BILL CHERRY'S GREATEST DALLAS PARK CITIES REAL ESTATE BLOG: May 2008

The property tax appraisal logic in Texas is this:

• One entity will decide the appraised values of every taxable property in the county.  These are called Central Appraisal Districts.  There is a chief appraiser overseeing each district.
• Using computer models and site visits, every piece of taxable property is given a value by the CAD.  Those values are then published as public record.
• A period of time is then allowed for taxpayers to compare the value that was assessed to their property with assessments of comparable properties.
• If the taxpayer can show that the value assigned to his property is not in line with the comparable properties, he can file a formal written protest with the CAD.  That protest must be filed by May 31 of the tax year.
• An informal meeting is then scheduled between a CAD appraiser and the property owner.  At that meeting the property owner shows his evidence of value to the appraiser and the appraiser shows his evidence of value to the property owner.  A compromise is offered.
• If the property owner is not satisfied with the offer made by the appraiser, he may request a hearing before the Appraisal Review Board.
• The Appraisal Review Board is made of up of other taxpayers in the county; taxpayers who are not employees of the CAD, and whose determinations cannot be overturned by the CAD.
• The ARB committee listens to the evidence presented it by the property owner and the evidence presented by the appraiser.  The ARB members ask questions of both, then they determine what the value will be.  The CAD must accept that value.
• Home owners who remain unsatisfied with the assigned value have one more option outside of filing suit against the district. They can request binding arbitration.  There are several hundred real estate professionals who have been certified by the Texas Comptroller to act as arbitrators.  They can hear cases for homes worth less than $1 million.  The cost of the arbitration cannot exceed $500, and the loser pays the fee.

The question you must ask is this:  How does the CAD's appraised value of my home compare with their appraised values of other like homes? 

It has nothing to do with what homes are selling for or have sold for,  It has nothing to do with whether or not you think the value is too high or that you can't afford the amount of your taxes.  And if you've lived in your home for a few years, it has nothing to do with what you paid for it when you bought it.

Again, the question is this:  How does the CAD's appraised value of my home compare with their appraised values of other like homes?  If yours is higher, then you protest.  And let me again emphasize, this is the only question.

The CAD mentality is this:  We'll do our best to appraise and assign accurate values.  If the property owners do not file protest, then they must agree.  If they agree, then we can conclude that our appraisal is correct.

All of this research information is available at the CAD office in your country and they are required to give it to you.  It is also available at the web sites of each CAD.  You can Google search by putting in the name of your country followed by CAD.  For an example, "Dallas CAD."

If you have further questions, I am a former Appraisal Review Board member and committee chairman, and I am an state appointed arbitrator.  Email me at cherrysells@aol.com.

BILL CHERRY, REAL ESTATE

DALLAS

OUR 43RD YEAR SELLING TEXAS

214 503-8563

Copyright 2008 - William S. Cherry

...who put your home on the market then turn the utilities off and move?  And on top of that, you make no provisions to keep the yard mowed, landscaping fresh looking, and the interior regularly cleaned?

And what is it with you agents who let them get away with this totally idiotic behavior? 

If my client won't budge, I just have it done myself and dial it into my marketing budget for that property.  It's either do that or watch it not sell.

In the Texas heat, neither agents nor clients go into un-airconditioned homes.  And on the chance that they do, that interior weather condition is so much in the forefront of their minds that actually considering buying that home never enters their minds.

I went in a home the other day that had been on the market for a year.  "What's my problem?" the owner asked. 

"How much do I love thee?  Let me count the ways...."

1. The utilities weren't on so not only was it stuffy and hot, a prospect couldn't see if they worked.
2. Someone had used one of the bathrooms, obviously not knowing that the water was off
3. The counters were dusty; the hardwood floors had blobs of mud on them from the time the house was shown when it was raining
4. The porches were dirty
5. The yard was unmowed-unedged.  The only thing missing was a big piece of Texas tumbleweed...and the only reason it was was because it doesn't grow near Dallas, and a piece hadn't blown in here from West Texas

I told the guy, "I'll send you a punch list.  Call me when you've got it complete, and we'll get the house sold." Then I winked.

Copyright 2008 - William S. Cherry

One of the things I do each morning is search the Multiple Listing Service to find and study each home that's listing has expired.  What happened to cause disappointment?

With just the bare bones information that's given on the listing sheet, I try to figure out why the listing agent was unsuccessful in his quest to find a buyer.  Sometimes it is obvious right off the bat.  The home was seriously over-priced; in the photos that were given us it doesn't show well; the front of the home and the landscaping are bland; things like that.

