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Category: Real Estate (page 172 of 266)

August 14, 2007

What’s love got to do with it? Shopping for a commodity instead of a home.

by

Realtor, Associate Broker

Author website

In the days of yore (one yore = 5 years on the metric conversion chart), open houses were much different. I almost enjoyed my Sunday afternoons. They were spent with people sincerely looking for a home, a home that fit their personal needs on both a functional and emotional level. The event went something like this: Agent makes home available for showing as a courtesy to the seller who wants to sell and the buyer who wants to buy, potential buyer tours home and makes assessment as to whether the home fits his needs, interested buyer asks questions to learn about features of said home and neighborhood, interested buyer compares recent sales to establish fair price and, having made his decision to purchase, enters meaningful negotiations.

These days, our open house experiences are very different. As an agent, I am a soldier being called to active duty. I am the enemy, and donning pith helmet, medieval shield and evil death ray deflector, I enter battle.

Steve and I both got the open house nod this weekend, and it was so painful as to be funny in hindsight. We enjoyed the usual Happy Hour debriefing, and our experiences were woefully the same.

“How long has it been on the market?” “Why are they moving?” That’s it. That is all anyone wanted to know, and these questions were generally flying as one run-on sentence before they had passed the threshold. Steve suggested that it was time for a little open house strategic planning, a preemptive strike if you will. Post it on the front door, or better yet, adopt Greg’s policy of using those nifty custom yard signs and display the vital statistics there. Even better, include the information in the open house ads we tirelessly run each weekend. No need to have anyone to driving across town when I can save them the trouble.

Keep in mind that we aren’t talking about the hobbyists, or the neighbors, or even the world-weary, sincerely-seeking-a-home contingents. We still get a smattering of these at our open houses. Steve related to me the story of a couple in the latter Read more

August 14, 2007

It’s Scary Outside of the Box…

by

Real Estate Rainmaker

Author website

mark-cuban.jpgRecently, Realtor Genius was called naive for suggesting that actual solutions be provided for the small portion of the market that we call “sub prime.” So, I’ve had my ears/eyes perked for solutions to the sub prime mess that I could share with everyone here…

Yesterday, I read on Mark Cuban’s blog (he’s the Dallas Maverick’s owner, genius business man, billiionaire of Broadcast.com, Web 2.0 savvy, worked at DQ for one day, and is NOT a Realtor) about his idea for how to break the “Boom Bust” cycle of Real Estate. I’m not a Realtor, but I really want to hear everyone’s take on this inventive idea… to me, it’s scary outside of the box!

—–

Why can’t home owners sell some percentage of equity in their homes on a listed exchange ? Why can’t I “Take My House Public?”

Why not create a market or exchange where homeowners can sell equity in their homes ?

The rules could be very eimple
1. The house is appraised by a company approved by the exchange that lists the houses.
2. “Shares” are set with a Par Value of 10pct of the appraised value. For a 100k dollar house, there are 10 shares potentially available. However at no point in time can more than 40pct of the “shares” in a home be sold. We dont want the opportunity for “hostile takeovers”
3. The price of the shares will of course be set by the market. In a hot market it will be set above par, in a tough market like today, it will sell below Par.
4. All Proceeds from the sale of shares MUST be used to pay down any debt on the home.

This is the key element of this approach. By selling equity in a home, the buyer gets an asset based security that will move up and down with the market. If this market is big enough, there should be enough liquidity to move in and out of positions.

The seller receives cash that can be used to pay down the debt and thereby reduce his/her monthly payments. The seller loses a part of the upside if the market Read more

August 14, 2007

Does the Real Estate Industry Need Realtors?

by

Real Estate Investor

Author website

Inspired by the glut of controversial posts appearing here lately, I thought I would add one more to the fire. In my recent browsing I stumbled upon a blog that asked a simple question, “Do we need Realtors?” That’s all. That was the whole post. While the questioned seemed relatively simple, the 1000+ (literally) comments made me think a bit harder about this question.

First, let me say that the comments came down on both sides. Many people screamed Yes and No for a variety of reasons, some valid and some simply ludicrous, but the most interesting point that came to my mind was what if someone asked do we need investment bankers? My immediate reaction would be outrage at the attack on my profession. After a bit more consideration, I would ask the more complex question, what has caused that question to be asked? What am I not doing to make my services indispensable to my client?

