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June 10, 2009

What If The Real Estate INDUSTRY Didn’t Control The Real Estate Market?

by

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

Author website

I have the heart of a trader.  If you read Mortgage Rates Report, you know that I’m fascinated with the forces that make markets move up, down or not at all.  One of the things I’ve noticed, since I started writing on Bloodhound Blog, is that the real estate industry is:

That lopsided opacity was the real reason for the eventual implosion of the real estate market. We hid market information from the buyers while the Baby Boomers moved through the home ownership life cycle.   A huge generation, yearning for “The American Dream of Homeownership”, assured strong demand for houses in the post-World War Two housing boom.  Banks were all too happy to hand out money, even when forced to lend by the Government.  Lew Ranieri saw a 25-year boom ahead and found a way to create a shadow banking system that could “bury bad loans”.  Any agent dealing with a short sale understands the problem of buried loans because she’s heard:

“Well, we aren’t quite sure WHO owns this loan”

Kind of sounds like the forensic audit of Bernie Madoff’s books, doesn’t it?  That’s what you hear when the jig is up on a Ponzi scheme:  confusion, wagon-circling, and practiced deflection.  It eventually catches up with the schemers.  I’m firmly in the camp that no matter how many incentives we offer to stave off the inevitable forced sales, or to provide a middle-class tax cut, or to bribe the next generation of buyers, the simple fact remains that we have more houses than we need in this country…and the people just ain’t buying like they used to.

It’s partly the National Association of REALTORs fault.  They’ve hoarded supply data and intentionally suppressed demand data since inception.  Suppressing the demand data resulted in a valuation system that relied on false positives (comparable sales) as a standard that contributed to the Ponzi-like atmosphere in the real estate market.   Think about it.  When we ask agents about rising demand, they point to dwindling supply as a measure of it.  Read more

June 10, 2009

Green or Beige?

by

Mortgage Officer

Author website

This afternoon, the Federal Reserve released their Beige Book.  What’s a Beige Book?  It’s their report based on observations and comments from people inside the business world on the state of the economy.    I’m going to walk through some “highlights” and “lowlights” of what’s happening.   My comments are in bold and italics……

“Reports from the twelve Federal Reserve District Banks indicate that economic conditions remained weak or deteriorated further during the period from mid-April through May.”

No surprise there, at least not for me.  So, if conditions remain weak or deteriorated, then where are the gree shoots of recovery that people are talking about?

“However, five of the Districts noted that the downward trend is showing signs of moderating.”

So, let’s think about that.   5 out of 12, that’s 41% show that the pace of downward trend is slowing down.  Is that a good thing?   Well, let’s look at a couple of other numbers.   According to this, 100% of the districts show that they are slowing down.  59% of them are slowing down at the same or faster paces than they were previously.

“Manufacturing declined or remained weak in most Districts.”  

Given the shutdowns in the auto industry and the related industries, this certainly isn’t a surprise.    What’s going to be interesting is what that shows as Chrysler (and hopefully GM) get back to work after their “furloughs.”

“Nonfinancial Services – Districts reporting on nonfinancial services indicated that for the most part activity continued to decline………In contrast, San Francisco reported a substantial pickup in real estate services such as title insurance due to an increase in home refinancing.

Ooohhh, that illustrates the trouble that we’re in.  One of the biggest “improvements” in the non-financial services is the title insurance industry because of mortgage refinancing.   Guess what’s not going to last very long due to rising rates…..

Consumer Spending and Tourism
Consumer spending remained soft as households focused on purchasing less expensive necessities……   Several Districts reported that discounters have seen their sales increase, while purchases of luxury goods continued to weaken. Respondents from Boston, Philadelphia, Cleveland, Atlanta, St. Louis, Kansas City, and Dallas expect soft consumer sales to Read more

June 10, 2009

If You Will Not Assist Us With the Shrubbery, We Will Be Forced To Say “MORTGAGE!!”

by

Database Marketing Expert

Author website

Oh, what sad times are these when loan originators can say such words as “Free” and “Mortgage” at will to their contact database?!?!

For if thou doest seek thine Holy Grail, or at least a decent shrubber, ye shalt best consult thy Book of Armaments here before lobbing thine Holy Hand Grenade of Drip Email upon thy database.

In Addition to Nee, Pang and Nuuuwon, Ye Shalt Also Avoid:

Okay, enough of the silly talk.  I’ve got actual work to do.

1)  Free + ________: Permission Marketing proponents love giving free stuff away.  Make it a point to avoid this evil word your email subject lines.

