I like to have my sellers do their termite inspection before the property comes to market.  That way any issues are found and dealt with in the beginning.  If I know there is $12,000 termite damage at a property, I’m going to suggest my client either corrects the problems or adjusts the price to reflect the termite report.  Recently my client found out that there was damage in one of the bathrooms and the floor needed to be replaced.  This is actually common.  The floor will be replaced before this property comes to market.  This will protect my seller from potential buyers muscling the price down because of “unseen” matters.  The termite will be clean on this property when it comes to market.  My seller is protected.

It’s helpful to know what to look for as a homeowner.  When I purchased my home there was $11,000 in termite damage.  In the case of my home that included the presence of subterranean termites in the garage.  I took the property subject to the damage in the bathroom because I was going to remodel anyway.  I asked the seller to deal with the subterranean termites by having a licensed professional treat the property with Timbor or a similar product.  This particular property is pretty wooded.  I have 19 trees here.  Actually 17 now, two have died and I’ve cut them down.  They were both infested with termites.  There are a lot of termites in this neighborhood. 

Your termite company will reinspect your property every year for a nominal fee, generally $75.  That’s cheap compared to replacing timber chewed up by bugs or damaged by water leakage.   I had my property reinspected last year and it was clean, however last Sunday I looked up in my garage and saw this.

That is what’s called a “tube”.  Tubes are built by the termites from particles of soil, wood and debris.  I’d seen some debris on my workbench a couple of weeks ago, but I looked up, not forward.  I thought it had come from the roof of the garage.   This house had been treated three years ago and reinspected last year so I knew it was recent.  I immediately called my termite company and asked them to come out.  They’ll be here on Friday.  Then I set out to figuring out what happened. 

One of the things the termite company will tell you is to be sure there is no wood to ground contact.  There isn’t at my house. The concrete foundation sets above the ground in all places.  Last night I set about finding the point of entry.  There it is.

That’s what’s called a shelter tube.  That allows the termite access to food as they cross the foundation to the wood of the house.  The good news is because I am diligent in checking my property, I caught these guys quickly.  I painted this house last October and they weren’t there then.  Since October this appeared on the side of the house.

California law does not allow a termite company to come out and treat a property without an inspection.  I’m absolutely certain that this is a termite infestation and the Inspector will arrive here on Friday and say “Yep, them’s termites”, but the State requires an inspection.  Once the inspection is complete, the treatment will occur next week and that will be the end of them for a while at my place.

If you live in an area where these are prevalent, it is imperative that you are vigilant in protecting your home and your investment against termite damage.  The $125 treatment I will pay for is peanuts compared to the damage these pests can do to the home if left unchecked.  It’s one of the easiest ways to save money when it comes to your investment.

First up, the term the started this mess REO.  It means, Real Estate Owned.  That simple.  Now how does that translate into the real world?  Real Estate Owned is actually a line item on a business’s balance sheet.  It is considered an asset.  Cisco has a line item for Real Estate Owned.  Pepsi has a line item for Real Estate Owned.  McDonald’s has a line item for Real Estate Owned.  The acronym has become a noun in today’s market, meaning the same thing as bank-owned.  When the balance sheet belongs to Citibank or Chase or Bank of America, the REO is bank-owned.  Cisco and Pepsi and McDonald’s do not market their REO properties as such, even though that’s what they are.  When those sorts of large corporations own real estate it is not “distressed”.  (Although a lot of property owned by a lot of large corporations today is upside-down)  When a property is respossessed by the lender and then placed back on the market, it needs to be disclosed that it is owned by a bank, or bank owned.  Pepsi and McDonald’s do not need to disclose in the marketing that they own the property, even though it shows up on that line item of their balance sheet.

When a bank sells one of their REO’s, (also called a bank owned property) they are exempt from a lot of the disclosures that a normal seller would be required to provide in the State of California.  The bank has probably never seen the property.  They don’t know if there is a leak in the roof.  They don’t know if the property previously had a termite infestation, or if water runs into the garage when it storms.  They don’t know if Uncle Fredo passed away in the third bedroom after a long illness.  I had one last week where the insurance company wanted to know the age of the roof.  That kind of information is not available in the sale of a bank owned property.  Two years ago I would have told you that those inspections were worth about $40,000 in the marketplace, depending on the value of the home and what area it was located.  Today, the market has adjusted and while I still believe them to be valuable, the market is no longer placing value on them.

