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Month: September 2007 (page 6 of 6)

September 5, 2007

Fantastic Interview with Gary Keller

by

Mega-Producing Realtor

Author website

I just received, via email, the September newsletter from Custom House Publishers. It had the large post-it you see below. Clicking it took me to the Quicktime video you will see. I could not over-recommend watching it and paying close attention. For some years I have considered Gary Keller to be the most knowledgeable person on the planet when it comes to the subject of correct and useful information regarding agent success. There is nothing he says here that is not valid and useful. I personally have five Custom House papers (mailing about 45,000 papers a month) but that isn’t why I am passing this along.

Once all of my mentoring videos and audio pod casts are cataloged and made available on a single page, I would hope this link occupies a prominent position on that page.

Enjoy.keller_post-it

 

September 5, 2007

Why do traditional Realtors despise discounters like Redfin.com?

by

Suburban Phoenix Real Estate Broker

Author website

This is me, guest-posting at Blown Mortgage while Morgan Brown is on vacation:

So why is a limited-service listing unlikely to succeed? If you’re in a high-demand market like Seattle, it just might. But in most of America, right now, a home must be marketed perfectly from the first day or it will sell slowly and at a deep discount — if at all.

The one difference between a true FSBO and a limited-service listing is the searchable record in the MLS database. The home will be offered by-owner in all other respects: Priced wrong, prepared wrong and inaccessible to buyers and their agents. This is not a necessary consequence, but it is very, very common. In the case of our newly-listed competition, the home is offered at $200,000 over its market value. Presumably because of the recent re-financing craze, it is encumbered at about $75,000 over market. This home will not be a threat to our listing.

But it wouldn’t be a threat even if it were priced right. There are too many weapons that a professional home marketer will bring into battle for an amateur, no matter how dedicated, to compete. A limited-service listing comes with none of the professionals’ arsenal. So much the worse, it shouts out a warning to skilled buyer’s agents to stay away.

Why would that be so? Because even if it’s competitively priced, even if the buyers love that particular home, it is being marketed by an amateur who will, in all innocence, make egregious errors again and again. Worse, the seller will have no one to turn to for advice, exposing the buyer’s agent to double the legal liability in the transaction, potentially even creating what a judge might regard as an undisclosed dual agency.

The same situation obtains in reverse with discount buyer’s agents like Redfin.com or Buyside.com. Their vaunted cost savings come not from their technology, nor even from picking the low-hanging fruit of well-prepared buyers. The savings they pass on to the buyer come from pushing the costs of buyer representation onto the listing agent.

I wrote this essay a couple of months ago, when Redfin.com Read more

September 5, 2007

This is what it smells like when Zunes die…

by

Suburban Phoenix Real Estate Broker

Author website

Going to the Social? Not anymore.

News abounds. There will be better coverage in an hour or two. For now:

  • New red iPod Shuffle
  • New iPod Nanos with iPhone-like video
  • New iPod Classics with iPhone-like video — up to 160GB
  • New iPod Touch — a phoneless iPhone with WiFi, iTunes by WiFi and Starbucks music previewing (hold your nose for that last bit of flatulent decay from the Zune)
  • New iPhone price, 8GB version only going forward for $399

And remember that Leopard is still out there this year…

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September 5, 2007

News You Can Use – Real Estate is a Business

by

Realtor, Associate Broker

Author website

When I want the news I can use, I head straight for the San Diego Union Tribune. From yesterday’s Currents section, in an article addressing the health benefits of swimming as exercise, they gave us this bit of sage advice:

Who is swimming not good for?

Swimming is not a good activity for someone who doesn’t know how to swim.

I think this should be an ongoing feature series. “Piloting a jetliner is not a good activity for someone who doesn’t know how to fly”, “Skydiving is not a good activity for someone who doesn’t have access to a parachute”, and “Attending a Barry Manilow concert is not a good activity for someone who…” – Well, that last one is just plain wrong.

Do you know what else is just plain wrong? Attempting to grow a successful business is not a good activity for someone who lacks the ability or willingness to think like an entrepreneur, to constantly evolve, to continually strive for excellence and to establish their brand as superior to that of the competition.

I suggest that rather than the Broker’s new-hire training beginning and ending with lessons in the fine art of bulk-mailing, working your sphere, passing out pumpkins on Halloween and flags on the 4th of July, and sitting open houses, the first lesson should be a boot camp on business basics.

New agents, and even the veteran hangers-on who are feeling stalled and challenged, would do well to start thinking like the self-employed business owner they are. Once licensed, it is not your divine right to make a living in real estate. It is not preordained that, once assigned a cubicle and a business card, you will enjoy untold riches or even eat. There are tens of thousands just like you. Only when you reach the point where they are NOT just like you and your customer knows it will you realize any consistent success.

Keep Inventing

The minute your product is finished, so are you.

Years ago, I had one of the first “car phones”. In those days, it was cutting edge, truly a thing of envy. It was hard-mounted to my dash, had the little curly Read more

September 5, 2007

Instead of a bailout of troubled borrowers, why not implement an equity-sharing plan?

by

Suburban Phoenix Real Estate Broker

Author website

Via Poor and Stupid, TCS Daily has a free (or at least free-er) market solution to bailouts for struggling mortgage borrowers.