As an outside observer, I would like to turn this around to suggest what I need and then take a look at how well consumers view realtors meet their needs. Obviously, there will be generalizations here, so if they don’t apply to you, don’t take offense to them.

First, as a consumer I want a realtor to relentlessly try to get me the best deal possible. If I am buying a property, I would like a realtor to help me get the lowest price and if I am selling I would like the opposite. In order to assess this, I need a realtor that knows the market beyond printing out a set of comparable transactions. I would like to know the best blocks to buy and why my house should be valued differently than the house next door.

Realtors fall all over the map in this area; however, on the buyer side they really don’t cut the mustard. To start, the commission structure favors the seller. Most realtors will tout their ethics, but on more than one occasion I have heard and seen realtors take a price that was Read more

August 13, 2007

Congressional “leadership” on lending policies: What is “crisis-itis?”

by

Suburban Phoenix Real Estate Broker

Author website

The Conspiracy to Keep You Poor and Stupid, which should be in your feed-reader — especially right now:

What is “crisis-itis?” It is my own diagnosis. It is a form of dementia where the inflicted believes his or her own self worth rises as the situation he monitors worsens. In all cases, the inflicted greatly exaggerates his or her control over events, as well as the size, duration, and impact of those events. In extreme cases, the inflicted seeks to worsen the crisis to inflate his or her self esteem.

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August 13, 2007

The Odysseus Medal Awards, week #1: An exposition of excellence in real estate weblogging

by

Suburban Phoenix Real Estate Broker

Author website

As you will have seen from yesterday’s short-list of entries, we had a lot of very high-quality posts among our contestants. This seems to augur well for the future of the contest. If you didn’t make the cut, soldier on. For the most part, even the posts that didn’t make it to the People’s Choice competition were very, very good.

But: It’s plausible to me that you’re reading this post to hear about winners, so let’s talk about those:

The People’s Choice Award, the winner of the popular voting yesterday afternoon and evening and this morning, goes to Michael Cook, with Realtors, Wake Up and Start Helping Consumers.

The Black Pearl is awarded to the entry that presents the best practical, technical or marketing idea of the week. This week that award goes to Benn Rosales for Mortgage drama, real estate bubble, tech crash, dotcom disaster. Here’s the winning idea:

So now that we know it’s coming, what shall we all do about it?  I’m doing a few things like; creating a shortsale team to assist sellers, offering move-down programs to those who aren’t so much in a bad way-yet, talking about it with sellers that call, offering advise on when to get out, and when to stay, talking to lenders about refinance options for those who might not need to move if we can do something now before they begin missing payments (not charging for that by the way, just guiding),  calling past clients to see how they are, and that they’re okay.

And the first Odysseus Medal in this new competition, the overall best post of the week in my opinion, goes to Kevin Boer with The Innovator’s Dilemma In Real Estate: Beware Of That Redfin Swimming Just Below You. I’m a Grand Opera kind of writer, and Kevin is a just-the-facts kind of guy, but the journey he took us on in this post is simply extraordinary.

I’ll be making the three ‘badges’ shown here available to the winners as ornaments to be used with their winning posts or on their sidebars. (And if a real artist wants to volunteer to make better versions, Read more

August 13, 2007

Consumer’s View on What Bloodhound Blog Is…

by

Real Estate Rainmaker

Author website

Contrary to unpopular belief, Realtors in the Bloodhound Blog pool care about consumers. Oh, I know it’s hard to buy because YOU once had a Realtor not call you back or because you read one single article that got heated, or because the For Sale sign is still crooked in your neighbor’s yard. I am not a Realtor, so I write from a consumer’s point of view.

From the consumer perspective, I feel that I can safely say that no one at Bloodhound lacks passion- be it lenders, Realtors, brokers or regular Joes (or Sallys) like me. There are a few Realtors that are not well informed, far behind the curve and still regurgitating the “buy/sell now, the market is hot hot hot” crap from their Intro to Real Estate classes. None of those people are reading or writing for the BHB.

If you read the nearly 2,000 articles written on the Bloodhound Blog, you’ll note that almost all of them are consumer focused even if the analysis upsets the few old school “buy/sell now, the market is hot hot hot” stragglers by implying that the consumer comes first. The Bloodhound Blog stands for the consumer, not just in words printed on a screen but by perpetuating the idea that the industry should stay informed, and by that sharing of ideas creating a better informed Realtor or lender that in turn has protected their clients from the rare “buy/sell now, the market is hot hot hot” junk.

