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September 10, 2006

My 9/11 prayer . . .

by

Suburban Phoenix Real Estate Broker

Author website

Cathy and I watched The Path to 9/11 on television tonight. I had forgotten that we were in Metro New York for the Turn of the Millennium. My father lives in Connecticut, and we went there that year for New Year’s Day. The photo you see is my son crawling all over a bronze statue of a stock broker in Liberty Park, directly across from what was then the Merrill Lynch Building — on December 30, 1999.

I lived in Manhattan for ten years, from 1976 to 1986. For quite a few of those years, I worked just across from Liberty Park, in the Equitable Building at 120 Broadway. At the other end of that little brick park was the southeast entrance to the World Trade Center complex.

I worked insane hours in those days, and, very often, when I got out of work, I would go sit at this tiny circular plaza plopped down between the Twin Towers. Not quite pre-dawn, still full dark, but completely deserted — and to be completely alone in New York City is an accomplishment. I would throw my head back and look up at the towers, the fourth movement of the Ninth Symphony running note-perfect through my head.

Everything I am describing was either destroyed or heavily damaged on September 11, 2001. Along with the lives of thousand of innocents. Along with the comfort and serenity of their families. Along with the peace of the entire world.

I don’t believe in any heaven except for this earth, this life — the heaven we make every day by pursuing the highest and best within us. The World Trade Center had its faults. I can detail every one. But it was a piece of the sublime, a proud testament to how high, how good our highest and best can be. I don’t believe in heaven, but when I think of what was done that day, I pray there is an everlasting torment for the men who did it…

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September 10, 2006

Caesar’s wife on the witness stand: The moral, the practical, the marketable and the defensible approach to forbidding dual agency . . .

by

Suburban Phoenix Real Estate Broker

Author website

I had a great letter today from Bob Hunter of the Muljat Group about our policy forbidding dual agency. I’ll quote the whole thing first:

Greg, my wife and I are agents in Bellingham, Wash and I have a question relating to your position on dual agency. Our brokerage is a 100% desk fee operation. The broker takes no cut from any commission. Why would a transaction between two agents from this office harm either of the parties? I have read your website (twice) and think I understand your philosophy (since your make it very prevalent marketing appears to be a pretty important motivator also). Still, in our situation I’m not sure how the clients are harmed.

We have tried different strategies, I represent one client, my wife the other, referring one client to another agent in our office, representing both clients. We have not yet referred to an agent out of our office. In all the years of doing this, we do more dual agency than the industry standard, I can think of only one instance where the buyer ‘felt’ his interests were not being represented fully. The transaction would have the same result with separate agents but any bad feelings are negative. In retrospect we should have contributed money to his cause which would have alleviated any feelings of misplaced loyalty.

If dual agency is outlawed and if the consumers rail against it, then it is a moot point, but I am still interested in your opinion of our office dynamics and why it is not equitable or ethical.

I read your blog regularly and hope to start my own.

thanks

Bob Hunter
The Muljat Group Realtors

Dual agency has a bad reputation for three reasons, only one of which is wholly deserved. That one is true double-dipping agents or brokers who are looking for the biggest payday regardless of who gets hurt. Second is the public’s perception of dual agency, which is colored to some degree by negative opinions about real estate agents generally. But third is the conviction, justified or not, on the part of buyers and sellers that dual agency resulted in unfair Read more

September 9, 2006

The FSBO and BUBBA variety hour: How to make the buyer’s agents dance . . .

by

Suburban Phoenix Real Estate Broker

Author website

Our friend, colleague and personal marketing god, Richard Riccelli is getting ready to FSBO his Boston townhouse. He’s spent a year planning this down to the last detail, including condo-izing his property into two apartments so that they can be sold separately — or together if someone wants a residence plus servant’s quarters.

Richard was all over the idea of being a risk-loving seller, offering “broker participation” in such a way that a buyer can choose what, if anything, to pay for representation. This is the language he’s using on his promotional materials:

Buyers or buyer-designated brokers receive 2.5% of sale price at closing.

Perfect! A 2.5% commission is normal in Boston, and agents are always looking for that “broker participation” rider on a FSBO sign before they’ll invest any effort. But if a buyer wants to come in as a BUBBA — a buyer unrepresented by a buyer’s agent — the money’s there for closing costs or whatever.

