BloodhoundBlog

There’s always something to howl about.

Month: May 2007 (page 4 of 7)

May 16, 2007

Ask The Broker — Discrimination based on price range?

by

Real Estate Investments Broker

Author website

Can a prospective buyer be discriminated against because of the price range of home they are looking to purchase? For example I feel that an agent I recently visited would not help me because I was looking for a low-priced home. I am a young, single, first-time home buyer and basically just wanted a roof over my head to avoid paying rent. The agent flat out told me that I needed to spend more money. I have called and left messages for him and he has never returned my calls. I think he is avoiding me becuase he knows I will not spend a lot of money on a bigger home. Should I press the issue or is this just something I need to get over? Thanks.

This is an easy one.

This agent did you a great favor. It sounds like he doesn’t handle that price range. You want an agent who specializes in lower end homes, or better yet, first time buyers. There are many loans available just for first time buyers that most agents, (including me) don’t have a clue about. It’s not that I don’t know the answers for all of your questions. It’s more crucial than that. I don’t know the questions you don’t know to ask — much less their answers. And that’s not a position in which you want to find yourself.

Let’s reverse this situation. What if you had asked a first time buyer’s agent to find you a million dollar show place? Would you have felt discriminated against if they had turned you down? Here’s the principle — Don’t use a wrench when what the job requires is a hammer.

I’m an expert in real estate investment, yet I don’t know about every single kind of investment real estate. For instance, I’ve never known much about industrial property. If you came to me wanting that kind of investment, I’d immediately fess up, then refer you to someone who is a specialist in that kind of property.

Believe me, you don’t want an agent who needs to reinvent the wheel because he wouldn’t turn you down Read more

May 16, 2007

Not to be missed: Marlow (The Hammer) Harris on the Redfin hustle

by

Suburban Phoenix Real Estate Broker

Author website

Eminently worth waiting for:

I’d love to be a fly on the wall at those meetings with the investors and venture capitalists. Pie charts, graphs, facts, figures. Lots of talk about disintermediation and volume of scale and that sort of thing.

When Redfin fails, they won’t blame themselves, the business model, lack of planning, poor management skills or bad judgement. They will blame the NAR, the “real estate industrial complex”, and the “real estate monopoly”.

VC’s out there reading this, please, use your head. At this rate, you will never see a dime returned on your money. It will just go down the same hole where the other $8M already went, subsidizing the 150 or so buyers who got their 2% refund from Redfin. That was YOUR money!

Redfin believes real estate agents are overpaid. They want to reduce commissions. If they succeed, THERE WILL BE NOTHING TO REFUND. Their whole M.O., their raison d’etre, their entire business model disintegrates.

Priceless. Read the whole thing.

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May 16, 2007

60 Minutes Redux – What it means to be Nordstrom

by

Mortgage Banker

Author website

After the fur is done flying over the 60 Minutes piece what are we left with? What has really changed? Has Redfin “revolutionized” real estate? Well if offering rebates on commission is considered revolutionary count me among the witnesses. With 6, soon to be 8 markets, I think there is some time before everyone that’s not Redfin is out on the sidewalk with their hat in their hand.

But really, after the complaining of how UNFAIR it all was, it all is — what are YOU going to change?

In all of the complaints and defense I heard a favorite refrain. It seems everyone likes to toss the Nordstrom/Kmart analogy around whenever the full-service v. discounter argument arises. It’s like a broken record “Realtors offer Nordstrom-level service, Redfin is the Kmart of the real estate world” we all drone on. But do we really know what we’re saying; what we’re implying when we toss around our favorite analogy?

Because, truth be told, there ain’t that many Nordstroms folks. There just ain’t. So what makes you as a Realtor THE NORDSTROM REALTOR? Let’s look at some of the elements that helped the Nordstrom brand become synonymous with excellence and see how we stack up.

