BloodhoundBlog

There’s always something to howl about.

Month: July 2009 (page 2 of 3)

July 21, 2009

All is Well… (A Tin Foil Hat Production)

by

Real Estate Renaissance Man

Author website

Quick check on the current status:

  • Goldman-Sachs reports RECORD earnings during the worst recession this nation has seen since the Great Depression.  Shortly after repaying $10 billion in tax-payer bailouts, Goldman trounced analysts’ estimates and continues to reap billions in profits trading in derivative markets.  (Actually, they trade in unregulated tertiary derivatives – that’s a derivative of a derivative of a derivative of something that actually exists, for those of you keeping score at home).  In the mean time, CIT – a company specializing in loans to small businesses and entrepreneurs – apparently serves no national interest to the Fed and has been told:  “Enough is enough.  No more bailouts”  (No soup for you!)  and is desperately searching for funding while on life support.  In related news, keys members of the Treasury, the Fed, the administration’s key economic advisers and the principles of Goldman-Sachs have all agreed on a new Read more
July 20, 2009

Consider a Seller-Paid Rate Buy-Down Rather Than Price Reduction

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Listing agents, considering offers might advise their sellers to counter-offer with a mortgage rate buy-down strategy rather than to reduce the sales price.

rate-buydown

We like to help our agents with charts from our Mortgage Lens program.  The chart helps to illustrate the power of leverage, to both the seller and buyer, and gives us a shot at the loan business.

(N.B.- The chart shown doesn’t match the scenario below)

Here’s a scenario designed to meet both the buyers’ and sellers’ objectives:

The property is listed at $300,000; an offer comes in at $283,000.  One of the most important benefits of the lower price, to the buyer, is the lower mortgage payment.  An 80% loan on $300,000 (at 5.25%) would yield a P&I mortgage payment of $1,325.  Lowering the price to $283,000, would lower the loan to $224,000 and the payment to $1250/month.

Consider a mortgage rate buy-down as the counter-offer. For two discount points (about $4800), the seller could reduce the rate to 4.75% and the payment to $1251.  The buyer gets the payment he wants and the mortgage rate buy-down strategy saves the seller some $12,200.

July 18, 2009

Unchained melodies: Stumblin’ onto the heart of Tom Waits

by

Suburban Phoenix Real Estate Broker

Author website

I’ve been tormenting Teri Lussier with Leonard Cohen. We can plumb for a new pain threshold with a selection of classics from Tom Waits. I don’t love everything about the sentiments behind this music, but I will always give it my highest score for having ambition, for daring to be something different from all the other crap that flows through your ears without ever penetrating your mind. The art that matters most to me is about splendor, where much of Waits is about squalor — but at least it’s about something. Give it your attention and see if it is repaid.

July 18, 2009

With MLS listings available everywhere on the internet, why do you need a buyer’s agent?

by

Suburban Phoenix Real Estate Broker

Author website

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

Here’s an intriguing question: Given that it’s so easy to search for homes on the internet, why do you need a buyer’s agent?

Face it, if you use the MLS search tool on my web site, you’re seeing exactly the same listings I see. And you know better than I ever could what you like and what you don’t like.

By now, the home search process is at best a partnership between the agent and the buyer. In some cases the buyer and I will work together to perfect our search criteria. But many buyers simply search the available inventory on their own, emailing me the MLS numbers of the homes they want to see.

So why do those buyers need a buyer’s agent?

Realtors hoarded the MLS data for so long that even they came to believe it was the source of their value to buyers. But this is very far from the truth.

You don’t need me to search for listings, although I’m happy to do that. And you don’t need me to open lock-boxes. You need a buyer’s agent to guide you through what is in fact an arcane and perilous process — potentially a financial disaster. You might not need me to find your next home, but you need me to make sure that you get it — or that you pass on it, if that is what is truly in your best interests.

A skilled buyer’s agent will write the kind of purchase contract that will prove surprising to you at every turn, with every term and condition tailored to achieve your best advantage. Your agent will supervise the inspection process and negotiate the optimal solution to the repair issues. Your agent will be prepared for every pitfall in the escrow process.

