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February 11, 2008

She tried to make me buy a rehab…

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

But I said, “no, no, no…”

Truth is; I can barely swing a hammer….Let me rephrase that; I can swing the hell out of a hammer but just not in a constructive way. I am not the fixer-upper type, in case we haven’t met. (See mug shot above for clarity.) I probably err to the side of demolition, if anything.

That being said, my lovely wife (and occasional muse) found a possible second home that in theory, could fulfill our retirement needs during those forthcoming platinum years that Dennis Hopper pitches on the Ameriprise commercials during prime time every night. All things equal, he’s my favorite corporate sell out so far this century, that Dennis Hopper.  Cool, quirky and rich beyond words, for sure.

“60 is the new 40,” exclaims my man, sharply dressed in black, The Spencer Davis Group blaring in the background, and looking unlike like any beshaded 72 year old cat I’ve ever met.  And I’m all over it. According to DH, I’ve got 40 more good ones ahead of me. According to his math and blueprint for living, I’m barely 34.  When he comes on the plasma in high def I get a sudden urge to run out and invest in something spectacular before I lose another precious second. I yearn to  join the expedition, or at the very least, embark on the journey to financial freedom.  After all, one man’s destination is another man’s starting point. Ask any truly wealthy person (9 figures+ by my definition) and I’m certain he will tell you as much. “It’s the journey, not the…” whatever.

But the ‘hidden gem’ my wife came across this past weekend, a shack on the Tennessee River, needs some serious attention; more attention than I’m prepared to pay for, quite frankly. She found it on the Film Location site our own house is registered with (unbeknownst to me until a few months ago). And in case you didn’t know, there is a market for short term property rentals (upwards of $30,000 a month–the first 14 days tax-free) ‘wherever motion pictures are regularly filmed near you.’  And guess what? We qualify!  Hell, everybody who pays the $199 enrollment fee qualifies, come to find out.  It’s the Barbazon School of Modeling for overly proud Read more

February 9, 2008

Who is vulnerable to Zillow.com? How about TopProducer.com?

by

Suburban Phoenix Real Estate Broker

Author website

I’m thinking the lending product, whatever it turns out to be, is going to involve some kind of Customer Relationship Management/Transaction Management component anyway. And what does everyone say made it worthwhile to drink the HouseValues.com KoolAde? Yep — CRM/TM.

Here’s my big-picture take: If you’re in any sort of business where the added-cost per additional increment approaches zero — all of TP’s costs are accounted for by customer #1, transaction #1; after that, they’re storing and swapping electrons — watch out. Anyone who is willing to eat your front-loaded costs can eat your lunch.

What’s the counter-measure? Price your product at zero. The plausible alternative to free is not-only-free-but-WAY-better. Otherwise, your installed-base should stay put, with all the new converts up for grabs. That’s a first-mover advantage, provided the first-mover stays nimble. Welcome to the Web 2.0 world…

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February 9, 2008

Los Angeles City Rent Control: Read it and REAP.

by

Real Estate Broker, Investor

Author website

I notice my sidebar title is “Investor”.  OK, I can run with that.  But please don’t expect fun and easy tips on how to get rich quick.  I haven’t quite mastered that yet. 

However, as the owner, operator and manager of a few residential rental units within the City of Los Angeles,  I can speak with a little authority on understanding and coping with rent control regulations.

Like any bureaucracy, Los Angeles Housing Dept is alphabet soup of departments, divisions, and special programs.

The acronym that most strikes fear into the heart of Los Angeles property owners is REAP: Rent Escrow Account Program.    Which basically means that if the City determines your property is “unsafe” or “untenantable”, the city collects your rent and places your money in a city escrow account, after first reducing the amount due based on a sliding scale of whether the conditions are “nuisance” or “hazardous”.   You don’t have access to the money.   Administration fees are charged, the City pockets any interest earned.  