But more often than not, it looks like the home should have brought at least one successful contract, especially when we are talking about listing periods with the same agent that have run for four, six, nine months; frequently a year or more.

There is only one primary question in any argument.  "Is there a need for a change?"  Every other thought and discussion is a sub-set of "Is there a need for a change?"

A debater would attempt to show that during the listing period other comparable homes were sold and closed. Then he would try to establish evidence that the reason this listing didn't sell was because it had been presented to the market in an unlike manner - that was the reason for its failure.

So I often wonder what is going on in an agent's mind when after, say, sixty days into the listing period at least one serious offer hasn't materialized, yet he continues down the same road. 

Why would he think that continuing the status quo was going to bring success when it hasn't in the months prior?  Why wouldn't he study how those that did sell were marketed?  Could any of that be applicable and applied here?

And I often wonder what is going on in the seller's mind when 1) he gives a listing to an agent for more than four months and 2) renews it once, twice, three times thereafter.  And even worse, they agree to renew it without making any significant changes. 

If a home hasn't gotten sufficient activity and at least one serious offer within, say, three months, the agent's marketing program for that listing is and was bankrupt from the beginning.  It's time for the listing agent and the client to part ways.

And on those occasions when it has happened to me, I have encouraged my client to find an agent with new ideas.  We shake hands, agree we are great friends, and bid each other adieu.

BILL CHERRY, REALTOR

DALLAS

214 503-8563

I want to speak with you today about the selection of title insurance underwriters.  For years the tradition has been for one or both of the Realtors involved in a sale to agree on a specific title company, office and escrow officer.  The clients usually don't voice an opinion.

So while the title company wants to lay claim to the seller on whose behalf they are insuring to the buyer that the seller has indisputable ownership of the property he is selling, their real clients are the Realtors.  And that's where their loyalty belongs.

In Texas, and probably throughout all or most all of America, the title insurance rates are regulated by the state.  If you buy a $200,000 home in Texas, the title premium is the same at all Texas licensed title companies. 

But what isn't regulated is what the title company passes off as additional charges for their services, frequently labeled as escrow fees, messenger service, document preparation, copies, wire transfers and on and on.  And they are rarely the same among companies. 

In fact, they are negotiable, yet I'll venture to say that most Realtors don't dial this into the equation when they are selecting the company where their sale/purchase will take place. (For the record, I always do.)

But how can it not be the Realtor's obligation to make certain that the client is not going to pay unnecessary fees so that your favorite closer can have their business? It can't be.  It is the Realtor's obligation.

I keep a watchful eye on what title companies want to charge my clients, and I frequently call around to see what a sample of the companies are charging for the components of their services.  If the charges to my clients are out of line, the title company either has to reconcile the matter or I threaten to move the file.  I've only had to do this once, but I'll promise you I'll do it in a heart beat if the company that's opened escrow for my client is padding the bill.

BILL CHERRY, REALTORS

DALLAS

214 503-8563

Our 43rd Year Selling Texas

Copyright 2008 - William S. Cherry

Ever since W.L. Moody, Jr., gave me his worn copy of Dale Carnegie's How to Win Friends and Influence People when I was about 12-years old, I've had this thing about making sure I'm around people who motivate me to both understand as well as improve myself.

It all started when I asked Mr. Moody how I could be rich like him someday, and he told me two things:  "First, to attain wealth you have to have money working for you, people working for you, but preferably both.  Second, read Dale Carnegie's book at least once a year for the rest of your life."

And that was when he gave me his copy of the Carnegie book.  It's on my desk right now because I have just finished reading it for about the 55th time.

What I get out of all of this is not necessarily lessons in life, but a better understanding of myself...what I think about the components of life, and why I think as I do.  Often times, I find I've had a lifetime of faulty reasoning that brought me to a lousy opinion that I need to change.

One of my favorite radio talk programs is hosted by Dennis Prager, a modern day Jewish scholar-philosopher.  The subjects of his programs are always about life, faith, who we are and why we are.  Sometimes I don't agree with him, but to listen just to his thoughts and reasoning, I have to reconcile them with my own belief system.  I admire Mr. Prager and I thank him for what he has given me.

And there's author John Maxwell.  His biographical blurb says he's "an internationally recognized leadership expert, speaker and author." Of his many books, I think I have gotten more out of The 21 Irrefutable Laws of Leadership. You can pick up a new one for $25 or a used one for less than $10. 

