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May 15, 2007

The Stockdale Paradox: “I never lost faith in the end of the story”

by

Suburban Phoenix Real Estate Broker

Author website

My friend Richard Nikoley dug this up, Admiral Jim Stockdale talking about his experience in a Vietnamese POW camp:

“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Asked: “Who didn’t make it out?”

“The optimists. They were the ones who said we’re going to be out by Christmas. And, Christmas would come and Christmas would go. Then they’d say, We’re going to be out by Easter. And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. Then they died of a broken heart.

“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

They can’t say “Yes” if you don’t ask — but they sure can say “No” if you do. Learning to surmount the fear of the “No” is how to get to the “Yes.”

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May 14, 2007

Ask the Broker: Buy now? Buy later?

by

Suburban Phoenix Real Estate Broker

Author website

This question concerns the Phoenix-area, but feel free to answer it for your own local market — just tell us where you are.

Which would be more attractive? The 8 month market or the 14 month?

I’m literally on the CUSP of being able to buy and with kids already transferring schools, the sooner the better in order to get some stability.

I’ve seen new home builders drop their prices pretty heavily or offer deep incentives. One of them has a home for around the 300k mark in Gilbert that’d be PERFECT. While I could make the payment now, I have been married to a house and that’s the worst type of one-way relationship. I don’t plan on doing it again anytime soon. Additionally, they just reduced prices 50k and are ALSO offering 20k in upgrades or a FREE Car/Truck (a Ford financed for 30 years is anything but free).

So with having settled on the fact renting the larger home I need and finishing another 6 month lease around 3/1/08 would put me at a greater financial advantage to tackle the home I have my eyes on, I question whether it’d be worth the higher payments for a shorter lease (as it’s on a home not an apartment), or if the market will be depressed enough to go the long haul at 12 months and spend more time preparing and saving.

I figured I’d shake my magic 8-blog (see what I did there? It’s a clever Monday!) and ask away. If you were advising a client on the buying side of life on how long to hold out if holding out was all they could do – Would you suggest holding on 8 months or 14?

Part of me says throwing money away on renting an additional 6 months is wasteful, the other part says that it’d allow me to save up for the stuff I’ll need to make the house a home. At a savings of around 500-600/month, that adds up to a few extra grand after 6 months.

The mention of a 40 year loan got me thinking more about affordability and financing. Read more

May 14, 2007

Are traditional Realtors being undercut? There’s always room at the top

by

Suburban Phoenix Real Estate Broker

Author website

This is me from last July. Real Estate Wives has a post on Redfin and WalMart today, so I thought I’d bring this back to the top of the queue.

Are traditional Realtors being undercut? There’s always room at the top

Let’s see… Our customers are leaving us in a steady march. They’ve found an alternative that is easier to use, more convenient, overall just a better fit to their lives — and to top it all off, it’s much cheaper than our product.

What should we do?

Here’s an idea. Our customers are telling us in no uncertain terms what they want: More! Newer! Better! Faster! Cheaper! So let’s do the same things we’ve been doing all along, only less!

From Reuters.com:

The New York Times Co. plans to narrow the size of its flagship newspaper and close a printing plant, resulting in the loss of 250 jobs, the company said in a story posted on its Web site late on Monday.

The changes, set to take place in April 2008, include the closure of a printing plant in Edison, New Jersey. The company will sublet the plant and consolidate its regional printing facilities at a plant in Queens, the paper said.

The newspaper will be narrower by 1 1/2 inches. The redesign will result in the loss of 250 production jobs, the company said.

The New York Times said it expected the changes to result in savings of $42 million.

The narrower format, offset by some additional pages, will reduce the space the paper has for news by 5 percent, Executive Editor Bill Keller said in the article.

The Times will join a list of several other papers from The Washington Post to the Los Angeles Times that have reduced their size as they cut newsprint and other production costs and try to stem a loss of readers and advertising to the Internet and other media.

It might be fun to chortle about someone else’s troubles — and who doesn’t love seeing the New York Times get it good and hard?

But what they are doing is what the real estate industry, in general, is doing. In both cases, the consequences Read more

May 14, 2007

Interview With Robert Ashby, CMPS

by

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

Author website

ashbyI interviewed Robert Ashby, a Certified Mortgage Planning Specialist, in this 15 minute podcast. Robert’s background is also in securities sales so he and I have much in common.

