Granville Haas’s Blog

As the intrest rates increase across the country the rates on ARMs move upward. Combine this with the housing prices declining and many Americans find themselves trapped in a situation where the cannot afford to pay yhier monthly mortgage payments and they can’t sell thier houses for as much as they owe on them. According to Aaron Wood from First American Title “This year, more than $300 billion worth of hybrid ARMs will readjust for the first time.”

James Gaines, a research economist at the reasearch economist at the Real Estate Center, has pointed out that although California’s default defalt notices arerising by the thousands, actual doreclosure sales remain in the hundreds. Because of Californias Active housing market, homeowners can sell thier properties before going into foreclosure.

If your gross monthly housepayment does not exceed 40% of your gross monthly income, it should be possible for you to keep the property. But if the monthly payment is still increasing or is more than 40% of your monthly income you should consider selling or transferring the property as soon as possible in order to avoind negative hits to your credit score and the eventual fate of a foreclosure. The objectives in order of importance ought to be:

1-Keeping the property if possible. Ask about the loan modifications your lender can provide.

2-If you have equity, sell your house and keep the profit.  This is much better then letting the lender take your home and all your equity with it.  If you are unsure of whether your house is worth more than you owe, call a real estate agent and they will be able to tell you where you stand.

3-Minimize damage to your credit, if you are upside-down on your home and you cannot make the payments, consider a short-sale as an alternative to traditional foreclosure.

Before looking for other options, try and work things out with your lender. Lenders don’t want a foreclosure either, no one does. Call your lender or consult a real estate agent if you feel like you can stay in your home with or without a loan modification. Ask about a deed in lieu of a foreclosure. Your lender will want to work with you to help find a solution if there is one. if the one really wanted too keep thier home and they knew that the would be able to pay off the additional debts, then this is a viable option. A good real estate professional may help make some sense of the situation and educate on the possible options, but rember that a Realtor’s opinion is not guaranteed to solve all financial hardships, but it can help turn the tide back in your favor. I know that everyones situation is unique and there is a solution that is right for everyone. But the first thing someone should do when facing the possibility of defaulting on a house payment is to educate themselves of the facts and procedures so they may take appropriate action.  The sooner you act the better, so call your lender and/or real estate professional today and take the power back.

-Grant Haas

http://granthaas.yourkwagent.com

On May 31, 2008 Alfonso Jackson resigned as the chairman of the US department of housing and urban development. Although JAckson stated personal reasons as the cause of his resignation it is widley speculated that he was pressured to resign based on a number of federal investigations and contraversies. Jackson, a longtime friend and former neighbor of President Bush, was appointed HUD chairman by Bush in 2006. Now, as the housing market is a sore spot for the US economy, a clearer picture of Jacksons mistakes emerges. He has been accused of favoratism during the Hurrican Katrina by directing funds to his friends in an unfair effort to clean up the aftermath of the natural disaster. Jackson is also remembered as saying in a speech that he refused to give a building contract to a bidder because the bidder ‘did not like president Bush’. HUD is a $35 billion agency that funds public housing and rental assistance for low-income families. It also runs the federal housing administration (FHA), which helps struggling and first-time buyers with low-down-payment home purchases and with refinancings.

I am not saying that all the housing woes are Jacksons fault. It is too much speculation to say Jackson is to blame for housing woes and little attention has been to the good things he has done acting as chairman. But in a capalist society playing favorites benefits few at the expense of everybody else. I feel that contracts should be given to the the most qualified bidder and when a less qualified bidder gets the contract because he/she is friends with the contract giver, that is wrong. Especially when the money being spent was provided by the taxpayers. Helping out you friends is one thing, but when people trust you to spend thier hard-earned money, one has an obligation to put personal issues aside and get the right person for the job. Clearly, there are circumstances surronding this issue of which I am unaware, and it seems dangerous to be too critical of a situation that I don’t fully understand.

Steve Preston, former head of the Small Business administration followes Jackson as the next chairman of HUD.

Citation:

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/31/AR2008033102672.html

-Grant Haas    http://granthaas.yourkwagent.com

I thought of this as a child, then one day in a classroom I found out there was a name for the train of thought I subscribed too.  I thought this was a little bit odd because intuitively, Bayesian rationality seemed so obvious there would be no disagreement from a sane person.  Giving this way a thinking a label is kind of like calling people who believe in gravity “Newtonian”.  Somebody does not need to have heard of Newton to believe in gravity.  All one has to do is to simply observe the effects of gravity and then decide that, in all likelihood, some unseen force pulls objects with mass towards the earth.  Obviously Newton made some more complex statements regarding gravity than just “things fall down”.  In particular his formula for calculating the force of gravity between two objects based upon thier respective mass and the distance between the two objects.  Newton did not discover gravity, he just observed the natural world and made some educated deductions based upon what he perceived.

