Seattle – What’s Happening “today”?

Posted on July 18, 2009 by ARDELL

Twitter is fast becoming the best source of “What’s Happening?” in any given area, on any given day. If you are one of those people who thinks it is “silly” to record “What are you doing?”, think about it from the perspective that you might be doing what someone else would consider doing, if they knew it was happening.

You become the “news” source for local events, when you report your whereabouts at a local event. You become the restaurant critic when you tweet from a local restaurant about the food and service.

Like it or not, the collective “we” values real information from people on the street, having the experience and noting that experience in “real time”.

So what IS happening in Seattle? Twitter has a “search box” into which I will now put the word “Seattle” and this is what we learn:

@MyWashingtonSt tells us “The Bite of Seattle” Open til 9pm tonight!! Premier Food Fest FREE ADMISSION www.biteofseattle.com

Now that we know that there is an event today called The Bite of Seattle and that it is open until 9 p.m., we might want to know if it is “worth” going to? What do people who are actually there have to say about their experience?

To dig deeper into real time info on the event, change the words on the search box to the event title. In this case I change “Seattle” to “Bite of Seattle” and find:

@Mr10K: We will be reporting to you live from the bite of seattle today people. The Neema taste tests will show no mercy on any booths today!

Maybe you and Mr10K don’t have the same tastes in food, but at least you know you can get a “merciless” review of the booth offerings by him throughout the day, so you can try to hit the “best” booths when you head out to “Bite of Seattle” later today before 9 p.m.

“Using Twitter” is not simply about telling people what you are doing at any given moment. It’s a huge and growing way for people to get the news THEY want at any given moment in time, and pretty much just about any where.

Using Twitter is not all about “I have an appointment at 2 to show a house in Bellevue” from @ARDELLd 🙂 It’s a way for people to use search terms to help them get a glimpse at what other people are doing, that they themselves might like to join.

Twitter has become my news source. Twitter reported that Michael Jackson passed, before CNN could “confirm” that. Twitter told me that Walter Cronkite passed away. Twitter told me that I could catch a radio show with Jeff Turner @respres, 5 minutes before it aired so I could turn on the audio while continuing to work.

Twitter can make you more productive and keep you on top of everything that is happening. You can control how much or how little “noise” you want, by limiting the people and news sources that you choose to follow, or by using a “sort” application like TweetDeck (just one of many).

The search box opens a door to over 2,700,000 people talking about…and you choose which topics are of interest to you, when you pick a search term.

If you have never, ever been to Twitter and have decided you are not going to…it may be time for you to think about why…and what that says about you vs. Twitter.

Snohomish Kla Ha Ya Days festival this weekend

Posted on July 17, 2009 by Tim

If you like any of the following then make time to visit Historic Snohomish this weekend during the Kla Ha Ya Days Festival:

Music
Friends, people watching
80 degree weather
Parades
Historic downtown shops and eateries
Hot-Rod cars (Sunday event)
Food (Salmon, Fish n Chips, Burgers, Ice Cream, Pizza, Thai food etc…)
Aircraft
Hot-Air balloons
Skydivers
absolutely gorgeous Snohomish Valley

Car Show - Photo by Brian Thompson Photography

Harvey Airfield

Tonight (Friday) offers a treat for family night at Harvey Airfield featuring “Balloon Glow-Fire in the Sky” event with live Bands and a fireworks show at 10pm. So, pull out the Harley Davidson from the garage and bike on over to Snohomish for the Kla Ha Ya Days (schedule) festival going on full throttle this weekend. It’s a great community and one that residents and future residents are sure to enjoy.

Saturday is the grand parade sponsored by my friend and fellow Seattle Pacific University Alum, Brad McDaniel of Snohomish’ McDaniel’s Do-It-Center.

Snohomish Valley Summer 09' - Courtesy Snohomish-Today.com

Tonight watch the Fire in the Sky Hot Air-Balloon event at Harvey Airfield and at 10pm you will be dazzled by a fireworks show.

