If you don’t have a sense of humor, you probably don’t have any sense at all.
To get things started, here is Lereah as a Dancing Elf. Turn your sound on to get the full effect.
Merry Christmas Everyone!
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This is me in today’s Arizona Republic (permanent link).
Cutting out middle man in a sale might cost you
I’ve talked about disintermediation before, and surely it will come up again. Disintermediation in real estate is the idea that buyers and sellers can eliminate the middle man — in this case the Realtors — and deal with each other directly.
The belief is that the Internet will provide information formerly “hoarded” by Realtors so that real estate transactions will become as simple as buying stocks or airline tickets online.
The information that is supposed to make this happen is the Multiple Listing Service, and that’s something we can talk about another day. For now it is sufficient to make plain that MLS listings are very far from being the most important information in the sale of a home. The simple fact is that, because I do this job every day, I can do a much better job than an unrepresented buyer or seller, much as you can do your job better than I could.
Want proof? Let’s go buy a house.
We’re out showing homes with our party and they settle on one they like. Because it’s a buyer’s market, and because the buyers aren’t very well prepared, we don’t write a contract right away.
What’s the best day to write an offer? Tuesday, in principle, but the absolute best day is the first Tuesday after the first of the month. The buyers have never given this a second thought, but it’s our job to know.
We’ll send the buyers to a lender we know and trust. Why? Because, although they have good credit and good incomes, they have no cash. Our lender can write a fast 80/20 loan with very low closing costs. Say what? That’s an 80 percent first mortgage, a 20 percent second mortgage with no private mortgage insurance — all without costly junk fees.
When we finally write the offer, we’ll recommend a structure like this: List price, less 5 percent, with an additional 3 percent coming back to the buyers as closing costs.
Are we done yet? Not even close, but we’re done for now. Come Read more
Talk is cheap. Supply exceeds Demand. 
Not His Favorite Clown What follows are a few “Economist Jokes”. Not wanting to shock anyone but all of these were written and were being told when David Lereah was still in grade school. Here is a news flash – people who are finding themselves being “victimized” by the pronouncements of an economist have to be looking for ways to be a victim. I’m not defending Lereah, I’ve never bothered to pay any attention to anything he (or any other economist) had to say about anything.
NO major economist accurately predicted, in advance, the phenomenal run up in prices that started two years ago. Every last one of them was asleep at the switch. The switch was turned on and they – along with everyone else – THEN could make pronouncements about it. That is observation of effect, after the fact. That is not “predicting” anything.
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Economics is extremely useful as a form of employment for economists.
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“I’m thinking of leaving my husband,” complained the economist’s wife.
“All he ever does is stand at the end of the bed and tell me how good things are going to be.”
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There is also a joke about the last Mayday parade in the Soviet Union. After the tanks and the troops and the planes and the missiles rolled by there came ten men dressed in black.
“Are they Spies?” Asked Gorby?
“They are economists,” replies the KGB director, “imagine the havoc they will wreak when we set them loose on the Americans”
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Economists don’t answer to questions others make because they know what the answer is. They answer because they are asked.
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The only thing more dangerous than an amateur economist is a professional economist.
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Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.
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An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.
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An Economist is someone who didn’t have enough personality to become an accountant.
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Q. What’s the difference between an economist and a befuddled old man with Alzheimer’s?
A. The economist is the one with the calculator.
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The last severe Read more
Remember these guys? From this post? Well, this just in…
Seems the one on the left (in the right hand picture) may have taken it a bit too seriously.
As for me, I’m Italian. And you know what they say.
Not to be left in the dust by our friends at Sellsius… the Bloodhound Blog has hit the 300 blog link milestone.
Congrats Greg and Cathleen!
I’ve been running some stats on advertising, Google rankings and agent performance over the last couple of days. One of the top agents in Atlanta has not had a selling-side transaction all year. Very unusual for this agent. Another top agent – who ranks very high in Google and has been a very productive selling agent in the past – has also not had a selling-side transaction this year. Both agents have seen sales on their listings, but not at the same rate as 2005.
