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Month: December 2006 (page 2 of 6)

December 25, 2006

Christmas story: A canticle for Kathleen Sullivan

by

Suburban Phoenix Real Estate Broker

Author website

A canticle for Kathleen Sullivan

A Ramblin’ Gamblin’ Willie story

I got to the hospital after visiting hours, but the nurse led me to the room anyway. “There hasn’t been anyone,” she confided.

I pursed my lips in grim acknowledgement. “That’s why I’m here.”

Inside the room the patient looked like purple death. It was a critical-care room, bright and white and cheerfully clinical. The bed was surrounded by apparatus, with lines and leads and probes and IV tubes running to him. The only unbruised part of him that I could see were his eyes, and his eyes were more deeply wounded than anything.

I’ll tell you his story, but I won’t tell you his name. His name is yours. His name is mine. His name is legion…

I pulled up a chair and got as close to the bed as I could. I wanted to see his eyes. I wanted him to see mine. His jaw was wired and he was breathing though a plastic tube mounted in his throat, which makes for a fairly one-sided conversation.

“I just came from the funeral,” I said. “Biggest one I’ve ever seen. The procession must have been two miles long. Kathleen Sullivan, mother of six, grandmother of two, with two more on the way, loving wife of Brian Sullivan — in the newspaper it’s just something that’s there, like the basketball scores or the stock tables. People die every day. People are born every day. It doesn’t seem to matter very much.”

I shrugged. “I think it does. I’ll tell you a story: About six months ago there was a woman driving down Endicott Avenue. Driving very safely, five miles an hour below the speed limit, doing everything just exactly right. There were some schoolboys riding their bikes on the sidewalk beside her, and, all at once, one of the boys decided to dart out into the street, right in front of her car. She stood on the brake pedal, but it was already too late. Screech, crunch, tragedy. The boy was killed instantly.

“She saw it, of course. His little schoolfriends saw it. Half a block away was the crossing Read more

December 24, 2006

Not just any fools: Heavy on the light rail propaganda, please . . .

by

Suburban Phoenix Real Estate Broker

Author website

Almost three years ago, The Goldwater Institute, a free-market think tank in Phoenix, published a devastating accounting of the light rail system now being built in Metropolitan Phoenix:

[The Maricopa Association of Governments]’s public transit plans deserve close scrutiny. Use of urban public transportation systems has been in decline since the end of World War II, when public transit provided 50 percent of urban travel. Last year, only three percent of urban travel in America was provided by public transit. This decline has occurred despite prodigious government efforts to prevent it. Governments now spend 30 to 40 times as much on public transit as for roadways. But evidence suggests that transit is not the most effective use of public transportation dollars.

Of all the options in the public transit mix, light rail deserves the most scrutiny. Because it requires its own special track, it lacks the flexibility of buses, which use existing city streets. And because tracks would be constructed on existing city streets, light rail in the Phoenix region is actually projected to increase traffic congestion. Furthermore, in no city in America does light rail transit account for much more than one percent of urban person-miles of travel. The Phoenix light rail system is projected to account for only two-tenths of one percent of travel in the region.

The average cost of light rail per passenger-mile is around $1.50, almost double the cost of bus transit, and five times the cost of automobile transportation per vehicle-mile. On average, taxpayers pay nearly 90 percent of the cost of light rail passenger travel, considerably more than for all other transit modes. Worst of all, light rail would do almost nothing to relieve traffic congestion. Because 80 percent of new light rail passengers in Maricopa County would be former bus passengers, light rail would remove less than one car in 1,000 from traffic.

To my knowledge, no one has ever challenged the numbers in this report — perhaps because it is based entirely on Valley Metro’s own projections. The Arizona Republic dismissed it with high-handed hand-waving, insisting — I kid you not — that people say that Read more

December 23, 2006

The Harm That David Lereah Does

by

Mega-Producing Realtor

Author website

Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius, and a lot of courage, to move in the opposite direction. — Albert Einstein

Mike wrote:

If you don’t have a sense of humor, you probably don’t have any sense at all.dog pissing on snowman

Merry Christmas to you and your family, Mr. Shaw.

And to everyone else here.

You see, salutations can be expressed without including a condescending, gratuitous insult; try it sometime.

__

Fair enough. As you were obviously smart enough to see that the humor line was intended for you (without me saying so) I’m going to attempt to respond to the whole “David Lereah Issue” without (after all, it IS Christmas) making any snide comments towards you (or any of the other people who may share your views). First, I am not “defending” David Lereah. I don’t know him and I have never paid any attention to any specific statement or prediction he has made. I don’t even know how long he has been the chief economist for the NAR. I have no data to suggest that any of his predictions or forecasts are ever accurate and I am not claiming that they are. I will also state that I have read comments from people who have meet him and / or have listened to him speak and from all accounts the reports would indicate that he is a likable person and comes off as well informed and intelligent.

