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There’s always something to howl about

The Samsung Galaxy S4 is the world’s first peripatetic computer: You walk, you work and you thrive.

You walk, you work – and you get the job done.

I was walking around the house Saturday — busily working away, headset in my ear, making phone calls and dealing with emails — when it hit me:

The Samsung Galaxy S4 is the world’s first peripatetic computer.

It’s easy and natural to work — to do real work — while walking. Salesmaniacs know that you work better on the phone when you’re walking and talking, but that’s just one aspect of the the sheer utility of doing the desk work where the work is, instead of trying to disgarble the mangled reports of intermediaries.

Comprehensive reviews of the S4 abound, pick your poison. I’m Apple to the core since 1985, so this was a big move for me. I have zero doubt that all smartphones are rip-offs of Apple, that without the iPhone, cell phones would still look and disappoint like the the Nokias and Motorolas of yore. But Samsung is number two and it is trying harder than Apple is now — a lot harder.

The unique features of the phone are gee-whiz and boy-howdy both, doubt you nothing, but that’s all just geekery (and the whole Android universe is rife with the kind of self-satisfied jargonistic needlessly-arcane asshattery that made normal people shun Unix (Eunichs?) geeks even before they made DOS for the dumb ones). What makes the S4 work is the way it’s made for work.

Like this:

* Size: Nice in my hand, maybe just a touch big for the wimminz, but very pocketable, unlike the largely-comparable Galaxy Note 2. (Between the lines: Leaving the phone out of the iPad and iPad Mini was an unforced error on Apple’s part.)

* Weight: That plastic shell feels cheesy, but it makes the phone super-light. I can hold it stationary in one hand indefinitely, easily, without rest or stress. I sold my iPad 2 because the weight of the thing made it, de facto, a crippled laptop, not a usefully-mobile computing solution.

* Software: This is still the weakest link for true peripateticism, computing while ambulating, working while you walk, but we’re getting there. The whole “app” diversion has been a disaster, with millions of people possessed of dozens of one-off (cr)apps, each one of which is really just a showy database client. But because Google is (dimly, slowly) catching onto the idea that the essential component in computing is not the device, not the code and not the data but the end-user, device-irrelevant computing gets better and better. As it does, the amount of work you can get done wherever you are grows dramatically.
 

This is my notifications screen, with my TV remote always ready to hand. Note that the phone is aware that earbuds are plugged in. The software suggestions it makes are all useless, but at least it's trying. Note to Google: Heuristics. You know how to do it.

This is my notifications screen, with my TV remote always ready to hand. Note that the phone is aware that earbuds are plugged in. The software suggestions it makes are all useless, but at least it’s trying. Note to Google: Heuristics. You know how to do it.

* Hardware: Beyond cool, so go read those reviews. There’s built-in biometric stuff and — soup to nuts — an IR blaster. I have a remote for our TV “widgeted” into my lock screen. Best news of all: A user-accessible micro-SD slot. I have the 16GB phone, augmented by a 64GB memory card for, I kid you not, fifty-six bucks. I have 80 gigs of static ram on my phone!

* Camera: Better than my point-and-shoot — by a lot. The sharing support everywhere is first rate, but it’s easy to move photos or videos wherever you want them.

* Battery: It’s a slow charge for a long life, a good trade-off. Much better, the battery is user-swappable, so dedicated road warriors can keep a spare or two fully-charged.

But wait. There’s more.

I can have a desk when I sit down, yet the computer comes with me when I move.

Take a look at this docking station. Power, monitor, hard-disk, keyboard, mouse — desktop. The S4 and this dock are, as of now, the perfect solution for working a conference: The workstation stays at your seat as you, the phone and your headset work the breaks, then everything is back to a desktop/laptop-like solution when you sit back down.

Invite me to your show. I want to prove this will work beautifully!

I’ll have more to say about the S4 as I have more time with it. But so far it’s doing for me what my Macbook Pro, my iPhone and my erstwhile iPad could not do: Giving me a way to work when the only flat surface available to me is my left hand.