If you bought and sold houses every day, you could do all these things yourself. It’s because you don’t — and because the seller and the listing agent are looking to take advantage of your naivete at every turn — that you need a skilled buyer’s agent as your steadfast champion in Read more

July 17, 2009

A Sailor Jerry Moment

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

tattoo

The base anticipation that precedes any journey to a new destination is always more vivid for me than the denouement that accompanies the physical descent to earth.  With rare exception (perhaps Paris and maybe Vegas), the image I conjure up in my two dimensional mind beforehand always seems to fall somewhat short of the real 3-D deal.  On our first trip to Maui, for example,  my notion of grass huts  and Woody Wagons clamped with surfboards was quickly dashed the moment I spotted a Costco and a  Wal-Mart just steps from the arrival terminal. It was raining  ukuleles that day and the lone, Port Authority hula dancer was, how shall I say… Samoan? I was expecting something a bit more, I don’t know….svelte?; like the subject of one of  those Sailor Jerry tattoos I threaten to get stenciled across my chest every 120  lunar cycles or so—-pure 1950’s  South Pacific paradise-of-the-mind stuff. I think we  bought our own leis for 8 bucks each at the gift shop, rented a Taurus from Avis, and called it a day.

And it’s not just Hawaii. The same holds true for Jamaica—or as I like to call it, The Bangladesh of the Caribbean, with its human squalor, smelly ceviche,  and over-abundance of  muddy water. Even the Antiquarium in Boscoreale, Italy, beneath the shadows of a nearby looming housing project,  is sequestered by a string of barbed wire and discarded heroin needles. Not that I don’t enjoy myself abroad, mind you. I’m an enthusiastic traveler, to be sure. The foreign landscapes that ultimately unfold just never fully mesh with the spatial images dancing around in my head before touch down.

Alaska was pretty spot-on but to be honest, I wasn’t expecting  too much from that particular latitude. And while I did not get a tattoo while docked in the port of  Juneau,  I was presented with a  shiny new Rolex Datejust in our cruise ship cabin later that evening.  Since I’m clearly never retiring from anywhere,  my wife decided to give me my ceremonial timepiece a few decades early— for my 50th birthday.  Just so you know, Read more

July 17, 2009

Now Could Be A Good Time To Buy A Top-Notch Home

by

Associate Broker

Author website

Some Well-Maintained & Updated Homes Are Better Values Than Foreclosures

When all of the comparable homes in an area are foreclosures and short sales, you could get a really good deal on the nicer, well-maintained and updated homes.

A broker recently called me regarding one of her listings. It’s a super nice property that’s been upgraded to the hilt – but every single comp within five miles that has sold in the last twelve months has been a foreclosure or short sale. Her problem was not that her listing wouldn’t sell – but that it might not appraise.

In certain areas, finding good comps for nice homes has become quite difficult – and depending upon the appraiser, you might not get the appraised value that is specified in the contract. Obviously, this is more of a problem for the sellers than for buyers.

When home prices are rising, homes that are not in good condition often sell for more than they should – and will appraise for more than they should, as well. The nicer homes tend to pull the values up. But in a declining market, homes that are in need of repair – or a quick sale – tend to pull the values down… therefore the sellers of nicer homes find it difficult to obtain top dollar – or a higher appraised value – for their properties.

So while you’re out trying to find the best foreclosure or short sale for your clients – take a look at some of the nicer listings. If you find a motivated seller, the best deal just might not involve a foreclosing lender.

July 16, 2009

For those of you following the lurid drama of our lives…

by

Suburban Phoenix Real Estate Broker

Author website

We bought our house out of hock today. All it took was a tiny little pawn ticket and a great big check. Our small feat of redemption was actually paid for by June’s receipts, but I got myself into this mess by surfing the payables, and I got myself out the same way. We retired the outstanding debt eleven days early, and it’s been a while since we’ve been that early on anything.

That notwithstanding, we are very far from being out of debt. But June was great, July is good, and August and September promise to be two of our best months ever. If the fourth quarter lives up to its promise, 2009 could end up being our best year so far. By this time next year, we could owe nothing but the mortgage — which is good, because our credit will take a while to recover from these past three years.

There is none of this that is anybody’s business, actually — except that people choose to affect to make my business their own because of who I am and how I behave. That’s fine, even if it sometimes seems to me to be simultaneously voyeuristic and masturbatory. I have a job that pays pretty well when it pays anything at all. When we got slow three years ago, we made a very big bet on internet marketing, which we were already pretty good at back then. By now we kill, and we’re getting better by leaps and bounds every single day. If you think our financial troubles prove our marketing ideas wrong — you just keep thinking that way. By the time you understand what it is we’re doing, we will have leapt into a completely different orbit.

