BloodhoundBlog

There’s always something to howl about.

Author: Greg Swann (page 123 of 209)

Suburban Phoenix Real Estate Broker

November 9, 2007

Birthing BloodhoundBlog.TV in time for the NAR Convention

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Suburban Phoenix Real Estate Broker

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We’re going to do the first run of a BloodhoundBlog.TV taping this Sunday night. My own life is a blur, but events are ganging up on me. I expect to have video posted by Monday early morning, before I take off for Las Vegas.

Cathy won’t be with me, alas. Her pneumonia might or might not be better, but the doctor is forbidding her to fly in any case.

I can’t speak for the others here, but I’m stocking up on MREs and pea-shooters for the NAR Convention next week. If you’re going, take your webcam and let me know you have it with you. We’ll do some interviews once you drag your tired carcass back to your suite.

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November 9, 2007

A consumer’s guide to the divorced real estate commission: We’re just sitting here at the closing table, watching the money flow

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Suburban Phoenix Real Estate Broker

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Part III: The who-pays-whom of real estate is not as simple as you might have thought…

All right, let’s go buy a house. I want to talk about the flow of money in a real estate transaction, and there is no better way of understanding that flow than wading right out into the middle of it all.

So let’s buy a house for $100,000. Where I live, in Phoenix, a hundred grand will get you a grungy dump. Where I grew up, in downstate Illinois, a hundred-thousand dollar house will put you among the diamond-crusted elite. Either way, it doesn’t matter. We’re not buying this house to live in it, but just so we can see who gets paid and how.

I want for us to buy this house with 100% financing — nothing down! — even though that kind of loan isn’t as easy to get as it used to be. Even better, I want you to take 3% of the purchase price as a concession from the seller to defray your closing costs. You’re going to have to put down an earnest deposit to show that you’re serious, but I like $500 for a house this cheap. Not only that, but, since there is going to be money left over from the closing costs concession, you’re actually going to get your $500 back at Close of Escrow.

Isn’t that cool? You just took possession of a $100,000 asset for not one red cent out-of-pocket. You bought a house for nothing. This is not a fantasy. I’ve done this for dozens of clients. But before you get on the phone to all your friends, telling them about your amazing financial skills, stop and think for a minute.

Did you just buy a house for nothing, or did you buy it by promising to make monthly payments for up to thirty — or forty — or fifty — years for principle, interest, taxes, insurance, HOA fees and private mortgage insurance?

Your lender pushed $100,000 onto the closing table, but he did it on the strength of your promise to pay all that money back and then some. Read more

November 8, 2007

Table for twenty, please — it’s a big party

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Suburban Phoenix Real Estate Broker

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We’re adding another hound-dog today, Eric Bramlett, a real estate broker from Austin. That makes nineteen in the list of frequent contributors, and, while I don’t have specific plans for a twentieth, I expect to see that slot filled shortly.

Here’s the scoop on Eric:

Eric Bramlett is the broker and co-owner of One Source Realty in Austin, TX. An active voice in the RE.net, he has also written for Broker Agent News. His interests include SEO/SEM, blogging and web design.

Eric has been howling at the gate for a few days, so I’m just going to turn loose of him and see where he runs.

There was a time when I wondered if we might someday all get together in one spot, all the BloodhoundBloggers at one table. Now all I can do is imagine the hell we’d make of some poor waitperson’s life…

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November 8, 2007

A consumer’s guide to the divorced real estate commission: Will the necessity of negotiating their buyer’s agent’s compensation make buyers more practical?

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Suburban Phoenix Real Estate Broker

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Part II: How buyers can finally take a seat at the grown-up’s table

When a potential home-seller calls me to set up a listing appointment, very often the first question I will hear is, “How much do you charge?” A motivated seller is done with the house, and now all that matters is money. Sellers — usually — are practical, phlegmatic and open — if not at first then eventually — to logical persuasion.

Buyers, on the other hand, are giddy and emotional and mercurial and fun. They are on a safari to capture something big and exciting, and mere matters of finance are the farthest thing from their minds. This applies even to move-up buyers, people who are also selling their current home to buy the next one. On Friday evening, meeting about the house they are selling, they are coldly rational. On Saturday morning, shopping for the new house, they are swept away by their emotions.

