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Month: October 2007 (page 1 of 8)

October 31, 2007

Real Estate Partnerships Under Attack in Congress

by

Commercial Real Estate Broker

Author website

For many of us that are involved in professional real estate designations (CCIM, CRB, SIOR, CRS, etc.), we’ve spent countless hours studying, networking and differentiating ourselves from the pack in order to better represent ourselves and our clients. Among the benefits is being alerted to the fact that someone in Washington is making a move that will impact our clients, their businesses and our livelihood without the aid of the WSJ, CNBC or the mainstream media’s focus on its impact to our profession. Below is an alert I received this evening that I wanted to pass along to the BHB:

CCIM INSTITUTE CALL TO ACTION: OPPOSE TAX INCREASE ON COMMERCIAL REAL ESTATE

House Ways and Means Chairman Charlie Rangel (D-NY) is moving forward with legislation that would make major changes to the tax structure. The bill proposes a massive tax increase for real estate partnerships, raising the tax rate on “carried interest” from 15% to 35%. This legislation would significantly impact commercial real estate projects, most of which are organized in partnerships. Why this legislation is detrimental to real estate practitioners:

  • Drives investors to put their money elsewhere such as stocks with much more favorable tax treatment;
  • Diminishes the value and/or put many partnership out of business because the capital would not be there to facilitate them;
  • Creates a disincentive to investing in real estate since many would no longer earn a reasonable profit;
  • Stifles growth in a part of our economy which has become increasingly important over the last several years due to manufacturing, call centers, and other key industries moving offshore;
  • Punishes partners involved with prior arranged transactions by causing a totally different economic result than all partners agreed with in advance; and,
  • Fails to recognize that real estate investors are involved in their investments daily, while hedge fund managers are not involved daily in their investments.

Contact your U.S. Senators and Representative informing them of your concerns and urge them to oppose the carried interest provision. How to contact your legislators:

  1. Look up your Members of Congress and their contact information;
  2. Introduce yourself in a sentence or two. For instance: “I am Read more
October 31, 2007

Real Estate Perfect Storm Warning: Do Not Miss This Window of Opportunity

by

Real Estate Investor

Author website

One very unique thing about investing is the valuation process.  While there are numerous ways to value an investment, the only true measure is what it can be sold for.  While I can say a piece of property is worth $1 million, if it does not sell at that value it is simply not worth $1 million.

This is essentially the free market concept.  You can set your own price and your business will succeed or fail based on the number of people who think they are getting value.  Another interesting part of this equation is time.  The more time you have to wait, the more likely you are to find someone who agrees with your valuation.  However, as the saying goes, “the market can stay irrational longer than you can stay solvent.”

This is the crux of a very important issue in investor perception.  Most investors make irrational decisions quite rationally.  If I see a house that seems unreasonably valued, and then I see a similar house that is even more unreasonably value, the first house now seems like a bargain.  This cycle continues until investors either run out of money or some event scares investors back into rationality.

The problem then over corrects itself.  Investors go the other way, thinking that every house is overvalued, when it may have only been a handful.  This happens until there is an overwhelming amount of value on the table; so much value that even the most naïve investor could make money.  And the cycle begins again, and again, and again.

Small investors are always the most susceptible to these cycles because they have the least amount of information.  They have no idea where interest rates are heading or where the next hot spot is emerging.  At best they might read the Wall Street Journal or Businessweek.  The problem with this strategy is that by definition news is old.  By the time something is reported, it will already have happened.  Furthermore, by the time your neighbor mentions it to you or by the time you see a special report, the market has most certainly moved on.

This begs Read more

October 31, 2007

Really, an Open House.

by

Realtor, Audio Engineer

Author website

First, let me say that I normally DO NOT DO OPEN HOUSES!  I generally think them to be a colossal waste of time for everybody involved. The neighbors come snooping, tire kicking strangers are tromping through a pricey home, and for what? Decorating ideas? Casing the joint? Checking list prices? I anticipate strangled cries of “BLASPHEMY” from the peanut gallery, but really, what are the stats? There have been lots of ideas bantered about concerning the efficacy of the open house, but I like the one that goes like this:

     “Less than 1% of homes are sold at an open house.”

If I had any real credibility, I suppose that I’d provide a citation for that, but alas, I have none (er. . .citation, that is).

 

 BUTT–I mean “BUT,” and that’s a big “BUT,” sometimes, extra-ordinary circumstances call for extraordinary measures, and there is a 1% chance, right?