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The end-times are upon us: DocuSign spam…

From my mail this morning:

DocuSignSpam

That’s a spoofed email — no links back to the mothership, and a big, fat executable at the bottom. I’m betting it’s WinPoison, so it probably won’t hurt my iMac, but I won’t be researching that question.

But: Be alert. Whether it’s spam, malware or a phishing line, nothing goes wrong until you make the mistake of clicking on the wrong file or link.

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Kotkin: “Why the next great American cities aren’t what you think.”

Joel Kotkin at The Daily Beast:

Once considered backwaters, these Sunbelt cities are quietly achieving a critical mass of well-educated residents. They are also becoming major magnets for immigrants. Over the past decade, the largest percentage growth in foreign-born population has occurred in sunbelt cities, led by Nashville, which has doubled its number of immigrants, as have Charlotte and Raleigh. During the first decade of the 21st century, Houston attracted the second-most new, foreign-born residents, some 400,000, of any American city—behind only much larger New York and slightly ahead of Dallas-Ft. Worth, but more than three times as many as Los Angeles. According to one recent Rice University study, Census data now shows that Houston has now surpassed New York as the country’s most racially and ethnically diverse metropolis.

Why are these people flocking to the aspirational cities, that lack the hip amenities, tourist draws, and cultural landmarks of the biggest American cities? People are still far more likely to buy a million dollar pied à terre in Manhattan than to do so in Oklahoma City. Like early-20th-century Polish peasants who came to work in Chicago’s factories or Russian immigrants, like my grandparents, who came to New York to labor in the rag trade, the appeal of today’s smaller cities is largely economic. The foreign born, along with generally younger educated workers, are canaries in the coal mine—singing loudest and most frequently in places that offer both employment and opportunities for upward mobility and a better life.

Over the decade, for example, Austin’s job base grew 28 percent, Raleigh’s by 21 percent, Houston by 20 percent, while Nashville, Atlanta, San Antonio, and Dallas-Ft. Worth saw job growth in the 14 percent range or better. In contrast, among all the legacy cities, only Seattle and Washington D.C.—the great economic parasite—have created jobs faster than the national average of roughly 5 percent. Most did far worse, with New York and Boston 20 percent below the norm; big urban regions including Philadelphia, Los Angeles, and, despite the current tech bubble, San Francisco have created essentially zero new jobs over the decade.

[....]

The reality is that most urban growth in our most dynamic, fastest-growing regions has included strong expansion of the suburban and even exurban fringe, along with a limited resurgence in their historically small inner cores. Economic growth, it turns out, allows for young hipsters to find amenable places before they enter their 30s, and affordable, more suburban environments nearby to start families.

This urbanizing process is shaped, in many ways, by the late development of these regions. In most aspirational cities, close-in neighborhoods often are dominated by single-family houses; it’s a mere 10 or 15 minute drive from nice, leafy streets in Ft. Worth, Charlotte, or Austin to the urban core. In these cities, families or individuals who want to live near the center can do without being forced to live in a tiny apartment.

And in many of these places, the historic underdevelopment in the central district, coupled with job growth, presents developers with economically viable options for higher-density housing as well. Houston presents the strongest example of this trend. Although nearly 60 percent of Houston’s growth over the decade has been more than 20 miles outside the core, the inner ring area encompassed within the loop around Interstate 610 has also been growing steadily, albeit at a markedly slower rate. This contrasts with many urban regions, where close-in areas just beyond downtowns have been actually losing population.

[....]

Pressed by local developers and planners, some aspirational cities spend heavily on urban transit, including light rail. To my mind, these efforts are largely quixotic, with transit accounting for five percent or less of all commuters in most systems. The Charlotte Area Transit System represents less a viable means of commuting for most residents than what could be called Manhattan infrastructure envy. Even urban-planning model Portland, now with five radial light rail lines and a population now growing largely at its fringes, carries a smaller portion of commuters on transit than before opening its first line in 1986.

