I heard a very sad story yesterday that should be a warning to anyone who heats with oil.

A burglar broke into a home and stole the toyo stove early this winter.  Toyo and Monitor heaters are about the most efficient way to heat with oil so they are very popular here.  They are also very popular with burglars. 

The loss of the stove and the freezing of the house was only a small problem compared to the disaster caused by the leaking of the fuel oil.  With the stove gone and the pipe broken the oil tank drained into the house and leaked through the floor into the crawlspace and into the ground.

The ground under the house was contaminated to a depth of 20 feet in places.  This will be very time consuming and expensive to clean up.  The costs could easily exceed the value of the house.

The value of this property has been reduced to almost nothing because of the unknown clean-up costs.  It is not the only property in the Mat-Su Borough that has been de-valued by leaking fuel storage tanks.  Many of the gas stations had leaking underground storage tanks…but the government  helped them get cleaned up.

As far as I know, there are no programs to help a homeowner clean up a contaminated property caused by leaking fuel oil.  All who heat with fuel would be wise to consider ways to prevent a similar disaster. Here is the State Of Alaska Guide For Heating Oil Tanks.

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The Mat-Su Borough says it’s going to raise taxes this year.  Rindi White wrote this piece in the Anchorage Daily News alerting us to this new hole in our pocket.  Surprisingly, the borough claims that the budget will decrease, but they need more money.  I’m not sure how that works.

What they don’t say is that they have been raising taxes almost every year since 1990.  When your assessment value on your house increases, your taxes increase.  So without having to increase the mill rate, the borough has been raking in more and more property taxes every year. 

In addition to that, the growth in the valley has increased the amount of houses from which they can gather taxes.  Raising the value of an empty lot that is valued at $30,000 to $230,000 with a house on it increases the change into the boroughs till by 6 times.  Of course, new homes equals a higher population, which does increase the work load for the borough…they need to hire more people to collect the money. 

Seriously, I do recognise that a higher population means that the borough needs more money.  But they should be receiving that money already with the increased property valuation of those new homes.  I am having a hard time understanding why taxes will need to go up this year unless they are in fact going to spend more money. 

I have a call in to the borough finance office and also to the employment office.  I hope they can help me understand why they want to raise taxes.  I’ll update this post when they help me clear the tax fog in my brain.

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I once had a call from an out-of-state owner telling me that he wanted his house sold by the weekend.  It was Wednesday.  When I told him that could be done for the right price he asked me to fax the listing papers.  We had the house sold by the weekend.

He was a MOTIVATED SELLER.

Some sellers are not motivated.  How do you know they aren’t motivated?  Here are a few clues.

• The house has been on the market for 600 days with no price reduction.
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• They don’t want to show the house today…how about next week?
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• It’s still a mess, even though they had a 24 hour notice for showing.
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• You make a good offer which they reject with no counter.
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• When you show up to the house you are greeted with a snarling pittbull

On the other hand, there are sellers who are very intent on getting their house sold.  A motivated seller will always try to find a way to make a transaction work.  They won’t balk about a $2,000 difference between the offered price and asking price .  They will make the reasonable repairs to get the deal done.  They will even change their plans to move early to help a buyer out.

How do you find these motivated sellers? 

• Sometimes you can tell immediately by the price.  If a new listing comes on at 10% below the competition you know that is a motivated seller.  Buy the place for the asking price before someone else does.  That seller will be a willing partner throughout the transaction.
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• Sometimes the listing will say “motivated seller”…that’s a good hint.    Actually, that seller often owes more on the loan than the house is worth.  The seller is motivated but not able to do anything about the price.
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• It’s been on the market a while with a recent price reduction.  This seller is still serious about selling, but is trying to find the right price.  Make them an offer.
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• It is owned by a relocation company, or is a foreclosure.  These people are going to sell…period.  But they aren’t going to give the property away.  Read this on foreclosures. 
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• It’s a divorce sale.  They need to sell so that they can get on with their lives.
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• Last, but not least, get my MOTIVATED SELLERS LIST.   I  go through the MLS system and actually read the listings to see if it’s a Relo, Foreclosure, Divorce etc.  I also include those that have been on the market a long time but have had recent price reductions.  Occasionally a realtor will call and ask to have a house on that list because their seller is genuinely motivated.

Just drop me an email by clicking on my contact button.  Ask to receive the motivated sellers list. I just updated it.  There are 43 homes on the list right now. 