Robert was the first CMPS in Florida and is President of Solid Rock Mortgage Corporation. He runs a site called Mortgage Meds and is an airline pilot (he still flies 5 days a month for American). Links to follow the podcast include:

Solid Rock Mortgage Corporation

Certified Mortgage Planning Institute

How to Earn Money Borrowing at 6% and Investing at 4%

Money Merge Acccounts

Home Equity: Risky During Hurricane Season

Mortgage Meds

I appreciate Robert’s participation and encourage you to listen to someone who is practicing the “Strategic Equity Positioning” approach.

May 14, 2007

Talk to the Clown – Would You Like Fries With That?

by

Realtor, Associate Broker

Author website

I am here today to present to you my proposal for a new business venture. The Internet is a veritable candy store of wealth-creating opportunity, and it is our turn to capitalize. On-line shopping is BIG, I tell you, and it is time we got our piece of the pie.

But, we don’t have a product to sell.

So what? Neither does Amazon. That’s why I have identified the perfect target – the real estate industry. We will become agents and dehumanize the home buying process.

But, how will we attract customers?

The way I see it, there are two ways to establish ourselves in an established industry. Either we give them better service or we give them money. We aren’t in a position to do the former, that would just be hard, so we will do the latter. In order to give away money, we will have to redefine the service and deal in volume. Jack In the Box does not make money on their burgers. People come to them for the burgers, of course, but their profit margin is in the fries. And anyone can get a better burger at the steak house, they can get real service at the steak house, and they will leave having had a better dining experience with an A rated establishment, but people are inherently greedy. Houses will be our burgers, but volume will be our fries. Focus on the fries and forget the burgers.

But, (whispers), representing home buyers and sellers is hard work!

QUIET! Do not EVER suggest that real estate is hard work again. This kind of crazy talk will undermine all of our efforts.

But, just take the traditional pre-sale activities. The best, most effective listing agents spend thousands of dollars on a given home marketing and exposing the property, not to mention the time involved constantly improving and expanding their systems. Sometimes this is done for naught; the seller decides not to sell, and the agent is out-of-pocket. How can we afford to give money away?

We can’t, not by representing sellers. The costs of doing business are simply too great, and it is far Read more

May 14, 2007

Mortgage Brokers — How Everybody Can Win

by

Real Estate Investments Broker

Author website

Almost three years ago we kinda sorta beta tested doing invitation only seminars for past clients of local mortgage brokers. It went like this.

The mortgage guy went through his data base looking for clients who either fit the investor profile, (as defined arbitrarily by some bald dude) or folks who had actually spoken to them about their investments, or how they wanted to get started. This resulted in a ’10 best list’. We’d decided to keep these seminars small and intimate. We didn’t want to play the numbers game. By limiting the invitees to those who were actually interested in real estate investing, we felt 10 people (or couples) was about the right sized group.

This turned out to be correct, as the atmosphere was more like having a conversation instead of being talked to. It also resulted in more time getting their questions answered than listening to me talking at them — a good thing.

I wrote in more depth on this topic several days ago.

So far, the mortgage brokers who have hosted these seminars have increased their production significantly, and their clients have begun the march to a great retirement through intelligent real estate investment. The very first mortgage broker to participate ended up inviting only five clients. All five became our clients. In the eight months immediately following our first client meetings, he closed almost 30 loans. In the year after that he did another dozen.

I invite you to contact me if you have interest. We don’t charge for the seminars, but the host is responsible for our travel and hotel expenses.

Our last seminar of was held in Boise, and the response was incredible. We ended up having to do two of them. All but one person decided to seriously consider becoming a client. So far, over half have indeed signed on. This will mean by the end of the year our Boise host will be busy providing about 10-20 new loans — all a direct result of the seminar. This also means that whatever these clients do in the future, the original seminar host will be the go-to Read more

May 13, 2007

SOBCon 07

by

Real Estate Investments Broker

Author website

I’ll make this short and to the point.

I just returned from the most informative conference I’ve ever attended. The speakers were remarkable. The tech-geeks were beyond description, and included many of blogging’s true heavyweights. I’ll be writing about the technical news — it was exciting, and most things blog-tech generally don’t do anything but irritate me. 🙂

There are some truly bright people out there. When I am able to compile an intelligent post on the tech stuff, I’ll post it here.