The idea? “[A] debt-for-equity swap with sub-prime borrowers.” Borrowers would give up 20% of their downstream equity in their homes in exchange for 20% debt and therefore payment relief:

To implement the swap plan, government would create an agency to buy equity from troubled borrowers. Call this new agency Bailie Mae.

When a borrower swaps with Bailie Mae, the borrower’s monthly payment of principal and interest immediately falls by 20 percent. Instead, Bailie Mae provides the other 20 percent of the monthly payment. The borrower still has to pay the full cost of other components of the mortgage payment, such as taxes and insurance.

As long as the borrower makes the new monthly payment, he stays in the home. When the home is sold, 20 percent of the gross proceeds go to Bailie Mae. At that time, Bailie Mae will be responsible for repaying 20 percent of the outstanding balance on the mortgage loan.

For example, suppose that the outstanding balance at the time of the swap is $100,000, and the borrower’s monthly principal and interest is $800. With the swap, the borrower’s monthly principal and interest payment would drop to $640, and Bailie Mae would pay $160 per month.

Several years later, the borrower gets a job in a new city and sells his home. By this time, the outstanding loan balance is, say, $90,000. Bailie Mae is responsible for 20 percent of that, or $18,000, with the borrower responsible for the remaining $72,000. If the home sells for $110,000, then 20 percent of that goes to Bailie Mae, which means $22,000. Another $72,000 is used by the borrower to pay off the loan, leaving $16,000 to go to the borrower.

Suppose that the house is sold for only $80,000. In that case, Bailie Mae gets only $16,000 even though it still has to pay $18,000. The borrower gets nothing, and $62,000 goes toward paying off the loan. The cost of the remaining $10,000 shortfall in paying back the loan is borne by the responsible lending Read more

September 4, 2007

ARMs Look Scary Before They Look Good or (How Wall Street Dupes the Little Guy)

by

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

Author website

I don’t look real smart today, do I ?

Mortgage rates in general took a fairly substantial dive during the previous week with longer term rates dropping double digits in most cases and some rates returning to mid-2006 levels. However, the Mortgage Bankers Association reported a spectacular increase in the interest rate of the one-year adjustable rate mortgage (ARM).

Hold on just one second ! Now is the time when you SHOULD be a contrarian. The alternative title of this post is the one you should read. Wall Street has always been ahead of the little guys and gals. They look into the future, and try to get money committed to best profit off of their forecast. If an annual ARM rate is rising above the fixed rate mortgage rate, Wall Street is trying to induce borrowers to lock up money.

Why would anybody in their right mind do that?

Wall Street thinks rates are going to drop like a ball off of a table. They think the inverted yield curve we’ve seen is a precursor to a recession. The inverted yield curve has indicated an impending recession some 85% of the time since the Civil War – which side would you bet on if this were Vegas?

Nobody likes the R word. I’ve been sensitive to the R word since Bill Gross of PIMCO talked about the housing recession in late 2005. He, and I, are more sensitive to the concept of a “housing recession”; we’re both in California. It’s estimated that close to 10% of the jobs in California are related to the housing industries be they Realtors in Rialto or a painters in Petaluma.

Why the Wall Street shuffle with higher ARM rates? They want you to take the risk of a fixed rate so they can stick them in the MBS pools for a few years. They know those loans will sell at a premium in 12-18 months- when rates are dramatically lower. To continue the Vegas Read more

September 4, 2007

What would you do with a totally free mobile phone?

by

Suburban Phoenix Real Estate Broker

Author website

We haven’t talked about the gPhone rumors, the possibly-apocryphal mobile phone alleged to be forthcoming from Google. I read about vaporware all the time, but I tend not to remark on it. Today is different.

Consider these conjectures from Seth:

My non-inside prediction of what the third-generation phone they ship will be like:
(Relatively) free
(Relatively) open
Ad supported

So, any carrier can offer it (hence the free part), any developer can easily modify it/enhance it, and the thing is paid for by location-aware permission marketing. Anticipated, personal and relevant ads based on who you are, what you do and where you are. GPS-coded photographs from all over the world automatically appended to Google Maps. Free calls if you’re on a wifi network. And it won’t be nearly as design-wonderful as an iPhone. But it will be addictive and in many ways, better.

Emphasis: “Free calls if you’re on a wifi network.”

Stipulate all of this just for the sake of the argument. If it’s not true of the gPhone, we’re probably headed in this direction, perhaps even toward “free” ad-supported cellular service.

First: This could easily be the primary phone for many, many people. No more for-pay mobile service, and no more for-pay land lines.

Next: The gPhone could be the ideal second phone for busy people like Realtors. I’ve thought for a while that I might end up with a BlueTooth headset on each ear. Imagine making all of your showing calls from the gPhone. Now you can ignore your main phone with clients — which I think is good marketing — but you will know to take the gPhone calls, since they will have the access information you need. You could also stage intra-skullular conference calls, which probably is more amusing in concept than in reality.