But then, the City makes the needed repairs with the money, right?  Hmm, no, not automatically.  The tenants or the property owner must petition for a release of escrowed funds, with the burden on the property owner to show “financial hardship preventing payment of such services beyond a mere negative cash flow for the property.”

“Mere”?

Back in 2001, city controller Laura Chick admitted that the REAP program was “broken“.  To me “broken” implies something that no longer works, but did in fact work at some point in time. 

Speaking as a pragmatist, REAP never worked.  It takes money to make repairs.  Reducing a property owner’s cash flow reduces his or her ability to make the needed repairs.

What would work?  Speaking again as a pragmatist, make low-cost/no-cost funds available to rental property owners for the sole purpose of repairing their properties.

February 9, 2008

Best Efforts

by

Commercial Real Estate Broker

Author website

Case law recognizes that a “best efforts” clause does not obligate the promisor to “spend itself into bankruptcy,” Bloor v. Falstaff Brewing Corp. But it seems like it when your clients find themselves in litigation, even if the claims against them seem ridiculous. I had an old football coach tell me, “Never argue with a fool, because an innocent bystander can’t tell the difference”, but I don’t think that saying applies to the courts.

It appears to me that the more the fool argues his case in front of a judge, throwing as much case law against the wall as possible hoping something sticks, the greater traction his ridiculous argument seems to gain with the court. After watching this practice in action, it appears to me that there is a professional courtesy among attorneys and judges, allowing those drowning in their own legal quicksand enough leeway to spew case law onto the court, like a lifeline they can use to extricate out of the mire, saving face with their clients.

If you’ve ever seen the episode of Man vs. Wild with Baer Grylls in which Baer voluntarily walks into a pit of quicksand, you’ll remember that it takes a certain skill, patience and effort to extricate oneself out of a “jam”. While remaining calm, one must get as much surface area on top of the quicksand without penetrating too deep. In my observations, it seems that the struggling attorney fights to gain “surface area” with the court without allowing any part of his case to penetrate too deeply into the mire, a practice which most judges will allow with some latitude.

Remembering my Physics 101 class (at least I think it’s Physics), every action has a reaction and every argument presented to the court has an appropriate response. Thus, every case law and ridiculous argument must be responded to preserving that your opponent remains mired in legal quicksand. These responses cost time and money, money that your clients must consider prior to entering into any litigation, if they have a choice.

One benefit to commercial litigation (if there is one) versus litigation in an emotionally Read more

February 8, 2008

Clients are people, too.

by

Realtor, Associate Broker

Author website

Indulge a father to make a point:

My youngest daughter is spending the next six weeks at a tiny hospital in northern Malawi, not far from the Zambian border. She’s there in one of her last rotations as a fourth year med student: The University of Washington recognizes that one of the biggest pitfalls for students is coming into a program with a passion for people and graduating with somewhat less passion for the cardiovascular system. The entire curriculum is centered on remembering the humanity of the patients, and encouraging students to get out of their comfort zones is of a piece to help drive that home. It’s a fabulous program, and she’s going to come back a changed person.

We – the real estate industry – have the same problem. We don’t have friends and family, we have a sphere. Clients are to be harvested from our farms. People aren’t people, they’re leads.  Buyers, of course, are liars.

I just got back from a listing appointment; wonderful couple, I’d sold them their home a year and a half ago. For a number of reasons they’re now in foreclosure. The tension, the anxiety, the fear, the anger were all palpable: She was in tears, he was stoic and blaming her. I was part real estate agent, part marriage counselor. I tried to mitigate some of their grief by absorbing some of the blame myself, and pointing to one of the worst loan originators I’ve ever dealt with, but they wouldn’t hear it. They’d made the decisions, they’d signed the papers, they’d failed to meet obligations, they were the ones to blame. And it hurt. Deeply.

I can quote John Galt verbatim, but that doesn’t obviate empathy.

