BloodhoundBlog

There’s always something to howl about.

Month: June 2008 (page 6 of 7)

June 9, 2008

Are You Driving in the Left Lane, but Only Going the Speed Limit (or less)?

by

CEO, PA Association of Realtors

Author website

I travel Interstate 64 between Charlottesville and Richmond at least once a month. It is a fairly lightly traveled highway (compared to 95 and 81), so it is justifiably only two lanes wide in either direction. It is also a fairly boring drive because the scenery (which is nice) does not change for 50 miles. The road is straight, flat, and requires a stop at Starbucks before you brave the monotony.

The lack of interesting scenery or road challenges allows my mind to wander and think up Blog posts like this one. On a recent trek back from Richmond, I experienced a common source of frustration – a legitimate pet peeve of mine – when I found myself going 5 miles UNDER the speed limit while driving in the “fast lane.” As you can guess, there was an otherwise “normal” person merrily cruising down the left lane and ignoring the signs that say “Slower Traffic Keep Right.” Cars had stacked up behind this slowpoke as they attempted to negotiate passing the vehicle on the right.

fast laneThere was a law on the books in Virginia that made it illegal to pass on the right, but that was removed several years ago because more than one member of the General Assembly shares my pet peeve. I would have preferred that we stiffen the penalty for driving slow in the left lane (perhaps jail time) instead of justifying cars weaving through traffic, but then again, how much sympathy can you have for drivers like me who believe a State Trooper’s mantra is “eight you’re great, nine you’re mine?”

For many agents, the same frustration occurs in the real estate business. I often hear complaints about less “professional” agents slowing up a transaction. In essence, the complaint is that one agent involved in the transaction is hurting the efficiency of information flow needed to get the deal done, much like a slow driver in the left lane hurts the efficiency of traffic flow. This analogy, however, breaks down when you compare the root cause of the problem. The driver in the left lane is simply rude or inconsiderate Read more

June 7, 2008

Every Day Is A Good Day To Invest In Phoenix Real Estate

by

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

Author website

Every day is a great day to buy a single family home, even in Phoenix. That ought to rile up the analytical types here. Of course, that same principle applies to the stock market, as well.

I started my career as a “Financial Consultant” but was mentored by some fellas who preferred to be called “Customer’s Man” (title preserved with apologies to the fairer gender). My tutors would buy me a scotch in Suburban Station, then ride the R5-Paoli Local home with me. I’d receive a 70-minute lesson about how and when to buy stocks for clients. The first lesson was that every day was a good day to own a good company.

Of course, the part I’m leaving out is that price and underlying quality were important factors in the investment decision- fundamentals rule when it comes to long-term investing. These Customer’s Men weren’t the Bud Fox-type on Wall Street, churning clients’ accounts, they were more like the character Hal Holbrook played (Stick to the fundamentals. That’s how IBM and Hilton were built. Good things, sometimes, take time).

The same principle can be applied to real estate. Greg Swann did his best Hal Holbrook impression with this article in the Arizona Republic. The fundamentals are fabulous for Maricopa County real estate. Three people move into Maricopa County for every two people that leave every year; that’s a growing population. The local economy is diversifying with small businesses leading the way. An expanding economic base and a growing population make for an attractive situation for landlords.

Are the long-term prospects for Phoenix real estate good? The fundamentals would have you believe that they are. Lawrence Yun predicted a 50% rise in Phoenix housing prices in a five year period; I commented that it may take ten years. Still, 50% over ten years is a helluva return, when leveraged four to one. Invest $100,000 in Phoenix real estate today, and you could conceivably receive a triple in your original investment, ten years from now. That Read more

June 7, 2008

Has the Phoenix real estate market turned the corner? It’s too early to tell, but May’s results suggest we may be nearing the bottom

by

Suburban Phoenix Real Estate Broker

Author website

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

 
Has the Phoenix real estate market turned the corner? It’s too early to tell, but May’s results suggest we may be nearing the bottom

Are you in the mood for some good real estate news for a change? How about some news that’s not all bad? Here’s what news there is, in any case:

May was a very strong month for clearing bread-and-butter inventory in the Phoenix real estate market. BloodhoundRealty.com tracks sales of newer suburban tract homes — three bedroom, two bath, single-story homes with tile roofs and two-car garages — the middle of the housing-supply bell curve.

