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Month: June 2007 (page 5 of 8)

June 14, 2007

An RE.net taxonomy: Identifying types of real estate weblogs

by

Suburban Phoenix Real Estate Broker

Author website

This is a first strike at a taxonomy of real estate weblogs. Taxonomy is the science of categorizing things. Of course, not everything can be neatly categorized, but the elucidation of categories can focus the mind, helping us to understand where certain weblogs might fit, which are hybrids of two or more categories, and which can only be described by the creation of new categories.

Again: This is a first strike. I may not have created enough categories, or I may have created some in error. I may have certain weblogs — offered here as examples — miscatalogued. If you think I’ve got something wrong, say so. If we can whip this into a decent shape, I may built it as a separate page, something we can lay by for an enterprising newspaper reporter — or the nonesuch, whichever comes along first.

In any case, here’s my first swing at the ball:

June 13, 2007

Ask the Broker: What’s up with my APR, and why is it so different from my interest rate?!?

by

Mortgage Banker

Author website

Hot out of the broker oven mailbox today is this question:

I am in the process of refinancing. Can you please tell me what the APR should be for a $295,800 loan? The broker is charging 2% origination fee and 1.5 loan discount. The interest rate at 6.64. I’m not sure if it makes a difference but its a adjustable rate and balloon loan. After 2 years mortgage will go up.

The total settlement charges are $14,590.77. The truth-in-lending disclosure has an annual percentage rate of 10.634%. This doesn’t look right.

I questioned the broker and he said that rate is all the fees and payments that are in the loan. This is not my first time refinancing and I never saw it that high. Why is the difference so much?

Disclaimer: I am not privy to the reasons or motivations for this transaction; nor the particulars above and beyond the above question. Below are simply some general thoughts that stand out from the above inquiry. I could be completely off-base in any one of my assumptions.
I had to step away from the computer and take a lap before responding to this mailbag question. Before we get to the APR/rate discussion there is another point I want to highlight first:

(1) Paying discount points to achieve a lower rate when taking a short-term ARM is always a money-losing proposition. Because this is a short-term 2-year ARM loan you will never recoup the money you paid in points to get the lower interest rate (1.5 points or $4,437 in this instance). In order to simply break even on the money spent for the loan discount in the two years before your rate adjusts your monthly mortgage payment would need to be $185 less than it would be otherwise with out the discount points.

If we make a rough assumption that each point paid in discount reduces your interest rate by .5% (a reasonable assumption on a subprime 2-year ARM, might be a bit generous) then your interest rate with out paying the 1.5 loan discount points should be around 7.39. This makes Read more

June 13, 2007

Department of redundancy department: How to get those living subjects to hold still for photographs

by

Realtor, Staging Consultant

Author website

Today our ever more irrelevant Arizona Republic demonstrated again that it is clueless about what over 1,100 daily readers of BloodhoundBlog.com know, which is… here on BHB you will find some of the finest weblog writing by real estate professionals available anywhere in the English speaking world. With the addition of so many fine writers with awesome credentials, since Greg and I started this site almost a year ago, I’ll admit that I feel outclassed. There’s really not much for me to deliver that teaches and informs and entertains like what our other illustrious contributors give us. But — Tom Johnson from Houston has given me an opportunity to show off my expertise…

In a comment on Teri’s post, “How Much Is That Doggie In The Window,” Tom talks about his dogs, Sophie and Duke, and asks

If I could figure out how to photograph them together, we could go for the all sizes, all families type thing. Suggestions?