It’s not quite right out there that the buyer can decide how that money is to be divided, if the buyer hires an agent, but there is nothing to keep the buyer from figuring it out. Either way, Richard gets what he wants: Avid interest either from buyers or from their agents.

With three exceptions, the silence from the real estate community on the idea of paying the buyer to pay the agent, rather than paying the agent directly, has been deafening. But there is more to real estate than Realtors. Unrepresented and semi-unrepresented sellers aren’t going to be invited to the Association of Realtors golf tournaments anyway. Writing their “broker participation” language the way Richard did makes perfect sense for them.

And that’s why it makes sense for Realtors, too. Whether they are correct or not, many people believe they can buy a home by themselves. In states where one or more attorneys are going to be involved anyway, they just might be right. Even in Arizona, if you have identified the property, agreed with the seller on terms and have effected the due diligence amicably, a title company will do all the necessary paperwork in exchange Read more

September 9, 2006

Fanmail — or fanning the flames mail: “So maybe you should just sit back and keep your mouth shut . . . “

by

Suburban Phoenix Real Estate Broker

Author website

Here’s an email I got regarding this week’s Arizona Republic column, detailing how the buyer actually pays the “seller paid closing costs”:

Hello Greg,

I was incensed at your first article about the buyer paying for everything but I didn’t feel the need to waste my time writing to you.

However, now you seem to just be digging yourself a deeper hole. You have now enraged BOTH the buyers and sellers. Good for you!

Obviously, if you had such a response to your article by agents and brokers, I would think that you would take time to pause to realize just what you did to our industry. But now you insist on pounding your ridiculous theory yet another week. You’re only making a fool of yourself. And buyers and sellers will realize this too.

It’s sad to see someone like you in the industry. Your article about dual agency was also way off base. Remember, we’re all in this together. So maybe you should just sit back and keep your mouth shut.

Regards,
Cindy Kingery

Cindy Kingery, Associate Broker, e-Pro
Windermere Real Estate/Surprise

Just as a matter of reference, the calls I get from ordinary people, not Realtors or brokers, are overwhelmingly supportive. But also as a matter of reference, the calls I get from Realtors and brokers are almost always line-blocked, and rarely do I get so much as a first name out of those callers. Cindy is to be commended for putting her name behind her words.

That said, I disagree that “we’re all in this together”. I think that attitude perfectly encapsulates what is wrong with real estate brokerage as it is currently practiced. I work for — and only for — my clients. If other Realtors make money as the result of my efforts, that’s a secondary consequence. My entire loyalty is owed to my clients. After that, I owe a duty of honesty to everyone. The buyer pays for everything in a real estate transaction. That’s the truth. To say anything else, or to “keep [my] mouth shut”, would be dishonest.

I have better surprises for you, Cindy. This week I plan to disclose how Read more

September 9, 2006

Riffing on poetry . . .

by

Suburban Phoenix Real Estate Broker

Author website

I wrote this as a speech many years ago. The little boy mentioned here towers over me by now…

Riffing on poetry…

My son Cameron is being confirmed this Easter. One of his jobs before then is to memorize the Nicene Creed, which is the shortest statement of Catholic doctrine. He was complaining to me how hard it is to memorize. I didn’t argue. Instead, I said:

The screen door slams. Mary’s dress sways.
Like a vision she dances across the porch as the radio plays.
Roy Orbison singing for the lonely.
Hey, that’s me, and I want you only.
Don’t turn me home again,
I just can’t face myself alone again.
Don’t run back inside, darling,
you know just what I’m here for.
So you’re scared and you’re thinking
that maybe we ain’t that young anymore.
Show a little faith, there’s magic in the night.
You ain’t a beauty, but hey you’re alright.
Oh and that’s alright with me.
You can hide ‘neath your covers and study your pain
Make crosses from your lovers, throw roses in the rain
Waste your summer praying in vain
For a savior to rise from these streets
Well now I’m no hero, that’s understood
All the redemption I can offer, girl, is beneath this dirty hood
With a chance to make it good somehow
Hey what else can we do now?

What is it? Thunder Road, by Bruce Springsteen. I gave Cameron every word, start to finish, more than 400 words.

He said, “But still, dad.” So I said:

Early one morning the sun was shining,
I was laying in bed
Wondering if she’d changed at all
If her hair was still red.
Her folks they said our lives together
Sure was gonna be rough
They never did like Mama’s homemade dress
Papa’s bankbook wasn’t big enough.
And I was standing on the side of the road
Rain falling on my shoes
Heading out for the East Coast
Lord knows I’ve paid some dues getting through,

What was I? Tangled Up In Blue, by Bob Dylan. I said every one of the almost 600 words in that song.

