There’s always something to howl about.

Author: Sean Purcell (page 2 of 11)

Real Estate Renaissance Man

Any Chance You’re Holding A Fun-House Mirror?

So what do you see when you look in the mirror?  No doubt as a real estate agent the way you present yourself is important, but is that all you see?  In a standard mirror, maybe it is.  “Let’s see: short sleeve, button down shirt with yellow plaid design: check.  Power red necktie, wide, hanging half way down my ample belly: check.  Name tag with alphabet soup of certifications, right side up and cleaned of (most of) last night’s pasta sauce: check.  Roger Rocket – real estate superman – reporting for duty.”  But seriously, there are other kinds of mirrors you know…

A Look Back…?
Last week, in my article on Temporal Awareness, I talked a little about how past and present do not actually exist.  I used the example of someone saying something about us behind our backs – the visceral reaction, the anger – only to discover they never said anything!  We cause ourselves stress over things that never exist.  We create realities and emotions over events that never happen.  These responses can, however, be turned into a wonderful tool.  And by “wonderful” I mean a gut-wrenching look at what’s inside of us that we are desperately trying to hide from both the outside world and ourselves.  That kind of wonderful.

The Mirror Effect
The Mirror Effect is a way to recognize what’s happening and take a peek at what’s causing our emotional response.  It also helps us stay in the present.  (Though, truth be told, you have to be present enough to engage The Mirror Effect in the first place.)  Suppose someone said something hurtful to you – an observation – that you knew in your heart to be inaccurate.  For example: “Sean, you were never the athlete you like to think you were.”  Our reaction to that would be pretty subdued; we might even chuckle a little.  Why?  In my example, because I know who I am in that realm; I know what I accomplished and even how I ranked.  I’ve accepted the changes that come with moving past one’s athletic prime, but that does not diminish the truth of my vision.  When we are secure in this regard, comment means little and garners little reaction.

Now, let’s Read more

MY SENIOR MOMENT

A couple of weeks ago I joined millions of other Americans in the last minute ritual of rushing to the post office on April 15th and filing… my tax extension.  Brimming with pride over not procrastinating this year, a reward was in order.  Now this is normally the realm of chocolate frozen yogurt, but I wanted something more appropriate, maybe even a little dangerous; so I went down to the local Tea Party Rally.

Though a newbie to the whole “Astroturf” experience, I felt I had some idea what to expect thanks to the fine, unbiased reporting of our main stream media.  I braced myself for loud, selfish people who didn’t give a damn about the less fortunate.  I girded myself for cynical young radicals.  I steeled myself for the subtle racism reportedly running just beneath the surface. In short, I entered the raucous Public Square of the Tea Party by embracing the Boy Scout motto: Be Prepared.

Ha!  Somebody – I’m not sure if it’s the Boy Scouts or the Fourth Estate – owes me an apology.  I didn’t hear any loud, selfish rhetoric.  In fact, the speeches mainly concerned the social justice of liberty and even saving public employee pensions!  I did not see young radicals (though this was Oceanside, CA so distinguishing between subversive radicals and skateboarders is tricky).  And any “subtle racism” must have been drowned out by Ted Hayes’ standing ovation.

I spent hours looking out over the nearly two thousand people who attended, and it’s what I did see that surprised me: the predominate, if not prototypical, Tea Party activist is a woman in her early fifties who is, or soon will be, a grandmother.

Surprising, right?   I wasn’t prepared either.  (You see why I’m looking for an apology from the main stream media… or is it the Boy Scouts?)  The more I thought about it though, the more sense it made; who else would it be?  The Tea Party, at its heart, stands opposed to the generational transfer of financial devastation.  Now granted, parents are generally more protective of children than anyone else.  But most moms and dads Read more

It’s About Time to Think About… Time

It’s time for me to apologize.  Some time back I introduced an idea – a set of ideas really – called the POPs Program, which I always meant to get back to it, but haven’t until today. So, to those of you who faithfully read my articles and were excited to learn more about the POPs Program, I am sorry.  I hope all four of you will forgive me…

In that Introduction, I discussed the autopilot that so often ends up running a great deal of our lives, and how diligent we must be to prevent it.  But it’s not easy, especially if you are a real estate agent!  One of the most common complaints I hear from agents is there’s not enough time in the day to get everything done.  Sound familiar?  Well be careful because that’s the beginning; that’s when we first begin to reach for the autopilot button.  Not on anything important – at least, not yet.  We turn it on to handle little things in our schedule; we allow it to help us move through a very busy week.  But tuning out is a slippery slope and eventually leads to the two great roadblocks of success: Guilt and Fear… and it all starts with Time.

