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August 13, 2007

The Odysseus Medal Awards, week #1: An exposition of excellence in real estate weblogging

by

Suburban Phoenix Real Estate Broker

Author website

As you will have seen from yesterday’s short-list of entries, we had a lot of very high-quality posts among our contestants. This seems to augur well for the future of the contest. If you didn’t make the cut, soldier on. For the most part, even the posts that didn’t make it to the People’s Choice competition were very, very good.

But: It’s plausible to me that you’re reading this post to hear about winners, so let’s talk about those:

The People’s Choice Award, the winner of the popular voting yesterday afternoon and evening and this morning, goes to Michael Cook, with Realtors, Wake Up and Start Helping Consumers.

The Black Pearl is awarded to the entry that presents the best practical, technical or marketing idea of the week. This week that award goes to Benn Rosales for Mortgage drama, real estate bubble, tech crash, dotcom disaster. Here’s the winning idea:

So now that we know it’s coming, what shall we all do about it?  I’m doing a few things like; creating a shortsale team to assist sellers, offering move-down programs to those who aren’t so much in a bad way-yet, talking about it with sellers that call, offering advise on when to get out, and when to stay, talking to lenders about refinance options for those who might not need to move if we can do something now before they begin missing payments (not charging for that by the way, just guiding),  calling past clients to see how they are, and that they’re okay.

And the first Odysseus Medal in this new competition, the overall best post of the week in my opinion, goes to Kevin Boer with The Innovator’s Dilemma In Real Estate: Beware Of That Redfin Swimming Just Below You. I’m a Grand Opera kind of writer, and Kevin is a just-the-facts kind of guy, but the journey he took us on in this post is simply extraordinary.

I’ll be making the three ‘badges’ shown here available to the winners as ornaments to be used with their winning posts or on their sidebars. (And if a real artist wants to volunteer to make better versions, Read more

August 13, 2007

Consumer’s View on What Bloodhound Blog Is…

by

Real Estate Rainmaker

Author website

Contrary to unpopular belief, Realtors in the Bloodhound Blog pool care about consumers. Oh, I know it’s hard to buy because YOU once had a Realtor not call you back or because you read one single article that got heated, or because the For Sale sign is still crooked in your neighbor’s yard. I am not a Realtor, so I write from a consumer’s point of view.

From the consumer perspective, I feel that I can safely say that no one at Bloodhound lacks passion- be it lenders, Realtors, brokers or regular Joes (or Sallys) like me. There are a few Realtors that are not well informed, far behind the curve and still regurgitating the “buy/sell now, the market is hot hot hot” crap from their Intro to Real Estate classes. None of those people are reading or writing for the BHB.

If you read the nearly 2,000 articles written on the Bloodhound Blog, you’ll note that almost all of them are consumer focused even if the analysis upsets the few old school “buy/sell now, the market is hot hot hot” stragglers by implying that the consumer comes first. The Bloodhound Blog stands for the consumer, not just in words printed on a screen but by perpetuating the idea that the industry should stay informed, and by that sharing of ideas creating a better informed Realtor or lender that in turn has protected their clients from the rare “buy/sell now, the market is hot hot hot” junk.

OF COURSE Realtors are also focused on their business (marketing, SEO, etc); without that task in the list of “To Dos” there would be no product to offer the clients that are supposed to be protected against an ignorant Realtor. Not focusing on business would, in essence, be not focusing on the consumer; therefore, the idea that an article about marketing as not consumer based is bunk.

I don’t care about those “hot hot hot” Realtors- they may be doing just fine. What is upsetting is that anyone could possibly come into the den of Bloodhound and opine that everyone in the industry Read more

August 13, 2007

Hating Selling through the Art of Sales

by

Realtor, Associate Broker

Author website

The friend of the son of a very good friend — an exceedingly polite young man just out of high school — came by late Friday afternoon to sell me some cutlery. I explained when he called to set the appointment that I was already doing some business with the company he was representing in the form of monogrammed house-warming gifts, but he said he’d like to come by anyway. To practice.

He arrived, carefully unsheathed his samples, and pulled out a three ring binder. He opened his presentation with a hand drawn graph of his progress toward his summer goal; if reached, he said, he would win a scholarship. Then he launched into a rote monologue, cribbed nearly verbatim from his notes. Per the script he handed me each utensil as he talked about it, wasn’t sure what to do with his hands after I refused the third one, and was flustered when I asked about something out of turn. All the sales-guy 101 feints were in play: “If you could choose between one of the two sets today, which would you pick?”; “Just for sitting down with me today, I’m authorized to offer you, for no extra cost, these kitchen shears. Is that something you’d be interested in?”