But such pretentions, however ill-suited, have always been commonplace for ambitious and ascending cities, and are hardly a reason to discount their prospects. Urbanistas need to wake up, start recognizing what the future is really looking like and search for ways to make it work better. Under almost any imaginable scenario, we are unlikely to see the creation of regions with anything like the dynamic inner cores of successful legacy cities such as New York, Boston, Chicago or San Francisco. For better or worse, demographic and economic trends suggest our urban destiny lies increasingly with the likes of Houston, Charlotte, Dallas-Ft. Worth, Raleigh and even Phoenix.

The critical reason for this is likely to be missed by those who worship at the altar of density and contemporary planning dogma. These cities grow primarily because they do what cities were designed to do in the first place: help their residents achieve their aspirations—and that’s why they keep getting bigger and more consequential, in spite of the planners who keep ignoring or deploring their ascendance.

Read the whole thing. I’ve been pimping Kotkin here for years. When you see his name out on the nets, give him your time. He’s been dead right about what’s happening in American cities, where Richard Florida has been dead wrong.

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If the condominum is not VA-approved, how do I get a VA home loan offer accepted?

Many veterans in California purchase properties which are classified as condominiums.  Some are large complexes, with professional HOA management, some are small complexes (under 6 units) with no monthly HOA fee and an informal cost-sharing agreement, and some are townhomes.  All share on thing in common–they are listed on the county records as a condominium.  This, the VA loan can not be funded until the condominium complex is approved.

The Southern California market has shifted, seemingly overnight from a buyer’s market to a seller’s market.  Many listing agents are presenting multiple offers to sellers.  Sadly, sellers leave some money on the table because the best offer is one using a VA home loan.  The sellers believe that the VA home loan can not be used because the condominium complex does not have a VA approval.

Buyer’s agents jobs then, are to present the VA offer with an eye towards minimizing the risk associated with it.

First, the buyer’s agent would do well to present documentation which demonstrates that the veteran is a strong buyer.  Some successful agents go so far to present my automated underwriting findings along with asset and income documentation (with the veteran’s permission, of course).  Demonstrating that the veteran has the credit, income, and asset requirements, to be approved for the loan amount, shows that the veteran is “bankable”.

Second, the buyer’s agent might address the three common concerns, sellers have with VA loans in the cover letter.  The cover letter should highlight that the veteran earned the no-down payment loan as compensation for his or her service to our country.  I sometimes call this “wrapping the offer in the flag” and the buyer’s agent should not be shy about doing it.  If the veteran served overseas, highlight it. If the veteran earned a distinctive award, highlight it.

The buyer’s agent should be clear about whether the seller is being asked to pay for the VA non-allowable costs and specify the dollar amount.  If the offer does not include seller-paid costs, the letter should state who is paying for those costs (usually the lender) and reference the section in the offer which states that.  I generally recommend that agents use this language

“VA non-allowable costs to be  paid by lender.  Seller not required to pay any of the veteran’s non-allowable closing costs”

The buyer’s agent should discuss the condominium approval process in the cover letter, too.  The lender’s name, email, and number should be included, along with 2-3 references who can confirm that the lender knows how to get the complex VA-approved.    This point is important.  The lender should be able to demonstrate proficiency in the complex approval complex and should state that the appraisal can be ordered before the complex is approved.  Not all lenders will do this.  Many lenders state that the complex has to be approved prior to ordering the appraisal–that just ain’t so.  The loan can be processed, underwritten, and approved before the complex approval comes in.  Ultimately, the lender should have a full approval with one condition remaining; the complex approval.

Finally, the buyer’s agent should confidently present the VA Amendatory Clause with the offer.  The VA Amendatory Clause is nothing to hide.  Sellers should understand that the appraisal will be performed conditioned upon the complex approval.  Ultimately, that means that the veteran buyer’s deposit is refundable if the complex can’t be approved.  If the buyer is bearing the cost of the attorney opinion letter, that should be disclosed as well–it shows that the veterans has “skin in the game” and a vested interest in a quick closing.

VA home loans are a great tool for buyers who have served our country.  Sellers can get top-dollar for their properties if they address the “risks” a VA offer might present, have a game plan for how to mitigate those risks, and help the agents, veteran, and lender to close the loan quickly.  Communication is key to a successful VA home loan transaction and that communication starts with a prepared buyer’s agent.