Snohomish Skydivers - Courtesy Snohomish-Today.com

Snohomish Skydivers July '09 - Courtesy Snohomish-Today.com

Mortgage Disclosure Improvement Act: New Waiting Periods on Mortgage Transactions

Posted on July 16, 2009 by Rhonda Porter

In an early post, Ardell wrote about the significance of a buyer being able to close quickly…new regulations may put a damper on that. With mortgage applications taken after July 30, 2009, waiting periods will go into effect with regards to when and how disclosure forms are provided to the consumer. The Mortgage Disclosure Improvement Act (MDIA), which modifies the Truth in Lending Act (TILA), was originally going to become effective on October 1, 2009, however the effective date was moved up two months which may catch some real estate professionals by surprise.

Here are some of the details:

Good Faith Estimate and Truth in Lending Disclosures….required waiting periods.

Under MDIA, early disclosures are required for “any extension of credit secured by the dwelling of the consumer.” Three business days from application, the consumer must receive an initial Good Faith Estimate and Truth in Lending (unless the borrower is denied at application).

The earliest a transaction can possibly close is seven days after the initial disclosures have been issued by the lender (delivered in person, mailed, emailed, etc.). This is assuming no re-disclosure is required.

Re-disclosure (waiting periods after the early disclosure and corrected disclosures) of the GFE/TIL are triggered if the fees and charges are more than 10%; if the APR is more than 0.125% or a change in loan terms. Three business days must pass in the event of re-disclosure. Re-disclosing is nothing new, it typically happened at closing–this will no longer be acceptable. Mortgage originators “should compare the APR at consummation with the APR in the most recently provided corrected disclosures (not the first set of disclosures provided) to determine whether the creditor must provide another set of corrected disclosures”. Double check those APRs prior to doc!

From MortgageDaily.com:

“The Commentary added by the MDIA Rule expressly provides that both the seven-business-day and three-business-day waiting periods must expire for consummation to occur. The seven-business-day waiting period begins when the early disclosures are delivered to the consumer or placed in the mail, and not when the consumer receives the disclosures. The three-business-day waiting periods begin when the consumer actually receives or is deemed to receive the corrected disclosures. If corrected disclosures are mailed, the consumer is deemed to receive the disclosures three business days after mailing. If a creditor delivers corrected disclosures via email or by a courier other than the postal service, the creditor may rely on either proof of actual receipt or the mailing rule for purposes of determining when the three-business-day waiting period begins to run.”

Consumers have the right to waive or shorten the MDIA if “a consumer determines that an extension of credit is needed to meet a bona fide perosnal financial emergency”.

No monies may be collected from the borrower with exception to a “bona fide and reasonable” credit report fee until they receive the initial disclosures. This may cause a delay of when an appraisal is ordered. Most lenders require an upfront deposit to cover the cost of the appraisal. The collection of fees rule may also cause potential issues if a borrower is doing a certain type of lock (some with float down or extended lock periods require an upfront deposit). NOTE: HVCC requires the borrower receive a copy of the appraisal at least three days prior to closing.

Tim Kane can attest that there is nothing worse than a borrower learning at signing their final loan papers that the fees are significantly higher than what was originally disclosed. I’d like to think that all mortgage originators redisclosed WHEN modifications to the transaction/fees take place…obviously, this has not been the case.

DFI covers MDIA here.

Re-disclosures could become a “holy hand grenade” to quick closings.

Are We Facing A Housing Shortage?

Posted on July 15, 2009 by Chuck

In looking at the latest Northwest MLS statistics for King County, it would be tempting to say that our housing market is recovering. But it is an odd mix of data. Single family home sales volumes are up (even better than last year), inventory is down sharply from last year, prices seem to be starting to rise again, and average days-on-market is dropping. That all sounds pretty good. (larger residential stats charts)

(Note that the Northwest Multiple Listing Service neither prepares nor is responsible for these charts – the interpretation is my own.)

But condominium sales are still slow (though rising some), inventory is staying high, and median prices are not rising. That doesn’t sound quite as good. (larger condo stats chart)

What are we to make of this seemingly conflicting data?

