You bought...what?

We found it in a dusty corner of the old collapsing garage...a building, that when viewed from a certain angle, looks like an Escher drawing as gravity tugs at its corners.  "I bet someone will buy it" giggles one of our auctioneers...I shake my head.."No way.  Toss it in the burn pile."  Fast forward to three weeks later and that hornet's nest we found in the garage has fetched $20 at auction.

Where does one put it?  Does it make a good centerpiece?  Should we keep it away from the dog?  Are we sure all the hornets are dead...are there any dead ones inside?  Can we turn it into a lamp?

I'm trying to figure out what was going through the mind of the purchaser.  What other sorts of things does this person own?  Ant farms?  Cicada husks?  A stuffed beaver?

At this same sale we managed to sell:  A rusty pile of sash weights, bags of sea shells, lots of broken things.  Twelve years in this business and I'm still astounded at what people want to own and what they will pay to own.  Certainly, the fact that I wouldn't want to own it doesn't necessarily mean that it isn't worth owning....by someone else....or maybe, something else is at work here....

Since an auction is a fast paced sale, folks need to make snap decisions about what they want to buy.  They don't have time to think beyond "Oh, that's really cool...I can do something with that."  The same principle is at work when you look at the Snicker's bar sitting in the display at the drugstore checkout.  You know you want it and you have to make a decision right then.  Then, when you have finished jamming it into your mouth you think..."Man, I just had pizza.  I didn't need to eat that."

I bet we can get $10 for it...

Unless it is now actually is a lamp....I'm sure there's a good chance the new owner of that dusty hornet's nest is thinking "What was I thinking!?" every time he/she passes it by in a corner of the garage.  "Can't get rid of it...got twenty bucks in the thing!"  

Be aware of your impulses.

Hey....is that twenty bucks I see up there?

Are things better now?

I love the beach.  I’m thankful to live so close to it and at a latitude that affords me the ability to visit the waves almost all year long.  Something about where land meets sea that coaxes thoughts out of you.  I forget the pressures of everyday life and let the ever changing coastal scenery blot out visions of unpaid bills and home repairs yet undone.  This evening was one of those evenings.  As the sky and clouds melted into pinkish sunset hues… then crimson, a lot went on in my normally cluttered head.

As the light faded, I watched the surfers who happened to be bobbing on the water .  Hoards of tanned, tattoo laden teen and twenty-somethings drop everything for the opportunity to “ride into a barrel.” 

One surfer caught my attention in that he looked to be well into his fifties.  I admire anyone old enough to receive AARP membership offers who can take on an activity that is typically reserved for the young set.  It proves life can be full of activity and fun at just about any age if you happen to be relatively healthy and want it bad enough.

I always thought surfing looked fun, but never felt I was a strong enough swimmer to tackle a sport which requires you to withstand the repeated battering of ocean waves.  I’m also sort of tallish and know that a low center of gravity is an asset in such a sport.  Truth is, I can make excuses all I want.  The bottom line is that my curiosity about surfing faded after some pretty rough spills from a boogie board that resulted in several mouthfuls of sand and shells and a bloody right arm.  It was supposed be fun, but the act of removing sharp bits of salty ocean debris from places it didn’t belong tarnished the experience.

As my walk continued, I thought about the activities I did enjoy.  Hiking, canoeing, biking, certainly nothing "extreme" that involved me jumping off or out of something, but enough to keep me active and (hopefully) healthy enough to avoid taking handfuls of small odd shaped pills each morning.  For now I am in what they call “midlife.”  That period firmly wedged between the drunken party-all-night exuberance of youth and the shuffleboard and early-bird specials of old age.  It is a period of life with makings for many a crisis.  I thought about my generation.. about being a kid in the 70’s, attending college in the 80’s.  In many ways it was better than it is now.

My daughter will be turning nine this year.  She’s growing up in a strange time.  A time of paranoia and technology.  Her iPod is everything.  It must be no more than 18 inches from her at all times or she starts to have anxiety attacks and requests a Xanax.  You can play about a half-million games on it.  That’s not enough for her.  She’s asking how to ‘jailbreak’ it so she can load third party games onto it.  That would make it MUCH cooler.   I started thinking about when I was nine…and then to the speeches my parents gave me about when they were nine.  You know, those “When I was your age, I walked up hill to school, both ways, with no shoes, in the snow, and when I got home my daddy beat me, and I was thankful for it” speeches?