Why do sellers pay the buyer’s agent’s commission, with or without sub-agency? Because it works. Buyers get to look at houses “for free.” The agent will set up searches “for free,” driving the buyers from house to house “for free.” And when it comes time to write a contract, the more the buyers pay for the home, the more the buyer’s agent will get paid. The seller is paying a percentage of the sales price, so the buyer’s agent’s pecuniary interest is aligned with that of the seller, not the buyers, his nominal clients. But — what the heck? — it’s all being done “for free.”

In the feast of residential real estate, buyers sit at the kiddie table and they don’t even know it. If a buyer even thinks to ask who is paying for all these free gifts of information, transportation and advice, the buyer’s agent will blow him off by saying, “Oh, the seller pays me.” We like to think we are smart shoppers, suspicious if not outright cynical, but no one ever thinks to ask, “The seller pays you for what?”

There’s more. Since the advent of buyer brokerage, the claim has been that Read more

November 7, 2007

New self-promo play at Trulia.com: Like Realtor.com, but cheaper

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Suburban Phoenix Real Estate Broker

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The details are here. This was to have been news tomorrow, but Trulia broke its own embargo. Unlike the last round of upgrades, this release is all about milking cash from Realtors in the best Realtor.com tradition. Perfectly understandable as a means of making money, but hardly earth-shaking. I would have more readily welcomed actual functionality, rather than just pay for play. The good news is, buying leads on Trulia.com is a lot cheaper than buying leads elsewhere. This argues to me that selling leads is a business ripe for disintermediation. If so, that day cannot come soon enough.

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November 7, 2007

A consumer’s guide to the divorced real estate commission: Why buyers and sellers each paying for their own representation is the most significant reform that can be made today in residential real estate

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Suburban Phoenix Real Estate Broker

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Part I: How we got into this mess in the first place

Can we be straight with each other? I’m not a soft and subtle kind of guy, and my working assumption is that you are sick to death of being hustled — handled — lied to. We yammer all day about transparency, but if transparency is something other than old wine in a new bottle, it’s time we told the truth, don’t you think?

So let’s start here: The National Association of Realtors, which celebrates its 100th birthday this year, is a vast and largely successful conspiracy against consumers by real estate brokers. By brokers, mind you, not agents, although agents are not without sin. The purpose of the National Association of Realtors is to limit — artificially, by fiat of law — the number of people to whom you might turn for help in effecting a real estate transaction. Before the NAR got real estate licensing laws passed, you could have worked with anyone: A friend, a relative, the local beautician or insurance agent. But because of real estate licensing laws, your choices are limited either to real estate brokers and their agents or attorneys. No one else can represent you in a real estate transaction, accepting compensation for their efforts, without breaking the law.

Why did the NAR do this? So that it might artificially raise the price you are obliged to pay for real estate representation. This is the conspiracy against the consumer, and it has been largely successful for the real estate brokers. The real estate licensing laws are written in such a way that the secondary victims of the NAR conspiracy are real estate agents — who fail in massive numbers — but they’re on their own today. What we are talking about, in the broadest possible terms, is how the residential real estate industry can be reformed so that it is not a conspiracy against the consumer.

I would warn you against rebuttals that take the form of, “Yeah, but.” The “yeah” concedes the point, and the “but” seeks to muddy the waters. So brokers will read this Read more

November 5, 2007

The Odysseus Medal: “Becoming and remaining a ‘professional’ is not bestowed on someone by virtue of a degree or a certificate”

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Suburban Phoenix Real Estate Broker

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I am buried. I have five houses in play and Cathy is on compulsory bed rest — on pain of hospitalization. I have a zillion little jobs that need doing around here, and I keep coming up with new ideas. For instance, I think it would be cool to promote the long list of Odysseus Medal nominees as a feed, as they come in, so that people can see what others are nominating. I say “sufficient unto the day” all the time, but, for now, I have to really mean it, because I can’t afford to get sick.