And it got me thinking about poetry. Poetry is about memorization first. It’s much older than discursive prose, and it was born not as some effete art form, but as an essential element Read more

September 8, 2006

Overall August real estate market results for MLS listed homes in the Phoenix area

by

Suburban Phoenix Real Estate Broker

Author website

In the Arizona Regional Multiple Listings Service at large, 6,170 homes sold in August against an inventory of 46,830, an implied absorption rate of 7.6 months. There are 6,185 properties listed as “Sale Pending.” All of these numbers are largely unchanged from July.

The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis — which we can expect from the Arizona Republic a week or more from now — is misleading.

Number of Homes Sold (with Days on Market)

March 2003   6471    67
          2004   8678    60
          2005   9959    36
          2006   7469    58

April    2003   7429    67
          2004   8889    61
          2005   9567    32
          2006   6725    60

May   2003   7428    67
          2004   8932    56
          2005   9853    27
          2006   7582    63

June   2003     7409    67
          2004    9969    55
          2005   10225    26
          2006    7209    67

July   2003     7643    64
          2004    8974    51
          2005    9326    25
          2006    6101    70

August 2003     7648    63
          2004    8968    47
          2005    9996    25
          2006    6170    76

Prices are virtually unchanged as well. The average sales price for a closed MLS transaction in July was $332,426. For the month of August, the average was $331,266, a net loss of about 0.35%.

Note that this may not accurately reflect the Phoenix-area real estate market as a whole. All private sales and most new-home builder sales are excluded from MLS statistics. However, for MLS-represented resale homes, the month of August was virtually a repeat of July — a few more transactions taking a few more days to sell for marginally less money. If the pending sales are any indication, September may be more of the same.

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September 8, 2006

Incremental movement toward a blanket Zillow.com disclaimer?

by

Suburban Phoenix Real Estate Broker

Author website

Today brings a game effort by David Gibbons of Zillow Blog to address Zillow.com’s disclosure/disclaimer issue. The problem for me is that the material he cites is at least one click deeper than where he puts is and two clicks deeper than where it should be. Even worse, the page he cites makes even more extravagant indefensible claims than does the Zillow.com home page.

This much, snipped together from David’s text

A Zestimate is really a starting point in figuring out the true value of a house. A Zestimate is not an appraisal.

would be perfectly adequate — if it were placed prominently on the Zillow.com home page and any page from which a Zestimate can be run. Of course, the extravagant claims would need a pruning, too…

But: This is incremental progress, movement in the right direction. Good on ya’, David!

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September 8, 2006

Move.com looks for viral buzz with sneak peeks of new commercials . . .

by

Suburban Phoenix Real Estate Broker

Author website

They’re looking for comments, they say. That’s because the spots are in the can and the media’s already bought:

As someone who regularly blogs about real estate, we thought you would like a sneak peek at the new Move.com; television ads before they air. We’d love to hear your comments.

What do they really want? Buzz, of course, word-of-mouth pre-conditioning of the audience. To me they’re just commercials — the email, bathroom and microwave popcorn time courteously inserted into broadcast TV. Your mileage may vary.

Here are the spots, shown with Move.com’s titles:

Atlas:

Paper:

Search:

Time:

Tires:

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September 8, 2006

Pre-Akismetization: Inoculating weblogs against comment-spam . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is completely inside baseball stuff for webloggers running the Akismet anti-comment-spam plug-in. If that ain’t you, you can safely press on.

Now then: Akismet doesn’t kill spam, of course, it just locks it up it in secret CIA prison camps hidden in friendly foreign dictatorships–no, wait…

Akismet quarantines suspected spam, but it’s up to you to inflict the actual act of spamicide. You have to do a spam-scan one or more times a day to make sure that there are no false positives — genuine comments misidentified as spam. The rest go to the spam-grinder.

If you only have a few spam comments to look at, it’s no big deal. I found, however, that I was collecting hundreds of detainees every day. True spammed comments, no question, many involving combinations and contortions that cannot actually be possible for normal human beings.

The Akismet server failure a couple of weeks ago brought all this most acutely home, since some spam comments were leaking through and many others were piling up in the moderation queue.