 

For example, I have a listing on the market right now in Tramonto that is what I would call “ideally situated” for an open house:  great traffic, premier location, smoking bargain, sits on the highest point of the mountain overlooking the valley, and in this market, every little bit helps. SO, I have determined that I will indeed do an open house, this very weekend. I have been planning it for a few weeks. 

Now, because I am an “over-the-top” type of person (and I am obsessive compulsive), I decided to go all out.  There are flyers blanketing the area shopping centers, restaurants, and cultural centers. There are postcards, to the tune of about 1000 going out to adjacent areas that may have “move-up buyers.” There are html blasts going out to about 600 people in my buyer and lead database. There are signs, balloons, food, drinks, door-prizes, the works.

Now, will this work? Perhaps. We’ll see. Maybe my faith in buyers will be restored. Maybe I will be firmly convinced that I should never do THAT again. Who knows.  It does make me look like a good agent, I guess.  If any of you all are in the area, you should stop by and say “hello.” Who knows, you Read more

October 31, 2007

Search Or Sell, Young Man

by

Chicago Broker Owner Realtor | RE 2.0 Blogger

Author website

Teach or be Taught

I entered my freshman year in college (the second time) sporting a 1967 VW Beetle with no radio, a grant-in-aid to play Division III football on the crumbling edge of Pennsylvania coal country, and $200 in my pocket from a half-finished summer house painting job back east. I emerged eight years later with a bachelor’s degree in Theatre, spitting distance close to a master’s degree in English, and a 1972 Riviera that served as both my wheels and my address, off and on, for several months to follow. Oh yeah…and 30 grand in student loans, give or take a few deferments. And a soon to be ex-wife. And a kid.

My choices, as I recall them now, were quite simple, really;

I Take a teaching job for $14,000 a year in a Pittsburgh inner-city high school and get buried even further below the rusty Monongahela crust–an option, rather than an actual choice, I suppose…

II Go back to graduate school (rather, stay in graduate school and be pushing 30 when I got out) adding another 20K to the loan tab–albeit a longshot wager as far as any lender with my correct SS number was concerned…

III Or run.

The first two choices were subsequently ruled out leaving me alone in a bar one night pondering Option III… to run or not to run. Run, that is, OR… possibly… pursue what I had ended up doing in the interim while trying to figure out an escape route from those winter stained strip mines of western Pennsylvania… Sales. The default career of all default careers. Knife and pot sales, actually. Door to door throughout the surrounding counties. My first crack at this profession of eating what one kills. And a natural born killer, I was not.

I’d forage the wedding announcement notices from back issues of the local weeklies then drop in on the family homes of the blushing brides-to-be, a suitcase full of kitchenwares in one hand and ten cent daisies in the other. Knock, knock, knock…“Why, you must be the the future Mrs Thaddeus McLelland Stump {pause} Oh…you are her mother? Dear Lord… I Read more

October 31, 2007

Writing for money? I’m in real estate. Writing for money is a big part of what I do to earn my living . . .

by

Suburban Phoenix Real Estate Broker

Author website

“No man but a blockhead ever wrote, except for money.” — Samuel Johnson

Kris Berg asked me last night about my experiences writing for money. This was something I was interested in when I was very young, but, again from Johnson, “The expense is damnable, the position is ridiculous, and the pleasure fleeting.” I have an absolutely unbounded loathing for the word “submit,” and this was something I could never eradicate from my mind, every time I licked a hopeful envelope.

When I am retired, I may consider the matter again, although it seems certain that writing for money is going the way of recording pop music for money: Ever more popular, no money. That doesn’t even matter to me. I’ve given away everything I’ve ever written, and I don’t see myself stopping. It is up to the reader to decide if the product is worth the price — and we are so much mis-schooled that many of us don’t know how to evaluate something that comes to us without a price. But it is very satisfying to me to write and to know that my writing is not being mucked with by some drooling, drunken moron to whom I am expected to “submit.” That satisfaction, the freedom to write whatever I damn well please, has always been compensation enough for me.

But do not for a moment entertain the idea that I am not writing for money. Yesterday I had what I considered to be an unjustifiably low offer on one of our listings. You can’t blame a guy for trying, but, upon reflection, I decided that the problem was at least partly mine.

I’ve written quite a bit about writing for real estate, but I realized yesterday that I need to be doing more than rhapsodizing about benefits and lifestyle. I am a good persuasive writer, and some small part of the writing I do for a listing has to be devoted to wrestling with logic and not just gaily dancing with emotion.

So: I wrote this text and put it on the back of the flyer with the floorplan:

Defending the price of this home…

It’s common Read more

October 31, 2007

Picking up the pace: Introducing Geno Petro

by

Suburban Phoenix Real Estate Broker

Author website

Today we’re adding another writer to our line-up, but we’re also revealing the secret subterranean agenda of The Odysseus Medal competition.

