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Month: July 2008 (page 5 of 8)

July 15, 2008

The Disappearing (Stressed) Middle Class — Where Are They Going?

by

Real Estate Investments Broker

Author website

David Shafer at Uncommon Financial Wisdom is smarter than the average bear, as Yogi used to say. We met online, though I don’t remember exactly how. Over time you discover he’s the real deal. After half a dozen conversations with him you’re not surprised to learn he’s also earned a Ph.D. What kind of mind gets a degree in finance and a doctorate in social science? How about a person who can understand the numbers in the relatively black and white world of business/finance while simultaneously being able to think.

Don’t engage mouth before putting brain in gear when dealing with David. Frankly, I think he’s a natural as a contributor here. But that’s a different post for another day.

Today he wrote a guest post on my blog. I was gonna add my 2¢ here before linking you to it, but wasn’t in the mood to embarrass myself. Read, and notice how quickly he lays out some fairly complex ideas. He points out problems and then brings solutions to the table.

So go find out What Happened To The Middle Class then head over to David’s blog. You won’t regret it.

July 15, 2008

Don’t learn all the wrong lessons about creative mortgages

by

Suburban Phoenix Real Estate Broker

Author website

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

 
Don’t learn all the wrong lessons about creative mortgages

Arguably, the Phoenix real estate market is in a state of incipient recovery. Will there be more bad news? Certainly. There are still thousands of homes stuck in the foreclosure process. But prices are low enough, by now, that our surplus inventory will be absorbed — by investors, new-comers and second-home bargain-hunters.

The bad news is that, at the end of all this, we will have learned all the wrong lessons from the real estate market downturn.

Are Adjustable Rate Mortgages a bad thing? People learned to hate the first generation of ARMs, so lenders built in guaranteed flat starter rates, fixed adjustment periods, maximum adjustment caps. But even with all that, ARMs came through the down market with a sullied reputation. With fixed rates still riding so low, ARMs don’t make a lot of sense right now, but that doesn’t mean they never make sense.

How about stated-income loans? Many of the foreclosed homes in the Valley were bought on stated income. But the problem wasn’t the loans, it was the buyers — who lied about their income — and the lenders — who let them get away with it.

Negative-amortization loans were another source of foreclosures, even though the idea behind the loan product itself is perfectly sound — in an appreciating real estate market.

The problem with all these loan products — and other “exotics” — was not the particular loan program. The problem was the profligacy of a surging real estate market — coupled with the securitization of mortgages.

Everyone acted as if the party would never end, that home prices would continue to rise indefinitely. Still worse, lenders had socialized the risk of their poorly-vetted loans to securities investors. Ultimately, lenders didn’t have to care if their loans were properly secured by good credit, steady income and valuable assets.

You can blame the people involved if you want, but don’t blame creative mortgage programs. Everything’s a trade-off, and it could make sense for you to get a stated neg-am ARM for your next Read more

July 15, 2008

Brainstorming – an attempt to tap the collective wisdom of the readership….

by

Mortgage Officer

Author website

Okay, I want to try to do a little brainstorming here.   Let me lay out what I’m thinking….

I had a conversation (about an hour and a half long) with a local Realtor who has been in the business for over 20  years.   We were talking about the current state of the housing and financial markets.   She made a comment and raised a question that I’ve got my own thoughts on, but I’d like to hear from the collective wisdom of the group.

The comment that she made was this:   “I think that the majority of our clients and consumers as a whole don’t have a clue as to what’s going on in the economy, what’s going on in the housing market and what’s going on in the banking world.”

The question she had was:  “What can we, as Realtors and lenders, do to educate and inform people in our markets so that they can wisely navigate through the market that we’re in?”

That got me thinking, are we, as the professionals who really understand (more than most) what’s happening in the market, really doing what we should to help people who want or need to either buy, sell or refinance in today’s turbulent markets?

I’d love to hear what the group has to say.  What are  you doing?   How’s it working?   I’m hoping we can raise the bar for all of us and help us all be better advocates for our clients.

What do you think?

