Archive for June, 2008

9 Biggest Enemies of Real Estate Professionals

1.  Dual Agency – The potential (and existence) of a conflict of interest is so overwhelming that there could never be a good argument for dual agency.  If it was appropriate, attorneys would do it.

Commissions

2 .  Commission Structure – The unwillingness to separate the commission and allow the consumer to negotiate each side individually says to the consumer that we are perpetrating a scam and deteriorates our standing with them.

3.  NAR Website and Advertising Campaigns – Just try and find anything on this website.  It is beyond horrible.  And the advertising campaigns make us look like total idiots.  Our hard earned dues are continually flushed down a toilet by the management of the Association.  Check out Narwisdom.com for more blunders and gaffes.

4.  Ethics and Regulatory Enforcement – No one gets thrown out of the NAR for violating the Code of Ethics.  And very few if any real estate agents lose their licenses to practice.  The states and the associations make their money by having more members, therefore it is counterproductive to toss out any potential dues paying agents.

President_of_oompa_loompas 5.  Banks – Banks are the reason for almost all of the market problems.  Their lax monetary policies created a hyperinflated market that has caused all of the current foreclosure and short sale problems of today.  They don’t care about people, their policies and procedures are ridiculously antiquated, they answer to no one and they create this same indifference in the agents that are working with them.  The management teams at banks are the worst executives in America.

6.  Licensing Requirements – The barrier to entry is a pulse and a check.  No need to speak English or have any reading comprehension.

Pyramid_scheme_2 7.  Brokerage Business Model – Hire anybody with a license, charge them as much as you can and hope someone sells a home to their aunt, cousin, brother or sister.  Collect your cut.  Repeat.  No need for training or minimum sales requirements.  In fact, lets create a multi-level marketing company (pyramid scheme) where you don’t even need to sell homes.  Be sure to bring your cards to church this Sunday.

8.  MLS Companies – A worse run organization can only be found running Realtor.com.  Build higher walls around the data, fine agents for giving you the data, waste millions on unneccesary programs and sit in your ivory towers collecting my money.

9.  Ourselves – We need to stand up and demand that changes be made.  We need to stop accepting the status quo as the only way to do business.  In some areas, we need to rebel against that which is destroying this industry, be it our own association, our own brokers or our own complacency.

Did I miss anything?  Let me know.

Previously published here.

Tomorrow is July 1: It’s a big deal

July 1 means we’re half-way through 2008. It also means there are several new laws, rules and regulations going into effect that impact the real estate business in Virginia. Here are some of the highlights in case you missed them in earlier VAR communications:

  1. A bushel of new Virginia laws affecting real estate professionals will be enforced beginning tomorrow. You can download a convenient two-sided legal-size summary (PDF) of the new laws to get more information. If the print is too small for your taste, try the whitepaper version (PDF).
  2. Changes to the laws governing property owners associations passed in the 2008 Virginia General Assembly (also effective beginning July 1) are so sweeping, we’ve created a special webcast with VAR’s special counsel Lem Marshall to address them. Watch it here.
  3. Related to the property owners association act, VREB has just released an FAQ document about the Common Interest Community Board and the Office of the Common Interest Community Ombudsman. Download it (PDF) here.
  4. All real estate brokers with VREB license renewals due on or after July 1, 2008 must complete eight hours of broker management and agent supervision CE in their two year renewal cycle. Download a letter (PDF) from VREB for full details.
  5. The IRS raises its mileage reimbursement rate tomorrow to $0.585 per mile.
  6. Tomorrow (but not before), you can toast all these new rules and regulations with a glass of sangria at your favorite Spanish tapas restaurant. That’s right, Virginia restaurants can serve drinks that mix beer or wine with liquors without fear of prosecution beginning tomorrow.

Monday morning humor… sort of

For reasons I honestly can’t remember, I was browsing through some real-estate books and came upon this one, published in early 2006.

no-bust

According to the publisher’s description, the book

…shows why the real estate market is poised to climb higher over the next decade–and explains what you can do to profit from it.

