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Goals? Plans? Tools? All Secondary — Teapots and Gyms As Teachers

So many of the lessons we’re taught growing up, or by life’s merciless classroom are not rocket science. First you learn to work hard, then you add work smart. Most of what we learn tends to follow that template. A brick at a time, right?

The teapot I’ve had for several years, and in which I boil water for my morning coffee, was lookin’ a lot older than it should. I wanted it to gleam the way it did the day I brought it home. So I found the elbow grease and broke out some serious scrubbin’ action. The results were, um, less than stellar. I tried all kinds of cleaners, different sponges and brushes, none of which produced. What to do?

Some time went by ’till I’d finished making coffee one morning and decided I’d spray one of the cleaners on the still hot teapot, then let it sit awhile. About an hour later I came in, used the rough side of a sponge, and quickly scrubbed and rinsed it. I repeated this twice daily for about three weeks. It’s shiny again! Who knew?

Seems the application of a mild solvent teamed with heat and time, followed by a little scrubbing — a couple times a day for 21 days or so, slowly but surely does the trick. It was an X brand cleaner, nothing special. The difference maker was showing up every day doing what had to be done. Again, not rocket science.

Like many of you, I belong to a gym, and workout frequently — usually six days a week. Due to tendon problems I’d let myself go, as I was pouting the last several years over the realization I was no longer a threat to Ahnold. (Talk about living in a fantasy world.) Then I met a guy who told me about a relatively different fitness approach, which wouldn’t, for the most part, mess with my tendons. It was anaerobic in nature, which in plain language means you’ll probably find yourself talkin’ with your long dead grandma more days than not.

I bought into the concept, and Read more

The Part You Give Away

Waits sings about The Part You Throw Away, and I did plenty of that once, but today, it’s about the part you give away.

For many reasons, I’ve been hesitant to discuss this except in the most general terms. It feels both invasive and self-indulgent to discuss my personal life here, but this post is about the part you give away.

I have a child who has been in and out of the hospital most of the summer, and she’s back there again. I’m not sure which is more strange- having a child in the hospital or, knowing exactly what to pack for the stay, and getting it packed in 20 minutes.

Things happen. We deal. And we deal. And we deal. And each time we deal, we grow stronger.

A mother becomes tempered steel, because she’s given away so much of herself that what is left, perhaps all that is left, is the very best. She’s dumped all the baggage, everything worthless, useless. What’s left is her essence.

I am now inside out. Stronger than I was two months ago, reduced and forged to my very essence.

I don’t want pity. I don’t want anything really, except to show you, and myself, that the part you give away is the part that creates the most strength and beauty in life.

 

Why should you enlist a buyer’s agent to help you buy a home? Because you’ll get a much better deal — even if you pay full price

This from my Arizona Republic real estate column (permanent link):

Are home-buyers best served by the vigilant efforts of an experienced buyer’s agent? Consider a transaction we have in play right now.

The buyers are a young couple, about to be married. They have about $10,000 in cash.

With a conventional loan, they could put 20% down on a dismal starter home. Or, with Private Mortgage Insurance, they could put 10% down on a nicer home.

But with an FHA loan, $10,000 is 3.5% down on a $285,000 home. We can argue the wisdom of making so small a down payment, but the FHA loan program is the path to homeownership for millions of Americans.

And $285,000 is too much house for our buyers. They found a nice lender-owned two-story home in the suburbs selling for $169,000. The down payment on that home would be $5,915. But the closing costs would probably run to another $5,000 — which comes to more money than they have.

They qualify for the $8,000 first-time home-buyer tax credit, but they won’t get that until they file their tax return. They also qualify for a state-funded grant program that will contribute up to 22% of the purchase price — but which can’t be used for the down payment or the closing costs.

Here’s the deal we put together. We offered $175,000, $6,000 over list price. In exchange, we asked the seller to contribute 4% of the full purchase price to defray the buyer’s closing costs.

The down payment will be $6,125, leaving the buyers $3,875 in cash to pay for the endless expenses of moving into a new home.