OF COURSE Realtors are also focused on their business (marketing, SEO, etc); without that task in the list of “To Dos” there would be no product to offer the clients that are supposed to be protected against an ignorant Realtor. Not focusing on business would, in essence, be not focusing on the consumer; therefore, the idea that an article about marketing as not consumer based is bunk.

I don’t care about those “hot hot hot” Realtors- they may be doing just fine. What is upsetting is that anyone could possibly come into the den of Bloodhound and opine that everyone in the industry Read more

August 13, 2007

Hating Selling through the Art of Sales

by

Realtor, Associate Broker

Author website

The friend of the son of a very good friend — an exceedingly polite young man just out of high school — came by late Friday afternoon to sell me some cutlery. I explained when he called to set the appointment that I was already doing some business with the company he was representing in the form of monogrammed house-warming gifts, but he said he’d like to come by anyway. To practice.

He arrived, carefully unsheathed his samples, and pulled out a three ring binder. He opened his presentation with a hand drawn graph of his progress toward his summer goal; if reached, he said, he would win a scholarship. Then he launched into a rote monologue, cribbed nearly verbatim from his notes. Per the script he handed me each utensil as he talked about it, wasn’t sure what to do with his hands after I refused the third one, and was flustered when I asked about something out of turn. All the sales-guy 101 feints were in play: “If you could choose between one of the two sets today, which would you pick?”; “Just for sitting down with me today, I’m authorized to offer you, for no extra cost, these kitchen shears. Is that something you’d be interested in?”

At which point I stopped him. I’ve sat through thousands of presentations and delivered thousands more. I didn’t need another to confirm what I’ve known forever: I hate sales. And salespeople.

So I waxed parental:

“Why, David, didn’t you ask what I was already using, what about it I liked and didn’t? Turn your head: five feet away is a full set of Wusthof; you should have known that before you came to the door. Why didn’t you ask about the sets I was already buying? Clearly there has been a need.

“Selling isn’t about glib one liners, happy hour entertaining or pat answers to pre-conceived objections. It’s considerably less about form than substance. It’s about having the knowledge and developing the trust in order to fill the real needs of your customers, better than anyone else.” LOVE parental mode.

Since this has a lot to Read more

August 13, 2007

Real estate weblogging to create the kind of relationships that lead to closed transactions, repeats and referrals

by

Suburban Phoenix Real Estate Broker

Author website

Sorry, Michael, but sometimes plumbers gotta talk about pipes. This is Teresa Boardman writing at The Real Estate Tomato:

In my humble opinion it isn’t about how many people read me. It is about who reads me and why. It is about speaking directly to the clients you prefer working with. A ton of leads can mean a ton of work and little business. Some of my blog readers are exactly the kind of person I want as a client and others are not. Not all leads are equal. The type and quality of the content does have an impact on the type of leads a blogger attracts.

I think this is dead-on. By pursuing real estate weblogging with a long-term strategy, you can grow your business in the way you want it to grow.

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August 12, 2007

Vote for The People’s Choice Award — Nominees on-line now

by

Suburban Phoenix Real Estate Broker

Author website

Okay, the live version of the People’s Choice Award voting interface is on-line. My short-list isn’t all that short, alas — 18 entries total, including seven from BloodhoundBlog. I’ll do a better job of eliminating posts in the future.

The selections are shown in random order in the voting interface, this because being at the top or the bottom of a list like this is a decided advantage.

These are the posts, in no special order, except the BloodhoundBlog entries are shown last:

Go here to view the entries and to vote. I’ll accumulate votes until 12 Noon PDT Monday. I’ll post the winners of The Odysseus Medal, The Black Pearl and The People’s Choice Award Monday afternoon.

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August 12, 2007

Feel like playing? The People’s Choice voting interface is live

by

Suburban Phoenix Real Estate Broker

Author website

I have a dummy version of the People’s Choice voting interface for the Odysseus Medal competition up and running. I used five of my recent posts for examples, since I’m excluded from the competition. Play with it, if you’re of a mind to. See if it makes sense to you. See if you can get it to break. The live version will go up later today.