We have records going back to January of 2004, so we have tracked both the boom and the bust in our recent real estate history. May 2008 was the strongest month for the homes we track since May of 2007, with the best month before then being November of 2006. A total of 170 of these homes sold in May, up from 114 in April.

Prices were down, month over month, and not by just a little bit, so May’s results no doubt reflect the sale of a lot of lender-owned properties. But inventories of the homes we track are down by 7% from April and by over 14% from March.

The implied absorption rate from May’s results is 5.2 months, down from 8.4 months for April. Absorption rate is the amount of time it would take to absorb all currently-available inventory at the current rate of sales.

The absorption rate calculation is less than reliable, since it uses backward-looking numbers to make a forward-looking projection. But substantially greater sales taken together with substantially lower inventories is a very good sign.

As a matter of anecdotal evidence, earlier this week I phoned the listing agent of a very market-weary short sale. After months of no activity, three offers came in over the weekend. The seller issued multiple counter-offers, with the high-bid being $17,000 over the list price.

So has the Phoenix real estate market finally turned the corner? We won’t know for sure for two or three months Read more

June 7, 2008

Is ePerks.com’s Ben Behrouzi, infamous for trying to censor a real estate weblogger, stealing content from Mervyns and Chevron?

by

Suburban Phoenix Real Estate Broker

Author website

At his new web site, BrokerScience.com, Trace Richardson is on a tear. Trace got his teeth into the story of ePerks.com’s attempts to silence real estate weblogger Vlad Zablotskyy with a cease and desist letter. Starting with an analysis of how ePerks has managed to achieve an orderly self-destruction, Trace has uncovered one irregularity after another in Ben Behrouzi’s internet businesses.

The latest snafu? Behrouzi added “Values” and “Culture” pages to the ePerks.com web site. The only problem is: The content seems to have been taken, in large measure, from Mervyns.com and Chevron.com.

Here’s the full run-down on Trace’s stories on Behrouzi’s start-ups:

At this point, I’m thinking Ben Behrouzi is beyond redemption. From the evidence, he seems to be much more interested in pushing people around than in making money on the internet. My hope is that other internet entrepreneurs following this train wreck can manage to catch a clue: For the first time since Athens — for the first time in history, really — ordinary people have equal access to the Agora. You cannot shout Vlad Zablotskyy or Russell Shaw or Trace Richardson or me down. Our voices are at least as loud as yours, and we will not be silenced by threats, intimidation or dirty tricks. You can learn to live by cooperation and conciliation, or you can master the art of starving alone.

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June 6, 2008

I can think. I can wait. I can fast.

by

Real Estate Broker, Investor

Author website

Back  in the late 1960s and early 1970s, I read all the works of Herman Hesse.   Some of them over, and over again.  Siddhartha  stuck a deep chord.

Siddhartha, after living three years as an ascetic, emerges from the forest and meets a beautiful woman.  In order to obtain worldly items to please woman, Siddhartha seeks employment with a merchant.  The merchant asks Siddhartha “What have you learned that you can give?”   Siddhartha replies “I can think, I can wait, I can fast.”

The merchant asks Siddhartha, “What good is fasting?”

Siddhartha responds “If, for instance,  Siddhartha has not learned to fast, he would have had to seek some kind of work today, either with you, or elsewhere, for hunger would have driven him.  But as it is, Siddhartha can wait calmly.  He is not impatient, he is not in need, he can ward off hunger for a long time and laugh at it.  Therefore, fasting is useful, sir.”

I can think.  I  can wait.  I can fast.  Those three short sentences became a mantra.

I can think.  I can offer ideas, I can create solutions.  I can wait.  I can hunker down and stay the course.  I can fast.   One look at my waistline could convince you not to take this answer in the literal sense.  But I can indeed  wait calmly,  in a position of strength, unencumbered by impatience or urgency.

I can remember repeating “I can think, I can wait, I can fast” to prospective employers a few times on job interviews back in those long ago days, to be met with blank, but polite, stares.

Fast forward a few decades.  I write a post on Bloodhound blog exploring ideas about re-inventing a small real estate brokerage in the Web 2.0 World.   People correctly point out that I need to assess what I can give a prospective agent. 

I visualize myself sitting across from a new agent, conducting an interview.  The agent is asking “so, what do you offer?”  I ponder E&O, desk fees, commission splits, niche marketing, contact systems, lead generation, vertical searches.  Lions and tigers and bears.  Oh my.

