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April 1, 2007

A Farewell to ARMs: One Less Option

by

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

Author website

Are Option ARMs the next casualty in the non prime mortgage meltdown war? Wall Street fired the shot heard ’round the world in the mortgage default war by demanding repurchases from subprime lenders. Lenders either closed their doors or waved the white flag and allowed the conquering army to annex them.

The next battle in the mortgage default war may have already been fought and decided long before the soldiers have time to lace up their boots. That battle is the “dirty bomb” that we call the Option ARM. I think Friday afternoon was the equivalent of Paul Revere’s midnight ride.

I received an e-mail from IndyMac Bank, a respectable non-prime and prime lender and leader in the negative amortization loan products, that said:

1- IndyMac Bank is retiring all 12 MAT products over the next few weeks. This is the traditional low start rate, negative amortization loan.

2- They are increasing the minimum payments and reducing the max price. No more four point rebates for mortgage brokers on an intentionally vague product.

3- They cite the popularity of the FlexPay 5/1 ARM for the 12 MAT demise. The Flex Pay 5/1 ARM has a fixed rate for five years with an option to pay less than the interest due which does defer interest. The advantage to the Flex Pay 5/1 ARM is that the potential negative amortization is completely predictable and not subject to the whims of interest rate fluctuations.

Now, three initial thoughts cross my mind:

1- Option ARMs are dead. That’s hard to believe. Jeff Brown states a great case for alternative loan products last week when he says that builders build and lenders lend. He’s been around long enough to know that opportunists capitalize amid fear and vacuums. Lenders with high exposure and nebulous underwriting guidelines will be decimated when the piper comes calling in the form of higher defaults. Lenders with cogent underwriters will survive and cherry pick the good borrowers with this useful loan product.

2- Wall Street is not at war with lenders but is betting on Read more

April 1, 2007

Free Real Estate Leads

by

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

Author website

I am a regular contributor to the Active Rain Real Estate Network. I was perusing the posts on Active Rain the other day when one jumped out at me with the title

FREE REAL ESTATE LEADS

This is an advertisement, but important that you read:

Real Estate Agent Directory
The most beneficial feature of this directory is that all leads generated in your area will be forwarded to you in real-time at no cost -ever. You can add a link to your website in the directory (more search engine exposure) and receive the leads that way as well.

*A FREE directory listing for 3 months (and only $9.00 per month thereafter-you may cancel at anytime)
*FREE LEADS from buyers and sellers (This will never change/completely free leads)
*No further commitments listed by county

This drew some fire from the good people at Active Rain. The real estate agents didn’t like the idea of a lead aggregator advertising their wares on the network. A few of us pointed out that advertising was permitted by the network and that many of the critical comments were coming from serial advertisers on Active Rain. Nonetheless, the lead aggregator was criticized for deceptive advertising and everyone poked holes in her business model.

Everyone knows that lead aggregators are the scourge of the industry; why do I defend them?

I thought back to my Principles of Promotion class from business school and I remembered the importance of having a mix in your promotional efforts. The appeal to a mortgage originator is that he might capture potential homebuyers before they contact a real estate agent; it allows him to control his destiny. There are many ways for a mortgage originator to promote his business: direct mail, telemarketing, hosting a web log, search engine optimization, seminars, co-hosting open houses, and even the old method of buying donuts for the real estate office and handing out rate sheets.

I started thinking that I might be falling victim to the old “ivory tower syndrome” that success sometimes breeds. I’ve had good results with writing articles for Active Rain. Myspace, and Bloodhound. It has generated 20-30 loan inquiries each month which Read more

April 1, 2007

Ask the Broker asks the audience: What should a brand new agent do to get traction?

by

Suburban Phoenix Real Estate Broker

Author website

This is another Ask the Broker question best thrown out to everyone:

It looks like I did Project Blogger one better. I actually hired on a new agent yesterday. As in brand new. The guy is an attorney, formerly in-house counsel for a non-profit, he just got his real estate license and wanted to hang it with us.

So what things would you say to a brand new agent in this market? What are the “New Basics”? I plan to tell him BloodhoundBlog is must reading. But whither from there?

I’ll lob a softball to get things started: I don’t want to seem to endorse Tom Hopkins, because too much of his real estate sales advice turns on what I consider to be deceptive tricks. But something he said has stuck with me forever:

Am I making the most productive possible use of my time right now?