Meanwhile: For all the good-hearted folks who wished us well in all of this: Thank you. I’d rather not have done this in public, but I couldn’t have picked a nicer bunch of people to do it with.

Now switch off this insipid soap opera and go do something productive with your life!

July 15, 2009

Just had to share this….

by

IDX Search Entrepreneur

Author website

I was doing some research today and came across an article on Realtor.org from 12-01-2006 about The Top 25 Most Influential Thought Leaders in Real Estate. After a list of 25  builders of the status quo, they had a runner-up list of 15.

Robert Schiller made that list, here is the “why”:

Got big media coverage equating rising real estate prices with the tech bubble, but we haven’t heard the pop yet.

Robert Shiller scored instant media celebrity when his 2000 book, Irrational Exuberance, predicted the tech bubble’s explosion just weeks before the fact. Four years later, when he tried to apply the same principles to the real estate boom, he found out that all investments don’t behave alike. Shiller contended that rising home prices weren’t based in the fundamentals of population growth and supply and demand; they were bubbles, destined to pop.

To the contrary, NAR economists predicted that market slowdowns would largely be gradual—a trend that’s playing out today. Shiller’s failed bubble scenario demonstrates that sometimes even smart guys get it wrong.

Yeah, and sometimes economists who work for the status quo get it SO wrong it makes you laugh out loud.

By December 2006, wasn’t it already becoming clear that sub-prime was a the tip of the iceberg? The Kool Aid must have been strong at Realtor.org for them to tempt fate so blatantly.

July 14, 2009

On Mortgages and Moral Compunction

by

Real Estate Renaissance Man

Author website

What would it take for you to walk away from your mortgage?

Kenneth Harney, in his column Nation’s Housing, reports on an interesting study recently done by the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management.  This study took a look at homeowner’s attitudes toward mortgage defaults, specifically what’s come to be called “strategic” walkaways or decisions to bail on a mortgage due to purely economic reasons.  The study found that “26% of the record number of home mortgage defaults across the country” were strategic – the homeowner had the ability to pay the mortgage but chose not to because the debt was greater than the asset.  In other words, one in four of the current foreclosures is not due to hardship, but rather a lack of compunction.

My partner and mortgage rate expert, Brian Brady, has for some time now railed against the disappearance of moral compunction with regard to mortgages.  His contention, as I understand it, is that moral compunction was  priced into the model by lenders.  There has historically been a stigma attached to not paying one’s debts, especially one’s home mortgage debt.  This may or may not be true; I am no expert on the history of mortgage defaults in our nation, but it is certainly compelling.  If accurate, the obvious question then becomes: to what degree did moral compunction affect rates and if it is indeed gone, how much higher will rates go?

There is no real mystery to how mortgage rates are priced.  Mathematicians create models of mortgage “behavior” based on the 4 C’s: Capacity, Capital, Collateral and Credit.  Of these four, Credit is really what we’re talking about here.  Your income, your assets and the property’s value are theoretically objective but your credit… well, it’s not really credit that’s being measured here is it?  It’s your Character; your likelihood to honor your debts, although lenders don’t like to say that because it has a snooty, superiority quality.  Make no mistake though, character is most definitely being evaluated during the loan process.   So the question seems to be: How do these Read more

July 14, 2009

Viable Business Models ….

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

After reading through John Rowles’ post about Glenn turning things profitable. (Hope that sticks for you Glenn, way to go.) And reading Michelle’s comment, where she rightly noted that Glenn has made changes to his model to get profitable, I thought some further comment is in order.

When I raise my glass to toast Glenn’s accomplishment, I am toasting HIM, and not his business model. Of course he has made changes (in my opinion–they were needed). Yes, he made a hugely difficult decision to cut staff in order to GET profitable. He made many other changes as well that were equally crucial.

It was countless moves that many others in his shoes might not have done and it was agonizing (I am sure) for him at times.

There have been numerous firms that have gone under trying to see “how low they can go”…commission limbo is VERY hard on the dancers as opposed to selling value. Looks easy, but it ain’t. How many caracasses of those companies have we seen strewn along the way.