Every time I turn around, there is someone accusing me of underhanded methods. I was seeking to get rich at $6.17 a month as an Amazon Affiliate. The Odysseus Medal is alleged to be a link-baiting scheme. And — the worst of my crimes — I hogged all the good grades in school!

I live in a simple world. I figure things are pretty much what they seem to be. Certainly I am, as is anything I build. I don’t do double-talk. I don’t get it, and I don’t care to take the time to puzzle it out.

So what is the real, super-secret, ultra-nefarious objective of The Odysseus Medal?

To unearth and celebrate talent. Period. My secondary hope is that I might recruit talented writers whose work I haven’t seen before to come write with us. But I want to improve my own mind — as I assume you do, too — and a good way for us to achieve that objective is to tell each other about great writing and great ideas we find as we leap across these nets.

Ooh… Crafty…

Today’s introduction is a treat for me. I had never read him before Sunday morning. He was nominated for The Odysseus Medal, and I knew about a third of the way through his post that he had won it. By the time I had finished reading, I knew I wanted to recruit him for BloodhoundBlog.

Enough. The man:

Geno Petro is the voice of Chicago on the RE.net. A top-producing listing agent, he has done leasing and has worked in his own behalf as an investor. On top of all that, he is a stunningly original writer.

Geno Petro is an incomparable writer. Like Kris Berg, he takes you right into his world, and, while you are there, you cannot even imagine any other, so completely is it realized.

I love what we do here, but one of the things I love best is that it makes all of us stronger. We all have to run Read more

October 31, 2007

Telling Secrets

by

Realtor, Associate Broker

Author website

secret.jpg 

Censorship has been on my mind. Not the definitive, prescribed and documented “heavy hand of authority” variety, and not the “thou shalt not be mean to NAR” Memorandum of Paranoia allegedly being unveiled in November, but the worst and most pervasive kind.

What I find more concerning and most stifling is the triple-secret censorship. Unless you are a Broker Owner, with no one to answer to but your own inner voice of reason, you are being judged by what you write. Every word I click onto the page is subject to scrutiny, and I must choose each oh-so carefully while perched atop my podium of egg shells. Sometimes I fail and trash the whole dozen. Independent contractor? Not entirely independent, I’m afraid.

Many topics are safe. Statistics and trend analyses are the poster children of the benign blog entry. Pictures of pretty buildings, diatribes on transactional intricacies, and advice on “how to pick an agent” are all fair game. It’s black or it’s white, and no one can make a compelling argument to the contrary. Fielding questions on contracts leads us closer to the mine field, but if we preface each thought that hits the page with “I am not an attorney,” we mitigate the risk of having to rephrase our post for His Honor.

We can talk about technology. It either is or it isn’t, and my broker is probably not going to hunt me down like a dog for taking a bold stand challenging the site design of Terabitz, nor will he give much thought to my in-depth expose on the accuracy of the Zestimate. While I am cautiously treading water with my choice of topics, however, I am risking either offending the reader with the triviality of my content or boring him senseless.

This blog scares me, because I think it scares my broker. The tone is sometimes caustic, mostly serious, and always challenging of the status quo. I enjoy satire, and I like to laugh. Many things make me laugh, and so many of those are related to common, every day life, the life unrelated to the job. I weave those stories into my writing, too often I suppose, Read more

October 30, 2007

Twittering on a wing and a prayer

by

Rust Belt Realtor

Author website

I Twitter. Therefore I am? Twitter appeals to me, although I’m wondering if that makes me a Twit. It seems so Web 2.0 lite. Blogging has weight. Facebook, LinkedIn, they have some business attire to them. Twitter is just casual Friday, isn’t it?

I’m not an expert Twit. I still need to learn all the little nuances like the tinyurl and how to reference another Twitter account, but I’m not caring about that at the moment. Right now I am simply trying to remember to Twitter and in order to be an interesting Twit you have to leave it open and just Twitter away. I Twitter on about the minutiae of life and work, but I also post my blog urls. That’s where the tinyurl comes in handy, since each Twit is limited to 140 characters. This being Bloodhound, I’ll anticipate your question- does it bring you leads? Goggle has picked up my Twittering for a keyword of some sort and pointed someone to my home blog, so, in other words, no leads. What’s the point, I hear you asking.