Thanks in advance,

Tom Vanderwell

July 14, 2008

Update on the Fannie and Freddie Issue

by

Mortgage Officer

Author website

Okay, here’s an overview of my take on the Fannie Freddie issue:

Do you think the Stock Markets like the Fannie Freddie Bailout?

Do you think the Stock Markets like the Fannie Freddie Bailout?

Uh, that would be a classic example of an initial elation followed by the let down that comes from looking at the details.   I’m not going to get into the details of exactly what was offered, but to focus more on the big picture instead.

So here’s the big picture (in my opinion):

1. The government has acknowledged officially that Fannie and Freddie are financially in trouble.

2. They have also indicated that they are not going to let Fannie and Freddie fail.

3. The Treasury got out their bandaids and have attempted to put a bandaid on the situation.

4. As part of their bandaid solution, they are essentially obligating the entire government and therefore the tax payers, to pay for Fannie and Freddie’s losses.

The markets initially said, “Yeah!  The government isn’t going to let Fannie and Freddie fail!   Our worries over!”

Then the markets looked at the details and said, “Uh, wait a minute, I’m not sure this is really going to work….”

The government is going to be able to prop up “publicly traded companies” by buying stock in them?   Under what rules?

What really happened at IndyMac bank?   Are there really 10,000 people who are going to lose money in a bank?   What’s that going to do to the rest of the banks?

If we’re going to bail out Fannie and Freddie, what impact is that going to have on the Fed’s financial position?   What’s that going to do the overall borrowing costs for the government?   How much of a hit are us taxpayers going to take for all of this?  These are all of the questions that are circulating out there.

Are there any solid answers?  There’s probably only one solid answer.   Ben Bernanke has done a huge amount of studying of the Great Depression and he firmly believes that the 1927 real estate crash caused the depression.   You can be certain that he’s going to do everything in his power to make sure that doesn’t happen again.

Will there be pain?  Yep, will there be Read more

July 14, 2008

Dead Dinosaurs Walking

by

IDX Search Entrepreneur

Author website

As far as I can tell, the RE.net has been advocating for better broker Web sites for as long as there has been an RE.net. Many articles and posts focus on the twin pillars of eCommerce — Search + Content — but many brokers still have Web 1.0 sites or, worse, Web 1.0 sites tarted up with gimmicks to look like Web 2.0 sites while offering the same old stove-piped database search of the same old IDX content.

I started my company to bring common sense eCommerce strategy and Best Practices to Real Estate. To be honest, it has been harder than I thought it would be to get brokers to play ball and, lately, I have been thinking about why that is.

I’ve found that brokers are unique creatures in many different ways, but the most frustrating thing for me when it comes to improving Web marketing programs is that many of them seem to operate on the principle that ignorance is bliss because its cheap. Our clients are the exceptions that prove the rule, but even among them the pace of acceptance and progress varies widely.

Let me put a finer point on that by comparing a project in the real world with what often happens in the Oz of Real Estate:

I just started a new integration project for UVEX Sports. This project will replace the Web-based Business to Business (B2B) platform they are currently using with one that is hosted in-house and tied directly to their enterprise management software. UVEX sees a huge benefit in making the information and functionality that their software holds completely accessible to sales reps and customers via the Web.  This is a significant upgrade over the current platform and a really, really good idea.

This exercise is understood by UVEX’s management, consultants and vendors as an integration project.  Integration projects have two basic components:

  1. Technology Integration: Integrating existing systems with new software and hardware.
  2. Business Integration:  Teaching management, customer service people, sales reps, and retail buyers to use the new system and make room for it in their day to day running of the business.

Once the project is complete, Read more

July 14, 2008

Realty dreams: Moving wisely ever cloud-wise, we approach the day when we can do anything from anywhere without lugging anything

by

Suburban Phoenix Real Estate Broker

Author website

Attend, if you please: OmniFocus for the iPhone. It will not only help you Get Things Done, it will tell you when to do them. No kidding. If one of your tasks is to ship a parcel at the post office, OmniFocus will sound an alarm when you are near one. Approaching the supermarket? Here’s your shopping list.

That much is just the idea of a PDA coupled with a GPS system. Still, it’s cool. But my dream for a hand-held computer is much larger than that.