And there will be about $2,000 left over after the closing costs are paid. This will be used to buy down the interest rate. The buyers will end up with just over 25% equity in the property for a cash outlay of $6,125 — all at a very low monthly payment. And they’ll still have their $8,000 tax credit to look forward to.

This is the kind of outcome a skilled buyer’s agent can achieve.

 
Steal this book: So far I’ve written two columns on this theme. If Read more

Too Stupid To Do Business With?

I’m not that guy who loves forwarding funny emails, but my father-in-law sent one to me that I had to share because it could totally apply to our industry.

Either way, I thought it would make for a little Friday fun.

___________

This is a true phone call from the Word Perfect Help line which was transcribed from a recording monitoring the customer care department.

Needless to say the Help Desk employee was fired.

>>>

“ABC computer assistance; may I help you?”

“Yes, well, I’m having trouble with Word Perfect.”

“What sort of trouble?”

“Well, I was just typing along, and all of a sudden the words went
away.”

“Went away?”

“They disappeared.”

“Hmm. So what does your screen look like now?”

“Nothing.”

“Nothing?”

“It’s blank, it won’t accept anything when I type.”

“Are you still in Word Perfect, or did you get out?”

“How do I tell?”

“Can you see the C: prompt on the screen?”

“What’s a sea-prompt?”

“Never mind, can you move your cursor around the screen?”

“There isn’t any cursor: I told you, it won’t accept anything I type.”

“Does your monitor have a power indicator?”

“What’s a monitor?”

“It’s the thing with the screen on it that looks like a TV. Does it
have a little light that tells you when it’s on?”

“I don’t know.”

“Well, then look on the back of the monitor and find where the power
cord goes into it. Can you see that?”

“Yes, I think so.”

“Great. Follow the cord to the plug, and tell me if it’s plugged into
the wall.”

“Yes, it is.”

“When you were behind the monitor, did you notice that there were two
cables plugged into the back of it, not just one?”

“No.”

“Well, there are. I need you to look back there again and find the
other cable.”

“Okay, here it is.”

“Follow it for me, and tell me if it’s plugged securely into the back
of your computer.”

“I can’t reach.”

“Uh huh. Well, can you see if it is?”

“No.”

“Even if you maybe put your knee on something and lean way over?”

“Oh, it’s not because I don’t have the right angle — it’s because it’s
dark.”

“Dark?”

“Yes, the office light is off, and the only light I have is coming in
from the window.”

“Well, turn on the office light then.”

“I can’t.”

“No? Why not?”

“Because there’s a power Read more

What’s an “Exit Strategy” and why does it matter to the housing market?

I originally wrote this and posted it on my new site, Straight Talk About Mortgages – The Bigger Picture, but I’ve been urged to post it here as well.    So, I’m doing that.   Why have I set up another site?   It’s pretty simple…..

The financial and real estate world that we are in are much more complex than most of us have ever experienced in our life times.   As part of what I’m going to be rolling out soon which I’m calling, “Straight Talk Lending,” I believe that it’s important that people have the an understanding of the bigger issues that are and potentially will be influencing their business, lending and real estate decisions.

Typically once a week, I’m going to take an issue and dive into it on a much deeper level.   The opportunity to explore what it really means and how it’s going to impact the mortgage and real estate worlds is an exciting challenge and I hope it will be beneficial for many others as well.

Tom Vanderwell

Now for the post that I wrote:

What is an Exit Strategy? and Why Does It Matter to the Housing Market?

Thursday, July 23, 2009

By admin

Okay, anyone who has watched the news, or at least the financial news in the last week, especially after Bernanke’s testimony before both the Senate and the House has heard talk of an “Exit Strategy.”    I think that it would be well for us to take a few minutes and look at a couple of questions relating to that issue:

  • What is an “exit strategy?”
  • Why is an exit strategy necessary?
  • What does it mean for the housing and mortgage markets?
  • What should I do to prepare myself and/or my clients for what’s coming?

Before we get into those questions, here’s a clip from Bloomberg that talks about an exit strategy and what Bernanke might be thinking and planning.   This interview was done last week and was looking forward to Bernanke’s testimony this week.