There’s this movie that I adore, “Wings of Desire“. If you are not familiar with it, two angels hover among Berliners. We watch the angels watch the humans, and the angels can hear human thoughts, so we get to hear what other people are thinking. One angel decides he no longer wants to watch, he wants to participate in life- as he says “At last to guess, instead of always knowing. To be able to say “ah” and “oh” and “hey” instead of “yea” and “amen.” This is one of those movies that people seem to love or hate- it’s not for everyone. My husband, Jamie, for example, can’t stand it. To him it ranks high on the list of most boring movies he’s ever seen, and my guess is that to him, Twitter would be the same.

You have the opportunity “follow” the twits of other people, and that’s where Twitter gets interesting, or really boring depending on your point of view. Twitter asks “What are you doing?” but it could ask Read more

October 30, 2007

Zillow.com upgrades its advertising arsenal, allowing you to target-market the Joneses you want to keep up with

by

Suburban Phoenix Real Estate Broker

Author website

I’ve been saying this for a long time: Buyers are temporarily interested in listings. Owners are always interested in their homes. Zillow.com wants buyers, hence the move to accept listings feeds. But what they really want are owners, people who will come back to the site again and again, potentially to be sold new stuff every time they come back.

Remember 13 months ago when Zillow opened up and let sellers create Do-It-Yourself Zestimates, detailing all the unZestimated changes they had made to the home?

Today all that data gets put to use. Zillow has a brand new advertising program called Home Direct Ads that will use every bit of the data it has collected to target market ads to particular buyers, to vendors like movers or remodeling contractors — even to visitors to specific homes in the Zillow database.

From the company’s press release:

Leading real estate Web site Zillow.com today announced the launch of Zillow® Home Direct Ads, a new set of patent-pending tools that enables advertisers to identify and connect online with homeowners who are on the verge of making major home-related purchases such as moving or updating the home they currently own.

The sophisticated toolset capitalizes on Zillow’s most compelling asset: data-rich, individual Web pages for more than 70 million U.S. homes that attract regular visits by the homeowners themselves. Zillow Home Direct Ads helps advertisers target ads to these homeowners by individual address, by value of their home, by psychographic cluster such as urban families with children, or even by whether they are planning to move. This type of intent and address-specific targeting has never before been available for advertisers online.

“What we’re offering advertisers is pin point accuracy on the purchasing intentions of homeowners, including the ability to forecast that they are highly likely to move or remodel well before they start the process,” said Greg Schwartz, Zillow vice president of ad sales. “Our advertisers can target ads down to the specific address or home value, or learn other facts about the neighborhood and locality that will allow them to tailor ads directly to this audience. As a result, advertisers are Read more

October 29, 2007

Sell Your Home? Get You a Loan? Do Your Taxes?

by

Mega-Producing Realtor

Author website

I have no idea if published Letters to the Editor are covered by copyright protection – if they are I will need to stop doing this. If someone were to suggest that there was a pattern to the types of letters Inman News chooses to publish (say, for example, that I’ve made assertions like that in the past) a person wouldn’t have to wait very long to find examples of that pattern. This one is from today:Mars Attacks

Higher commissions are ‘anti-consumer’

Dear Editor:

Are semantics clouding the real issue? When you have thousands of real estate agents competing for a limited amount of business this is construed as competitive, just as Realogy and RE/MAX suggest. However, this does not equate to competitive real estate models, which should — but do not — benefit consumers.

In this agent’s opinion, the issue is not whether there is competition between agents to obtain business — it is the competition as it relates to commissions that have these companies on edge. This should be considered “anti-consumer,” not necessarily an anti-competitive issue, which is simply a case of semantics.

These companies readily admit and demonstrate that they will do and say almost anything to thwart competition with regard to commission dollars.

How many times do they have to say that they are worried about the pressures of lower commissions? It is well documented and stated by these companies that they spend inordinate amounts of money to attract business, thereby placing them in a position where they cannot compete with other models that use pricing (commissions) to compete with the “anti-consumer” real estate models that hire thousands of agents and spend millions of dollars to obtain market dominance.

Ironically, these “anti-consumer” companies are honest about the reasons they continue to frustrate a decline in commission rates. They cannot “compete” within these confines. This is about commissions, not competition to attract business.

What the public should consider is whether they want to do business with companies that knowingly take advantage of their mere size as opposed to finding ways to lower the costs and becoming more efficient when it comes to actually selling homes. Besides higher Read more

October 29, 2007

For some reason, the Redfin Consumer Bill of Rights is ‘news,’ but will the news extend to exploring real reform in real estate?

by

Suburban Phoenix Real Estate Broker

Author website

Take a look at this map:

That’s the route from my home, in North Central Phoenix, to Johnson’s Ranch, a master-planned community in Queen Creek, AZ. The distance is 55 miles by the odometer, but travel time is more like two hours. It’s a brutal, awful trip, over two-lane roads for the last third of the ride, interrupted once a mile by four-way stop signs. In traffic, each one of those four-way stops could account for ten minutes of your travel time. An accident or an over-heated car could drive your trip time up to three hours or more.