Oooh, oooh, I can answer that! Take lots and lots of pictures! I know what I’m talking about! For our December 2000 holiday card I wanted to include our entire family, even those with fur or feathers, in the family photo. So I recruited my sister Terry, and she managed to shoot a perfect portrait. Took her only 40 shots to get it. Here are 16 of those pictures:

Fortinbras the Cockatiel and Gwen the Gerbil, alas, met the fate of animals who decide to escape the cages that protected them from their bigger sisters and brothers. And Charley, the regal Akita mix who Greg’s sitting on, and Peritas, the black Lab puppy with the bubblegum tongue who’s sitting next to me, were the ill-fated dogs Greg talks about in his comment on Teri’s post, whose loss led us to Odysseus. My heart still aches over that loss. In fact, you’ll notice, the sadness has been so profound, that it turned me blonde!

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June 13, 2007

We finally made the paper! Oh, wait, we didn’t . . .

by

Suburban Phoenix Real Estate Broker

Author website

I have a pretty much boundless contempt for the Arizona Republic. The paper’s real estate coverage is eclipsed in its stupidity only by its insipidity. There is no conceivable issue upon which ASU’s Jay Butler is not the absolute authority, and there is never an occasion when the news, no matter how good, could not be worse. I’m utterly amazed that they let me write for them — albeit, not very much — and I await that “Goodbye Look” phone call in my every waking minute. In fact, I think I deserve 1,500 words on the front page of the business section every Sunday, but that would require a different Republic — or perhaps an alternate universe.

But today comes vindication, yes?

No.

Glen Creno wrote a report on “Valley realty bloggers” and managed to omit any mention of Phoenix-area real estate webloggers. No Jay. No Jonathan. No Greg. No Russell. Here’s the really fun part: Of the “Valley realty bloggers” he does mention, only two are actually in the Phoenix area.

Who’s in the article?

  • The Housing Doom bubble blog in Gilbert, AZ
  • Shannon Hubbard’s Phoenix blog
  • Housing Panic — in London, England
  • I Am Facing Foreclosure — in Sacramento, CA
  • The Real Estate Bloggers — in Atlanta, GA

Who’s not in the article? Their names are legion.

Is that link clear? Webloggers are constantly derided and diminished by mainstream media reporters who can’t do the simplest research.

The fact is, I don’t care. We’re talking to people who are paying attention. If the hometown paper were to discover what is going on under its nose in the epicenter of real estate weblogging, I would lay awake nights wondering what we had done wrong…

More: Jonathan Dalton, Jay Thompson.

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June 13, 2007

Subprime “Bookies” May End Up Like The Ending of The Last Sopranos’ Episode

by

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

Author website

I wrote a tongue-in-cheek post about the subprime loans’ collapse about three months ago. I wanted to show the history of securitization of home loans and explain that many of these defaults may actually be “buried” in mortgage pools. I pontificated that the expected debacle from the collapse may not be as bad as we think. Hmmm…maybe I’m wrong?

Bloomberg.com reports today that hedge funds are petitioning the Securities and Exchange Commission to be vigilant of mortgage pool manipulation. Simply put, mortgage pool manipulation is “burying the bad loans in the back of the breadbox”. Issuers of mortgage bonds have a responsibility to comb through the mortgage pool and extract the loans that were in default, especially those that are in default do to fraud or botched underwriting. It is a requirement because mortgage investors hedge their credit risk in the derivatives market.

Derivatives are volatile financial instruments designed for hedging purposes. They are the “afterbirth” of the carving up of whole loans in a mortgage pool. Let me try to explain a bit further. Mortgage bond issuers sometimes extract different characteristics of a mortgage pool and sell them to different investors with varying opinion about interest rates. They can sell the interest portions of the loans to one investor and the principal payments to another. Why would they do that? Profit, of course. It is conceivable that a bond issuer can add as much as ten percent profit to the value of a mortgage pool by issuing derivative securities.

Investors who were expecting interest rates to rise might pay a premium for the steady income a 5.5% loan provides while the investor who believes rates may drop prefers to buy the principal portion of the loans at a discount. Mostly, these financial instruments are used by institutions to hedge large fixed income investment portfolios.

