Tim's Atlanta Real Estate Blog: February 2007

What if you didn't care about making friends?  What if you didn't care about developing relationships for  future business?  What if you didn't care about losing current business?  How would you talk to people?  What if you were free to give your honest to goodness opinion without any concern for negative consequences?

Would you feel freed up to tell people the whole truth?  Would you still be polite and try not to hurt anyone's feelings?

How much of what we say and do is tied up with our financial and personal self interest?  Are we nice to people because we want to hold open the possibility for some future gain for ourselves? 

How about the comments that we leave here at Active Rain?  Do we really say what needs to be said or do we say things for selfish reasons.  Maybe we should be saying things but don't because we don't want to offend someone who might be able to refer us some future business.  Maybe we kiss up to popular members and jump on a popular bandwagon in hopes of showing others that we fit in.

There was an episode in Star Trek where the aliens from an advanced culture were able to pick up your thoughts.  No need for talking.  No hiding what you really thought.  Would this create bitter resentment amongst each other or would it speed up the process of learning and improving oneself?

Parents usually are very frank with their young children.  They tell them when they are good and when they are bad.  They have no problem telling them their honest opinions.  Their purpose is to try to teach their children and protect them from doing the wrong thing.  If the child is smart, they'll listen and progress through life with fewer setbacks.  Of course, experience is the best teacher but avoiding major setbacks can get you to your goals a lot faster. 

When we sugar coat the truth for our sellers about their home, are we really helping them?  When we smell a strong offensive cat odor, do we ignore it because the seller loves their little kitty and if you offend kitty, you in effect offend them?   Or do we have the courage to come out and say that something needs to be done about the cat odor in order to get the most for their home?

A little kid will flat out say that someone's breath stinks of cigarettes or grandpa talks crazy after a few drinks.  They don't do it to be mean.  They just tell it like they see it.  The truth might hurt at first but I bet things are done immediately to change the problems.  Is this not better than avoiding the truth and allowing the person to continue to unknowingly offend more people? 

The people who come out and speak their mind usually initially shock people.  It's shocking because it is so rare.  I love it when someone speaks their mind.  I might not agree with them but at least I know where they stand. I can make a quick decision as to spend more time in the relationship or to quickly move on. 

Actually, I think people who don't speak their mind are time wasters.  I'd rather have a client quickly tell me what's on their mind than having to try to read between the lines and decipher their body language.   If they don't want to continue the relationship, tell me why and let's either fix it or move on. 

Jim Carey had a movie named Liar, Liar.  I didn't watch all of it but the premise was that he could do nothing but tell the truth when he spoke.  It made for some really funny scenes. It made me wonder what life would be like if everyone was like that.

Real estate is known for agents who really stretch the truth and puff up properties.  Many agents are perceived as nothing but used car salespeople who will say anything to close a deal.  I'm trying a different approach.  I'm trying to:

• Be as open and innocent as a child because they have no fear and don't know any better.
• Be as wise and straight forward as an "old fart" who doesn't really care what you think about them.
• Be loving and courteous because it's just the right thing to do.
• Be humorous and fun because life is but a dream.  We might as well enjoy the ride.

I'm not there yet but every day is an opportunity to get a little better at it.

Many people who haven't bought a home for a while or are first time home buyers are always amazed at the electronic lockbox keys.  Agents are so used to them that they just take them for granted.  There is some amazing technology embedded in these simple looking devices.

I really don't know how business was done before lockboxes were invented.  I've heard some old timers tell tales of running to each broker's office to pick up individual keys for each house that they wanted to show.  Can you imagine if you wanted to see ten homes in one day?  Remember TVs before remote controls?  I tell my kids stories of having to get up and walk all the way over to the TV and turn a dial, one channel at a time.  It makes them realize how lucky they have it. I am so grateful I have my lockbox key and appreciate the time that it saves me.