What can we say with absolute certainty about Queen Creek?

How about this? It isn’t in Phoenix.

Johnson’s Ranch isn’t even in the same county as Phoenix.

So why, when the New York Times wanted to slime the Phoenix real estate market — why would it do so from Queen Creek?

How about because the real estate market in Queen Creek is astoundingly bad, and — unless you live here — you won’t know you’re being had.

Don’t confuse yourself. Skyharbor Airport is eleven minutes from my house, right in the heart of town. No one could fly into Phoenix, then drive through mile after mile of cattle-scrubbed desert to Queen Creek, and manage to confuse the two. The purpose of the article was deception, the same kind of slimy deception “professional” journalism has been able to pull off forever — until now.

Want proof? The Associated Press pulled the same stunt earlier this month.

I’m not being a pollyanna. The real estate market is rough right now in Phoenix. But it is a whole lot better than it is in Pinal county. Conflating the two is not an error of knowledge, it is a deliberate falsehood — just exactly as false as talking about single-family homes in New York selling for $350,000 — which I would imagine you could obtain 55 miles southwest of Times Square.

In any case, I’m not talking about these particular lies but about the pattern of lying, about the pre-canned story lines mainstream journalists try to foist off as “news” — until very lately with no Read more

October 29, 2007

My Hybrid is a Gas Guzzler

by

Realtor, Associate Broker

Author website

hybrid.jpg

The business of real estate sales is a business unlike any other. The Real Estate Hybrid is neither energy nor cost efficient. Ours does not fit neatly under the Service Provider heading nor do we have a product to sell in the traditional sense. What we do have, however, is the goal universal to all commercial business ventures – profitability.

Why, then, is it so fashionable these days to portray the real estate agent as overpaid, and the profession in the broadest terms as engorged with greed? Several factors contribute: The consumer’s lack of understanding or their misconceptions of our business model, our inability to effectively communicate and demonstrate our value, and our tendency to carry on a public charade suggesting that our job is one big public service announcement. The latter, of course, is compensation for the former, with the real answer lying somewhere in the middle.

When did profit become a dirty word?

Just Take a Little Off the Top

A business consulting firm, Virtual Advisor Interactive, wrote this about the pure consulting or service-oriented business:

You may tend to think that pricing is not as complicated as product pricing, since what you are offering is less tangible, but appearances can be deceiving… Say you are a hair stylist, for example. Your raw costs will probably include the following: rent and utilities, equipment (including chairs, hair dryers, combs and brushes, sinks, mirrors, towels, washers and dryers, etc.), products (assorted shampoos, conditioners, hair spray and hair color), insurance, and staff salaries and benefits. Also, what about insurance, should a customer slip and fall? So while your service may be hair styling, you must carefully examine everything you will need… to perform that service. You must carefully and continuously list every expense. Once you have determined your raw costs, you can then set up an effective pricing model and figure how much you will need to charge for your service or time in order to break even and/or make a profit.

So, we aren’t hair stylists, but a very large component of our business is delivering service. I won’t offend the reader by listing the costs associated with fueling our business; if you are Read more

October 29, 2007

Don’t feel badly, traditional brokers- even FRENCH people hate Stahl

by

Real Estate Rainmaker

Author website

Nicolas Sarkosy ditches The StahlFor those of you not up to speed, the 10 second version of why we can’t stand Lesley Stahl of 60 Minutes dates back a few months to a grossly slanted piece that amounted to Stahl’s stacking the story to “prove” that traditional real estate brokerages are stupid swindlers even if they discount and turned the article into a free PR piece for Redfin (the west coast based “revolutionary” rebate real estate firm).

Then, take it back a few more years to the “Axis of Weasel” comprised of the French government officials… ringing a bell?  Freedom fries, anyone?  That said, French President Nicolas Sarkozy agreed hesitantly to an interview with Stahl and after only minutes of the “stupid interview” (his words, not mine), he cut the interview off by removing his earpiece and half-assedly shaking her hand goodbye.

So, for all of you traditional brokers (or discounters who had thunder stolen by Stahl’s Redfin ad), don’t feel badly- even FRENCH people can’t stomach Stahl.  I’m seriously feeling pro-France… imagine that!

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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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