Oh yes, when I was nine….(I’m sure many of you reading this will chuckle, and understand.)

Video games hadn’t been invented yet.  Sometime in the 70’s there was “Pong” and its butt kicking sequel “Breakout.”  Back then, it was nothing short of super cool.  My best friend had the console you hooked to the TV.   Stuff like Pac-Man came years later.  It was a circle that ate dots and everyone loved it.

There were no computers….heck calculators were still in their infancy and they weren’t “pocket” calculators either.  Some were the size of an iPad and they boggled the mind by adding, subtracting, multiplying AND dividing.

No cable TV.  We had a black and white “portable” TV.  It was portable in that it didn’t take three people to move it, just two.  When we turned it on, it needed to warm up before we could see the picture.  To adjust it, we rotated a ring around the channel knob (yes, a knob).  If the picture jumped, my sister just whacked it on the side.  Sometimes that worked.  The picture was often fuzzy, but sometimes we’d fix that by adding a bit of foil to the antenna or standing in a certain position while we touched the foil.  Life was tough.  Saturday morning cartoons had a moral.  Fat Albert and Josie would sing it for us.  Yep…life was a real chore.

We played games on a slab of cardboard called a “board.”  We had chocolate colored shag carpet in the living room.  I would actually lose things in it and our cat could actually hide IN it much like a lion hides in the tall grass of the Serengeti.  And (this one is bad) we even had a wooden rake for it.  My parents insisted we rake the carpet after being in the living room so the deep pile would all lie in one direction.  Our house smelled of sandalwood incense and Santana and Iron Butterfly could always be heard on weekend nights in the family room.

When I was nine, my sister was six and NOT traveling in a car seat by then.  If memory serves me correctly, she was about two when she could ride on the bench back seat of our AMC Javelin.  I vaguely remember her car seat was a hulking tubular steel monster with a bit of foam on the hand rest that came down over her head like the one that secures you before you ride on a roller coaster.  We were able to fight over the invisible line on the back seat of the car while we waited in line to get gas.  On that day only odd numbered license plates could fuel up!

Today, a child needs to be about eighty pounds before being released from the embarrassing prison of a car seat.  I remember my college sweetheart probably weighed about ninety pounds.  Imagine dropping your daughter off at the college dorms for the first time and giving her the car seat in case she joins her friends on a road trip.  That’s where we’re headed.

We played with (and occasionally ingested) nails, frogs and mud and we had no antibacterial hand cream to save us from marauding protozoans-gone-wild.  I think I was selling fireworks to my friends at age 7.  We left home in the morning and came back inside only to eat dinner…all without parental supervision.  None of those child snatchers supposedly hiding in the bushes ever nabbed us.  Must have been all those street-smarts we had.  We rode big metal bikes with no helmets or pads.  Heck, most of us didn’t even have brakes and some had no seats!  You had to stand up to ride!  Nobody seemed to have allergies to peanuts, gluten, dust, water or air.  We got whacked with wooden spoons, belts and bare hands when we got out of line and we didn’t feel the need to hit everyone else because of it.

Yup.  It was way cooler to be a kid back then.  I’d trade all the technology if my daughter could live in the 70’s.  The beach is pretty much the same though….

Download a song?  What the heck is an MP-3?  What planet are you from?

Meltdown

As I sit here poring over the news of another day of financial carnage, it makes me think….  Our nest eggs have had cinder blocks dropped upon them and at the end of the day we throw up our hands and tell ourselves that there’s nothing we can do.  You can’t argue with the market.

News of the stock market troubles is hardly a secret.  It affects nearly everyone.  But there has also been destruction wrought upon other markets.  Markets that aren’t followed closely by CNBC or the pundits who claim to have explanations for everything.