2)  Mortgage: Perhaps the evilest word of them all!  How do you avoid this one if you’re a loan originator?  I guess you could substitute nuuuwon.  Or you can just make it a habit to check your subject lines for keyword spam infractions before sending.  Either will do.

3)  Low Interest Rates: Not that we have a problem with that right now.  So I’m announcing a temporary hunger strike until rates drop back below 5%.  Or at least until dinner.

carrot-top-steroids1Hey, you’ve been a great audience.  Now I’ll turn the stage over to not a good friend of mine who definitely has not been doing any steroids or performance enhancing drugs.  His jokes sucked before he looked like this too.

June 9, 2009

Don’t Look At The Explosion, Just Focus On Your Mission.

by

Instigator, anthill kicker.

Author website

One of my favorite Hollywood staples is the bad ass hero that blows something up and doesn’t need to look back.  He’s already won the battle, and he’s done his damage, and he’s walking away towards the next thing on his todo list.  Jerry Bruckheimer seems to use this 3 times a minute in his flicks.    I think of Jack Bauer and not caring, the explosion happened, so what, moooooving along now.

The only thing that matters is the mission. The explosion is in the past. Cool guys never look.  What you do next to accomplish your mission is the now. So many times I’ve either:

  1. Admired my past successes.  (Hey, pin a trophy on me, I sold a house)
  2. Looked at the things I screwed up. (I lost a customer today)
  3. Been distracted with red flashy nonsense.  (Oooh, what will Inman do next)

All of it’s rubbish.  Our job is simply to lead by example.  Move more product.  Get them to sign on the line that is dotted.   Do it honestly.  Do it to the best of our ability and know that that will always improve.  Know that the job we do today isn’t gonna be as good as the job we can to tomorrow.  Do better.  Don’t sweat the screw ups, and don’t laud the victories.

Don’t look at explosions.

I see politics as an explosion.  Yes.  Obama wants our money.  SHOCKER.  So did Bush, who was all to eager to fire up the bailoutmobile.  The government is a parasite.  TELL ME SOMETHING I DON’T KNOW.   We can pour energy and tears into politics.  Or, we can look at the landscape, get into an OODA pattern, and figure out…what to do next.  We cannot moan ineffectually about the loss of our freedoms, blaming Obama on our faulures.  I mean, we CAN, but dude, setting a good example amidst the chaos.

Learning the laws first isn’t whining about them.  Creating a business that can survive HVCC or whatever BS the power drunk Ivy Leaguers can do…and not whining that we’re not surviving.   THATS the play of the day.

Sure things changed, and more obstacles were thrown Read more

June 9, 2009

Those Who Can Not Remember The Past Are Condemned To Repeat It

by

Associate Broker

Author website

Add This 1934 Cartoon To The “There’s Nothing New Under The Sun” List:

Click for larger image

Click image for larger version

If you think the housing market is bad now – just wait until these economic policies drive interest rates up… and don’t kid yourself – they’re heading up NOW.

George Santayana knew what he was talking about.

It’s a good time to buy real estate – while you can afford it.

June 8, 2009

The mortgage situation for nonresident buyers

by

International Tax Lawyer

Author website

Tom Vanderwall chimes in here on BHB regularly and helpfully about the mortgage situation. I look forward to his interpretation of the spins we get from DJ Bernake and crew.

I handle foreign real estate transactions and here’s what I’m seeing right now. What follows is all buyer-side stuff, because of course they’re the ones looking for financing.

War story. (In progress).

I have a buyer from the Middle East. Extremely solid person, extremely *ahem* solid balance sheet. Wants to buy a house in the $5 million range. No one that I have found (and I have tried mortgage brokers from Florida to California) can put an offer on the table for a sane mortgage. Even at 50% loan-to-value.

He banks with one of the brand name international banks and ordinarily you’d think that they would do something for him, if only to protect their customer relationship. (Considering the other business the bank gets from him and the family business, you’d think . . . .) But no.

So we keep looking. Most likely solution is either an all cash purchase or my buyer will do a margin loan against an investment account outside the U.S.

War story. (In progress).

Family from outside the U.S. is busily buying up rental properties by the handful somewhere in a State that isn’t touched by ocean. Let’s just leave it vague like that. Putting in enough money so the properties will be cash flow positive. Can’t get a single lender interested in taking a look at the portfolio of properties. At any “reasonably close to market” terms.

Again they will leverage offshore assets, borrowing short term. They’re buying all cash, basically lending to themselves (via a nifty “Bank of Me” structure I set up for them), and hoping that in 6 – 12 months they can find a bank that is willing to look at lending against 25 properties all cash flow positive.