  1. Do we follow the motto: “Respond to Unreasonable Customer Requests”? How well do we respond to reasonable customer requests? When is the last time we left a truly remarkable memory with a customer? Do we relish rising to the challenge of unreasonable requests like Nordstrom does? Do we look at them with dread and think “How am I going to deal with this one?” or do we think “Here’s the opportunity to add another story to the growing legend of my customer service”?
  2. Do we “Use [our] good judgment in all situations”? Do we shirk responsibility when our gut tells us not too? Do we look at the phone at 4:59 on Friday ringing and not answer it? Do we start or end the day in a bad mood? Do we brush off someone because they don’t look like a potential customer? Do we skip the neighborhood mixer for the ballgame Read more
May 15, 2007

Speed links: Freakonomics, podcasting Dustin and WordPress 2.2

by

Suburban Phoenix Real Estate Broker

Author website

Thanks to Rueben Moore of BrickAndGarden.com, we were cited by the Freakonomics weblog today for beating up on the NAR.

BloodhoundBlog contributor Morgan Brown has a podcast interview with Rain City Guides’s Dustin Luther at BlownMortgage, his home weblog.

WordPress 2.2 is out. We’re running 2.1 on all our hosted weblogs except this one, which is still quivering in the corner under version 2.0.10. Time for some upgrades.

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May 15, 2007

FTC to NCRC regarding Zillow.com: What price justice?

by

Suburban Phoenix Real Estate Broker

Author website

The attempted shakedown of Zillow.com that began last October — when The National Community Reinvestment Coalition (NCRC) sent a letter to the Federal Trade Commission (FTC) complaining that the nascent Seattle-based Automated Valuation Model (AVM) was misleading minority homeowners about the value of their homes — has come to stunningly banal conclusion.

In a letter dated May 4, 2007, the FTC elects to take “no further Commission action,” citing Zillow.com’s fortified disclaimers about the accuracy of AVM results and the need for site visitors to investiagte other sources of real estate evaluation.

The NCRC has since discovered the sub-prime mortgage melt-down as a more profitable mine to be quarried, since lenders can be faulted simultaneously for the foolish loans they made to minority borrowers in the past and for forbearing to be equally foolish in the present.

You can read the FTC’s letter here.

I wrote a great deal about this issue last fall, all of which is linked below. As with the State of Arizona’s persecution of Zillow.com, I see the NCRC shake-down as old-school criminality attempting to impose itself on the internet — trying to leverage off of Zillow’s fame or perhaps viewing AVMs as the weakest member of the new-economy herd in PR terms. In any case, this moral victory with the FTC will rob innuendo-wending reporters of a minor weapon to inveigh against the web start-up in stories about the on-going Arizona controversy.

These are my posts about the attempted NCRC shake-down of Zillow.com:

More at John’s Cook’s Venture Blog at Read more

May 15, 2007

When To Buy? Now — Later — Never?

by

Real Estate Investments Broker

Author website

Last night Greg posted an Ask The Broker question — In your market, is it better to buy in eight months or 14 months? Aside from the arbitrary and limiting waiting periods, it’s an excellent and very timely question. It’s also a question my bride and I are tossing around these days.

We’re still living in my bachelor pad which is a very well located condo in a suburb of San Diego in what’s informally known as East County. It has plenty of room, is incredibly convenient, and has served us well. But we want to buy a detached home in the area. Our current floor plan was apparently designed by a sixth grade class project, and since my wife (in a former life) was a very successful interior designer, it’s time to end her suffering.

Deciding to buy a home in San Diego isn’t a choice made on a lark. A piece of mundane crud goes for half a million bucks. Also, we’re probably going to insist on a granny flat or room to build one, as my mom is closer to 80 than 70. We may actually end up with two extra flats as my mother-in-law is also approaching the time when she’ll need family close by. So our price range will fall somewhere around $700-1Mil — ouch! We’ve been spoiled by the relatively low monthly housing costs we’ve enjoyed for the last few years.

Adding to the cost of buying of course, will be the truckload of cash Queen of All That Is BawldGuy will require to make the new house our home. When you marry a designer you know this going in. Moving or adding walls, and even rearranging entire floor plans isn’t out of the question with her. I’m already practicing my “of course, honey” responses. 🙂 Since I couldn’t design my way out of a wet paper bag, this is guaranteed to be the correct approach.