But after all these years, I have come full circle.   What else can I give Read more

June 5, 2008

The Meltdown Culprits are Finally Punished

by

Real Estate Renaissance Man

Author website

I just finished writing a comment regarding the mortgage meltdown which led to the credit crisis which has caused a real estate recession (don’t you just love our fondness for allegorical alliteration!)  We were playing the blame game over on a post I wrote regarding The Gang of Three and how Wachovia’s current misfortunes may signal the bottom.

While many lenders and originators and agents and appraisers and so on can shoulder some of the blame, we should look to two primary sources for our stone throwing activities: the first is borrowers.  Borrowers, however, get a pass because it is politically, if not financially, incorrect to blame the customer.  That leaves us with number two: the rating agencies.  Yes, the rating agencies: Moodys, Fitch and Standard & Poor’s.  Have you heard much in the press or by the politicians with regard to the rating agencies?   Neither have I, yet I argue that they are the proximate cause and primary culprit in this mess.  Lenders make money by lending money.  Investors make money by investing.  Borrowers can borrow because lenders can lend because investors will purchase on the secondary market.  The secondary market prices and purchases based on the rating given by the neutral, third party rating agency.

But, it turns out that the rating agencies were being shopped and whoever gave the best rating got the job.  So instead of giving investors accurate warnings, which in turn would have made the loans much more expensive, which in turn would have cut way down on the volume of high-risk loans – we instead have rating agencies trying to make money.  There’s that pesky “invisible hand” at work again.

Thankfully we can all relax.  As you can see by reading this article in Business Weekly, New York Attorney General Andrew Cuomo has brought these criminals to justice and hit them with the severest of all punishments: he made them say “sorry.”  They have also agreed to set up some new guidelines (may I suggest: “Keep your hand out of the cookie jar” be first and foremost?)  Wow, nothing like a good strong talking to when you have caused or at least been heavily involved in Read more

June 5, 2008

On Becoming A Real Estate Agent (and other things)

by

Real Estate Broker

Author website

Every once in a while I get in a metaphysical mood and need to get it out of my system, so bear with me. I usually get like this when I”m transitioning from ideas and thinking to action. I’m taking actions to transform my business once again so I’m in the process of becoming what I’ve been thinking. Often ideas are stuck in the theory phase and never become a reality. Back in my heavy drinking days I had grand ideas that could change the world but they never left the barstool — probably a good thing they stayed there. I’ve always been a “thinker” and it’s too bad I didn’t have a great mind. When I was in my thirties I began making the transition from thinking into action — or, rather, I began putting my thoughts into action — although I still have some brilliant ideas I’ve never put into action like my idea to start a cafe that specializes in blackberries: blackberry pies, blackberry cobblers, blackberry tarts, blackberry sauce on pork chops, blackberry bagels…..perhaps when my Forrest Gump comes along I’ll do it.

But becoming is different than thinking about it. My wife taught me a lot about becoming the other. When she was pregnant, I was terrified of being a father and went into my theorizing phase, thinking it to death. When she had our first child I was still theorizing and thinking while she simply became a mother. I was always wondering – How does she know all this stuff? Well, she just became what was called for. I’m sure a social worker could go back and critique her “parenting skills” and find she was lacking in modern child-rearing techniques, but no one loves their mother anymore than her sons. She never sat around in an anxious state wondering what actions to take — she became a mother and a damn good one.

Becoming takes committment. Until you commit and take actions the ideas are still theoretical. One reason a lot of agents in real estate are never successful is that they never become real estate agents, they merely have a license, and real Read more

June 5, 2008

Planning to retire at 50? Good on ya! Have you made plans for living a hundred years beyond that? In a world that changes like dreams?

by

Suburban Phoenix Real Estate Broker

Author website

Unless you come down with a fatal disease or find yourself in a gun battle, you’re probably going to live a lot longer than you ever imagined. This week’s news is interesting, but life-extension is a secondary consequence of everything associated with free markets. That trend is centuries old by now — better food and water, personal hygiene, continuous improvements in medicine, the widespread availability of something as mundane as fresh cow’s milk.

And just think how much longer and richer your life could be if you weren’t carrying 50% or more in parasitic government weight on your back. The interesting thing is that the rate of change is increasing far faster than governments and other misanthropes can drag it down. My own personal dictum has always been, “They can’t enslave us if they can’t catch us.” The literate third of the globe is at that point now. The other two thirds are just a few years away. If we can navigate the next few years without blowing ourselves up, we will reach a point where the average middle class household in the United States will control more real wealth than entire countries would have owned just a few centuries ago.