Everyone knows that Herb Kelleher and Lamar Muse founded Southwest Airlines.  Mr. Muse resigned after a few years, so it was left up to Mr. Kelleher to promote and attain the airline company dream that he and Mr. Muse had.  John Maxwell reminded me in his The 21 Irrefutable Laws of Leadership that Mr. Kelleher's employees bought a full page ad on Boss's Day, 1994, in "USA Today."  Here's what it said.

Thanks, Herb

For remembering every one our our names

For supporting the Ronald McDonald House

For helping load baggage on Thanksgiving

For giving everyone a kiss (and we mean everyone)

For listening

For running the only profitable major airline

For singing at our holiday party

For singing only once a year

For letting us wear shorts and sneakers to work

For golfing at The LUV Classic with only one club

For out-talking Sam Donaldson

For riding your Harley Davidson into Southwest Headquarters

For being a friend, not just a boss

Happy Boss's Day from Each One of Your 16,000 Employees

So what did I get out of this?  Other than reinforcement of my deep respect for Mr. Kelleher and his 16,000 employees, I got this:

What would my prior clients write about me if there were a Realtors' Day?  I'd better do some evaluating and make some major adjustments.  What about you?  How would you fair?

Copyright 2008 - William S. Cherry

BILL CHERRY, REALTORS

DALLAS

214 503-8563

OUR 43RD YEAR SELLING TEXAS!

So I suppose this is logical:  Because major big-box tenants attract a lot of shopping traffic, landlords usually give them cheap rents and big build-out allowances. 

And small tenants have their rent rates burdened by their prorata part of those discounts.  After all, without the big box traffic and marketing, most of the smaller shops in the center could not survive. 

However on the other side, if the small shops had a good representative negotiating their leases, they made sure that they could terminate their lease at anytime one of the big boxes closed up and left the center.

There are two very important considerations when setting up a tenanting plan.  The first and primary one is picking the right tenant mix and the second is where each store is placed in the mall, i.e., who are its neighbors?  This requires serious talent in order to make a good footprint.

And there is a third one, one that is often either overlooked or not enforced by the management company.  All shops must have the same business hours and the same days for holidays.  And that even applies to not closing or opening five minutes late.

I often use Dallas' North Park for examples.  There are four high-end jewelry stores in the mall and they are grouped together.  None of them respects the mall's posted business hours.  In fact, one of them isn't even open one day each week.  Others close helter-skelter...totally unpredictable.  I guess if the manager's son has a socker game, that's reason enough to close early.  I often wonder if the store's home office approves these closings.

Shoppers frequently stop and go back when they reach 1) a blank store space 2) a closed store.  So this behavior by the tenants not only affects the business revenues of their neighbors, but it also affects the percentage of their sales that is a part of their rent. 

To line of the stars for the best oppotrunity to revitalize an older mall or strip center, you'll surely want to keep these important concepts in mind.

*The spell check feature is not working as I post this.  Please forgive errors.

Copyright 2008 - William S. Cherry

One day recently, Wal-Mart decided to close one of its "supercenters" in the Dallas suburb of Garland.  One day the 250,000 square feet building that hovered over a big parking lot on Garland Road, just a few blocks from the  LBJ Freeway, was there, the next day the only hint it had been a Wal-Mart was they had not painted over the Wal-Mart blue on the façade.

To the naked eye, the store looked viable and profitable.  It had been well-stocked and seemed to have many shoppers through the day.  Today a newly-painted For Sale Sign spawns rumors that looks were deceiving. 

Apparently store closures like this usually come with no advance notice to the public, not even to the employees.  And there's rarely a definitive explanation.

I did find this statement in one of the company's recent annual reports.

"The decision (to close stores) is related to Wal-Mart's recently announced plans to moderate growth of U.S. supercenters as part of leveraging capital resources through a strategy designed to improve returns and sales within U.S. stores."

This, even though in this same report, future expansion for the company showed they had budgeted for a net gain of about 265 of the huge stores that year.

Nevertheless, almost immediately they did just the opposite - the slowed down building new stores as well as began closing a number of those already on the ground.

Stockholders and analysts shared shock while the New York Times said the company had reached a turning point.

No longer satisfied with its own definition of what a Wal-Mart store is, company officials are beginning the same journey that Sears-Roebuck started down years ago - investing in businesses and ideas that do not fit its model. 

Today Sears is drowning in debt as the result of its prior and current management's idiocy.  It'll be interesting to see if the same thing happens to Wal-Mart over time.

Copyright 2008 - William S. Cherry

There's been an expression around for a few years that dictates, "Think outside of the box."  While it's overused, tired and annoying to hear these days, it still has a life.  Here's a place where it does.

