There’s always something to howl about

Archive for July, 2009

What Lessons Have We Learned From Past Hard Times?

Most of us can remember a time, sometimes even a specific moment when our spirit was so beat up it seemingly had to look up to see down. I’ve had those times. They come and go for all of us, and come in so many different forms. It can be financial, health, family, or a combination of all the above. Although in my head I’m still roughly 22, and even though I’m healthy as a horse, very fit, blah blah blah, I can remember bad times like they were last week.

I was first licensed in a recession — went full time after school was done in a recession — saw my first child born in a recession — see a trend there do ya? I’d be the last guy to claim having lived a hard life, though I’ve had my fair share of, um, challenges. In our minds we tend not to step back and extract the lessons life so generously offers to teach us. But we do learn from our times in the barrel, don’t we?

You’ll not meet many folks more private than I, on that you can bank. I tend to keep to myself, though paradoxically I’m gregarious and outgoing by nature. Today I had one of those moments when it seems everything goes into super slow motion, and you begin to ‘see’ things you musta been missing. I’ll keep the subject matter to myself as it wasn’t directly about me, but suffice to say I was both emotionally and intellectually moved a great deal.

It reminded me of the lessons I’ve not only learned about life and living, but about myself — many of which were learned in the pressure cooker of desperate straits. I’d love to hear what some of you have learned when things in your life went to hell in a hand basket, but fair is fair so I’ll tell you some of what I learned in some of the darkest hours from my past.

I learned no matter how much family support there is, no matter how many friends there are, in the end we traverse through life’s most treacherous roadways alone. We make our decisions alone — even if it happens to be alone in a crowd. We deal with our thoughts alone. We deal, ultimately with our greatest fears alone.

I learned my spiritual faith was rock solid, deeply rooted, and part of my DNA. That’s a discovery I wish on everyone. Fortunately for me it happened when I was still a young man. It’s the reason I’m still standing today, and the reason I know nothing will ever defeat me.

I learned how to be brutally honest with myself. Those who know me know this about me. Knowing yourself is a gift most people really never experience. It’s value is priceless.

I learned who I’m not. Not net worth, what I drive, where I live, or any of those silly trappings. Finding out you’re the same person in all circumstances is akin to finding out you can never really be lost. Who you are is everything. Knowing who you are is the best weapon against whatever life throws at you. There’s a confidence from knowing who you are that transcends what usually passes for confidence.

I learned maybe most of all, that when I’ve suffered the most, when I felt the sun might never come up again, I was so very wrong. That no matter how bad things were, others were going through times so difficult it made my anguish and stress look like church summer camp.

Fast forward to the present.

The Stockdale Paradox is how I’d describe what some of us learn, even though sometimes, surely in my case, we’re unaware we’ve actually learned it. Admiral Stockdale was a POW in Viet Nam for a very long time, eight years — and the highest ranking officer. When asked how he survived both mentally, physically (including consistent torture) and emotionally that long, his answer was surprising to say the least. I first read about it a few years ago while reading Good to Great, one of the best business books I’ve ever read. I was reminded while reading a post today by The Mortgage Cicerone. Here’s what Stockdale said.

“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

He was then asked, “Who didn’t make it out?”

He answered, “The optimists. They were the ones who said ‘we’re going to be out by Christmas’. And, Christmas would come and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. Then they died of a broken heart.”

“You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

You can help so many here by simply sharing some of the lessons you’ve learned from past challenges. What are they, and how have they helped you as life moved on?

Have a good one.


In search of better, faster, linkier Craigslist Ads

I still get quite a bit of activity from Craigslist ads. I have been using Postlets, because it puts listings a bunch of different places, and adding a bit of html before and after their code with links to the individual property site, my blogs and my real estate site.

Even though Postlets doesn’t put links in the Craigslist ads, I wanted links! So, since I’m lazy about coding and not very fluent in html, I did a draft post in WordPress with the things I wanted to say and link to and put three lines above the Postlets ad with links to the individual property site, my blog and my real estate home page, clicked to have it shown in html and pasted it in above and below the postlets ad. It looks like this. With 20 or so of these running, I get a noticeable bump in google search results and traffic. No problems with being flagged or having the ads yanked.

But, I’m thinking I can do more.

Craigslist is a more time consuming than I would like because the ads expire every week. I want to automate the process where I can create a template that I can prepare quickly, much like the custom page creation for each property can be automated using Engenu.

So, I took the source code for a property page from Engenu and pasted it into a Craigslist ad to see what would happen. I found out right away that only 30,000 characters were allowed in the post description (the place I can paste in html code). Since the file I tried was 11,000 lines of code, I found that limit pretty quickly. I wanted to see what would come up and I at least found how many characters are allowed. 30,000 characters of code is enough that I should be able to do something better.

Then, I finally searched BHB for Craigslist and found Greg’s post on CL from last year. The comment string is pretty important on that post. After reading those, I was ready to experiment with making a new .html template that let me put in more photos and links. I don’t know if I can figure out to do a slideshow in some easy way, or I should just use the Ryan Hartman technique of a screenshot with a click to link to my individual property web site.

THEN, I saw Ryan Hartman’t post on Realbird’s IDX product this morning. While looking at it, I found Realbird’s flyer/promotion product. It has unlimited pictures, allows some great chat stuff, and lets me put tons of copy into the flyers. When I used it to publish in Craigslist, it even put my IDX search into the post. Cool. I added some links like I do with Postlets and think it is a better solution than Postlets. A bit less refined in format, but with far more information I can control. I haven’t played with the chat feature yet. You can see it here.