Now, time to dig into the details of it.  What is an exit strategy? It’s pretty simple:

How in the world is the government going to get out of owning an Read more

Americans and Hard Times

Born in the summer of 1951, I’m one of those Boomers who’ve lived the transformation from simpler, more innocent times, to the hi-tech, everything’s gotta be in the fast lane, in your face 21st century. 1951? Possibly the best debut year in post WW II Major League Baseball, as both Mickey Mantle and Willie Mays broke in that year. I grew up watchin’ both of ’em in their primes, as they played at levels normal human beings could only daydream about.

America was a country in transition. The big war victoriously concluded, albeit at horrific cost, the Korean ‘Police Action’ about done, and Boomers were being born by the dozens everywhere you looked. So many paradigms were shifting all at once it seemed. The GI Bill was sending thousands of young men and women to college — folks who before the war would only have fantasized about affording a college degree and the life it promised. Suburbs entered our vocabulary. Home ownership begin to grow at prodigious velocity. Cars became a must have item.

It all sounds pretty cool, doesn’t it? It was, but it wasn’t all Channel No. 5 and Willie makin’ basket catches.

My memory really only goes back to around 1956, when I turned five, started kindergarten, and got to attend ‘regular kid’ Sunday school at Dad’s church. Of course, it wasn’t ’till much later in life that I realized why I had such a good time with the older kids — duh, I was the preacher’s kid, but wasn’t anything in the same zip code as a goody two-shoes. Yeah, even back then.

Ironically, like many in my generation I learned how Americans handled hard times by listening to my grandparents tell about the Great Depression. Once you’ve heard enough of those stories from folks who lived through it as teens and emerged as adults of tempered steel, you tend to shy away from self pity when hard times come knockin’ at your door — hard times hardly in the league about which they talked.

Grandma was the oldest of eight kids who were born and raised Read more

Search Engine Marketing is about Conversations – my (errr…) Manifesto

Somewhere near the top of the Cluetrain Manifesto, you will find the following statement:

These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can’t be faked.

These words were penned in same general timeframe (read: +/- a couple of years) that Sergey and Larry were cooking up a way to measure and evaluate those conversations for their relevance.

It was the late 1990’s and while the conversations, the communities that house those conversations and the algorithms that evaluate them have all increased in complexity, THE FOUNDATIONAL PRINCIPLE (in my opinion) HAS REMAINED RELATIVELY SIMPLE AND UNDEFILED.

I offer the following opinions for your consideration:

The goal is to BE an authority.

To do that is more than just knowing your stuff.

You must enter the arena of ideas.

You MUST write. (see above.)

You must converse. (markets are conversations…)

You must converse on other peoples sites as well as your own. And in their online communities as well. And even borrowing their authority where allowed if you do not yet have enough of your own. (If you only discuss your thoughts with yourself, then you by definition cannot be considered by others to be an authority.)

You must be authentic. (see above again.)

You must build and form solid lasting relationships that are reflected online as well as off. That includes respecting the writings of other and linking to ones that are authoritative. You cannot get long term without giving.

You must participate in the ongoing discussions of your industry AND MORE IMPORTANTLY LOCALLY – with people who can actually become clients. You need to be a respected voice both by colleagues and potential clients.

You need to find the biggest microphone available to reach out to the widest audience, not to overtly promote or argue, but to converse, engage, brand, market and build.

That may include many types of earned media.

My authority building approach over the past couple of years has morphed to coach and consult and teach folks to have conversations in places where Google and other search engines Read more

All is Well… (A Tin Foil Hat Production)

Quick check on the current status:

  • Goldman-Sachs reports RECORD earnings during the worst recession this nation has seen since the Great Depression.  Shortly after repaying $10 billion in tax-payer bailouts, Goldman trounced analysts’ estimates and continues to reap billions in profits trading in derivative markets.  (Actually, they trade in unregulated tertiary derivatives – that’s a derivative of a derivative of a derivative of something that actually exists, for those of you keeping score at home).  In the mean time, CIT – a company specializing in loans to small businesses and entrepreneurs – apparently serves no national interest to the Fed and has been told:  “Enough is enough.  No more bailouts”  (No soup for you!)  and is desperately searching for funding while on life support.  In related news, keys members of the Treasury, the Fed, the administration’s key economic advisers and the principles of Goldman-Sachs have all agreed on a new Read more