What it looks like to me is that we are in the early stages of a housing shortage. While Seattle and the west side have been built out for decades, Bellevue and the east side communities have been absorbing most of the region’s growth for the past 50 years or so. But we passed the Growth Management Act in 1990, and then we added the Critical Areas Ordinances. As a result, it has become harder and harder to get permits for housing developments of any significant size. In fact it appears that over the last 10 years or so it has become far easier to get a permit for a 100-unit condominium high-rise than for a 100-home residential development. The rate of application for new building permits “fell off a cliff

Everyone Does Not Qualify for a Loan Mod

Posted on July 14, 2009 by Jillayne Schlicke

Loan modification fever is here. Families all over the U.S. are struggling to make their mortgage payments and many are expressing frustration that their lender won’t modify their loan. Any of us could try to make a rational argument that a lender is better off modifying a mortgage loan instead of foreclosing but this is a simple answer to a complex problem. This blog post will help homeowners understand who is not going to get a loan mod. Hopefully homeowners will be able to then move forward toward other solutions.

Loan modifications are not for people in temporary financial distress. Temporary financial distress is when a homeowner missed a payment for one or two months because of a temporary hardship. Lenders can and do help these folks with a forbearance and repayment plan where the missed payments are made up over time or tacked on to the end of the mortgage. This is not a loan modification, it’s a repayment plan. If your financial distress is only TEMPORARY then asking for a full-on loan mod is wasting your time and everyone elses time. New research out this week from CR shows us that 30% of all delinquent borrowers self-cure without receiving any kind of loan modification. This means lenders who can effectively triage out borrowers likely to self-cure are behaving rationally by setting aside pleas for loan mods.

Long term financial hardship means homeowners need long term financial solutions. A loan modification is only ONE of MANY long term solutions. In order for a homeowner to receive a loan mod, the homeowner must be able to document stable monthly income. Lenders have to re-underwrite the file to make sure that the loan modification will not result in further loss to the lender. This takes time. If a homeowner’s monthly income has dropped so low, to the point where they really can’t qualify to repay the modified loan, this loan modification will not be approved nor should it. (Note: Lender guidelines on qualifications vary and change often, just like the retail side of lending.) This homeowner should consider other options which will be outlined below. It should be beyond clear by now that lenders are not going to voluntarily start reducing principal balances unless forced by gunpoint. The government can try to shame them into it but let’s face it: most corporations are shameless and nothing any of us say and do is going to change this.

Long term financial hardship cases do happen. Case in point. I received an email last night from a homeowner who is on permanent disability. Her husband just got laid off. They are seeking a loan mod. In no way can they afford the $4500/month payment on their interest only loan so they’d like the lender to lower the payment (lower the interest-only rate, extend the term). They are $100,000 negative equity. Sounds rough, doesn’t it? However, they happen to have $250,00 in the bank. This is not a case of financial hardship! A lender would be wasting time and money modifying this loan. These homeowners HAVE MONEY in the bank to continue to make their existing payment for many more months. Besides, looking at the amount of money coming in the door each month, once their money runs out, chance of a re-default is sky high. The only thing a loan mod does for these homeowners is it keeps them in their home for a little while longer. If the husband can become re-employed at his same rate of pay, maybe the chance of default drops a bit, but no lender will modify this loan if there’s literally zero money coming in every month. This lender is making a good business decision to put this file on ice while they continue to pay as agreed each month using their $250K.

I agree with CR: “If it became widely known that lenders routinely reduce the principal balance for delinquent borrowers with negative equity, this would be an incentive for a large number of additional homeowners to stop paying their mortgages.” It would be rational for negative equity homeowners to make the decision to trash their credit score in exchange for a shot at wiping out $50K, $100K+ negative equity if they wanted to keep their home. We shouldn’t hold our breath for lenders to make principal balance reductions en masse.