I could build myself a better, still good looking template that I can easily change for different properties. However, I like the Realbird result if it isn’t too much work to do. I did not figure out how to upload multiple pictures at once, but it claims to do it. Better would be something that takes less time, but if I decide to use Realbird to syndicate to a bunch of other web sites, I’ll be putting listings into it anyway. Adding links to my Craigslist ads seems to work pretty well. Let me know any thoughts you have and I’ll keep playing with this and let you know what is working best for me.


Realbird’s Free IDX Alternative: (Eeeee….aaaaahhhh…aahhhhahhhhhhah)


I just recently realized that Realbird offers the syndication based total IDX solution on the cheap for Real Estate Agents that I was talking about here a little while back.


Considering the whole MIBOR thing that went down a few months back, here below is how we might expect some local MLS board officials to be reacting to the product?

[Click to play obnoxious but hilarious vid in new tab/window….]
Caption: Local Boards React To Free Real Estate Data For Real Estate Agents

Shouldn’t the freak of nature that is a free, framable, “google based” solution for displaying all that precious real estate property data have a whole lotta folks up in arms somewhere?

Oh well…doesn’t matter. Dead horse maybe… The important thing is this. I found a relevant way to share that video.

That and…

The Realbird search can likely replace your current idx solution, and is pretty darn feature rich for the money. An ad supported version is free, and to remove ads and allow tight, framable integration with your website costs an easy $99/year (That’s $99/12 per month, if you’re doing the math.)


Sure, I know… it’s not every listing in the local MLS system. Even though Realbird’s property search results appear to be limited to what’s available in google base, it’s enough in my opinion. All our search page needs to do these days is keep my visitors engaged for a while until they fall into one of our nifty lead capture traps, right? I’d argue that the day has pretty much arrived when a 3rd party providing a partially complete snapshot of local real estate market inventory based on data provided by syndication partners is pretty much as good as what most fully populated with local board data idx solutions have to offer.


To see what I mean, check out Central Pa’s cheapest and arguably most comprehensive Real Estate Search portal at Central Pa Living.Com.


And keep in mind just a few of the features on that page which the local board prohibits from being displayed on that page:


  • The ability to display property description remarks within the listings!
  • RSS feeds for Search Results…
  • Keyword Search!


That and … I didn’t have to pay the local board for the feed. In fact, I’m not even a local board member yet….Which highlights perhaps one of the coolest features of Realbird’s property search. If you live in an area with a lot of different boards, all with their own special nonsensical data requirements, you can bypass all the noise, membership fees, and confusion by truly adding “millions of listings to your website.”  Go ahead, try searching Phoenix Real Estate on CentralPaLiving.Com… A whole lot of it will be there…



So… will agents everywhere  catch on pretty quick that Realbird’s free idx alternative is the way to go? Will Trulia and Zillow soon follow with a framable something of their own?  “99 a bucks a year, or you and your site visitors have to see our ads.” – Good call Realbird…


Want a free GPS-aware smart-phone client to search the complete Phoenix MLS? has one, thanks to SmarterAgent

We signed up for our own version of the SmarterAgent smart-phone MLS client. We’ve been live since Monday, but it proved its value and then some yesterday afternoon.

Cathy was out with buyers, and they asked the most dreaded question of all: “What about that one?” Not every house with a sign is for sale, and, even then, most homes for sale don’t meet your search criteria. That’s why we don’t have that listing with us. But Cathy whipped out her iPhone and did a GPS-based search on her own location. Voile! Three bedrooms. Too small.

That’s not in the SmarterAgent marketing patois, but it doesn’t have to be. The software rocks in anyone’s hands. We had been looking at pure iPhone solutions, but the SmarterAgent tool is simultaneously more robust and more broad-based: It provides a GPS-aware MLS search from virtually any smart-phone. You can also search by map, by address, by MLS number, by neighborhood or subdivision, etc. The user interface is easy to navigate, and the level of detail on the listings exceeds many desktop-based IDX systems.

I wouldn’t want to use this client for showing purposes, but it’s a nice tool for buyers to use as they explore neighborhoods. And, as above, it’s very useful to working Realtors to deal with on-the-fly questions about properties. The best part is, if you follow through and inquire about a property, the phone call — and an email — comes to me. We have the email set up to echo to all of our mail clients, so we don’t miss anything. And the email includes the listing agent’s phone number, so we can track down specific information quickly, no matter where we might happen to be.

If you’re a Realtor working anywhere but Phoenix, I think you should get this thing. It’s a pain in the ass to get in Phoenix, and, besides, my plan is to suck all the oxygen out of the SmarterAgent space in Phoenix.

To that end, here’s how you can help: Write a post on your own weblog about how you intend to look into this cool new tool, and how you heard about it from Use anchor text like “hassle-free Phoenix MLS search” or “free GPS-aware smart-phone client to search the Phoenix MLS” — stuff like that.

Want to play to see what you’re getting? If you click on the image above, you’ll be taken to a landing page where you can acquire your own smart-phone search into the Phoenix MLS.

And: If you do sign up for your own version of the SmarterAgent client, stay tuned here. Like FBS Systems, SmarterAgent listens to its end-users, so the product should get better and better as time goes by.

Even faster: Text HOUND to 87778.


I’m Not Saying Cap and Trade is Gonna Be Expensive, But…


It’s just that I can save 70% by going “blue”:


I’m just a greedy business owner, trying to cut corners, right?

Can you imagine what this is going to do to residential real estate?



It’s official, Yahoo, the original search brand, is outsourcing its search function to Microsoft. I don’t think either Microsoft or Yahoo had a choice. It’s a shotgun marriage.

Those work out all the time, right?

Coming out with something that is noticeably better than Google’s Search experience is the only way anyone will  take significant search audience share from them, because despite all the hype around Tweets and FB, Search is still the fundamental App that makes the Web useful and people need a real reason to switch from what they like and are used to.

Failing that (as Microsoft  has with every incremental redesign of their search offering, including Bing), Redmond probably figured why not buy a solid, if distant, second place?