If you are an investor who is purchasing the principal repayment portions of the loans, and those loans will never be repaid…you’re screwed. And that is the risk you take…if you knew the risks Read more

June 13, 2007

Another Happy Customer For Robson?

by

Mega-Producing Realtor

Author website

I happened to stumble into finding out about the website, robsonunfair.com by receiving an email. The people who put up the site are more than a little unhappy with their attempts to resolve their grievances with their homebuilder. The link from their site I found most interesting was this one. I had no idea that information was even available. It lists the total number of complaints (1998-2001) for all of the big to small homebuilders and the number of complaints they get – and then shows how many complaints compared to how many houses they build. Del Webb/Coventry, for example got only one complaint filed for every 189 houses they build. If I am understanding this correctly, Jackson Properties had a remarkable ratio of one complaint filed for every sixteen homes they built.

I am always amazed when a large (seemingly reputable) company allows their reputation to become tarnished like this. It is doubtful it is possible to build a lot Kathy_Robsonof houses and never have a problem. And there are some people you can’t make happy – no matter what you do.

Many years ago there was a car dealer in Phoenix (the dealership name still exists) named Lou Grubb. About 15 years ago Mr. Grubb retired and sold the dealership. A few years after he sold it, I read in the paper (bottom of the front page) about a woman who bought a used car at the dealership and when she took it somewhere for service about 5 months after she bought it the mechanic informed her that the odometer had been rolled back and that her car did not have the mileage she thought it did – but an extra 30,000 miles or so. She takes the car back to the dealership wanting a refund. The idiots who then ran the place explain to her they can not give her her money back – she has been driving the car for those five months. Further, they had purchased the car from a wholesaler and she can rest assured that it wasn’t them who tampered with the odometer. They offer her Read more

June 12, 2007

Catching a sniff of the stench from Tennessee: Why being right about the real estate licensing laws matters

by

Suburban Phoenix Real Estate Broker

Author website

Well.

It is beyond all doubt that readers here are thrilled to the core to cogitate on the implications of real estate licensing laws and their hypothetical repeal. So far the silence has been deafening, with nothing but a host of fallacious arguments, some charming insults and something new under the sun: green-baiting. (It’s like red-baiting, but for Capitalists.) What we have not had is a rational defense of the law.

That’s a real shame, because we are on the verge, potentially, of a revolution in real estate brokerage. Take note:

By means of its “Make Me Move” feature, Zillow.com is engaged in the essential act of real estate brokerage, the introduction of buyer to seller. Zillow’s efforts are not subject to state regulation because it is not performing brokerage for compensation.

IggysHouse.com is going to list homes for sale for free. The state may try to regulate IggysHouse, perhaps by arguing that the co-broke is compensation, even if IggysHouse keeps none of it.

Either way, the stench from Tennessee is too thick to ignore. What are traditional real estate brokers going to try to do with state laws when they come up against competition willing to work for free?

And: Does anyone want to argue that the proposals the traditional brokers come up with will be good for the consumer?

Why has no one been able to rebut the argument that real estate licensing laws are contrary to the consumer’s interests? How about because the argument is correct?

But: I’m here to help. The laws themselves are not going anywhere. Rotarian Socialism rules the country, and it will for quite a while. But you can know what is right and what is wrong, and you can apply your mind to figuring out who is to be benefitted and who penalized when new laws are proposed — as they will be.

Give a look to these questions. If you answer them honestly, you will understand why the real estate licensing laws should be repealed — even though they won’t be.

Like this:

In the absence of real estate licensing laws, are consumers more likely or less likely to investigate the education, qualifications Read more

June 12, 2007

Ask the Mortgage Broker: On Title But Not On the Loan?

by

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

Author website

This came in today:

My Mortgage Broker told us; because of my low credit score (Low 600) and my husband’s higher score (High 600) — he wants to not include me on the mortgage, but put me on the title as a owner. This would mean the mortgage will not show up on my credit.

