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May 15, 2009

Skinning elephants: The lifelong salutary benefits of negotiating your compensation with your buyers

by

Suburban Phoenix Real Estate Broker

Author website

Here’s how Mike Elsberry, my home inspector, charges for an inspection for one of my clients:

  • A sliding-scale price based on square footage
  • A sliding scale price based on the age of the home

Bigger homes take somewhat longer and entail somewhat more work to inspect than smaller homes. Older homes may have more wear and tear, also resulting in a longer, more arduous inspection. Mike has a little pricing grid, and taking those two numbers, square footage and age of the home, he can plot the precise price point on his matrix.

You could argue that he could come up with a more predictive pricing scheme, but the genius of his system is obvious: It’s reasonably objective, making it hard to argue with, and Mike can price a job from his cell phone, while driving, with his mouth half full of burrito. Lo-tech don’t mean no-tech.

Okayfine. Now let’s sell a couple of houses.

I’m about to do a Facebook deal with an old friend from high school. I will be representing her son in the purchase of the condominium he will live in while attending graduate school. Approximate purchase price: $80,000. Gross commission to me: $2,400.

I’m also about to help a very nice couple buy a small hacienda in Paradise Valley, one of the wealthiest towns, per head, in the United States. Approximate purchase price: $800,000. Gross commission to me: $24,000.

Obviously the differences between the two transactions are myriad, but here’s the one that matters most: The $80,000 condo will almost certainly take a lot more of my time than the $800,000 hacienda. I’ll get paid maybe $50 an hour for the condo, and possibly as much as $1,500 an hour for the hacienda.

How does that make sense?

Home inspector Mike Elsberry’s pricing scale makes sense, even if you could argue that something more complicated might make even more sense. The compensation buyer’s agents receive bears no relation to the time and effort expended. As the Freakonomics boys point out, the incentives are misaligned, as well: I get paid more if my buyers pay more, even though their best interest is to pay less. But even Read more

May 15, 2009

The $1392.50 Appraisal Fee or How the Home Valuation Code of Conduct Rewards Inefficiency At the Expense of the Consumer

by

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

Author website

Have you heard of the Home Valuation Code of Conduct?  New York Attorney General Cuomo forced Fannie Mae and Freddie Mac to adopt the measure, in what can only be described as a Machiavellian scheme.  Essentially, mortgage brokers are forbidden from direct contact with residential appraisers; all appraisals for agency loans (not FHA or VA) must be ordered by a lender-approved appraisal management company.

What’s an appraisal management company? Exactly.

The intended result is to keep all loan production personnel (broker or banker) from undue influence on the independent appraisers hired to perform the valuation report.  You see, rather than to cease doing business with rogue mortgage brokers or unscrupulous lenders, a minority of appraisers felt it necessary to encourage Attorney General Cuomo to “put the arm” on the lending industry to protect their past ethical trangressions.

Wholesale lenders, realizing that the appraisal would now be THEIR property, clamored to the idea.  This was just another chance to restrict the value proposition of mortgage brokers (portability) and lock up some business.

Big Banks 1 Consumers 0

Wait!  That’s not all!  If the assigned appraiser is backed up, tough crap!

You see where I’m going with this?  The lender pipelines are ALREADY clogged up because the volume has spiked and the employee count is down.  Soon, we’ll be adding loan applications from the Obama refinance/loan modification plan and a further drain will be put on the overloaded appraisers.  Can I choose to deal with appraisers who won’t do refinance transactions?  Nuthin’ doin.  Ya takes what ya gets under HVCC.

Big Banks 2 Consumers 0

Still, I persist like Mr. Magoo negotiates a maze.  I took a loan application last week, checked Zillow for the Zestimate, closed my eyes and ordered the appraisal from the selected lender.  I locked the rate for thirty days and uploaded the loan submission.  I expected 10 business days in underwriting; surely, the appraisal would be uploaded within a week.