Consider: I carry my digital still camera and my Flip video camera with me wherever I go. I have LowePro belt-mounted camera cases, so they’re easy to carry, never in the way. I keep those two cameras with my car keys, along with everything else I take with me when I put my car keys in my pocket: My wallet, my business cards, my watch, my phone, my Bluetooth headset and my MLS key. All of these things are small and portable, either pocketable or belt-mounted, so I have almost all of the tools of my trade upon my person when I leave the house. I look like a freakin’ cop — which is not always a bad thing — but I have my stuff with me so that I can work when I need to.

This is what I want for the iPhone — and for later iterations of the idea of a hand-held computer. A laptop or a notebook computer is luggable, not portable. Even the Canon and HP rechargeable printers are luggable, not portable. You might have a laptop and printer in your trunk — absorbing damage from every bump in the road and cooking in the summer heat — but you don’t have that computing power on your person.

My dream is simple: Everything that I might do on a desktop or laptop computer, I want to be able to do from a hand-held computer. I want to be able to carry my entire real estate business with me, every time I leave the house. This implies cloud computing, of course, since I will Read more

July 14, 2008

Let’s Do Some Survivin’: 5 FREE Things To Do Right Now To Ensure You Can Survive This Here Real Estate Market.

by

Instigator, anthill kicker.

Author website

OKAYfine.  H2s aren’t so practical, are they?   And it’s maybe vanity to have an assistant at this point, when you’re down to 20 deals a year.  Maybe it’s stupid to run that display ad in the paper, sharing space with a Realtor or Loan Officer.  But you’re committed, right?  The give and take of this grind is in your blood, and you’re gonna survive this..resurgence of the 1970’s.  

So let’s figure out how:

  1. Ruthlessly Control Your Personal Spending. Thanks to the IRS, I’ve been a low-spending guy anyway. But there was still fat in my budget.  Mint.Com quickly pointed out what I actually spent money on.   And there was tons of room to save.   About $700 bucks a month without much lifestyle change.  Each $100 you can save a month is $150 you don’t have to earn. The lower your nut is, the better equipped you’re gonna be.  Having a low cash need = low stress.
  2. Control Your Environment.  De clutter the hell out of everything.  That stack of “broker/agent” magazines?  Pitch.  Everything in your workspace is something that you have to think about and something that siphons mental energy.  Spend 40 minutes pitching damn near everything till you’re down to your computer, family pictures, a pen and paper, and maybe a cup for coffee or water.  Make your workspace look like an Apple commercial, and see what the you get done.
  3. Lead Generation = 35% of your time, minimum. Yeah, deals take longer and are more fragile then ever.  I get it.  But would you sleep better at night with six more fragile deals?   Surely SOME of your deals would close if you had more going.  And, when you learn how to ensure fragile deals are gonna close, well, when the market hits the other end of the cycle, you will be crushing your new competition.   C’mon.  Instead of calling your lender and asking for a status update every three minutes (even though they should be calling you), Read more
July 14, 2008

The Mortgage Dance? EZ: Just Follow The Bouncing Ball.

by

Real Estate Renaissance Man

Author website

And the beat goes on…  but sometimes it helps to have that little bouncing ball show us exactly what lyric we are singing this week.  All together now:

Today the Fed suprised no one by opening the discount window to ailing siblings: Fannie Mae and Freddie Mac.  Together they hold more than half of all mortgages in the US and the guarantee that they would not fail has been implied for some time.  The Fed also intimated there would be no other bail outs in the foreseeable future.  Who is walking the thin line?  WaMu, Wachovia, Downey, Indy Mac (oops, they were written out of the chorus last week).  Now it looks as if the Fed has reworked a few more lines and their song to the Wall Street firms goes a little something like this: if you can not fix your problem with the ability to borrow at 2.25%, your problem is not fixable.

This does not bode well for our short list.  Downey is more of a regional and will likely go down under its own weight of Losses and Lawsuits (the real “L” words).  Previous posts right here on BHB have fixed WaMu as the consensus “next big one” to fall.  Wachovia, in my opinion, is more of a question mark.  Straight-laced, tea-loving bank goes to a frat party where “everyone who is anyone” is drinking and the peer pressure just becomes too much.  This is a hangover for which they are ill prepared.