In my little corner of the world, there exists a Market for Personal Property.  It’s a market every auctioneer follows closely and if you roll that whole market and all its respective auctioneers into one big ball, it actually amounts to tens and even hundreds of millions of dollars of sales.  Basically, it is the aggregate market demand for all the things we have in our homes.  TV’s, sofa’s, pots, pans, bicycles, furniture, figurines…you name it.

Over the past decade this market has, with few exceptions, been in steep decline.  Ask any auctioneer who conducts a lot of household and estate sales and he or she will tell you about the “good old days” when an old chest of drawers would bring $250 and a good china set would bring the same amount.  Those days are gone.  Today, those numbers are down 50-75% across the board.  Try swallowing a number like that on Wall Street.

Because the Personal Property Market isn’t followed, nobody realizes how bad it is.  When I explain it, I’m invariably presented with an argument that grandma’s mahogany buffet is certainly “worth more than that.”  No.  It isn’t.  It’s worth what the public is willing to pay for it and nothing more.  Nothing I can do will change that fact or the fact that Bank of America stock lost 20% of its value today.  The market has spoken.  Because nobody reads or regularly hears about the Personal Property Market, the horrific declines in the values of household items at auction aren’t taken seriously. 

When market realities are delivered by a source perceived as credible….like CNN, they are taken to be truths….but I’m just an auctioneer.  I’ve probably sold hundreds of thousands of items of every sort in the local marketplace over the last decade or so.  I’m not on TV….yet.   My words don’t carry the credibility of Neal Cavuto or Maria Bartiromo.  If Personal Property prices are low, then it must be…my fault for not finding the right buyers.  Try using that argument with your stock broker today.

Is this auction really any different from...

This one?  Other than the cool clothes and a few extra computers?

We Did This to Ourselves

It's been awhile since I ranted about something.   

Economy, economy, economy….it’s all we care about.  According to the pundits, there must always be expansion if there is to be happiness.  Contraction indicates misery.

I listen to friends tell me about how bad things are out there.  People can’t find jobs.  Nobody seems to have any money lately. Businesses are sucking wind.  Ours isn’t immune.  In the past several years we’ve watched the average market price for everyday items fall precipitously at auction.  The decline as been so steep, we now have a rather large list of items we won’t even allow through the front door due to the fact that they won’t sell for enough to justify using our valuable real estate to display them.  It’s bad out there.

My take is that we did this to ourselves.  Our free market economy encourages consumption.  That is….buying stuff, using it up, throwing it away, then buying more…..infinitum.  Marketers take pride in getting each and every one of us to buy more stuff.  Our houses are filled with it.  If we replace our kitchen cabinets with white ones this year, there’s no question that next year’s color will be anything but white.  Anyone who is anyone can’t have outdated cabinets.  Call the contractor. 

We sell homes all the time.  Recently, we sold one that had perfectly usable…everything.  It was just “outdated.”  The buyers whined about how many thousands it would take to upgrade the home.  Functionality has become irrelevant.  What matters in our society is how it LOOKS, not how well it functions.  We’ll replace solid wood cabinets with particle board ones if they LOOK more modern.  How’d that happen?  How did we get so shallow?  More than half the people on this planet would just like something to EAT or a place to get out of the cold and rain…We rip out perfectly good fixtures and cabinets so our friends won’t talk about how cheap and behind the times we are.  But getting back to my point…It’s the pursuit of all the stuff that requires an ever increasing amount of money.  We demand pay raises and minimum acceptable wages because we feel we’re entitled to new cabinetry, new cars, new clothes and a flat screen TV.  It’s the American Way.

Outside of America, wants and needs are more modest…requiring less capital.  When any four walls and a roof will do for today, the worry is not a pay raise, but rather any job that will bring in enough to provide the ability to subsist.  Jobs are going away because we live in a global economy where people will work for $1 an hour or even $1 a day.  Why pay the union guys $37.50 an hour with paid 5 week vacation, double overtime and mandatory health benefits when you can get the job done for $1 per hour and nothing extra?  In many places, people will bow at your feet for $1 an hour.

It’s easy for us to say that people who work for such wages are exploited….and there’s no question that many workers ARE exploited, but we are so darned used to the big numbers, we can’t understand how anyone, anywhere would work for the little numbers.  As a result, companies are abandoning high cost labor resources to utilize the less expensive sources.  That’s the way it is.

