Entries from May 2007 ↓

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The site that will symbolize the excesses of the last housing boom and the excesses it can breed, iamfacingforeclosure.com, has shut it’s doors.

I have not written much about the travail of Casey Serin and his very public entry into the depths of mortgage fraud, foreclosure, and most likely a long and painful process of legal and financial distress. He has done all this very publicly and anything I would do would have just fed his ego and led him further down the path of shame and ruin.

And I am not gloating as at that age I also thought that I was smarter than the rest of the world and made some dumb business decisions. But I am glad that Casey decided to shut down the site and focus on his family and life and not lead it in the public eye.

So tonight, if it is your style, say a small prayer for the guy and hope that all ends up okay for him and his family. My guess is they will need every bit of it.

If there is something that you do “Once in a Blue Moon” tonight is the night to do so. The phrase traditionally means that there has been a full moon twice in a month, which is what is occurring tonight.

So let your hair down and enjoy the “Blue Moon” tonight.

The phrase “Once in a blue Moon” was first noted in 1824 and refers to occurrences that are uncommon, though not truly rare. Yet, to have two full Moons in the same month is not as uncommon as one might think. In fact, it occurs, on average, about every 32 months. And in the year 1999, it occurred twice in a span of just three months!
For the longest time no one seemed to have a clue as to where the “Blue Moon Rule” originated. Many years ago in the pages of Natural History magazine, I speculated that the rule might have evolved out of the fact that the word “belewe” came from the Old English, meaning, “to betray.” “Perhaps,” I suggested, “the second full Moon is ‘belewe’ because it betrays the usual perception of one full moon per month.” via  Yahoo! News.

If you want to “Feel Good, I know that you could” by buying James Brown’s former Manhattan apartment. He lived in this property during the 70’s and 80’s. The Godfather of Soul’s apartment is not a very lavish place as one would expect from the pop icon, but it a spacious 2 story property in the heart of the Upper East Side.

But the late Godfather of Soul also kept an apartment on the Upper East Side, and it’s just come on the market. The surprisingly modest three-bedroom—spacious and sunny, to be sure, but on Third Avenue at 67th Street—carries a price under a million and a half dollars. Brown is said to have lived here from the late seventies through the early eighties, during which time his career started to recover from disco- induced malaise. (“Living in America” hit in 1986.) We checked the closets, and regrettably there are no gold-fringed suits included in the sale. – New York Magazine

Trigger leads, those insidious creatures that credit monitoring companies sell when someone pulls your credit file for a mortgage application, are coming under increased pressure from state and federal government agencies. Typically what happens is that you apply for a mortgage and the lending company runs a credit check.

Then about 12–24 hours later your phone starts to ring off the hook. Shady, low down dirty scum sucking mortgage brokers (can you see I am a fan?) start making promises of lower rates or fishing for information to run a competing offer for your business. What is scary is that if you fall for their lies and scams you have the chance of not even qualifying for the original loan because of all the activity on your credit reports. And who gets this information to these lowlifes, the credit companies themselves who make a pretty penny selling your information. A vicious circle that captures you the borrower in at best an annoyance and at worst subject to a con.

These folks are bottom feeders of the lowest variety. Next week I will have a post on how to avoid the Mortgage Trigger Lead scrapers, but for now here is how governments are getting into the action trying to stop these unscrupulous lenders.

These days, mortgage shoppers like Ashley are supreme telemarketing targets, thanks to “trigger leads” that the credit reporting bureaus sell to lenders the instant a consumer’s credit file is pulled by a loan officer. So when Ashley’s lender checked her credit to prepare her loan, dozens of other mortgage companies were tipped off. These alerts can be had for a few bucks per name if bought in bulk.

This is legal - though not necessarily for much longer. A few states have been exploring restrictions on the practice, and last week Minnesota’s governor approved a block on most trigger leads. A ban is pending in Massachusetts.

Potential Congressional action is brewing as well. The House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass., is investigating the issue in advance of hearings it expects to hold on a broad review of the credit-reporting agencies, according to committee spokesman Steven Adamske. Such hearings could find that trigger leads have drawn some powerful enemies.

The proposed ban in Massachusetts, for example, was floated by the state bankers’ association. Its chief operating officer, Kevin Kiley, fears that “the trust that has been established between the bank and the consumer has been essentially undercut” because of trigger leads.  via BostonHerald.com

It looks like there is a major retrenchment going on at Pulte Homes. The Michigan company is reducing it’s payroll by 1,900 jobs or 16 percent as a slow housing sales environment is causing the company to reduce overhead. The company expects to save over 200 million a year with this move.

My only question is why did it take so long for the company to start reducing headcount. If you are a real estate industry watcher you know that the marketplace has been slowing dramatically. These cuts should have started a year ago and be concluding right about now.