War story. (In progress).

Right now. East Coast. Condo purchase, around a quarter million. Same thing.

War story. (In progress). Read more

June 7, 2009

Name of My New Band: Best Efforts Are For Cowards

by

Real Estate Investments Broker

Author website

It wasn’t until I was past 30 when it came to me, much like the cliché bolt of lightning. As is the human condition, I sometimes allowed circumstances to dictate my thoughts and actions, instead of rational thought dictating even more valuable thought, often followed by ever increasing productive action. Once I realized this, the lightning struck.

It’s been put a myriad ways, but my favorite has always been the one aimed for the mind’s jugular.

Simply put — those who endeavor to generate any result, immeasurably small or life changing, with the attitude based upon trying their best — are cowards, pure and simple. Sound harsh? Who among us doesn’t see examples of their lives in that truth?

In my recent post about handling change and adversity I alluded to this axiom. In essence it says — There are those who try, and there are those that do. In my experience, there’s no middle ground I’ve ever witnessed. The so-called ‘journey to success’ hymn is nice balm for those who never really succeed, but succeeding is a fairly easy concept to recognize when we see it. Succeeding clearly involves a journey, but when there’s consistently no ‘Point B’ to the infinite journeys on which one embarks, success hasn’t been attained. The journey as balm is nothing if not a substitute for actually getting something done.

“I’m gonna run a marathon.” Yeah, right. Can’t tell you how many times it took me ’till after the 20th mile to pass some 60-something year old guy who never once tried to run a marathon in his life. He just ran it. Come to think of it, one of my favorite running memories is coming in ‘3rd woman’ in my age group in a 20K race. 🙂 Go figure.

I’ll quote someone who stared right through me as he said: “Don’t make excuses Brown, make good.” Lest anyone miss the deadly heart-piercing arrow in that admonishment, I’ll translate.

Triers make excuses while Doers succeed. Still don’t quite see it? Life doesn’t reward those who try. Real estate offices are almost completely populated with triers. Ouch!

Possibly Read more

June 7, 2009

Is Rice A Roni Really a San Francisco Treat?

by

Realtor, Rabble-Rouser

Author website

Just think about my disappointment when I entered a prominent San Francisco eatery seeking the most coveted food stuff, only to find it was neither a specialty nor an item on the menu!

Yet again, I was bamboozled.

What ever happened to truth in advertising?

Perhaps my San Francisco mishap taught me to be perhaps a bit less gullible.  When I see a claim, even a statement of fact, I figure it might be important to do some more digging.

Let’s take NAR’s recent press release regarding Pending Home sales, up 6.7% from a year ago last year.  Sounds encouraging – and let’s face it, we all could use encouraging news.  But what does the increase really mean?

Let’s take a look at the data behind the aggregated index of 6.7% that NAR published:

NAR Pending Home Sales Index

NAR Pending Home Sales Index

While 6.7% sounded encouraging, I am not necessarily convinced that it means we are anywhere near out of the woods.  Why?  Because if you look at the seasonally adjusted for the West and South, areas that have the highest concentrations of inventory and loss of value, the numbers don’t seem to be telling the same encouraging news.

Here’s why.  Take Las Vegas for example:

Single Family Home Inventory in Las Vegas per Altos Research

Single Family Home Inventory in Las Vegas per Altos Research

There are about 15,661 properties on the market in LAS VEGAS as of June 07, 2009.

How about Phoenix:

Single Family Home Inventory in Pheonix per Altos Research

Single Family Home Inventory in Pheonix per Altos Research

There are about 7,816 properties on the market in PHOENIX as of June 07, 2009.  Definitely making progress, but still a fairly long way to go.

What about Miami?

Single Family Home Inventory in Miami per Altos Research

Single Family Home Inventory in Miami per Altos Research

There are about 8,450 properties on the Read more

June 7, 2009

Mr Inman, less advertorial content please!

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

Ok…I have tried to stay off of this topic for a LONG time, but I keep seeing stuff that brings me back. Brad, errr..Mr. Inman? I have never met you. I know you have a lot of power in the real estate news sector, because InmanNews reaches many agents and brokers.

Here’s the deal. I see SO much advertorial content and self promotional crap in the real estate space that it is hard to keep up with it all. Then I see this little gem. Seriously…please go look at it before reading further.

Even in the comments people are chiding Joel a bit for it being an advertisement. So Joel does have a disclosure in there saying that TurnHere is owned by Inman.

Then I went to WHOIS and found out that this blog Future Of Real Estate Marketing is OWNED BY INMAN.

