BAIL OUT!  BAIL OUT!  BAIL OUT!     Those are exciting words in those war movies I still enjoy.  However, the word bailout means something different today. It means that you and I are being forced to pay for the sins of a few... well, maybe more than a few. Although I am not a big fan of government getting involved in bailing out businesses and individuals, in this case the housing debacle is so large the consequences to our economy would be horrendous if they don’t do something.
 
  This whole housing fiasco has been caused by over building, low interest rates, no down payment loans, adjustable rate mortgages and the American optimism that the economy always goes up and never comes down.
 
What is aggravating is that congress debates mindless trivia while ignoring the financial and energy issues that have been brewing for over 20 years. 
 
  I saw this coming back in 1998.  Since that time I have advised my clients (based off sales statistics) that buying a new home is like buying a new car. A car loses about 25% of the value when you convert it from new to used  and a house will lose 15% of the value the day you make it a used house (move-in date) and another 6% if the builder paid your down payment and closing costs.  The difference is that cars continue to depreciate and real estate use to “appreciate”, therefore masking the fact that it actually lost value when you moved in. What I didn't foresee was the huge impact that it was going to have on the whole real estate market.  
 
  You still get to share in the cost of the bailout in two ways, first in the 20% decline in your property has experienced in the last couple of years, and you better believe congress will be in your pocket in order to balance the budget.  Where else can they go to get money?  No…not oil companies. They don't really pay taxes.  They pass them through to you and me at the gas pump.  People pay taxes, businesses don't.  So you may as well get your checkbook out because they will be asking for it soon.    
  
So call your congressman and thank him or her for doing a great job and tell ‘em you’ll have your checkbook ready.
 
Attached is an article from the August 2008 "OHIO REALTOR" magazine.    
 
 
John Jacobus, ABR, GRI, CRS
 
RE/MAX Impact
Broker/Owner
440 Polaris Pkwy
Westerville, OH 43081
614-523-1000
Cell 614-296-8350