I’m sure I’ve cited this before, and this version of the film is an antique by now — it’s almost a year old — but this is a very compelling presentation:

Of course you cannot make any detailed plans about living decades longer than you expected with everything changing constantly — and at an ever-accelerating rate of change. The truth of the matter is, if you live to be 150 years old, you have a decent chance of living forever. The even more startling truth is that the ever-accelerating rate of change in all branches of technology is racing us toward a singularity, a point where all of our models of understanding break down and we have no rational means of predicting what will happen.

No one can predict the future more than a few years out, but what you can do is reprogram your mind. In omnia paratus — prepared for everything. If Read more

June 5, 2008

Real Estate Marketing Channel Dominance Theory – my truth.

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

MIke Farmer got me to mention the thought of Navy Seal Teams as a basis for real estate marketing. He got me thinking on that…and my mind turned towards my Market Channel Dominance Theory(s).

istock_000000792680xsmall.jpg

Or…let’s just call it B-I-N-G-O. In the game of BINGO, you can win by being the first to dominate one row, either across, down or diagonally. Let’s throw out the diagonal option for a second. (and the free space in the middle-there’s NO free lunch).

First off, real estate marketing channels, (local radio, newspaper, TV, Organic Search, Paid Search, Blogging (and you have to break this out for EACH niche and hyperlocal) can take the place of letters BINGO making each column represent dominance of a marketing channel and each row represent exposure generating ability across ALL marketing channels.

My theory #1: If you are a listings focused REALTOR, you need to get exposure across as many channels as possible. Why? Because you want to WIN listings presentations and to do that, you need to answer the $64 question..”What are you gonna do differently to market my home?”. You want excellence for your clients and nothing less.

My theory #2: If you are focused on buyers, you do NOT need to be all things to all people, but to be effective, you need dominance of a marketing channel. This gives you excellence in attracting buyers by having top of mind presence and does not require dominance of other marketing channels.

My theory #3: The ULTIMATE Guerilla marketing group (whether brokerage, team or lone agent with employees-franchise or not) is a highly skilled group of folks who can EACH dominate a vertical (read: marketing channel) and they work UNSELFISHLY to defend each others’ turf. This gives you excellence in attracting buyers and in sellers by having top of mind presence for your merry little band…errr…brand. Like Greg’s recent point here about BHB. None would get orders from headquarters. They would not need to have excellence defined for them. They ARE it. Each would be a specialist and yet communication of threats and opportunities would be immediate and instant. Read more

June 4, 2008

An Unchained expostulation: Guess who is not coming to Inman?

by

Suburban Phoenix Real Estate Broker

Author website

We made a ton of video clips at BloodhoundBlog Unchained. BrokerIPTV.com made a bunch more, and theirs feature strange and esoteric production elements like good lighting and audible sound. The difference is, ours were on YouTube right away, and theirs took a while to gestate. One that I’ve been waiting for finally hatched today, yours truly on the subject of being Unchained:

If you watch that clip, this should be obvious, but I’ll say it anyway: I don’t tell people what to do. There are no rules for BloodhoundBlog contributors. I don’t like rules, but I also don’t like working with people who need to be told what to do — and I really don’t like working with people who try to tell other people what to do.

That paragraph is predicate to this one: Since there is no Official BloodhoundBlog Policy on anything, it should be obvious that there is no Official BloodhoundBlog Policy on Inman Connect. Bloodhounds have been invited to speak at the last couple of events, and I, personally, have no feelings about this one way or another.

But, oddly enough, for this summer’s event, only one Bloodhound has been invited to speak, Estately.com’s Galen Ward. That’s not completely true. Just after Unchained, Brian Brady was approached, perhaps as a ham-handed divide-and-conquer strategy. But Cheryl Johnson was not invited to teach PhotoShop, Eric Blackwell and Eric Bramlett weren’t invited to teach SEO, Geno Petro wasn’t invited to teach the art of mesmerizing an audience. Mike Farmer, Sean Purcell and Jeff Brown are, each in his own way, reinventing the real estate brokerage, but this is not a topic of interest at Inman Connect.

In other words, there does seem to be an Official BloodhoundBlog Policy on Inman Connect, but it doesn’t originate here.