Yahoo knows how this works: A combination of loyalty and laziness is the only reason they still have enough users that Microsoft is even interested in this deal.

So what does this mean for your SEM efforts?

As Wired points out in a good take on this deal, “…by capturing one opposing army, (Microsoft) dramatically simplifies the battle lines and creates a two-sided conflict.”

Google knows how to hit Microsoft where it hurts, most recently by forcing Microsoft to sacrifice its cash cow, Office, by making it available on line next year to counter Google Docs. So far, Microsoft has not been able to land an equally  solid punch on Google.

That has to make Steve Ballmer’s forehead all purple with the veins popping out, like the evil aliens in the original Star Trek pilot. I don’t think I could work for Ballmer. I first saw those aliens when I was like 6, and I still have nightmares about them.


….but I digress…

One way Steve could finally get some would be to introduce serious competition in contextual text ads, the Web advertising form that Google invented and the only ad model that works on the Web (Exhibit A: They made Google $5.5 Billion last Qtr.).

Real competition from Microsoft in the form of lower costs per click could drive Adword prices down, which all by itself does nothing to take overall search audience share from Google, but it would hurt them where it counts — in the profits that Adwords generates.

That would be good news for search advertisers, who would be reaching more people for less money,  and it would be a win-win for Microsoft — they would make more than they are making now on contextual search  and they could finally land a punch on Google.


Is ActiveRain Selling Loan Officers An Exclusive Opportunity, Or Just Selling Their Real Estate Agents Out?


I’ve received a few emails and calls from my loan officers this week about some new exclusive opportunity that is pitching to the mortgage industry.

Apparently, Active Rain is cold calling mortgage professionals who have an AR blogging history and offering them an “extremely rare opportunity” to pay $299 / month for the privilege of being able to re-sell upgraded AR products to real estate agents.

The following email is an example of what the new Active Rain business model appears to be:


Thank you for taking the time out of your day to speak with me.  As I said, this is an extremely rare opportunity.


Currently 848 Real Estate Agents

Currently 123 Loan Officers

You will have a full training course with ActiveRain to learn the knowledge on how to dominate the first page of Google.  With this knowledge you will train agents to do the same.  You will keep in contact with these agents as their trusted advisor who has directly taught them on how to fully market themselves successfully.  There will be loyalty here.  You will have full access to every single new and old agent in the whole state of Wisconsin.  You will be highlighted all over ActiveRain for this.

$299/month is your investment.

After 15 upgrades you will receive $700.

For every rainmaker upgrade thereafter, you receive $25.

The relationships and possibilities are endless.

Please let me know as soon as possible as time is of the essence.

Member Services

I’ve obviously blanked out the names to protect the people involved in this specific conversation, but I’ve already been given permission by my loan officers to talk about this on Bloodhoundblog.


Let me get a few disclaimers out of the way before I dive in to this Active Rain thing.

I’m a loan officer with several blogging platforms – some are free, and some cost money to participate.

My main objective with 99% of the group blogs that I build is to help my contributors expand their reach online with a little help from a few friends who share the same goals.

I understand the importance of having a well capitalized web project so that the development crew can stay on the cutting edge of innovation.

The real estate industry is brutal enough, so I can truly empathize with the additional complexities and logistics involved with building a social media business in this vertical- especially when competing with the new economics of free.

Matter of fact, the overwhelming demand of advances in technology, combined with limited time and resources may ultimately force us to shut down our real estate social network after 3 hard years of blood, sweat and tears.

Either way, the experience has taught me how vital it is for real estate and mortgage professionals to take ownership of their online presence and actually build equity in something that they personally control.


Basically, I respect AR’s right and need to create revenue streams to be able to facilitate the perceived value their members expect.

However, I’m insulted as a loan officer by a Goliath like AR thinking that it is OK to base a business model off of the same tired “pay us a bunch of money for the opportunity to meet more agents” pitch that we’ve been guarding ourselves against for years.

It just sounds dirty.  And according to one phone call I had this week with a loan officer, the AR sales team is laying it on thick – telling loan officers that if they don’t call back by the end of the day, Active Rain will find another mortgage company to give exclusivity to.

Here are my 3 main issues:

1. The veteran loan officer members have sacrificed their valuable time over the years writing content and earning points for the potential to be featured somewhere special on the site.  Yet, now a new loan officer can just buy preferred  placement and access to all of the agents in that state?

I know that the $299 may not replace the relationships that the non-paying LOs have worked hard to build with the AR agents, but it will create a little confusion.

How can you measure the true value of a point system when the members have to consider whether or not someone has actually earned their place at the top?

I guess AR is going to issue these loan officers a special badge, but that is just going to let the community know that they were one of the suckers who got duped into buying “full access to every single new and old agent in the whole state of……..”

Keep in mind that the email above clearly states this is for Active Rain, not Localism.

2. Real Estate agents have worked hard establishing a presence on AR for the purpose of reaching their target audiences in the search engines…. But instead, they are being presented as a dangling carrot in front of  hungry loan officers who are starving for the opportunity to take a bite out of that agent database.

3. I guess it would be fair to give agents free blogs since they are being traded as a commodity for the $300 / month from loan officers.  But actually, the loan officer is simply buying the right to re-sell the blogs to new agents with the potential for a kickback after a certain quota has been met.

First of all, most loan officers don’t have $300 a month to blow on a new business venture.  And, the ones that do have the money are way too busy closing loans to spend their time pushing Active Rain blogs on their few producing agents.

This sounds more like activeway than a real mortgage marketing solution.


If loan officers are interested in teaching their agents the super cool new tricks of getting found on Google, then here are six great resources that won’t cost you $3600 a year:

I’m just a loan officer with a few mortgage blogs and a single voice in the business, so I don’t have any personal reasons to be threatened by Active Rain’s new loan officer marketing campaign.