It is essential that the buyer does their inspections on bank owned real estate.  It is also essential to have a competant inspector complete a home inspection on your property.  I’ve seen P-traps pulled out of the sinks, electrical yanked out by bitter former owners, disconnected appliances and everything in between.  Unless the buyer is a contractor, it is incumbant that they purchase a home inspection.  One of my buyer’s recently renegotiated with the bank after the inspections were completed for a $100,000 price reduction, and got it!  That’s the benefit of working with a Realtor experienced in bank owned property.

The next term is Short Sale.  Short Sales are not the same as a bank owned property, they are not REO’s either.  In a Short Sale the borrower is still in possession of the property.  That owner will provide the new buyer with full disclosure on the property.  The bank is being asked to take less than what is owned as satisfaction of the obligation.  In the last three years, banks have done a terrible job of handling these transactions.  Many real estate agents don’t understand how to handle them either.  In order to consider a Short Sale, the bank has a large package of information that they require, including all of the seller’s financials.  If the seller has access to funds, the bank will ask them to bring those in to escrow.  As an example, the seller is selling a piece of investment property and they are a businessperson with $250,000 in an investment portfolio.  They owe $750,000 on the property but in today’s marketplace they can only get $560,00 for it.  The bank is going to ask them to bring in the short fall.   Conversely, if it is a owner occupied property and the owner has lost their job and can no longer make the payments, the bank will review the seller’s financials, see that they are maxed out and make the Short Sale.

There are three different ways a Short Sale can come to market.  As a pipe dream, the package submitted or fully approved.  They don’t call it a pipe dream, but the listing agent has brought a property to the marketplace with no idea what the bank will accept as a settlement.  Sometimes the banks require an offer before they will look at the package.  These are the toughest ones to get to close.  A lot of the time these Short Sales are grossly underpriced just because the agent needs an offer to work with.  They don’t care if that offer closes or not, the bank won’t give them a pay off number without an offer.  I think this is a lousy practice on the part of the agent and the bank.  I just took over a property last week that had been priced at $500,000 on a Short Sale.  The offer had been accepted by the seller but the bank wanted $575,000 and the buyer wouldn’t come up the last $75,000.  In doing my research, the bank was right, the property was worth $575,000 and the agent grossly underpriced it, costing the owner the home and all the credit damage that goes with that.

I don’t believe there are deals in Short Sales.  The Short Sales I see show a lot of deferred maintenance.  Many times the sellers don’t bother to stage the home or even clean it up.  Some of the dumpiest homes I’ve seen have been Short Sales.  Things that were so bad that I would be embarrassed to put my sign on them if I weren’t advertising them as a fixer upper.  If the seller isn’t making payments during the Short Sale process, the possibility of it becoming foreclosed is always looming.  The default department does not stop the process because the seller is attempting to Short Sell the property.  I’ve seen many Short Sales crushed two weeks before close because the bank took the property back.  Short Sales are not for the weak of heart.

Hopefully this has helped demystify the difference between a bank owned property, an REO and a Short Sale.  Kind of makes you wish for the good old days eh?

Consider that the mortgage meltdown began in 2008.  The worst of it is already over.  Our market has stabilized and has been pretty stable for almost six months.  The meat of the meltdown only lasted about 20 months and this country managed to turn it around.  That’s not to say that there aren’t families still in trouble, there are.  Until the employment situation stabilizes there will still be families battling to keep their homes, but the worst is over.

I’ve thought in our marketplace that the $8000 doesn’t really matter much.  While it certainly matters in a $50,000 home in Pittsburg or on the outskirts of Antioch, it doesn’t matter much in a $600,000 home in San Ramon.   Basically if the purchaser can qualify for that home, they may very well  make too much money to qualify for the credit.  It helps in places where a home can be bought for $250,000, but if homes are being bid up by $10-20k, an $8000 credit becomes negligible.  It could be argued that the purchaser ended up with $8000 more in purchasing power, but even if the market pulls back that same $8000, in most Contra Costa marketplaces, it’s not much. 

At the end of the day, buyers may recoil slightly when the credit expires, but as I’ve always said “People have to live in houses”.  Unless that changes, the marketplace will always recover.