Odds are that by the time the company completes the reduction in force, or firings, they will need to start rehiring some of the same people.

Pulte said it expects to take pretax charges of $40 million to $50 million for the restructuring, mostly in the second quarter of 2007.
Bloomfield Hills-based Pulte reported losses of $85.7 million, or 33 cents a share, and revenue of $1.9 billion in the first quarter of 2007. It earned $262.6 million for the same period last year, or $1.01 per share, on revenues of $3 billion.
It had about 11,900 workers before the cuts, down from 12,400 employees in 2006 and 13,400 in 2005.
“At the conclusion of this reorganization, we expect to employ just over 10,000 people,” Pulte spokesman Mark Marymee said in an e-mail message Tuesday evening.
Pulte operates in 50 markets and 26 states, delivering 41,487 homes in 2006, according to its Web site. via MSNBC.com.

I was just reading this article by John Stossel, the ABC consumer reporter, and it struck a huge chord with me. I listen and read regularly to the real estate blogs about the growth of the low cost broker. It is a fact, but a great broker to protect his commission should fight for the double thank you moment every day of his or her existence.

If you truly believe in your right to 6 percent, then you must have at closing a customer who is saying thank you for a service that they are paying for that you have delivered. That something of value.

And you as a real estate agent must look that customer in the eye and thank them for letting you earn your commission.

• You have given them something that they value in terms of expertise and service.
• And they have given you something you value, money to feed your children and pay your mortgage.

Make sure the customer is thinking they got the better of the deal at the closing and you will have a happy customer. There is nothing wrong with that and they will never worry about the commission they paid you.

Or as Seth Godin wrote recently:

Maybe the reason it seems that price is all your customers care about is…

… that you haven’t given them anything else to care about.

I have glossed over the idea, but read John’s article and see what you think.

How many times have you paid $1 for a cup of coffee and after the clerk said, “thank you,” you responded, “thank you “? There’s a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win.
Economists have long understood that two people trade because each wants what the other has more than what he already has. In their respective eyes, the things traded are unequal in value. But this means each comes out ahead, having given up something he wants less for something he wants more. It’s just not true that one gains and the other loses. If that were the case, the loser wouldn’t have traded. It’s win-win, or as economists would say, positive-sum.
We experience this every time we have that double thank-you moment in a store or restaurant.
It doesn’t matter that you wish the price of coffee were lower. We want the price of everything to be lower (except the price of what we’re selling, whether it’s our products or labor). What matters is that you bought the coffee for a buck.
The story doesn’t change if you buy from someone in another city or another state. It doesn’t change even if you buy from someone in another country. Read the rest of this article by John Stossel

You have to admire the chutzpah of a couple of Hawaii entrepreneurs. They are selling land on the island of Lo’ihi for 39.95 per parcel. The only problem, it is presently 3,000 underwater and not expected to be above sea level for 10,000 years.

Small potatoes for Jimmy from Cleveland who wants to brag to his buddies at the local watering hole that he just bought some property in Hawaii. The partners, Norm Nichols and Linda Kramer, do have a sense of humor though. They plan on having their homeowner association meetings on a boat over the property each year and are going to set up a website where the planning of the future city will take place via chat and forums.

You wonder where the modern day Florida swampland sellers ended up? We found them in sunny Hawaii. But it is great they have the idea and a sense of humor.

His Web site will be renovated in the next couple of weeks to officially begin selling parcels for an introductory price of $39.95. Buyers will receive a brochure and a “deed,” but much like Internet groups that claim to sell stars, they probably can’t call themselves owners.
“What’s the scam?” said Norm Nichols, co-developer of the online venture. “If you really think there’s something here that you can’t live with, nobody’s forcing you to buy it. It’s meant to be fun.”
The Web site advertises, “Lo’ihi Seaview Estates: Real Estate for the Future. Grand Water View Front Lots.” A photo of the sales office is a raft in the middle of the ocean. via Boston.com

The commercial real estate mergers keep getting bigger. After buying Peter Cooper Village and Stuyvesant Town in 2006, Tishman Speyer has put on it’s aquisition hat again and is swallowing up Archstone-Smith for the paltry sum of 15.5 billion dollars. Archstone-Smith owns more than 86,000 apartments across the country and is a publicly traded company.

Tishman Speyer is paying a 22 percent premium for the shares of Archstone-Smith, or $60.75 per share. Lehman Brothers is participating in the deal with Tishman Speyers as a partner.

For Tishman Speyer, the acquisition may be a welcome change. The company bought Stuyvesant Town and Peter Cooper Village in 2006 for more than $5 billion, but most of the apartments in those complexes are protected from market-rate rents by government controls. Not so with the Archstone-Smith apartments. One-bedrooms in the Archstone 39th start now at $4,475 a month; in the Archstone 101 West End, a studio can run toward $2,900 a month. via  The New York Observer.