Can this work? If so, what are the pros and cons???
That sounds completely plausible. I would caution you that your addition to title is most likely post closing. If so, your husband would be technically violating the loan covenant he signs with the lender. It’s not a violation that is going to end him up in jail. A technical violation could result in default, which could start the foreclosure process.
Your husband on the loan (and title) will most likely give you a loan with better terms, Excluding you from the loan may be the best option at this time. My advice would be to proceed with the mortgage broker’s recommendation, attack and cure the issues which affect your credit score, and petition the lender to add you to the loan at a later date.
June 12, 2007

Redfin’s Sweet Digs weblogs resurrected as neighborhood sites

by

Suburban Phoenix Real Estate Broker

Author website

From John Cook’s Venture Blog:

“Sweet Digs” is back — kind of.

The Redfin real estate blog, which was shut down last month after agents complained to the Northwest Multiple Listing Service that the home reviews were hurting sales, is making its return today in a modified state.

No longer will Redfin bloggers post in-depth reviews of open houses. Instead, the posts will detail information such as price reductions, past sales, open house listings and the number of homes for sale in certain neighborhoods. It also plans to do previews of new listings.

Sweet Digs also will be launched later this summer in Boston and Southern California, the company’s two newest markets.

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June 12, 2007

One simple step advertisers and Realtor associations can take for a cleaner, greener world: Stop printing stuff!

by

Suburban Phoenix Real Estate Broker

Author website

I’m in the process of cleaning my desk. Pause a moment and consider how big a chore has to be before it becomes a “process.” I did the lawnmower job yesterday (with poor Cameron hauling away the clippings, as it were), and I’ll tackle the finessing, the trimming and edging, in spare moments today.

But while I was working late yesterday, I had a blinding epiphany, a magical, mystical, miraculous method to keep my desk clean forever:

Would everyone please stop printing stuff!

I threw away half a landfill of Realtor association debris yesterday: Realtor magazine, the state and local newsletters, etc. I threw away two years’ worth of CRS membership directories, both still unopened in the boxes they shipped in. Miscellaneous Realtor magazines, direct-mail promotions I thought I might want to have a look at, the goofy workbooks they hand out at advanced-designation classes, etc. Piles and piles of paper — disorganized in the piles, but disorganized in essence, inherently non-searchable and thus inherently useless.

I thought about hanging onto the Realtor magazines, but why would I? I don’t have the time to give to everything I want to read on-line. I have almost zero time for printed books, which at least promise to repay their marginal time-cost in information density. (A marginal calculus of reading!) It could be that there is something in all those unread magazines that I cannot discover on the net. But, second-for-second of my time, I will learn so much more working the way I do now that I cannot risk wasting my time prospecting through random atoms for a nugget of gold that may not even be there.

And: Where paper is static and dead, in the net.world, good ideas get echoed. If anyone, anywhere dug up gold in a dead-tree artifact, I will run across that idea a dozen times over the course of a year on the net. The web is dynamic, self-correcting and searchable. Atom-based media are inherently inferior to electronic media.

That’s not all. Half of the dead-tree detritus I threw away yesterday was yammering about the fundamental religious virtue of being “Green.” Rationing is the Read more

June 11, 2007

Zillow.com and MarketLinx/Tempo work with Safari 3, suggesting that they will also work on the iPhone

by

Suburban Phoenix Real Estate Broker

Author website

At today’s World Wide Developer Conference, Apple CEO Steve Jobs announced the availability of a public beta version of Safari 3 for both the Macintosh and Windows. Apple’s goal is to increase Safari’s already-respectable market share, probably to induce more Windows users to switch to the Macintosh.

Importantly, Safari 3 successfully runs Zillow.com’s main web site, as well as the MarketLinx/Tempo MLS system. These were two of the more notable sites that failed to work properly with past versions of Safari. The inability to run the MLS system in Safari had stymied our own plans at BloodhoundRealty.com to completely jettison Windows and the kludgey hardware it runs on.