The other reason I like Broker’s Opens, besides it’s an easy way to see all the homes in the area in about ninety minutes, is the conversations I have with other professionals. Something that I noticed, and I always notice trends on the ground before everyone else, is that the phone quit ringing.  I call it “crickets”, because it’s so quiet all you can hear is the crickets singing.  I’m currently advertising seven properties, I have signs on another 11 properties and no one is calling.  I listened to the lenders talking and the interest rate is below 5 with a point right now.  That’s beautiful money.  So why is it so quiet?  I talked to several of my colleagues about it yesterday.  They all noticed it too and one of the prevailing theories was that people are scared.  We are living in scary financial times.

We’ve just watched businesses go under, many of us have lost our jobs and can’t get new jobs.  We’ve watched friends lose their homes.  We’ve watched families on the brink of ruin and marriages collapsing under the pressure.  It’s scary out there.  For the risk adverse home purchaser it’s very hard to get off the sidelines right now.  But it’s necessary, because the market is going to change again later this year.  The opportunities that exist right now will be gone forever.

I’ve talked before about how real estate is one of those industries that anyone thinks they can be an expert at, whether they’re in the industry or not.  Last week I fought a traffic ticket.  I haven’t been in traffic court to fight a ticket since 1989.  I got demolished.  Because I don’t do that every day.  It should have been a simple process, but I should have hired an attorney.  If you’re not living and breathing an industry every day, you’re going to get demolished going it alone.  Real estate is no different.

Yesterday one agent told me that he heard that the banks were going to release all the foreclosures in June.  Really?  No, he laughed.  Some soccer mom told him that while he was waiting to pick up his kids from soccer practice.  I work for one of the biggest REO brokers in the area.  We’ve been hearing that directly from the asset management companies since March of last year.  It’s just wishful thinking on the part of the asset management company.  They ain’t coming.

Why?  Because 2008 was essentially a run on the banks.  It sent this country to the brink of ruin. Banks failed under the weight of it.  They drove down prices by dumping into the market which made people walk away, driving the market down even further in a snowball effect.  The banks aren’t stupid.  They’re not going to do it to themselves again.  They will release these foreclosures, but in a measured fashion over a long period of time.  There are several factors that make this favorable to the banks.  One, tax treatment.  There have been changes in the rules that allow the banks to go back three years and take the whole loss off of their profits.  Win.  Two, some of these loans are government insured so they are made whole anyway.  Win.  And dumping them on to the market has been a PR nightmare.  I truly believe that the CEO’s of the banks saw what Obama did to the CEO of General Motors and don’t want to be next.  They like their salaries and bonuses.  If hanging on to these assets for an extra six months keeps them off of Obama’s radar, that’s a good thing to them.

How does that affect the local market?  We’re bottomed out.  We’ve been skipping along the bottom for a while now. I called the bottom back in April and I was pretty darned close in most local markets.  In spite of the gloom and doom reporting out there, we’re done.  It’s over.  Now is the time.  It’s not going to get any better than this.  The one thing that is going to change is if the interest rates pop up.  That will lessen affordability and box some people out of the market.  That’s why the time is now.  Are you ready?

The crux of her talk was that we were in the sweet spot of the market right now.  She outlined two market pull back scenarios.  One was an area would pull back to 2002 numbers.  The second was that if the area pulled back past 2002 numbers, it would pull back all the way to 1998.  Hello Brentwood.  Hello Antioch.  Hello Central Valley.  Conversely, areas like Walnut Creek, San Ramon, Danville, parts of Oakland and the LaMorinda area were done. I think she’s dead on.

Why am I talking about this?  Because I received an email yesterday pitching a loft in Oakland.

An absolute bargain and 100k less than they sold for two years ago.

Sounds like quite a deal right?  Except two years ago doesn’t matter.  Not one iota.  What matters is today’s market price, that’s what determines value.  A hundred thousand less than two years ago may or may not be a bargain depending on the area’s comparable sales.  Not the area’s comparable listings, but the area’s current comparable sales, say within the last 3-6 months.  Even a year ago doesn’t matter.  To know my history as a stock broker is to know this truth. I love charts.  I love juxtaposing them and making them in different colors and taking a slide rule to them and every thing in between.  And that’s great for us chart geeks.