Temporal Awareness is the great gift, and great curse, of sentient beings.  Unlike any other organism on this planet, we are aware of time as a line; we are cognizant of a past and a future.  This no doubt has served us well.  We know how to delay gratification, plan ahead and save.  We are adept at learning from mistakes, recognizing patterns and creating the possibility of a more successful future based on experiences of the past.  BUT (and you just knew there was a big “but” coming), this linear understanding of time is the seed of our undoing as well.

To understand this better, go with me on a quick, imaginary trip to the Serengeti plains of Africa where a tiger is chasing a gazelle… presumably for lunch.  The entire chase lasts less than a minute before both animals are exhausted and, in our happy little trip, the gazelle has escaped.  Do you know what happens next?  Nothing!  The tiger lays down to rest; Read more

Is Brian Brady the Easter Bunny?

No – he’s better.  Hey, do the Easter Bunny’s eggs tell us what the future has in store?  No, they just keep us busy looking for something that benefits us not at all.  Brian, on the other hand, is not only as sweet as candy, but he actually does give us a glimpse into what’s coming next.  He recently did it again.  This is a clip of Brian on a local television news show about two weeks ago.  Check out what he says around 1:50 into the clip.  If I didn’t know better, I’d say he just warned us that the US ability to borrow money – it’s credit worthiness – is in imminent danger.

And here, two weeks later, the Wall Street Journal reports on S&P’s decision to… downgrade their outlook on US creditworthiness from “Stable” to “Negative”.

If only we could impose on Brian to play a little Santa Claus next.  Maybe we’d all end up with more than an economic lump of coal in our stocking this year…

The Coffee House Crisis

With all the talk lately about the new lending regulations that will apply on April 1st, a similar set of new laws and regulations has been completely overlooked.  I felt it prudent to bring this unsettling situation to light.

As you may or may not be aware, over the past few years there have been quite a few problems “percolating” in the retail coffee business.  It seems that some customers have been over-charged, while others have ordered coffee that was too hot or just plain did not satisfy. This is a serious situation, not only because of the expense involved, but also the very real danger of severe burning.

The House sub-Committee on Agriculture and Imports has been holding hearings into this matter.  They brought a number of new regulations to the full Congress, which were subsequently voted into law and take effect April 1st of this year.  These new regulations govern the coffee purchase transaction within a retail coffee vendor.

I’ve highlighted some of the key components below:

  • The server must be paid (or tipped) the same for all beverages and may not earn more based on the time or effort involved.  (E.g. there is no difference between an Iced Cocoa Cappuccino 1 pump mocha, 1 pump white mocha, non-fat milk with a drizzle on top and a plain black coffee.
  • Customers must pay by credit card or cash, but never both.  If paying by credit card, they may not leave any cash tip for the server.
  • The Coffee House must distinguish between beans grown / brewed in-house and beans that are imported.  With beans grown / brewed in-house, the server must decide what to charge the customer before the customer ever enters the establishment and must then charge ALL customers that exact same amount.  (The server may only change what they charge once per “qualified period”.)
  • If a customer orders a beverage from the grown / brewed in-house selection and pays with a credit card, the server may receive no tip. (For purposes of this section, even the owner of the Coffee House is considered a “server”.)  Instead, they must be paid according to a compensation plan the Read more

Social Security and the Tyranny of NOOMPs

The debate over Social Security and America’s mind-boggling debt is going to get more heated.  We’ve seen over and over in polls that people favor cutting spending… unless that spending involves them directly.  In my industry we see it with the NAR and every Rotarian Socialist program that comes down the pike.  But we see it with everyday homeowners too.  “Yes!” they scream with their signs and their votes, “cut spending across the board.  I’ve been taxed enough!”  But suggest eliminating the mortgage interest deduction and see what happens.  “It’s way too important,” and “What would that do to the real estate industry?” (virtually nothing, by the way).  What’s to be concluded?  We are dealing with a nation of NOOMPs. (You remember NIMBYs, right?)  NOOMPs are people who support spending cuts, so long as those cuts are Not Out Of My Pocket.)  And I suggest there’s no greater concentration of NOOMPs than within the AARP.