This is our house on Zillow.com. The Zestimate is off by $123,397 or so, but the site is running flawlessly in Safari, where it has never run before.

There’s more. Last week, Jobs said that the operating system on the iPhone will be a full version of Mac OS X. Today at the WWDC, he said that the iPhone will be running a full version of Safari.

The implication? As I discussed when the iPhone was introduced, with MLS access, this will be the best Realtor phone ever.

Guess what? This is looking like the best Realtor phone ever…

I’ve found all kinds of cool upgrades in the Safari 3 beta just in the course of writing this post. Download it and play with it yourself. Not only did your Windows machine just drop off the edge of the universe, your laptop, whether Windows or Mac, may have gone with it.

Further notice: Richard Riccelli points out that pre-release software always entails a risk. If you can’t get yourself out of trouble, better not to get in. On the other hand, Saft has been updated to work with the beta. And while the Windows wizards have been trying to knock Safari down, over 1,000,000 people have downloaded the WinSafarai beta.

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June 11, 2007

Nadel’s critique of commission structures gets wider distribution

by

Suburban Phoenix Real Estate Broker

Author website

Mark Nadel‘s ground-breaking paper on traditional real estate commission models has been published in an abbreviated form in the Cornell Real Estate Review.

Nota bene: I embedded the wrong link for the Cornell version of the paper. It’s fixed now.

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June 10, 2007

Who says print advertising doesn’t work? One of our ads is working so well a competitor cut out the good part!

by

Suburban Phoenix Real Estate Broker

Author website

I showed a house today in one of the historic districts we farm. A copy of the neighborhood newsletter was laid out the mantle, along with the fliers and business cards. I took a quick peek to see our ad, the only print advertising we’re doing right now.

Here’s what I saw:

A piece of our ad had been cut out. There was nothing significant behind it, so it was clearly our ad that had been excised. This is what that ad should look like:

You can click on the image to see a PDF version, if you like.

What was cut? The highlighted copy in this picture:

The only thing I can figure is that the lister didn’t want the seller to see that part of our ad. Nice to know someone is paying attention…

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June 10, 2007

Real estate licensing laws are a criminal conspiracy against the consumer created by and for the benefit of a cartel

by

Suburban Phoenix Real Estate Broker

Author website

When I walk into a supermarket, the first thing I look at are the floors. If they aren’t buffed to a blinding glow, I walk right back out. Why? Because if the manager isn’t staying on top of the floor maintenance, he isn’t staying on top of anything else, either. Without doubt, I am “protected” by vast armies of federal, state and local food cops, but it turns out that they are not willing to get food poisoning in my place. If I fail to guard my own self-interest, the courts might make me (or my heirs) whole — after-the-fact. But nothing can protect me if I won’t protect myself.

Surely you effect many similar sorts of “consumer protection” in your own behalf, possibly believing in your heart that the laws can protect you, yet exercising caution to protect yourself even so. But consider this: If, when selecting electrical equipment, you had to choose between oversight by government functionaries or the Underwriters Laboratories — but not both — which one would you choose?

If you said government, you can stop reading now. You’re hopeless. For those still with us, what we’re doing is exploring the implications of doing away with real estate licensing laws. And if that idea makes you shiver, you can settle down: No matter what I say, the real estate laws are not going to be repealed any time soon.

But imagine for a moment that your neighbor’s mother introduced an old friend to the FSBO seller up the street. This is brokerage, introducing buyer to seller. The principals are unrepresented, but they can do everything they need to do — in Arizona, at least — at the offices of a title company. Nothing unlawful has occurred — until grandma takes a finder’s fee from either the seller or the buyer.

At that point she is in violation of real estate licensing laws. She can connect buyers with sellers all day, every day — provided she does not get paid for doing so. The purpose of the real estate licensing laws is not to protect buyers and sellers from chatty grandmas, who Read more

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Inventing Real Estate 2.0

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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