There’s always something to howl about.

Author: Sean Purcell (page 3 of 11)

Real Estate Renaissance Man

Do the BAD Thing…

The Unexpected Hanging Paradox:

A judge tells a condemned prisoner that he will be hanged at noon on one weekday in the following week but that the execution will be a surprise to the prisoner. He will not know the day of the hanging until the executioner knocks on his cell door at noon that day.

Having reflected on his sentence, the prisoner draws the conclusion that he will escape from the hanging. His reasoning is in several parts. He begins by concluding that the “surprise hanging” can’t be on a Friday, as if he hasn’t been hanged by Thursday, there is only one day left – and so it won’t be a surprise if he’s hanged on a Friday. Since the judge’s sentence stipulated that the hanging would be a surprise to him, he concludes it cannot occur on Friday.

He then reasons that the surprise hanging cannot be on Thursday either, because Friday has already been eliminated and if he hasn’t been hanged by Wednesday night, the hanging must occur on Thursday, making a Thursday hanging not a surprise either. By similar reasoning he concludes that the hanging can also not occur on Wednesday, Tuesday or Monday. Joyfully he retires to his cell confident that the hanging will not occur at all.

The next week, the prisoner is hanged anyway, despite all the above. That’s the surprise…

The lesson I draw from this is that things are not always what we think they are. The world is full of paradox and real estate is certainly no exception. On the one hand it’s a profession with tremendous freedom of time, yet to be proficient (never mind truly successful) you must become a master of time management. The field of real estate is over-flowing with practitioners and competition can be fierce, yet the key to a smooth transaction is the ultimate cooperation between two “competing” agents. Almost every day as a real estate professional feels like a sprint to put out multiple fires, yet ultimate success depends on the realization that real estate is an endurance event comprised of doing small things right on a continuous Read more

At What Point Does an Agent Become a Criminal?

I wrote an offer for a young couple who wished to purchase the home they were renting.  The buyer and seller had already discussed a price of $400,000 before agents got involved.  (The seller thought it wise that both parties be represented, which is when I came into the picture along with an agent for the seller.)  I comp’d the home and the area: $400,000 was a stretch. But the buyers liked the property, wanted an extra large master bedroom (which this home had) and wanted to avoid the cost and hassle of moving.  Fair enough; I’ve fulfilled my responsibility of providing accurate and professional counsel regarding value and the buyers have made an informed and justifiable decision.

We wrote the offer for $400,000 with 3% seller concessions for the repairs that the seller had already acknowledged.  The listing agent scoffed.  It seems she had advised her client the property, with a little cosmetic improvement, would sell for the mid $400s.  Brilliant.  Real Estate is by no means rocket science, but the ability to properly value a property and understand comparables is a skill and not every agent is adept.  I sent along a 3 page analysis of comparables and pricing to buttress our offer.  Seller came back at $410,000 with $10,000 in concessions.  Once again I advised my clients that, in my professional opinion, the price was greater than the value, but the mitigating factors were enough for them to justify accepting the contract.  Which they did.  I agreed to a 2% commission as my work load was less and the listing agent admitted to me that she was working for only 1% as her work load was greatly diminished.  And we all lived happily ever after, right?  No…

In California, the standard contract calls for the loan contingency to be removed in 17 days.  (This bit of paint-by-numbers idiocy came about during the hey-day of real estate when anyone with a pulse could get a loan.  In the current economic market, it’s only purpose is to expose which agents are inexperienced and clueless enough to put their clients at risk.)  The buyers needed roughly three weeks for their funds to fully season so Read more

Want More Showings and Quicker Offers? The “Secret” Source of Buyers.

In a recent comment on his own post: Are you closing on the wrong objectives? The most insidious form of sales call reluctance is proudly racking up empty “accomplishments.”  Greg Swann, the author, said this:  “we devote a lot of effort … to closing on the buyer and on the buyer’s agent. Salespeople need something to say, so we go to great lengths to get them to say what we want said.”  That’s a very good point, as far as it goes – which is not far enough.