Before I left for our meeting I watched an on-demand training video on short sales, hoping for a little more insight on how I might help. The star was an overly made up realtor stereotype that each year manages to make it to the bottom of the Harris Interactive poll of respected professions, animated and delightfully giddy in the good news she had to deliver:

I can tell you very frankly that, Read more

February 8, 2008

The Great Debates – Monday, Feb 11

by

Mega-Producing Realtor

Author website

Dustin asks if Brian Wilson is really going to argue .. .. that Realtor.com is an agent’s friend with me taking the other side? Yes, is the answer. I met Brian in wilsonshawHawaii just a little over a week ago. We were both there for CRS Sell-a-bration.
I was a speaker (on how to correctly price listings in this market) and when I wasn’t actually teaching made it a point to either be out at the beach or doing something very non-productive. This time it was sitting in a hot tub. Brian greeted me by saying something about my posts on BloodhoundBlog. No one else in the tub knew what BHB was, but I wasn’t surprised, three of the other people were either fron Ireland or England and weren’t Realtors. Chatting briefly with Brian was all it took for me to instantly like him.

When he first sent me a list of ten different topics to debate I had to reject a couple of them just because I don’t know a damn thing about them. I don’t feel that way about Realtor.com. I do know about them and there are several things I really wish were different. Having seen Brian’s response to my first writing on the subject I have to say that I doubt anyone from Realtor.com could have done any better job defending them.

This isn’t to say that I won’t ultimately win the “debate” – as the “pro” position isn’t very defensible. You can see for yourself here.

February 8, 2008

Higher Loan Limits OK-ed by Senate

by

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

Author website

We talked about the foregone conclusion of higher loan limits for conforming and HUD loans two weeks ago:

The word inside the Beltway is that the deal has been fast-tracked for approval (by The Senate and President) under the following terms:

1- GSE (conforming) loan limits will be temporarily increased to $650,000 and remain in place until 12/31/2008. That means that states like California, Illinois, New York, Massachusetts, and New Jersey will get some much needed relief.

2- FHA loan limits, currently locked at $362,790, will be recalculated to 125% of the county’s median price, with a limit of $729,000. This is useful for states like California where the conforming loans are subject to LTV decreases due to declining market conditions. FHA loans aren’t subject to those blanket LTV guidelines. This loan limit hike is expected to be permanent, unlike the temporary GSE hike.

Nothing is rock-solid; it’s all rumor at this point. The Senate will play with the numbers but the Beltway Crowd says that President Bush has signaled the loan limits he will support, today. Expect this to be a reality sometime between Valentine’s Day and St. Patrick’s Day.

The Senate played some politics, then promptly passed the bill:

Congress on Thursday passed a $152 billion economic stimulus package designed to provide a timely, targeted and temporary boost to the flagging U.S. economy.

One day after Republicans successfully filibustered a broader plan favored by the Senate Finance Committee, the Senate approved the Republican-backed measure, nearly identical to one passed by the House last week, on an 81-16 vote.

The House approved the measure hours later on a 380-34 vote.
President Bush is expected to sign the legislation quickly.

President Bush telegraphed his likely approval:

“This plan is robust, broad-based, timely, and it will be effective,” Bush said in a statement released by the White House. “This bill will help to stimulate consumer spending and accelerate needed business investment.”

Just in time for Valentine’s Day. Get those loan applications in now; the herd will be stampeding in March.

February 8, 2008

What will the NAR do with this?

by

Realtor, Real Estate Ethicist

Author website

It would be too easy to pile on the NAR, what with their recent tempests in respective teapots.  But here is a hypothetical –

What’s the NAR going to do in this scenario as described at SearchEngineWatch?

Adding more confusion to the case law surrounding trademark issues and search advertising, a Sixth Circuit federal court in Kentucky found that keyword advertising is a “trademark use in commerce” under the Lanham Act.
…
If buying an ad triggered by a trademarked keyword is eventually found to be a trademark use in commerce, that would essentially prevent advertisers from doing so legally. Goldman has written quite extensively about online trademark law, and he agrees with the Second Circuit courts.