Lereah calls today’s market a "once-in-every-other generation opportunity." Today’s boom is not just driven by low interest rates–there are a host of demographic and economic reasons why real estate will continue to outpace other investments, from the growing needs of the baby-boomer generation and the rise of the "echo" boomer generation to the new ways real estate is marketed and sold.

And one review reads, "Today’s real estate markets are booming and Lereah makes a convincing case for why the real estate expansion will continue into the next decade."

The author of the review? Dewey Daane, former governor of the Federal Reserve Board Of Governors.

I believe the word I’m looking for is "Oops."

Help Renters Save Thousands of Dollars

Just finished up reading Maggie Dokic’s tale of a rental scam she experienced this past weekend.

I don’t deal with a lot of renters in my business, instead referring them solid property managers in the areas they’re looking, but I do on properties I own.  Regardless of whether you work directly with renters or not, this is probably good information for ALL of us to have in our pockets.

Safety first …

But there are more in the pipeline!

You could be one of a few lucky REALTORS® to win the perfect opportunity to get ahead in this challenging marketplace.

In honor of VAR’s 88th Convention & Expo, registrants numbers 88 (gone) 188, 288, 388, 488, 588, and so on… will receive a full refund for their base convention registration. That’s right, register before September 15 (the discounted early bird deadline is July 18, by the way) and you might just get your entire base registration fee back. Winners will be announced at VARConvention.com and notified by e-mail.

Trying to time this contest is like trying to time the real estate market, so don’t bother trying. Just register today for your chance to attend VAR’s Convention & Expo for FREE!

Reader response to short sales issue of Commonwealth

REALTORS® are coming out of the woodwork in reaction to the May/June issue of Commonwealth magazine. In addition to the comments left on the three feature articles here on VARbuzz (count them #1, #2, #3), we’ve also received numerous phone calls and e-mails about the issue. Here’s what members like you are saying:

  • “The non-English speaking population in Virginia was disproportionately affected by the foreclosure crisis. In my opinion, mortgage brokers took advantage of these people.”
  • Short sales are not for someone who is looking for a quick close. What is more interesting about the process is the same bank that can give you a response on a foreclosure in 48 hours takes 60 days to go through the file on a short sale. We all realize it is two different departments but if you are sitting on a file with all of the required documents and four offers why wouldn’t you respond?”
  • “Short sales are a great opportunity for investors, but I still believe they should be avoided by people who are looking for a home.”
  • “It was funny for me to see this [magazine cover]. I had a house listed a few years ago in Austin and advertised it with an upsidedown photo. It got a lot of attention and I got some good calls off of it.”
  • “This is one of the clearest and most straightforward breakdowns of short sales that I have ever seen.”
  • “One of the only correct, concise articles I have read about short sales! … Thanks for a great article!”

We’ve also gotten a couple of inbound links from these articles. One comes from the Memphis Area Association of REALTORS®.  The other from Jeff Royce, a Fairfax REALTOR® who was quoted in one of the articles and explained his position more fully on his blog.

In related news, Cindy Jones says REALTORS® should factor in 25% more time to work a short sale listing, based on her personal experience (see the comments). What’s your experience?

Got feedback about this issue? Leave a comment or blog about it and link to us!

Oh, you haven’t read your May/June Commonwealth yet? Now you know what you’re missing.

Making short into sweet

Smart agents are learning they shouldn’t run from short sales anymore

This article originally ran in the May/June 2008 edition of VAR’s Commonwealth Magazine

Accept the reality: Short sales are here and, for the foreseeable future, they’re here to stay. And while some agents won’t go near them, the numbers are hard to ignore — as much as 40 percent of the market in some areas around Washington, according to Jeanette Newton, chief executive officer of the Dulles Area Association of REALTORS®.

It’s just not good business to ignore that much real estate. Even better, short sales, while not as simple as typical transactions, are starting to get easier to handle.

“In the very beginning of this, nobody knew what a short sale was, because it had been 15 years since the last ones.” So said Tony Arko of Market Advantage Real Estate in Loudoun County. Agents were reminded — the hard way — what makes a short sale different: bank approval. “Agents were getting them sold, but they didn’t realize that the bank wasn’t willing to sign off on them,” Arko said. That led to some bad blood, and, once bitten, buyers and buyers’ agents weren’t anxious to give short sales another chance.