A couple of days ago, in a post by Glenn Kelman comparing days on market to listing activity level the discussion led, as it should, to actual offers in comparison to days on market.  I wrote a comment that in our local market, “If you go more than two weeks without an offer, you’ve done something wrong… which, generally speaking, means you’ve priced it poorly.”  Again, true as far as it goes – which is not far enough.

Agents don’t realize who their target market is or, if they do, agents don’t act on that knowledge.  Who sells a home?  The buyer?  No.  The buyers’ agent.  According to the latest statistics from NAR, when asked where they found the home they eventually purchased, the number one answer is: agent.  Think about that for a second: the primary referral source for the actual buyer who purchases your listing is the buyers’ agent.  Do you think maybe they merit a little of our marketing focus? Duh…

I co-host our weekly Brokers’ Open Caravan.  I have a few minor responsibilities: inject a little humor, keep the energy in the room up, and a weekly “Marketing Minute” presentation.  But my primary job as MC is to keep the highlight on the Listing Agents who are there to pitch their property.  Most agents, God bless ’em, get up to the front of the room, drop their head down into their notes and, in their best impression of a sleep aid, recite the Agents’ Manifesto of Facts: “This beautiful home has 3 bedrooms, 2 baths and 1400 square feet.  It’s offered at…”  Shoot me now!  Good Grief Myrtle, I already have that info right here Read more

“…I knocked that transaction right on it’s…”

The Real Estate Ideal?

Sometimes the best part about being a real estate agent is the time it affords you to be with your family.  Of course, other times the best thing about being a real estate agent is the excuses it provides for doing exactly the opposite: “What’s that dear?  Your mother is going to be in town this Sunday and you want to spend the morning down at Begonias, Begonias and Tulips, then do a little shoe shopping?  Gosh darn it all, I’ve got an Open House that Sunday.”  You get the idea.  But if you really think about it, the best part about being a real estate agent is the opportunity to knock someone else right on their derriere – metaphorically speaking, of course.

Last week our local football team (the San Diego Super Chargers!) held an open practice at the stadium where they play their home games.  I took my two boys down there and we made an evening of it.  (Mostly because I wanted my boys to see what the inside of a professional football stadium looks like without having to drop a cool $500 on parking, tickets, popcorn and a great big Styrofoam finger that implies we’re #1 at something… I’m guessing it’s separating fools from their money, but I can’t be sure.)  Anyway, being there gave us an opportunity to watch Kris Dielman in action.  Man I like watching this guy play the offensive line.  Having been a defensive lineman myself, that’s saying something.  The difference in mind-set between the two is staggering, but that’s exactly why I enjoy watching him so much: he plays offensive line like a defensive lineman… and he plays football the way we should practice real estate.

He’ll often knock his guy 2, 3 even 5 yards back; sometimes he puts the guy right on his backside.  Now that’s what you call getting the job done.  Even more than that: it’s what you call getting the job done very, very well.  You might say he’s a Top Producer at what he does.  But here’s the thing: after he knocks that guy back one yard and two cheeks, do you Read more

You Still Here? Good. Now Get Out!

I was talking to a pretty large group of agents yesterday and during the break I asked my standard questions: “So, how’s business?”  “Are you keeping busy?”  Over and over I heard the same two answers.  One agent would say, “No, it’s been slow and it’s killin’ me.”  The next agent would say “Yeah, I’m real busy, but every transaction takes three times as much work and pays half what it did.  It’s killin’ me.”  Kind of reminded me of a classic Woody Allen joke about two old ladies sitting at a resort in the Catskills.  The first one complains, “The food here is terrible.” The second one replies, “Yes, and such small portions.”

I know, I know – this space is normally reserved for big-brain posts and how-to tutorials all written to help you find your bigger, better, more passionate place in this bowl of cold porridge we call real estate.  Heck, just for writing this I might get drummed out of the “challenge them till they drop” school of bootcamp real esate training that cost me $19.99 and four cereal box tops.  But listen, if you’re making it right now – despite the poor food and small portions – then you are a success and when the tides eventually rise, you’re going to reap ever increasing rewards. (Unless, of course, those tides drown you, in which case your reward is in the mail… please don’t contact me.)  So give yourself a pat on the back.  Better still, take yourself out to dinner this weekend and make damn sure to show this post to your wife or husband.  They should spend the better part of that dinner telling you how impressed they are that you’re still making it.  (Wouldn’t hurt if they commented on your tremendous bouyancy either.)  Oh, and make sure you order dessert too – something decadent and fattening.  Just tell the waiter that no matter how bad the dessert is, you want a large portion.  It’ll be okay, I promise.  Besides, you deserve it.