This article is not about Newton, I am just using him as an example to illustrate how the same phenomona can be so simple “apples fall down” and so complex “(Fg=(gxm1xm2))/distance squared”.  So it is with baysean rationality, the principle that bayseans use to determine what is the best way to behave.  The founding principle of baysean rationality is to constantly try to make what you believe to be true and what actually is trueas close as possible.  Sure this makes sense, you have to understand a situation before you can determine what the best strategy is to make the most out of the situation.  Bayes, like myself, is an epistemic skeptic which means that he does not believe that anything can be known by a human being with absolute certainty.  Bayes’s notion of probabilistic coherence applies not to beliefs, but to degrees of belief.  An example of this type of rationality is as follows:

I am going to make a list of 1 -10.  Starting with 1, I am going to make a statement which is as close to complete certainty that I can possibly have, and then work my way back to statements which are progressively less-certain until I reach 10 which is the least certain of all the statements. The numbers represent how beliefs are almost certain, almost uncertain or somewhere in between, but complete certainty and complete uncertinty are more elusive.

1-I exist

2-My body exists

3-Things outside my body exist

4-This keyboard exists

5- This keyboard has 104 keys

6- This keyboard does not have 104 keys

7- This keyboard does not exist

8- Things outside my body do not exist

9- My body Does not exist

10- I do not exist

There you have it, a look into my mind and what I believe to be true and what I do not believe to be true.  I accept the fact all of these statements, 1-10, can be either completely true or completely false and I will never, as long as I live, ever know with certainty weather they are or not.  Now I encourage you to look at your own life, do you have certainty about anything?  If you do, what are you certain about?  What are your most fundamental beliefs?  What things do you doubt?  Is it possible that you may be mistaken about something?  I know I am most certainly mistaken about a number of things and I make it my life goal to get to the bottem of them as much as possible.  I’ll never run out of beliefs to examine and those who have beliefs that match most closely with the way things actually are (objectively) are very praiseworthy. 

As a blogger myself I am constantly going to the internet as a source of new matereal. The formula is simple; research a grip of information (books, websites, newspapers, personal experience, whatever) and then interpret the data and consider the highpoints. This is how I live my life being an open source for empirical stimulation and then to decipher experience in to what probably is and is not true. Anyhow, as far as the internet and real estate goes, blogs are a great source of fresh new information. Here is a list of some of my favorite blogs. Blogs are like Ice Cream because each one has a different flavor.

If you are looking for a humerous, light hearted blog that mixes it up with some very helpful information then check out the Sellsius blog. I like how this blog has a fresh approach and keeps it entertaining.

http://blog.sellsiusrealestate.com/

A blog that gives the power to the people and keeps it personal is the Trulia Voices webpage. If you are a buyer or a seller and you have a question then go ahead and post it on Trulia. All the regestered Real estate professionals who are registered to Trulia will give thier answers to your question. Usually they give helpful information and if they don’t another person will come along to even the odds. As an added bonus potential buyers and sellers can meet agents based on who gives them good answers to their questions. And if anybody wants to send me questions on this channel, then go ahead, G-Haas will take care of you.

http://www.trulia.com/voices/

This last blog is probably the most stoic of them all.  The housing bubble blog is a very serious, grass roots level blog.  Frequently updated with very long entries, this blog can help people make sense of the crazy market that all us Americans are subject too.  Just try and find a blog with more fresh matereal and information about the real estate market.

http://thehousingbubbleblog.com/

So this is a short list of blogs that I like to read.  I will keep everybody posted as I find new sources on information in blog form.

If you are someone who is thinking about selling their home the first question people ask is “should I use an agent?”  The short answer is yes, if you have courage and a know how of the business then by all means, sell it yourself.  There is no point in paying a commission if one does not feel like it is necessary and I am not in the business of convincing someone to pay for a service that they don’t need. 

Once you decide that using an agent to list your house is the way you want to go, then the next step is critical; choosing the right agent for you.  Unless you are an agent yourself or you have someone you know and trust who is a pro, then the process of picking the right agent can be a crapshoot.  I suggest looking for agents who work for Keller Williams, have their own blog, and have the name Granville Haas.  But seriously, people differ and if you are looking to list your home with a Realtor then interview them.  At least 3, because then you have an idea of what is out there and what direction you want to go.  When interviewing agents here are some questions I recommend asking yourself:

1-Is this person trustworthy and reliable?

2-Does this agent have a good reputation?

3-Is this agent’s listing presentation orderly or do they seem to not know what they are talking about?

4-Does this agent have the ability to answer questions in a language everyone can understand? Does he/she answer questions straight foreword or dodge the questions?

5-What sets this person apart from the others?

6-Is this person being really honest or just telling me what I want to hear?

7-Was he/she really just talking to the fish?

A relationship of this kind does not depend on the agent, nor does it depend on the client, it depends on the relationship that both parties create.  So look around and find the Realtor that suits you best .