Update: I was driven crazy by the different valuations put on this deal. But the experts in the media could not figure it out either. The range is from Bloomberg’s 13.5 billion to the NY Observers 22.2 billion. I settled on the AP’s 15.5 Billion as it is the most widely reported number, but let’s let the dust settle before we try to figure this one out.

Selling a home these days means that it has to be marketed through the internet. And for the home to be sticky on the internet, photography is very important. The Los Angeles Times had a great post on photographing homes for the web. I have culled some of the best advice and added some of my own to create the:

Top 10 Tips For Photographing a Home For Sale:

1. Use a tripod. It provides steadiness and allows you to operate your digital camera’s controls — specifically, shooting interiors at a slower speed.
2. Strive for even lighting. Professionals use strobe lights to brighten the dark spots. One of the mistakes that amateur photographers make is to shut all the blinds and turn on every artificial light in the room. This creates “halos” around each lamp. Don’t shoot when sunlight is streaming in from the windows. And use the flash on the camera to even things out.
3. Remove all clutter. Also remove all personal photos. The goal is to have potential buyers envision themselves living in your house; your family’s photos interfere with that process.
4. Wet down the brick patio and concrete pool surround to avoid it being too bright in the photo. Wetting it down also brings out the rich color in the brick.
5. Don’t be afraid of the shade. Gardens look richer when they aren’t shot in the blazing sun.
6. Leave no detail unattended. Tape the folds of the dining room tablecloth so it doesn’t pucker out. Position chairs uniformly (about 1 foot) from the table’s edge.
7. Shooting a pool presents special challenges because of the reflective nature of the water. Use a flash and try your shot in late afternoon or early morning.
8. Change the Perspective for exterior shots. If you shoot the home from the traditional front on shot, it is generic. Be creative and make the pictures memorable.
9. Consider using a software program such as Photoshop to touch things up. It is a way to eliminate telephone and electric wires. Ditto for punching up colors and obscuring some less desirable elements.
10. Tell a story. Your photo’s still may not win awards but the key thing is to create an impression that this house will be someones home. Remember the end in mind, the goal of every picture is to sell the home. Even if you use an outside photographer, tell them the idea’s you want to get across and the target market.

Bonus Tip:

Take your camera every time you visit the home. Nobody said that the photo’s you put up on the site have to remain forever. If you see a great shot that shows off the home, take it and change out the pictures. Small improvements lead to great results.

Bonus Tip 2:

Play with the video on your digital camera. Most have it and you may be surprised with the results. Video is becoming more and more accepted and can tell a richer story to prospective buyers. Think I am nuts, then watch Doug Quance’s video on pouring the foundation and basement of a home being built. It may not be exciting, but over the next 5 years this video will probably be watched 1,000 times by prospective sellers and buyers who will learn from the great attention to detail. Not a bad investment for Doug or for you if you get motivated to make your own.

So today you have 12 new ideas for photographing the homes you are marketing. They are fairly easy and most come from top photographers in the field. If you are selling homes and marketing them on the internet, photographs are your best friend. Get out of the mindset of minimalist classified advertising and make your website rich in information. Big photographs, soaring descriptions, and educational video’s will turn your moribund internet efforts into stellar results.

Demand for cranes is soaring and the lack of them is slowing down commercial construction in parts of the country. With all the focus on the residential slowdown we sometimes fail to see how busy commercial construction has been.

The commercial market is up 14 percent in the first 3 months of 2007 as compared to last year. That is a huge number. We get so focused on the slowdown on residential real estate since most of the people here make their living in that sphere that we forget about the other half.

So when those that expected a huge domino effect to happen when the residential market slowed down, a spiraling effect of housing losses and great damage to the economy, are still going to be waiting. The economy is continuing to chug along and those that work in the real estate sector have just transposed their skills to the commercial building side.

The only group that is being seriously affected are those homeowners with bad loans (which is a self inflicted wound), real estate agents, and mortgage brokers. The latter two categories needed a culling and if I had to place a bet, the better agents are still making a pretty good living waiting out the slowdown.

But if you say that real estate as a whole is falling apart, you are sadly mistaken.

Booming commercial construction, an aging work force and tighter certification requirements are pushing demand for cranes and their operators nationwide.”Every marketplace that we’re in right now is saturated,” said Sam Latona, preconstruction manager with Turner Construction, a Dallas-based company with offices across the country. “All the contractors are basically at 100 percent capacity and exceeding it.”

Commercial building is hot in Texas, Florida, California, New York and other parts of the West Coast, Midwest and Northeast, industry officials say. Spending on nonresidential construction was up nearly 14 percent during the first three months of 2007 from last year, according to the U.S. Census Bureau.Ken Simonson, chief economist with The Associated General Contractors of America, said much of that spending involves crane projects, such as multistory hotels and offices. via My Way Finance