At which point I stopped him. I’ve sat through thousands of presentations and delivered thousands more. I didn’t need another to confirm what I’ve known forever: I hate sales. And salespeople.

So I waxed parental:

“Why, David, didn’t you ask what I was already using, what about it I liked and didn’t? Turn your head: five feet away is a full set of Wusthof; you should have known that before you came to the door. Why didn’t you ask about the sets I was already buying? Clearly there has been a need.

“Selling isn’t about glib one liners, happy hour entertaining or pat answers to pre-conceived objections. It’s considerably less about form than substance. It’s about having the knowledge and developing the trust in order to fill the real needs of your customers, better than anyone else.” LOVE parental mode.

Since this has a lot to Read more

August 13, 2007

Real estate weblogging to create the kind of relationships that lead to closed transactions, repeats and referrals

by

Suburban Phoenix Real Estate Broker

Author website

Sorry, Michael, but sometimes plumbers gotta talk about pipes. This is Teresa Boardman writing at The Real Estate Tomato:

In my humble opinion it isn’t about how many people read me. It is about who reads me and why. It is about speaking directly to the clients you prefer working with. A ton of leads can mean a ton of work and little business. Some of my blog readers are exactly the kind of person I want as a client and others are not. Not all leads are equal. The type and quality of the content does have an impact on the type of leads a blogger attracts.

I think this is dead-on. By pursuing real estate weblogging with a long-term strategy, you can grow your business in the way you want it to grow.

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August 12, 2007

Vote for The People’s Choice Award — Nominees on-line now

by

Suburban Phoenix Real Estate Broker

Author website

Okay, the live version of the People’s Choice Award voting interface is on-line. My short-list isn’t all that short, alas — 18 entries total, including seven from BloodhoundBlog. I’ll do a better job of eliminating posts in the future.

The selections are shown in random order in the voting interface, this because being at the top or the bottom of a list like this is a decided advantage.

These are the posts, in no special order, except the BloodhoundBlog entries are shown last:

Go here to view the entries and to vote. I’ll accumulate votes until 12 Noon PDT Monday. I’ll post the winners of The Odysseus Medal, The Black Pearl and The People’s Choice Award Monday afternoon.

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August 12, 2007

Feel like playing? The People’s Choice voting interface is live

by

Suburban Phoenix Real Estate Broker

Author website

I have a dummy version of the People’s Choice voting interface for the Odysseus Medal competition up and running. I used five of my recent posts for examples, since I’m excluded from the competition. Play with it, if you’re of a mind to. See if it makes sense to you. See if you can get it to break. The live version will go up later today.

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August 12, 2007

It’s A Lenders’ Market

by

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

Author website

I pulled a Cramer today. The pressure has been mounting for some time, now.

Roberta Lee, a real estate broker in Norco, CA left a comment on an article I wrote on Active Rain:

My son is in the mortgage industry. He took the time….. 🙂 to enlighten me…..”Mom this isn’t a buyers market or a sellers market, it’s a lenders market.”

Ain’t that the truth, Roberta? I had two, um, situations this week that influenced the Cramer that erupted at 3PM this afternoon. Both involved incompetence and arrogance by the wholesale lending “professionals”. THAT is going to be a problem that needs to be addressed immediately.

Customers are scared. I know and you know that this stuff happens every ten years or so but it’s pretty scary when it’s happening to you. I do a fair amount of business in negative amortization loans. That product has been repriced to reflect the investor’s perception of increased risk but the portfolio lenders are still in the game. I’ve come full circle and have started placing loans with the banks I used in the 90s. None of my old friends are there, anymore. They’ve been replaced with the cast of High School Musical.

One rep doesn’t truly understand her products. She parroted the sales manager’s script when I questioned about a recast and argued relentlessly while I did the math. She was off by about nine months…those nine months matter to an engineer (my customer). When I asked her to be more precise with her answers, that customers’ financial futures were at stake, she flippantly replied that it wasn’t her problem these “morons” are in trouble. She lacks what business school professors might call, um, a “consumer-centric” philosophy.

Another bank rep couldn’t understand why my customer was nervous when she broke a promise to me. The problem was exacerbated by her poor knowledge of her bank’s closing process, so she told another little white lie. This delayed the closing another day. When I explained why customers were stressing in this Read more

August 11, 2007

Thomas Sowell: Housing woes caused by land-use restrictions and federal micro-management of lenders

by

Suburban Phoenix Real Estate Broker

Author website

Hoover Institute Economist Thomas Sowell:

Amid all the hand-wringing and finger-pointing as housing markets collapse, mortgage foreclosures skyrocket, and financial markets panic, there is very little attention being paid to the fundamental economic and political decisions that led to this mess.