Robert Samuelson wrote a good piece in Newsweek recently entitled Who Rules America? It’s The AARP.  In it, he suggests “the AARP sets overall priorities (in government).  Its power derives from the fear it inspires in senators, congressmen, presidents and political candidates.”  He went on to say “No one wants to strip needy seniors of essential benefits.  Social Security, Medicare and Medicaid provide crucial protections for millions of poorer and older households.  But for many relatively healthy and economically secure Americans, these programs constitute middle-class welfare.”  That last bit of analogy apparently caused such an uproar (ostensibly from middle-class Americans who don’t appreciate it when someone points out they are on welfare), that he felt obliged to write a second article entitled Social Security: A Form of Welfare to try and set the record straight.  I applaud Mr. Samuelson for his frank and honest discussion, but I don’t think he goes far enough…

The Social Security system has been a welfare scheme since its inception.  If it had been a situation where people paid in and then later withdrew – what we might call a retirement account – and which Congress then went in and stole from (leaving Read more

Rage and Rates… a Tin Foil Hat Production

I wrote the article below a couple of days ago for a blog on political and economic freedom.  I’m reprinting it here after enjoying some discussion on the matter with fellow Bloodhound and VA mortgage expert Brian Brady.  Besides it being a brilliant piece (of tin foil hat wearing rantings), the article does actually touch on an area that could be of great importance to our real estate buying clients:  mortgage rates.  You see (in an over-simplified explanation), when the world gets scared, money flows to safety.  Safety, at least for the time being, still resides in US bonds.  Though not always correlated, the interest rates on mortgages often travel in the same direction as those on bonds.  So if, for some crazy, unforseen reason, the world becomes a little apprehensive over the next 2 weeks, we might see mortgage rates drop.  The question is: when do you lock the rate for your client?  Well, if we knew the actual date this crazy, unforseen event may occur, we could watch closely and lock right up to the day before. Why the day before?  Because there are three possible outcomes to this disruptive event, and two of them are bad:

  1. It could turn out to be a tempest in a teapot, in which case money will quickly flow out of the bond market and interest rates will rise.  (Because of the inverse relationship between bond prices and interest rates, when people sell bonds the price drops and the rate rises… I see people’s eyes rolling back in their heads… moving on then);
  2. Or, things could go as bad or even worse than expected and oil prices shoot up (geographical hint), causing inflationary fears. Because inflation erodes fixed rate returns, bonds sell off and interest rates rise in response;
  3. Or, things could go as bad or even worse than expected adding to the already existing fear – oil prices be damned; in which case even more money flows to the safety of bonds and interest rates continue to drop.

As you can see, of the three scenarios, two give rise to higher interest rates making us heroes for locking our client’s rate before the event.  If, on the other hand, we find ourselves knee deep in the third Read more

Shouldn’t Sellers Invoice Listing Agents?

I suppose it’s pretty rare that a seller actually hands their listing agent an invoice during the course of a listing, but it shouldn’t be. Based on what I see, the vast majority of listing agents should be billed by the seller, same as they would be by any other third party vendor. The fact that it doesn’t happen simply means most sellers don’t understand what is really going on during the course of a listing and, I’d wager, neither do most agents – or if they do they certainly haven’t informed their client.

Here’s a question every seller should ask their listing agent: “Why are you going to put up a For Sale sign in my front yard?” Standard answer: “A sign is just one part of my ‘Handy-Dandy, Super-Duper, 24 Point, 7 Step, Maximum Sales Price Marketing Plan’ or HDSD-24/7-MSM Plan… which I offer to all my clients completely free of charge.” (The standard answer is impressive, wouldn’t you agree? We agents are very creative indeed.). Of course, given the use of internet these days, I suggest to you, dear reader, that most For Sale signs are more directional than informational, but let’s not split hairs. Okay, so the sign is a part of the marketing plan. Next question by an informed home seller: “If that sign is part of your plan to market my house, why doesn’t it mention anything about my actual, you know… house?”