Consider a Seller-Paid Rate Buy-Down Rather Than Price Reduction

Listing agents, considering offers might advise their sellers to counter-offer with a mortgage rate buy-down strategy rather than to reduce the sales price.

rate-buydown

We like to help our agents with charts from our Mortgage Lens program.  The chart helps to illustrate the power of leverage, to both the seller and buyer, and gives us a shot at the loan business.

(N.B.- The chart shown doesn’t match the scenario below)

Here’s a scenario designed to meet both the buyers’ and sellers’ objectives:

The property is listed at $300,000; an offer comes in at $283,000.  One of the most important benefits of the lower price, to the buyer, is the lower mortgage payment.  An 80% loan on $300,000 (at 5.25%) would yield a P&I mortgage payment of $1,325.  Lowering the price to $283,000, would lower the loan to $224,000 and the payment to $1250/month.

Consider a mortgage rate buy-down as the counter-offer. For two discount points (about $4800), the seller could reduce the rate to 4.75% and the payment to $1251.  The buyer gets the payment he wants and the mortgage rate buy-down strategy saves the seller some $12,200.

Unchained melodies: Stumblin’ onto the heart of Tom Waits

I’ve been tormenting Teri Lussier with Leonard Cohen. We can plumb for a new pain threshold with a selection of classics from Tom Waits. I don’t love everything about the sentiments behind this music, but I will always give it my highest score for having ambition, for daring to be something different from all the other crap that flows through your ears without ever penetrating your mind. The art that matters most to me is about splendor, where much of Waits is about squalor — but at least it’s about something. Give it your attention and see if it is repaid.

With MLS listings available everywhere on the internet, why do you need a buyer’s agent?

This from my Arizona Republic real estate column (permanent link):

Here’s an intriguing question: Given that it’s so easy to search for homes on the internet, why do you need a buyer’s agent?

Face it, if you use the MLS search tool on my web site, you’re seeing exactly the same listings I see. And you know better than I ever could what you like and what you don’t like.

By now, the home search process is at best a partnership between the agent and the buyer. In some cases the buyer and I will work together to perfect our search criteria. But many buyers simply search the available inventory on their own, emailing me the MLS numbers of the homes they want to see.

So why do those buyers need a buyer’s agent?

Realtors hoarded the MLS data for so long that even they came to believe it was the source of their value to buyers. But this is very far from the truth.

You don’t need me to search for listings, although I’m happy to do that. And you don’t need me to open lock-boxes. You need a buyer’s agent to guide you through what is in fact an arcane and perilous process — potentially a financial disaster. You might not need me to find your next home, but you need me to make sure that you get it — or that you pass on it, if that is what is truly in your best interests.

A skilled buyer’s agent will write the kind of purchase contract that will prove surprising to you at every turn, with every term and condition tailored to achieve your best advantage. Your agent will supervise the inspection process and negotiate the optimal solution to the repair issues. Your agent will be prepared for every pitfall in the escrow process.

If you bought and sold houses every day, you could do all these things yourself. It’s because you don’t — and because the seller and the listing agent are looking to take advantage of your naivete at every turn — that you need a skilled buyer’s agent as your steadfast champion in Read more

A Sailor Jerry Moment

tattoo

The base anticipation that precedes any journey to a new destination is always more vivid for me than the denouement that accompanies the physical descent to earth.  With rare exception (perhaps Paris and maybe Vegas), the image I conjure up in my two dimensional mind beforehand always seems to fall somewhat short of the real 3-D deal.  On our first trip to Maui, for example,  my notion of grass huts  and Woody Wagons clamped with surfboards was quickly dashed the moment I spotted a Costco and a  Wal-Mart just steps from the arrival terminal. It was raining  ukuleles that day and the lone, Port Authority hula dancer was, how shall I say… Samoan? I was expecting something a bit more, I don’t know….svelte?; like the subject of one of  those Sailor Jerry tattoos I threaten to get stenciled across my chest every 120  lunar cycles or so—-pure 1950’s  South Pacific paradise-of-the-mind stuff. I think we  bought our own leis for 8 bucks each at the gift shop, rented a Taurus from Avis, and called it a day.