So be it. We care a lot. As is discussed in the clip, BloodhoundBlog Unchained set a new standard for training events in the wired world of real estate in our first swing at the ball. We dropped the ball completely on the drinking and partying and killing time in the hallways categories, but I know we traded a Read more

June 3, 2008

Chaos, Order, and Noble Corruption

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

I’m pretty sure the simple fear of  ‘getting caught’ has kept me from doing a whole myriad of things other braver, but perhaps, less ethical men have done with impunity. Take the dirty cop trials going on in Chicago this week where 10 city policemen have decided to come forth to reveal their own bad behaviors–various unlawful acts performed at the arrest scene to ensure ‘the criminal’ doesn’t escape Justice–acts mostly surrounding issues of probable cause, search, seizure, and varying degrees of Miranda indiscretions (for the greater good of the community as a whole, they claim); little white lie kinds of cop acts like you see on Law and Order every night—bum-bum…  “These are their stories.” Northwestern University professor Jona Goldschmidt refers to this seemingly justified behavior as “Noble Corruption.”  I personally am too fearful to be nobly corrupt or even run-of-the mill corrupt for that matter.  And some days it’s the only redeeming thing I can say about myself…

“Hey guy,” as I look at myself in the bathroom mirror, “at least you’re not corrupt.”  Good thing I’m not a cop, I suppose. Too bad I’m a Realtor.

“Sorry Mrs Climbladder, but I’m fairly certain I’ve taken an NAR Oath of Ethics or at the very least, checked a box admitting to as much on my quarterly dues coupon. They always cash the check so I guess I’m in.  Anyway,  I couldn’t possibly recommend that you move forward on this Inspection Punchlist Nightmare the listing agent is calling an REO. You have the right to remain silent…”

I bring this up because for the third time in as many weeks, I’ve advised a client against moving forward on a property I felt was a dog; and not a Bloodhound dog either. A mutt. And not a lovable mutt either. A dirty old smelly mean three legged junkyard people killing mutt. A beast, actually. An upside down, sideways beast. With fleas.

I heard a self-proclaimed bottom feeding foreclosure poacher on NPR the other day state that he was actually doing a service to the neighborhood as a whole by preying on the misfortunes of the disamortized few.  And while I think I might even concur with him on some level, I’m way too afraid Read more

June 3, 2008

3 Hours On Blogging, Sponsored By The Chicago Association of REALTORS

by

Mortgage Planner

Author website

Chicago There’s lots of ways to waste three hours:

  1. Watch The English Patient
  2. Commute from Norristown to Manhattan
  3. Wait in line for Space Mountain

Now, one more: Come hear me talk about blogging next week in Chicago.

As part of its Hot Topics series, The Chicago Association of REALTORS is trotting me out to educate Chicagoland real estate, mortgage and title professionals about writing effective blogs that build client loyalty and new business.

Novice or Pro, there’s something for everyone. And seriously — there are worse ways to spend your morning.

The two 3-hour sessions are:

  • June 12: 6600 W. Irving Park Rd, 9:00 A.M.
  • June 13: 200 S. Michigan Ave, 9:00 A.M.

CAR is charging $49 for members and $69 for non-members. If you’re in the latter group, use my name as a reference and you’ll get the member pricing. And feel free to bring guests — I really enjoy playing to a packed house.

June 3, 2008

Who Should Use EIUL’s — 401(k)’s Aren’t Cutting It For Most

by

Real Estate Investments Broker

Author website

Equity Indexed Universal Life is, when simplified, investment grade insurance. It’s a tool, a vehicle used by folks to create retirement income. I’ve written of this before, much to the chagrin of Mr. Swann. I’ve since put many clients into them using industry experts. Why? ‘Cuz it’s the right thing to do. Every dollar a client spends on this vehicle is a buck they’re not spending with me. I make zip, nada, zilch. They understand this, and appreciate it. They’ve come to rely on our consistent congruency when it comes to keeping their agenda #1. And their agenda is a magnificently abundant retirement. We make use of what i’ve called a Purposeful Plan. Sometimes that Plan includes investment vehicles other than real estate. We do what works.

EIUL’s work.

As a favor to Greg, though he didn’t ask, I’ve moved this party over to my place. Last time I think his head almost exploded when this subject came up here. People tend to get upset when it’s their ox being gored. Heck, I’m goring my own ox with this one. But again, it’s the right thing to do much of the time.

David Shafer is the guy who will answer your technical questions for this post. He recently wrote a guest post on BawldGuy Talking explaining why and when taxpayers would opt for an EIUL over their qualified retirement plan.