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August 11, 2007

Thomas Sowell: Housing woes caused by land-use restrictions and federal micro-management of lenders

by

Suburban Phoenix Real Estate Broker

Author website

Hoover Institute Economist Thomas Sowell:

Amid all the hand-wringing and finger-pointing as housing markets collapse, mortgage foreclosures skyrocket, and financial markets panic, there is very little attention being paid to the fundamental economic and political decisions that led to this mess.

The growth in risky “sub-prime” mortgage loans by people buying homes they could not really afford has been a key factor in the collapse of housing markets, when the risks caught up with both borrowers and lenders.

But why were home buyers suddenly taking out so many risky loans and lenders suddenly arranging so much “creative” financing for these borrowers?

One clue is the concentration of such risky behavior in particular places and times.

Interest-only mortgages, where nothing is being paid on the principal for the first few years, enable many people to get started on buying a home with lower mortgage payments at the outset.

But of course it is only a matter of time before the mortgage payments go up and, unless their income has gone up enough in the meantime for them to be able to afford the new and higher payments, such borrowers can end up losing their homes.

Such risky mortgage loans were rare just a few years ago. As of 2002, fewer than 10 percent of the new mortgages in the United States were of this type. But, by 2006, 31 percent of all new mortgages were of this “creative” or risky type.

In the San Francisco Bay Area, 66 percent of the new mortgages were of this type.

Why this difference in times and places? Because housing prices were skyrocketing in some places and times, so that people of modest incomes had to go out on a limb to buy a house, if they expected to buy a house at all.

But why were housing prices going up so fast, in the first place? A number of studies of communities across the United States and in countries overseas turned up the same conclusion: Government restrictions on building.

While many other factors can be involved — rising incomes, population growth, construction costs — a scrutiny of the times and places where housing prices doubled, tripled, Read more

August 10, 2007

How Big Is the Sub-Prime Mortgage Market? Not very big at all

by

Suburban Phoenix Real Estate Broker

Author website

Cited by BusinessWeek Online, a very eye-opening analysis of the sub-prime mess from National Review Online:

I’ve thought a lot about Rain Man over the past few months as I’ve been following the press coverage of the sub-prime mortgage crisis. The story’s been on the front page of the Wall Street Journal nearly every day. Pretty much every show on CNBC — except Kudlow & Co. and one or two others — has been obsessed with the topic. Yet no one seems to be asking the Rain Man question: “How big is the sub-prime mortgage market?”

And the answer, as Ben Stein makes clear, is not very big at all.

Currently there are about 44 million mortgages in the U.S., and less than 14 percent of them are sub-prime. And only about 13 percent of those are late on payments, with the majority of late payers working through their problems with the banks.

So, all in all, when you work through the details and get down to the number that really matters, only about 0.6 percent of U.S. mortgages are currently in foreclosure. That’s up a hair from roughly 0.5 percent last year. That’s it.

Actually, that’s not it. Things are actually better than the numbers suggest, since sub-prime-mortgage homes are less expensive than prime-mortgage homes. This makes sense. Wealthier people, generally, can afford costlier homes than less-wealthy people. The recent sub-prime surge brought large numbers of moderate-income families into the home-ownership market, and their houses are less expensive than most. Therefore, the dollar impact of the sub-prime default is smaller than if it were a prime default.

With approximately 254,000 mortgages in foreclosure at the moment — up from roughly 219,000 last year — the sub-prime meltdown has given us an increase of 35,000 mortgage foreclosures over the last quarter. Since the average sub-prime mortgage clocks in at almost exactly $200,000, we’re looking at an approximate $7 billion increase in foreclosed value in the first quarter of this year.

Raymond, how big is household net worth in the U.S.? About a hundred dollars?

Actually, it’s a lot bigger than that — about $53 trillion. In other words, the Read more

August 10, 2007

How do you win The Odysseus Medal? Write your heart out — and follow the rules . . .

by

Suburban Phoenix Real Estate Broker

Author website

I’ve posted the rules for The Odysseus Medal competition, but there aren’t so many that I can’t also show them here:

The Rules (few and fair):

  • The entry must have been posted within the two weeks before the entry deadline
  • The entrant must be the author of the post
  • More than one entry from the same weblog is fine
  • More than one entry from the same person is also fine, provided that you have multiple personality disorder
  • No second-guessing, no do-overs, no cry-babies

The Prizes:

Three awards will be given weekly:

  • The Odysseus Medal, for the overall best post of the week
  • The Black Pearl, for the best practical, technical or marketing idea of the week
  • The People’s Choice Award, selected by popular voting on Sunday evenings

The Deadline: Sunday at 12 Noon MST — which is 12 Noon PDT, 3 pm EDT, etc.