For the purposes of what I want us to look at here, we can think of David Lereah as the equivalent of a stopped clock – at a minimum, he is going to be right twice a day with the correct time. So, if the point is that he is usually wrong – lets just agree, he is almost always wrong. For me, he does not cast a “long shadow”. I don’t think most REALTORS even know who he is, or what he has to say – let alone the general public. I don’t believe that most people who live in the United States give a crap what he or anyone Read more

December 23, 2006

Wikipedia founder proposes Google alternative . . .

by

Suburban Phoenix Real Estate Broker

Author website

From The Times of London (via TechMeme):

[Wikipedia founder Jimbo] Wales believes that Google’s computer-based algorithmic search program is no match for the editorial judgment of humans.

Google searches are conducted using an algorithm that calculates how many other websites are linked to a certain site, which in turn gives the material found by the search a ranking. Therefore, the first result in any Google search is the website that has the most links pointing to it.

Wikipedia is an encyclopaedia written by thousands of contributors from around the world, known as “Wikipedians”, using free open-source software.

Mr Wales aims to exploit the same network of followers and the same type of free software to create his search engine.

“Essentially, if you consider one of the basic tasks of a search engine, it is to make a decision: ‘this page is good, this page sucks’,” Mr Wales said. “Computers are notoriously bad at making such judgments, so algorithmic search has to go about it in a roundabout way.

“But we have a really great method for doing that ourselves,” he added. “We just look at the page. It usually only takes a second to figure out if the page is good, so the key here is building a community of trust that can do that.”

Mr Wales believes that the reputation already fostered by his Wikipedia community and the transparency of his technology will build sufficient trust in his search engine to bring in advertising revenue and make the Wikiasari venture profitable.

I like the idea in principle, but I can see two gaping holes: One is simply that pages that are highly worthy but hugely unknown will not be ranked. And, more obviously, the kind of bogus rank-spamming evident at sites like Digg is a real risk.

A mash-up using Google for raw results filtered through Wikiasari’s vetting might be a great short-answer search engine, though…

A further thought: Jimmy Wales already has access to a fine database of social site rankings: Wikipedia itself. Starting there and making ranking easy through the search-engine UI, he might have a product…

Pat Kitano has more.

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December 22, 2006

Cutting out middle man in a sale might cost you

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link).

 
Cutting out middle man in a sale might cost you

I’ve talked about disintermediation before, and surely it will come up again. Disintermediation in real estate is the idea that buyers and sellers can eliminate the middle man — in this case the Realtors — and deal with each other directly.

The belief is that the Internet will provide information formerly “hoarded” by Realtors so that real estate transactions will become as simple as buying stocks or airline tickets online.

The information that is supposed to make this happen is the Multiple Listing Service, and that’s something we can talk about another day. For now it is sufficient to make plain that MLS listings are very far from being the most important information in the sale of a home. The simple fact is that, because I do this job every day, I can do a much better job than an unrepresented buyer or seller, much as you can do your job better than I could.

Want proof? Let’s go buy a house.

We’re out showing homes with our party and they settle on one they like. Because it’s a buyer’s market, and because the buyers aren’t very well prepared, we don’t write a contract right away.

What’s the best day to write an offer? Tuesday, in principle, but the absolute best day is the first Tuesday after the first of the month. The buyers have never given this a second thought, but it’s our job to know.

We’ll send the buyers to a lender we know and trust. Why? Because, although they have good credit and good incomes, they have no cash. Our lender can write a fast 80/20 loan with very low closing costs. Say what? That’s an 80 percent first mortgage, a 20 percent second mortgage with no private mortgage insurance — all without costly junk fees.

When we finally write the offer, we’ll recommend a structure like this: List price, less 5 percent, with an additional 3 percent coming back to the buyers as closing costs.

Are we done yet? Not even close, but we’re done for now. Come Read more

December 21, 2006

Lereah Must Die! He is a Clown

by

Mega-Producing Realtor

Author website

Talk is cheap. Supply exceeds Demand. Lereah

Not His Favorite Clown What follows are a few “Economist Jokes”. Not wanting to shock anyone but all of these were written and were being told when David Lereah was still in grade school. Here is a news flash – people who are finding themselves being “victimized” by the pronouncements of an economist have to be looking for ways to be a victim. I’m not defending Lereah, I’ve never bothered to pay any attention to anything he (or any other economist) had to say about anything.

NO major economist accurately predicted, in advance, the phenomenal run up in prices that started two years ago. Every last one of them was asleep at the switch. The switch was turned on and they – along with everyone else – THEN could make pronouncements about it. That is observation of effect, after the fact. That is not “predicting” anything.

____________

Economics is extremely useful as a form of employment for economists.