When I examine the number of homes sold in the greater Atlanta area in 2005 versus 2006, the numbers are virtually the same… but the number that didn’t sell was much higher in 2006. In 2004 – 99% of all listings sold… in 2005 – 71% of all listings sold… but in 2006, only 54% sold. If this trend continues, we will soon reach a point where a property will be more likely NOT to sell.
Meanwhile, for the umpteenth time over the last few days, GMAC Metro Brokers Real Estate has been running their television ads trying to get more people to become real estate agents. One of their ads features a guy saying that he sold $9 million in his first year. Oh yeah… we’re all swimming in cash right now. Even their website asks, “Who wants to be a millionaire?”
I wrote “How Many Agents Is Too Many” back in October.
So, with a yearly average of three or four transaction sides per agent in Georgia… why would Metro Brokers advertise for more agents?
Simple. Because these agents aren’t on salary.
Many businesses that hire commission-only salespeople don’t care who they hire, as these people only get paid when the company gets paid. To them, the more the merrier… and I fear that the same is true in real estate companies.
The questions is: “Is this a good model for our industry?”
Some new brokerages are trying a salary model, and time will tell if these models will thrive – or even survive. I have yet to hear what kind of money these salaried positions are paying.
On the Read more
One of my clients gave me a wake-up call late this year. She has a computer, but she’s never unpacked it in her current home. I don’t know if the computer is robust enough for broadband, but it really doesn’t matter, does it? I’ve been ferrying listings to her by car — printed on paper, stuffed in envelopes and parked under her doormat. Just lately she acquired a fax machine, which is convenient. We have a house under contract and there is a lot of paper flowing back and forth. Certain oil-rich sheikdoms might weep, but everyone else can breathe freely — and from a cleaner air supply.
This is a weird world for a wired Realtor, but guess what? It’s the real world. My own sweet mother is such a Luddite that we’re buying her the dumbest dumb terminal I have ever seen for Christmas. We started out saying, “When all you have is a hammer, everything looks like a nail.” By this point, we act as though we believe that everything is a nail.
This is incorrect.
For one thing, buyers and sellers of residential real estate are not on-line in concentrations greater than other demographics. How could they be? Young people, yes. Technophiles, yes. Everyone else…? Not so much.
Moreover, whether or not buyers and sellers are poking around on-line, for the most part they are not making life-altering financial decisions in untouched-by-human-hands on-line real estate transactions. There might be a news story about a crazy young couple taking the plunge, but you need to stop for a moment to recall that that exact page of the newspaper only just last week was devoted to a young man who has never cut his toenails. What makes news? The exception, not the rule.
We are too much misled. The exception is interesting, but it’s interesting because it’s rare. We ignore the commonplace because… well, it’s commonplace. In the last year, we saw the launches of dozens of new Realty.bots, each one devised to provide easier access to information that was, for the most part, already available. What changed in actual, on-the-ground residential real estate Read more
Obstacles are those frightful things you see when you take your eyes off your goal. – Henry Ford
In an email, Adam wrote:
Russell-
I never got a chance to thank you for the Star Wars “Duel in the Desert.” I attended the event and very much appreciated your insight and humor. I have been doing Real Estate for over 6 years in CA and AZ. Although I have made over 100k one year, I have struggled through many others. I found this interesting in the sense that you mentioned doing this through the first part of your career (the ups and downs).
Somebody asked you a question and you mentioned to them about not being “all the way in the box.” You then mentioned something along the line of You finally getting this perspective yourself in your career and getting “all the way in the box.”
I want to get all the way in. How is this change made? How do/did you flip that switch? I’ve been waiting for years yet it hasn’t happened.
If this seems like a strange email, it’s because it is! I just valued your advice so much that you gave a couple of months back and thought you might be able to give me more insight.
Thanks,
Adam
The question I was responding to was from a lady asking about sending out postcards but she didn’t want to mail “ordinary” postcards to a farm area or a personal mailing list. She wanted something really unique – something outside the box. As I hear this sort of thing all the time (and recognize it as a destructive idea) I told her that her problem was not that she wasn’t outside the box with her thinking and her postcard program but that she wasn’t IN the box yet. Few agents are suffering from not being “outside the box”. They think they are but their real problem is they haven’t gotten “inside the box” yet.