On a Scale of 1 to 10…

USC is cleaning house after the Reggie Bush debacle.  (For those of you with real lives, Reggies Bush is a running back for the Saints who, while attending USC, was lucky enough to receive – no strings attached – a big, beautiful new home for his family here in San Diego…  It reportedly had nothing to do with his prowess on the football field.)  According to a recent AP story reported in the San Diego Union Tribune, USC will be sending Mr. Bush’s Heisman Trophy back to the Heisman Committee as an expression of their shame.  Apparently, they are no longer proud to display it along side the trophies of Mike Garrett, Matt Leinart, Carson Palmer, Charles White, Marcus Allen and … OJ Simpson.
 
I’m guessing the closed-door strategy session ended with something like this: “Yes, yes, he nearly severed two people’s heads… I mean he alledgedly nearly severed two people’s heads!  But Reggie cost us scholarships and bowl games.  Gentleman, I believe our course of action is clear.”

No Day At The Beach

Yesterday was no day at the beach.  Okay, technically I suppose you could twist the facts around and put a major league, curve ball spin on it and call it a day at the beach.  You know, if you want to get hung up on little details like how I spent the entire day at the beach.  I packed up my two boys, an ice chest full of Cheetos and one large cantaloupe.  (I didn’t bring a knife and apparently you don’t eat those things like an apple, so I returned with one empty ice chest and one large cantaloupe.)  I met up with my good friend and occasional confessor Brian Brady and his lovely daughter.  We were later joined by his wife, whom I’ll just call Mrs. Lance Armstrong Brady for this story, and we spent an entire, glorious day at the beach.  But other than that, yesterday was no day at the beach.  Yeah, okay, I see your point.  Put it this way, it wasn’t a typical day at the beach.

For me, a typical day at the beach would mainly involve long discussions with Brian on solving the world’s problems (ask us sometime… we’ve got the whole thing whittled down to a small pamphlet) and occasionally testing the sandy hardness of the ocean floor by falling off my boogie board.  (This is all done purposefully and as part of my larger interest in oceanography.  I could ride a wave on a boogie board if I wanted to…)  Sometimes, just to spice things up, I see how long I can hold in my gut without passing out in front of an attractive, bikini-clad woman.  They usually do a surprisingly good job of pretending to not even notice me, but we’re so close to Hollywood I assume most of them are just acting…  Anyway, that’s a typical day at the beach for me.  But not yesterday.  Yesterday I was distracted by a gigantic hole.  Yes, a hole… in the sand.  Like I said: not your typical day at the beach.

My two boys and Brian’s daughter spent a good chunk of their morning – when they weren’t out on boogie boards Read more

FNMA Lends a Helping Hand (to Our Moral Backside)

Two days ago, FNMA announced their new policy regarding strategic defaults; it’s a mortgage death penalty: seven years before the offender is eligible for another FNMA loan.  Finally, they got one right.  Yes, you read that correctly; if you make your profession in the business of real estate, Wednesday’s announcement is cause for celebration on more than one level.  I’ll explain why in a moment, but first let’s dispense with the two primary arguments in favor of strategic foreclosure we see over and over again from the bubble-heads on the left:

Already we’ve got Shahien Nasiripour on The Huffington Post (I know, that’s an easy target – but it’s usually wise to start slow and thoroughly warm-up one’s disdain muscles) trotting out the tired argument about how the average homeowner should be allowed to default because the corporations that hold mortgages do it themselves.  Mr. Nasiripour would apparently like to see individuals and large corporations share the same default outlook.  I wonder if he would also prefer that homeowners negotiate their own individual, custom loan contracts; pay much higher commercial insurance premiums; price home loans on the specific risk of the homeowner rather than a pooled risk; and so on.  Either he hasn’t thought this all the way through, or he’d actually like to see the cost of home ownership much higher than it is now.