If it were your company, and you had to answer to shareholders, what would you do?

The relentless pursuit of stuff, economic expansion forever, and bigger things had gotten us into this mess. If everyone just wanted less and wasn’t concerned about what color the cabinets are, we’d need less money, we’d be under less pressure and we might actually be able to work for a wage that would keep us competitive.  Our desire for material things is becoming our undoing.  It’s not the government, it’s not the immigrants or the folks in China, it’s us.  

Time to take a look in the mirror and ask some big questions about where we are going.

We feel entitled to drive this...

When plenty of people in other countries would be happy with this...

You found WHAT? Cover your eyes if easily offended! I'm serious.

" You must see some interesting things in your line of work" an inquisitive auction customer says to me.  Indeed I do.  Sometimes I see things I don't WANT to see.

I can tell an awful lot about a person when I enter a house and sift through their belongings.  I get to view it all...especially when the seller is deceased  and we are told to go through EVERYTHING in order to properly inventory and assess value.  So I offer a caveat for the living.  If you got something you don't want anyone to find, you'd better bury it in the yard because if an executor sends our firm to handle the disposition of a deceased individual's assets....I'm going to find everything that person never wanted anyone to find.  Ask me...I'll tell you stories of things pulled from dark corners of closets that we didn't have the heart to turn over to any family member.  Lets just say there'd be a great deal of awkwardness.

I realize that nobody knows when they will get "sent for."  By the time the end is near, most people aren't very mobile so most often family and friends end up taking care of little things like bringing clean clothing and making sure the cat is fed.  It isn't often that someone's dying aunt pulls a family member over and whispers that they need to go to her house and get rid of that crumpled bag in the old luggage in the bedroom closet because it contains...well...a few potentially embarrassing things.  A riding crop and a leather mask.... maybe?  Something else?

It doesn't happen like that.

Nobody says anything about it.  Invariably, we find it...after the fact.

I wasn't surprised to find out that most people...old and young have dirty little secrets.  We're all a little debauched now and then...C'est normal.  Charity workers, dedicated parents, business leaders...everyone.  Believe me, I know.

So the next time you reach into the deep recesses of some drawer or behind the shelf unit in the den or even into the little cedar box that you hide in the rafters above the ceiling tiles....remember that someone, someday, will likely find whatever it is you are reaching for if you happen to leave this world without it.  It might be someone like me, which would be good since part of my job description involves being sensitive to the bereaved.  I'll make sure nobody cries more than they have to.  Promise.

Just something to think about......

No matter how well you think it might be hidden....think again.

I've gone and complicated my life a bit...a short renovation chronicle.

I used to love messing around with real estate.  I've been a broker for 18 years and have probably purchased and renovated at least that many properties.  Then, at some point I decided that I'd had enough.   Dealing with multiple properties meant dealing with mounds of assorted utility bills, maintenance issues and tenants who have a nervous breakdown if a door hinge develops an annoying squeak.  "It's so irritating and I really feel that since it is a maintenance issue, you should come and deal with it.  Can you come today?"  I'd wince and croak "Have you heard of WD-40? Get to know it....along with duct tape."

So...three years ago, I sold the last property I owned other than my personal residence.  Suddenly life got simpler and I absolutely relished it.  But real estate people are like restauranteurs.  No matter how irritated and pissed off our ventures make us, we can't seem to stay out of the grinder.  We secretly crave the feeling we get when our lives are turned upside down.  There must be some sick pleasure in yelling on the phone at a food purveyor who can't fill an order correctly or a tenant who is tardy with rent one too many times.

In the back of mind, I saw the real estate meltdown coming.  It simply wasn't possible to see 15%+ annual price gains forever, so when the disaster struck I was already sitting on the sidelines well on my way to a full simplification of my life.  In reality, the massacre of the local real estate market was far worse than anyone could have expected.  Foreclosures piled up and sellers went into panic mode, seizing whatever opportunity they had to make a deal with even lukewarm buyers.