There are certain fundamentals in any industry, profession or activity. There are correct ways of doing almost anything. The people at the top (of almost any activity) have Read more
For the first time I’d like to post, almost simultaneously, (simulpost?) on a subject which has facinated me for years. My purpose is merely to introduce the subject. A meatier post will follow.
Investors have been told by Wall Street to diversify since the street signs were put up on the corner of Wall and Broad in Manhattan. On the surface it seems a more than reasonable principle. After all, the only reason for its existence is to avoid losses. And who in their right mind doesn’t want to avoid losses? Indeed.
Warren Buffett and George Soros are both multi-billionaires — due solely to their ability to invest in winners. They think diversification is for those who simply don’t know what they’re doing. This is because they define risk as the result of not knowing what you’re doing. It’s ironic that most of their investments are in businesses that haven’t diversified themselves.
Here’s what Mr. Buffett had to say to his own shareholders 13 years ago:
“The strategy we’ve adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it.”- 1993 Chairman’s Letter to Shareholders
Mr. Soros seems to like the more direct approach:
“Diversification is for the birds.”
They both have been quoted saying:
“Risk comes from not knowing what you’re doing.”
We laugh at the thought of the coffee can full of cash buried in the backyard. But it’s not funny. The reason the old guy did that was because he simply didn’t know what else to do. He did know one thing for sure — he didn’t want to lose what he had earned so far. Fear of loss and not knowing what one is doing is what risk is all about.
Since when do fear and ignorance combine to create great investment portfolios? Mr. Buffett and Mr. Soros say Read more
I keep thinking that I’m going to have free time for blue sky projects at Christmas, and I just keep getting busier. I accidentally sold another house today — 166,800 packages of Top Ramen to me, but it’s a new build that won’t close until around July of 2008. As the Phoenix market recovers, we could end up with a lot of Top Ramen in the pipeline.
I should be linking more, but I think Christmas has got everyone, one way or another. The much-promoted Yankee Blog Swap was today. I credit Mary McKnight with an impressive amount of preparation, but only three bits of news jumped out at me:
First, Kris Berg is a rare wit wherever she goes.
Second, Dan Green thinks mortgage weblogs are boring. So much he knows.
And third, Glenn Kelman is much more tolerable at his increased dosage.
I have houses closing all week, along with our own refi. It’s cold here, something I almost never get to say. But I caught the wind in a sinus, and I have that half-stupid feeling that precedes a cold. Wonderful. I should probably have some chicken soup, but we have all this damnable Top Ramen to dispose of…
Technorati Tags: blogging, real estate marketing
The four victims I tagged for the “Five things you didn’t know about me” have come forward with their deepest darkest secrets:
Kris Berg is a very smart person with a quick wit (who didn’t know this?) and a perilous driver.
Doug Quance has led a life of Steinbeck-like diversity in a vast host of locations.
Jeff Brown takes you on a grand tour of his life, from his grandfather to his wife. Along the way he explains the origins of the appellation “Bawldguy.”
And Dan Green is gracious enough to show us the everyday life of the hard-charging over-achiever. I say we enter the man in a pie-eating marathon!
My duty is discharged, and I am deeply honored to be working with such amazing people.
But there is a lingering detail…
Russell: Did you notice that Jeff called you out…?
Technorati Tags: blogging, real estate marketing
Read, learn, mark and inwardly digest. If you weblog, it matters…
Technorati Tags: blogging
…is up at Seattle Real Estate Professionals. Moderator Marlow Harris presents awards in three categories.
BloodhoundBlog is a Carnival unto its own. Here are eleven entries from the last week that I thought were exemplary:
Russell Shaw: Thank You, Mr. Barton, May I Have Another?
Kris Berg: When It Clicks
Cathleen Collins: Punch and Pie At This Week’s Carnival of Real Estate
Dan Green: Why The Fed Matters to Real Estate
Greg Swann: Who needs Realtors . . . ?
Russell Shaw: Making Predictions, Cowards & Lies
Kris Berg: Between Rock and a Hard Place
Greg Swann: Everybody loves Ramen . . .