Soon, I’ll be writing a piece referencing a recent 20 year study showing mutual fund returns inside 401(k)’s have been less than 5% annually. And this study is used as a marketing tool. Go figure. I’ll make the study available, probably in dual form with David’s site. This study sheds light on the dirty little truth about mutual funds and their performance inside taxpayers’ qualified retirement plans.

  • Folks aren’t starting with realistic numbers. Mutual fund returns in 401(k)’s not good.
  • Front loading EIUL is best — drives down the cost of the insurance.
  • Your combined income tax rate is over 15%? Then numbers skew toward EIUL.
  • The higher the combined retirement income tax bracket, the more the numbers favor EIUL
  • EIUL never tells you when you Read more
    • June 3, 2008

    Mitch Ribak: It’s The Contact, Not The Content

    by

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

    Author website

    As Jeff Brown would say, “There’s more than one way to skin a cat”.

    Mitch Ribak is a Florida real estate broker who purposefully avoids the Web 2.0 world. Well, that’s not really true. Mitch Ribak is a blogger. I met him on Home Gain Blog and I read everything he writes. Why? Because he’s VERY effective at marketing.

    Mitch is extremely helpful. In the 3-4 months I’ve known him, he’s answered every single question I’ve asked and gone out of his way to explain the efficacy of his pay per click marketing success. He is extremely open with advice, sharing with whomever asks for it. Mitch designed a CRM called 100mphmarketing.com which he’ll release next month. I respect this guy a lot.

    Here’s the short version of this 15 minute interview:

    1- If a REALTOR is not online, he’s going to lose out.

    2- Buyers control this market, not sellers. Ergo, attract buyers with your marketing.

    3- Websites should offer less content, not more. The most important tool is a lead capture tool.

    4- Give enough content to entice the buyer to call you.

    5- The lead capture form should be prominent on every page.

    6- Quality lead generation comes from attracting serious buyers; the lead capture form distinguishes their intent.

    7- Traffic should be high quality. Mitch uses PPC and affiliate marketing programs.

    8- No email= no access to listings. Real estate brokerage is a business and businesses must deal with serious buyers.

    9- Conversion is key. It is the contact with not the content provided for the customer that is of paramount importance. Autoresponders work because they automate the marketing process. “Dripped” MLS listings buys customers’ brain cells.

    Mitch has “street cred”. His team of 14 agents closed 193 transactions, last year. Last month, they closed 38 transactions. Not a big deal? He sells real estate in Brevard County, Florida; the eye of the hurricane.

    I’ll ask you to listen to the interview with Mitch before you comment.

    June 3, 2008

    And Wachovia Completes the Gang of Three

    by

    Real Estate Renaissance Man

    Author website

    Wachovia board members have forced CEO Ken Thompson to retire  and Realtors should be popping champagne corks all over the nation.  Why?  Because Wachovia is the final reckoning of the Gang of Three and this may very well signal the bottom of the market.  Disclaimer #1: I usually write posts and comments backed by statistics.  Barry Cunningham will attest to that.  But this post is going to be more along the lines of a common sense case study; a thought experiment.

    The Gang of Three
    When the press first started reporting on the “sub-prime” crisis (a misnomer in itself, but we’ll save that for another day), a number of us were pointing out the real problems and what was to come.  There were three lenders to worry about and Countrywide, by virtue of its size more than any particular wrong doing, was used as the example.  In my weekly speeches to Realtors, I began to refer to them as The Gang of Three: Countrywide, WaMu and Wachovia.  The initial problems at Countrywide can be seen as far back as May of last year.  The set-asides at Countrywide were woefully inadequate, in my opinion, and that seems to have been borne out.  WaMu went down the exact same path and now, finally, we see Wachovia doubling the losses they originally forecast.  Why are these three lenders leading the Lemming parade off the financial cliff?  What do all three lenders have in common? (Hint: it’s not sub-prime loans.)  The common thread here is Negative Amortization Loans (cue ominous music).  Disclaimer #2: I am on record as being VERY against Neg-Ams (I have never written one for a single client).  Do they have a purpose?  Yes.  A few of my colleagues have used them effectively.  But I would venture to guess 75% of the neg-am loans produced were at least a by-product of greed if not out right theft on the part of the originator.

    There is not space here to go into why these loans are, generally speaking, so abused and that is not the point of this post.  The point is that these are the big three originators of neg-ams (Countrywide, WaMu and Wachovia through their very questionable puchase of Golden West Financial) and all three 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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