As Meatloaf might say “Stop Right There!  Before we go any further…”

I received an e-mail from the lender instructing me to immediately extend the rate lock for another 15 days…at a .25% fee.  For this $417,000 Read more

May 14, 2009

What’s in a BBB Rating…

by

The Real Estate Group, Virginia Beach and Chesapeake VA

Author website

Earlier today, Louis from HomeGain posted about them having an A-plus BBB rating. I will buy that. I think HomeGain has come a long way on his watch and think they have earned it. But since I had not looked at BBB ratings in a LONG time, I was intrigued enough to check out some others in the Real Estate Sector:

The Brokerage where I work: A plus (woot! see you and raise you Louis! 😉 )
Most of our local competitors: A to A plus (well done!)
RE/MAX Intl: A
RedFin: A minus (kudos, Mr. Kelmann…an accomplishment in a tough industry.
Zillow: Z for yourself. Yikes. But Zestimates can be a tough thing to keep people happy with, no? And that can affect your Zcore.
HouseValues: C

BBB ratings are supposed to be about a business keeping it’s commitments to its customers and living up to its agreements. I would also go so far as to say that it involves customer service. Going the extra mile to take care of people is an important piece of that.

In the end it is not about a rating but rather a commitment to do the right thing…thoughts?

I’d invite you to drop by the BBB.org and see how you or your brokerage or business rate! Ratings are not everything, but the idea that the better we serve our customers and their needs, the better we will be is a solid principle in my opinion.

May 14, 2009

NAR Backs Off Labeling Google a “Scraper”

by

IDX Search Entrepreneur

Author website

I’m basing this on a flurry of tweets out of NAR Mid Year, but it looks like the NAR rules committee came to its senses.

I await the actual verbiage. It will be interesting to see what twisted hedge they come up with to distinguish an “indexer” from a “scraper”.

Still, the question remains: Was the original decision to back MIBOR a deliberate attempt to see if they could rally the Luddites to hobble IDX?

Or was it just plain vanilla cluelessness?

Either way, it begs the even bigger question that was asked hundreds of times on blog posts over the last week: What are NAR members paying for?

UPDATE: Not so fast. See Malok’s comment below. It’s not a done deal, apparently, and the twits are silent.

May 14, 2009

More Stuff On CRM: Know In Advance What You Want to Do.

by

Instigator, anthill kicker.

Author website

You can use Google Docs as a more effective CRM than most people do.  I know, for a while, I did. It’s better than what most CRMs do which is to hide you from your people.

Complexity is not your friend.  Also, having permanent storage is not that useful either, unless you’re in the business of collecting names.   FACEBOOK can more or less be permanent storage for your longterm loosely tied contacts.  Anyway.

Every time I add someone in, one of a few things needs to happen:

  1. I need to get more data on the guy TO call him.
  2. I need to call him/her.
  3. I need to assign an activity series to him.

These are separate events.  I can’t be doing all of them at once, so I seperate out the #1 part of the activity series.  I do my ‘who the hell am I gonna call’ research basically a couple of times a week.  I start with:

  1. People that Add me on twitter (I’m about 400 behind right now)
  2. People that I find in a couple of LinkedIn Groups that add me.
  3. People with truly shitty websites with no title tags, and a flash intro.

Because I practice a half assed version of GTD, I’ve got the ubiquitous capture habit down.  (Mac users: K-notes plus Dashboard is a winning combo for ubiquitous capture.  PC users:  My friend Amy from Twitter wrote a script called CunningNote)  So these people all get brought into something.  For me, it’s a sheet in a spreadsheet.  I put name, email, where I found ’em, twitter handle, phone number, industry and website.    Alt-Tab and I’m in, Alt-Tab and I’m out.  Takes 10 seconds and it’s good mental exercise to try and get it right without going back to look. I do this when my mental energy is sapped.  This is something that I intend to eventually have someone else do, but I need my revenue to triple before that can happen.

So, the next thing I do is make sure I have an inventory of about 150 people to call at the moment.  That way I never procrastinate calling and start doing ‘research.’  I batch ’em into Read more

May 14, 2009

How we say_What we say_Is important

by

Realtor, Renaissance Man

Author website

This is actually a post about transparency, but as you’ll see, I am not a big fan of the ‘word’ itself. The idea of belaboring a word all of you seem to take for granted came about as I was talking with Scott Schang a few days ago. We were just enjoying each other’s company, doing real work, a lender and real estate guy talking about the industry, our own ideas, sharing and laughing, scribbling notes and taking stock of the ideas that just never seemed to quit coming.

