And why do we get appraisals?

After being away from real estate for many months, I've had an opportunity to come up with comics about the industry. I have even gone so far as to buy a book written by the comic guru himself, Bob Mankoff of the New Yorker. I'm learning to draw. I will publish these comics. I may begin on this site.

But what I learned about real estate during the five years I worked for myself and over the last few months while purchasing a home in Colorado I'd like to share with the buying and selling public.

The old days of pulse = loan is over. Loans are first dictated by your crazy little number -- credit score. Second by down payment, where more is not always better. And third by the appraiser. When I bought my first house it appraised $18,000 less than purchase price. Because I had the worst real estate agent in the country, I paid the $18,000 "extra". Well, we did as I co-owned that house. I figured the karma gods would come around -- they did! My house in Colorado appraised for $5,000 more than agreed upon purchase price. And then, the appraisal was rejected.

I need to explain. I had more than 50% as a down payment. My loan amount was for a mere $37,500. At the monthly payment quoted by the lender I was left with 25 years of reserves (savings) in the bank. My appraisal was higher than purchase price. The lender rejected the appraisal stating the comps were inadequate and the house was unacceptable. The man I bought the house from lived in this "inadequate" home for years. My home inspector said this house was in great shape -- solid foundation, new plumbing and electrical. Since taking ownership of the house, I've had an electrician and two plumbers come to my house, both saying the house was in great shape. I'm dumbfounded.

I share this because in the five years I worked in the real estate industry and in the 25 years my Colorado real estate agent worked in the industry (and her husband is an appraiser), we've never heard of such a thing.

This reiterates more and more, don't spend the money until the cash is in the bank and the fat lady sings. A house is closed only after the money is received.

Incredible Livingston Home

Located in a quiet north side neighborhood you'll find 327 N 3rd. It is Livingston's well kept secret. Exquisite two bedroom home features all hardwood floors throughout the bedrooms, living room, and dining room. The kitchen has wanes coating, new flooring, and paint. There is ample cabinet space and with solid wood cabinets. The bathroom is very large with new flooring, tile shower, and linen closet. Enjoy the private yard with mature landscaping or start a new hobby in the back shop/garage. There is off-street parking in front and in the back.

All this for $148,500. Call Connie at (406) 539-9255 to schedule a showing today!

Exquisite Downtown Home!

Looking for fabulous and affordability in historic Downtown Bozeman?

• Best location in Downtown -- 2 blocks to Main St., Library, Peet's Hill, Bogert Park, Lindley Park
• Incredible living room with dining area

• Completely remodeled bathroom with all new electric and plumbing, insulation, heater, new window, all tile, dual flushing water conserving toilet

• Functional no-maintenance kitchen with plenty of morning sun, range, dishwasher, refrigerator included

• Wonderfully private landscaped yard
• Absolutely stunning price -- $249,000

Visit this home this Sunday, August 3rd from 1:00 to 4:00 p.m. for an open house! You won't be disappointed!

For complete details visit my website.

Real Estate as an Asset

I am reading Rich Dad, Poor Dad and have found it very enlightening.

I have been going through refinancing of my house for some time now with little success due to the new lending guidelines and therefore have found my house to be more of a liability. As a real estate agent I have long advocated a personal residence as an asset, which in the book is clearly described as a liability.

I am left to reflect on just how my real estate -- my house -- can become an asset and have come to the following conclusion:

For a personal residence to become an asset, the monthly mortgage payment cannot exceed what the house can be rented for in any given month.

For example if you house has a rental value of $1,000/month then the mortgage should be no more than $1,000 per month.

Of course this does not actually make your house an asset because it is not paying you $1,000 per month. I'm not advocating that everyone should own a multi-unit home where the rental portion pays all of the rent. Homes are an emotional purchase and a place in which most folks find peace. What I am advocating is that if the poop hits the fan, be able to rent your house for the full mortgage to get back on your feet -- and for some this may mean camping in the meantime!

Other options for turning your house into an asset include leasing out storage space if you have a large lot or multi-car garage, convert a portion of your house or garage into office space and lease that (check zoning), or grow marketable produce and/or flowers and sell them. Just a few ideas off the cuff!

If you do plan to refinance, call Jason McHann at Clear Horizon Financial Services at 406.579.3660.

Buying is consistent with May 2007

Prices have held steady over April with a 36% increase in the number of sold units and a 65% increase in pending sales. This is good news for both buyers and sellers. For buyers -- prices are holding. For sellers -- there are more house hunters out there.

My crystal ball reads that prices will hold steady through the end of this year with pockets of appreciation and depreciation throughout the valley. Buying will pick up, however, absorption will rise only slightly due to increased inventory.

As an addendum -- 40 houses sold in May 2007. Not all data has been reported yet for May 2008 so it is very likely we will hit that number this year as well.

If you are in the market to buy real estate don't wait.

Data was obtained June 3, 2008. Data will change as more listings are closed out of the system. Data is obtained by the SW MT MLS

Open House Bonanza in Churchill

Don't miss this Sunday from 1 to 3 p.m. in Churchill, MT.

Featuring seven great homes, food, drinks, prizes, and giveaways!

View my listing online and then come see for yourself why

Churchill offers some of the most serene beauty in Montana.

http://www.7045skylark.com

Beautiful Churchill Home For Sale

www.7045Skylark.com

Welcome home!

From the living room enjoy Bridger views out your large front windows.

Dining as a family or with friends is easy and conversational in this highly functional kitchen creating a very social atmosphere that can include and accommodate all your guests.

In the fully finished daylight basement,

enjoy games or family gatherings in this large den full of natural light.

Home features:

2900 sf home on approximately 1/4 acre

adjacent to a farm and neighborhood park

3 bedrooms, 3 bathrooms

Craft and/or hobby room

Media room

Large living room

Large den

Exercise room or room to do with what you wish

Laundry room

Oversize garage with "secret" room that can be used for fly-tying, workshop

Fully landscaped yard with pond

Back all-weather deck

Front covered porch

Imagine sitting on your deck at your new house watching this sunset...nice.

visit www.7045Skylark.com for more information.

e-mail Connie@BozemanMontanaProperties.com for a showing or

call toll free today 866-647-5268