The growth in risky “sub-prime” mortgage loans by people buying homes they could not really afford has been a key factor in the collapse of housing markets, when the risks caught up with both borrowers and lenders.

But why were home buyers suddenly taking out so many risky loans and lenders suddenly arranging so much “creative” financing for these borrowers?

One clue is the concentration of such risky behavior in particular places and times.

Interest-only mortgages, where nothing is being paid on the principal for the first few years, enable many people to get started on buying a home with lower mortgage payments at the outset.

But of course it is only a matter of time before the mortgage payments go up and, unless their income has gone up enough in the meantime for them to be able to afford the new and higher payments, such borrowers can end up losing their homes.

Such risky mortgage loans were rare just a few years ago. As of 2002, fewer than 10 percent of the new mortgages in the United States were of this type. But, by 2006, 31 percent of all new mortgages were of this “creative” or risky type.

In the San Francisco Bay Area, 66 percent of the new mortgages were of this type.

Why this difference in times and places? Because housing prices were skyrocketing in some places and times, so that people of modest incomes had to go out on a limb to buy a house, if they expected to buy a house at all.

But why were housing prices going up so fast, in the first place? A number of studies of communities across the United States and in countries overseas turned up the same conclusion: Government restrictions on building.

While many other factors can be involved — rising incomes, population growth, construction costs — a scrutiny of the times and places where housing prices doubled, tripled, Read more

August 10, 2007

How Big Is the Sub-Prime Mortgage Market? Not very big at all

by

Suburban Phoenix Real Estate Broker

Author website

Cited by BusinessWeek Online, a very eye-opening analysis of the sub-prime mess from National Review Online:

I’ve thought a lot about Rain Man over the past few months as I’ve been following the press coverage of the sub-prime mortgage crisis. The story’s been on the front page of the Wall Street Journal nearly every day. Pretty much every show on CNBC — except Kudlow & Co. and one or two others — has been obsessed with the topic. Yet no one seems to be asking the Rain Man question: “How big is the sub-prime mortgage market?”

And the answer, as Ben Stein makes clear, is not very big at all.

Currently there are about 44 million mortgages in the U.S., and less than 14 percent of them are sub-prime. And only about 13 percent of those are late on payments, with the majority of late payers working through their problems with the banks.

So, all in all, when you work through the details and get down to the number that really matters, only about 0.6 percent of U.S. mortgages are currently in foreclosure. That’s up a hair from roughly 0.5 percent last year. That’s it.

Actually, that’s not it. Things are actually better than the numbers suggest, since sub-prime-mortgage homes are less expensive than prime-mortgage homes. This makes sense. Wealthier people, generally, can afford costlier homes than less-wealthy people. The recent sub-prime surge brought large numbers of moderate-income families into the home-ownership market, and their houses are less expensive than most. Therefore, the dollar impact of the sub-prime default is smaller than if it were a prime default.

With approximately 254,000 mortgages in foreclosure at the moment — up from roughly 219,000 last year — the sub-prime meltdown has given us an increase of 35,000 mortgage foreclosures over the last quarter. Since the average sub-prime mortgage clocks in at almost exactly $200,000, we’re looking at an approximate $7 billion increase in foreclosed value in the first quarter of this year.

Raymond, how big is household net worth in the U.S.? About a hundred dollars?

Actually, it’s a lot bigger than that — about $53 trillion. In other words, the Read more

August 10, 2007

How do you win The Odysseus Medal? Write your heart out — and follow the rules . . .

by

Suburban Phoenix Real Estate Broker

Author website

I’ve posted the rules for The Odysseus Medal competition, but there aren’t so many that I can’t also show them here:

The Rules (few and fair):

  • The entry must have been posted within the two weeks before the entry deadline
  • The entrant must be the author of the post
  • More than one entry from the same weblog is fine
  • More than one entry from the same person is also fine, provided that you have multiple personality disorder
  • No second-guessing, no do-overs, no cry-babies

The Prizes:

Three awards will be given weekly:

  • The Odysseus Medal, for the overall best post of the week
  • The Black Pearl, for the best practical, technical or marketing idea of the week
  • The People’s Choice Award, selected by popular voting on Sunday evenings

The Deadline: Sunday at 12 Noon MST — which is 12 Noon PDT, 3 pm EDT, etc.

Entry form: It’s here.