For me transparency is about saying what you want to say, showing what you want to show, sharing what you want to share, and doing it in a manner and method that is most likely to allow the reader or listener to understand. In order for that to happen the writer or creater of thoughts and ideas, facts or fictions, must decide up front HOW they will present the information.

Let me give you some examples.

Greg Swann

“I write well. I’m a tough read here, but I can be much, much more difficult to read. I understand grammar the way other people understand cars or football or cooking, and I can build perfectly valid sentences in English that almost no one can understand, much less diagram. The English language is like Jazz to me, and it ripples and rolls through my head all the time, making connections like lightning strikes that take many paragraphs to explain to other people.

Brian Brady

“I posed this question at Unchained Phoenix ‘09 and you would have thought I asked the REALTORs to walk on coals…at first. A few bright agents listened to my reasoning:”

Geno Petro

“When I awoke from my dehydrated coma and rack focused my blurry vision toward the general direction of the deactivated alarm clock on my night stand, the numbers 7:07 burned my retinas digital red. I jumped up in a virtual panic, threw on a suit and Hermes noose, splashed on a handful of Bulgari, gargled a Red Bull and Diet Coke highball and flew out the door in search of my car. Alas, God was looking Read more

May 13, 2009

FHA and the $8000 Tax Credit – what I know and what I don’t….

by

Mortgage Officer

Author website

It has amazed me how many people (mainly Realtors and lenders) are already out there proclaiming that you can now go back to the days of the “No money down” loans with FHA and you can do it right now.   Well, that’s not quite the whole story.    Let me explain:

What I know:

  • I know that FHA is now allowing a borrower who qualifies for the $8000 tax credit to use that tax credit as the downpayment for purchasing the house.
  • I know that they can’t get any cash back – if they need $7000, they can only get $7000.
  • Government agencies and non-profits can do second liens against the house for the downpayment.
  • The payments on that second lien need to be counted into qualifying rations.   In other words, if you are going to borrow the $8000 so you can use it for your down payment, you need to be able to pay that amount back.  Gee, there’s a novel concept.
  • FHA approved mortgagees can do a “bridge loan” against the tax credit.

What I don’t know:

  • I don’t know whether any FHA approved non-profits are going to be willing to do second liens in situations like that.
  • I don’t know whether any FHA mortgagees (such as my bank) are going to be willing to do a bridge loan against a tax credit.   Typically banks don’t like to do unsecured loans and I’m not sure how you can secure a loan against a tax credit.
  • I don’t know what fees and rates will be charged for such a bridge loan.

Personal feelings:

  • In today’s volatile market, if you aren’t able to come up with 3.5% for a downpayment on a house, maybe you should continue to rent for a while.
  • The “tightest” 12 to 18 months that a home buyer typically has is their first 12 to 18 months when they are getting used to the house payment.   Do we really want to add the cost of having to pay back a bridge loan on top of that? 

So I guess my recommendation is essentially this:

  • Take a deep breath.
  • Wait to give the financial institutions the time to sort this all out.
  • Once we Read more
May 13, 2009

Prospecting Numbers, Real And Acutal (In Case You Wanna Skin Some Cats).

by

Instigator, anthill kicker.

Author website

Skinning cats requires that I’m on the phone.  A lot.  I’m all 2.0, that works, but it’s a tool.

Anyway, the numbers from a week of prospecting where I actually hit the phones each day.

I’m targeted here, calling folks from twitter and linkedin and others.  (People always ask how I get the numbers.  Even when the number is prominent on the website).  I’m pulling folks into a spreadsheet, and sorting it by called/uncalled.  I’m using Google Docs for much of this.  I do it at a stand-up-desk on my old PC.  Anyway, if I could bring myself to do it more–and I think I will–then its scalable.

What I’m doing is feeding people into a database and then I’ll work them from there.  My goals are to:  1.) Make Direct Sales, 2.) Get people in my database.

Total Time Calling: 7 hours, 30 minutes.  (50 minute hour–25 minutes with 5 minute break, 25 minutes with 5 minute break).

Total dials:  641.  (I use Skype to measure this, and I simple went in my call history and sorted by times).

Total Contacts (where I get a live person and not a voice mail):  168

Leads Generated (people that want an email that’s not just a blowoff):  51

Blogs Sold:  9  (12 total sold).