That may not be an exact quote. The point is to make sure that, when you’re working, you’re working on things that will improve your present or future income potential, not spinning your wheels. The other end of the argument is, when you’re not working, make the most productive possible use of that time, giving your spouse, family and friends your undivided attention.

There’s much more than this, of course. What say you? Should a new agent go hi-tech — or go door-to-door. Farm and pray for rain or pay for leads? Go it alone or fill a hole on somebody’s team?

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March 31, 2007

My short list of real estate carnival candidates

by

Suburban Phoenix Real Estate Broker

Author website

I am continually amazed at the people who write for BloodhoundBlog. Day after day they knock me out, but it’s always late Saturday or early Sunday when I am most impressed. Why? That’s when I have to make my short-list of candidate posts for the week’s real estate carnivals. Cathleen normally makes the final choices, thank goodness, but all of the contributors have a chance to nominate their favorites. Here are my picks for the week:

That’s nine, and there are more I might have included. If you missed some of these, give them a look. Only one will be entered in each carnival, and there’s no telling if we’ll win. But win, lose or draw, we are good and ever better. Go see for yourself…

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March 31, 2007

Ask the Broker says: Ask the audience: Is now the time to jump into the housing market?

by

Suburban Phoenix Real Estate Broker

Author website

This came in as an “Ask the Broker” question, but it’s really a wide open pitch for any informed observer. (That would be you.)

So should second-home buyers buy now, or wait? Will lending rates go lower soon? Or is this the time to strike?

Have at it, if you like, but back it up with a reasoned argument. I have no idea where our interlocutor is located, so respond for your own market.

My own take: If you’re willing to buy aggressively and hold for at least three years — five would be better — this might be the ideal time to buy a turn-key home in the Phoenix area. Values could continue to slip over the short-run, but interest rates are unlikely to stay this low in the long-run. Waiting out the bottom on price could result in a worse buy overall, where hammering hard now on price while rates are still very low could put you in an excellent position to prosper when values start to rise again. Nota bene: Never invest money you can’t afford to lose.

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March 31, 2007

Want to make sure you can defend yourself from internet bad guys? Aim for the body, not the head . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is Tim O’Reilly on the Kathy Sierra persecution:

There’s an attitude among many bloggers that deleting inflammatory comments is censorship. I think that needs to change. I’m not suggesting that every blog will want to delete such comments, but I am suggesting that blogs that do want to keep the level of dialog at a higher level not be censured for doing so.

I’m not crazy about some kind of quasi-official clean comments pledge, presumably accompanied by a Good Housekeeping Seal of Approval. The more webloggers look like Babbitts, the less I like them.

However: Policing comments in your own weblog is not censorship.

With the bogus legal standard, “Shouting fire in a crowded theater,” Oliver Wendell Holmes did incredible violence to two fundamental American liberties — the right of free speech and the right to private property.

You have every right to free speech at your own expense on your own property or on public property. Holmes invented his specious standard to outlaw activities that should have been — and since have been — upheld as constitutionally protected speech. Not surprisingly, the perverse standard he proposed is used ubiquitously by thoughtless people to justify all manner of suppression of private property rights.

The owner of a theater has every right to shout, “Fire!” on his own property. He has every right to host a “Shout Fire!” party on his own property. If someone is injured in consequence, he’s subject to lawsuit — but none of this has anything to do with free speech. It would make no difference if the exhortation had been, “Excelsior!”

But: You do not have the right to free speech at someone else’s expense or on someone else’s property. The issue in that circumstance is not the speaker’s right to self-expression but the property owner’s right to condition his hospitality on the behavior of his guests. You do not have the right to shout, “Fire!” in the theater because you are a guest of the owner, not because your right to free speech is being suppressed.

In other words, if someone is acting like a jackass in your living room — or in Read more

March 30, 2007

Soundtrack for my Project Bloodhound life

by

Rust Belt Realtor

Author website

This isn’t real estate related, but since I’m only here as a blogging experiment anyway…

A stunninngly gorgeous and pretty damn smart teenager has found a soundtrack for my Project Bloodhound life. It might be old to the technogeeks here, but it’s new to me, and as there is no accounting for taste, I think it’s fun. Just the thing for tapping your toes during blogsomnia (just close your eyes and listen, the video sucks).

Happy Friday!

March 30, 2007

Success is contagious: Russell Shaw and the StarPower experience

by

Suburban Phoenix Real Estate Broker

Author website

Mega-producing Realtor and BloodhoundBlog contributor Russell Shaw insists that “success is contagious.” He backed up that argument at yesterday’s StarPower seminar in Phoenix. Russell spent much of his day surrounded by Realtors eager to infect themselves with his 400-transaction-a-year mojo. As we have good cause to know, Russell is boundlessly generous with good advice, so it could be a few dozen new millionaires came down with an incurable case of success yesterday.