Actually, if I want to be selfish about things, it works to my advantage if a bunch of competitors are chasing shiny AR objects while I focus on building my own domain’s strength in the search engines.

However, for some reason, I just can’t sit back and let these giant media companies poach on our industry like this.

I mean, when did Active Rain go from being a great industry social network to just another company that wants to gouge the already battered loan officer?

We’re not mules chasing carrots anymore, and we’re not the solution to boosting your bottom line.

Image Credit


VA Jumbo Mortgages: Determining The Down Payment

Sean Purcell and I are really figuring VA-guaranteed  jumbo loans.  We’re getting a steady stream of business from high-cost California counties.  One of the common misconceptions is that VA loans are capped at the county loan limit, like FHA and conventional mortgages.  I’m going to walk you through the formula to determine the required down payment and maximum loan amounts for VA jumbo home loans.


___Lesser of purchase price or appraised value +

___Add the 100% financing VA funding fee =

___Gross loan amount


___ VA county loan limit * (.25) =

___ Veteran’s maximum entitlement * 4 =

___ Maximum VA guaranty (including funding fee)


___ Gross loan amount (from step one) * (.25) =

___ Required Guaranty –

___ Veteran’s maximum entitlement (from step 2) =

___ Required down payment


___ Purchase price –

___ Required down payment (from step three) =

___ Base loan amount (before adding funding fee) +

___ Applicable LTV-adjusted VA funding fee =

___ Total loan amount after down payment

Let’s try a $650,000 purchase price in Maricopa County, where the county loan limit is $417,000, for a first-time VA loan user.


$650,000 (purchase price) +

$13,975 (2.15% funding fee) =

$663,975 (gross loan amount)


$417,000 county loan limit * (.25)=

$104,250 (maximum entitlement) * 4 =

$417,000 (maximum VA guaranty)


$663,975 (gross loan amount) * (.25) =

$165,993 (required guaranty) –

$104,250 (maximum entitlement) =

$61,744 (required down payment)


$650,000 (purchase price) –

$61,744 (required down payment) =

$588,256 (base loan amount) +

$8823 (applicable LTV-adjusted funding fee) =

$597,079 (total loan amount after down payment)

Don’t be confused by the entitlement and loan amount; just follow the formula and any VA-approved underwriter will accept your figures.  As you can see, the required down payment, for this example,  is only 9.4%.  I’d probably round it up to an even 10% down payment so that the funding fee would drop to 1.25% instead of 1.5%.  Putting down an extra $3900 saves the veteran $1625 in the funding fee.

Very few jumbo loan programs allow for a down payment of 10% with no mortgage insurance.  This makes the VA-guaranteed jumbo mortgage tough to beat.  The first question you ask for  any loan application should be…

Did you serve ?

It could make a huge difference.  Good luck and good funding.


Goals? Plans? Tools? All Secondary — Teapots and Gyms As Teachers

So many of the lessons we’re taught growing up, or by life’s merciless classroom are not rocket science. First you learn to work hard, then you add work smart. Most of what we learn tends to follow that template. A brick at a time, right?

The teapot I’ve had for several years, and in which I boil water for my morning coffee, was lookin’ a lot older than it should. I wanted it to gleam the way it did the day I brought it home. So I found the elbow grease and broke out some serious scrubbin’ action. The results were, um, less than stellar. I tried all kinds of cleaners, different sponges and brushes, none of which produced. What to do?

Some time went by ’till I’d finished making coffee one morning and decided I’d spray one of the cleaners on the still hot teapot, then let it sit awhile. About an hour later I came in, used the rough side of a sponge, and quickly scrubbed and rinsed it. I repeated this twice daily for about three weeks. It’s shiny again! Who knew?

Seems the application of a mild solvent teamed with heat and time, followed by a little scrubbing — a couple times a day for 21 days or so, slowly but surely does the trick. It was an X brand cleaner, nothing special. The difference maker was showing up every day doing what had to be done. Again, not rocket science.

Like many of you, I belong to a gym, and workout frequently — usually six days a week. Due to tendon problems I’d let myself go, as I was pouting the last several years over the realization I was no longer a threat to Ahnold. (Talk about living in a fantasy world.) Then I met a guy who told me about a relatively different fitness approach, which wouldn’t, for the most part, mess with my tendons. It was anaerobic in nature, which in plain language means you’ll probably find yourself talkin’ with your long dead grandma more days than not.

I bought into the concept, and began in earnest March 1st. I kept goin’ regardless of what seemed at times to be lagging results. Almost five months later, I’m 27 pounds lighter, down 8½ inches on my waist, and my body fat is down over 30% from when I started. When I was itchin’ to goose the speed of the progress, I began adding 30 minutes on the treadmill after workouts in which I’d managed to keep my lunch down. 🙂

Same moral as the teapot. Show up when you’re supposed to, do what you know you should be doing, keep doing it for a long time. Results will happen over time — guaranteed. Even a poor plan, relentlessly carried out, will succeed — just not as well as a superior plan. Action mated to persistence — wed to quietly showing up every day like the sun rising in the east — will produce positive results.

We can’t be relentlessly persistent ’till we show up — not a minor point. Showing up, at least from where I sit, is the catalyst to the attainment of any goal. You’d think that would be self evident, but after decades of watchin’ agents in their natural habitat I can assure you it ain’t self evident to most of ’em. Know what most of ’em think holds the key to success? It’s a tie between another agent’s office, the coffee room, and happy hour.

Here’s an example of a poor plan executed religiously for a couple years.

It was waaaaay back in the day — I was 23, almost, and the market was in a recession, something I thought only happened to hairlines. (Little did I know.)

