There’s always something to howl about.

Month: March 2009 (page 1 of 5)

It’s Springtime in Madison, Wisconsin. The trees are in blossom, the students are protesting — and I have a no-fee referral for an investment-savvy agent who works like a Bloodhound…

An old friend, very smart, very good with numbers, has landed in Madison, Wisconsin. He’s sitting on way too much cash, and he realizes he needs to capitalize that dough before it gets inflated away to nothing.

That much is a silver platter. Deep pockets and unlimited future earning power, a client to die for. But: He’s an attorney, non-practicing, and an MBA, also non-practicing. He can handle the truth, no matter how ugly, but you will never slide even the smallest lie past him. You need to know what you’re talking about, and you need to be able to back up what you say.

He’s living in Middleton Hills, but he’s interested in investment opportunities anywhere in the Greater Madison area. He’s never been a landlord, so he’ll need education in that regard — and it’s plausible to me that he’s a better candidate for commercial properties than for rental housing. That’s something you’ll have to work out.

What I’m looking for, in exchange for a no-fee referral, is an agent who works like a Bloodhound. If you’re willing to work hard for a serious, motivated, monied investor, give me a howl. I’ll put you and my friend in touch.

Don’t Discount Points As A Strategy To Lower Mortgage Costs

Discount fees (sometimes called “points”) are considered pre-paid interest.  Points are generally tax-deductible and are used to lower a buyer’s mortgage rate.  Most real estate agents have been taught that “points” are “padded profit” to a lender or loan originator and should be avoided at all costs.  Jeff Belonger debunked that myth yesterday; I was surprised to see the misinformed opinions being offered by the real estate agents and mortgage originators.

Today’s low interest rate environment combined with low expectation of immediate home price appreciation offers a perfect opportunity for buyers to secure a low mortgage rate by employing a strategy of “buying the rate down” through a discount fee.

Let’s look at an example, from today’s rate sheet-$400,000 purchase price, $100,000 downpayment, for a 720 credit score borrower with adequate income documentation:

RATE               DISCOUNT FEE     NET BORROWER COST

5.00%                            0                          $0

4.75%                            1%                     $3000

4.5%                              1.5%                  $4,500

The proper way to perform this analysis is to determine the expected minimum hold time for the mortgage.  Most real estate agents will agree that in this environment, transaction costs combined with low expected appreciation rates suggest that five years is the absolute minimum to hold the property.  Buyers may elect to move (and rent) the property but few agents would be so bold as to suggest that the buyer could make a profit in less than the five year time frame.

It is my opinion that refinancing the mortgage loan will be difficult and unprofitable, during those same five years because:

  • low price appreciation will limit buyers ability to “harvest home equity
  • interest rates are at a 35-year low.
  • rapid inflation seems likely due to massive government borrowing and the Federal Reserve’s “printing money” policy of the past 8-12 months.  Inflation leads to higher mortgage rates.

Five years will be our minimum hold time for the mortgage loan then. This amortization schedule helps us determines what the lowest total costs are over five years.  Simply add the cumulative interest (at month 60) plus the discount fee to determine the total costs:

RATE      CUM. INT.   Read more

Announcing RealSearchUSA.com


No, that’s not me with The Hoff and a Google Search Appliance, that’s Google’s UK Sales Mgr.
RealSearchUSA.com will be a network of Independent brokers connected by a unique function – a natural language Real Estate search engine. Our goal is to create a true consumer benefit: A Google-inspired (and powered) natural language search experience that leads to a good, local independent broker.

The success of our network will be determined by Word of Mouth (or, more accurately, Word of Email, Word of Facebook, Word of IM, Word of Twitter…).

Here’s the thing about that: We, as the technical force behind the network, have no control over what happens after we hand a homebuyer off to a broker, but that is the part of the experience that will drive WOM for both the broker and the network.

Since we work on an exclusive territory basis to preserve the competitive advantage of a unique user experience, we need to be sure that we are working with the right brokers if we want to see that WOM, so we are being selective about who we hook up to the network.

That’s why I am announcing RealSearchUSA here on BHB: If we can network Web-smart brokers together at the Search Result level, not only would we be off to a good start, we would be taking concrete steps to strengthen the independent brokers who are poised to shake up this industry whenever a recovery gets going.

In most cases, we can place a Google-powered Real Estate Search box on an existing Web site, as we have done here for Mike DiMella at Charlesgate Realty in Boston. It is a network based on an upgrade to Search, which is the function that most Real Estate Web site users are looking for in the first place, but here is the kicker: This search function will also make you a node on a network of independent brokers like you.