Russell was one of the seminar speakers, and he did a killer 25 minute presentation on how to price listings — or how to price listings that will sell — or how not to take listings that will never sell. His overarching thesis is that successful people think differently, and his presentation stood as good evidence of that argument: He told the audience nothing they did not already know, but he forced them to look at it from such a different frame of reference that he had the rolling in the aisles.

StarPower CEO and Ringmaster Howard Brinton has agreed to share the audio recording of Russell’s talk with us, so we’ll make it available as a podcast when we get the file.

Cathy and I were both hugely impressed with the intellectual content of the event. Despite my first name, I am not a terribly gregarious specimen, so I am much more likely to catch success from a book. But every one of the eight presenters was bursting with good ideas. Cathy was particularly impressed with Tami Spaulding from The Group in Denver. So many good ideas seem to come out of The Group that I may want to devote some concentrated attention to what they’re doing.

Cathy fell in love with Spaulding’s ideas for a pre-listing package, and I immediately saw how such a thing could be done on-line as well as in print. There were a lot of other ideas like that, things that we think we can adapt to our way of going at things.

This year’s StarPower Annual Conference is in Phoenix. If you come to town, we’ll buy you a beer. And there’s an excellent chance you’ll catch Read more

March 30, 2007

Independence Day – It’s Your Business

by

Realtor, Associate Broker

Author website

It finally dawned on me. I have been grappling with the idea of single-property websites for some time. Should I? Shouldn’t I? Would a single-property website for a listing enhance the exposure of the home and therefore hasten a sale or would it simply serve to impress the seller? Would a single-property URL be detrimental in that it would cause brand confusion with our widely-promoted and established website which already provides all of the property information in what I consider a very comprehensive and compelling format? I could create a distinct site or blog for the home, but wouldn’t that drive traffic from my site? Conversely, I could create a domain forward and point the URL to the existing page in my site, but wouldn’t that in fact be redundant?

Yahoo! Today I’m on board with the concept of the single-property site, and I have Yahoo! and my real estate company to thank for my sudden clarity of thought.

Let’s Call Them “Prudential”

I happen to be affiliated with a company (who shall remain nameless) who negotiated an exclusive agreement with Yahoo! Real Estate. Without going into specifics, I will be the first to admit that there is great benefit to the agents of this partnership, but it comes with a cost. Agents pay to be included in the program but, more importantly, I fear that as many leads are being driven from me as they are to me.

We Want to Help You (Help Us)

Participating agents can assign a unique Yahoo! Search ID to their listings which, when entered in the Yahoo! search bar, will bring up the full property page. This page is branded with the agent’s information which, at first blush, sounds like a hell of a deal. Further, if a consumer happens upon the property during a search, they will be directed to this same branded page.

Let’s start with the obvious. This is a company branding effort in agent-branding sheep’s clothing. As an example, a client of ours who was relocating back to San Diego was using the Yahoo! site to search for homes. She innocently saved her search and within Read more

March 30, 2007

Surprise and Delight Us

by

Mortgage Banker

Author website

“Surprise and Delight” is a mantra that has been engrained in my consciousness from my pre-mortgage education in the world homebuilder marketing and customer experience modeling. “Surprise and Delight” is a very straightforward concept; however, the astounding lack of implementation in the marketplace (especially the mortgage and real estate market) makes this strategy an untapped powerhouse waiting to be used to your advantage. “Surprise and Delight” strategy is just what it sounds like — surprise your customer with a small delight when they least expect it; taking their experience with you from acceptable to exceptional. Propelling past acceptable to exceptional gives you the ultimate power in marketing — the power of remarkable service.

Surprise and delight can be traced from concepts well outlined in Seth Godin’s Free Prize Inside, and Harry Beckwith’s Selling the Invisible (both must reads). The basic tenet is excellent service is no longer enough, superior knowledge is not enough, a “great deal” is certainly not enough. None are enough to make your service remarkable. There has to be something more – something worth remarking on. It’s important to define remarkable service as service that is so extraordinary it makes your customer share the experience with people they know. And not just share, advocate on your behalf because of it. Anything less than their advocacy means you’ve failed to render a service to the degree of remarkability.