This is old Greg Swann stuff, but I’m rehashing because it needs to be taken further. There are actually two correct reasons for placing a sign in someone’s front yard:

  1. Sell the actual home. (The primary objective from a fiduciary standpoint.)
  2. Attract future home sellers from the neighborhood. (Secondary objective, but a legitimate expectation of work well done.)

So why is it then, that the vast majority of signs fail both of these objectives? Because they are designed with a different purpose altogether; they are designed to advertise the brokerage (hence the uniform colors, logos, big brokerage name and phone number). To a smaller degree, they are also designed to advertise a brokerage’s presence in a neighborhood Read more

“Greece is the word, is the word, is the word…”

Some of us, here on BHB and elsewhere, have been arguing that a collapse is coming.  A financial collapse due to the almost incomprehensibly fraudulent practices of the local, state and federal governments.  A fraud so immense that most of us can’t even begin to wrap our minds around it.  In my home state of California, just to give one example, people still discuss the budget deficit of $19,000,000,000 to $25,000,000,000 depending on who’s talking.  (Yes, those numbers are in billions.)  They do that to avoid discussing the unfunded liabilities that are now well over $500,000,000,000.  Yes, that is $500 billion.  No, no other state is even within a factor of that.  Yes, that means the state of California is completely lost; there is no possible way back to solvency.  This ends with a massive federal bailout and/or bankruptcy.

My point here is not California, because California’s problems are dwarfed by the massive theft and malfeasance that has happended on the federal watch.  I mention them only by way of example, and in that California best portends what’s happening.  What’s interesting, but not at all surprising, is that California does not portend what’s to come.  For a glimpse through that window we can look to Wisconsin.  Today.  Why there?  Why not California?  Simple: there’s no pain in the Golden State… yet.  The good people here continue to elect politicians based on the size of their promises.  So, while the 8th largest economy in the world burns to the ground, no one seems to notice because nothing is being done about it.  In Wisconsin, on the other hand, (where the budget deficit is only $3.1 billion) the Governor has set out to make some changes and all hell is breaking loose.  Chief among these changes is to rid the state of the absurd concept of collective bargaining for state workers, which is nothing more than institutionalized bribery. Imagine a situation where the owners of a company – those in charge of employee pay and benefits – owe their position to the workers of the company!

Union Rep: “What we want is a pay raise and greater benefits.  If you give us those, we will support Read more

California’s State Mascot: the Super Nanny

I’m just throwing out a guess here, but I’ll bet man has been burning wood and creating fire for around 40,000 years.  Fire: creator of warmth, food, light… you get the picture.  Basically, it comes down to this: if you’re in the wild and you can’t get a branch lit, odds are your odds are short.

Except, of course, here in California.  Here in California (State Motto: Don’t do Nuthin’ Till We Tell You the Right Way to Do It), the state in its infinite (and infinitely superior) wisdom, knows better.  No, I’m serious.  California (State Bird: the Red Ink Buttinski) actually thinks for us.  As a matter of fact, the state of California (State Seal: the Finger Wagging Nanny) states very clearly in this Warning found hanging by my firewood, that ideas and concepts are known by it.

CA Warning Label

All I can think of now is all the fires over all the millenia… those poor saps.  Thank the god of Nannidom I’m taken care of here in California (State Song: “I’ll Be Watching You” by Sting… which is also the State MO).

Final Scene. Cut, Print… That Was, Unfortunately, a Wrap.

EXT. CHICAGO STREET – NIGHT

The MAN walks up to the cab.  The back door is open and a PASSENGER sits inside. The Man leans in and talks to the Passenger.

MAN

               I’d like to tell you I’ll stay in touch, but… hell, I haven’t stayed in touch at all over the past years.

 

PASSENGER

               Don’t worry about it.

