into place by an organization who has no elected authority over the township, the county, and the citizens.

The process in rife with contradiction, but one constant remains: SEWRPC is in charge. They are a government body, not directly elected but somehow still in charge. They are granted tax dollars and then they maintain the growth plans for the county that falls under their oversight. The county feels obligated to SEWRPC and generally votes to approve anything suggested by SEWRPC even though the officials at the county level are elected democratically to serve their constituents and not simply bend to the whims of their SEWRPC overlords. This is the conflict.

Do you suppose a professional developer who owns large parcels of land that he wishes to someday develop is aware of this? Do you suppose a developer is keen enough to quietly lobby SEWRPC in hopes that they’ll see his development vision and allow for it in their master plan?  If we were naive, we might think this not to be a possibility. But we’re smart, because we’re learning, and we know better. The county is run by SEWRPC, by officials who were not democratically elected yet still, somehow, dictate to us what our county should and will look like in the coming years.

SEWRPC recommends certain development in certain areas based largely on their population and demographic projections (FYI- I’m discussing primary neighborhoods here and rarely, if ever, lake access type properties in the Lake Geneva vacation home segment). These are just that- projections-  guesses made based on seemingly good faith that are viewed as infallible truths by the counties that bend and sway to SEWRPC and their holy whims. Most of the development goals for Walworth County were set based on estimates of population growth. Let’s look back and fact check SEWRPC to see just how accurate they have been.

In 2010  the population of Walworth County was 102,228.  SEWPRC, in 2010 produced the arbitrary 2035 Walworth County Master Plan. No word if it was printed at a press or handed down directly at Mount Sinai. That plan made growth predictions for Walworth County, with three different projections for High Growth, Medium Growth, and Low Growth. Most of the development guidelines in the cumbersome, holy document were based off of the Medium Growth predictions.  SEWPRC projected that the 2015 population of Walworth County would be 109,800 (High), 106,800 (Medium), or 104,800 (low). This was the growth map that the county adopted in 2010, and it is because of  this assumed growth that the county has been approving subdivisions.

So how did our dictates at SEWRPC do in their estimates? How accurately did they forecast Walworth County growth?   Walworth County population is currently estimated to be 103,527.  Those at SEWRPC overshot all of their estimates, even their low estimate.   How did they miss the mark so badly? Well, in part, because they failed to read their own report. Walworth County’s population is aging more rapidly than the surrounding counties. They reported this but they cannot fathom the reason. Walworth County chimes in and suggests that the reason we haven’t grown is because we don’t have enough vinyl ranch homes on the market.

The reason Walworth County isn’t growing in full time population has everything to do with demographic trends. Millenniums are moving to cities and staying put. Gen Xer’s did the same thing. The jobs available to full time residents here are dominated by those in the hospitality and tourism industries, because that’s where this county’s bread is buttered. How would I know this? How would I claim to understand Walworth County’s demographic trends? Because I’m a 37 year old kid who grew up here and watched his friends move away to big cities where corner coffee shops and jobs awaited them.  But this isn’t about me or my friends, this is about my county and the problem with following the guidelines of an organization that has demonstrably missed the mark.  Why then, if we already know the 2035 plan is falling short of the initial population projections, should we continue to adhere to it without a thorough revision?

We shouldn’t, of course. SEWRPC should have no control over us. Why would we allow un-elected officials to create and impose growth plans for our towns and villages? Why should we sit here and quietly absorb blow after blow to our county’s legacy by a group who cannot even predict growth over five years, let alone 20?  Shouldn’t we question a group that presented “VISION 2050”  when they’ve already been proven discredited after failing to correctly see VISION 2015? If you share my concern, email the following and tell them Walworth County shouldn’t be beholden to an organization that has failed to accurately predict growth and should, as a result, no longer dictate which farm fields get turned into empty subdivisions.

 

mcotter@co.walworth.wi.us

soldenburg@co.walworth.wi.us

lurm@co.walworth.wi.us

shaydin@co.walworth.wi.us

Information deemed reliable but not guaranteed.