Anyone want to tell me that this blatant self promo was NOT an advertisement? I really am willing to listen if someone wants to make that case.

Joel, you said that how this came off was 100% your bad. Ummm, can you argue that you have 100% editorial control when it isn’t your site? Methinks not. Since the site is owned by Brad Inman, my request is to him. Please tone down the advertorial content. Also, a more complete disclosure as to who owns the site would be far more transparent. If this was totally Joel’s bad as he says in the comments, perhaps some editorial control (on a site you OWN) is in order, but I really don’t think that was the case here.

I hope I am wrong.

Responsibility for content lies with the owner of the domain.

Thoughts?

June 7, 2009

Unchained Melody at Heaven’s Gate

by

Rust Belt Realtor

Author website

I’m spending time in a hospital as the mother of a patient, but this is not about transparency. You can send a good thought or well-wish in our direction, and I will truly appreciate it, but I’m not here to petition for sympathy or prayers, and I’m not here to share my personal life.

So much of my life includes a musical soundtrack of some sort or another and I’m always selfishly sharing them here mostly because I often struggle with words- music can say what I cannot, so I’m posting a remarkable clip from a movie that is about property rights, but also about independence and passion for life- it’s very appropriate for this real estate blog. Bloodhounds know about living life with passion: Purposeful life as defined only by our independent selves, and I find that life in a children’s hospital is very similar: Raw, painful, staggeringly beautiful, and always remarkable.

Today is Sunday, a day of the week that might have you contemplating higher thoughts, or the meaning of life, or might have you preparing to conduct serious business. Today, for four minutes, a break from real estate, a respite from the hard times in life, to give yourself over to an unbridled celebratory lust for life.

June 6, 2009

Are Our Customers EnTitle-ed To Better Fees?

by

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

Author website

Admit it.  You’ve wondered if there was a lot of fat in title policies, didn’t you?  I mean, how many claims does a title company REALLY get in this “nobody trusts anyone” market?  We order a title commitment and the title company:

  • performs a detailed search of the property’s chain-of-title
  • mitigates most any risk
  • insures the title and earns an insurance premium.

One would think that this highly-regulated, extremely commoditized business would file premiums within cents of each other, right?

I received a direct mail piece from EnTitle Direct today.  They are a national title insurance company (the old Guardian Title):

ENTITLE DIRECT is the only title insurance company that markets and sells directly to consumers at 35% savings. We combine 30 years of experience and stability with a consumer-friendly approach and provide you with significant savings on title insurance, the ability to control your own closing, and transparency throughout the closing process.

I was curious so I got a quote for a $400,000 refinance transaction:

  • $500.00 escrow fee (about $100 more than the local folks)
  • $357.50 for a title policy (endorsements not included)

I ran the CLTA Title Wizard to comparison shop.  Local escrow fees are about $400.00 so the locals are winning, at this point.  Let’s see what the locals offer for title policy premiums:

  • Commonwealth $1, 045
  • Ticor $1,045
  • Placer $675
  • Orange Coast $625
  • Stewart $675
  • Provident $800
  • Old Republic $800
  • Chicago $1045
  • FATCO at $605

What am I missing here, gang?

I think someone may have just figured this game out.  Any comments or experiences with EnTitle Direct are appreciated.

PS:  EnTitle Direct claims to be a member of the Read more

June 6, 2009

Why Real Estate Agents Should Stop Playing Loan Officer

by

Las Vegas Mortgage Blogger

Author website

I wasted a few hours this week cleaning up the messes that real estate agents created for their first time home-buyers.

End result – loan officer still looks like a jerk, but now the borrowers are really confused about who to trust.

I’m going to combine about five separate scenarios and conversations that I had this week into one rant just to get my point across.

First of all, the mortgage industry is changing very rapidly.

True  mortgage professionals are paying attention to things like:  HVCC, concerns of HR1728, Mortgage Insurance companies changing their guidelines, Fannie’s new condo rules, FHA fico score requirements, Loan Level Price Adjustments, new FHA appraisal guidelines, adjusting interest rates in an unstable market, and a constant stream of mortgage Twitter chatter that only adds to the noise.

For those of us primarily working with FHA First-Time Home Buyers, we’re also keeping tabs on the $8000 Tax Credit being used as a down payment, as well as how long the Fed plans on purchasing Mortgage Backed Securities to keep rates lower.

Just as real estate agents are learning about short sales, bank owned properties, and transparency, mortgage originators have a full-time job keeping up with industry news so that we can lead our clients down the right path.