Allow me to explain the node thing:

We build Real Estate Search Engines using Google’s Enterprise technology. Our goal is to provide the best Real Estate Search experience for people who like the way Read more

The mapmaker’s dilemma: What the hell are you doing with your time?

That’s a screen shot of the user interface of the beta version of the mapping software I talked about on Friday.

This version:

  • Creates a Google Maps KML file from a list of street addresses
  • Assigns a user-selectable map marker to those addresses
  • Optionally creates a folder on the file server for that address — to serve as an engenu folder
  • Optionally creates folders and folder structures, thus to create an engenu hierarchy
  • Optionally builds links from the map markers to the individual street address folders

This is me writing to the Swallow Hill Gang last night, a very brief outline of features and capabilities:


Any valid addresses, one to a line, will produce a KML file that can be imported into Google Maps.

Like this, which is me and my best beloved:

314 East El Caminito Drive, Phoenix, AZ 85020

You’ll have the map marker you choose. I’ll be adding more.

If you select Folders, a folder will be created for that address:

“314_East_El_Caminito_Drive,_Phoenix,_AZ_85020”

If you select Links, the folder will be linked from the map marker.

If you select Links without Folders, neither one happens, for obvious reasons.

If you precede a line with a tilde — “~” — a folder is created, and subsequent address lines and their respective folders and links are created hierarchically. Like this:

~Top Level Folder

would create a folder at the top level named “Top_Level_Folder”.

This structure:

~Top Level Folder
314 East El Caminito Drive, Phoenix, AZ 85020

would create a link to a folder from the map marker for my house inside of the “Top_Level_Folder” folder, hence:

“Top_Level_Folder/314_East_El_Caminito_Drive,_Phoenix,_AZ_85020”

If you do this:
~Top Level Folder
~Top Level Folder/Second Level Folder
314 East El Caminito Drive, Phoenix, AZ 85020

You would get this:

“Top_Level_Folder/Second_Level_Folder/314_East_El_Caminito_Drive,_Phoenix,_AZ_85020”

You have to build each level of the hierarchy as you go. No harm, no foul if you try to create a folder that already exists.

You can do this:

~Love
~Love/Barefoot Boy With Cheek
314 East El Caminito Drive, Phoenix, AZ 85020
~Love/Barefoot Boy With Cheek/Girl Next Door
322 East El Caminito Drive, Phoenix, AZ 85020
~Love/Barefoot Boy With Cheek/Girl Next Door/And Baby Makes Three
402 East El Caminito Drive, Phoenix, AZ 85020

and you will have created what I hope will be a by-now obvious hierarchy.

If all you want to do is create a folder hierarchy, Read more

Building customized Google Maps and engenu folder structures from lists of addresses

I have very alpha software that makes a KML file that Google Maps will eat to make something like this:


View Larger Map

It’s kinda-sorta like ZeeMaps, except I get a true Google Maps map, which I can then customize and embed.

I start with a list of addresses, which I can type if I absolutely have to.

There’s more: I’m going to build in the ability to create an engenu folder structure from the list of addresses, so that a site like this essentially builds itself.

For that kind of engenu site, I’ll cut my time from 40 minutes to 20 minutes, on the order of two minutes a page for brand new, original, knock-your-socks-off content.

Wheaten Terrier Picks Agent for $150m Listing

How long before the “Real Estate Coaches” are advising their clients to walk into listing appointments with a pocketful of snausages?

LOS ANGELES (AP) – The widow of producer Aaron Spelling is placing “The Manor” in the exclusive Holmby Hills neighborhood on the market for a jaw-dropping $150 million, making it by far the most expensive home for sale in the U.S…

…Candy Spelling’s late husband produced hit shows such as “Charlie’s Angels,””Dynasty” and “Beverly Hills 90210.” He died in 2006…

…Candy Spelling told The Associated Press that she let her dog Madison, a soft-coated Wheaten Terrier, help pick out the best real estate agent for the task. She had her security bring the dog into the room every time she met one of the candidate agents and watched how the dog reacted. If Madison didn’t like them, Spelling crossed them off the list.

Prospective buyers won’t have to worry about passing such scrutiny, Spelling jokes.

“Not at all,” she says.

Too bad her late husband didn’t have the dog sniff the shows he produced.

What a laugh Candy is having at our expense. She thinks all agents are the same. One of them is going to get let’s say a cool 1% of $150m ($1.5m). That’s probably Madison’s yearly grooming budget, so let’s let the dog decide. What a lark.