The other misleading argument is neatly presented by Ezra Klein at The Washington Post.  Actually, kudos to Mr. Klein because he not only presents the other misleading argument, but he also manages to mislead us on the very definition of a strategic default.   The essence of the second argument, in his own words: “…a mortgage is a specific contract. It says that if the borrower stops paying, the bank forecloses on his or her house.”  Not quite.  The contract specifies foreclosure as one (and there may be more) remedy available to the bank if the borrower breaks the contract.  The point of the contract itself is a promise by the lender to loan money at a rate and term that will not vary from what’s specified in return for a promise by the borrower to repay the loan as specified.  That’s not such a Read more

There are Only Four Things Certain Since Social Progress Began

(alternatively entitled – with all due apologies)
Though I’ve Belted You and Flayed You, By the Livin’ Gawd That Made You;
You’ve Made a Worser Man of Me, Socialism

 

“And a woman is only a woman, but a good cigar is a smoke”  (from The Betrothed).  I have loved Rudyard Kipling from the very first time I read Gunga Din.  His pace and pattern appeal to me, as does his archaic sense of manhood.  I have argued before, and dare say would do so again quite successfully, that his poem If  is among the finest pieces ever written in the English language.  Of all the inspirational articles I have written and the many orations I have given, much time could have been saved had I simply gone in, recited If and walked out.  If you have never read it, stop what you are doing now and do so.  The answer to just about every event you may encounter in your life is contained in that poem.

This post, however, is not about Kipling’s great work If.  (If it were, I would certainly link to my own, real estate based homage to wisdom, and I’ve done no such thing.)  No, this post is about another poem Kipling wrote, one I am chagrined to admit I only recently discovered.  More mortifying still, I discovered it only because Glenn Beck is using a couple of lines from this poem to plug a new book of his.  (I’m not denigrating Mr. Beck, only lamenting the discovery of fine art through it’s crass commercialization.)

The poem refers to Copybook Headings and I was unsure what those were.  For the one or two of you out there as simple as I am, copybooks were primers used by school children to perfect their penmanship.  Across the top of each page was written a Biblical passage or similar lesson of moral imperative.  The children would copy the line over and over on the page below, thus improving their cursive and at the same internalizing certain truths.  Truths that, according to Mr. Kipling, are forgotten at our own peril.

Printed below in its entirety, this poem was written almost 100 years ago.  But you’d be amazed Read more

The Mirror Effect

Do you ever wonder how to deal with someone else’s opinion of you – especially if it’s negative?  Not how to handle a negative or even rude opinion; early on you should have learned that politeness is how we handle almost any situation.  No, I’m asking if you have a mechanism or coping skill for those times when you discover what someone else thinks about you and it’s painful in some way?  This is not an uncommon experience and might be especially common for real estate agents!  (I’ll leave you to find your own context on that one.)  Personally, I’ve heard a number of answers to this question and they are usually similar to the one found in The Four Agreements by Don Miguel Ruiz.  While not completely representative of everyone’s answer, it’s close enough. This solution seems to lie in finding ways to ignore, become indifferent to, or otherwise devalue the offending expression.  (Mr. Ruiz, for example, points out that when someone says something about us, we should remember they are limited by their own view of the world – their own prism – and realize what they say, says a lot more about them, than us.)  This is both obvious and oblivious.  May I suggest something a little different?

The Mirror Effect
Of course other people see things through their own prism; so what?  Their opinions can not – and do not – hurt me in the least. How could they?  They are only words and, depending on your philosophical bent, the person saying them may or may not even exist!  If I feel hurt or pain (or happiness for that matter), you can be sure I am the sole cause.  I hear the words, I interpret them (through my own prism Mr. Ruiz) and I create feelings in reaction to my interpretation.  I create…  That’s where the wonderful opportunity lies.  The negative or painful (or happy) feelings are created from within.  That’s not just a difference regarding who is in control (per Mr. Ruiz and the rest, I am to develop some ability that will counter the hurt caused by the words or expressions of Read more