And here is a bonus that didn’t make the list.  This guy is really motivated.  He has only been on the market 10 days and has lowered his price three times already.  Click here to see the listing, call me to get in.  My cell phone number is 232–7900.

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Here is the market update for the week of March 10–17, 2008.  We have topped 700 listings for the first time since mid-December.  We will likely see listings increase over the next couple months

If you click on the chart to the right above, you will see a running tally of listings, pendings and closings since January of 2007.   You can see that pendings are starting to climb while closings are still lumbering along at a steady pace.

I anticipate to see closings begin to climb a little in the next couple of weeks.  Let’s watch and see.

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This article will tell you how best to find property on-line.  I’m going to let the cat out of the bag and reveal some secrets no one mentions. 

Many real estate websites have a property search link on their page. The link is provided by the Alaska Listing Exchange, ALE.   This link will allow you to do your own search for homes.  I had a similar link on my page in the past but was disappointed in it.  I have since found out why I was disappointed. 

The Alaska Listing Exchange system only allows certain search parameters.  For example, you would not be able to search for ranch style homes, or homes on gas heat as opposed to oil, or log homes.  You can do a search based on a broad area, price range, size, bedrooms and baths.  That’s about it.  ALE has good reasons for these restrictions but their reasons don’t help you in your search.

In addition, there are a few brokers who do not allow their properties to be on ALE. These do not comprise many listings, but you are missing them when you do you own search.  The AKMLS has a public site at alaskarealestate.com.  This site allows more search parameters than does the ALE link found on real estate licensee’s sites, but it is still very limiting.

As a real estate licensee I can set up a search for you that is much more useful.  For example here are some of the ways your search will be better :

• you can search by heating type…gas, oil, propane, wood etc.
• you can search by house type…log, ranch, two story etc
• you can search a school district…Colony, Palmer, Wasilla, Houston
• you can search for waterfront…lake, creek, ocean
• you can search sold sales that will allow you to see how much certain homes sold for
• you can search new listings since any date you select
• you can search by access…paved, gravel etc
• you can search for horse property, airstrip property etc

Your search can be as specific or as broad as you want it to be.  In addition, I can set it up so that as soon as a new listing comes on the market that meets your search parameters it will be sent to you. 

Sometimes a house is just outside the price range of your search.  If that house price is lowered so that it is now in your price range, you will immediately be notified.  For example…I just lowered the price of this house  today.  If your price range had topped out at $340,000 you would have been notified immediately. 

Your search will be much more useful, and you can change it whenever you like, or even set up several different searches for different types of property. 

All you need to do is drop me a note by clicking on my contact link in the top right hand side of this page.  Include your name, the email address you want the search to use, and a good phone number.  Then give me as many specifics as you can about the type of property you want.  I will set up the search for you free of charge. 

Don’t worry, I don’t give or sell your personal information to anyone…this is just to let me set up a search for you that will actually be useful.  Not only that, you won’t have to spend hours on the computer every time you are looking for houses, they will automatically be sent to your email box and you can just browse at your leisure.

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I went out to see a house in Wasilla this week that is owned by a 22 year old young lady.  She and her husband purchased it brand new in 2006 with a VA loan. Her husband was killed in Iraq not long after they purchased the house. Since she could no longer afford the $1,800 per month payment on her $2,200 per month income, she moved into less expensive housing and rented the house out.

Unfortunately, the tenants did several thousand dollars damage to the house and she was in the process of making the repairs when I arrived.  She needed to sell it quickly and wanted a price that would get it sold very fast.  When I discovered that she owed about $229,000 on the house I realized we were likely in short-sale country.  The house was probably worth less than $229,000 and would need to be be priced significantly less than that to sell quickly.

She mentioned that there was some issue about the house being too close to the street right-of-way when they purchased it.  She remembers signing something about this problem at closing.  Unfortunately all her paperwork had been shipped to her mothers home in the states where she planned to move as soon as the house was sold.  I was not able to see what she signed but decided to call the Mat-Su Borough to find out what I could.

The borough has certain set back regulations for structures.  Any experienced Realtor or builder in the borough is very familiar with these regulations.  According to the borough code compliance officer, this house was built only 15 feet from the right-of-way when it was supposed to be 25 feet.  Further, the builder was informed of the violation during the construction process.  Apparently the real estate licensees also knew about the violation since they had the buyers sign an acknowledgement.