Moreover: You could use the gPhone as the mobile analogue to your Yahoo mail account: A throwaway that you will throw away when the spam gets out of control.

There is an argument that people don’t respect things they get for free. That may not be true, or it may be progressively less true, but it remains that we treat free resources very differently Read more

September 3, 2007

The Odysseus Medal: “Government was never intended to bail out corporations”

by

Suburban Phoenix Real Estate Broker

Author website

I was at a party Saturday night, and everyone kept telling that it’s a great time to buy. I’ve been showing all weekend, so, who knows?, maybe it’s true. In any case, I’m short on minutes, so we’ll do this week’s awards on horseback.

The Minnesota Association of Realtors has a peculiar talent for inviting scorn and ridicule. This year’s fun-fest, the winner of our People’s Choice Award, was kicked off by Teresa Boardman, with Has MAR forgotten who pays the bills?

I would love it if half of the agents in the twin cities quit. That would mean more money and more business for me. It just doesn’t work that way and it never will. When it gets easy everyone wants to do it, and they do. When the going gets rough they quit.

Glen, your letter is just another example of how an industry in turmoil has started eating it’s young to protect old business models instead of innovating to better serve the consumer. Real estate is a self eliminating market driven profession. It works on the principals of supply and demand, as does the housing market.  When agents can’t make ends meet they will seek employment outside the industry and maybe they will sell a few homes too. We call our economic system capitalism and I just love the almost endless opportunities the system brings. Anyone can start their own business, how cool is that? 

You don’t get to decide who will stay and who will go based on earnings and years in the business. Each of us will make that decision on our own.

The Black Pearl Award this week goes to Morgan Brown’s Taking advantage of convertible home equity lines of credit, which teaches us how to encumber a Jumbo-priced property without a Jumbo loan:

Instead of taking the whole loan balance as a 1st position HELOC, take a conforming 1st mortgage up to $417,000 and then take the remaining as a convertible HELOC. Once you sign the loan documents you can convert the HELOC to a fixed rate and achieve a blended interest rate (the effective interest rate of Read more

September 2, 2007

The People’s Choice Award voting is open: Vote for your choice of the best RE.net posts this week

by

Suburban Phoenix Real Estate Broker

Author website

The voting for this week’s People’s Choice Award is open. The short list is not short — 24 entries — but it’s rich in quality writing.

Voting will run until Monday at 12 noon PDT/MST. The ballot form will permit you to read every article, but here are the links to the nominated posts:

The Odysseus Medal competition is a weekly carnival of the very best weblog posts in the RE.net. If you would like to compete — or to nominate someone else’s excellent work — this is the nomination form.

I’ll announce this week’s winners tomorrow early afternoon.

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September 2, 2007

The “Very Best” Alternative to the National Association of Realtors

by

Real Estate Investor

Author website

There has been a lot of talk about how to fix the National Association of Realtors or even how to supplant the organization completely.  As an outsider looking in, I have one simply question:  Why are realtors paying good money to an organization that they hate?  As an investor I cannot not think of a more egregious instance of throwing good money after bad money.  I have said more than my fair share of bad things about the NAR and realtors, so I think it is my turn to be solution-oriented.

My solution is simple, instead of working from the bottom up, start top down.  If the best realtors/agents formed their own group, they would instantly dominate whatever market they chose.  Imagine, if you will, that the NAR was made up of only the top 10% of agents in the country.  These agents have a proven sales track record, impeccable ethics, and strong client feedback.  Additionally, the MLS is one of many marketing vehicles they understand and use regularly.  Simply guessing, this group would probably have quicker close rates, achieve better prices for their clients, and have a much better pulse of the direction of the market.

Such a simple idea must have many flaws, so I will start naming a few obvious ones and propose solutions that would seem to work.  Remember, I am on the outside looking in, so feel free to comment if these are way off.  First, the most obvious problem is the MLS access issue.  I think this problem actually solves itself.  Consider how large the listing database would be if the top 10% of the real estate community decided to leave the MLS and start their own listing service.  Additionally, many areas now have a public MLS or many other listing services in addition to the current NAR controlled MLS.  Finally, imagine the hit the MLS would take if the top 10% of the real estate community chose to stop listing with them?  That might open some eyes at the top.

Second, how do you get the top 10% of the real estate community to come to this Read more

September 2, 2007

Rufus Wainwright sings “Hallelujah” + Leon Russell sings “Jumpin’ Jack Flash”

by

Mega-Producing Realtor

Author website

OK, it looks like BloodhoundBlog is going to have a music section after all. Here is a link to Rufus Wainwright singing one of the most beautiful songs ever. There are a number of artists who do this song, I believe his version is even better than the one by Jeff Buckley.

My favorite artist, this lifetime, would have to be Leon Russell . Here is a video of one of his monster performances, singing the Stones classic, “Jumpin’ Jack Flash” combined with The Coasters hit, “Youngblood”.
This was from the Concert For Bangladesh recorded and filmed in 1971.

Enjoy.

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