“What is the market?  It is the law of the jungle, the law of nature.  And what is civilization?  It is the struggle against nature.” -Edouard Balladur

 It has been said that money is the root of all evil.  Well I think this is taking it a bit too far… after all in a capatilistic society money is an intergral tool used to support the well being of hundreds of millions of people.  And yes it’s true, not everybody has money and millions experience homlessness and poverty.  One would be in denial if they refused to acknowledge the homless people freezing to death and dying of hunger everytime the sun goes down in any major metro area.  

Money, and the lack there of, have caused substantial human suffering.  But money has done good things.  Capatilistic societies create intense competition and the result of this competition is innovation.  Is it sad that typewriter manufacturers are now out of a job?  Yes, but think of the benefits bestowed upon innovators who manufacture computers and wordprocessing software not to mention the benefits bestowed upon the consumers who use the products.  Bill Gates is now the biggest philanthropist in the history of civilization, so he puts many people out of a business, but he also gives his profit away, you can interpret that however you want.  I’m not even sure whether that is right or not, but my gut feeling tells me that his earnings are completely legitimate and he can do whatever he wants with the money he earned.  You play the game, in this case the game is market capitalism,  as hard as you can and anything less would be a disservice to the game.   

So what does this have to do with real estate?  Short answer; a lot.  First; there is the moral delimma: is it ethical to profit from another persons misfortune?    In my opinion it is ok to profit off another persons misfortune, just don’t be the cause of misfortune.  If someone is so desperate to sell, they practically give thier property away it is absolutley OK to take advantage of a good deal.  But benefiting from someone else’s misfortune is not the same as causing it.  It is never accaptable to act in a way that directly leads to anothers misfortune. 

Second, consider the supply and demand model and how it applies to our current real estate market.  There is a large supply of unsold homes on the market.  This explains the dropping in prices for closings of homes, and it also explains why so many people are having difficulty finding people who want to buy.  Some people consider it to be a “down” market.  We are going through a correction period, a period of tough love.  Market theory indicates that the economy will go through boom and bust cycles, the longer and greater the boom, the longer and greater the bust.  Here in California we have earthquakes, it is inevitable.  The Crust of the earth is shifting, and there is nothing we can do about it.  But I am of the feeling that many small, frequent earthquakes are better than no earthquakes for a long time followed by the big one.  And this is the same sentiments I have about the economy and real estate market.  Small, frequent variations in the market are better than long periods of uneventfulness followed by catastrophic “correction”.  So even when the times apper tough realize that it is for our good as Americans.  We are taking our collective medicine and while it may not always have a delicious flavor please understand that it is good for us in the long run.    

In this current market problems exist for many homeowners.  According to the San Bernadino Press-Enterprise foreclosures in Riverside County are up 281 percent this quarter when compared to the same quarter one year ago.  What is the cause of this?  Well it seems the one thing that is problematic is the end of those low introductory rates and now monthly payments are going up on borrowers.  Other causes are job loss, illness and divorce.  Foreclosures cost the bank money and they also cost the borrower money, credit, stress, and sometimes even the roof over thier head. 

 It is important to identify the problem as soon as possible to make the solution as simple as possible.  Think of the SS Titanic; by the time the capitan had identified the threat (the iceburg), it was too late and thousands of people drowned in the freezing cold ocean.  If the problem had been identified sooner the solution would have been as simple as turning the ship a little off course and that’s it.    Long story short, small, evasive action now can lead save lots of headaches in the future.  Nowhere is this more evident than in our current real estate market.  If you are having trouble making the ends meet on your mortgage payment, take action now the solution could be as simple as turning the steering wheel now, which is far better than drowning in the cold later.

 A strategy being used more and more these days is the short sale.  Lenders will often to agree to take less than what is owed to them by means of a short sale.  The banks benefit from this because when they avoid forclosure, they save a lot of money.  It is a win-win because the borrowers also save a lot of money when the foreclosure is avoided through short sale.  If you or anyone you know is realizing diffuculties with mortgage payments, don’t bury your head in the sand and hope that the problem will just go away, it won’t.  Take action now, the longer you wait, the more complex the solution will become. 

 And another thing, I know this probably goes without saying, but if you are having trouble keeping up with you house payments it does not mean that you owe more than the house is worth.  And the sooner you put the house on the market the better opportunity you will give yourself to get the best price for it, no one, and I mean no one, has a great deal of respect for extreme deperation.

Hello everyone out there in cyberland.  I hope that you enjoy the internet as much as I do.  The internet is full of so much information and locked up potential.  The ancient Greeks, said that everything exists in an either.  This is ancient chemestry, what is the universe composed of… according to them it was air, fire, water, earth, and either.  The either was one of the hardest of those elements to understand.  Now I have a wireless network in my house, a little modem connected to a cabel sends a signal to a little router and now there is an seemingly infinate amount of information going throught the air, going through walls and onvisible to the naked eye.  It is everywhere! 

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