Save My Real Estate Deal

1. Tax Assessor: This appraiser will appraise the value of property at it’s highest, nearly unrealistic value for the sole purpose of creating a tax base for the local governmental agency. (High Values)

2. Bank Appraiser: This appraiser is employed by the bank (lender). The appraiser in this case assesses values at a very conservative level. Since this appraiser is paid by the bank, it is in the appraiser’s best interest to lower values---especially when they are used as a review appraiser. (Low Values). Both Tax Assessor and Bank Appraisers have a difficult time earning a living as an Independent Fee Appraiser—ergo, they work for those who like to sabotage your values.

3. Independent Fee Appraiser: This appraiser is employed by a variety of scores, most commonly the Broker. This individual uses market conditions to determine the most likely value a property will bring at time of sale after consideration of all circumstances and conditions. (Closest to Actual Values a property will sell for in a fair market).

 I hope this information you will find useful. Next Issue ( Part II): Appraisals and Appraisers: Licensing.

I have never really been an auto show fan, so I really never had been to an auto show, outside the Texas State Fair and what I would see on TV about any of the big auto shows like, LA, Detroit, New York, etc. All the glitz, glamor, staging, lights and displays. I never gave it much thought into how it all worked before and after, until recently.

My brother-in-law works for a company that sets up the auto show booths for Mercedes, Mazerati and Farrari as the shows travel throughout the US and Canada. This year he asked if I had the time to work on a show with him--since this time of year the mortgage business is a little slow, I told him I'd be glad to help.

The LA Auto Show opened on Thursday Nov. 14 with Press Day and the public opening was the following day. The Show closed at 5pm on Sunday November 25th. Good Morning America broadcasted from the LA Auto show on Wednesday November 13th at 3:00 am.

That is what the upfront exposure that all of use see. Now how did it get there?

Work began on Monday November 5th with the marking of the booth spaces and the off loading of semi loads with show crates (the display stuff). Electrical and carpet laying began on Nov 6th. Nov 7th the forklift drivers begin bring in the fregit to the assigned booths and setup begins. I worked on the Mercedes Benz booth starting on Nov 8 through Nov 11 with an average of 12 hrs/day un packing, assembling and setting up stages, turntables, towers, light walls, arches, VIP and reception booths, tile flooring, display cases and so on. Work days started at 7am and I usually didn't get home until 9:30 in the evening. I was back at the Auto show on Thursday Nov. 15th for a cleanup/polish up detail, prior to opening of press day from 5am until 9am.

After the closing of the show the tear down commences at 8pm on the last day of the show (Nov 25th) and continued until everything was disassembled, recrated and all of the carpet and flooring removed. This process was completed by 7pm Nov 27th.

Here are some figures that just might astonish you about the auto show.

1. No cars are sold at the show.
2. Mercedes-Benz's space was 61,000 sq. feet with 2 turn tables, 3 performance stages, 17 plasma screen TV's and an impressive movie screen 20'x80' suspended 15 feet in the air over the new BlueTech Series.
3. Mercedes-Benz's displayed 23 models.
4. Over 1100 man hours were clocked setting up the booth (excluding: electricians, riggers, forklift drivers,  carpet layers and 24-hour security).
5. Over 350 man hours were clocked tearing down the booth at close.
6. $180 the average per man hour charge paid. (over $260,000 in labor costs from only one contractor).
7. $5,000,000 Est. Value of MBZ models displayed
8. $2,000,000 est. cost MBZ paid to participate in this show.

I now have a greater appreciation for all of those who toil to make the glitz and glamor of any show come off so marvelously.

The first thing to remember is that the media dwells on bad news because it gets your blood pressure up and rings your fear alarm bells.

I am not in denial about the nature of the business, real estate, values and the effects it has on a personal and wide scale levels. However, all of the information must be questioned and throughly analysized to determine the value of the data.

In addition to that, all the data affects one based upon the position they are in at the time of the events unfold. Example: If your neighbor is out of work it is a recession. If you are out of work it is a depression.

Since the last downturn (1991-1996) we have added over 8 million housing units to the national matrix. According to those that track these figures claim about a 4% increase in housing units over 10+ years. Assuming we have 180,000,000 housing units at the end of 2006 and the average annual foreclosure rate anticipated is in the 3-4.5% range during a normal healthy economy, translates out to we can sustain around 8,000,000 in distressed properties.

Here's the where the screamers go off the handle.  In the past years (2001-2005) we were seeing a national foreclosure (distressed properties) rate running in the 1% range. Now we appear to be closing in on the 2% per annum range.  Yes a big increase. No--not the end of the world. You would need over 650,000 housing units per month going into distress to really mean big problems. However we are running about 81,000 units per month.

I see this at this point as a correction to the market and not a need for panic.

I also see that the equity markets have enough money to continue lending at increased levels since the credit crunch that was much ballyhooed is apparently not as deeply entrenched as once thought. The investors will eventually agree upon a industry standardization of credit criteria so consumers can once again obtian mortgage loans. The actions will occur sooner than later because by not lending, the investors will loose far too much in income/profits than they will ever loose by servicing non-performing assets (bad loans). Beside, with preasure from governmental agencies to reform credit guidelines in the works to make them into law, the industry will adapt faster as to avert regulatory mandated changes.

BTW have a happy and safe Thanksgiving.