An example. There is a little flower shop in Laguna Beach, California named The Black Iris. They are not just another flower shop – they are flower artists that create imaginative works of art with flowers and other flora. The first time I saw one of their bouquets I was blown away. I inquired about it from the person who had purchased it and they raved about this little shop. I had to order one for my wife’s birthday. $150 later, my wife had an exquisite arrangement that actually made her weep with happiness. $150 is a lot for flowers; it’s a piddling price to be a hero to your loved one. I immediately told my brother-in-law about them and many other Read more

March 30, 2007

Skilled Realtor bargain of lifetime

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link):

 
Skilled Realtor bargain of lifetime

We own 65 Internet domains so far. Of those, 29 are actually hosted on the Internet, sites you can visit with your Web browser. The others are “pointed” at the hosted sites.

If you forget that I work for BloodhoundRealty.com but remember my name, GregSwann.com will take you to our main Web site.

We build custom sites for our higher-priced listings, which accounts for many of the hosted sites. We also have sites for our Weblogs and a site we use to test new versions of our software to make sure it’s ready to deploy.

We are a high-tech real estate brokerage trying to stay ahead of the curve in a high-tech era.

Looking over one shoulder, we compete against traditional Realtors. But looking over the other, the Realty.bots — venture-capital-funded Internet real estate start-ups — make the traditional real estate marketing message harder and harder to deliver.

Is Zillow.com, or another automated valuation method, a useful tool for pricing homes? No, but I have to be prepared to show why, perhaps first overcoming my client’s skepticism.

Is a $199 Internet listing as effective as the full-service marketing package we bring to the table?

My view is that a skilled, experienced Realtor is the bargain of a lifetime. Under one hat, you get pricing and sales expertise, advice about staging and repairs, an expertly executed marketing campaign, a professional negotiator, thoughtful and knowledgeable hand-holding through the escrow process — and more.

Unlike a Realty.bot, your Realtor has actually bought and sold houses — dozens or hundreds of times. With expertise that stretches from little things, like hiring a landscaper, to topics as big as the Internet itself, the professional advice you will get from a good Realtor cannot be matched by canned Realty.bots, no matter how much fun they are to play with.

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March 29, 2007

Predatory Coaching For Realtors and Loan Originators

by

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

Author website

Are you a victim of predatory coaching?
There are many advice gurus available to Realtors and loan originators. I watch our industry grow and am amazed at the cottage industries that have hatched from that growth. It reminds me that the only people really making money in multi-level marketing sell the books and tapes on how to succeed in MLM. I can think of three or four gurus who offer real content and provide “how-to-do-the-business” knowledge that comes from personal experience…

…but…….THERE ARE PREDATORY COACHES

There is a vacuum in the real estate and mortgage brokerage industry when it comes to training. A new licensee signs up with a brokerage and the broker says “Get to work!” Many have figured out how to make an above-average income doing just that. Hustlers love vacuums, though. They “prey” upon the weak and their booty is an annuity of fees extracted from an unsuspecting and well-meaning Realtor or originator.

Let me give you a real life example. In 1999, a good friend of mine opted for a career in real estate brokerage over her corporate recruiting career. She approached me to secure a line of credit for her so she would have ample reserves to meet expenses in an irregular income environment. The predators started circling like hungry buzzards on a hot desert day.

1-She was encouraged by her broker to “invest” in training. (What the hell does the broker do?).

2-She was encouraged to take out full-color ads borrowing other people’s listings. (Good for the brokerage; free advertising.)

3-She enrolled in coaching programs at $500/month.

The best marketing advice she received was from SCORE (Service Corps of Retired Executives). The cost was $79.00 for the six-week consultation.

We have a new vacuum and that vacuum is in marketing. Realtors and loan originators are having increasing difficulty learning how to market themselves. The new buzzards are circling. They come disguised as “online marketing experts”. They sell and resell “online leads” to us. They hold seminars and follow-up with pushy sales people who try to make Read more

March 29, 2007

Nine months on the trail: Whither BloodhoundBlog?

by

Suburban Phoenix Real Estate Broker

Author website

I don’t like mission statements, but I’ll give you one for BloodhoundBlog:

Everything you wish were in Realtor magazine but isn’t.

That’s pithy but inadequate, because there’s more here already than Realtor magazine — or the Specialist — would ever take on. We have three lenders to take us inside the mortgage industry. We have two investment experts to brings us hard-core, hands-on advice. We have some of the best writers in the RE.net — who produce some of the best reading in real estate writing, period, weblogged or printed.

And we are nine months old today.

