I’m a gardener by inclination. In a perfect world, I’d be a full time gardener, with unlimited funds and time. In the real world, I’m an early morning, late evening and weekend gardener, fitting it in when I can.  I am a full time REALTOR®–doing sales, appraisals and education.  One of the specialty markets I sell in, and love to teach others about, is  RSPS.  I have in my yard a perennial border with huge daylily on the corner.  I remember when it was a measly twig like stalk.  Here’s where my perennial gardening and real estate are alike: both can take years to cultivate, and both are worth the effort.

We know one of the unique things about our specialty is that our buyers are seldom in a hurry. A second home is a discretionary purchase. They can live without it. My perennial border is completely discretionary as well.  I’d pay a fine if I let my grass grow long, but I don’t HAVE to have flowers. I don’t have to invest time and effort in flowers that don’t reach their peak for a long time. But, the payoff on that investment, like the clump of daylilies, is spectacular when it comes to fruition.

Our second home buyers are like that. We need to cultivate them, sometimes for years, making certain they get information (sunlight), advice (water) and keep ourselves top of their minds (weeding). If we are patient, they bloom beautifully when they are ready.  Perennials, after a certain amount of time, get too big and need to be divided. That clump in the picture will get divided this fall—probably into at least four clumps total.  I’ll give some to friends and family, and make another border somewhere in my yard—just like how, in real estate, we keep growing our business, sending and getting referrals—all because we gave our garden sun, water, and kept it weeded. Patience! It’s a byword for gardening and for second home buyers.

It’s spring in North Central Pennsylvania. Fishing season opening day has been here already, and we’re busy getting our cabin ready for the summer. Across my region, this is when we return to camps and cabins for another season. A big portion of the real estate my husband and I sell are second homes used for fishing, hunting, hiking, snowmobiling, ATV riding, and just generally kicking back and enjoying life. This year, I’m reminded again of how special a second home is to so many families. Our first grandchild, Cayson, turns one in June. We had him at the cabin last year as an infant, but now he is walking and into everything. “Pap-Pap” (aka Jim) and I couldn’t resist getting three chairs for the creek bank–and one is Cayson-sized. Our old Adirondack chairs had finally given up the ghost. This is the spot we take our coffee in the morning and watch the mist rist from Kettle Creek and the fish taunt Jim (“You can’t catch us!”). Thisyear we had to have a place for Cayson–so whether he is there with us, his parents, or all of us, he has his own chair.

But the bigest part of why we love this place is what it means to our family. Cayson is the fourth generation of McLanes to come to “Forty Acres,” our place in the mountains of Pennsylvania, in Potter County. The original cabin was built by Jim’s dad and a team of his friends during the 1930s. Our son Clark, with some assistance, built a new cabin there in 2010. But the traditions and memories continue: smores on the campfire, card games at the old oak table, coffee in the morning along the creek, stream hiking on hot days and the absolute peace and stillness at dusk, as we watch the wildlife go to the creek.

Many buyers want second homes just for this reason–a place to enjoy with their families–a place to unwind and make memories. In our hectic lives, we can count on restoring ourselves with a trip to this special place. When I talk to those who have second homes–whether a cabin in the woods or a beach house, a ski chalet, or a condo in a tropical place–everyone cherishes the time and memoris they have there. One of the best parts of my job is helping people find a place to carve out time and make their own memories.

Often, one of the biggest issues for REALTORS® selling second homes is obtaining financing, including getting a satisfactory appraisal. To effectively value a second home, the appraiser must be aware of the “relevant characteristics” of the property and how they impact value. “Relevant characteristics” is a phrase right out of the Uniform Standards of Professional Appraisal Practice, known as USPAP, which is the ethical and legal code all licensed and certified appraisers must adhere to. USPAP is embedded into license/certification laws in all states in the US.

A relevant characteristic of a property is something that is quite simply, relevant to the value. Relevant characteristics can emerge overnight. My recreational market, which is hunting camps, cabins and fishing lodges in North Central Pennsylvania, has a new relevant characteristic—gas. Specifically, gas rights and gas leases are now a huge relevant characteristic as we are in the center of Marcellus Shale. Five years ago, most of our sellers did not know (or care) if they owned their gas rights. Today, it can make or break a sale.

Appraisers not familiar with second home markets can miss the importance of relevant characteristics. I have a REALTOR® friend who sells homes in the Poconos in Pennsylvania, and sold a property with lake frontage. Unbelievably, the first appraiser (who came from Philadelphia, about 3 hours away) used comparables not on the lake, and made no adjustment for frontage—despite extensive market data which supports the value of lake frontage.

In places like Aspen, ski in/ski out is a huge influence on value. In Lake Tahoe, a dock will add value. In your market, it may be a number of things. The important thing for you as an agent to find out is whether or not the appraiser is familiar with your market and its relevant characteristics. Do not hesitate to (nicely) educate the appraiser about what you consider to be relevant characteristics. Supply market data to support what you are telling the appraiser. Encourage your local lenders to insist that whoever orders appraisals for your market only assigns them to appraisers familiar with the relevant characteristics of your market.

Read “A Certification That’s Not the Last Resort”, by Michele Gillis

Quite often when I go on a listing presentation, the seller tells me at the end of the presentation, “Well, I really don’t have to sell”.  This is after giving them a thorough market analysis, showing them how many properties compete with their property and how many sales have happened in the last 12 to 15 months in their category.  Sometimes I’ll take them out to look at several of the most similar properties to their property in order to give them an idea of what their competition is.  Many times, of course, they say, “My property is better.”  As you might guess, most sellers take that position.  When I give the seller the market analysis, the same exact analysis that every buyer/broker is going to give their buyers and that seller says, “I really don’t have to sell,” the first question that enters my mind is, “So why are you putting your property on the market”?  It takes a terrific amount of effort on the listing broker’s part for showing appointments, marketing materials, and advertising expense to have a successful sale.  And then the seller is going to say, “If I can get my price I might sell my house.”  Let me translate what that means.  If we get a really wealthy person that will pay cash, close quickly, doesn’t do any market research, and is really stupid, and will just pay whatever the asking price is, I’ll sell my house.  What an incredible burden this creates for the listing agent and a setup for disappointment for all parties engaged. 