No doubt this will change somewhat with time, but probably not by much. I really don’t like rules, making them or, especially, complying with them. Entries that I’ve already received will be grandfathered, of course. Fair is fair.

Anyway, get crackin’. Either Cameron or I will build a voting bot for the People’s Choice Award, and I’ll put together graphic trophies for the winners. I want for this to be an enduring tribute to quality weblogging. But the truth is, I’ve got the easy job. You’re the one whose going to have to do the hard work…

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August 10, 2007

Mortgage meltdown? The end of the world has been delayed again

by

Suburban Phoenix Real Estate Broker

Author website

This is me from the Arizona Republic (permanent link):

 
Mortgage meltdown? The end of the world has been delayed again

If you watch the TV news, you can’t miss the video clips of financial pundits screeching about the imminent collapse of the mortgage industry. In fact, the world probably cannot end more often than once or twice a day, but it’s worthwhile to remember that television is an entertainment medium. Financial news is inherently boring — unless it’s reported by a shrill demagogue.

So what’s really going on?

Investors are pulling the plug on the most liberal — or most willfully gullible — mortgage underwriting firms. Investment banks that bought or brokered portfolios of shaky loans are also suffering.

Does this mean you can’t get a home loan? Not at all. You just need verifiable income, good credit and a down payment. That wouldn’t even sound odd if we had not lived through 2005, when all you needed was a reliable pulse.

What really happened in the home loan market? There was so much money available, and homes were appreciating so quickly, that some lenders stopped worrying about the financial qualifications of borrowers.

Has there been a surge in foreclosures? Yes. Had there been a substantial number of loans made to high-risk borrowers? Yes. We’re paying the piper now, that’s all.

There is still plenty of money in the mortgage market, but guidelines are stricter. Nothing-down loans are harder to obtain, as are stated-income loans. Some lenders are charging higher rates for jumbo loans — amounts over $417,000. But the rates for a 30-year conforming fixed-rate mortgage — the bread-and-butter home loan — are actually down. This fact will have been omitted by the demagogues on TV.

While things shake out, sellers will want to stay on top of their buyers’ loans, and buyers might want to ask their lenders to submit their files to more than one underwriter. Some parts of the Valley are suffering more than others, but buyers are buying, sellers are selling and home values are holding up fairly well through the down-turn. It would seem that the end of the world, contrary to televised reports, Read more

August 10, 2007

Realtors, Wake Up and Start Helping Consumers

by

Real Estate Investor

Author website

Jeff Brown’s, Real Estate Bloggers — Why Are You Blogging? What Currency Does Your Banker Accept?, has evoke a ton of comments and emotion over the past few days. As an outside observer I find it interesting during these crazy times in the real estate market, people get so worked up over SEO, but don’t seem to carry that same passion over to the market.

While I have no real interest in SEO, I thought I would mention that if (and when) the real estate market tanks, it wont matter how many people are coming to your site if they aren’t able to buy. While the point of Jeff’s article got lost after about the 20th comment, I think that it is really unfortunate. Blogging for business is fine by me, but what about the consumer? There will be a point very soon when consumers will be looking for advice on how to approach and handle a down market. It would seem like everyone’s time would be better spent having these discussions.

I am probably one of the few non-real estate agents writing/reading here, but as a current home shopper, a Realtor could really differentiate themselves by understanding the market and providing helpful advice. In a world where good content is king, I am spending my time reading and understanding where the market is going, so that I can provide readers support as things go from bad to worse.

A major knock on Realtors is the fact that they are always selling, not necessarily with their client’s best interest in mind. The National Association of Realtors makes this perception worse with every rosy real estate forecast they send out to the market in spite of overwhelmingly negative information. Interestingly, two days after I wrote this piece about the NAR forecast, the stock market had the second worse day of the year.

Looking at a variety of the real estate bloggers blogs, who have been commenting here, I have seen very little content on many sites that could really help consumers deal with this changing market. Now Read more

August 9, 2007

In closing… and on hiatus.

by

Realtor, Associate Broker

Author website

To be fair, Sweet Digs in its current form is innocuous enough. It didn’t begin that way, but that’s where it has landed.

And, to be fair, my mini-eruption this morning had nothing to do with Sweet Digs but everything to do with the role Redfin has assumed of industry hate monger. Take the Forums.

I made reference to a comment posted on the Redfin Forums in which the writer referred to traditional agents as conniving and greedy con artists. I had seen this remark a week ago and the words had been on a slow boil in my brain since. Redfin the Real Estate Company didn’t pen these words, but in effect they did. Their rhetoric from inception has been carefully crafted to incite riot. When I go to an appointment with a buyer or seller, I go intent on demonstrating how I bring more value than my competitors. What I do not do is attempt to elevate my position in their minds by criticizing and demeaning others whom they may be considering.