____________
“I’m thinking of leaving my husband,” complained the economist’s wife.

“All he ever does is stand at the end of the bed and tell me how good things are going to be.”

____________
There is also a joke about the last Mayday parade in the Soviet Union. After the tanks and the troops and the planes and the missiles rolled by there came ten men dressed in black.

“Are they Spies?” Asked Gorby?

“They are economists,” replies the KGB director, “imagine the havoc they will wreak when we set them loose on the Americans”

____________
Economists don’t answer to questions others make because they know what the answer is. They answer because they are asked.

____________
The only thing more dangerous than an amateur economist is a professional economist.

____________

Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.
____________

An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.

____________

An Economist is someone who didn’t have enough personality to become an accountant.

____________
Q. What’s the difference between an economist and a befuddled old man with Alzheimer’s?

A. The economist is the one with the calculator.

____________
The last severe Read more

December 21, 2006

Maybe We Need More Salaried Agents

by

Associate Broker

Author website

I’ve been running some stats on advertising, Google rankings and agent performance over the last couple of days. One of the top agents in Atlanta has not had a selling-side transaction all year. Very unusual for this agent. Another top agent – who ranks very high in Google and has been a very productive selling agent in the past – has also not had a selling-side transaction this year. Both agents have seen sales on their listings, but not at the same rate as 2005.

When I examine the number of homes sold in the greater Atlanta area in 2005 versus 2006, the numbers are virtually the same… but the number that didn’t sell was much higher in 2006. In 2004 – 99% of all listings sold… in 2005 – 71% of all listings sold… but in 2006, only 54% sold. If this trend continues, we will soon reach a point where a property will be more likely NOT to sell.

Meanwhile, for the umpteenth time over the last few days, GMAC Metro Brokers Real Estate has been running their television ads trying to get more people to become real estate agents. One of their ads features a guy saying that he sold $9 million in his first year. Oh yeah… we’re all swimming in cash right now. Even their website asks, “Who wants to be a millionaire?”

I wrote “How Many Agents Is Too Many” back in October.

So, with a yearly average of three or four transaction sides per agent in Georgia… why would Metro Brokers advertise for more agents?

Simple. Because these agents aren’t on salary.

Many businesses that hire commission-only salespeople don’t care who they hire, as these people only get paid when the company gets paid. To them, the more the merrier… and I fear that the same is true in real estate companies.

The questions is: “Is this a good model for our industry?”

Some new brokerages are trying a salary model, and time will tell if these models will thrive – or even survive. I have yet to hear what kind of money these salaried positions are paying.

On the Read more

December 21, 2006

Ooh, baby, baby it’s a wired world — but what is going to change in residential real estate in the next 12 months? Almost nothing . . .

by

Suburban Phoenix Real Estate Broker

Author website

One of my clients gave me a wake-up call late this year. She has a computer, but she’s never unpacked it in her current home. I don’t know if the computer is robust enough for broadband, but it really doesn’t matter, does it? I’ve been ferrying listings to her by car — printed on paper, stuffed in envelopes and parked under her doormat. Just lately she acquired a fax machine, which is convenient. We have a house under contract and there is a lot of paper flowing back and forth. Certain oil-rich sheikdoms might weep, but everyone else can breathe freely — and from a cleaner air supply.

This is a weird world for a wired Realtor, but guess what? It’s the real world. My own sweet mother is such a Luddite that we’re buying her the dumbest dumb terminal I have ever seen for Christmas. We started out saying, “When all you have is a hammer, everything looks like a nail.” By this point, we act as though we believe that everything is a nail.

This is incorrect.

For one thing, buyers and sellers of residential real estate are not on-line in concentrations greater than other demographics. How could they be? Young people, yes. Technophiles, yes. Everyone else…? Not so much.

Moreover, whether or not buyers and sellers are poking around on-line, for the most part they are not making life-altering financial decisions in untouched-by-human-hands on-line real estate transactions. There might be a news story about a crazy young couple taking the plunge, but you need to stop for a moment to recall that that exact page of the newspaper only just last week was devoted to a young man who has never cut his toenails. What makes news? The exception, not the rule.

We are too much misled. The exception is interesting, but it’s interesting because it’s rare. We ignore the commonplace because… well, it’s commonplace. In the last year, we saw the launches of dozens of new Realty.bots, each one devised to provide easier access to information that was, for the most part, already available. What changed in actual, on-the-ground residential real estate Read more

December 21, 2006

Inside The Box – YES, NO and MAYBE

by

Mega-Producing Realtor

Author website

Obstacles are those frightful things you see when you take your eyes off your goal. – Henry Ford

In an email, Adam wrote:

Russell-

I never got a chance to thank you for the Star Wars “Duel in the Desert.” I attended the event and very much appreciated your insight and humor. I have been doing Real Estate for over 6 years in CA and AZ. Although I have made over 100k one year, I have struggled through many others. I found this interesting in the sense that you mentioned doing this through the first part of your career (the ups and downs).