Killer Real Estate Videos That Won’t Kill Your Budget

Yesterday I put up a post on Marketing Videos and Real Estate.  My plea was for more creativity and less facts.  My point? An agent who gets creative and starts using video wisely might just take down the Goliath agent in their neck of the woods.  The very first comment, from Tallahassee Realtor Barry Bevis, got me to thinking.  He said: “Quality at a price is the struggle…  Without going “Hartman” I can’t figure out how to make a good video at a reasonable cost.”  I quickly sat down and jotted out a half dozen video ideas, then put the pad down and walked away.  When working with creative ideas, I usually find it’s a good idea to let them breathe for a while and come back later.  Often times, after rereading them, you discover even fresher and better ideas.  No such luck today though… you get the original ideas and all their rough edges. 🙂

The goal here is to throw some ideas out and have the genius that is BHB add a lot more.  If we’re lucky, this could turn into a “mini-library” of video marketing ideas for real estate agents temporarily running low in the creativity tank and staring at an empty screen.  For me, it’s all about latching onto an aspect of the house and then running a little wild.  Oh, and I love to steal already well-established ideas from the big boys.

VISA Take-Off #1 – there are a number of ways to shoot this.  Show aspects of the house that shine and do the voice-over: “View of the mountains, $10,000; Jacuzzi tub in your masterbath, $3000; and so on.  Then come in with the conclusion everyone knows: “Owning your own home, priceless.”  The key is what you show during that line: Young husband carrying beautiful bride across threshold.  Or, husband painting vertical, purple stripes in the living room while the kids nod approvingly. Or, an exterior evening shot of the house with every window warmly lit while we see the sights and sounds of a fantastic party going on inside.  Single site web address appears at the bottom of the screen.

VISA Take-Off #2 – Same idea, but a child’s perspective (especially Read more

The NAR Backs the FHA… Who’s Backing You?

Late last week the House of Representatives passed H.R. 5072, the so-called FHA Reform Bill.  One of the major components of that bill (you can read the text of the bill here), raises the monthly insurance premium for all FHA buyers.  What does that mean to your bottom line?
 
Currently, the FHA monthly premium is .55% and the new legislation Congress is looking at will raise the premium a wopping 272% to 1.5%.  What does this mean to your buyer?  If they are at the limit of their eligibility on a $300,000 purchase price now, they would have to lower their interest rate by over 1.25% to still qualify for that house.  In other words, if the current market rate is 5.00%, it would have to drop to 3.75%!  If you think you might have trouble locating a lender who will do 30 year fixed loans at 3.75%, don’t worry; you can also lower their purchase price to bring them back into eligibility.  Their new price would only have to drop 10%!  A buyer looking at $300,000 today will be looking at $265,000 to $270.000 as soon as this bill passes. Does that change your market opportunities for the better… or the worse?
 
I understand why the NAR supports this, it keeps FHA alive and well, doing sub-prime loans for people who can’t afford to buy a home, which in turn keeps dues paying agents busy and coughing up their fair share.  But why do agents support it?  It’s going to have a devestating affect on your clients, and therefore on you.  Do you support it?  Have you let anybody know?

Video Killed the Real Estate Star…

I love marketing.  I love the opportunity presented by a brand new marketing campaign to be creative and stand out from the day-to-day noise of everyone else.  Unfortunately, most agents don’t share my zeal for marketing.  At least, I assume they don’t; how else to explain the mind-numbing dreck I see every day.  Whether by email, on Twitter, over Facebook, online; even on flyers! (When there are flyers.)  Most agents seem to have attended the Detective Joe Friday school of marketing: “Just the facts, ma’am.”

