Entries from September 2007 ↓

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Not that it is such a high hurdle that you would expect someone who you are trusting with your financial future to clear, but the California Association of Realtors and the California State House have made a token effort to tighten up the criteria for attaining ones real estate license.

Now instead of attaining a conditional license with one class taken and passing a very simple test, you have to take 3 classes and pass a very simple test. Is it any wonder that 1 in 50 Californians has a real estate license. Maybe with the slowdown in the market and these tougher restrictions the cartel can get the number down to 1 in 60 and raise the professionalism.

Nah, never mind, that is just madness on my behalf…

Beginning Oct. 1, the state will tighten its licensing requirements for real estate agents. Signed last year by Gov. Arnold Schwarzenegger, Assembly Bill 2429 mandates that applicants complete three college-level courses before taking the state real estate license exam. It was sponsored by the California Association of Realtors.
A soon-to-be-eliminated alternative allows applicants to seek a conditional license after taking a single class and passing the state exam. The remaining course work must be completed over the next 18 months. Under the new law, “there is no more conditional license,” said Alex Creel, chief lobbyist of the realty group. via The San Diego Union-Tribune

Michael Baden is a kindred soul as he is willing to take on the impossible just to see what happens. A real estate agent in the Phoenix, Arizona region he has taken on the impossible home to sell, a 150,000 dollar fixer upper (which only a real estate agent could call a fixer upper) in the most disreputable condition imaginable. 

 Every picture of the home would make Athol Kay’s Bad MLS Photo of the Day Top 10 of all time hands down.

The dirt and filth that permeates this shack would make the infamous cleaning ladies from the BBC’s show “How Clean is Your House” go running in shock and awe.

And the best part of the listing, the home has tenants. My bet is that if you could ever arrange a showing they would be in the house when the buyers arrived.

If you have the stomach for it, here is a video tour to download, my bet this is the first time that this musical piece was used for a virtual tour.  You have to love Michael Baden’s gumption and humor and if he does sell the home for the list price in this market he deserves to be Realtor of the Year for the nation!

Thanks to Jose Miguel at KNXV for the story.

This is a very good quote from the New York Times on buying foreclosures. If you are good at it and do your due diligence there are great profits to be made. But if you are an amateur or just throwing money at properties without understanding the history and condition of each property there are many problems that can befall you.

Pitfalls vary. There are buyers who bid too much in an auction frenzy. There are buyers who cannot inspect the property beforehand and find out later that it is missing items like copper wiring, toilets and cabinets. Or, a property may have a cloudy title, which may leave the buyers responsible for thousands of dollars in unexpected debts, say real estate agents, foreclosure investors, mortgage bankers and lawyers. “There is danger in today’s market because people who are thinking they are going to steal a foreclosure property and flip it for a profit are making the same error that caused half of the foreclosures taking place in the country,” said Wayne Palmer, who owns National Note of Utah, a money management firm in Salt Lake City. via the New York Times.

Click here to for a Free Foreclosure search in your area if you are still interested in getting into the foreclosure game to find properties near your home.

If you are looking to save your home from foreclosure the trick is to get help quickly according to a study done by the Consumer Credit Counseling Service of Greater Atlanta. While many think that once they get behind on their payments their home is gone that really does not have to be the case.

75 percent of those who proactively sought help with their lenders or legitimate credit counseling services were able to work out a deal with the lenders and avoid a foreclosure. The other 25 percent waited too long and eventually lost their homes.

The real lesson in this is that banks want to avoid foreclosures as much as borrowers do. With the slow moving market banks know that selling the homes they have foreclosed upon is going to be expensive and take a long time.

They also know that foreclosures lower the property values of the neighborhoods and communities and odds are they have lent to others in the community. The last thing a bank wants is to have property values drop and more homes enter foreclosure because the borrowers are upside down and have no motivation to keep their homes.

About 75 percent of 3,327 homeowners sought counseling in time and staved off foreclosure, the study found. The other 25 percent waited more than 3 1/2 months before seeking help and ended up in foreclosure in Georgia, which has one of the fastest foreclosure processes in the country.
CCCS acts as an intermediary between borrowers and their creditors — from mortgagees to credit card companies — in setting up payment plans. It also counsels people on budgeting and debt.
“When we looked at the differences, the one thing that stood out was the delinquency in their seeking counseling,” CCCS’ president, Suzanne Boas, said in an interview Tuesday. “The sooner you can reach for help, the better because the more options that you have available to you.” via the ajc.com.

Mary Umberger of the Chicago Tribune nails the housing market with the line, “it’s the psychology, stupid.” The economy is still moving ahead, the dollar is weak allowing international buyers bargains getting into the market, and interest rates are low.

But the buyers and sellers can not make a deal. Sellers are holding out for the dollars of yester-year and buyers are afraid they are buying too early. So agents and brokers sit waiting for the impasse to be cleared. Once commerce starts up again we will not have the salad days of the early 2000’s but we will have a marketplace functioning normally. Now all we have is a national game of chicken.

“Mismatched expectations,” explains Jay Ritter, a professor of finance at the University of Florida who says that consumer behavior is the wild card in the marketplace impasse. Many home sellers, he says, are in love with the old days, when home prices seemingly rose by the hour. And sellers, he said, are stuck in neutral, waiting for a better deal.
“When prices are going down and there are articles in the news about prices dropping, it leads more people to wait and see, and it becomes a self-fulfilling prophecy,” Ritter said. “Rather than closing the deal now, they’re on strike, waiting until after prices have fallen.”
This week, the impasse manifested itself in a 13 percent decline in the nation’s existing-home sales in August, as reported by the National Association of Realtors. Thursday’s report from the Commerce Department showed a 21.2 percent drop in sales of new single-family homes year-over-year, to an annualized rate of 795,000, the lowest since June 2000. via chicagotribune.com.