I don’t think that I need to throw another 9 links in this post to demonstrate that there are a lot of things real estate agents and loan officers need to understand before we can express with confidence to our clients that we truly have a handle on their unique scenario.

Imagine what the effect would be on a first-time home buyer if puked all of this overwhelming information on a them in the first 10 minutes of the initial phone call?

I had to do this all week just so that the agents and borrowers would understand why I wasn’t able to issue a quick pre-approval letter and GFE simply based on a 15 min phone call and credit score.

We’re in a tough market, and I totally empathize with the hard working agents who are competing for new business by giving the highest levels of service possible.

However, Read more

June 5, 2009

Swiss Accounts, Condo Developers, and an Open Door

by

International Tax Lawyer

Author website

Americans who hide money offshore have a almost mystical belief in foreign bank secrecy laws. Whether it is Switzerland or the Carribean they believe that these countries’ laws and bankers will protect them from the U.S. government’s investigators and tax collectors.

Secrecy has crumbled. You wouldn’t know it from the people who come to my office looking for advice. They have faith that their bearer shares and banking arrangements will stay invisible to the IRS. They believe that the U.S. government is pursuing the Swiss bank UBS. They don’t have their money in UBS, so they think they are safe.

There is no such thing as secrecy. The likelihood that the IRS will find Americans with hidden offshore bank accounts increases with each passing day. Let’s look at recent history.

In early 2008 it was revealed that the German government had paid an informant 4 million euros for stolen information about “safe” accounts in Liechtenstein. This information was passed on to other governments. Including the USA. One hundred U.S. taxpayers were caught in this net…so far. Bribery by the German government put U.S. taxpayers in the cross-hairs of criminal charges.

What about resentful ex-employees doing dumb things? Rudolf Elmer worked at Bank Julius Baer, a prominent Swiss bank. He lost his job. The normal legal back and forth followed. Except that in a fit of pique Mr. Elmer released hundreds of internal bank documents on the internet. Including the names of bank customers.

Now the elephant is dancing. The U.S. Department of Justice is pursuing UBS, trying to get UBS to turn over the names of as many as 50,000 names of U.S. account holders. A UBS executive was arrested, pleaded guilty, and is cooperating with the U.S. government.

I’m guessing that more than a few of BHB’s readers have clients with offshore bank accounts. Asset protection trusts. Etc. People whose tax strategy is “How will the IRS ever find out?” Especially condominium developers. 🙂 As sure as night follows day, construction defect litigation by homeowners associations will follow the successful completion of that condominium project.  And Read more

June 5, 2009

Please Help Me Welcome NAMB President Marc Savitt To Web 2.0 – Action Step Requested

by

Database Marketing Expert

Author website

I wrote an article at Lenderama yesterday.  Here’s the deal:

I’m a card carrying NAMB Basher and have been for several years.  And I’m hardly alone.  The other day, I had a 10-minute phone conversation with NAMB President Marc Savitt.  The conversation inspired me to write the article you’ll find on Lenderama.

If you’d be so kind to read that article, and if compelled, please leave a comment letting Mr. Savitt know that if he engages us, we’ll respond – and above all that you appreciate his efforts.  Now, more than ever, the mortgage industry needs to come together as one.  Brokers, bankers, supply chain… all of us.

Please help me give Marc Savitt a warm welcome to the world of Web 2.0.  Thanks in advance.

June 5, 2009

“Search Overload” = Toenail Fungus

by

IDX Search Entrepreneur

Author website

Bing! I’ve decided that following big pharma’s TV marketing playbook to launch a search engine that is supposed to compete with Google is an idea so dumb, it could only have been approved by whoever thought that Jerry Seinfeld and Bill Gates walking around a mall would make people think Vista doesn’t suck.

Apparently, there is a condition called “search overload”. I didn’t know it existed until I saw the Bing commercial last night, but now I think I might have it.

According to the commercial, symptoms of “search overload” include feelings of being blind-sided by what’s happened to the economy, high gas prices,  and anger that Google didn’t tell me that housing prices don’t always go up.

I feel compelled to ask my doctor about Bing.

You see, unlike regular search engines, Bing doesn’t just give you what you ask for, it helps you to make decisions – it’s a “decision engine” (uh-huh)  and using it to make decisions for you makes your life better.

(Bing isn’t for everyone: People who know how to use a search engine may actually feel themselves getting dumber while using Bing.

If you thought the Bing ad was the funniest thing on Conan O’Brien’s Late Show last night, be sure to mention that to your Doctor when you ask about Bing.

If blaming Google for the economic collapse makes sense to you for more than 4 hours, proceed to the nearest Verizon store and purchase a Windows Mobile device.)

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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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