Median Sale Price

This one doesn’t go back to 1998, but it doesn’t need to. San Ramon pulled back to 2002 numbers. There has been a lot talk about a second downturn in the market. Looking at this chart, I don’t see a reason for a second severe downturn. That’s the nice thing about charts, they tell stories. The run up is clear and if I were better at playing with ShockwaveFlash, I’d draw in little red lines to demonstrate my point, but imagine a line connecting the highs and another connecting the lows. I don’t see another pull back in that chart at all. The reason for the crash is as plain as the nose on my face, no second crash.

While we’re playing with charts, lets add another chart in.

Zillow Home Value Index

Now let’s compare the two. The first one is actual sales over the last 10 years. The second is Zillow’s Home Value Index which is a computer generated guesstimate of value based on six month trailing trends. This is the best argument I have ever made for not relying on Zillow for home values. Say you were a seller in late 2006. Or a buyer in late 2008. The Zillow numbers would not have been your friend. It’s fine for spotting trends, not so good for actual valuation of property.

The best bet for property valuation is a qualified real estate professional who understands the local markets, studies them and understands where they are going and why. I can be reached via phone, email, twitter or facebook. Ask for a Comprehensive Market Analysis. It’s from me to you.

It’s a buyer’s market, sellers are desperate, I can get a really good deal.

Not exactly.  It’s not a buyer’s market, most sellers are not really desperate and “a good deal” is subjective. Let me explain.  According to Investorwords.com

buyer’s market

A market which has more sellers than buyers. Low prices result from this excess of supply over demand, also called soft market.  Opposite of seller’s market.

When properties are receiving 10-40 offers each, it’s not a buyer’s market.  It’s a seller’s market.  And they aren’t desperate.

Yes, but if someone wants to sell in this market they must be desperate.  Not exactly.  There are numerous reasons to sell in this market.  Job change.  Life changes.  No one is holding off having another child because of the economy.  I defy you to show me a woman who will bet her biological clock against a shrinking economy.  If a family is ready to grow, they’re going to grow, the economy doesn’t matter.  If they need more space, they need more space.  I would argue that this is a great time to move up or downsize.  No matter which way they go, they save money on their property taxes, the purchase costs are less and that helps offset the pull back on the sale of the existing home.  Not necessarily a recipe for desperation.

Now there are desperate sellers out there, but don’t assume that every seller is desperate.  Some just need to make a move for a real pedestrian reason, like life. 

Yes, but I want a good deal.  Who doesn’t?  I have yet to receive a phone call where the potential buyer said “Please find me an over priced home in a lousy neighborhood with questionable schools and a lot of gang activity.  It would be best if there were a liquor store on the corner with a bunch of guys hanging out so I could buy my crack from them”. 

Does this property make sense right now?  Will it make sense in five years? Do I want to spend the rest of my life in this home?  What is your holding period?  A thousand or even ten thousand dollars right now may make absolutely no difference five years from now.  No difference ten or twenty years from now.  Is this a flip or is this a termed investment with an eye towards generating income and appreciation?  What’s the exit plan?  Is this to be your dream house?  Is the exit plan giving the home to one of your children to raise their family?  The numbers differ depending on the scenario.  A good deal really is subjective.  Before you ask the question, know what your definition is.  It might simply be a property with enough space for the family in the preferred school district with a payment that the family can afford.  Or it could be an investment and only the numbers matter.  Know the definition of “a good deal” and know the exit plan to achieve the greatest return on investment.  Maybe the return is a great eduction for your kids in a house on a safe street.  That’s measurable.  Don’t discount it.  It has value.  And it colors the definition of what a good deal really is.

Reading that, it could be argued that the mortgage crisis is over and we can all join hands and start singing “Happy Days are here again”.  We’d be premature.  I’ve been watching the so called “shadow inventory” for over six months now.  The San Francisco Chronicle wrote about it back in April 2009.  Here’s a little slice of ugly from last April as shown in that Chronicle article. 

Chart from 4/8/2009 SFGATE

Quite honestly, I can’t figure out what the motivation is.  In an effort to answer that question I did a little research.  First, let me define the “shadow inventory”.  This is the property that is in the process or has been foreclosed upon and is either in the possession of, or should be in the possession of the lender who had the original loan on it but has not shown up on the marketplace.  That is, houses in default or owned by the banks after foreclosure but not for sale.  Research by Amherst Securities estimates are as high as 7 million properties nationwide.  Read the report here.  The numbers are staggering.  Currently in Contra Costa County there are 6331 Notice of Defaults filed, 4824 properties up for auction and 5649 bank owned properties throughout the county.  Total=16,408.  The homes that are either on the market or pending in Contra Costa County currently equals 6978.  Houston, we have a problem.