Here’s a classic joke:

Q: How do you get a professional poker player off your porch?

A: Pay him for the pizza, cheapskate!

I’ve never been a big booster of the idea of real estate as a profession because I tend to associate the word “professional” with people who lie about what they do for a living and live in Uncle Bob’s basement. Real estate is a business, on its best days, and someday it might grow to be an industry — if it ever dares to wean itself from Big Mother’s teat.

Bill Leider from Real Estate Shows has a different take on the matter, and he deploys it to take this week’s Odysseus Medal with What Is A Professional?:

When we shift the focus of the term professional from what we do to how we are perceived and treated, the definition and the entire concept of the designation “professional” changes.

In that context of status and respect, what exactly is a professional? I believe that a “professional” is someone who takes what they do, whatever that happens to be, and transforms it into an art form. They make the mundane look magnificent. They make seemingly impossible things look drop-dead easy. They cover all the details, all the time. They master the subtleties. They silently acknowledge that they have a gift for what they do and they give that gift to the people in their world respectfully and compassionately. They know that they have never “arrived.”

They are never content with their present body of knowledge. They live with a Read more

November 5, 2007

One more for the hunt: Introducing Eric Blackwell

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Suburban Phoenix Real Estate Broker

Author website

The winner of The Black Pearl Award a few weeks ago is the newest contributor to BloodhoundBlog:

Eric Blackwell is Director of Technology for a RE/Max franchise in Louisville, KY. He is active in the real estate webmasters community and consults on Search Engine Optimization and Marketing for select clients.

Eric is a good soldier, so he’s pointing his BloodhoundBlog traffic to his day job, but he also operates the hugely informative Eric On Search weblog.

How many contributors do we intend to add to BloodhoundBlog? As many as it takes to make sure we don’t miss anything. And with that in mind, if you have something we need, we need to hear from you. There is plenty of room in the RE.net for many voices. But if you can command the attention of a national audience, we can provide the platform so that your voice will be heard.

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November 5, 2007

TV writers shoot selves in foot: Rassafrassin’ swearing unconvincing

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Suburban Phoenix Real Estate Broker

Author website

TechCrunch:

The strike poses an interesting challenge for television at a time where internet usage has surpassed TV viewing time in most homes. Users are already choosing online entertainment over TV, how many more will switch off their televisions when their favorite shows stop going to air? These eyeballs present a real opportunity for online content creators at all levels; from the VC funded video startups through to the DIY part timers. The trends in viewer numbers have all been headed online to this point, this strike could well accelerate this trend, particularly if it lasts over the long term.

I was thinking about this yesterday, and, of course, this was the subject of the very first post I wrote on BloodhoundBlog:

In a subsistence culture, the work of the mind is precious and literally unsupportable. We are by now so rich that millions of people can create intellectual resources that they give away, in turn to be remarketed by others…. If almost-as-good is free or nearly free, what is the market value of slightly-better?

As an irony supplement, some of the free content that will be created during this strike will have been created by the strikers.

Amendment: Like this:

There are natural barriers to wealth, such as scarcity and inaccessibility. There are man-made barriers to wealth, like walls and laws. And there are barriers to wealth that are co-factors of relative wealth and poverty.

In a condition of vast abundance, trying to build walls around popular media content is an effort doomed to failure. What the Writers Guild actually needs to advance its agenda is not a strike but a campaign to forbid the creation of cheesy entertainment without a license.

And now you understand the National Association of Realtors…

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November 4, 2007

The Odysseus Medal competition — Voting for the People’s Choice Award is open

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Suburban Phoenix Real Estate Broker

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A dozen-and-a-half nominees, but seven of them are from BloodhoundBlog. We had a great week; there were five more that I had to wince hard and cut.

A lot from the news, as usual, plus tools, tips, tricks and techniques and the kind of deep thinking that makes this competition what it is.

Vote for the People’s Choice Award here. You can use the voting interface to see each nominated post, so comparison is easy.

Voting runs through to 12 Noon MST Monday. I’ll announce the winners of this week’s awards soon thereafter.