The New Game
David Curry

The New Game

There’s something changing in the Lake Geneva real estate market. The change is mostly involving the lakefront market, but there’s little doubt that this change will make its way through the different segments, eventually engulfing everything, everyone.  The change is subtle to the casual onlookers, but it’s game changing for the players in the market, both buyers, sellers, and agents, alike. When something is described as game-changing, that usually reflects positive change. Like, this new phone/device/tablet/thing is game changing! But in this case, it’s game changing in the way that it makes losers out of us all.

The new rules of real estate are not at all like the old rules. The old rules involved some decorum, some particular process that was generally respected by those in the business. Real estate has always been cutthroat, as is most commission based business where the barrier to entry is the skill that is a continuous but methodical pulse. The business will never cease to be that way. Even as Redfin, Opendoor, and others have tried to change the old commission method with new technology, it’s obvious now that the model preferred by the consumer and agents alike is the old format of commission for results.

In this hunt for results, the new model has taken sellers and agents to extreme levels. Sellers, under the old model, would interview the agents that they thought gave them the best chance at selling. Sometimes, this agent was their sister’s hairdresser, or the lady who they know from the PTA. This wasn’t generally the best way to find an agent, but it worked and it worked for decades, for generations. Today, sellers in competitive markets interview agents, but mum is no longer the word.

Sellers interview, then sellers play hard to get. This is fun for the seller. The result of playing hard to get is a bidding process by the agents who know of the property.  The first time in the door, for that initial meeting, the agent told the seller the home was worth $3MM. The agent knew it would be easier to sell at $2.65MM, but she came in high, because the business is important. The seller fields these initial numbers, then goes quiet. Then, after some quiet, he tells the agents that he’d consider selling if he was able to get $3.4MM. The agents think, ponder, call back. They have someone interested.

Because they always have someone interested. I have someone interested, usually. At $3.4MM it’s no longer any representative of market value, but it’s a price and it’s a lakefront and that’s the game.  Agents looking to make a name for themselves, or further a name they already own, will pounce at the opportunity to list high and sell, maybe someday much, much later.  But the seller won’t list, and so the calls resume, and the agents tell the seller that it’s time to sell, for $3.5MM, maybe. Or perhaps it’s $3.6MM that will make this deal happen. The negotiations are between the seller and the agent, and in a market that some incorrectly perceive to be torrid, the price is always driven higher.

Without committing to an agent, the seller thinks he has many agents working for him, when in fact, the agents are working only for themselves. If they have a buyer, one that might think $3.5MM is a reasonable ransom for a $2.65MM house, they’ll bring the buyer to the door. They’ll show the house, and they’ll try like crazy to tell the buyer it’s the right house at the right time, because hurry! If they don’t buy it someone else will. This is the refrain of the ignorant, unless it is employed only when the case dictates such a sensationalized phrase. If your agent tells you this every time, you need a new agent.

The seller is at a disadvantage in this scenario, because he truly has no one representing his best interests in the sales process. He is flying blind, and by the time he does ultimately list, the bloom is off the rose and the market has already heard of his property, and they’ve already dismissed it as being overpriced, ugly, and bad. The traditional model would have better served this seller, if he had only chosen an agent, listed the home, and marketed effectively without first crying wolf at those artificially, agent-inflated numbers.

While the seller is making a mistake, because he thinks, erroneously, that he’ll be saving money, it truly is the buyer who is making the worst decision here. Buyers put their trust in agents, and the idea is that the agent is serving the buyer’s best interests in all of their advice. I effort daily to follow this, and I’ve talked myself out of far more deals than I’ve ever talked anyone into. But if the agent has the goal of selling the house quickly and quietly, before the market can even know of the property, has the buyer been receiving the sort of objective information that she should be entitled to? Highly doubtful. But this is the new game, and the new game isn’t engineered to serve the buyer or the seller, it’s engineered to serve the agent. In that, there should be concern, because the game has changed and it’s changed at the expense of the consumer.

For now, this: Merry Christmas. I’ll be back on this small keyboard on Monday, though I’ll be working this weekend should you require some assistance. Ideally, you won’t require assistance on Christmas Eve or Christmas Day, but Boxing Day is an embarrassing Canadian Holiday and I take pleasure in working while Canadians rest.