 

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What’s big, dumb, sclerotic and panics on command? A California Association of Realtors member, apparently.

So this big dumb robot shows up on the front porch this morning:

Believe it or not, it’s from the California Association of Realtors. The robot exists to support this video:

Get it? There’s a meet-cute featuring pre-tween pretend robots, and this clunky piece of junk communicates… what…?

My reaction? “Urf. Now I’m going to have to waste time mocking this nonsense…”

Okayfine. You will note that the robot seems to be suggesting that California Real Estate is something of a slot machine.

But at least your CAR member agent has his squarish mechanical head screwed on right.

And in a batteries-not-included world, your mechano-Realtor comes complete with two enormous D-cells, which must have added considerably to the postage.

The box didn’t provide a lot of insight into why one should choose a CAR-certified RealtorBot, but it was fun imagery:

Ultimately, though, it’s the test of the marketplace that matters. And a CAR-approved RealtorBot can panic mindlessly like no other.

Hey, CAR members: No tar, no feathers in California? This is your money I’m having such a good time with…

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Apparently, insanity is buying the same house over and over again, even though you never qualify.

You just can’t make this shit up: Obama administration pushes banks to make home loans to people with weaker credit. Why not? It worked out so well the last time.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.

“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.

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Can Bernanke Keep Mortgage Rates This Low Into 2015?

I’ve been a vocal critic of Ben Bernanke.  I thought his Quantitative Easing schemes would eventually create a bubble in the Treasury and mortgage-bond markets.  Bernanke has committed to keeping rates low for another 18-24 months.

I was wrong.  I violated the first rule of market prognostication (from the late Marty Zweig):  Don’t Fight the Fed

Let me give you some background.  Mortgage rates are driven by the secondary market (which is a fancy word for bond buyers on Wall Street).  I offered an abbreviated history of secondary mortgage marketing , six years ago, here on Bloodhound Blog.  Essentially it works like this:

  • Home buyer applies for a loan with a mortgage originator
  • Originator processes the loan for submission to a lender
  • Lender underwrites the loan to agency guidelines (FHA, FNMA, FHLMC, VA)
  • Lender funds the loan
  • Lender secures guaranty from agency
  • Lender retains servicing rights but assigns rights to principal and interest to an investment bank
  • Investment bank packages loans in a pool, carves up the pool into bonds, and sells them to individual investors

Two things are important in secondary marketing:  the agency guaranty and the ability to sell the bonds.  The agency guaranty offers a sense of security to the investors and the demand for the bonds must be there.  When I thought rates would rise, because of runaway inflation, I posited the the Federal Reserve Bank’s power was quickly deteriorating.  What I hadn’t anticipated was that central banks, all over the word, were in even worse shape.  The Fed might be ugly but she’s the prettiest gal at the dance.

Last month, I asked Alan Nevin, economist with the London Group, “What if the buyers run away?”  To which, he replied, “Where will they go?”.

This is not a pollyannish answer.  Where WILL investors go?  I offered these options:  Hong Kong, Australia,  and Canada

Then it hit me–the world wide capital market is huge and the options for capital investment are limited.  Imagine the global capital market as a 64-gallon trash can.  The Hong Kong, Australian, and Canadian bond markets are like a shot glass, a pint bottle, and a quart can.  Even if you tried to dump all that trash into those three little receptacles, you’d have at least 63 gallons of trash which needed a landfill.

The domestic treasury and mortgage-backed securities markets are that landfill—a great place to dump all of that trash.  Maybe Hong Kong, Australia, and Canada can pull some capital away from the domestic bond markets but The Fed-controlled landfill is still a good place for investment.  For now…

 

 

 

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We are all ‘greater fools’ now: How can you sell your house to a big family when big families don’t exist any longer?

Markets go up. Markets go down. But the whole house of cards is built on the idea that population will grow. What happens when it doesn’t?

matt-king-most-depressing-slide

From Business Insider:

It’s what I like to call “the most depressing slide I’ve ever created.” In almost every country you look at, the peak in real estate prices has coincided – give or take literally a couple of years – with the peak in the inverse dependency ratio (the proportion of population of working age relative to old and young).

