Brickor Mortis

brickor mortis n. Falling house prices have caused property website Rightmove to coin a new phrase. "Brickor mortis" is the paralyzing condition caused by sellers refusing to lower prices as they don't accept their home's value has dropped. Buyers won't buy as they think homes will be cheaper in the future-or because they can't get a loan. -"Revealed: Middle Britain will be hardest hit by falling house prices" by Becky Barrow Mail Online (United Kingdom) July 18, 2008.

Susan's First Rule of Real Estate Sales - "if it hasn't sold in 75 days, it's priced too high."



If you're working mostly in areas where properties get snapped up nearly as quickly as they hit the market - great!

One could call this a schizophrenic marketplace, where lots of "spec" properties that have gone up and sold in the last five years are not selling, and other neighborhoods are like wildfire.

What's the difference?

Well, yes, it's location (location location, I had to do it.) It's also the difference between neighborhood characteristics - how well the neighborhood has been kept, the ethnic diversity in the neighborhood and whether it's primarily new construction.

My Realtor friends are telling me that they are encountering a lot of "brickor mortis" when they consider advising clients about making an offer - properties are listed higher than the comps will support, and yet the listing parties are dead set on the value that they've established. While that strategy may work in the 750,000+ arena, it's a great way to sit on a property for months or longer in markets where homes are just commodities.



How do we deal with this market schizophrenia? By advising more aggressive pricing in lower neighborhoods - offering down payment assistance and closing cost programs in more diverse neighborhoods, and working with clients on understanding that whimsy will inhibit the sale of their property.

In my own experience over the last two weeks, I've seen a well priced house in the Southwest languish in a diverse and transitional neighborhood until a recent sale of a foreclosed property came in nearly 20% lower than the asking price of the subject property. I've talked to a well educated non-real estate professional who was convinced he knew the market and was just dead wrong about all of his assumptions. And, I've seen a friend taking his time thinking about which properties to visit in the neighborhood of his choice, and in less than 24 hours, every single property on his list went from "available" to "option pending."

There is no blanket way to deal with this market. Focusing on your core strengths, educating clients thoroughly, and doing your research and homework are the only things that can be relied on. It may be time to focus on your consulting relationship with the client and speaking to them more in terms of what you're seeing the market doing and how it affects them, than just agreeing to their assumptions and wishes.

Credit where credit is given

Today, we're going to talk in broad terms about credit - business and personal credit. This is a summary for everyone, not a detailed discussion.

First, if you're not aware of it, there is a pending settlement in a lawsuit against TransUnion - if you've had a credit account since 1987, you're entitled to participate in it. You have a month to get in on the settlement. You'll get either nine months of enhanced credit review and access, or six months and the possibility of getting a cash distribution if there is one. Either call the settlement hotline at 866-416-3470 or go to the very easy website at http://www.listclassaction.com.

Second, this is an article you MUST read. Written by a lady who worked for credit card companies for years, it explains how late fees can be assessed when you do everything right, and how to save hundreds each year by being pro-active.

Third, I've been facilitating the Dave Ramsey Financial Peace University course at New Vision now for about a month. If you don't know Dave Ramsey, listen to one of his radio show podcasts here. If you do know Dave Ramsey, but haven't ever thought that you need his methods, you're probably wrong.

I've always thought of myself as a guy who knew how money worked until I took this course. I thought I knew how budgeting worked. Uh, wrong-o. His budgeting techniques make perfect sense not only from a math standpoint, but from a spiritual/metaphysical standpoint (although that's not his focus.)

I can see very clearly how these are skills that would benefit substantially everyone - save for a few friends of mine who have these skills down pat.

So, if you have any lack of peace about money at ALL, click here, find the nearest Financial Peace University course and spend the hundred bucks and thirteen weeks to take it. And, pay attention to it! Maybe take it twice.

Last piece - again, I've been working with small business people who need financing to grow their business and be flexible, and their tax returns are so focused on avoiding paying tax that nothing is available to them.

I've seen someone with terrific credit in this situation, and a bunch of someones with not so terrific credit.

To have business financing (that you'd be attracted to,) you must have provable cash flow AND proof that you pay your obligations on time.

PLEASE don't be fooled by "consultants" who offer to set you up with shelf corporations and existing credit histories to get you hundreds of thousands of unsecured financing.

They want up front fees, and the unsecured financing market is largely gone.

Get with me if you have questions on any of these items.