Entry form: It’s here.

No doubt this will change somewhat with time, but probably not by much. I really don’t like rules, making them or, especially, complying with them. Entries that I’ve already received will be grandfathered, of course. Fair is fair.

Anyway, get crackin’. Either Cameron or I will build a voting bot for the People’s Choice Award, and I’ll put together graphic trophies for the winners. I want for this to be an enduring tribute to quality weblogging. But the truth is, I’ve got the easy job. You’re the one whose going to have to do the hard work…

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August 10, 2007

Mortgage meltdown? The end of the world has been delayed again

by

Suburban Phoenix Real Estate Broker

Author website

This is me from the Arizona Republic (permanent link):

 
Mortgage meltdown? The end of the world has been delayed again

If you watch the TV news, you can’t miss the video clips of financial pundits screeching about the imminent collapse of the mortgage industry. In fact, the world probably cannot end more often than once or twice a day, but it’s worthwhile to remember that television is an entertainment medium. Financial news is inherently boring — unless it’s reported by a shrill demagogue.

So what’s really going on?

Investors are pulling the plug on the most liberal — or most willfully gullible — mortgage underwriting firms. Investment banks that bought or brokered portfolios of shaky loans are also suffering.

Does this mean you can’t get a home loan? Not at all. You just need verifiable income, good credit and a down payment. That wouldn’t even sound odd if we had not lived through 2005, when all you needed was a reliable pulse.

What really happened in the home loan market? There was so much money available, and homes were appreciating so quickly, that some lenders stopped worrying about the financial qualifications of borrowers.

Has there been a surge in foreclosures? Yes. Had there been a substantial number of loans made to high-risk borrowers? Yes. We’re paying the piper now, that’s all.

There is still plenty of money in the mortgage market, but guidelines are stricter. Nothing-down loans are harder to obtain, as are stated-income loans. Some lenders are charging higher rates for jumbo loans — amounts over $417,000. But the rates for a 30-year conforming fixed-rate mortgage — the bread-and-butter home loan — are actually down. This fact will have been omitted by the demagogues on TV.

While things shake out, sellers will want to stay on top of their buyers’ loans, and buyers might want to ask their lenders to submit their files to more than one underwriter. Some parts of the Valley are suffering more than others, but buyers are buying, sellers are selling and home values are holding up fairly well through the down-turn. It would seem that the end of the world, contrary to televised reports, Read more

August 10, 2007

Realtors, Wake Up and Start Helping Consumers

by

Real Estate Investor

Author website

Jeff Brown’s, Real Estate Bloggers — Why Are You Blogging? What Currency Does Your Banker Accept?, has evoke a ton of comments and emotion over the past few days. As an outside observer I find it interesting during these crazy times in the real estate market, people get so worked up over SEO, but don’t seem to carry that same passion over to the market.

While I have no real interest in SEO, I thought I would mention that if (and when) the real estate market tanks, it wont matter how many people are coming to your site if they aren’t able to buy. While the point of Jeff’s article got lost after about the 20th comment, I think that it is really unfortunate. Blogging for business is fine by me, but what about the consumer? There will be a point very soon when consumers will be looking for advice on how to approach and handle a down market. It would seem like everyone’s time would be better spent having these discussions.

I am probably one of the few non-real estate agents writing/reading here, but as a current home shopper, a Realtor could really differentiate themselves by understanding the market and providing helpful advice. In a world where good content is king, I am spending my time reading and understanding where the market is going, so that I can provide readers support as things go from bad to worse.

A major knock on Realtors is the fact that they are always selling, not necessarily with their client’s best interest in mind. The National Association of Realtors makes this perception worse with every rosy real estate forecast they send out to the market in spite of overwhelmingly negative information. Interestingly, two days after I wrote this piece about the NAR forecast, the stock market had the second worse day of the year.

Looking at a variety of the real estate bloggers blogs, who have been commenting here, I have seen very little content on many sites that could really help consumers deal with this changing market. Now Read more

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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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