There has been thousands of conversations throughout the real estate community regarding this phenomenon and what the solution might be.  One Realtor opined that the  bank had already taken it’s write down and they were good holding on to the property until the market came around.  Others, including myself just scratch our heads.  You know when you have to do something you don’t want to and you keep thinking about it and mulling it over and pacing the floor and avoiding it?  Then you’re finally forced to do something and when it’s all over you sit there and think “Why did I put myself through all of that?  Why didn’t I just bite the bullet and get it over with?”  That’s what I think the banks are doing.  I think the management of these banks don’t want Wall Street to see them taking a second beating on their watch so they’re sitting on their hands and doing nothing.  Maybe the next guy up for retirement will pull the trigger on the situation. 

The market is currently artificially stabilized.  Is the artificial stabilization by the banking industry and more right than the artificial stabilizing by the Government?  Not in a free market.  In a free market it has to behave as it’s going to, and we, as members of a capitalist society have to ride it out, whatever “it” is.

Most properties are flying off the shelf in under 3 days now.  The only reason their days on the market is more than 3 is because the listing agent is leaving it open so more potential buyers have an opportunity to see it.  In other words, the property goes on last Tuesday.  The seller will review offers a week from Friday so the property remains on the market 10 days.  At the end of 1o days the listing agent is bringing the seller 15-20 offers to review.  The REO properties are staying on the market long enough for the Asset Manager to make a decision.  Usually 5-10 days again.  Some banks require that a property age on the market 3-5 days before they will review offers.  The offer deadline is 3-5 days from when it comes on the market, the rest of the days on market is just everyone standing around waiting for the bank to sign one of the offers.   As Realtors, if we’re not ready to show it right away and write right away, we’ll be watching that property sail into the sunset.  If our clients are on board with that tight timeline, the ship will sail without them.  The term I use is “Food fight”.  And it is.

I sent a client of mine to an open house in Oakland a couple of weeks ago.  He told me it was like waiting in line at a rock concert.  He estimated over 40 people at the open house.  I had previewed the house for him earlier that week and there was somebody there when I arrived and somebody waiting for the keys when I left.  I estimate that over 200 people saw that property.  We submitted, at 15 percent over asking which amounted to a little more than $51k.  We lost out to numerous offers that were more than 20% over asking.  And this is not a aberration, this is the norm for this market.  Think you can lowball a property in this market?  Think again. Oh, well that property must have been perfect.  No, actually it was in a good neighborhood and it was clean inside.  Not updated, just clean.  Termites, foundation, roof, fungus, 100 year old electrical, plumbing, faulty systems, the list went on and on for that property.  That’s the reality of this market.

If you want to play in this market, you have to be ready to strike.  And you have to want to sting like a bee.  You have to be agile, you have to float like a butterfly.  I ran into a couple and their agent at a property I was previewing last week.  We exchanged pleasantries on the stoop.  The wife told me she left work to come look at the property, she wasn’t taking a chance waiting.  That’s what people are doing out there in this market.  That’s the competition.

Has it been ten minutes? Here are the top three requests I get.

1. I’d like a nice house in a good neighborhood in Hayward for $200,000
2. I’d like a nice house in a good neighborhood in Concord for $150,000
3. I’d like a nice house in a good neighborhood in Oakland for $300,000

Generally the caller would also like good schools. Those three requests have something in common with Santa Claus and the Easter Bunny. That’s right, they don’t exist. The caller has probably heard some story from somebody at a dinner party or at the office water cooler. Housing stories are like fish stories. The home tends to be in a better neighborhood and better condition the more the story is retold. I’ve gotten those $200k homes in Hayward for my clients and I’ve gotten the $300k in Oakland, but the client has gotten dirty getting the home ready to rent.

In other words, you’re going to have to give something up to achieve your goal.

Do you give up cash, location or condition? I would argue that you never give up location, so it’s cash or condition. What are some of the typical condition issues with these homes?