I knocked on 50-60 doors daily. Kinda sorta made it up as I went, following instructions from a book on farming — I wasn’t aware of any local farming experts or mentors. Most agents just picked a different neighborhood almost every time out and started knockin’ doors.

Anywho, it took about two months or so before I got my first listing. I kept refining the process, adding stuff, discarding what wasn’t working. After a year, I was getting about half the listings or more — after 18 months I was listing way more than half. Believe me when I tell you that when I first started talking to those folks, I was literally making it up as I went. But those home owners must’ve figured out I was gonna be there month in and month out regardless, as they began asking me in on cold or rainy days for coffee and pastry. I remember my broker at the time hated rainy days when I farmed, because he knew I’d come back to the office wired for sound. 🙂

All I did was start showin’ up, then kept showin’ up, then results flowed. Were there better farmers back then? My guess is they were all better than I was — how good could I have been for Heaven’s sake? But I was the one who kept showin’ up at their door.

So do yourself a favor, grab a plan, any plan, and begin a long, uninterrupted period of showin’ up — executing that plan like a dog with a bone. When the results start coming in, and they surely will, don’t act surprised, OK?


The Part You Give Away

Waits sings about The Part You Throw Away, and I did plenty of that once, but today, it’s about the part you give away.

For many reasons, I’ve been hesitant to discuss this except in the most general terms. It feels both invasive and self-indulgent to discuss my personal life here, but this post is about the part you give away.

I have a child who has been in and out of the hospital most of the summer, and she’s back there again. I’m not sure which is more strange- having a child in the hospital or, knowing exactly what to pack for the stay, and getting it packed in 20 minutes.

Things happen. We deal. And we deal. And we deal. And each time we deal, we grow stronger.

A mother becomes tempered steel, because she’s given away so much of herself that what is left, perhaps all that is left, is the very best. She’s dumped all the baggage, everything worthless, useless. What’s left is her essence.

I am now inside out. Stronger than I was two months ago, reduced and forged to my very essence.

I don’t want pity. I don’t want anything really, except to show you, and myself, that the part you give away is the part that creates the most strength and beauty in life.



Why should you enlist a buyer’s agent to help you buy a home? Because you’ll get a much better deal — even if you pay full price

This from my Arizona Republic real estate column (permanent link):

Are home-buyers best served by the vigilant efforts of an experienced buyer’s agent? Consider a transaction we have in play right now.

The buyers are a young couple, about to be married. They have about $10,000 in cash.

With a conventional loan, they could put 20% down on a dismal starter home. Or, with Private Mortgage Insurance, they could put 10% down on a nicer home.

But with an FHA loan, $10,000 is 3.5% down on a $285,000 home. We can argue the wisdom of making so small a down payment, but the FHA loan program is the path to homeownership for millions of Americans.

And $285,000 is too much house for our buyers. They found a nice lender-owned two-story home in the suburbs selling for $169,000. The down payment on that home would be $5,915. But the closing costs would probably run to another $5,000 — which comes to more money than they have.

They qualify for the $8,000 first-time home-buyer tax credit, but they won’t get that until they file their tax return. They also qualify for a state-funded grant program that will contribute up to 22% of the purchase price — but which can’t be used for the down payment or the closing costs.

Here’s the deal we put together. We offered $175,000, $6,000 over list price. In exchange, we asked the seller to contribute 4% of the full purchase price to defray the buyer’s closing costs.

The down payment will be $6,125, leaving the buyers $3,875 in cash to pay for the endless expenses of moving into a new home.

And there will be about $2,000 left over after the closing costs are paid. This will be used to buy down the interest rate. The buyers will end up with just over 25% equity in the property for a cash outlay of $6,125 — all at a very low monthly payment. And they’ll still have their $8,000 tax credit to look forward to.

This is the kind of outcome a skilled buyer’s agent can achieve.

Steal this book: So far I’ve written two columns on this theme. If you want to use either of them on your real estate weblog, feel free. Just give me a link back to


Too Stupid To Do Business With?

I’m not that guy who loves forwarding funny emails, but my father-in-law sent one to me that I had to share because it could totally apply to our industry.

Either way, I thought it would make for a little Friday fun.


This is a true phone call from the Word Perfect Help line which was transcribed from a recording monitoring the customer care department.

Needless to say the Help Desk employee was fired.


“ABC computer assistance; may I help you?”

“Yes, well, I’m having trouble with Word Perfect.”

“What sort of trouble?”

“Well, I was just typing along, and all of a sudden the words went

“Went away?”

“They disappeared.”

“Hmm. So what does your screen look like now?”



“It’s blank, it won’t accept anything when I type.”

“Are you still in Word Perfect, or did you get out?”

“How do I tell?”

“Can you see the C: prompt on the screen?”

“What’s a sea-prompt?”

“Never mind, can you move your cursor around the screen?”

“There isn’t any cursor: I told you, it won’t accept anything I type.”

“Does your monitor have a power indicator?”

“What’s a monitor?”

“It’s the thing with the screen on it that looks like a TV. Does it
have a little light that tells you when it’s on?”

“I don’t know.”

“Well, then look on the back of the monitor and find where the power
cord goes into it. Can you see that?”

“Yes, I think so.”

“Great. Follow the cord to the plug, and tell me if it’s plugged into
the wall.”

“Yes, it is.”

“When you were behind the monitor, did you notice that there were two
cables plugged into the back of it, not just one?”


“Well, there are. I need you to look back there again and find the
other cable.”

“Okay, here it is.”

“Follow it for me, and tell me if it’s plugged securely into the back
of your computer.”

“I can’t reach.”

“Uh huh. Well, can you see if it is?”


“Even if you maybe put your knee on something and lean way over?”