And it’s not just Hawaii. The same holds true for Jamaica—or as I like to call it, The Bangladesh of the Caribbean, with its human squalor, smelly ceviche,  and over-abundance of  muddy water. Even the Antiquarium in Boscoreale, Italy, beneath the shadows of a nearby looming housing project,  is sequestered by a string of barbed wire and discarded heroin needles. Not that I don’t enjoy myself abroad, mind you. I’m an enthusiastic traveler, to be sure. The foreign landscapes that ultimately unfold just never fully mesh with the spatial images dancing around in my head before touch down.

Alaska was pretty spot-on but to be honest, I wasn’t expecting  too much from that particular latitude. And while I did not get a tattoo while docked in the port of  Juneau,  I was presented with a  shiny new Rolex Datejust in our cruise ship cabin later that evening.  Since I’m clearly never retiring from anywhere,  my wife decided to give me my ceremonial timepiece a few decades early— for my 50th birthday.  Just so you know, Read more

Now Could Be A Good Time To Buy A Top-Notch Home

Some Well-Maintained & Updated Homes Are Better Values Than Foreclosures

When all of the comparable homes in an area are foreclosures and short sales, you could get a really good deal on the nicer, well-maintained and updated homes.

A broker recently called me regarding one of her listings. It’s a super nice property that’s been upgraded to the hilt – but every single comp within five miles that has sold in the last twelve months has been a foreclosure or short sale. Her problem was not that her listing wouldn’t sell – but that it might not appraise.

In certain areas, finding good comps for nice homes has become quite difficult – and depending upon the appraiser, you might not get the appraised value that is specified in the contract. Obviously, this is more of a problem for the sellers than for buyers.

When home prices are rising, homes that are not in good condition often sell for more than they should – and will appraise for more than they should, as well. The nicer homes tend to pull the values up. But in a declining market, homes that are in need of repair – or a quick sale – tend to pull the values down… therefore the sellers of nicer homes find it difficult to obtain top dollar – or a higher appraised value – for their properties.

So while you’re out trying to find the best foreclosure or short sale for your clients – take a look at some of the nicer listings. If you find a motivated seller, the best deal just might not involve a foreclosing lender.

For those of you following the lurid drama of our lives…

We bought our house out of hock today. All it took was a tiny little pawn ticket and a great big check. Our small feat of redemption was actually paid for by June’s receipts, but I got myself into this mess by surfing the payables, and I got myself out the same way. We retired the outstanding debt eleven days early, and it’s been a while since we’ve been that early on anything.

That notwithstanding, we are very far from being out of debt. But June was great, July is good, and August and September promise to be two of our best months ever. If the fourth quarter lives up to its promise, 2009 could end up being our best year so far. By this time next year, we could owe nothing but the mortgage — which is good, because our credit will take a while to recover from these past three years.

There is none of this that is anybody’s business, actually — except that people choose to affect to make my business their own because of who I am and how I behave. That’s fine, even if it sometimes seems to me to be simultaneously voyeuristic and masturbatory. I have a job that pays pretty well when it pays anything at all. When we got slow three years ago, we made a very big bet on internet marketing, which we were already pretty good at back then. By now we kill, and we’re getting better by leaps and bounds every single day. If you think our financial troubles prove our marketing ideas wrong — you just keep thinking that way. By the time you understand what it is we’re doing, we will have leapt into a completely different orbit.

Meanwhile: For all the good-hearted folks who wished us well in all of this: Thank you. I’d rather not have done this in public, but I couldn’t have picked a nicer bunch of people to do it with.

Now switch off this insipid soap opera and go do something productive with your life!