The Lanham Act defines “use in commerce” as using a trademark on physical packaging or displays, or “in the sale and advertising of services,” an ambiguous definition when it comes to the Internet and search engine marketing, says Goldman. He expects the matter to remain unresolved until Congress passes a new law or the Supreme Court makes a ruling.

Google’s current trademark policy allows advertisers in the U.S. and Canada to trigger an ad from another party’s trademarked keyword, but not to use the trademarked term in the ad text. In all other countries, advertisers are not allowed to do either.

If a Realtor advertises with Google for “Charlottesville Realtor,” or “Phoenix Realtor” would they be met with a Cease and Desist from NAR? While “Realtor” is trademarked, wouldn’t Realtors benefit more by having the word officially enter the vernacular akin to Doctor, Lawyer, Mechanic?

February 7, 2008

Help raise funds for tornado relief and reconstruction: Post one of these buttons on your weblog

by

Suburban Phoenix Real Estate Broker

Author website

Help raise funds for tornado relief: Post one of these buttons on your weblog

Agent Genius is puttng together a fund-raising effort to provided money for relief and reconstruction for those hardest hit by this week’s tornadoes.

Below you will find code that you can use to post a button or banner on your weblog to encourage donations. All three incorporate Jay Thompson’s PayPal donation interface, so your readers can make donations online by credit card. Copy everything inside the text box and paste that into your sidebar or header file:

225 pixels wide:

125 pixels wide:

Banner — 750 x 90 pixels — not shown:

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February 7, 2008

Folk Music, Blame and Fundamental Solutions

by

Real Estate Broker

Author website

A block from my office on one of the squares there’s this guitar player and singer sitting on a bench providing folk music for the passersby. It’s not music I’d actually go out and buy (probably why he’s playing from a bench in the square), but its good in its environment. It’s down to earth, raw, natural and centering. When I’m half bonkers from all the hubbub, I’ll drop by and listen – it helps to get centered.

At the center there’s a clearer, more peaceful world that’s difficult to access among the daily nabob nattering (see Spiro Agnew) and incessant activity. Yesterday, after completing my centering ritual by listening to “Old Mountain Dew”, —

Well they call it that good old mountain dew

And them that refuse it are few

I’ll hush up my mug, if you’ll fill up my jug

With that good old mountain dew

 — back at the office I started thinking about blame while reading some comments regarding the ongoing real estate bog. Blame has little meaning at the center. Some are blaming the media while others blame lenders, foolish buyers making foolish choices, greedy sellers, Greenspan’s years at the helm of the Fed, on and on it goes.

Here’s what Peter Senge writes about blame in his book, The Fifth Discipline:

We tend to blame outside circumstances for our problems. “Someone else” — the competitors, the press, the changing mood of the marketplace, the government — did it to us. Systems thinking shows there is no outside; that you and the cause of your problems are part of a single system. The cure lies in your reationship with your “enemy.”

Senge goes on to talk about putting pieces of the puzzle together to gain an understanding of the whole, how to look for leverage in the midst of fundamental problems in order to create fundamental solutions, rather than get mired in symptomatic problems and tinkering with symptomatic, short-sighted solutions.

Blame tends to lead the mind in wrong directions and use up energy better spent on fundamental solutions. Every day I’m given what is, and I can recognize it and work with it or complain about it and Read more

February 7, 2008

Choosing A Brokerage

by

Realtor, Audio Engineer

Author website

Let me state first and categorically that I am not leaving my brokerage. I actually have been having a protracted dicussion with a colleague about choosing a brokerage. He’s new to town (Arizona) and is looking for a brokerage. Now, I have a different perspective than a new agent might have, and certainly different than a “mega-agent” might have.

For a new agent, I would assume that a person would want a brokerage that has excellent training to help launch a career. If I were new, I would want lots of help. I might like lots of classes, great mentors, lots of broker contact and communication, and possibly lots of “added stuff” like free printing, brochures, business cards, and the like. Of course, I would assume that a brokerage that has all of these extras will charge a higher commission split. I would expect to give them 20 – 30% of my money for these “helps.”