In the past, we all levered up, bought a big house, enjoyed capital gains tax-free, lived in the thing, and then, when the kids grew up and left home, we sold it to someone in our children’s generation. Unfortunately, that doesn’t work so well when there start to be more pensioners than workers.

The entire welfare state is built on the idea that young people can be milked of their wealth because they’re too busy being young to notice.

Alas, the welfare state also awards adults either for not reproducing or for reproducing in only the most wealth-destructive ways. The consequence (entirely foreseeable) is that the number of dependents-by-choice goes up while the number of de facto slaves declines — by people either opting out of producing wealth or opting in to the welfare state’s “free” benefits or, as here, by not being born in the first place.

This will not end happily…

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Has your town pissed away a fortune on the so-called ‘creative class’? Bad news from Richard Florida: “On close inspection, talent clustering provides little in the way of trickle-down benefits.”

Joel Kotkin:

Among the most pervasive, and arguably pernicious, notions of the past decade has been that the “creative class” of the skilled, educated and hip would remake and revive American cities. The idea, packaged and peddled by consultant Richard Florida, had been that unlike spending public money to court Wall Street fat cats, corporate executives or other traditional elites, paying to appeal to the creative would truly trickle down, generating a widespread urban revival.

Urbanists, journalists, and academics—not to mention big-city developers— were easily persuaded that shelling out to court “the hip and cool” would benefit everyone else, too. And Florida himself has prospered through books, articles, lectures, and university positions that have helped promote his ideas and brand and grow his Creative Class Group’s impressive client list, which in addition to big corporations and developers has included cities as diverse as Detroit and El Paso, Cleveland and Seattle.

Well, oops.

Florida himself, in his role as an editor at The Atlantic, admitted last month what his critics, including myself, have said for a decade: that the benefits of appealing to the creative class accrue largely to its members—and do little to make anyone else any better off. The rewards of the “creative class” strategy, he notes, “flow disproportionately to more highly-skilled knowledge, professional and creative workers,” since the wage increases that blue-collar and lower-skilled workers see “disappear when their higher housing costs are taken into account.” His reasonable and fairly brave, if belated, takeaway: “On close inspection, talent clustering provides little in the way of trickle-down benefits.”

Rotarian Socialism doesn’t work? Not even when you geyser those subsidies at really hip, pomo Rotarians? Who knew…?

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My client went shopping for houses on Trulia.com, and only 75% of those she found were bogus listings…

My note to her: “Trulia and Zillow both present inactive listings as though they were active to fool the public into thinking that they have more inventory than the agents they exploit for advertising money, even though their listings come straight from the MLS systems. Mere real estate brokers would be fined out of business for pulling these stunts.”

Despair you nothing, though, hard-working dogs. Every time Trulia or Zillow are caught pulling these bait-and-switch stunts, one more active real estate shopper is turned off of their sites forever. Nice going, suits…

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Beating the IRS One Regulation at a Time

Occupational licensing is a tricky topic for those of us who have “professional” occupations. The notion that any old schmuck can simply hang out a shingle – in the case of a law practice – or open a brokerage with nothing more than a computer, smartphone, and printer – in the case of real estate – strikes fear in the hearts of established practitioners and of busybodies everywhere.

What about the ignorant public? What about the sacred profession (whichever profession) we’re a part of? What about my own livelihood?

If there are oxes to be gored, we’d prefer they be other peoples’ oxes. Not our own.

It didn’t used to be so. Occupational licensing and testing and fee-paying and continuing professional education programs didn’t really get going until the 1920s, a consequence of the progressive movement. In the 1950s, only about 1 in 20 American workers needed the government’s permission before pursuing their chosen occupation. Today, it’s almost one in three. Greg’s called this Rotarian socialism.

Enter the Internal Revenue Service. For nearly 100 years, tax preparers were unlicensed. Consumers – i.e., filers – could make their own decisions about whom they wished to hire in order to prepare their taxes. Civil and criminal statutes can punish preparers who prepare inaccurate or fraudulent returns.