I have not worked in loan servicing for many years but when I did, there was a triage system of making sure cases that were going to cost the bank the most money were prioritized over cases that could wait longer. We already know that loan servicing departments are far understaffed for the tsunami that’s hitting them full on. If we want banks to beef up staffing and spend money hiring and training more loss mitigation underwriters, the expense for these costs is going to be priced into new mortgage loans made tomorrow and in the future. Even so, this will take time. Working in loan servicing is a very high stress job. Imagine what it’s like to work 8 to 5 every day with a 1 hour break from lunch and 2, 15-minute breaks…with the rest of your day spent being yelled at by Realtors asking for their short sales to be approved RIGHT NOW. High stress = high turnover. I could never do that job today because I’d yell back and surely get fired.

Homeowners with bonafide cases of lender law violations or predatory lending can and should be prioritized in getting help modifying their loans. These homeowners are better served by hiring competent legal counsel to represent their interests in negotiating fair and just mortgage terms. But that’s not what’s happening today.

Today, it seems that the masses believe they deserve a loan mod based on whatever is going on in their lives. Job loss, reduction in hours, on and on….I know I may sound heartless here but lenders need to make sure you are able to repay a modified loan and that you are eligible for a loan modification under their specific guidelines. Not everyone will qualify.

Options beyond a loan modification:

Move out of the house
If you don’t want to sell the home, perhaps you will be able to rent out your home and cover or almost cover the mortgage payment. Then you can seek out other living arrangements that comport with your ability to pay. When your income adjusts upward again, you can move back in.

Take on a tenant
Maybe you can rent out your basement or spare room to a tenant. I know several people who are doing this just so that they can make their own mortgage payment. Check your local city or county rental guidelines.

Sell the home
If you have negative equity, interview at least three real estate agents who are COMPETENT in the practice of listing and selling short sales. Do NOT hire an agent who has no experience in short sales. If you decide to hire a Realtor who’s your friend or relative and that person has no experience listing and selling short sales, you get what you deserve.

Hire an attorney
Some homeowners seek out a loan modification only to find out that the real problem was far beyond just the mortgage but instead was an abundance of consumer credit card debt. Maybe an appointment with an attorney who represents debtors is in your future. An attorney can fully explain all the reasons for and reasons against letting the home go to foreclosure, as well as all the legal consequences. News today suggests a foreclosed homeowner might even be able to rent back their home from the lender!

Whatever you do, do NOT pay ANYONE cash up front for services before the services are actually performed (with the exception of when you hire an attorney.) If you part with cash to pay a loan mod company, you are setting yourself up to become re-victimized. They will tell you anything you want to hear in order to get your money because they know you are desperate. If you have money, hire your own attorney who will represent you directly. If you do not have money, contact your state’s bar association for a referral to free legal aid.

Also worth saying: Avoid any third party who claims to have a solution to all your problems and asks you to sign anything. Especially if they say, “This is perfectly legal.” Before signing anything hire your own local legal counsel. Foreclosure rescue scams continue to be on the rise nationwide.

Not everyone will qualify for a loan mod and not everyone is going to get their loan mod processed in a timeframe that the majority would consider anywhere near “good customer service.” Loan servicing doesn’t have to provide you with good customer service because you have no where else to go. There is no automated underwriting slam dunk approval system for loan mods. There’s no stated income program for loan mods. Real humans underwrite the file and this takes time. It’s going to take many, many years to work all the bad loans out of the system. We are in for a long ride. If you don’t qualify for a loan mod it might be time to move on to other solutions.

Lower Interest Rate – Escrow Timeframe

Posted on July 13, 2009 by ARDELL

1) How long is Escrow?

The correct answer is it can be as long or short as the buyer and seller want it to be. However a long escrow timeframe can cause an escrow to fail, because it can create a situation where the buyer no longer qualifies for the mortgage. Just because the buyer qualified when the offer was submitted, doesn’t mean the buyer will continue to qualify on the day the lender is supposed to fund the loan so the escrow can close.

A lender assumes a given interest rate when they qualify the buyer. If that interest rate is different for the reasons detailed below, at time of close, the buyer may not qualify at that changed interest rate.

2) Why do most agents write a contract to close in 30 days or less?