The Man reaches out to shake hands. He’s trying to come across with a kind of distant warmth common to men who don’t express any real feelings, but his smile only makes him look sadder.

MAN

               It’s been great to see you bro’.

The Passenger accepts the Man’s handshake and pulls it in tight, bringing both men together. The Passenger wraps his other arm around the Man, embracing him in a hug.

PASSENGER

               You too.

 

MAN

(still hugging)

               I had a great time this weekend.  I really miss talking to you… And getting to see everyone again, like old times? You were always the one; you always brought everyone together.

The Man begins pulling back from the hug. They drop the handshake, but the Man remains there; leaning into the back of the cab. They are close in proximity. The Passenger is relaxed… accepting, but the Man feels a little awkward. He holds on to the front seat of the cab to steady himself. His grip tightens, willing himself to hold the position. To remain close.

PASSENGER

(in a tired, weak voice)

               Yeah?

 

MAN

               Yeah.

(looking directly into the Passenger’s eyes)

MAN (CON’T)

               You know, if there’s anything I can do… Anything you need…

 

PASSENGER

(nodding gently)

               I know.

The Man lets go his grip on the front seat and begins to straighten up out of the cab. The headlight of a passing car reflects wetness in his eyes.

MAN

               Take care of yourself brother

 

PASSENGER

               You too…

It’s dark and it’s snowing and the wind whips at the Man’s jacket collar. He turns and walks five or six steps back to the sidewalk. His face looks like it might have been five or six miles. The snow muffles everything and it is quiet. The Man turns and looks back into the cab; through the front windshield. He sees only a silhouette now. He raises his arm up, bent at the elbow, hand about shoulder height. Read more

This Article is a Waste of Your Time

The NAR has come out against the Debt Reduction Commission’s recommendation to eliminate (actually, not eliminate but rather greatly reduce and alter) the mortgage interest tax deduction (MID)…  Isn’t that a shock?  No? You knew those dip-shits at NAR would knee-jerk react to their sacred cow?  Hey, I warned you in the title that this article is a waste of your time.

What has caught my eye is the speed with which the NAR propoganda hit mainstream agents and found its way to popular social media sites like Facebook.  A quick look this morning and I must have caught half a dozen agents I know personally, out there spreading the bullshit around on behalf of the NAR; not realizing how hypocritical and stupid they looked.

Attention All Agents:  Taxes are theft.  You may acquiese to some form of theft in the ignorant belief that it somehow does some good. But tax deductions? They are pure evil.  They are, by definition, designed to separate you from your natural freedoms through bribery and penalty.  The mortgage interest tax deduction is no different and in some ways worse.

You might make allowance for the mugger on the street stealing your money because (he says) his kids are hungry. (I think you should kick his ass, in no small part because it may be the best thing you can do for his kids… but that’s a different post.)   But do you really want to defend the guy who takes your money and then tells you that if you will walk where he tells you and stop where he tells you and wear what he tells you, he might (MIGHT!) give you some of your own money back? Are you that spineless?  Let me see if Ican put this into perspective:

I (the government) have declared that all real estate agents must give me 30% of their commission checks. But, I think funny underwear makes people laugh and laughter is a social good… so if you’ll wear funny underwear on your head I’ll give you some of your commission back.

Feeling pretty good about your deduction? Take that stupid underwear off your head and pay attention!  It’s not even true!  The vast majority of tax payers Read more

All Things Being Equal… You’re Not Even Close

I was working with a group of agents this week on their 2011 business plan.  We were going through various forms of marketing and the expected returns when one spoke up and said: “The problem is, I hate calling people.  I can send letters and even emails, but I don’t want to call anyone.”  She is a very good agent as far as real estate agent activities go: she works well with clients, she shows homes well, she negotiates well and so forth.  She just doesn’t want to call people.  At all.  

“Okay,” I told her, “that’s not the end of the world.  If you’re not willing to call clients you can still be an agent, you just need to join a team that provides the clients or partner up with someone who has more clients than they can handle.”  That’s where the conversation got interesting.

Turns out this agent has tried my suggestion in the past and is looking for the right relationship right now.  “But,” she says, “the agents I’ve found so far are all so greedy.  They want a big piece of the commission.  All they do is hand me the name and then I do all the work.  I’m trying to meet an agent that understands our roles are different, but we both equally are growing the business.”