But in 2011, the IRS decided these laws were not enough, and imposed sweeping changes that would require tax preparers to apply for licenses from the IRS in order to prepare federal tax returns on behalf of clients. The new regulations require all paid tax return preparers—except for attorneys and CPAS-to become a “registered tax return preparer” by taking and passing a competency examination, and paying application fees. They would also require preparers to complete 15 hours of continuing education.

The regulations did not spring ex nihilo into existence. They were largely drafted by the former CEO of H&R Block. Most occupational licensing helps big firms or brokerages which can bear the cost of training employees and paying fees, and who benefit disproportionately when small and independent providers are kept out of the business.

My good friend Dan Alban, an attorney for the Institute for Justice, a libertarian non-profit law firm that sues the government on issues relating to licensing, eminent domain, economic freedom, school choice, and the like, won a tremendous victory on January 18 when a federal district court judge struck down the the IRS’ licensing scheme, saying that the Congress had never given the IRS the power to regulate tax preparers and the IRS could not unilaterally grab this power on its own.

The IRS has since appealed the ruling, and asked for the judge to lift the injunction that has put a stop to these regulations.

I would not expect this battle to be over so quickly. The big tax preparers certainly have the ability to lobby Congress to grant the IRS this regulatory authority, even if the IRS loses on this particular issue.

That would be a shame. As I noted on my blog in a different context, there’s no evidence that compulsory educational requirements imposed by certain states on lawyers have any positive benefit for the public.

Whenever I broach the subject of the bar, the bar exam, and licensing regulations, lawyers I talk to acknowledge how ineffective these rules and requirements are. But in the next breath, they worry about the flood of people who would join the profession if we didn’t have such barriers to entry.

The idea that we should be free to pursue a profession or a job used to be a quintessentially American idea. But no longer…

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There is no real estate inventory problem in Oceanside, CA

How often had you heard real estate agents complain about “the inventory problem” this past year?  I used to think their complaints were farcical until these past 3-4 months.  I have about a dozen pre-approved buyers out looking for homes.  Interest rates are low and the foreclosures are getting snapped up as soon as they hit the market.  Not one of those dozen has been able to get an accepted offer since Labor Day, 2012.

Clearly, there must be an inventory problem. 

It’s time to change gears real estate agents.  A few years back, I suggested that buyers would be controlling the market and the listings side of the business should be de-emphasized.  All the properties being offered were short sales or foreclosures.  Paperwork-intensive transactions didn’t sound so appealing to me and I recommended that agents focus all their efforts on finding buyers and getting them into contracts.  Those who followed such advice didn’t get rich but earned a darned good living these past few years.

I had breakfast this morning with Mr. Oceanside, Don Reedy.  We discussed the local market and “the inventory problem” when it hit me; there is no shortage of homes.  In Oceanside alone, there are thousands of home owners, with equity, who can sell their properties to ready and willing home buyers.  This offers the ambitious real estate agent a great opportunity.  Too often, real estate agents (and loan originators) forget that we are paid to add value to transactions.  If we’re simply acting as gatekeepers, we are no different from everyone else.  We need to “create personal inventory”–find sellers for the buyers who want their homes.

Here is my ten- step plan for real estate agents, for a great 2013…with PLENTY of “personal” inventory:

  1. Attend your local caravan meeting each week.  Pay close attention to the agents who speak during the “buyers’ needs” segment.
    Call a dozen local agents weekly who work with buyers.  Find out where the inventory problem is.  At this point, you will see a glaring opportunity in your town/market area.  If you know that those agents have 2-3 buyers, for a certain price range, in a certain area, you have identified “half” a market.
  2. Look at the property tax records in the “problem” subdivision.  Choose only properties with owner’s equity.  Generally speaking, you’ll look for homes bought prior to 2006 or in 2010.  If you’re doing a search with the local title company, and you know the homes are worth $350,000-$400,000, you could also search for sales which had recorded mortgages under $250,000 (that can eliminate a lot of problems).  Compile a lit of potential “equity sellers”.
  3. Visit those equity sellers on a Saturday morning or Sunday afternoon.  Don’t mail them.  Don’t call them.  Don’t email them.  Bang on their door and tell them that you KNOW where 2-3 willing buyers of their property are.  Ask to meet with them to discuss the idea of “equity transfer” to different property.
  4. Meet the now interested seller and explain that, when they look at their original mortgage payment (before they refinanced), and add the expected equity from the sale of their home, they might be able to buy a “better” (bigger, nicer, closer to work) home.  It might be useful to have some listings printed out, in the “better” homes’ price range, to whet their appetite.  Recommend that they speak with America’s #1 mortgage broker, to get pre-qualified for the “equity transfer” program, with mortgage payments which were equal to their original (before they refinanced) payment.  Schedule a follow-up visit and tell them you’ll have the mortgage broker call them in the morning.
  5. Speak with the agents who have willing buyers for the home.  Verify that they are still in the market and that you might have a property about to hit the MLS.  Explain that you’ll give them a “heads up”, right after the listing agreement is signed, and tell them that you’ll let their buyers “preview” the property the day the listing is entered into the MLS.  Estimate when you think that will be.
  6. At the follow up visit to the interested seller, start the meeting off by showing them the available inventory for the pre-approved amount (you’ll have a pre-approval letter from the mortgage broker).  Sell the fact that you are transferring the equity from the existing property.  If they seem excited, offer to list thee property for 30 days only.  Explain that this market is a bit of an anomaly and, if you can’t get them the price they need, to affect the “equity transfer” in 30 days, it may not make sense to sell at that time.  Have the seller sign a 30-day listing agreement along with a 60-day buyer’s brokerage agreement.
  7. Instruct them to be out of the property from 2PM-7PM on the next Friday and out of the property from 1PM-4PM on the next Saturday.  Schedule time to review offers, at 6PM on that Sunday evening.
  8. Plan to enter the listing into the MLS on Friday morning (or late Thursday night).  Schedule an open house for that Saturday.  Call the agents with buyers, and instruct them to schedule a showing on that Friday (from 2:30PM until 6PM).  Tell those agents you plan to hold it open that Saturday and that quick offers are the wisest policy.  Explain that you expect to be presenting offers all day Sunday.
  9. Find your seller a new home.  Collect commission checks for adding real value to a lopsided market.  Celebrate.
  10. Repeat.

It really is that simple.  If there are more buyers than sellers in a market, find more sellers.

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Doom and Gloom Redux

In 2008 – four years ago! – I penned a doom and gloom email that Greg posted to this here blog (with my permission). Soon thereafter, he invited me to join as a regular writer.

To sum it up, I thought (and still do believe) there is no way the government can automagically print currency in an effort to create real wealth. Paper is not wealth.

I expected inflation to hit much harder and more dramatically than it has. It’s been far more restrained. I suspect this is because that paper has been disproportionately sent to particular areas of the economy – large banks, for instance – that continue to hoard it.

I’m sure you don’t need me to tell you how easy it was to get credit in 2005 (when I bought my first home) compared to 2012 where the bank made me jump through all sorts of hoops to refinance a home I’ve got even though I’m in a much more financially sound position today than I was in 2012.

Still, my prediction that this recession would last years and years has borne out. I believe we are still in the first half of this financial crisis. That it simply feels like a crappy “normal” existence is a consequence of its duration.

But you aren’t getting the worst of it, unless you’re a recent graduate from a college or, wait for it, law school and now finding yourself saddled with six-figure debt earning a low five-figure salary.

Educational debt – non-dischargeable in bankruptcy – is like mortgage debt which is not cram-downable. That effectively keeps a whole class of citizens in debt-poverty. You can say, as you can say about indebted homeowners, that they made that choice of their own free will (I don’t agree with this view…), but the fact remains that hundreds of thousands of people in their mid-twenties and thirties are saddled with enormous debts punishing them for choices they made when they were 18 and 19.

This is not good for the economy, or society.

The consequence is an economy that limps along until this debt is cleared out, which means for the next 10 to 15 years.

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Things to do in Denver when all you can say is “SMIE!”