Yesterday we published the list of the Top 10 Most Expensive Markets for an average home, today we are going to cover the least expensive markets in the country.

The average home in this survey by Caldwell Banker is 2,200 square feet with 4 bedrooms, 2 1/2 baths, a family room, and a 2 car garage. I some parts of the country the price tag can be over 2 million dollars, but these cities will find the average price all under 160,000 dollars.

6 of the ten cities in the survey are military towns which is a great thing. To live the average lifestyle our military should not have to suffer as pay is not the driving force for our soldiers and sailors.

So if you are looking to live in a place with a lower cost of living but having the ability to own the average American home, here are the places.

Top 10 Most Least Markets For “Average Home”

1. Killeen, Texas $136,725
2. Minot, N.D. $139,033
3. Arlington, Texas $139,175
4. Canton, Ohio $146,333
5. Muncie, Ind. $150,000
6. Topeka, Kan. $150,075
7. Fort Worth, Texas $151,250
8. Tulsa, Okla. $153,750
9. Grayling, Mich. $155,000
10. Wichita, Kansas $156,500

via CNN

Tags: Killeen, Minot, Arlington, Canton, Muncie, Topeka, Fort+Worth, Tulsa, Grayling, Wichita

Foxtons was one of the early innovators in the low commission real estate model and focused on the high priced New Jersey bedroom communities. They offered a 2 percent commission to sellers and their agents were on salary, not commission.

The company struggled even in the heart of the boom as other agents did not want to show their homes as being commission based their was very little money for them. Once the market broke, so did Foxtons and now the company is looking at bankruptcy and cutting most of it’s staff.

While it is a shame for the employees that are losing their positions, it also is a testament to the innovative spirit in America. While the real estate sales model is fairly stable, innovators are still able to work and try and build a better mousetrap. Their will be many failures and near misses along the way, but that innate American sense of we can find a better way leads to innovation for the whole industry over time.

So, goodbye Foxtons, but thanks for trying something new and different.

It will lay off 350 of its 380 workers and intends to keep 4,400 listings on the market.
Senior vice president John Blomquist tells The Asbury Park Press the company no longer has the liquidity to operate as a going concern.
Foxtons was founded in 1999 on the principle that consumers shouldn’t pay a 6 percent commission. Agents were paid salaries and customers were charged 2 percent. The company was sold in 2004 and eventually commissions were raised to motivate agents to show Foxtons’ homes.  via Newsday.com

While this story is fairly parochial, I chose it because it also is illustrating a very important trend in real estate. Real estate sales is traditionally a second career for many. The average Realtor is over 40 and has a great deal of experience in another field.

But there is a new emphasis on real estate education on the university level. And the earning levels for a first year agent may be scary if you are 40, for a recent college graduate with a focus on real estate education, it is not a bad income for the first year out of school.

I think we are going to watch a transformation as agents will start getting younger and real estate will be the first choice for a career, not the second, and the agents coming in will be better educated in the nuances of real estate after studying it at college for 4 years.

The new executive director at the Alabama Center for Real Estate at the University of Alabama’s Culverhouse College of Commerce and Business Administration thinks so. Grayson M. Glaze is aiming to take the program to the next level and make it a national learning center for real estate education.

As part of the shift in focus, Glaze said the center will revamp its Web site to include more assistance for the real estate community, as well as possibly adding distance learning programs and Web seminars and conferences.
“I also hope to find more student internships in the real estate community, and I will be looking for ways to increase student participation through student-oriented activities,” Glaze said. via the  Birmingham Business Journal

If you are looking to buy the average home in the United States, these are the most expensive markets. The average home in this survey by Caldwell Banker is 2,200 square feet with 4 bedrooms, 2 1/2 baths, a family room, and a 2 car garage.

Looking over the list, California has 8 of the top 10 most expensive towns for the average home which is not a surprise with the fantastic run up in property values in 2007. Also on the list are Greenwich, Connecticut and Boston, Massachusetts in the northeast.

This has to account for the attention placed on housing out in California. When the average person is having to dig up nearly a million to get into a home housing becomes the leading discussion in the household. And if you held onto a home during the run-up you have a great deal of your wealth tied up in the real estate market.

Top 10 Most Expensive Markets For “Average Home”

1. Beverly Hills, Calif. $2,206,883
2. Greenwich, Conn. $2,018,750
3. La Jolla, Calif. $1,800,000
4. Santa Monica, Calif. $1,785,000
5. Palo Alto, Calif. $1,677,000
6. Newport Beach, Calif. $1,617,500
7. Santa Barbara, Calif. $1,599,667
8. San Mateo, Calif. $1,498,023
9. San Francisco, Calif. $1,451,250
10. Boston, Mass. $1,381,250

Tags: Beverly+Hills, Greenwich, La+Jolla, Santa+Monica, Palo+Alto, Newport+Beach, Santa+Barbara, San+Mateo, San+Francisco, Boston

I was just emailed about a new site, IntoTheBox.tv, that was actually enjoyable to watch. The video they have up today features Rachel Natalie Klein who gave a perky description of what constitutes a New York apartment versus a New York Crack Den.

It is fun to learn something new each day…