Dan Green of The Mortgage Reports wrote a post today explaining why a shorter escrow timeframe equals a lower mortgage interest rate. His post explains that a 60 day lock “costs more” than a 30 day lock, often in terms of higher interest rate vs. higher cash costs to close.

In order for the buyer to get the rate they think they are getting, they have to be able to lock that rate for no longer than 30 days. While the buyer is not required to lock that rate, it should at least be a possibility. If a buyer looks at a rate quote of 5%, they often are not told that assumes a rate lock period of no more than 30 days. So if they sign a contract to close in 60 days, and then try to lock the rate in the first week of their contract, they will find the rate to do that is higher than the rate they were quoted the day they made the offer.

The rate can change in a few hours without the issues noted in this post. But even if the rate does not change at all, the rate will be higher if you try to lock it through a 60 day closing vs. a 30 day closing.

The honest lender who asks “what is your proposed closing date” and gives you a “60 day lock rate quote” will be higher than the lender who assumes a 30 day lock. Be sure the lenders are using the same parameters when quoting you a rate prior to making an offer, so that you are comparing apples to apples. In this scenario the most trustworthy lender could appear to have a higher rate, when they are being most honest about the potential for rate if you lock for 60 vs. 30 days.

3) How does the closing date timeframe, chosen at time of offer AND ACCEPTANCE, impact the buyer and seller in other ways?

Buyer A gets a pre-approval letter the day they are submitting an offer. The lender pre-approves the buyer for a $300,000 mortgage at 5%.

Seller B accepts the buyer’s offer BUT asks for a 90 day closing, as the home they are moving to is new construction, and won’t be completed for 90 days.

Buyer A accepts the seller’s counter-offer as to closing date.

30 days later the buyer sees interest rates rising and wants to lock the rate. The lender quotes the “lock rate” and the buyer is confused. “I see the rate on your website is 5%. Why are you quoting me 5.25%?” Lender explains that a 60 day lock vs. a 30 day lock adds 1/4 of a % point to the mortgage interest rate.

Here’s where it gets REALLY complicated…if the buyer doesn’t qualify to buy the house if the rate is 5.25% vs. 5%, he can’t lock it. If he chooses to wait until the closing is within 30 days before he locks the rate, the rate could be at 5.5% at that time. If the timeframe for the finance contingency protecting the buyer’s Earnest Money expires prior to that time (and almost all do), the buyer is painted into a corner by circumstance.

Moral of the story is often a buyer CAN let the seller have 90 days to close if they are renting month to month. But a buyer must consider the impact of the interest rate floating out for 60 of those 90 days and/or the cost of locking for more than 30 days at time of contract.

Today, it is near impossible for a seller to stay in the property for more than 60 days from time of offer and acceptance. You can close in 30 days and let the seller stay or rent back from the buyer. BUT the buyer’s lender will not allow that seller to rent bank for an extended period. If the buyer is qualifying at an “owner occupied” interest rate, they will impose a maximum number of days that the buyer can rent it to the seller. Beyond that time period the buyer’s lender will consider it an “investment” mortgage, and higher investor interest rate and higher downpayment requirements, vs. an “owner occupied” purchase money loan.

The “ifs, ands or buts” that happen in a split second during negotiations, can change the “assumptions” made at the time the buyer received their preapproval letter. The lender is often not “in the room” while these negotiations take place, or consulted for every tiny change in close date or rent back terms. They most often don’t see those “changes” until the buyer and seller both sign the contract as finally negotiated.

These small changes can put the buyer’s Earnest Money “at risk” of loss. The agent is the “protector of the buyer’s Earnest Money”, as related to changes in contract terms during negotiations. Yet how many realize the changed position the buyer is put in when the seller counters for a longer close date?

We see thousands of articles on “How to choose an agent?” Perhaps asking the agent “what happens if the seller wants to close in 90 days, or wants to rent back for 90 days?”, is a better question than “How many homes have you ‘sold’ this year?” The cost of closing is VERY important to the buyer. Not closing at all, due to changes no one played out to the likely eventual worst case scenario, affects both the buyer AND the seller.

