Category: General

Some have compared the excitement of watching a baseball game to watching paint dry (and to others, that’s a tad offensive to paint), but the Chicago Cubs and the Cleveland Indians certainly gave it their all and took it not only to the last of seven games for the World Series to be decided but into extra innings. It seemed to be a fitting dramatic build up for the Cubs to end their 108-year drought of winning a World Series – the Curse of the Billy Goat has been broken.

Oddly enough, a high school kid from Mission Viejo, CA, wrote this as his senior quote beneath his photograph in his 1993 year book: “Chicago Cubs. 2016 World Champions. You heard it here first.” I’m not making that up. The kid’s name is Michael Lee – Google it. Media outlets have since interviewed Mr. Lee – now a grown man – and he claims he had a dream about this when he was a young kid, and it’s always stayed vivid in his mind. I’m sure, like you, that there wasn’t even a trace of trying to be a smart aleck because we all know how serious high school students take the writing of their senior quotes. If I remember correctly, mine included the words “blah blah blah.”

I’m sure when the young Mr. Lee’s classmates cracked open their yearbooks to write messages of “have a great summer” and “don’t ever change”, they read his quote, laughed uproariously (because the Cubs of the ‘90s were no great shakes), and focused on more important things like whose party they were going to crash that weekend. To that same end, I’m confident Mr. Bircham the shop teacher didn’t say to himself, “The world should keep an eye on Michael Lee. He’s got something there about the Cubs.”

While I honestly find the whole “prediction” fun – it’s great fodder for an article like this – there are some things that are happening today that would have seemed just as outrageous not very many years prior. For example, three years ago, Amsterdam’s mayor asked a roomful of pension fund managers if they’d be willing to invest in the regeneration of his city’s notorious red light district. Two lonely hands went up. The two funds whose managers raised their hands, as a result of taking the mayor up on his offer, are seeing an annual rate of return between 10 and 15 percent. The other funds stuck with “normal” investments like government bonds, which are yielding about . . . zero percent. Another investment firm representing the British Medical Association decided to look farther afield for growth opportunities and purchased 52 bingo parlors – they’re offering a net yield of 8.4% currently.

Single-family residences are the “regular” or “vanilla” home purchases these days – to the conventional way of thinking, such a home is the first property one acquires before doing anything else in the real estate world. But a case can certainly be made – not as a wild prediction but one that can be proved with numbers – to step outside the “norm” and make your first purchase a duplex or a fourplex. With it as your primary residence, you can get a lot of great products with much lower down-payment requirements, and you can get the other tenants to pay your mortgage. Plus, you only need to live there for a year – then you can move on and purchase that dream house while you keep the original property as a great investment. People may laugh a bit like you just told them a joke when you tell them that this is your plan – they might fail to see into the future like you can. Just smile and think of all that passive income.

And speaking of strange jokes: If you had told me two or three years ago that my two major choices for President of the United States came down to Donald and Hillary, a case possibly could have been made for voting for the Billy Goat. With that said, be a solid citizen and vote this Tuesday!

In practically every aspect of our lives these days, we rely on data. Either it’s data we seem to use up too frequently on our phone plans during the month or it’s data concerning something that’s coming up in our lives on which we need to make a decision – and in both cases, if we use the data incorrectly, it could certainly cost us (or so we think).

When Nordstrom decided to stop releasing monthly sales numbers by store, Credit Suisse – a company that provides, among other things, data to the financial industry – claimed they could reliably predict Nordstrom’s monthly numbers by using monthly sales figures from (I’m not making this up) The Cheesecake Factory. Credit Suisse believes the customer demographics of both companies are fairly similar so their spending behaviors will also be similar (i.e. if sales go up at CF, they go up at Nordstrom). Credit Suisse claims they’ve gone back and compared available data from the past, and their claim bears fruit (not to be confused with the strawberries, blueberries, or cherries you find most frequently atop a cheesecake).