Our market hasn’t been hit nearly as hard as Phoenix. I haven’t checked, but I can’t imagine we’re mirroring their market — only one of nine homes listed actually selling. And, also Read more

May 15, 2007

The Stockdale Paradox: “I never lost faith in the end of the story”

by

Suburban Phoenix Real Estate Broker

Author website

My friend Richard Nikoley dug this up, Admiral Jim Stockdale talking about his experience in a Vietnamese POW camp:

“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Asked: “Who didn’t make it out?”

“The optimists. They were the ones who said we’re going to be out by Christmas. And, Christmas would come and Christmas would go. Then they’d say, We’re going to be out by Easter. And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. Then they died of a broken heart.

“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

They can’t say “Yes” if you don’t ask — but they sure can say “No” if you do. Learning to surmount the fear of the “No” is how to get to the “Yes.”

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May 14, 2007

Ask the Broker: Buy now? Buy later?

by

Suburban Phoenix Real Estate Broker

Author website

This question concerns the Phoenix-area, but feel free to answer it for your own local market — just tell us where you are.

Which would be more attractive? The 8 month market or the 14 month?

I’m literally on the CUSP of being able to buy and with kids already transferring schools, the sooner the better in order to get some stability.

I’ve seen new home builders drop their prices pretty heavily or offer deep incentives. One of them has a home for around the 300k mark in Gilbert that’d be PERFECT. While I could make the payment now, I have been married to a house and that’s the worst type of one-way relationship. I don’t plan on doing it again anytime soon. Additionally, they just reduced prices 50k and are ALSO offering 20k in upgrades or a FREE Car/Truck (a Ford financed for 30 years is anything but free).

So with having settled on the fact renting the larger home I need and finishing another 6 month lease around 3/1/08 would put me at a greater financial advantage to tackle the home I have my eyes on, I question whether it’d be worth the higher payments for a shorter lease (as it’s on a home not an apartment), or if the market will be depressed enough to go the long haul at 12 months and spend more time preparing and saving.

I figured I’d shake my magic 8-blog (see what I did there? It’s a clever Monday!) and ask away. If you were advising a client on the buying side of life on how long to hold out if holding out was all they could do – Would you suggest holding on 8 months or 14?

Part of me says throwing money away on renting an additional 6 months is wasteful, the other part says that it’d allow me to save up for the stuff I’ll need to make the house a home. At a savings of around 500-600/month, that adds up to a few extra grand after 6 months.

The mention of a 40 year loan got me thinking more about affordability and financing. Read more

May 14, 2007

Are traditional Realtors being undercut? There’s always room at the top

by

Suburban Phoenix Real Estate Broker

Author website

This is me from last July. Real Estate Wives has a post on Redfin and WalMart today, so I thought I’d bring this back to the top of the queue.

Are traditional Realtors being undercut? There’s always room at the top

Let’s see… Our customers are leaving us in a steady march. They’ve found an alternative that is easier to use, more convenient, overall just a better fit to their lives — and to top it all off, it’s much cheaper than our product.

What should we do?

Here’s an idea. Our customers are telling us in no uncertain terms what they want: More! Newer! Better! Faster! Cheaper! So let’s do the same things we’ve been doing all along, only less!

From Reuters.com:

The New York Times Co. plans to narrow the size of its flagship newspaper and close a printing plant, resulting in the loss of 250 jobs, the company said in a story posted on its Web site late on Monday.

The changes, set to take place in April 2008, include the closure of a printing plant in Edison, New Jersey. The company will sublet the plant and consolidate its regional printing facilities at a plant in Queens, the paper said.

The newspaper will be narrower by 1 1/2 inches. The redesign will result in the loss of 250 production jobs, the company said.

The New York Times said it expected the changes to result in savings of $42 million.

The narrower format, offset by some additional pages, will reduce the space the paper has for news by 5 percent, Executive Editor Bill Keller said in the article.

The Times will join a list of several other papers from The Washington Post to the Los Angeles Times that have reduced their size as they cut newsprint and other production costs and try to stem a loss of readers and advertising to the Internet and other media.

It might be fun to chortle about someone else’s troubles — and who doesn’t love seeing the New York Times get it good and hard?