Sales on First Pitch:  1 (was a linkedin Acquaintance that had intended to do a blog for a long time).

Sales off of email/video:  5

Sales on 2nd-3rd pitch: 2

Per sale, my revenue is $750ish.  My take after fees and stuff is $500ish.  This is one of my sources of income, and it’s the most significant one at the moment.

So…I attempted to call and sell 641 times.  That’s a dial every minute and change.  I failed all but nine times.   .014 batting average.    There is always a serious suck factor when I’m making calls.  I don’t always enjoy it.  I do procrastinate and try to find something more interesting to do.  It is tedious at times.  It is hard to stay up and active for an hour and 20 minutes a day.  Not impossible.

I’m telling you all this because it works.  Don’t let anyone tell you anything different.  Failure Read more

May 13, 2009

Need Maps? BatchGeocode.com is the easiest way to create them

by

Realtor, Tech Connoisseur

Author website

I used Batch Geocode yesterday to make a wonderful “quick and dirty” map of homes for a relo buyer

All it needs is Address, City & State.

Grab the info in Excel Format from your MLS Search, paste into the Batch Geocode Window, and it creates a great, scalable map with labelled balloons. The legend even includes the rest of the information from the spreadsheet data. WAY COOL.

May 12, 2009

The essential importance of criticism to my mental functioning

by

Suburban Phoenix Real Estate Broker

Author website

I hate the idea of belaboring this topic, because I think it should be obvious. But it keeps coming up, so I wanted to take a moment to shoot it down. If the headline seems really boring to you, that’s only because you’re right. Feel free to make your exit while your faculties are still unbenumbed.

In response to my post this morning on the sartorial elegance of Todd Carpenter, Dave Gooden says:

I don’t understand your need to pile on people like this.

I never pile on anyone. Piling on is done by groups of people, generally speaking fairly stupid people. I always stand alone in everything I do.

But: That’s beside the point.

Without piling on, John Kalinowski adds:

I can’t understand for the life of me why you waste time insulting others publicly, which seems to happen often on this site.

Both comments are specious, in the sense that I wasn’t insulting anyone. I was tweaking Todd Carpenter for a comical photo of the most un-besuited person I know wearing a suit.

But I’m willing to entertain these questions, if only because these kinds of complaints come up fairly often, and it’s plausible that I can help people better understand how I use my mind.

I will say first that I consider rebukes like these to be unconscionably rude. I am chastised — to my face, in public and behind my back — for being some sort of paragon of bad behavior, but I would never in my life consider it good character to presume to remonstrate my host while I am a guest in that man’s home. If I have a big-enough problem with your behavior, I will certainly take you to task, but only on my own property, never on yours. In this respect, I am regularly amazed that people would seek to address minor issues of style while committing an outright betrayal of my hospitality.

In the same way, it would never occur to me to tell someone else how to write. Your mind is your property. Do what you want with it. I will tell you now — and I’m sure I’ve said this Read more

May 12, 2009

Why Aren’t There ‘Guys Nights’ At Bars and Clubs? Duh

by

Real Estate Investments Broker

Author website

The logic is so simple, and the result is usually so predictable, having a ‘Ladies Night’ at the local bar or club is a no-brainer. The more foxy ladies there are, the more guys there’ll be to buy ’em drinks etc. Why else would a local bar be packed on a Wednesday night? Gimme a break.

Listings are our foxy ladies. If worked correctly, every night is Wednesday — if you’re a lister. Look, for the record, guys go to bars on Ladies Nights ‘cuz it makes sense to hunt in a guaranteed target rich environment, right? Same with real estate buyers — they tend to congregate where the listings are.

But let’s look at this through the Ladies’ eyes.

They’re the magnets and they know it goin’ in. From bank owned Barb to rehabbed Richelle to young and perky Pamela, they congregate together, knowing there will no doubt be more than enough guys to go around. There’s usually all kinds of gals for all kinds of guys. But make no mistake — no gals? No guys.

Buyer’s markets are what I often describe as a ‘get while the gettin’s good’ situation. Sellers, if possible, tend to stay home when they realize for every buyer there could literally be dozens of houses from which to choose. This is why you won’t find bars lasting long with an extreme undersupply of ladies. Though guys are surely an integral part of the equation, women are in the driver’s seat with rare exception.