However, if I were an experienced agent, I might like to have a brokerage where I have low fees, very little interference, and a broker that I like/respect. As an experienced agent, I don’t need training, free stuff, and lots of oversight. I just need a place to hang my license so I can get to producing.

Here’s a specific scenario that my friend and I discussed the other day. He was talking to a well known firm that is very large and growing. They have a tremendous “company culture,” lots of education/support, and “profit sharing.” (You can probably guess. . .) Now, for all of these perks, the brokerage will take 30% of the agent’s earnings until a certain dollar amount is collected, then the agent will go to 100%. What is the dollar amount? $18,000 per year. So, after he makes the company 18k, the rest of the money is his, with low monthly/transaction fees.

So, my question is, “Will all of these perks raise your productivity?” Will you earn enough “extra” to justify the expense of belonging to said firm?

What say you all?

February 7, 2008

Introducing Cheryl Johnson — finally

by

Suburban Phoenix Real Estate Broker

Author website

I can concentrate. This is my gift from the gods.

The human mind is a scattered thing, flitting off at any instant in any random direction. I have the peculiar talent of being able to think about one thing exclusively — literally excluding the whole of the rest of the universe. Because of this, I can write fast, write software fast, think about things down to the last whirling atom. But the corollary is that I am exceptionally gifted at overlooking things. Cathy gets stuck with everything that I don’t want to think about.

I tend to think about things completely, to the point of tedium or even outright aggravation to other people, but I never think about something until I do. My oversights are unspeckled by anything resembling foresight.

All that’s by way of introduction to yet another “duh!” introduction:

Cheryl Johnson lives in a “how-to” world. Never satisfied with the off-the-shelf solution, she fine-tunes her tools — then teaches the “how-to” of what she’s done. This real estate broker and investor calls Los Angeles her home.

CJ has been a boon to BloodhoundBlog since we were brand new. She’s been working with me by email on a project of mine. She has actually built the holiest of holies, a viable community weblog. Add to that her tutorial talents and she’s a natural fit for BloodhoundBlog.

So why didn’t I think to invite her to join us earlier? Duh…

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February 6, 2008

The Odysseus Medal: Always check snopes.com first?

by

Suburban Phoenix Real Estate Broker

Author website

Amended: The Odysseus Medal goes this week to… no one. The post I had picked as the winner turned out to be someone else’s work. I’ve elected not to award The Odysseus Medal this week and, instead, to gargle with Listerine to clear my palate and my mind of schmaltz.

The Black Pearl Award this week goes to Mike Farmer with Real Estate in A Brave New World:

Despite the rhetoric from politicians who claim we’re on the edge of ruin, there’s a lot of wealth in this country, and it’s congregated in metropolitan areas that have outgrown, or never had, an appeal for comfort, hominess and quality of living. Baby boomers (BB) will have second thoughts about retiring in areas where road rage and pollution are the nicest things you can say about them. These places are where the money’s at, but now a large chunk of it’s in the banking accounts of BBs and will transfer anywhere their hearts desire – North Carolina, Georgia, Utah, Colorado, Tennessee, Nevada.

Many of these BB buyers will want to live in places where they can golf and shop and exercise, walk the streets and smile rather than snarl, join clubs, start a mini second career doing something they love in communities where everyone knows their names and don’t give a fig what they’re worth on a financial sheet – the easy, slow, entertaining, friendly life. I’m talking myself into early retirement, here.

These BB buyers are already net-addicted and I receive emails each day from them asking me about the area, home prices, things to do, etc. – they’re gathering information and making plans. They aren’t in a hurry and they want good, reliable, spam-free information. This has been written about many times – but what many agents don’t realize is that it’s here, now. No one’s predicting the future anymore – they’re reporting. How many are ready?

Who better to service their needs, to be their wise guides, their comforting counsel, to make information gathering and analysis painless and useful, than the modern day, internet savvy, service-oriented, friendly and efficient local realtor?

Many agents will have to change Read more

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Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

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