The most common issue is the foundation. That’s what I call a critical issue. Not fatal, but critical. Is the foundation buckling or cracked? Are the floors sagging? Are the walls cracked? Is the cracking major or minor? Is it simply shifting over time? You need to get a qualified professional in there to assess how bad the foundation issues are. My home shifts. I have some minor cracking around a couple of doorways. I live out in Concord where it’s 28º every night for weeks at a time in the winter and then over 100º every day for weeks at a time in the summer. The ground expands and contracts. My foundation is not cracked and the support system under the house is sound. I just live with it. Conversely, I’ve seen a lot of buckled foundations out there, a lot of homes slipping off of their foundations and a tremendous amount of sagging floors because of damaged beams. So many that I’ve added the level application to my iPhone. I’ll walk around the house leaning my phone against walls, floors and cabinets, 3º seems to be the norm for these places. If you’re going to consider a home with these issues it’s imperative that you have a complete understanding of the scope of the issue. Have a qualified professional inspect the site during your inspection contingency period. Don’t guess on that one.

The second most common condition issue is overall condition. I’ve walked into a lot of homes where the first thing I notices is the odor of a roach infestation. To me that indicates a general level of filth in the home. Even if it appears cleaned up, I know that it’s seen better days. But that’s not tragic or fatal, just disgusting. The same with a flea or rat infestation. I had a house last month that had a flea, roach, ant, rat and maggot infestation. I have no idea where the latter came from, there was no host source, but they were there. That house makes me gag, but, it’s not fatal. All can be treated. A lot of potential investors will walk away from that situation because it’s so ugly, yet it’s the cheapest to fix.

Termites and dry rot is another issue. Subterranean are easier to treat than drywood termites. Drywood may require tenting which is expensive. A treatment of Timbor or other insecticide for subterranean termites is not nearly as expensive. And then there’s the damage they did. Did they eat beams in the foundation? Joists? Framing? How much of it? It’s easy to rebuild a porch or steps on a home versus lifting it up and replacing chewed up crossbeams. Once again, seek a qualified professional who can guide you through these repairs.

Finally, giving up cash. As the saying goes “Pay me now or pay me later”. Cash up front can alleviate the condition issues, or cash spent after acquisition can alleviate the condition issues. Some investors chose to not spend the cash at all and they leave it on the table with rent they cannot collect because of the condition of the property. I think they leave it morally on the table by not providing clean, healthful living space. And they pay for it over time. My preference is always to pay for it after acquisition. That way you as the owner can know the quality of workmanship that went into the repair. You know that it is or isn’t going to hold based on how the repair was handled. It’s your investment, and that seems to be the way it should be to me.

Opportunities are still there in this market, but it’s a tough market right now. Personally, I love this market because I have to think out and strategize on every offer and transaction. I have to know where the point of critical mass is, I have to know that it’s going to appraise if we bid it up. I have to know that we’re going to be in the running if my client bids on it or it’s all a waste of time and resources. Patience is king in this market and patience pays off.

I did a BPO on a property up the road last week.  Within a one mile radius there were 22 homes for sale.  Of the 22, one was REO, 2 were regular sales and 19 were short sales.  What’s the message?  Banks aren’t taking them back as quickly and they aren’t dumping them on the market like they did last year.  They finally figured out that flooding the market was a self defeating proposal.  The problem is other agents aren’t conveying this information to their clients.  They’re doing exactly what they’ve always been doing, selling.  Wrong.

I met a guy yesterday who wanted to see one of our listings.  A very nice young man who hasn’t really settled on an agent, he’s just bouncing around.  Thirteen different agents have written on thirteen different properties for him.  He said to me, I just want to get a house and be done with this.  I told him I could get him the house, but did he want to over pay for the house?  He didn’t.  I explained the market to him and told him that I spend a lot of time knowing what real estate is worth.  If he was going to overpay with me, he was going to do it completely informed.  But I preferred he didn’t and was just patient with the process.  What?  So I don’t get a sale today.  Big deal.  Just because you can, doesn’t mean you should.  It’s about paying what makes sense for the client’s personal situation, the home and the neighborhood.  The fundamentals never change.  It’s about a client for life.  I don’t want to sell just this guy’s starter home, I want to sell him his move up home when he meets the right girl.  I want to sell him his next move up home when his family grows out of that one.  And if I’m still alive and in business, I’d sell him his downsized retirement house.  Along the way, I’ll help his friends out too, his brother, his Mom, the guy he works with, his sister in law and that’s all worth not making a sale today.  That’s all worth waiting for the house that makes the most sense for him.  That’s worth taking 15 minutes out of my day to teach him about the market.  Because the more my clients know, the better I look.