This is even true when the gals out number guys on a given night. You know I’m right. See the trio of lovely young ladies over in the corner? They’re all pretty nice, but geez-a-lou, look at the one in the middle. Absolute perfection — a vision of everything that is feminine pulchritude. You think she’ll have a tough time meeting a cool gentleman even though the ladies out number the men 5-1? Yeah, me neither.

This is all my very roundabout way of pointin’ out the obvious. Buyers are a huge part of my business, no doubt about that. But Read more

May 12, 2009

A quick, random thought

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

It’s not that I couldn’t somehow get my hands on a late model Ferrari if I really wanted one (and I doubt I’m any different than most happily married men of my demographic in this regard). After the divorce, I’d simply have to move in with relatives, liquidate whatever is left for 100 pennies on the dollar, then slap down the balance on American Express between billing cycles, that’s all. With the proceeds I could probably score a pretty decent off-lease, if not road worn,  Enzo Berlinetta…in the least desirable color—with stock rims. I’m just saying.

I want one, but ideally…I want one 20 years ago.  (Actually, I’ll just take the 20 years ago and you can keep the Ferrari and this whole real estate business.)  A 32 year old Realtor in a Ferrari is a Bad Ass but a 52 year divorcee old living at home with mother is….well, just plain sad—especially when forced to park a high mileage phallus behind her Subaru in the driveway. (God how I hate that Freud.)

So this middle-aged guy zooms into my rear view mirror on the freeway entrance ramp last evening, hesitates for a double-bump tach rev,  then screams past me on the right in 1st gear. He was neatly tucked into a couple hundred thou of  handcrafted, precious scarlet metal and buttery cowhide.  His straw gray, combed-over tonsure hovered in the breeze above a sun-chapped bald spot. A rose gold Chopard watch, with matching cuff links, deflected all remaining rays of Envy as he dissolved into the North Shore Chicago smogset.  Judging from the pink gold blur, I pegged his left wrist alone at around 50 grand. Clearly, our little speedster’s got more jack than any man knows what to do with. His engine sounded like an amped-up Joe Satriani guitar riff in the dusky ether.  His license plate read RAINMKR. I’ve been behind this ass clown before.  He used to double park his banana cream Bentley at a renowned Viagra Triangle watering hole during happier hours. Must have gotten a divorce. If he got a red Ferrari then somebody got a house. Read more

May 11, 2009

Losing my CRM Was The Best Thing That Happened To My Business.

by

Instigator, anthill kicker.

Author website

In October, 2006, I had a problem. While getting ready for a trip to the Outter Banks, I was bouncing my 17 month old on my lap, drinking a coffee and checking my emails.   Fast like lightning, he spilled the Starbucks on my Toshiba…and in an uncanny feat of chance, the coffee had also gone into the back of my Networked Drive, and my Router.

A cleanup made my computer seem to be OK, but it wasn’t meant to be.  About 10 minutes later, my Venti Verona seeped into the computer, and it breathed its last.   I was using ACT 6.0, nothing online at the time, and it was tweak-figured to my liking.  Activity series, word docs, and all.  Gone, toasted, busted.  A trip to the data recovery center at MicroCenter said it was dead to them, dead to all.

The whole disk.

My backup disk was in worse shape, taking it out of its casing revealed that it had been entirely saturated in coffee.  My son in one swoop, used a 1.85 cup of coffee to destroy a $700 laptop and a $300 backup drive.  In a lot of ways, I was a proud dad.

But, I had a problem: I was leaving for vacation without a database.  My lifelong history of maybes, dids, mights, won’ts and dids-but-with-someone else was gone.  I only had my pipeline of 7 deals in the Flagstar pipeline, and the emails that my gmail had archived.  And that was it.  Nothing else–nothing else at all.

That was about the best thing that ever happened to my throughput.  That blessing from Jack doubled my income and my capacity to produce.

One of the things every realtor-mortgage lender (that doesn’t use something like Kaliedico) does is over-report and overestimate their pipeline.  The reason for this is the maybes.  These are the folks that could benefit from you, but don’t feel a sense of urgency.  They may not get the paperwork together for weeks or months.  But they close, and they kill your inventory turns because you count ’em in March, April and May.  And hey, you are right at the beginning of each Read more

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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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