Somebody asked you a question and you mentioned to them about not being “all the way in the box.” You then mentioned something along the line of You finally getting this perspective yourself in your career and getting “all the way in the box.”

I want to get all the way in. How is this change made? How do/did you flip that switch? I’ve been waiting for years yet it hasn’t happened.

If this seems like a strange email, it’s because it is! I just valued your advice so much that you gave a couple of months back and thought you might be able to give me more insight.

Thanks,

Adam

The question I was responding to was from a lady asking about sending out postcards but she didn’t want to mail “ordinary” postcards to a farm area or a personal mailing list. She wanted something really unique – something outside the box. As I hear this sort of thing all the time (and recognize it as a destructive idea) I told her that her problem was not that she wasn’t outside the box with her thinking and her postcard program but that she wasn’t IN the box yet. Few agents are suffering from not being “outside the box”. They think they are but their real problem is they haven’t gotten “inside the box” yet.

There are certain fundamentals in any industry, profession or activity. There are correct ways of doing almost anything. The people at the top (of almost any activity) have Read more

December 19, 2006

Investor’s Version Of Grandpa’s Coffee Can — Diversification

by

Real Estate Investments Broker

Author website

For the first time I’d like to post, almost simultaneously, (simulpost?) on a subject which has facinated me for years. My purpose is merely to introduce the subject. A meatier post will follow.

Investors have been told by Wall Street to diversify since the street signs were put up on the corner of Wall and Broad in Manhattan. On the surface it seems a more than reasonable principle. After all, the only reason for its existence is to avoid losses. And who in their right mind doesn’t want to avoid losses? Indeed.

Warren Buffett and George Soros are both multi-billionaires — due solely to their ability to invest in winners. They think diversification is for those who simply don’t know what they’re doing. This is because they define risk as the result of not knowing what you’re doing. It’s ironic that most of their investments are in businesses that haven’t diversified themselves.

Money Filled Coffee CAn

Here’s what Mr. Buffett had to say to his own shareholders 13 years ago:

“The strategy we’ve adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it.”- 1993 Chairman’s Letter to Shareholders

Mr. Soros seems to like the more direct approach:

“Diversification is for the birds.”

They both have been quoted saying:

“Risk comes from not knowing what you’re doing.”

We laugh at the thought of the coffee can full of cash buried in the backyard. But it’s not funny. The reason the old guy did that was because he simply didn’t know what else to do. He did know one thing for sure — he didn’t want to lose what he had earned so far. Fear of loss and not knowing what one is doing is what risk is all about.

Since when do fear and ignorance combine to create great investment portfolios? Mr. Buffett and Mr. Soros say Read more

December 19, 2006

A richness of embarrassments: My soup-bowl runneth over with Top Ramen . . .

by

Suburban Phoenix Real Estate Broker

Author website

I keep thinking that I’m going to have free time for blue sky projects at Christmas, and I just keep getting busier. I accidentally sold another house today — 166,800 packages of Top Ramen to me, but it’s a new build that won’t close until around July of 2008. As the Phoenix market recovers, we could end up with a lot of Top Ramen in the pipeline.

I should be linking more, but I think Christmas has got everyone, one way or another. The much-promoted Yankee Blog Swap was today. I credit Mary McKnight with an impressive amount of preparation, but only three bits of news jumped out at me:

First, Kris Berg is a rare wit wherever she goes.

Second, Dan Green thinks mortgage weblogs are boring. So much he knows.

And third, Glenn Kelman is much more tolerable at his increased dosage.

I have houses closing all week, along with our own refi. It’s cold here, something I almost never get to say. But I caught the wind in a sinus, and I have that half-stupid feeling that precedes a cold. Wonderful. I should probably have some chicken soup, but we have all this damnable Top Ramen to dispose of…

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December 18, 2006

Five by four: Twenty things you didn’t know, with five more to come . . .

by

Suburban Phoenix Real Estate Broker

Author website

The four victims I tagged for the “Five things you didn’t know about me” have come forward with their deepest darkest secrets:

Kris Berg is a very smart person with a quick wit (who didn’t know this?) and a perilous driver.

Doug Quance has led a life of Steinbeck-like diversity in a vast host of locations.

Jeff Brown takes you on a grand tour of his life, from his grandfather to his wife. Along the way he explains the origins of the appellation “Bawldguy.”

And Dan Green is gracious enough to show us the everyday life of the hard-charging over-achiever. I say we enter the man in a pie-eating marathon!

My duty is discharged, and I am deeply honored to be working with such amazing people.

But there is a lingering detail…

Russell: Did you notice that Jeff called you out…?

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