I think even Greg might have been excited over some of this stuff. 🙂

May 13, 2007

60 Minutes’ Redfin.com story delivers 400 hits in 60 minutes flat . . .

by

Suburban Phoenix Real Estate Broker

Author website

Who says the old media is dead? In the hour just ended, Redfin.com’s Real Estate Consumer’s Bill of Rights: A wolf in sheepskin clothing had over 400 hits from organic search. Just think what might happen if the NAR made reasoned arguments instead of trying to club reality into shape with legislation…

(This search is why we’re getting the traffic. As with Zillow.com, we are the highest-ranking discouraging words on the topic. It’s up to you to determine where the intellectual leadership of the real estate industry resides…)

More: real estate 2.x emerges from its Howard Hughes-like seclusion to comment.

Further notice: Well. That was pretty lame. You can see the video here. Wouldn’t it be cool if a reporter could ask an intelligent question? Wouldn’t it be cool if both sides of a story were actually presented? Even so, the bottom line is: Big deal.

Still more: I commented on the TechCrunch.com post, not that anyone other than insiders cares about accuracy on these issues.

My initial comment:

[Quoting Michael Arrington]> Redfin is doing their best to completely remove real estate agents and brokers from at least half of a home sale.

This is incorrect. Redfin’s cost “savings” consists of pushing the cost of buyer representation off to the listing agent and the buyer. It “saves” money by not doing the work the buyer’s agent’s commission is intended to compensate. The net consequence, if no other changes are made in the real estate industry, is that sellers and listing agents are likely to change the way they provide for the buyer’s agent’s compensation. Redfin.com has never turned a profit, and, if its business model actually gets traction, the money it “rebates” will no longer be available to it.

This was Arrington’s response:

Greg – the fact is that the real estate market is seriously screwed up and needs to be disrupted. Agents are overpaid and often do little more than underprice a house to ensure a quick sale. The model needs to change, and Redfin is changing it. Good for them.

That rejoinder is devoid of any actual response to what I had said, but people are rarely Read more

May 13, 2007

A Move Towards Mediocrity – And Beyond

by

Associate Broker

Author website

Many Agents Choose To Be Less Than They Can Be

In an industry overflowing with too many agents chasing too few opportunities, one might think that this level of competition would cause an overall increase in the professionalism and dedication of its principals.

I submit to you – that’s not the case.

While there are many several agents like Greg Swann who pride themselves on taking their efforts to the extreme… there are far more who try to see how little they can do to get a paycheck.

The list of offenses is lengthy, and quite frankly – I don’t know where to start.

One that really chaps my rear is the failure of an agent to return a call. As a listing agent, you have a responsibility to return the calls of other agents regarding your listings. It’s not an optional burden.

A recent case in point involves a few listings I showed a few days ago. Of three of them, we got in to see one. Calls to each of the listing agents was made the previous day to ensure availability and ascertain any special showing instructions.

One of the agents had a full voicemail box, so I was unable to leave her a message – but I did attempt to reach her several other times… including while we were at the home unable to get into the combination lockbox, as there was NO combination given in the listing.

You would think that a listing that had been on the market for more than a week would have this discrepancy fixed – but alas, we can not reach the listing agent to inform her of such. And since this listing is getting stale, I’m willing to bet that her voicemail box has been full for quite a while. Angry clients, I suspect.

Neither of the other agents was kind enough to return my call. When we arrived at one of those other two listings, we discovered that the lockbox and sign had been removed… even though the listing is shown as active in the MLS.

This experience is common to many other agents

I hear about this kind of behavior Read more

May 12, 2007

Can I ease out of my pay-option loan?

by

Mortgage Banker

Author website

Heard this one before? I tell you what, if I had a nickel… skip it, you know what I’m saying. During the last few years home owners, especially in areas with exceptionally low levels of housing affordability, have flocked in droves to the “dreaded” pay option mortgage. Now with recasts looming, interest rates rising, and equity dripping away, more and more home owners are calling me asking how they can still afford their home AND stop losing equity.

A quick thought on the “dreaded” pay-option mortgage. Negative amortization gets a bad rap these days. The mainstream media loves these loans because they are the ideal poster-child of a mortgage market debacle. Think about these loans for a minute: they eat home equity, have high interest rates (usually), are confusing, and make the people who sell them A BOAT LOAD of money. That sounds like music to a reporter’s ears. And so they get a bad rap.