And, now we have gotten to the bottom of my recent attack on their little locally focused blog, and my sudden unease with even talking about this Redfin stuff at all. I listened to Glenn himself say recently that you should never promote yourself; let others do it, and it becomes viral. Is cancer a virus? By just “putting it out there”, I am giving their business model and their business practices (which I find offensive on many levels) increased exposure and credibility. By lambasting that with which I am in disagreement, I do them one better. I set myself up to be portrayed as that agent living in fear of their “new and better way”, the personification of the old industry guard which has become their poster child for all that is evil in the world.

Traditional agents hate us, traditional agents fear us, traditional agents are pond scum – These are the battle cries of a Redfin trying to get noticed. While they are so obviously wrong on each count, every Redfin rant I post will suggest otherwise to Read more

August 9, 2007

I went duck-hunting with Elmer Fudd and came home with a radically different approach to real estate prospecting

by

Suburban Phoenix Real Estate Broker

Author website

About fifteen months ago, we were preparing to list a home for someone we had known for quite a while. The house was a cosmetic flip in an excellent location. We had been consulting with the seller for months to get the repairs and upgrades done the way we wanted them. The seller had great equity, even if he were to sell it at the fix-up price. But he kept trying to cheap out the remodeling, which we thought was the wrong thing to do in a luxury location.

We even paid to have the home inspected, pre-listing, to get another set of eyes on the problems we had identified. The major items on the punch-list were addressed, but not in a way appropriate to the price-range of the neighborhood.

Okayfine. There are listings you can’t get away from — family, old friends, past clients. So knowing that close-enough was going to have to be good-enough, we priced the house as it would be delivered into a buyer’s market: $425,000.

The seller wanted $475,000, which would have been easy to get if the home had been improved to the quality of the location. But it hadn’t. Whoever bought it was going to live in it as-is, or, more likely, they were going to spend that extra $50,000 to bring the house up to its true potential. Ether way, there were competing listings at both prices points, so no one was going to confuse the one for the other.

At $425,000, we could have sold that house in 30 days or fewer, even against all the competition. Lucky us, the seller let us off the hook. He insisted on $475,000, by phone, and he got so mad that he hung up on me.

Dang! I lost a $475,000 listing, which at 3% of never-ever-sold would only have netted out to a loss of around $2,500 for us, not counting our labor.

It takes us a solid week to get a home on the market — photos, floorplans, signs, web site, open house cards, etc. The house was listed the next day — for $479,000. The extra $4,000 might Read more

August 9, 2007

“They are conniving and con artists” – Redfin launches Southern California Sweet Digs

by

Realtor, Associate Broker

Author website

And for the record, Redfin, the title was a quote taken from one of your Southern California Forum posters, and it was directed at me, or rather my ilk. I started writing this with every intention of giving you the publicity you asked for, the “don’t promote yourself, let others do it, and it will become viral” marketing which has been your hallmark. I changed my mind.

This morning Redfin issued a press release announcing expansion of the “Online Magazine Formerly Known As”, well, something else.

SEATTLE — August 9, 2007: Online real estate broker Redfin Corporation today launched its online real estate magazine, “Sweet Digs,” for Southern California. Home-buyers in Los Angeles, Orange County and San Diego neighborhoods can read daily, local real estate market information via the Sweet Digs blog or email newsletter.

The new Southern California Sweet Digs will offer as many as 40 candid, saucy and analytical write-ups each week of recent sales, price reductions, open houses and real estate trends in local areas, including Beverly Hills, Irvine, Newport Beach, Ocean Beach and Westwood. Southern California already boasts some of the top real estate blogs, and Sweet Digs complements them with its hyper-local, data-driven format written by real estate fanatics, not agents.

We are talking about real estate fanatics here, as in, people marked by extreme enthusiasm for real estate, not agents, since we all know real estate agents have little interest in real estate. Fanatics, as in people being paid to show extreme enthusiasm for that for which they were paid. One of my first jobs was at Bob’s Big Boy (during the Steel Age). I was fanatical about the Big Boy Combo, but this was in large part due to the fact that the Big Boy cut my paycheck.

Okay, in all fairness, I know what you were trying to say. The newsletter-blog thingy will be written by non-industry professionals. I get that, and I can see an appeal. And, in the name of fairness, I wouldn’t enlist contributors to my Blog who were Redfin disciples.

Sweet Digs launched December 2006 in Seattle and February 2007 in San Francisco to provide 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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