This is the problem with many self-employed people and real estate agents in particular.  They seem to think their value is tied to their time.  “All you did was give me the client’s name.  I did all the work so I think we should split 30/70 my way.”  This couldn’t be further from the truth and the faster you understand “value” in an open market economy, the smoother your business life will become.  Your value is not tied to the time you contribute.  It’s tied to the value you bring.  Hmmm, your value is tied to your value.  Can I get a big “Duh” from the Jeff Brown camp?

Apparently this comes as a surprise to some agents, but you are not all equal.  As a matter of fact, I’d estimate that 5% to 20% of you (and I’m Read more

New Math… or An Old Game?

General Motors is preparing a public stock offering… you know, because it’s primarily owned by the government and unions right now.    The sale is expected to raise $10.6 billion, most of which is going to the government against the $50 billion bailout last year.  Since government is literally us (I mean, the $50 billion didn’t come from some savings account the Fed has from working nights and weekends as a pizza delivery boy, right?), that means we are selling an asset we purchased with bail out money… back to ourselves… and then putting the money we took from our left pocket into our right and claiming to have paid ourselves back.  Not sure, but I think there’s a nice big dollop of irony in there somewhere. 

This is all well and good so far as socialist, potato-passing goes.  I’m sure I’m not alone when I say that, while I don’t speak political gobbley-gook, I understand it just fine.

What bothers me here is the math.   The plan is to sell about 365 million shares at between $26 and $29 each, raising an estimated $10.6 billion.  This will value the company at around $48 billion which, surprise, surprise, is Ford’s capitalization.  As a matter of fact, if the shares sell near the high end of the range, GM’s capitalization will be closer to $60 billion – which means bigger and, ostensibly, better than Ford.  (Side note: Ford saw the problems ahead of time, made the difficult choices, accepted no public welfare, didn’t forever alter the bond market and our basic understanding of risk/reward investing, came through the worst economic times the auto industry had ever seen and recently reported record profits… but they’re market capitalization is the same as or less than GM’s? I suppose that’s the price you pay for actually thinking the rules of the market place should apply to everyone equally.  Makes one wonder though, how happy Ford’s stock holders would be – and how much money they might be spending right now – if Ford’s efforts had been properly rewarded in the free market and they were not in competition with the US Government.)

Back to the math.  Most of this ($10 Read more

Wanna Be a Big Hitter? Spend Some Time on Your Legacy…

A little song, a little dance, a little seltzer down your pants. A final end, a funeral’s toll, a little wisdom for your soul.”

Legacy is a bitch for most of us. What will you be remembered for? Do you know? Are you sure? Me? Heck, right now I’d be happy to simply know it’s not the little ditty you just read in ode to life and death! I attended a memorial this weekend for a truly remarkable man. In my lifetime I’ve had over 50 teachers, from Catholic grade school nuns to Princeton University professors. Of those, three stand out for their impact on me: there was Miss Carlson in 5th grade, who first taught me that life was fun even in a Catholic school; and my anthropology professor at Princeton who asked me a question so powerful, I finally left the church for good. But in between those two wonderful theological bookends, was Mr. Jerome “Jerry” Lipetzky, for whom the memorial was held. He taught me that there’s no end to learning and nothing quite so liberating as the exploration of a new interest. He was also one of the smartest and sarcastically humorous men I’ve ever met. (In his classroom there was not one square inch of wall space that was not covered with something funny, educational or challenging and usually all three at once.) My favorite memory to this day: a bumper sticker casually stuck to a small, flat boulder near the back of his room that read:

The World is Flat
Class of ’91

Think about that for a minute… humor, history, a little sarcastic jab at what we think we know, and how often we are wrong; that’s an amazing sticker and trust me when I tell you he was an amazing man.

So What…

“Yes, yes, so what’s the point of this post Sean?” Coming to it. At the memorial, one of the speakers stood before us and read aloud a list of seven rules, for lack of a better word, that Mr. Lipetzky tried to live his life by; each rule came with a short explanation. As I heard Read more