Agents don’t “sell” houses. Agents represent the buyer OR the seller AND the transaction as a whole, as it appears at time of offer…AND as it changes during negotiations and escrow.

Handing a contract to escrow and waiting for a commission check is no longer an option. Changes in lending BACK TO the old tried and true rules of the game, requires agents to be on their toes all the way to the day escrow closes…or doesn’t close.

Why are so many escrows not closing these days? Everyone asks that question. Truth is the skills needed by an agent have changed dramatically back to old school…and agents still think “it’s the lender’s job” vs. theirs.

$8K Tax Credit Closing Deadline of Nov 30 Could Slow Interest in Short Sales

Posted on July 9, 2009 by Jillayne Schlicke

Kary brings up an excellent point here.

“One other agent short sale issue is going to pop up shortly, if it hasn’t already, but it will be a buyer’s agent issue. The $8,000 first time home buyer credit needs a property to close by November 30. Making an offer on a short sale property, without advising a first time homeowner of the risk of not closing by the deadline is probably malpractice. It’s sort of a “suitability” issue for real estate.”

It’s not outside the realm of possibility that falling in love with a short sale today means the transaction may not close by Nov 30, 2009. I suppose there might be a chance that the tax credit will be extended or even expanded. Yet many homeowners with Option ARMs were given verbal assurances that they would be able to easily refinance.

I wonder what life is going to be like inside loan servicing during the month of November, when the pressure will be sky high to get these short sales APPROVED so the buyers can make the closing deadline?

Gone Facebooking… Be back soon

Posted on July 9, 2009 by Dustin Luther

Earlier today, I launched the latest integration between Facebook and RCG… If you check out the right sidepanel, you’ll see that you can now become a fan of RCG directly from this site thanks a new tool released by Facebook called the Fan Box.

Since I launched the RCG fan page a few weeks ago, I’ve been experimenting will all kinds of content. Some RCG articles, some news articles, some community blog posts, some event related posts… and it’s been really interesting to see which ones resonate with people enough to get them to engage. Just some of the articles I’ve highlighted on our fan page include:

What I really like about the RCG FB Page is that it lets me publish quick links that I think will be interesting to the RCG community without the need to take up a post.

If you’re interested in taking part in this extension of RCG, all you need to do is “become a fan” using the box to the right!

And if you have a story you want to see us cover, I just created a page that will let you use a nifty Facebook Updater widget to share links and/or stories with us. This is definitely not the permanent solution, but as a test of the technology, it should do the trick!

Happy Facebooking!

[CC photo courtesy of Lopolis]

Tales From the Dark Side #1

Posted on July 9, 2009 by Ray Pepper

[Editor’s Note: As a long time member of the Rain City Guide community, Ray Pepper has offered to share stories with us about his on-the-ground experience working as a real estate broker with $500 Realty. We’re calling these “Tales from the Dark Side” and today, I’m please to hit publish on the first edition of this series. Please give a warm welcome to Ray Pepper as the latest contributor to Rain City Guide!]

In an attempt to educate the public and fellow agents of the NWMLS I offer an incident dated Sept 2008.

Client Sam and Tim have been Pre-Approved clients looking for a home in Des Moines with a current Buyers Agency agreement on file. They attend Open Houses and call me for showings every month or so. They have been educated on how to advise all fellow agents they are working with an Agent.

Sam found a home driving around and called me from her cell at the vacant residence. It was a Sunday at 4pm and I got the message about 8pm. The voice mail indicated she called the Agent on the sign, to inquire on the price, and as it turned out the agent lived across the street.

As the story unfolds the Agent spent 2.5 hours with our client talking about the home, the history of it, and the wonderful community she has lived in for decades.

I receive a phone call to write an offer on the property Sunday night. I asked my client how they got inside. She stated the listing agent let me in. I asked, ” Did you remind her you were working with an agent?” She said absolutely!

An offer was written around midnight and was promptly sent Monday morning.