After reading Rowles’ post I then flipped over to Joost De Valk’s post on his blog about the business model for WordPress and how theme developers vs plugin developers are being treated.

He argues that there should be commercially supported plugins (read: not free) as well as free plugins (GPL- or gnu public license) on the WordPress plugins site.

I agree.

Plugin developers (if they are good enough to develop commercially viable plugins SHOULD be able to charge and charge what the market will bear.) Those who want to work for FREE are able to do so. (They will starve.)

In my own business at EricOnSearch, I have used several models (started with full service SEO, then went to Coaching, and now emphasize joint ventures with select partners).

There are lead generators out there who are profitable and there are many who never will be and will die or sell out due to lack of cash. (How’s the burn rate, fellas?)

I guess the bottom line is this. I like freedom. I like people who succeed. I celebrate profitability. (and there are some profitable lead Read more

July 13, 2009

Redfin Turns a profit

by

IDX Search Entrepreneur

Author website

Mention “Redfin” to many real estate traditionalistas and among the “Yeah, buts…”  the closer is usually, “Yeah, but they aren’t profitable.”

That is no longer the case.

Congratulations, Glenn.

As we ponder the future of this business,  the impact that technology is having and will have, and why it is taking so long to see real change, Redfin’s success proves that, sooner or later, money talks and bullshit lets its license expire.

July 12, 2009

Halfway Through The Year (And Then Some) What Next?

by

Instigator, anthill kicker.

Author website

[[Crm notes: OK, I’m not gonna give a green light to Infusionsoft, not yet.  I HAAAATE the interface. But… there are triggers & action sequences that do a lot.  It might be the real deal.  This said, especially since they are ditching or have ditched most of their upfront fees.]]

So we’re smack dab in the middle of july.  5.5 months left in this year.

How’s it going?

Making enough?   Was talking to Tim and Alexis McGee the other day.  They tell me that loads of Realtors are not chasing dreams and in are survival mode.  But, that they don’t wanna leave the business that’s not making enough anymore.

Look, 5.5 months are left.  165 days.  120 workdays.  Tick Tock.

Time is the enemy right now.  And not go go all Purcell and Brady on you, but is it gonna be EASIER, EVER to build wealth than it is today?  Tick Tock.

How many closings have you had?  If you double it, is it enough?  If it’s not, what will you do differently to get more business in the door?   Tick Tock.

Most of the industry, like it or not, makes it harder to do deals past Thanksgiving.  There are 137 days till then.  And only 106 work days, based on a 5.5 day workweek.   Tick Tock.

Now, I’m saying this because we gotta be cognizant every day that it’s go time.  Time is finite.  It’s every one’s tendency to spend some time, “planning to get ready.” Tick Tock.

Now is ready time.

Every month has an excuse not to do jack in real estate sales:

  • January- “All my clients Just got over the holidays.”
  • February- “All my clients Waiting for the spring rush.”  (Deus ex machina).
  • March- “All my clients are getting their houses ready.  Mmm doggie, summer’s gonna RAWK!”
  • April- “All my clients are waiting for summer.”
  • May- “All my clients are priced too high.”
  • June- “All my clients are expecting a deal that just doesn’t exist.”
  • July= “All my clients are on vactation.”
  • August= “None of my clients want to take their kids out in the middle of a school year.”
  • September- “You can’t get ahold of anyone around labor day.”
  • October- “This fall is unseasonably cold.”
  • November- Read more
July 12, 2009

Some questions about using DocuSign for electronic signatures

by

Suburban Phoenix Real Estate Broker

Author website

We’ve avoided DocuSign because ZipForms was so terrible in the Mac world. While the new implementation is not great, it’s better. And as kludgey and expensive as DocuSign seems, I really, really want electronic signatures.

But I have questions:

1. Can I use DocuSign to do my “broker oversight” signatures? That’s not a legal question. I’m just asking, is it possible?

2. If I receive a document — say a counter-offer — from another DocuSign-using Realtor, can I use DocuSign to get my client’s signature on that document?

3. Same question, but just an ordinary PDF? How about an ordinary fax?

4. What about added documents? We do a lot in the way of extended additional clauses, especially on listings, with each version of those clauses being unique. Is it possible to add our own forms in a DocuSign envelope?

5. What do you love about DocuSign?

6. What do you hate about it?

I’m grateful for any insights you can offer.

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Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

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