Jay Thompson Earning His Pay

“Please don’t shoot me! I’m your buddy, I swear…”

The Knights Who Say “SMIE!”, spewers of beguiling lies, get their heads handed to them in Denver, but like all good shills, they just keep on spewing.

Don’t say I didn’t warn you

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Are Zillow and Trulia thrashing savagely in a blood-red ocean? Here’s a clue: Both of them are jumping the shark.

Do you feel like dinner?Is the business model of all the Realty.bots daft?

It is Citron’s primary thesis that Zillow is a Web 1.0 business presenting itself as a Web 2.0 investment. The entire premise of Web 2.0 is that smart managing and publication of information interactively to users can scale tremendously, while costs remain fixed. But unlike Netflix, LinkedIn, and even Facebook, Zillow isn’t voyaging forth into an ever-expanding horizon of unlimited sized markets opening up on the internet. It generates virtually all of its revenue from U.S. real estate agents. And it does so the old- fashioned way—by cold-calling them on the telephone. It’s been operating since 2006 more or less as it does today, and was consistently unprofitable, until the last two quarters.

[....] It is a “heavyweight” sales company masquerading as a “web 2.0″ leveraged technology play. The only way it has to grow revenues right now is with the increasing intensity of the sales effort. It’s not light and leverageable like LinkedIn, or OpenTable (Sales and mktg 21.4% of revenues) Zillow is more similar to Groupon than a Web 2.0 company such as LinkedIn or Open Table.

[....]

Expressed another way, it is apparent to Citron that Zillow is buying revenues with an intense telesales effort. Put in its simplest terms, they spent an additional $3.8 million on sales expense last quarter, and only generated $4.8 million in new revenues!

By comparison, Open Table spends 21% of revenues on sales, and even LinkedIn spends 33%. This comparison shows how much Zillow is dependent on old school phone room sales—not Web 2.0 online leverage.

While management might spin a fun story about their company growing revenues at a rapid pace, the proof is in the numbers. The cost of sales demonstrates that customers do not buy Zillow ads; they are sold Zillow ads, which should be disturbing because they address a target niche market unlike OPEN or LNKD—and cost of sales should be lower.

[....]

Citron notes that MOVE.com, formerly Homestore.com, referenced above, could not make money during the real estate boom of the mid 2000′s. At the time, they were the only online destination for brokers to buy leads. (Citron wrote about MOVE when its market cap was over two billion “with a B”; today it is 350 million “with an M”).

How does anyone expect Zillow to thrive in that identical business, with competition from Realtor.com, Trulia, and a host of smaller competitors, all fighting for wedges of the same finite customer base? The inescapable market reality is that the business model of selling leads to real estate brokers just does not scale…read on.

Do read on. The Citron report is devastating to all of the Realty.bots.

Is it true? The suits deny it, of course, but for the minions of publicly-traded companies, it is a felony to tell the truth about business prospects. That Zillow and Trulia have hired a herd of Judas Goats — six-figure flunkies paid to write rah-rah-rah weblog posts — seems telling to me.

Meanwhile, note these bold new initiatives:

Trulia.com will give you a chance to win a Mercedes E550 just for building out your agent profile. That’s a car worth something like $75,000 in exchange for contributing free content to Trulia’s site. Why isn’t it worth your while to populate your profile without the incentive? Uh…

But wait. There’s more. Zillow.com will give you a chance to win a $10,000 Amazon.com gift card just for completing a Zillow Premier Agent web site. And this is not worth doing without the incentive because…? Yeah.

These are both instances of jumping the shark, and they’re both very loud statements that the big bosses at both Zillow and Trulia think their product — advertising paid for by schmucks like you — isn’t worth the money they charge for it. How can we know that for sure? Because free advertising is not the prize offered in their contests. Not even second-prize. Not even tenth-prize. Instead, your opportunity is to be their bitch and then not win a car or a gift card. The lottery is a sucker bet, too, but at least the lottery doesn’t hold you hostage forevermore.

Are the Realty.bots really in trouble? I have nothing invested in them in any way you can measure investment. But people who will say things like this

Think about the possibilities … $10,000 worth of free stuff.

will say just about anything…

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