Russell Shaw: Anonymous Posters Who Hate Lereah
Jeff Brown: How Much Is An Excellent Assistant Worth? Are You Kidding?
Richard Riccelli: There’s no business like show business, like no business I know
Dan Green’s Why The Fed Matters to Real Estate was our entry in the Carnival of Real Estate, the Carnival of Real Estate Investing, the Carnival of Business and the Carnival of Marketing.
Cathleen Collins is the judge of our Carnival entries, but her Punch and Pie At This Week’s Carnival of Real Estate got the most votes from our contributors, so it is my honor to declare her the winner of the Bloodhound Carnival.
Marlow Harris hosts the Carnival of Real Estate at her own 360 Digest on January 15, 2007 — a week after Elvis Presley’s birthday. She threatens to have a category devoted to Elvis posts, which should be fun…
Technorati Tags: blogging, real estate marketing
We see everything through the lens of real estate, including films and television programs. It’s baked in the cake. Houses, always, and rooms and neighborhoods, and god help us if there’s a real estate transaction in a movie or TV show. When we were leaving The Pursuit of Happyness last night, Cathy said, “That makes starting out in a split shop look easy.”
(For non-Realtors, a split shop is one where you have to split your commissions with your broker. New agents often have to give the broker 50% of their earnings, and they may have to pay a mandatory mentor 50% of the remainder. The attested quid pro quo is training, but most new licensees starve and quit before they see much training. They often leave a ton of money behind in other people’s pockets, though, so almost everyone is happy.)
Anyway, the travails Chris Gordon undergoes in “The Pursuit of Happyness” make everything associated with mere straight commission sales look downright easy. Yes, I know successful salespeople go through a lot to get to a place where money problems seem remote, but few of us take the path through Dante’s torments followed by Gordon.
Despite a dogged persistence he is dogged by persistent failure. His wife leaves him, and he voluntarily undertakes the burden of single parenthood. All of his capital is invested in portable medical devices that street people keep stealing. He is evicted from his apartment. His limited savings are confiscated by the IRS. He and his son end up homeless, vying and sometimes failing to get space in homeless shelters. Through all of this, he is working as hard as he can in an internship at a stock brokerage, competing against nineteen other applicants for the one available paying position.
This is a Hollywood movie based on the real-life Chris Gordon’s autobiography, so you know how it’s going to end. It’s the getting there that makes this film worth seeing. To say it is inspirational is a massive understatement.
I’d tell you to go see it, but I can’t imagine that anyone who cares about human achievement would not see this Read more
You wouldn’t know it from its advertising, but Jordan’s is a furniture store local to Boston. And a rather successful one too. Always near or at the top of national lists for most sales per square foot in the retail furniture business. So profitable, it attracted the attention of the Sage of Omaha who bought Jordan’s with the expressed purpose of leaving a good thing alone. He wanted it to continue doing what it has always done: Act like anything but a furniture store while making money at a phenomenal rate.
If you didn’t know better, you might think Jordan’s was a movie theater. Or a theme park. Perhaps a restaurant. And when you got to know better, you would be right. That’s because Jordan’s realized early on that success in the furniture business first required success in the baby-sitting business. So they created stores that kids thought were way cool. A place where mom and dad would eagerly take them — and leave them alone! — for unadulterated fun. Mom and dad too thought this way cool. Because where else could they safely escape from the kids for an hour, and serenely spend their suddenly free time exploring an adult fantasy of their own? An Eden filled with rooms of perfectly arranged and accessorized furniture, all of which — when combined with a ready credit card and the relaxed sales resistance of couples floating in what feels like homes for their dreams — could be delivered whole the very next day?
Without jumping ahead, I know you already know what makes Jordan’s successful. And what you can learn from their example. The brothers Jordan asked “what business are we in?” And the right answer was show business. Entertainment for kids to be precise. A perfect, powerful synergy — because kids, most of all, drive the demand for furniture. You buy it when they’re born. You replace it as they grow. Again when they ruin it. And once more when they move away — free at last to repeat the same cycle.
Summon the gods and you’ll learn “What business are you in?” was Read more