Which led me to a discovery…

Most of the spammed comments were accruing solely to one post, with another one catching the vast majority of the remainder. The implication was, if I were to turn off commenting in those two posts, I would effectively inoculate BloodhoundBlog from most comment-spam before it even got to Akismet — and without installing a captcha kludge.

Guess what? It worked. I get between five and zero spam comments a day. There is no risk that I’ll scroll past a valid comment in my rush to throw out all that very dirty trash. There are two old posts that won’t take comments — but there is no possibility that they would have gotten any in the first place. Presumably, in due course, some skeezy spambot will penetrate (ew!) another post, so I may have to effect the cure there, too.

Will this work for you? Don’t know. Look at your spam comments and see if there are particular posts that are being gang-raped, as it were. If there are, turning off commenting for those few posts may turn off your Read more

September 8, 2006

August 2006 Market-Basket of Homes: Values up .25% on stronger sales . . .

by

Suburban Phoenix Real Estate Broker

Author website

Is the Metropolitan Phoenix real estate market starting to recover? Too soon to say, but prices edged up slightly on sales that were stronger — even if they are still slow — in the August edition of the BloodhoundRealty.com Market-Basket of Homes.

Average prices for Market Basket homes in August were up 0.25%, compared to July. Don’t break out the champagne, though. Year-over-year, prices are still down 1.72%, and down a little less than 6% from the December 2005 high.

A total of 199 sales were recorded, up substantially from July’s total of 151. August is the second-strongest month for 2006, so far, trailing May’s high of 211 transactions. Market-Basket homes spent an average of 78 days on market, four days more than in July. For comparison purposes, 200 Market Basket homes were sold in August of 2003, the last relatively normal year, in an average of 56 days.

As has been the case in recent months, most Market-Basket homes are selling at or above list price. A few deeply-discounted properties pulled down the average, and average discounting netted out to 1.43%, down from 1.61% in July.

Inventories of available Market Basket homes continue their decline. There are now 1,406 homes available for sale in the Market-Basket, where there were 1,506 in July. With sales of 199 homes, the implied absorption rate is a littlle over 7 months, down significantly from almost 10 months in July. A six-month absorption rate is considered normal. The number of homes listed as "Sale Pending" is 179, no change from July.

Based on the idea of the Consumer Price Index market-basket of goods and services, the Market-Basket of Homes uses average sales prices for a small subset of all Valley home sales to get a clearer idea of what is happening in the middle of the bell curve. The alternative method, striking a median among all closed transactions, introduces too many extraneous factors to provide a reliable indicator of what is happening to prices for those homes that are most avidly desired by the greatest number of people. To that end, the Market-Basket of Homes looks at sales prices for Read more

September 8, 2006

Who pays when “seller pays closing costs”? The buyer . . .

by

Suburban Phoenix Real Estate Broker

Author website

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

Who pays when “seller pays closing costs”? The buyer…

Not all of the phone calls I get in response to these columns are from angry Realtors.

I like the calls I get from real people, rather than Realtors or brokers. Even so, a brief telephone call is not the always the best way for a person to wrap his or her mind around a new idea.

As an example, I had a very nice call in response to the article I wrote arguing that the buyer pays for everything in a real estate transaction. The caller was a very sweet man, but he insisted I must be wrong, because the seller of his home had paid his closing costs.

I explained to him that I write deals that way all the time, that I prefer to do things that way no matter what the buyer’s financial circumstances, because, for now at least, retaining your own cash is usually more profitable than the interest-cost of the additional borrowed funds.

But – emphasize that “but” – it doesn’t matter. You’re paying your own closing costs either way. If you pay them in cash, you can watch the money come out of your checking account. If “the seller pays the closing costs,” all you’re doing is exchanging one price discount for another. Your money stays in your checking account because you are paying more for the home and financing the closing costs.

“But, but, but,” the caller sputtered.

“I know,” I continued. “This is hard. If the seller hadn’t paid your closing costs, would the purchase price have been the same?”

“Heck, no!”

“So you took a three percent discount in closing costs instead of shaving three percent off the price?” I asked.

“That sounds about right.”

“So you borrowed three percent more from your lender than you would have done if you had paid the closing costs out of pocket.”

Silence – the threshold of rhetorical surrender.

“So who paid the closing costs?” I asked.

“When you put it that way…”

“Who paid for everything?”

“I’ll be danged if you haven’t got me convinced.”

If only my Realtor and broker callers were Read more

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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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