Still an investor at heart, I couldn't help but watch closely as prices continued to tumble.  The few investors that had survived the mayhem were now poised to make once-in-a-lifetime deals....and they did.  The prospect of jumping back into the market suddenly became more than a passing thought.

For those who don't know, a recent sequence of events has resulted in my living in a wonderful little rental space in town.  It is small and cozy and perfect.  My dwelling provides me an excellent opportunity to test my resolve at living a (sort of) minimalist lifestyle.....but....I'm a real estate OWNER at heart.  As much sense as it makes to rent from a standpoint of maintenance and simplicity, I have this gnawing need to own my home...to have control over renovations, layout and choices of paint color.

To make a long story short,  I decided to toss some low ball offers into the ring to see what might happen.  "No, no, no...don't do it...not now." I thought, but apparently, no offer is too ridiculous in this market and against my better judgement, I'm now the owner of a cute 1100 square foot 1940's Sears and Roebuck house.  As of today, I've owned it for exactly 12 days and in that time an awful lot has happened.

The real estate fiasco has all but shut down new home construction.  Tradesman and sub contractors now occupy their time watching Judge Judy and doing odd jobs for neighbors so there's no shortage of eager folks with hammers, trowels and saws who'd jump at the chance for a substantial job.  As a result, in 12 days....the entire plumbing system has been replaced, the kitchen and bath have been tiled, and a new roof graces the upper section of the house.  What remains is some electrical work, an interior repaint and having the wood floors, which for years remained buried under ugly green carpet, refinished.

In better times, banging out these jobs at such a pace would have been impossible.  Wait times for the best and most skilled tradesman were often measured in months.  Now they ask if they can start tomorrow.  Personally, I enjoy working in a house where there's lots of banging, sawing and the occasional low thud of heavy construction material  or equipment hitting the floor.  I join in, crowbar in hand, removing crappy shelving or tearing up old tack strip from the hardwood.  I used to do a lot of the big stuff, but I'm no tradesman.  Although the results were typically satisfactory, it took weeks and even months longer than a skilled professional would take to knock it out.  I've since learned that time is money...and in the end, paying to get the job done quickly might actually save a few bucks in the long run.  Certainly now, more than ever, is a time you can get nearly anything done quickly.

First step....get all those old appliances out of the way...

Deep green carpet?  Umm....NOT!  It goes bye-bye.

Next step..removal of vanity made of "oatmeal" (particle board) and the fake tile board.

Someone was smoking crack when they chose this color.  Can you say "Kilz?"

Cement board going down where the cigarette burned linoleum was.

Off comes the old roof.  Dry forecast for a few days...

Hey, how'd the roof get in there?

Much better.

Not a bad result in the bathroom either.  The glass tile border was just a last minute idea that worked pretty well.

Gorgeous floors, but someone's dog had an incontinence problem.  Let there be big industrial, high amperage sanding equipment....

New lid.

And...the finished product!  Actually...this is where I'm living now.  Pretty darned nice and right in the middle of downtown.  I'm reluctant to leave....and I might not! 

My goal is to have the entire project finished in 30 days.  But then what?  Honestly, the jury is still out on this one, but I have several options.  Some have suggested that I break my lease and move into the house.  Financially, this would be a pretty good move but I actually LIKE where I'm living right now and I'm not in a hurry to move again.  The most likely outcome will be that I rent the house to a tenant.  The going rental rate for the area will more than cover any monthly expenses for the house and the positive cash flow will offset my current rent.  A final option is to simply flip the house when it is finished.  Flip?  In this market?  Actually a lot of people are doing it.  You just have to buy REALLY low.  Even after the renovation costs there's room for a reasonable profit even if I price the house very low to attract a buyer.  From a simplification standpoint, this would be the best option.  Sell, simplify and invest the profit.  I admit it's mighty tempting, but part of me still envisions moving in after my lease is up.  I suppose in the coming months, the best path will fall into focus.  In the meantime I've filled my life once again with sheetrock dust, construction dumpsters and coming home encrusted with the dirt and grime of full fledged home renovation.

What's it worth to you?

What's it worth?

This is the question I am asked most often.  An understandable question, but I dislike it.

