Practice Management

An article in HuffPo detailed an Associated Press-AOL Money  & Finance Poll, which found that more that 60% of the respondents said they definitely would not buy a home in the next two years, which was up from 53% from the previous year.  More interestingly, just 11% are certain or very likely to buy a house soon, which is down 15% from two years ago.

People are worried about the value of housing falling and the economy.  But, if you are a home office attorney, work out of your home often, or want to start doing so, you might not want to make this mistake.

Housing is at or near its best pricing for buyers.  As for the economy, you are always going to need a place to live and to work.  That is not going to change and that costs is not likely to be eliminated just because the economy takes a dip.  Only, many of the office expenses can be eliminated if you move your practice home, and then you will also get tax write offs on some of your living expenses and costs that you are paying for anyway.  That should be enough to fend off a worsening economy.

Just like your law practice, your home is or can be a business transaction.  If you need a place to work, or a different home configuration, or a different environment so as to house your home office, then money is not made and equity is not obtained by buying at the top of the market.  It is made by buying at or near the bottom of the market, when it is a buyer's market.

This is partly the reason we had a housing bubble.  People saw the real estate market hitting its peak and then they decide they want a part of it.  They bought at the top of the market and then they got stuck.  Most of the money is made, however, by those who bought before the real estate surge.

You home is your respite.  It is also be your best longer term investment.  But, if you can find the way, it is not best to wait two years to make your move, when the market will be recovering.  Whether your real estate market has imploded or is merely soft, you can drive a hard bargain if you will just chose the specifics that you want in a home, do not get attached to any particular one in your group of houses identified, and negotiate hard.  Do not be afraid to negotiate with the financial institution holding or servicing the existing mortgage to take less than what is owed.

The real estate market generally is pretty soft for good old middle class homes.  That is where opportunities lies.  Now is the time to buy a new place and borrow enough to bring it up to snuff so that when the market does turn around you will be sitting on some nice equity.  You get what you want in a house and you get a nice return.  You buy what you can afford, and you get the best of all worlds.

Real estate markets have always been cyclical.  In a couple of years the market will be back and then you will have missed out.

And, if you already have a house you need to sale, you need to remember that despite all of the bad news, that houses are still selling.  Buyers for ready made houses are just more discriminating.  You will need to clean the house until it shines, make some repairs and stage the house like a model home, but it will sale because people are still interesting in buying the shiniest penny in the neighborhood for top dollar.  It just needs some spit and polish and some staging.

I am not just saying this.  I did it.  My wife and I were ready to downsize in that most of our children have left home.  In late fall, in a soft market, we sold our house in 48 hours (after spending weeks getting it prepped) for a pretty penny more than we paid for it just three years before.  We then went on a wild hunt for a new smaller home.  We made a list of what we wanted (and what we though would sell well in a few years), viewed the inventory, a bid fast and hard on the properties.  The first three either dallied too long or said no to our low offer, and we moved on.  We had preferences, but we did not get attached to any one properly in our selected neighborhood.  One took the low offer, we closed on in a couple of weeks.  Then we put most of what we made on our former house into this one, bringing the new house into prime condition.  New floors, remove wall paper, repaint inside and out, wire the house for broadband, put in surround sound and a large flat screen TV, replace fixtures and rotten wood, furnishing the house, and more.  We now have what we want and enjoy, and come the turn around we have a readily marketable house that will appreciate quickly.

Would you really think about buying gold at $1,000 a ounce when it is obvious that it is peaking?  I would hope not.  The money was made by those who bought it when it was $500 and $600 an ounce.  You would be just buying them out at a huge profit.  Well, the same is true for housing.  The key is to buy low and sell high.  And, if you want to move your practice home, now is the time to best accommodate your needs.

And, because the market is soft, you can get all kinds of concessions.  You can get the seller to pay your closing costs.  You can get your Realtor to cut their commission of give you cash back at closing.  More houses now qualify for FHA, so you can get a house at a lower interest rate for 3% down and in some instances avoid paying the PMI each month.