While I generally dislike pay option loans, it’s not the loans themselves; it’s how they are (mis)used. To be sure, neg-am pay-option loans have a place in the lending spectrum; but I believe that place to be with the short-term, savvy investor, playing the flipping game in a rising market, not with the family of four trying to buy a bigger house in San Francisco while working with restrictive cash flows. The problem is that the people calling me are not the savvy investors; it’s the family of four that took a neg-am loan, got addicted to the minimum payment option, and now is in a world of hurt.

These people chose the pay option for either the low payments, the low fees (with a commission north of 3 points on the back of these loans, anyone charging front points with a full margin is sadistic), or they liked the idea of choosing their payment option each month. Most people in the payment-option loans made two critical mistakes: 1. they took the loan for a property they planned on staying in for a long time and 2. they lacked the will power to make anything more Read more

May 12, 2007

Peeing on your own tree with Bloodhound-enriched Googlejuice

by

Suburban Phoenix Real Estate Broker

Author website

Cathy brought this up this morning, so I thought I would look into it. A version of this went out as email to BloodhoundBlog contributors earlier today.

Cathy’s question: What is the Google impact of being a BloodhoundBlog contributor?

We have a Page Rank of 5 on the main landing page — the “top” of the weblog. I expect us to be PR6 at the next recalculation.

Either way, the link to each contributor’s web site in the landing page should be hugely beneficial, since that page has such a high Page Rank.

A contributor’s spot in the list of Frequent Contributors also puts that person’s link on a huge number of other BloodhoundBlog pages: Each post, each category, each month, each author, each indexable page of posts, etc. The actual number of pages Google is “seeing” at BloodhoundBlog may be as good as infinite. Most of those pages will have a much lower Page Rank, of course, but every time Google spiders one of them, each web site it “sees” will be queued to be spidered.

Plus: We get spidered dozens of times a day, by Google but also by Yahoo, MSN and other search engines.

We have a Technorati Authority of 463 as I write, putting us within the top 7,000 blogs overall — third place among Technorati-tracked real estate weblogs. We have 3,868 total links from other weblogs — second place — which argues that many weblogs are linking to us multiple times.

There’s more: After I started thinking about this, I realized I could go the whole thing one better. I’ve changed the way the meta-entry information is presented, post-by-post, to put the link to each contributor’s home web site there, as well.

We’re already delivering a lot of clicks back to contributor’s sites, but this change should yield even more. Plus, every post is now that much more Googlejuice-enriched — with the link being very high within the content, from Google’s point of view. Even better, every theme change is retroactive: All of our past posts, going back forever, will have this link, also.

I changed the date entry, too, so people can figure out Read more

May 12, 2007

How Much Is That Doggie In The Window?

by

Rust Belt Realtor

Author website

The natives are getting restless.

Much grumbling was heard this week about judging the Project Blogger competition. I don’t have too much to say about that. The contest rules and judging criteria were vague and rather useless from the beginning so no one should be shocked, shocked that things are vague and confusing now. I have my own goals for my little blog and I’m doing what I can to stay focused on those.

I do think however, that a good hard critical look at something is never a bad thing, so when Derek Burress stepped up to the plate and generously volunteered to give an honest critique, I thought it was a capitol idea. He graciously gave me his feedback and if you are an Active Rain member you can read his excellent critique here. When the week 4 judging was completed on Friday, I got more feedback. Looks like I got some splanin’ to do. Well that’s not entirely true. I rarely feel I have to explain anything I do, except to my loved ones and clients, but if it helps those playing along at home, I will.

The burning question is: What’s with theBrickRanch dog? The assumptive answer is that Coach uses a dog so Apprentice uses a dog. Not exactly. I don’t know the back-story of why Bloodhound is Bloodhound, but I can guess that part of the dog motif is this: What would you rather see, big soft puppy eyes gazing back at you or a cactus? What feels more like home to you: A warm, sweet puppy or a prickly desert plant? Which do you respond to on an emotional level: Bloodhound Realty or CactusPlant Realty? There might be more to the story of the bloodhound than that, but I understand the emotional trigger, the warm and fuzzy-ness of using a dog. It makes sense to me. I market to a very family oriented, dog friendly community and I have two big mutts myself so it fits my market, my blog, and me. Damn. We should get bonus points for that.

I took a local web marketing/ WordPress 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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