Here is this week’s short-list of Odysseus Medal nominees:

< ?PHP $AltEntries = array ( "Galen Ward -- Photos Photos are worth 1,000 words (and a lot of money too)”,
“Kris Berg — The green room The Green Room“,
“Jim Cronin — RE weblogging The 7 Reasons Why Your (Future) Clients Should Care That You Are a Real Estate Blogger“,
“Jim Duncan — Martyr yourself? Are you willing to martyr yourself to the industry?“,
“Dan Green — Investors in ARMs Falling Prices And Adjusting ARMs: Real Estate Investors Have A Way Out“,
“Jay Thompson — Prize money? A Commission is Prize Money (?!?)“,
“Richard Warren — Trickle down The Economic Trickle Down Effect“,
“Rhonda Porter — Mortgage witch hunt The Mortgage Witch Hunt“,
“Steve Belt — Trulia Voices Opting out of Trulia Voices“,
“Brian Brady — Hiring a Realtor Hire A Realtor Like You Would Sign a Top NFL Draft Pick“,
“Bill Leider — What is a professional? What Is A Professional?“,
“Geno Petro — La spinster? Mademoiselle? Oui. La Spinster?…ZUT!“,
“Kris Berg — Gas guzzler My Hybrid is a Gas Guzzler“,
“Michael Cook — Perfect storm Real Estate Perfect Storm Warning: Do Not Miss This Window of Opportunity“,
“Brian Brady — HR 3915 HR 3915 Is Dangerous“,
“Teri Lussier — Twittering Twittering on a wing and a prayer“,
“Geno Petro — Search or sell Search Or Sell, Young Man“,
“Kris Berg — Genoa Petrol You, ma’am, are no Genoa Petrol!”
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    Deadline for next week’s competition is Sunday at 12 Noon MST. You can nominate your own weblog entry or any post you admire here.

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    • November 4, 2007

    The Odysseus Medal competition doesn’t change its clocks, but virtually everyone else does: Nomination deadline is 12 Noon MST

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    Suburban Phoenix Real Estate Broker

    Author website

    Cut-off is today at 12 Noon MST, which means that folks on the left coast, particularly, need to adjust their thinking. In any case, if you know of something that reeks of pith (does that sound right?), your own work or someone else’s, nominate it now before you have to wonder what time it is in Phoenix.

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    November 3, 2007

    How low can they go? Negotiating a real estate bargain

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    Suburban Phoenix Real Estate Broker

    Author website

    This is my column this week from the Arizona Republic (permanent link):

     
    How low can they go? Negotiating a real estate bargain

    Everybody wants a bargain. The question for homebuyers is, how do you get one?

    I was in a property last weekend with a buyer. The home was listed for $450,000 and the buyer asked, “Do you think they’d be willing to cut the price by $100,000?”

    Stranger things have happened, but I’d bet against it.

    Here’s why: Let’s assume the monthly payment is $2,000. The seller could afford to wait four years for a better offer before slashing the the price by $100,000 would make sense. There are other factors to consider in real life, and this kind of analysis is best done on a spreadsheet. But a lot can change in four years.

    You certainly don’t want to pay any more than you have to, but you cannot possibly pay less than the seller will agree to.

    What can make sellers particularly negotiable? A new job out of state and they can’t qualify for two mortgages. A new house under contract with a hefty non-refundable deposit. No one likes to think about profiting on the misfortunes of others, but sellers who are facing foreclosure are likely to be ready to cut to the quick.

    In other words, sellers who have a strong motivation to sell now are going to be a lot more willing to negotiate price cuts than people who kinda-sorta want to move, provided they can get their price.

    But even if you find a motivated seller, there’s a complicating factor: That seller has to have room to negotiate — equity in the home. If the house is encumbered at or near the list price, there’s a limit to how much the sellers can cut the price, no matter what their motivation. To go further would result in a short sale — the sellers would come to the closing table “short” of the full amount they owe.

    Short sales can be great bargains, too, but, since you’re negotiating with the lender more than the seller, they’re a chancy proposition at best, and they can take a Read more

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