The next phone call I received was one that has been repeated before but this time much harsher then I have ever heard. It reminded me of my old female Drill Sergeant at Fort Leonard Wood. ” Listen here Pepper!” “I’m a million dollar producer!” “I’ve seen the likes of you come and go!” “My time is very valuable!” “Don’t speak until I have finished what I’m saying!” “Your clients lied to me!” ” We have a wonderful community here and I don’t think dishonesty is a good fit for our community!” “I’m not here to do your work for you!”

I’m new here to RCG and I believe none of you know me personally. Those who do will attest that there is nobody more sincere, honest, and willing to take any and all slanderous language. I have listened to it for years at the Seattle/Tacoma Home Show and Puyallup Fair. I took it all in as usual. I attempt to never laugh but always educate based on the rules set forth by the NWMLS and the State.

I immediately contacted my clients and told them about the incident and how I had to remove myself from this transaction. My clients stated to me SHE is the liar and the agent “offered” to just walk across the street and show her listing to them. As it turns out while I was on the phone with my clients the listing agent called back for Round 2 of screaming and I continued to listen. I must confess that at times I find this very therapeutic and relaxing. I was threatened to be turned into the NWMLS, the State, and her Broker. I strongly encouraged her to do so.

We all know how this story ends. The Buyer wanted the home. The Seller wanted it sold. The buyers walked because they did not want to have this agent as their neighbor.

It is my opinion the only one who ever loses from this type of behavior is the one who will never know it happened. At last look the house still remains on the market today, this time with a new agent.

Our clients closed on their new home in April 2009.

[photo source: Sir Mervs]

Price per square foot revisited

Posted on July 6, 2009 by ARDELL

Are formal dining rooms becoming obsolete? Are huge master suites too “selfish” for today’s changing society? Is “keeping up with the Joneses” turning into “Cutting down with the Joneses”?

In a market projected to be flat at best for the foreseeable future, these questions are fast becoming very important for each home buyer to ask and answer, each in their own way.

In the age of “me”, me being the parents vs. the children, the places where children “go” in their home got smaller and smaller. Families used to spend more time together in the “living” room until the children were banished to the “family room” and the living room became a “formal” living room that most no one ever used. People gathered in the kitchen with friends and family, until the “formal” dining room became a place and space ONLY used once in a while when “guests” came. As if the kitchen was OK for the kids, but the visitors were somehow more important, so much so that we paid big money for a special room just for “guests” vs the family on an everyday basis.

Beyond price per square foot, it is time for home buyers to determine price per square foot of WHAT? Forget about how it currently “works”. It’s time to change how it works.

First Floor = 1,630 sf of which only 534 square feet represent rooms the children enter on a regular basis. The rest is “formal” living room, “formal” dining room, “Dad’s” study, “grand” staircase and foyer. Even if you throw in the 1/2 bath, the space the children live in is smaller than the square footage of the attached 3 car garage at 660 sf.

When did the children become entitled to less space than the cars?

Second Floor = 1,260 sf of which each child’s bedroom is only 130 sf. If you have two children and throw in the bathroom they share at 5 x 8, that gives them 380 sf on the second floor. Let’s be generous and give them an open loft “bonus” room to do their homework in at 15 x 15 and you still have a full HALF of the second floor devoted to master suites and grand staircases.

2,890 sf of home plus 660 sf of garage = 3,550 sf of which only 1,165 sf is space the children enter on a regular basis. The “children’s” place is not even double the amount devoted to housing the cars. Given the “children’s” space includes the kitchen and the family room, that’s just sad.

Let’s put a price tag of $550,000 on this home = $154 per square foot including the garage. 1,165 sf times $154 = $180,500 of that $550,000 devoted to the “family” and places where the children go on a daily basis. That’s about $370,000 for formal areas, master bedrooms and baths, showy staircases and places to put the cars.

Do you really want to spend $380,000 for places your children don’t enjoy?

Put this house on a small lot, as a zero lot line home, and we have to ask ourselves: I know we’ve come a long way, we’re changing day to day. But tell me, where do the children play?