I’m not sure what the take-away is, here.

Part of me realizes the problem isn’t that Candy let her dog pick her Real Estate agent. The problem is that Candy, widow of Aaron, mother of Tori, knew it would play.

If she thought for a second that the general public or prospective buyers would think she was an idiot for letting the dog pick a Realtor, she wouldn’t be laughing about it with the AP. It’s not that she made the joke, its that she knew the audience would get it.

On the other hand, it’s Friday. If you have spent the week trying to be the best agent or broker you can be, trying to build your business in this market, and then you find out that a dog decided who got the most expensive listing in the US, it Read more

Reflecting upon the Obamanation: “Love of our brothers? That’s when we learned to hate our brothers for the first time in our lives.”

I’ve been thinking about the disgusting spectacle of millions of Americans presuming to have an opinion about whether or not some AIG employee deserves to be paid a bonus. This was once a country where the idea of minding one’s own business was virtually a sacrament. And then I can’t turn on the television without seeing some grandmother bragging that Medicare makes it possible for her to dine on her own grandchildren. And to top it all off, tonight I’ve been trading depressing emails with Joe Strummer about our progress down the Road to Serfdom.

I know people think they understand what I’m talking about, when I talk about political philosophy, but I’m pretty sure that’s not true. The simple truth is this: I am sovereign in my person — and so are you. I do not have the right or power or privilege or duty to push you around by force, and you do not have that right or power or privilege or duty with respect to me. That’s easy to understand when we’re only talking about we two: If I overstep the boundaries, you will surely help me find my way back to the righteous path. But there’s no difference whether we’re talking about two people or two billion people. Each one of us is free in our person, free as a necessary consequence of being what we are.

Does that mean that other people cannot try to push us around by force? Obviously not. It simply means that failing to respond to human beings as sovereign entities, each one of us a unique end in himself, is wrong — epistemologically incorrect, morally unrighteous, politically criminal.

All of economics is based in collectivist premises, which leads to statements that are true but fundamentally irrelevant. Smith taught us that leaving men free to produce is better for everyone — which does not matter, because each one of us is free regardless of the benefits freedom yields for other people. Hayek among others points out that enslaving us is bad for everyone, which also does not matter. The impact upon the collective is meaningless. Read more

Meet My New BFF: GoToWebinar

Hate cold calling?  No, not you Chris Johnson.  I mean the rest of us.

Me too.  So I invested a few dollars into GoToMeeting and a few hours promoting a few educational Webinars with Brian Brady on Facebook and LinkedIn.

If you can deal with my goofball face and occasional blabbering, you’ll find a couple of nuggets in the 19 minute video below.

Takeaways:

1)  Pick a hot Webinar topic.  Find an industry expert.  And give the goods.  You don’t need to sell anything.  Just give.

2)  Have your friends, referral sources and counterparts help you promote your webinar.  Return the favor when they ask.

3)  Use the Webinar registration process to build your database and collect valuable data on your attendees.

4)  Record your Webinar, use video editing software like Camtasia to reformat, and post your Webinar onto your blog.

5)  Promote your Webinar on high traffic blogs.  Drive registrants to your blog to fill out the Registration Form.

Hey Sunshine! Tell Me About Your Day

I’ve not only been a broker since January of 1977, but the designated broker since then too. For those not familiar with the term, a designated broker is the one with the dotted line drawn on their neck. The buck stops with the DB. Though not all DB’s are office/company managers, my guess is most are. Ironically, in my first decade as a DB the only thing I was allowed to be in charge of was the coffee room, as Dad pretty much called the shots back then — as he should’ve. Besides, who puts a 25 year old in charge of a real estate investment firm? I generally rated solid reviews as Executive Vice President of coffee room operations.

When Dad finally rode into the real estate sunset, making golf the only line on his daily to-do list, it fell to me to be the DB more than just on paper. Calling Brown and Brown a small firm is the working definition of redundant, as the most folks we’ve ever had working, including me, is four — counting the secretary. However, shortly after Dad’s handicap began it’s downward descent, I was headhunted by a local C/21 owner to create and run a separate and unattached commercial division. I was 35, and ready for a challenge. Creating something from scratch appealed to me.

This post’s title is how Dad used to greet me as I walked into the room, when I was asked to join his cadre of old merciless bastards at the 19th hole. This happened about three times a week, and was literally a graduate course in real estate, management, business in general and performing under pressure. I learned pretty quickly my job was to share my fries, speak when I was spoken to, and most of all, listen. There were about 16 of ’em. They were affectionately known at the club as The Bandits, as they regularly schooled the assistant pros, often leaving the poor guys poorer.