FEMA claims they can predict where a hurricane has wreaked the most havoc by seeing where Waffle House restaurants remained open and which ones closed. In 2011’s Hurricane Irene, they witnessed WH outlets closing in a number of states on the eastern seaboard, and only one in Virginia closing, so they deployed more supplies/people to those areas where WH was closed and fewer in Virginia. They employed this theory most recently with Hurricane Matthew and relied on WH’s Twitter account to give them updates. (I’m not that sure about how secure a Twitter account is, but it seems HIGHLY possible a 15-year-old could hack it and cause FEMA to dispatch a fleet of semis to a bar mitzvah in Toledo, Ohio, if they’re not careful.)

In a recent newspaper article, the author said he could predict the future of the housing market (it wasn’t rosy) by looking at IKEA’s recently released 2017 catalog. He noted that rather than having walls in a house, IKEA is telling you that you’ll separate rooms using clothes racks instead. Along those same lines, rather than sleeping in a bed in an actual bedroom, you’ll live in a “multi-functional” space with a sofa bed as your day-to-day sleeping arrangement. To wit, he was predicting that housing prices will continue to soar to heights where people will be able to afford only the square footage of the box in which the IKEA products were delivered. (The ONLY upside to all of that would be that EVERYTHING could be assembled and fixed with just that one Allen wrench that comes with every IKEA product ever made.)

Admittedly, I’m poking a bit of fun at Credit Suisse, FEMA, and IKEA, but I’m not saying they’re necessarily wrong . . . OR right for that matter. I’m just giving you three examples of the lengths many people will go to in order to gather data and “predict” the future. Many people have spent the last six to twelve months in a sort of analysis paralysis about the real estate and mortgage markets because of this side-show election we have going on here in the US. They’re poring over web sites and cable news programs all in the interest of trying to decide if they should buy their first home, sell their home and downsize, or purchase an investment property – and yet they still haven’t done anything on that front. Why? Well, the answer is quite simple: they want someone else to make their decision for them so they can blame them if it’s the wrong decision. I’m going to tell you something that flies in the face of all that: TRUST YOUR GUT and move forward. Sure, you might make a decision that will leave you holding a few extra proverbial IKEA screws that you know should have been used but can’t figure out where they go. You might find yourself needing to eat at a Waffle House instead of a Cheesecake Factory for a while. Using the hurricane as an analogy: as unpredictable as its path may be, it’s a lot harder for it to hit a moving target – so move!

When you volunteer to give blood, you show up at the designated location (i.e. school, church, illegal cock fight, etc.) and wait to be called by one of the technicians. Once they call you, you’re ushered over to a temporary cubicle away from prying eyes so they can ask you 348 health questions in 30 seconds to which you are supposed to answer “no” on each one. “Have you had in the last six months bodily fluids that defy description with a standard pallet of primary and secondary colors oozing from any natural or recently created orifices?” (They read those suckers so fast – I think that was one of the questions.)

One would think that they could hand you a laminated card when you first check in that had all of these questions, and at the bottom of the questionnaire there would be a note saying: “If you answered ‘yes’ to any of the previous questions, you may not donate blood today – you have more important things to worry about.” Instead, they bring you back to the cubicle and grill you. Some of the technicians give you the evil eye if they think you’re lying. You’re sort of waiting for the tech to lean across the little table and say, “Look. I understand you got caught up in the moment when everyone was signing up for the blood drive – you wanted to impress everyone with ‘Hey, look at me. I’m as selfless as any of you.’ But let’s be honest: you’re not eligible to donate, so I’m going to let you sit here for a couple more minutes and gather your wits about you. When you get up to leave, if anyone catches your eye and questions you, just tell them you have iron-poor blood. Do you understand? And don’t let me catch you back here again. Peer pressure’s tough, I’ll grant you, but the business end of my size eleven shoe is tougher.”