Video affords us a new form of communication.  It includes multiple modalities that can reach – and interest – many more people than an equivalent, uni-dimensional form of communication.  Some people are predominantly visual, some auditory and some kinesthetic.  An email loses two of those groups, so does a radio spot.  But with video we can reach out to all three groups; we can create terrific visual, we can add sound and we can tell a story that creates emotion.  But even with all that going for it, there is still a limit on effectiveness: us.  In the computer world there is a maxim: garbage in, garbage out.  That can be true of video marketing too, but let’s give it a positive spin.  Here’s the maxim I suggest:

CREATIVITY IN, CASH OUT

I expect some might find that a little too crass, but never forget: the ultimate goal is skinnin’ cats.  In any case, my point is creativity.  Believe it or not, a marketing piece for a listing does NOT have to include all the details; that’s what the single site is for, right?  A marketing piece, and especially a video marketing piece, has as its purpose one real objective: TO STAND OUT FROM THE NOISE!  Be memorable, make someone laugh; if you’re really creative: go viral.  This serves the dual purpose of generating interest in what you’re marketing AND generating interest in you – the best damn agent that viewer has ever met.  Now that’s getting bang for your marketing buck.

Neither of the following two videos is about real estate.  Nor, really, are they much about their product.  But they are creative, they are memorable and they are viral.  Look at what Read more

Define the Tipping Point

The following began as a comment to a great post put up by Greg Swann recently, in which he excerpted a terrific article from Mark Steyn on income taxes and suckers:

…by 2004, 20% of U.S. households were getting about 75% of their income from the federal government… how receptive would they be to a pitch for lower taxes, which they don’t pay, or lower government spending, of which they are such fortunate beneficiaries? How receptive would another fifth of households, who get about 40% of their income from federal programs, be to such a pitch?

I believe My Styne is talking about the “tipping point” here, something I’ve also been talking about since before the election in 2008. Once enough people are dependent on the government, we reach a tipping point from which there is no purposeful return; only failure and rebirth. This is not news.

What’s interesting (at least to me) is the actual equation marking this tipping point. Obviously if more than 50% of the populace received 100% of their income (or benefits) from the government, we’d be over the tipping point. Not much of a stretch there, but not much of a definition either. I suggest the tipping point is well below the “50% get 100%” threshold.

So what is the level? This strikes me as a very important number – and concept – to know. Where is the line if it’s not “50% getting 100%:”? For argument’s sake, let’s say we have a voting block that will endorse politicians and policies which benefit themselves. Is receiving 75% of their income from entitlements enough to effect that vote? 60%? 45%? I suggest that the block crumbles at 20%, but is monolithic at 75%, so the answer lies somewhere in between. A 30% loss of income would be pretty bad for most people, but may not be bad enough that they would forsake their principles and beliefs. At 40% though… I think we’re dialing in the range.

On top of this, we should take into account the actual voting numbers of the population. How is the tipping point affected if Read more

A Future By Halves vs. A Future of Have-Nots

Voluntaryism vs Social Democracy

Two quick polls: First, all those who enjoy belonging to a society that provides some minimal safety net for the least among us, please raise your hands… Ahh, I see some hands going up. Very good. Second, all those who occasionally enjoy being forced to do something against their will by threat of a gun, please raise your hands… Right, masochists aside I see no hands raised. Very good. The problem is, you cannot have one without the other. Thus spoke the Voluntaryists.

On Monday night I was invited by fellow Bloodhound Brian Brady to attend a debate entitled Voluntaryism/Market Anarchy vs. Democratic-Socialism held in a little hot bed of thought and cafe called Cafe Libertalia. It was an engaging evening spent listening to the point / counter-point discussion on the very legitimacy of government itself. You can gain a more detailed understanding of Voluntaryism here and of Social Democracy here. (Although if you’re a regular reader of BHB you’ve no doubt gained quite a bit of free-market, Voluntaryism philosophy from our Greek emeritus: Greg Swann.)

I must be honest in admitting that I know quite a bit less about Social Democracy philosophy than I do Voluntaryism, and the debate was of little help. The team on the Social Democracy side presented a less than cogent argument for a society wherein free markets and democracy exist in ever changing ratios, as dictated by the people themselves. When asked, the speakers could not name a single  society where this system currently exists.  When pressed, they admitted that the countries currently attempting it are abysmal failures.  But this did not dissuade them from the idea that it could exist. Their logic – such as it was – stemmed from the idea of pure democracy (one man, one vote) and concluded that the majority would decide which means of production should be left to the free markets and which to the nurturing womb of centralized government. “How can you be against that?” they asked.  “We’re not advocating government take-over; we’re saying Read more