There’s always something to howl about.

Month: January 2013 (page 1 of 1)

Beating the IRS One Regulation at a Time

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

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

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

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

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

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

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

My good friend Read more

There is no real estate inventory problem in Oceanside, CA

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

Clearly, there must be an inventory problem. 

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

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

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

  1. Attend your local caravan meeting each week.  Pay close attention to the agents who speak during the “buyers’ needs” segment.
    Call a dozen local agents weekly who work with buyers.  Find out where the inventory problem is.  At this point, you will see a glaring opportunity in your town/market area.  If you know that those agents have 2-3 buyers, for a certain price range, in a certain Read more