But what they are doing is what the real estate industry, in general, is doing. In both cases, the consequences Read more

May 14, 2007

Interview With Robert Ashby, CMPS

by

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

Author website

ashbyI interviewed Robert Ashby, a Certified Mortgage Planning Specialist, in this 15 minute podcast. Robert’s background is also in securities sales so he and I have much in common.

Robert was the first CMPS in Florida and is President of Solid Rock Mortgage Corporation. He runs a site called Mortgage Meds and is an airline pilot (he still flies 5 days a month for American). Links to follow the podcast include:

Solid Rock Mortgage Corporation

Certified Mortgage Planning Institute

How to Earn Money Borrowing at 6% and Investing at 4%

Money Merge Acccounts

Home Equity: Risky During Hurricane Season

Mortgage Meds

I appreciate Robert’s participation and encourage you to listen to someone who is practicing the “Strategic Equity Positioning” approach.

May 14, 2007

Talk to the Clown – Would You Like Fries With That?

by

Realtor, Associate Broker

Author website

I am here today to present to you my proposal for a new business venture. The Internet is a veritable candy store of wealth-creating opportunity, and it is our turn to capitalize. On-line shopping is BIG, I tell you, and it is time we got our piece of the pie.

But, we don’t have a product to sell.

So what? Neither does Amazon. That’s why I have identified the perfect target – the real estate industry. We will become agents and dehumanize the home buying process.

But, how will we attract customers?

The way I see it, there are two ways to establish ourselves in an established industry. Either we give them better service or we give them money. We aren’t in a position to do the former, that would just be hard, so we will do the latter. In order to give away money, we will have to redefine the service and deal in volume. Jack In the Box does not make money on their burgers. People come to them for the burgers, of course, but their profit margin is in the fries. And anyone can get a better burger at the steak house, they can get real service at the steak house, and they will leave having had a better dining experience with an A rated establishment, but people are inherently greedy. Houses will be our burgers, but volume will be our fries. Focus on the fries and forget the burgers.

But, (whispers), representing home buyers and sellers is hard work!

QUIET! Do not EVER suggest that real estate is hard work again. This kind of crazy talk will undermine all of our efforts.

But, just take the traditional pre-sale activities. The best, most effective listing agents spend thousands of dollars on a given home marketing and exposing the property, not to mention the time involved constantly improving and expanding their systems. Sometimes this is done for naught; the seller decides not to sell, and the agent is out-of-pocket. How can we afford to give money away?

We can’t, not by representing sellers. The costs of doing business are simply too great, and it is far Read more

May 14, 2007

Mortgage Brokers — How Everybody Can Win

by

Real Estate Investments Broker

Author website

Almost three years ago we kinda sorta beta tested doing invitation only seminars for past clients of local mortgage brokers. It went like this.

The mortgage guy went through his data base looking for clients who either fit the investor profile, (as defined arbitrarily by some bald dude) or folks who had actually spoken to them about their investments, or how they wanted to get started. This resulted in a ’10 best list’. We’d decided to keep these seminars small and intimate. We didn’t want to play the numbers game. By limiting the invitees to those who were actually interested in real estate investing, we felt 10 people (or couples) was about the right sized group.

This turned out to be correct, as the atmosphere was more like having a conversation instead of being talked to. It also resulted in more time getting their questions answered than listening to me talking at them — a good thing.

I wrote in more depth on this topic several days ago.

So far, the mortgage brokers who have hosted these seminars have increased their production significantly, and their clients have begun the march to a great retirement through intelligent real estate investment. The very first mortgage broker to participate ended up inviting only five clients. All five became our clients. In the eight months immediately following our first client meetings, he closed almost 30 loans. In the year after that he did another dozen.

I invite you to contact me if you have interest. We don’t charge for the seminars, but the host is responsible for our travel and hotel expenses.

Our last seminar of was held in Boise, and the response was incredible. We ended up having to do two of them. All but one person decided to seriously consider becoming a client. So far, over half have indeed signed on. This will mean by the end of the year our Boise host will be busy providing about 10-20 new loans — all a direct result of the seminar. This also means that whatever these clients do in the future, the original seminar host will be the go-to 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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