What does this mean for real estate and the mortgages that drive its cycles?  Here’s one thought: if you are a specialist in homes that do not play the Fannie/Freddie tune, you may want to create some more income streams and fast.  Any regional that has not already eviscerated it’s “improvisational jazz” lending will find themselves looking at a Wall Street that no longer believes anyone is above failing.  If recent history has taught us anything it is this: the big firms currently involved in lending are either asleep at the wheel or lying outright.  We watched Counrywide lie about their financials right up until the end.  We watched WaMu take hits twice their predictions.  Even Wachovia, a stalwart bank, was “surprised” by losses more Read more

July 12, 2008

Meano Geno

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

Feedback

“Okay,” I finally tell the other realtor after two solid minutes of back and forth phone chatter. “You’re right. I’m wrong. You win the argument. But guess what…? We’re still not buying the house.”

I try to be nice. I really do.  But sometimes my fellow property slingers just touch on that last raw nerve (I think we all know which one I’m referring to) and I say something mean.  One agent even called me “Meano Geno.”

“Thanks for the feedback, Meano Geno,” she snapped into the phone.

“You’re not very welcome,” I muttered back into the dial tone.

I’ve written about this before; listing agents who, within hours and sometimes even minutes of a showing, ring me up for feedback. And occasionally, they don’t even wait for everyone to leave the premises. One recently minted licensee strategically positioned himself in the foyer as my clients and I were scurrying to safety through the living room.  Blocking the front door with his presumptuousness, he posed to us, with the toothy despondence of a Ford sales trainee, the universal cliche of the day…

“What do we have to do to earn your business today, sir?” he asked, looking right past me and my client’s wife, going straight to the perceived decision maker. The husband looked at me. I looked at the wife. We paused for a moment of silence. I reached into my shirt pocket and took out the business card of an agent we met an hour earlier at a different showing; another panter.  (Pant”er\, n. One who pants. –Congreve.)

“Here…call me later for feedback,” I said as we all inched past him, close enough to catch a whiff of that new car smell cologne he was wearing, and slipped out the front door in single file, toward higher, more residentially improved ground.  Our new toothy friend stared down at the gold embossed Century 21 card for a few seconds then looked up at us before finally calling out toward the sidewalk…

“Thank you Barbara!”

Me too, me too

Yes, I know. I can be glib at times.  And the truth is, I am hardly ever without a half dozen or so of my own problematic listings that need to be sold yesterday. The difference between me (along with those like me–us, we…) and Read more

July 11, 2008

Google may not love BloodhoundBlog, but Technorati does

by

Suburban Phoenix Real Estate Broker

Author website

The Erics and I have been trying to figure out why Google has been holding out on us for coming on two months now. We tripped some trigger, obviously, but we can’t figure out which. The upshot is that we’re losing between 500 and 1,000 hard clicks we would have gotten every day — most all of them with a uselessly-high bounce rate. The other end of the stick is that, because we’re seeing nothing but serious visitors, our pageviews and time on site are way up.

And at the other other end of the stick, there is Technorati, the gift that keeps on giving. Our rank is 615 as I write this, as high as it has ever been. I don’t know how many more links we will need to make it into the Top 5,000 weblogs — but I would love to find out.

Technorati Tags: ,

July 11, 2008

I don’t need to show you any stinking badges! I’m a Zillow All Star!

by

Suburban Phoenix Real Estate Broker

Author website

About a month ago, Zillow started showing the number of contributions you have made to their data base in your profile. Up at the top you see the total number of contributions, and down below you get a running total of recent contributions.

It was obvious where they were headed, a de facto ranking system based on user contributions. In the co-branding information released earlier this week, Zillow made mention of “badges,” and one of the pix they released showed a badge in the co-branding area.

But… I didn’t actually dare to think that I would qualify as a Zillow All Star…

There’s a point at which it’s kind of funny — does it come with a secret decoder ring? But even so, I don’t hate the idea. Active Rain built something that might someday be a business on a completely brain-dead points system. There is no way to make a brain-dead contribution to Zillow. Everything matters.