Throughout America are weird outdoor strip centers and worn out malls that are begging for an enthusiastic second life.  Most go unnoticed year after year.  The remaining tenants weren't there on opening day.  A tattoo parlor, a fake nail parlor, a dry cleaner's substation, a flea market, and one of the forms of "everything is a dollar."

Some of them had important anchors like Sears, J.C. Penny, Dillard's, Montgomery Wards.  But they haven't been in the neighborhood for years.

To the landlords, property taxes and insurance continue to accrue, deterioriation chips away at the asset, and the huge cardboard For Lease signs now hang on by one piece of tape in a cockeyed fashion.  The leasing agent hasn't been by to check the property in months, but the landlord lets him hang on.

Ironically, a good portion of these centers and malls can be revitalized and retenanted.  They can be a profitable asset again.  It's happening in pockets here there and everywhere all over America.  And it is a perfect niche for Realtors who are struggling to make a living in the home market and are looking for a new income stream.

The secret is quite simple.  American and foreign investment trusts are flush with money and looking for stable American real estate investments.  These centers present three ways for them to invest:  as a joint venture partner with the current owner, as the sole owner, as a lender with an equity/income participation.

The Realtor's part in this is to put together the team that will modernize and redevelop the property, and will solicit and tenant it.

If you need us, my team of experts can provide the foundation and back-office expertise for putting together these plans and bringing them to a succsssful conclusion.  We have solid credentials and we've worked together for years.  We'll augment you and your team!

BILL CHERRY, REALTORS

DALLAS

214 503-8563

Copyright 2008 - William S. Cherry

All Rights Reserved

There probably has never been a more famous American decorator than Dorothy Draper.  Most projects that she did were larger than life projects - huge mansions of the wealthy - and by far her most famous, The Greenbrier Hotel in White Sulphur Springs, West Virginia, a landmark since the late 1770s.

In 1937, she was commissioned to decorate the 37 story Hampshire House on Manhattan's Central Park South.  The results were so outrageously wonderful that the style became her signature and the media named it "Baroque fantasy."

I remember the first time I went to the Greenbrier with my mom and dad.  It was about 1950 or so, and even as a child of ten I knew it wasn't like any other hotel.  For most of his adult life, my dad would stop there regularly on his way back from a business trip to relax and horseback ride in the West Virginia mountains.

Over the years we visited the Mark Hopkins, the Drake, the cafeteria at the Metropolitan Museum of Art, the San Francisco Nob Hill Fairmont, and the hotel that remains my favorite of New York hotels even today, the Essex House.  All were decorated by Miss Draper.  And there was her hotel apartment at the Hotel Carlyle, the most famous of the apartment hotels in New York.

Carleton Varney was Miss Draper's protégé for many years, and he took over as president of Dorothy Draper & Co., Inc., when Miss Draper retired.  He has collected a compendium of Miss Draper's drawings and photographs of her works, and added a fascinating, comprehensive narrative.  What fun seeing her weave her way to the top.

The book, In the Pink is a coffee table size book of about 225 pages.  It would be a wonderful present for Mother's Day as well as a gift for those who are interested in commercial design.

Because of my memories as a guest in a number of the places Miss Draper decorated, I'm very appreciative that Mr. Varney wrote a personal note and signed a copy of In the Pink for me.  It came a couple of weeks ago.

Again, the book is IN THE PINK by Carleton Varney.  Published at ninety-nine dollars, it's on sale now at amazon.com for one-half that.

Copyright 2008 - William S. Cherry

From CNN-Money

Lenoard Lauder

Chairman, The Estée Lauder Companies

The best advice I ever got came from my mother, Estée Lauder: She believed that if you had something good to say, you should put it in writing. But if you had something bad to say, you should tell the person to his or her face.

I learned this lesson the hard way. I'm chairman of the Whitney Museum of American Art in New York, and several years ago, I was angry with one of my trustees. I wrote a letter and signed it. But then I decided not to send the letter.

The following Monday ... a temp saw the letter and mailed it.

I've always had an easy time intellectually knowing this is totally correct.  But I've had a much harder time following it. 

Phil Noah, friend and chairman of the board of a company I briefly worked for, told me the same thing as Lenoard Lauder's mother told him.  But Mr. Noah added a caveat.  He said, "If you tell a person your criticism, over time any hurt he experiences from it diminishes.  But if you write it, he can save your letter, pull it out and reread it anytime he wants to.  It'll help him be mad at you all over again.