I do find a great deal of personal satisfaction with donating blood. Sure, it’s nice to think about the people I’m helping, and that’s all fine and dandy, but what I really enjoy about the whole experience is watching how nervous people get with the whole ordeal. I feel beholden to feed that fear.

The son of a friend of ours walked up to me and said he accompanied his dad so he could understand the whole process. Noting a look of trepidation on his face I said, “Not a bad plan, Chet, but I’m surprised it’s so quiet here today. Usually you hear a lot of screaming and moaning. They must be using some pretty strong drugs today. Better make sure they don’t slip you something – you could end up with a needle in your arm, too.” As the boy screamed and ran to find his dad, I noticed a lot of people were looking at me. I just told them, “Poor kid just found out he has iron-poor blood.”

While I’m fairly confident this young man will grow up to be a strong contributing member of society and won’t need hours of therapy (knock on wood), I’m reminded of how our perceptions are shaped by little tidbits we hear from someone we perceive as wise or intelligent (I’m sure Chet sees me as a pillar of knowledge). Our moms, for example, told us as children that we couldn’t go swimming for an hour after we ate. The truth behind that was our moms needed a nap (understandably so) – there was no scientific evidence supporting that – but we took that counsel as gospel, even though we weren’t happy about it.

At some point in almost everyone’s life, this little nugget of mortgage “truth” has been imparted: you have to have 20% saved for a down payment on a house. Over the last 35 years, according to the National Association of Realtors, the median down payment for a first-time homebuyer has been only 5%. Let that sink in for a moment. How many people could buy RIGHT NOW (with rocking interest rates) but are waiting until they’ve put away 20%? THAT should be a question they ask when you donate blood!

The game show “The Price is Right” – the show where 95% of what they give away is total garbage (fireproof bathmats in the shape of Ecuador, really?) – is probably each child’s first exercise in trying to guess how much something costs. Admit it, you sat glued to the TV set either screaming at the screen so the contestant could hear you or you were sending out vibes telepathically – either way, you KNEW you were the BEST price guesser in the world . . . until the very moment the model would reveal the real price of $732 for a set of salad tongs made of Lucite and cubic zirconia (your bid was $17, and you thought THAT was probably a little high). But that didn’t stop you because here comes that toaster oven that doubles as a brief case – how could anyone put a price on THAT?

A recent study published in the Journal of Housing Research (just let the sheer coolness of that name wash over you for a few moments) concerning pricing was interesting. The researchers in the study (who, you have to think, are absolute party animals) concluded that “buyers are more drawn to a house priced ‘just below’ at, say, $199,000 than to a house priced at a rounded number like $200,000.” They provided further nuggets of wisdom by adding that their study suggested that by using this “just below” strategy, sellers can price their homes slightly higher without driving away potential buyers. Compared to a “rounded” pricing strategy (that means the number has been rounded up from $199K to $200K and not something involving the feeding of high-calorie foods to fatten it up), the authors of this study say the “just below” strategy yields a selling price that is between 2.5 and 3 percent higher. This is solid science, right? I mean, these guys obviously stayed at the office late crunching numbers and missing their kids’ soccer games to bring us this stuff, so it must be dead on.

Oddly enough, in their very next breath, they say that “rounded” priced homes usually have a shorter time on the market and a lower discount relative to the listing price. Huh? Didn’t they just say the “just below” pricing strategy yielded a selling price 2.5-3% higher than a home being marketed with a “rounded” pricing strategy? So, if the “rounded” priced homes usually have a shorter time on the market and a lower discount relative to the listing price, how much higher are the “just below” folks bumping up their list price so they can turn around and negotiate downward and leave the house on the market LONGER? That sounds like a lot of work, hassle, and worry. Wouldn’t it just make more sense to price the home correctly in the first place? Okay, now I’m just talking crazy, I know.