I don’t have any idea how this transaction was allowed to close.  I suppose that it is possible that the loan underwriter knew about the violation but didn’t care.  Perhaps the title company that closed the transaction felt that as long as the buyers signed an acknowledgement everything was OK.  Somehow the appraiser must have seen the as-built survey but let it go. Perhaps the buyer’s real estate licensee who was supposed to represent the buyer’s best interest felt that it wasn’t a big deal and allowed it to close.  I guess the builder felt that the house was a perfectly good house even though it was built to close to the right-of-way.

On the other hand, it is possible that at least some of the people involved saddled this young couple with this problem because they wanted to make their piece of the pie.  Two real estate licensees made a good commission.  The title company made a decent closing fee and insurance fee  The loan officer pocketed the loan origination fee and whatever else the lender makes on the hidden side of the transaction. The appraiser made $550 for his work. The builder banked a handsome profit and has not come out to the house even one time since the sale.

In the meantime the 20, (now 22 ), year old widow has been making payments of $1,800 per month for two years on a house that she probably cannot sell.  I don’t know anyone in their right mind who would buy a house that is too close to the lot line.  It will cost several tens of thousands to move it.  The borough is NOT going to waive their regulation for a house that was built contrary to code.

This story is still ongoing.  I suggested that the widow get legal counsel. She cannot afford a lawyer so she will see what she can get from legal counsel on base.

There are many, many lessons to be learned from this story.  Here are just a few of them:

• 1. Use a Realtor who is very experienced in the area.  An Alaska Real Estate license allows me to represent buyers and sellers anywhere in Alaska.  I have been working in the Mat-Su Valley for 17 years.  I do not represent buyers in Anchorage, or Juneau, or anywhere else in Alaska.  I stick with my area of expertise.  A buyer should ask how many transactions per year that their Realtor does in the area.  Both the buyer’s representative and the seller’s representative in this transaction did most of their work in Anchorage, they likely did not realize the seriousness of this problem in the Mat-Su Borough.
• 2. If someone asks you to sign an acknowledgement of a problem, make sure that you understand the long term consequences.  I cannot believe that had these buyer been told that  they would not be able to sell their home because of the set back violation that they would have signed the acknowledgement.
• 3. When a builder knowingly builds a house against the boroughs regulations and then tries to sell it to you he probably does not have the character to follow up with warranty work. There are still pieces of blue tape in this house left up from the final walk-through.  The builder did not fix the problems then and has not been back.
• 4. Do not allow the pressure of needing to move into a house allow you to take risks you otherwise would not.  These buyers were under pressure to get into a house very quickly and were in the mood to sign anything put in front of them as long as it would accomplish that end.
• 5.  Just because the appraiser says it’s a go doesn’t mean everything is great.  Just because the VA will loan on the home does not mean it’s a good home. 
• 6.  If there are setback problems on a new home in the Mat-Su Borough DO NOT CLOSE until those problems are resolved.  Some set back problems with older homes can be resolved through different procedures at the borough, but new homes get no mercy.

I give a free initial consultation on any property like I did for this young lady.  If you would like me to come out to your property give me a call on my cell.  907 232–7900

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I recently received an email from a reader in Fairbanks.  He was questioning my opinion that Alaska’s economy will hold together as long as the oil prices stay high.

Here is his question.

It appears that Alaska has not experienced the “crashes” of other markets but why do you think it is because of high oil prices? I would think that if oil prices continue at current levels or even increase that housing prices will have to decrease as it costs more per month in expenses to heat the home and for the drive to and from.

And here is my answer…it’s my opinion and I’m sticking with it.  For now anyway.

Alaska’s economy is oil dependent.  Well, at least 80% of it is oil dependent.  That means 80% of the money that comes into the state comes in because of oil.  If oil prices were to tank as they did in the 80’s then the oil companies lose incentive to find more oil and to figure out how to get more oil out of their current wells.  That means they lay off workers.  No more workers, no more people buying stuff at Walmart or meals at your local restaurant

We get less for royalty oil as well.

And the state gets less taxes from the oil companies.

It’s a triple whammy…we lose jobs and we lose taxes and we lose royalties.  The economy will go downhill very fast if oil prices drop.   So swallow hard and smile when you fill your tank.  Without those high prices we would be in poor shape.

It is more expensive to heat and drive, but at least we still have jobs.  If we don’t have jobs we don’t have any money to pay our house payments and car payments, let alone the fuel payments.