In this group were three former real estate board presidents, land, income property, and leasing specialists — all but one who’d been DB’s Read more

Is your business about to take a quantum leap? So is mine, so all I have time for is this: Whip your on-line and off-line marketing message into shape now, to make the most of the business coming your way

If you’re looking for the long, newsy pitch, I’ll try to get to it later this week. But for now I am working with and incubating more solid money work than I have in three years. I expect your dance card is starting to fill up, too.

Even given all the turmoil in the economy, BloodhoundBlog Unchained in Phoenix could not be coming at a better time. Why? Because you need to get your marketing profile in shape now — first to take advantage of all that new business coming your way, and second because your days of idle blue-sky time are coming to an end.

If you’re ready to rock, all you have to do from here is click a PayPal button to reserve your place at BloodhoundBlog Unchained in Phoenix. The event runs from April 28th to May 1st, 2009. Many more details can be found at the BloodhoundBlog Unchained in Phoenix weblog.

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We’re looking forward to seeing you in Phoenix!

By applying CDSs to CDOs, did AIG go MIA? Or could the SEC, the OTS and one unhired CFO have kept it from turning up DOA?

A totally killer run down of the Wall Street mess from — you’ll never guess it — Rolling Stone magazine:

There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs — a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That’s the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers’ credit card.

The people who have spent their lives cloistered in this Wall Street community aren’t much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don’t know what the hell LIBOR is or how a REIT works or how to use the word “zero coupon bond” in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.

That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize “toxic” risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage Read more

Inquiry Bump?

Yesterday, after the housing data came out, there was spike in the number of web-generated inquiries we see.

I’d have to take the time to aggregate the data across all clients to put a number on it, but just looking at the inbox we use to keep an eye on “Ask our Agent” questions, the jump was significant.

Obviously, people are influenced by the news. I could look at Q4 traffic graph from last year and show you the day Lehman went down, but I don’t remember a good news bump like this in the five years I’ve been managing Real Estate Web sites.

Are you seeing the same thing?

The “Bad Bank” Plan…..(complete with music and video)

I’ve copied the announcement from the Treasury that sent the markets on a moonrocket today and thought that I would “walk you through it” so that we can get a better feel for whether this is a relief rally or something sustainable (and therefore what it means for mortgage rates).   So, here goes.  As usual, my comments are in bold and italics…..

The Financial Stability Plan – Progress So Far:

Over the past six weeks, the Treasury Department has implemented a series of initiatives as part of its Financial Stability Plan that – alongside the American Recovery and Reinvestment Act – lay the foundations for economic recovery: and spend about how many trillions?  I’ve lost count.

* Efforts to Improve Affordability for Responsible Homeowners: Treasury has implemented programs to allow families to save on their mortgage payments by refinancing I’m glad that they didn’t characterize Fannie and Freddie’s 105% plan as a foreclosure prevention step because only one of the borrowers I’m doing that type of a refi for is anywhere near close to “at risk”, assist responsible homeowners in avoiding foreclosure through a loan modification plan, and, alongside the Federal Reserve, help bring mortgage interest rates down to near historic lows. This past month, the 30% increase in mortgage refinancing demonstrated that working families are benefiting from the savings due to these lower rates.

* Consumer and Business Lending Initiative to Unlock Frozen Credit Markets: Treasury and the Federal Reserve are expanding the TALF in conjunction with the Federal Reserve to jumpstart the secondary markets that support consumer and business lending. Last week, Treasury announced its plans to purchase up to $15 billion in securities backed by Small Business Administration loans.  The fact that the Fed and the Treasury are buying these “packages” of consumer and business loans doesn’t mean that 1) Consumers and businesses are going to start, en masse, living on borrowed money again and 2) That the banks are going to find consumers and businesses who are credit worthy enough to write loans to.

* Capital Assistance Program: Read more

Just when you think the comedy can’t get any more rich…

So I told them how badly they had screwed up, and, god help ’em, they set about to fix their mistake:

Good grief. How sad…

The Arizona Association of Realtors has some kind of event coming up, too, and, it goes without saying, I’ve been snubbed from that, too.

Listen up, functionaries: It’s totally cool. I’m not going to do anything that gives aid and comfort to any branch of the NAR, nor to any exponent of the co-broke. I’m sure the more intelligent members of AAR and ARMLS might like to hear what I have to say, but — taking account of where your eyes are right now — what do we need you for?

Even so, you have to admit the whole thing is funny…