At the end of the article, there were lots of comments about the “just below v. rounded” debate – not to be confused with the Kitchen Debate between Krushchev and Nixon which resulted in the creation of nachos – and many had good points. However, if I start listing them here, my head (and possibly yours) might explode. In the interest of keeping my cerebral cortex attached to the rest of my body, let me just say this: do yourself and favor and don’t overthink it. There are SO MANY factors that play into the ultimate sale price of a home that have NOTHING to do with the first number that went up on the board: demand, timing, what you (the buyer) may have had for lunch and is threatening to make a reappearance, etc. Focus your attention on “the deal” (this goes for both sides of the transaction) and lean on your agent’s expertise to guide you through this. Some agents may yell at you to make sure you hear them correctly, and others will just try to send you a vibe telepathically. Whatever their method of guiding you through this exciting time may be, try to make sure they get the other party to throw in the fireproof bathmats in the shape of Ecuador. You’ll never know when you might need them.

Recently, we were invited to a wedding, and I was reminded that we needed to get the happy couple a gift. Tradition teaches me that you get a gift to help them “establish” a new home, which makes perfect sense for two young kids who are fresh out of college, for example, and they’re moving out of mom and dad’s house. The rub here, though, is that both the bride and groom have been living on their own for quite some time and had “established” their homes LONG ago. My bow to tradition notwithstanding, I was overruled and the search for a gift commenced.

Fortunately, there’s the Wedding Registry – and it’s online! As you know, it’s a helpful list of a bazillion things, hand picked by the bride and groom (read: by the bride), that lets you know what items they will “need” to start a home and begin their new life together. As I had already mentioned, both had homes and weren’t lacking in the housewares department. Oddly enough, though, when we went online to check out the several registries, housewares and furniture were exactly what they had on their lists. (We did notice that the groom had chosen some beer mugs from Crate & Barrel . . . but the @#$% quantities had already been purchased!) So, rather than trying to decide between the Casablanca Round Placemat and the Savoy Mocha Placemat (which, incidentally, is rectangular for all of those who are scoring at home) or between the Cookie Dough Scoop and the “Y” Peeler (yes, the letter Y was in quotations, and come to think of it, I’ve never had occasion to peel the letter Y or any other vowels for that matter), we decided to get them a crock pot, which wasn’t on the registry. You laugh now, but they’ll thank us when they’re looking to make a great chili to go with the hot dogs and beer at their first tailgate party as a married couple. We’ll be their heroes – we’re patient and can wait for the accolades from them.

Getting ready to buy a house (whether it’s your first or your fifth, a vacation property, or an investment) is very similar to compiling a wedding registry. You sit down and come up with a list of things you want and need – and depending on the persons involved, this list could kill a couple of large trees if one were to print it out. But that’s okay, because this is an exciting time and should be enjoyed. The fundamental difference, of course, is at a wedding, you wait to see what others have picked out for you; when buying a house, you have the ultimate say on what you will or won’t negotiate/trade to complete the transaction. This is where you separate the GREAT real estate agents from the good and the mediocre ones, too.

For example, at present, it’s mostly a seller’s market. The great agent, before she even puts you in a car to start looking at properties, is going to ask to see your “registry”. Because it’s a seller’s market, she’s going to tell you what will and won’t fly, and she’s going to be very firm about it – this is like the mother of the bride “reminding” the couple that a number of relatives who have been invited to the wedding won’t be able to afford even one place setting of jewel-encrusted flatware so they need to put something (like a crock pot, perhaps) on the registry. An agent’s job is to help you purchase a house. A great agent’s job is to do the legwork up front to determine what can be crossed off the wish list and what is absolutely NOT negotiable – and then she moves heaven and earth to get that for you.

At the wedding I mentioned at the beginning of this article, we didn’t stick around to watch them open their gifts, but I was really curious to see if they got a “Y” Peeler – because if they had, I would have insisted they show us all how one peels the letter Y, and that would NOT have been negotiable.