“Oh, it’s not because I don’t have the right angle — it’s because it’s


“Yes, the office light is off, and the only light I have is coming in
from the window.”

“Well, turn on the office light then.”

“I can’t.”

“No? Why not?”

“Because there’s a power failure.”

“A power… A power failure? Aha. Okay, we’ve got it licked now. Do you
still have the boxes and manuals and packing stuff your computer came in?”

“Well, yes, I keep them in the closet.”

“Good. Go get them, and unplug your system and pack it up just like it
was when you got it. Then take it back to the store you bought it from.”

“Really? Is it that bad?”

“Yes, I’m afraid it is.”

“Well, all right then, I suppose. What do I tell them?”

“Tell them you’re too damned stupid to own a computer.”


So, I guess the main lesson that we can take away from this transcript is that asking the right questions is essential in determining whether or not someone is qualified to do business with.

I’m sure we’ve all had a conversation with an agent, loan officer or potential client that could have easily ended up in a similar manner.

You can’t blame the tech help guy for not asking the most obvious question up-front, even though the answer he received would have probably saved both of them 20 min. of frustration.

I’m wondering what obvious questions we should be asking our clients, agents and loan officers ahead of time….


What’s an “Exit Strategy” and why does it matter to the housing market?

I originally wrote this and posted it on my new site, Straight Talk About Mortgages – The Bigger Picture, but I’ve been urged to post it here as well.    So, I’m doing that.   Why have I set up another site?   It’s pretty simple…..

The financial and real estate world that we are in are much more complex than most of us have ever experienced in our life times.   As part of what I’m going to be rolling out soon which I’m calling, “Straight Talk Lending,” I believe that it’s important that people have the an understanding of the bigger issues that are and potentially will be influencing their business, lending and real estate decisions.

Typically once a week, I’m going to take an issue and dive into it on a much deeper level.   The opportunity to explore what it really means and how it’s going to impact the mortgage and real estate worlds is an exciting challenge and I hope it will be beneficial for many others as well.

Tom Vanderwell

Now for the post that I wrote:

What is an Exit Strategy? and Why Does It Matter to the Housing Market?

Thursday, July 23, 2009

By admin

Okay, anyone who has watched the news, or at least the financial news in the last week, especially after Bernanke’s testimony before both the Senate and the House has heard talk of an “Exit Strategy.”    I think that it would be well for us to take a few minutes and look at a couple of questions relating to that issue:

  • What is an “exit strategy?”
  • Why is an exit strategy necessary?
  • What does it mean for the housing and mortgage markets?
  • What should I do to prepare myself and/or my clients for what’s coming?

Before we get into those questions, here’s a clip from Bloomberg that talks about an exit strategy and what Bernanke might be thinking and planning.   This interview was done last week and was looking forward to Bernanke’s testimony this week.

Now, time to dig into the details of it.  What is an exit strategy? It’s pretty simple:

How in the world is the government going to get out of owning an insanely large share of the US economy and the US financial industry?

Seriously, we’ve got a big issue.   In order to keep the financial world from melting down completely (and I don’t believe I’m being melodramatic when I say that we were that close to a total meltdown), Bernanke and company had to throw everything they could at the problem to keep it from being a disaster.   So the government now owns large portions of many financial institutions, they are in the process of buying over $1 Trillion worth of Treasury bonds and mortgage backed securities, they are majority shareholders in 66% of the US car makers, and they have guaranteed billions and billions of dollars worth of bonds, mortgage backed securities and other very complex financial instruments.

Now I want to pause for a minute and say something about Fed Chairman Bernanke.   There are many people in the main stream media who like to bring up Bernanke’s comment in 2007 about the problems being contained in the subprime mortgage market and use that as an excuse for saying that Bernanke doesn’t know what he’s doing and shouldn’t be reappointed.   A couple of thoughts about that:

  • Bernanke has a long standing reputation as a scholar and an extremely well educated member of the Federal Reserve, long before he was appointed to the “big office.”
  • One of his main areas of his educational focus has been the Depression, what caused it, what was done during the Depression, and how the “solutions” made it worse than the original problems.

So, we’re dealing with someone who really knows what he’s talking about.   Is he a human?   Absolutely.   Has he made mistakes?  His “contained in subprime” quote is a classic example of a mistake that was made.   But in my mind, he has done more to prevent the terrible financial mess that we’re in from getting even worse than anyone else and deserves way more credit than he’s getting.

So we have a situation where we had to take emergency and heroic measures to save the economy from a total meltdown.   But now we have to figure out, once the market and the economy comes around enough, how do we get out of the situation we’re in:

  • How do GM and Chrysler “buy out” the government from their ownership?
  • How does AIG pay back the multi billions that they got from the government?
  • How do the financial markets pay back the government?
  • How does the Federal Reserve change their interest rate pattern and move it to a more “normal” pattern (rather than .25%) without tanking the economy?
  • How is the Treasury going to change the 0% discount window that they are currently charging to banks to a “normal” rate?
  • And how is the economy going to react as all of these things happen?
  • And what is that going to do to the housing market?

Why do we need an exit strategy?

There are a couple of reasons that we need an exit strategy:

  • Because socialism doesn’t work.   We are in a situation now where the government owns a substantial amount of our financial and auto industries and the long term prognosis of government run industry doesn’t bode well for our economic health.  I know what you’re thinking, “How well did capitalism serve us in the past 5 to 10 years?”   The answer, not so well.   But there’s a substantial difference between having the government institute rules and regulations regarding leverage, capital requirements and so forth, and the government actually owning the industry itself.   The one can work, the other won’t work.
  • Because a 0% interest rate is and will eventually be inflationary. That’s right, the government is currently loaning money at 0% interest and eventually it’s going to come back and become inflationary.   Do I expect the inflation to show up soon?   More on that in the “what to do” section below.
  • Because we have to pay the money back. That’s right, the government is borrowing all of the money that they spent on these bailouts and buyouts and we’re going to eventually have to start paying that money back.   The cost per tax payer would be simply unpayable.   If the amount is unpayable, then liquidation is the only way to go.   So, the government is going to start selling some of the Treasuries, mortgage backed securities and other collateral that they have purchased.