Our traffic grows month-by-month. In addition to the folks who see our work by RSS feed, we are routinely attracting more than 1,000 unique visitors a day on weekdays. We’re slower on weekends, but we’re right on the verge of hitting 30,000 visitors a month. Our readers take in just short of two pages each, on average, so a lot of what we write is getting read. We throw off at least 500 outbound clicks every day, which means that the sites we link to are seeing quite a few Bloodhounds in their kennels.

This is all great, but I want more. We’re building the Russell Shaw Sales Success curriculum, and, by the time we’re done with it, we should have something that will provide tremendous value to Realtors and other sales professionals for a long time to come. I have no expectation that Teri Lussier and I will win the Project Blogger contest, but I plan to make the course material I’m developing available via ebook to any Realtors who hope to join the burgeoning RE.net. Our contributors are becoming steadily better known, and this cannot but produce interesting opportunities for them in the long run.

Even so, I want more. I am very proud of everything we have done so far — and a week’s worth of BloodhoundBlog content is an over-scale pound of meaty reading — but I want to come to the place where a day’s work is of that weighty scale. I know we can do this. There are days when we do it already. Read more

March 29, 2007

Second Russell Shaw Sales Success Seminar scheduled for Tuesday, April 17

by

Suburban Phoenix Real Estate Broker

Author website

Mega-producing Realtor and BloodhoundBlog contributor Russell Shaw is is hosting the second in his series of Sales Success symposia for striving Realtors. The first event was a huge success.

The purpose of the seminars is to establish the most vitally-important points to be covered in a sales training curriculum, to be produced in the coming months in audio and video podcasts. Russell will address larger meta-topics and then entertain questions from the audience to unearth smaller but still important sub-topics to be addressed in the podcasts.

The second of these events will be held on Tuesday, April 17, 2007, at the offices of North American Title, 3200 East Camelback Road, Suite #150, Phoenix, AZ 85018. The event will run from 6:30 PM to approximately 9:30 PM, and refreshments will be served. There is no charge to attend. Russell will handle two meta-topics, followed by question and answer sessions, with a short break between. North American Title and Worldwide Credit Corporation are sponsoring the event and will make short presentations.

Who should come? A striving Realtor is one who has learned how to stay afloat in this business but wants to learn how to build a bigger, more profitable business. In other words, if you’re a brand new agent or if you’re happy with your current level of production or if you’re already a top-producer, these symposia are not for you. Because Russell is building the curriculum for a full-blown Sales Success training course, his goal is to hear from the Realtors who want most to learn the lessons he has mastered in his career.

Click here for a poster you can hang up in your office to let other agents know about the seminar. All the details plus driving directions.

If you want to attend, we’d love to have you, but space is limited. This is an opportunity to learn a whole lot even as you help other Realtors learn a whole lot — for years to come. Plus which, it should be a lot of fun…

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March 29, 2007

Late-night random notes . . .

by

Suburban Phoenix Real Estate Broker

Author website

I finished moving the last of our 29 hosted web sites today, and, so far, I am 98% delighted with the choice me made. The pages just snap, including BloodhoundBlog — which is one fat, data-sodden dog. We have some kind of DNS problem that is intermittently affecting some of our PHP programming. Until now, I have been prepared to write this off to slow or flaky DNS servers out in the world. As of today, I’m thinking we have a problem in-house. By Friday, I’ll have it worked out, and then I expect to be 100% happy.

I’ve had poor Cameron working for two days to solve a problem that may not even be his problem. It is biologically ordained, I think, that fathers and manling sons must quarrel, but Cameron and I spar not about cars or curfews but about software — right now about Unix environment variables. Tonight’s South Park was aimed right at both of us — family togetherness in the form of rude comedy peppered with net.references.

Todd Tarson’s MOCO Real News celebrated its first anniversary yesterday. Todd deserves accolades every which way. The depth of responsibility he feels for other Realtors is without parallel. Because he’s in Arizona, Cathy and I will get to watch him as he becomes one of the Grand Old Men of the Arizona Association of Realtors.

We’re at StarPower tomorrow, so I have a couple of entries set up in advance, to be posted by the scrupulously punctual WordPress bot. Because of all the work I did to keep the foul-mouthed flamers out, quite a few comments are being captured by the moderation bot, or even the spam bot. I won’t be around to deal with those until late in the day. My apologies.

I have many more thoughts on the subject of local real estate weblogging for dollars. Now that I have this hosting issue (mostly) off my plate, I can begin to implement some of them, as well as talk about them.

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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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