“They’re good for buyers who have the time to wait,” said Jeff Royce of RE/MAX Choice in Fairfax. But “your typical buyer probably should avoid them like the plague.”

And lenders aren’t helping much, to say the least. “The management of these companies was not telling their worker bees ‘You need to work harder to work these things out’,” said Mary Dykstra of RE/MAX Valley REALTORS® in Roanoke. “They have an old-time mindset that the agent is the enemy.”

So short sales picked up a bad rap, and agents learned to steer clear.

The times, though, are a-changing.

Smoother sailing

When short sales first appeared on the radar, lenders weren’t interested. As Arko explained, “They were willing to Continue reading Making short into sweet

Will States Continue To Go After Lenders?

Just Say No Is Illinois over-reaching, or will we see this become a trend?

“Madigan spokeswoman Robyn Ziegler said the lawsuit would be filed Wednesday in
Cook County Circuit Court. In the complaint, Madigan says that Countrywide offered
unfair loans with risky features, used misleading sales techniques and encouraged
employees and brokers through incentives to sell more high-risk loans.”

Risky features, misleading sales techniques and high-risk loans … sounds like payday loan centers.  States aren’t pursuing those businesses, is this really a good idea?

H/T to BP1 for the image

It would appear that Gov. Kaine thinks so. (thanks to Richmond Sunlight for pointing out this article)

Kaine is proposing a statewide 25-cent increase in the grantors tax, which is now 10 cents per $100 of assessed value, that owners pay on the sale of a house.

First, the grantor’s tax is paid based on the sales price of the house, not (thanks, Danilo) or the assessed value (still not corrected five days after the original article was published).

Nuts and bolts – currently the median price in the Charlottesville area is about $275,000. Thus, the grantor’s tax paid by the seller on that particular transaction would be about $275 – and that’s a lot of money! If the tax is increased to 25 cents $687.50. Note also that this tax is paid only when a property sells (which is happening less and less frequently).

Make no mistake – Virginia’s (and the localities’) transportation systems need help; they need maintenance and they need new infrastructure – roads, bike paths, rail lines – but taxing only one segment of the population that uses the system is wrong. It is difficult to get hard, accurate data on what percentage of people in this area own their homes, but let’s assume it’s anywhere from sixty to seventy percent. Thirty to forty percent of people in the area won’t pay this tax, yet they will still use our roads, buses, etc. This is not a question of fair, but one of whether this is a reasonable proposal.

One reason that the grantor’s tax is proposed is because it is a bit of a hidden tax – it’s just another one of those fees that gets thrown together on the HUD-1 at closing. In the hot market, no one questioned the tax; now every nickel counts.

Why not a broad-based tax that everyone would pay (gas tax), other than lack of political and intestinal will and fortitude?

To target one segment of the population for a tax that needs to be focused on the entire population, regardless of the state of the housing market, is not right.

The best prediction from the Washington Post article goes to lobbyist Charlie Davis -

“At the end of the day, maybe putting a ‘lockbox’ on transportation funds, maybe a local taxing authority, but that is it. Give Kaine credit for pushing for something. The Republicans can be tagged as obstructionists but . . . Kaine came back with almost the identical plan that was shot down last year, so which is more foolhardy? But the session will provide ample opportunity for a lot of social interaction to discuss the presidential campaign and enjoy some wonderful cuisine at the Capitol snack bar.”

And he’s probably right.

 

Related posts -

Whom should we tax?

A few Transportation bills

Text of Governor Kaine’s speech to the General Assembly

 

Transportation talk revs up in Richmond

Too funny not to post – Copy of the Republican Transportation Plan


Original article appeared at RealCentralVA, and appears here by request.

 

Strap On Your Walking Shoes

How walkable is your community?  Did you know you can find out the “walkability score” of your community?

Inman News posted a link today to the Walk Score site, and I know I spent a good 15 minutes playing with the site.  My childhood home?  Pretty friendly to walking to shops, restaurants and such.  Bill Gates’ house?  Not so much.

I know it seems a little cheeky and cute, but I think there’s a real value there as the premium continues to rise, both at the pump and in the consumer’s desire to live in and near the urban core.