One of the biggest problems that we have in the Telluride market as well as other markets in the resort and second home niche, is sellers still pricing to the peak of 2006, ’07, and ‘08 markets. 

​Buyers in general are well informed and have done their homework on the internet and always ask for all the market comps.  Sellers often ​say, “Well my property is special or unique or here’s why I bought it”.  All those wonderful things are good points for potential buyers in the future, but every buyer has their own list of dreams and desires and they’re all watching Bloomberg. 

​Not only does a property in this market have to be priced competitively, but it needs to be one or two best values in its market category to even get on the show list.  It also has to be in great condition, because buyers are now looking for every flaw possible and are making objections for the smallest of items.  The end result for sellers that don’t price to the market is following the market all the way down and always being just behind the selling price range rather than just in front of it where they should be.  If you are a property owner in a resort or second home market and truly want to sell, ask you listing broker to do a very thorough market analysis and what it will take to be the first one or two properties shown in that market niche.  It will greatly improve your odds of making a sale and won’t waste your time and your listing agent’s.

You may contact George Harvey at 970-729-0111 or george@TheHarveyTeam.net

On Oct. 4, 2011, Congress extended National Flood Insurance Program (NFIP) authority as part of a broader stopgap government funding measure, the Continuing Appropriations Act (H.R. 2608). This latest extension will run through Nov. 18, 2011.

However, while NAR is urging Congress to use the additional time to complete work on a 5-year NFIP reauthorization and reform bill (H.R. 1309), sources from the Hill say this is anything but a done deal. While long-term reform and reauthorization would provide certainty and avoid further disruption to real estate markets, a tough Washington lobbying fight among America’s insurance companies threatens to delay the long-term renewal of the National Flood Insurance Program later this month. All this may mean the bill, and its other reforms of the flood insurance program, gets kicked down the road. A likely outcome could be another one-year extension included in a final fiscal 2012 spending bill. NAR will continue to push for the 5-year reform and reauthorization bill in order to give confidence to real estate markets nationwide.

How many times have you said “This is a great time to buy.  Interest rates are low, inventory is plentiful and prices are lower than they have been in years.”

In May I decided to take my own advice and buy an investment property in Florida.  Although I had considered a second home in Florida several years ago, when the market changed, my discretionary money wasn’t there and my plans went on the back burner.  But things have changed dramatically.  Prices are unbelievable.  Even after all I had read, I could scarcely believe the values compared to my own Cape Cod market.  I looked at nice single family homes that were priced at one-third of what they were 5 years ago.

Part of the good news was when I learned that the equity line that I already had in place on my primary residence has a ridiculously low interest rate and I could use that to pay cash for my Florida home.

I discovered that rental rates are excellent and the monthly rent would cover my taxes, insurance, and interest on the loan – with some left to go toward the principal.  My daughter is a student in graduate school in Florida and was prepared to move in as soon as I closed.  So my investment would start working for me right away.

I closed on the perfect little house just 60 days after making the decision to buy.

In 4 or 5 years, my tenant/daughter may be ready to move on and I will need to reassess the investment.  To sell?  To rent?  To retire and move in myself (it is Florida, after all)?  There will be choices.

Today I feel pretty good about how I just spent my money – IT IS A GREAT TIME TO BUY A SECOND HOME.   So for all you Resort and Second Home Specialists out there, consider taking your own professional advice and make an investment!

The National Association of Realtors and the National Association of Home Builders want the FHA to eliminate the restriction on condo rentals and increase or at least temporarily suspend its limitation on the number of units that can be financed by government-insured loans. They also want relief from a rule that requires a certain number of units must be sold before buyers can qualify for an FHA mortgage.

Under current FHA rules, at least 30% of a condominium community’s total units must be sold before the agency will endorse a mortgage on any unit. But the requirement will become even more onerous when it returns to its previous 50% level on June 30.

In addition, FHA financing is limited to no more than 50% of the condominium’s units, and no less than half the community can be owner-occupied.

Relaxing the rules, the NAR and NAHB said in a letter to acting FHA Commissioner Robert Ryan, would allow more first-time buyers to purchase condos, which tend to be aimed at the first-time buyer market. Often, FHA financing is the only financing for which rookie buyers can qualify, they pointed out.

The two groups, which were joined in the letter by the Community Associations Institute, and the Institute for Real Estate Management, also want the prohibition against investors owning more than 10% of the development’s units raised “to a more appropriate level,” and to increase that part of a mixed-use property’s floor area that can be used for commercial purposes from 25% to 45%.

On the latter proposal, they argued that combining residential and commercial uses helps reduce sprawl and offers residents employment opportunities and easier access to products and services.

Finally, to more accurately reflect current market conditions, the trade groups want the FHA to change its requirement that no more than15% of the owners in any one condo be more than 30 days late on their homeowners association dues to “no greater than 90 days.”

Read More: http://www.sunshinestatenews.com/story/survey-vacation-home-market-rebound

Bob Waun, managing director of Americor Mortgage/Vacation Finance and a board member of the Condo Coalition, an advocacy group for homeowners associations, said financing — not demand — is the reason vacation property sales are in the doldrums.

Read more at http://www.inman.com/buyers-sellers/columnists/tomkelly/the-truth-behind-second-home-slowdown