I've been an auctioneer and appraiser for about a dozen years and have been messing about with antiques for another half-decade more than that.  When I am asked the "question" the honest answer is "I don't know."

Sure I can sometimes come up with a ballpark figure, but that is about it.  What all these years of auctioneering has taught me is that something is worth what someone is willing to pay for it...nothing more and nothing less.  Forget guide books, appraisals and Antiques Roadshow.  If someone tells you your mother's old rocker is worth $500, they had better have their checkbook out, otherwise that statement of opinion isn't worth anything.  Truth is, I could look you right in the eye and tell you a discarded egg carton is worth twenty bucks, but if I'm not willing to hand over a crisp Jackson, my words are meaningless.

It makes perfect sense that a potential seller wants to have an idea what sorts of numbers to expect after an auction.  Will it be beans or filet mignon while out to dinner?  I really don't know until we have all those bodies in the gallery, wallets open, ready to spend.  To mention specific numbers is professional suicide.  If I say 100 and the market says 60, I look like crap.  You can't argue with the market.  Still, I am prodded and poked, my facial expressions watched closely for a hint.  "I don't want to give it away now" barks my potential client. "I don't want to give it away either" I retort.  My earnings are tied to my ability to sell an item.  The more money I can pry from a bidder's hands, the more money I make, but I can't make miracles when the market scoffs at an item.

During this process it becomes easy to determine if a seller is too emotionally attached to his or her belongings.  If someone is too enamored with stuff, I will never deliver a number that is big enough to satisfy the client.  We could have 300 bidders and fetch record breaking prices and I'll get responses like "It had to be worth more than that. My sister's husband's brother's cousin offered me (insert ridiculous number here) for it ten years ago. I guess you just don't get the right people at your auctions."  Somewhere out there is a legion of folks, their pockets stuffed with money running around the country offering random people greatly inflated prices for their junk.  They make their offers and then they're gone...like the wind.  By the time I show up, this magical buyer who by the way was ALWAYS turned down, is no longer available to make a purchase.  "Oh, he moved."  "Well, she died in '97." Always something.

After years of this sort of thing, I realized that when you want to sell something, just sell it.  Don't look back.  Sometimes you win and sometimes you lose.  If you got to use it and enjoy it, don't expect to get more than you paid for it...or even half.  I know people who have been dragging around heavy assets for years trying to get the very best price.  They're sure they've got something special and nobody seems to recognize it.  One day, the right person will come along and....Yeah, OK.  Tell your family to dig an extra big hole when you die so they can toss in all your beloved items.  Maybe someone will pay what you want in the afterlife.

This week, some more of my (now former) possessions found new homes.  Some sold for great prices, some didn't, but it doesn't matter.  In the end, it all evens out.  The windfalls usually negate the disappointments and it all works out.  eBay and Craigslist have huge audiences and you'll know fairly quickly if you've priced something too high.  You might get inquiries, but nobody will be serious.  Ignore what others are asking for similar items.  What matters is the price that something SOLD for.

During these last couple of years as I have made my physical load smaller, I have sold items at at my own auctions, some on eBay, and a few on Craigslist.  I have never waited more than a week to get an item sold.  If I got no responses, the price came down.  If I sold at auction, there was no minimum.  Each time money changed hands, I have felt freer, less weighed down.  It's hard to put a price on that. Surprisingly, the dollars have added up to a not-so-insignificant amount.  Over the last year the tally has topped five figures, often coming $50 or $100 at a time.  That's how much stuff I used to own and I didn't consider myself to be a packrat.  Far from it.  So here I am, all those dollars later, even happier than I was when I owned and toted around all those things.

Surprisingly,  I actually have very little left to sell...I only have some necessities and a few of the things I truly love.  There's little to worry about.  If someone broke into my place and stole everything, I'd be able to replace the majority of it in a week.  I don't need insurance riders anymore.  Now the new challenge will be to maintain a life with less material things.  There will be temptation and I will occasionally cave but I'm ready to ignore the calls to materialism and start living.  Look around....are you?

What's more important?  Going home without all the stuff or loading it up, taking it home and dragging it into the garage because you couldn't get a few extra bucks?