Lake Geneva Pocket Listings
David Curry

Lake Geneva Pocket Listings

The business of real estate is a very big business. Prior to the last decade and a half, the big business players in the world of real estate were actually in real estate. They were Coldwell Banker, Century 21, ReMax and others. The biggest players in the real estate industry were the patrons of the industry, the behemoths that grew large and venerable because they earned it on the ground, in the trenches, at the closing tables and open houses. The big business of real estate today has very little to do with those old titans, and everything to do with start ups. Sure, Wells Fargo is still a big deal, but Avant is so much sexier. In the same way, Coldwell Banker is still the number one brokerage in Chicago (no matter what @&^&$ company would have you believe), but they are already what they are. Zillow is now the king maker in the industry, and Zillow looks at what it might acquire in terms of software and hardware, and the small start ups that make the next big thing are the new leaders of the real estate industry.

Both Zillow and the National Association of Realtors, through their various entities that they control, have business models that must continue growing, and at all costs. Zillow must behave this way because they have shareholders to answer to, and NAR must behave this way because they’re terrified that Zillow will make them obsolete (they will). They are looking for what’s next, thinking that some thing that some guys from MIT dreamt up might be worth the $30MM they’ll sell it for. Real estate is the largest asset class in these United States, so anything that can gain traction as part of the process has the potential to be big. Like huge. As the players scan the start up scene for some possible disruptors, they find companies like Opendoor.com. They are the purveyors of an interesting (lame) concept that allows homeowners to sell their homes the moment you’re ready!  The company promises that you can sell your house and avoid the hassle of the traditional sales model, and all you’ll need to do  is fill out a couple of online forms and they’ll buy your house from you. The company then re-sells your house. This is the online version of those bright yellow signs you see along the highway with ransom note style lettering spelling out  I BUY HOUSES. It’s a gimmick that works in an appreciating market, and dies a horrible, VC funded death once the market inevitably pauses or declines. Still, they might sell enough cookie-cutter Arizona ranches to convince some large player to buy them at a trillion times earnings (there probably aren’t any).

 

As the market continues its nice pace forward, more and more agents are entering the business. This is to be expected. As more and more leave their jobs as baristas, car salesmen, and hair dressers to transform their lives by the promise of immediate, unfathomable real estate wealth, the agents who are already established in the business do what they can to hold on to their market share. One way to do this is by controlling listings, because (s)he who has the listing has the power. Control the inventory and control a market, this is the way real estate is done. This is why new companies will list anything and everything. $35k caboose condo? Yes. $2MM lakefront house? Yes. Vinyl ranches as far as the eye can see? Yes. Rentals? Yes. They’ll take it all, because listings represent power. And why do listings represent power? Well, obviously because they ensure revenue by listing side commissions, but mostly because this forever evolving, technological business of real estate still relies on metal signs, pushed into the front lawn.

In an attempt to control listings, and to shield listings from the open market during periods of time when it isn’t in the seller’s best interest to present fresh to market, agents are increasingly turning to pocket listings. Before the MLS, every listing was essentially a pocket listing. Now, with the internet ruling our lives and this business, pocket listings have returned as a unique way to quietly market marquee, or otherwise rare, offerings. Getting back to our initial thoughts about Zillow, and their need to have their zestimatey hands in everything, they have a new feature that allows for agents to market pocket listings. They do this with the promise that it benefits consumers,  but of course we know that it benefits Zillow by having control over more of the inventory, whether it’s public inventory or not. Agents, as they fight to maintain some marketing relevancy, will hold their pocket listings back from these national portals, because if a pocket listing is listed online, it’s obviously no longer a pocket listing.

Lake Geneva has quite a few pocket listings at the moment. They may be true pocket listings, like one I just listed last week on the North Shore in the $4s, or they may be pocket listings of a different nature- unsecured properties that certain agents know are possibly for sale, while the majority of the internet searching world assumes they have the market canvassed. The cloudy, distracted message for today is simple. Want to know about pocket listings at Lake Geneva? Ask me. Want to know about pocket listings in Chicago? Ask a connected agent in Chicago. Want to sell your real estate start up that does something no one asked to have done? Call Zillow. Want to sell your super boring Arizona ranch? Opendoor has a few forms for you to fill out.