So, what does the need for an exit strategy mean for the housing and mortgage market?

There are a few things that it means looking forward:

  • Bernanke said in his testimony on Capitol Hill this week that interest rates will stay stable and low for a substantial period of time.   I’m in total agreement with that statement.   I believe that we’re looking at most likely 12 to 18 months with stable interest rates.   I believe the overall trend during that period will be slightly higher, but not substantially higher.
  • During that time period, the economy will begin healing.   It will eventually start turning around and become a decent economy.   As soon as that happens, inflation is going to become an issue.   When inflation becomes an issue, interest rates are going to spike and spike dramatically.   Am I willing to say how high?   Nope.   I’ll use the term substantially, but I won’t say how much higher than they are now.   Why not?  Because how high they go will depend in many ways on how the government does at unwinding all of the government interventions that have taken place.
  • The law of supply and demand when it comes borrowing money for mortgages is going to make it harder to get a loan.   What’s that?   A couple of thoughts:  As the government unwinds their position in the Treasury and mortgage markets, they are going to flood the market with debt looking for a place to go.    If there is $100,000,000,000 out there looking for a place to go, it’s going to be easier and cheaper than if there is $500,000,000,000 out there looking for a place to go.    So, an investor has $20 Billion in his account and is looking to buy bonds.   He’s got choices of buying existing stuff from the government or buying new “stuff” that’s coming on the market.    The financial institutions that are coming out with new bonds and mortgage backed securities are going to need to make sure that their stuff is really clean (meaning good quality) and attractively priced (meaning higher rates) so that it can compete with what the government is trying to unload.

So we’ve got a situation where the likelihood is that over the next 12 to 48 months, we’re going to be looking at a government that needs to unwind their current positions in the financial markets and it’s going to create an economic situation where we’ve got higher interest rates, lower demand and the possibility of a double dip recession.

So what do you do to prepare for it?   And what do you tell your clients?   A couple of recommendations:

  • We’ve got 12 to 18 months until interest rates go up. Any consumer, mortgage and business debt that won’t be paid off within the next 2 to 4 years should be moved to fixed rates. Why 2 to 4 years?  Because rates are so low that it’s going to take a little while for the “average rate” that you’d pay on a variable rate to catch up to what rates are going to go to.  Call me at (616) 209-8811 and let’s talk about how to go fixed on your debt.   E-mail me at and we can take a look at things that way too.
  • Take a look at your real estate holdings.   If you own investment properties, the time to look at whether you’ve got the right property and the right loan on it is not next month, next year or when Junior graduates from college.   The time is now.   Call my friend and real estate investment professional, Jeff, “Bawld Guy” Brown at (619-889-7100) or e-mail him at to get the input of someone who truly has your best interests and your retirement plan in mind.
  • Take a look at your financial and real estate moves. Do you see the likelihood of wanting or needing to do anything in the next few years?   Buy a bigger house?   Downsize because the kids are moving out?   Move out to the country?   You might want to see if makes sense to adjust and tighten those time frames.

I have a confession to make, I didn’t see the scope and size of this economic crisis coming.   Yes, I felt that certain areas couldn’t continue to go up as fast as they did but the nearly nuclear meltdown, nope, I didn’t see it coming.   I do take some comfort in knowing that I’m not the only one who missed it.

But, I do see the unwinding of what we had to do to keep the ship floating as the source of trouble in the future.   Understanding and being prepared for what’s coming is a large part of handling an incoming storm.   And that’s why an Exit Strategy for the Fed makes a difference to the housing and mortgage market.

Stay tuned, I’ll be writing more in depth articles on Straight Talk – the Bigger Picture in the future to help us all adjust and prepare for the new realities that we are and will continue to face going forward.


Tom Vanderwell


Americans and Hard Times

Born in the summer of 1951, I’m one of those Boomers who’ve lived the transformation from simpler, more innocent times, to the hi-tech, everything’s gotta be in the fast lane, in your face 21st century. 1951? Possibly the best debut year in post WW II Major League Baseball, as both Mickey Mantle and Willie Mays broke in that year. I grew up watchin’ both of ’em in their primes, as they played at levels normal human beings could only daydream about.

America was a country in transition. The big war victoriously concluded, albeit at horrific cost, the Korean ‘Police Action’ about done, and Boomers were being born by the dozens everywhere you looked. So many paradigms were shifting all at once it seemed. The GI Bill was sending thousands of young men and women to college — folks who before the war would only have fantasized about affording a college degree and the life it promised. Suburbs entered our vocabulary. Home ownership begin to grow at prodigious velocity. Cars became a must have item.

It all sounds pretty cool, doesn’t it? It was, but it wasn’t all Channel No. 5 and Willie makin’ basket catches.

My memory really only goes back to around 1956, when I turned five, started kindergarten, and got to attend ‘regular kid’ Sunday school at Dad’s church. Of course, it wasn’t ’till much later in life that I realized why I had such a good time with the older kids — duh, I was the preacher’s kid, but wasn’t anything in the same zip code as a goody two-shoes. Yeah, even back then.

Ironically, like many in my generation I learned how Americans handled hard times by listening to my grandparents tell about the Great Depression. Once you’ve heard enough of those stories from folks who lived through it as teens and emerged as adults of tempered steel, you tend to shy away from self pity when hard times come knockin’ at your door — hard times hardly in the league about which they talked.