And thrusting everything associated with the sale of real estate to the side, I love the idea of Zillow becoming fully-populated with data. There may come a day when the Zillow data base is the de facto museum of residential real estate. Hundreds of biz school PhD theses could emerge from that vast store of information.

In the mean time, your Zillow All Star badge is another co-branding trinket you can put on your weblog.

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July 11, 2008

Mortgage Market Week in Review – Fannie and Freddie

by

Mortgage Officer

Author website

Okay, here it is Friday afternoon and time to write the “Mortgage Market Week in Review.” You know how some newscasts warn you to tell the kids to go in the other room because what comes on next isn’t going to be pretty? Well, there aren’t any pictures but what’s happening in the financial world is not pretty right now. If you’re squeamish, you might want to wait to read this until after you’ve eaten. So here goes:

The battle that’s waging right has now settled quite firmly in the “credit crisis” camp. Here’s what’s been happening on that front:
Indymac Bank (who?) They have a good sized branch presence in Southern California but did a lot of mortgage lending on the wholesale side. They announced that they are effectively ending their writing of residential mortgages and buying residential mortgages from brokers (with the exception of retail staff at their branches in California). How does the song go, “Another one bites the dust?”
Lehman – this time it’s not a mortgage company, it’s another investment bank (remember Bear Stearns?). They’ve spent a lot of time this week trying to dispel rumors that they are in trouble and trying to show that they actually have enough capital (aka cash) to make things work. It sounds a lot like what was being said before Bear Stearns almost went under and almost brought the entire financial system down with them.
and now for the big issue of the week:

Fannie and Freddie: Yep, I put them in bold print and underlined because they are, in my mind, infinitely more important to the housing and mortgage market than what Indymac or Lehman are. So what’s up with Fannie and Freddie? Here’s an overview:
1. They are experiencing substantial losses. Somewhere in the neighborhood of $11 Billion (that’s $11,000,000,000) so far this year.
2. Many analysts are raising questions about whether they have enough capital to keep functioning the way they are.
3. They currently control over $5 Trillion Read more

July 11, 2008

Agent Shot By Angry 73-Year-Old Former Client

by

Associate Broker

Author website

As If This Crappy Real Estate Market Wasn’t Bad Enough

One of the potential hazards of working with the public – is that you have to work with the public.  Most of the time, it’s a great social experience – and you’ll find most agents to be outgoing and friendly. But working with the public can bring some unexpected – and unwelcome – surprises.

July 1st started out as any other day for Troy VanderStelt, a real estate agent with Nexes Realty in Muskegon, Michigan.  Robert Johnson, a former client whom VanderStelt represented in the purchase of his home, came to the Nexes Realty office where he was asked to wait for VanderStelt in a conference room. When VanderStelt arrived at the conference room, Johnson allegedly distracted VanderStelt with a portfolio of papers – then shot him point blank in the temple.

Apparently Johnson was getting ready to sell his home – and was advised by another agent that his home was not worth what he paid for it… so instead of considering the current real estate market conditions – Johnson decided he was going to take matters into his own hands.

Troy VanderStelt, 33, leaves behind a loving wife and four children… and a damaged community that feels the loss. This is the first murder this year in the county – and the first murder in 20 years in the town.

If you have a few extra dollars that you can spare, an educational trust has been set up for Troy’s children where you help this family in their time of need.

http://troyvanderstelt.com

If you would like to read more about this tragic story, try here:

http://www.zimbio.com/Troy+VanderStelt

July 11, 2008

5 Minutes On “Why Now Is A Good Time To Buy”

by

Mortgage Planner

Author website

Old-fashioned microphoneI gave a quick radio interview this week that may worth a listen.  It’s another take on “Why Now Is A Good Time To Buy” from the mortgage guy’s perspective.

Some of the highlights:

  • Getting a mortgage approval is likely to get tougher
  • FHA is increasing its fees and Fannie and Freddie are likely to follow
  • Why banks are turning down loans with 50 percent downpayments
  • How the election is playing into consumer confidence

Mortgage markets are a pendulum and, right now, we’re swinging to the rough side.  Give a listen, find your talking points, and help your clients understand what’s coming down the pipe.

(Image courtesy: davebytes.com)

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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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