There is some evidence that oil prices will fall.  Here is a report about lower gas prices in the near future.  The report says demand for gasoline is dropping because of a recession.  That will likely mean that crude oil prices will go down as well.  I don’t think they will far too far but no one knows for sure.  There is certainly a cut off line below which it will begin to hurt the state’s budget.  I think the state is budgeting for $70 per barrel oil.  It will have to go lower than that before we will begin to feel it in the economy.

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Alaska has a unique choice this Tuesday.  The presidential race is coming down to the wire.  It’s real close and may be over by Wednesday.  For the first time in my life it is extremely important for those of us in Alaska to let our voice be heard.

The Republicans are holding a presidential preference poll on Tuesday.  This is a binding poll and will determine how many delegates will be allocated to each candidate.  Republicans are sending 29 candidates to the national convention and the poll will determine how they will be allocated.  As I understand it, these will split according to the results of the poll.  If one candidate gets 25% of the vote, he will receive 25% of the delegates.  Go to http://www.alaskarepublicans.com for locations and time.

The Democrats are holding their caucus meetings on Tuesday as well.  The caucus will ultimately determine which delegates will be chosen to go to the Democratic National Convention.  I have participated in caucus meetings and they are actually very educational.  If you are a supporter of Clinton, Obama, or Gravel you should attend.  Go to http://www.alaskademocrats.org for the locations and time.

For other information here are some other sites:  

• http://votehelp.org This site will help you determine which candidate best fits your own views
• How do the candidates stand on ANWR drilling?  Click Here
• Wall Builders Voter Guide

If you are wondering…I’m supporting Mike Huckabee.  Click here to see where he stands on the issues.  I think it will be pretty obvious to see why I’m supporting him.

Politics is not usually a part of my website, but this is a particularly important election.  Feel free to comment if you like…but keep it civil.

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Buyers and sellers need to be careful about the people they deal with.  If you are giving all your personal information to someone that you found over the internet, you had better check them out carefully first.

Last month I wrote about a Shark Alert In Alaska’s Waters.  At the time I didn’t name anyone because it was not yet absolutely clear that the person was doing anything illegal although it was definitely unethical. 

Since then a lot of information has come out Richardson Equities and it seems that the FBI has uncovered a huge scheme that has hundreds of victims.  Here is a video from KATU in Oregon about the investigation.  If you see this guy, call the FBI.

He tells people that he will help them buy a house if they send him a deposit.  It seems that most people sent him $3,000 to $5,000 but I have heard of one person who lost more than $50,000.  In most case I heard about,  he just pocketed the deposit and flaked out of buying the house.   If they actually do buy a house he set up a rent-to-own plan where they would pay him an above market rent amount on a monthly basis.  But he pocketed all the rent monies without paying the mortgage. People are now receiving notices from the lender that they must vacate. 

This is a good lesson in the importance of making sure you are dealing with reputable people.  Get references from people who know.  In this case, Richardson Equities not only bilked his victims out of the money they payed him for real estate, it appears that they also drained their bank accounts. 

If you would like to good references give me a call.  My cell number is 907 232–7900

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Daily, sometimes several times a day, people ask what is going on with real estate in the Mat-Su Valley.  We hear continual bad news about falling prices in California, Florida, Michigan and other places like that.  But people want to know what is going on in Palmer, Wasilla, and even in Anchorage…can you imagine that?

As my last Market Memo showed the market is hanging in there.  Compared to last year at this time the inventory and sales are about the same.   My 2008 Predictions show enough good news to make me feel like the markets will continue to remain about the same..until they change :-).

If you have been around awhile, you will remember the crash of 85 when prices dropped precipitously here in Alaska and especially in Palmer and Wasilla.  In fact, we purchased a home in 1987 for about 1/2 of it new price in 1983…and then we saw our house value drop even further.

But that was a different problem.  The problem in 85 was that the builders and banks continued to build like the economy was booming while oil prices were in the tank.and companies on the North Slope were laying off workers in droves.  People were leaving the state looking for work.  Prospects were better elsewhere and there was little hope for an economic recovery in Alaska. 

Things are different now.  We are in a global economy and things are actually looking better in Alaska than in many places of the country.  I think people will tend to stay in Alaska.  In fact, if my email box is any indication, people are clamoring to move here.  If more people move in than out they certainly need a place to live.  So they will buy or rent and keep our realestate market active.

So that’s my opinion, time will tell if I’m right.

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