Grandma was the oldest of eight kids who were born and raised in rural Missouri. Hard times? Most don’t realize this, but hard times hit rural areas long before the big crash of 1929. In the mid to late ’20’s Grandma and Great-grandpa (also a preacher) several times headed out on a freight train, leaving the rest of the family to work on dairy farms in Ohio, pick crops in other surrounding states, or in one case shuck corn at harvest time in Nebraska. She was 14 when her dad began bringing her with him on those sojourns.

Hard times? Those were hard times. And that’s how Americans back then got through them. They relied on family and neighbors and themselves, making incredible personal sacrifices as a matter of course. It takes a village? My ass. It took rugged individuals who helped those who helped themselves. Their hard core sense of self reliance, responsibility, duty to family and those in need was fierce. Wanna know what was missing?

A sense of entitlement and moral relativism. Even those showing up at Grandma’s door, later on during the actual Depression, in Vista, California, would refuse even a sparse meal of scraps unless they could do something, anything to earn their way. The worst of it though was when, “We literally didn’t have anything to share — then being thanked for our kind hospitality.”

Hard times.

We’re in the middle of a giant helping of what my Uncle calls FUBAR. Don’t know what it means? Ask anyone who’s been in the military. It means things are screwed up pretty badly. Having lived through several recessions, I have my own sad stories, which I won’t share here, as my stories are surely no different than yours. I’ve stared into the black abyss alone too.

It’s an experience we’ve all had when times turn harder than Aunt Evie’s stare after you’ve crossed her. It’s the sudden awareness that your worst fears may indeed become the new reality in your life. The cold chill of desperate fear that sweeps through every part of you with a sometimes literal sense of temporary paralysis. It’s when we look directly into the black abyss — alone with our thoughts. It makes some, it breaks some — but it’s difficult to imagine it leaving anyone the same as before.

And the nights? Geez, Louise, Mytle — who hasn’t gone through a 20 hour night of your mind playing horror movies with you as the victim? It can be debilitating.

So many of those in real estate and related fields have been playing out the black abyss part of their life’s script lately. We all make that trip alone, regardless of our support system. It’s like major surgery — your family and friends will be there for you, but you’re still the only one on the table with a doctor standing over you wielding a scalpel. Support only goes so far.

I write about this only to remind you — you’re not alone — not by a long shot. Speaking only for myself and my past trips through the black abyss, I can tell you this without reservation. I came out a better person, with a stronger sense of who I am, and a steely confidence born only from the heat it takes to temper high quality steel.

I also discovered quite happily that my spiritual faith had been tested. Turns out my faith and beliefs were strong, and made stronger — a blessing from which I benefit to this day. There’s nothing like getting your priorities right, while learning you were up to the task.

Would most of us go through the black abyss again by choice? No sir, not me. But I’ll tell ya something that surprised me about myself — I wouldn’t go back and erase those experiences for all the gold in Fort Knox. There’s a freedom that comes with successfully staring down the demons that seem to arise in us during soul-wrenching, character testing, hard times.

There’s no feeling freer than the knowledge you measured up. You were knocked down, but not out. You emerged as a higher quality, tempered steel. And even better than that? Hard times will never scare you again.

Put a price on that.


Search Engine Marketing is about Conversations – my (errr…) Manifesto

Somewhere near the top of the Cluetrain Manifesto, you will find the following statement:

These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can’t be faked.

These words were penned in same general timeframe (read: +/- a couple of years) that Sergey and Larry were cooking up a way to measure and evaluate those conversations for their relevance.

It was the late 1990’s and while the conversations, the communities that house those conversations and the algorithms that evaluate them have all increased in complexity, THE FOUNDATIONAL PRINCIPLE (in my opinion) HAS REMAINED RELATIVELY SIMPLE AND UNDEFILED.

I offer the following opinions for your consideration:

The goal is to BE an authority.

To do that is more than just knowing your stuff.

You must enter the arena of ideas.

You MUST write. (see above.)

You must converse. (markets are conversations…)

You must converse on other peoples sites as well as your own. And in their online communities as well. And even borrowing their authority where allowed if you do not yet have enough of your own. (If you only discuss your thoughts with yourself, then you by definition cannot be considered by others to be an authority.)

You must be authentic. (see above again.)

You must build and form solid lasting relationships that are reflected online as well as off. That includes respecting the writings of other and linking to ones that are authoritative. You cannot get long term without giving.

You must participate in the ongoing discussions of your industry AND MORE IMPORTANTLY LOCALLY – with people who can actually become clients. You need to be a respected voice both by colleagues and potential clients.

You need to find the biggest microphone available to reach out to the widest audience, not to overtly promote or argue, but to converse, engage, brand, market and build.

That may include many types of earned media.

My authority building approach over the past couple of years has morphed to coach and consult and teach folks to have conversations in places where Google and other search engines can easily find and give credit for the authority of those conversations and NOT to hire someone to create those relationships FOR them.

In other words, build your OWN authority. Naturally. BE an Authority.

Part of that is to avoid wasting time in building authority in places where either no credit is given or it is not noticeable to the search engines. (There are plenty of those places out there in the real estate world in my opinion) (Hint: Google doesn’t count POINTS 😉 ) No one ever gave a search engine spider an IQ test…and it is a good thing. 😉

Okayfine, why is it important to bring these basic principles up again and remind myself? How does this apply to us as REALTORS (trying to make a living in a tough environment)?

Well, we only have a limited amount of time…and yet the number of venues, online communities, and places to put content continue to GROW.

IF we have the conversations. WHERE we have the conversations. WHO we have the conversations with. and HOW we build the relationships that result from the conversations…

Those are all seeming to me to be more important decisions than ever before…and they were important then. Right now, when each marketing move NEEDS to throw a strike and / or skin a cat, these decisions IMHO are critical.

What is your manifesto?


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