Our lockbox system does more than open up the lockbox in order to get the key to the home.  Every lockbox and lockbox key has it's owner's special code in it.  When an agent connects it to the lockbox, the lockbox key collects the information from that particular lockbox and also leaves a digital code on the lockbox itself. The new keys actually beam the information back and forth so you don't even have to connect the key to the lockbox.  Kids are just amazed at this.  I feel like an agent in a Star Trek episode.

Every day, each agent is required to place their lockbox key in a cradle that uploads all the information that their key has gathered from each lockbox that it has been exposed to.  This information is sent to a central database which can be accessed by every agent.  The listing agent can then log on to the database via the Internet and see who has been to their listing and when they were there.

The listing agent can also get this information directly off of the individual lockbox.

It's a great way to keep agents accountable.  No one can get into a home without it being noted.

It's also a great way to see if someone is very interested in their listing.  If you see that the same agent has shown the home multiple times, it probably means that they have a buyer who was interersted enough to come back for another look. 

This little device in itself is worth the price of using a buyer's agent.  How much time and effort would it take to coordinate the logistics to see 10 homes listed with 10 different agents.  Trying to synchronize everyone's schedule in order to create an efficient tour of homes would be a nightmare.

With the help of a lockbox key, an agent is able to set up a tour of 10 homes very easily.  No need to meet anyone at the house. It's nice when you don't feel obligated to spend time doing a pity showing just because someone took the time to meet you at the house.  If you don't like it, just say next and we're on to the next home.  It would probably take less than three hours to see 10 homes.  You could easily go back and look at your favorites that same day.  All without having the stress of meeting a different agent at a specific time. 

I want to give a heartfelt thank you to the inventors of such a great tool. You've changed the speed of real estate.

Do you think the housing slump has hit bottom and things are picking up?  The worse might be yet to come.  It's sometimes hard to get a really good analysis from general newspaper or magazine stories.  They usually have an agenda and they need to write what sells. I never put too much trust in the headlines.

A good friend and great financial advisor, Chris Morris of CMA, sent me a story that brings up some very interesting perspectives on several factors that could really add up to major trouble for both the housing market and the economy.  It could get really scary. This article is one the most coherant pieces I have read on the topic.

3/1 ARMS were at their lowest levels and at their peak of popularity in the middle of 2004.  That means that a huge amount of these loans are getting ready to adjust.  They will be going from 4.25% to 6.75%.  Some people will be able to refinance. Some will be able to handle the increased payments. Many will not.  In areas with decreasing values it will be very tempting to just walk away and let the bank foreclose.  More foreclosures mean more inventory. And the downward spiral continues.

Bank owned homes and new homes that are either complete or have been started are homes that have to be sold one way or another.  They aren't homes that can be taken off the market where the owner can stay put for a few more years until things improve.  The price declines that these homes will exert could snowball into a major downward spiral.

Atlanta is already a top city for the number of foreclosures.  It is also a city where many interest only loans and ARMs were sold through HomeBanc.  I think I remember at one point more than half of their sales came from these products. I've always felt comforted here because of the slow and steady appeciation that we've experienced but I sure do see a lot of new homes being built.   Will job growth be enough to support all of this home growth?  For the past few years buyers from the bubble markets were coming to Atlanta with more money than they knew what to do with.  This really helped keep prices going up, especially in the $500,000 to $1,000,000 market.  Many of those relocating buyers are now staying put because they can't sell their home. Will the foreclosures be the spark that begins putting pressure on these prices? 

I hope all of these negative things can be countered by other factors.  It is making me very nervous.  But with everything problem there is always opportunity.  I think it's time to start getting in the right position to take advantage of them if the worse case scenario does in fact occur. 

It's funny that after the initial excitement back in December when Zillow started allowing homes to be listed, talk sure seems to have quieted down.  The first week I had put my five listings up on Zillow and mentioned it to several agents in my office.  At the time no one had heard of Zillow.  Many agents here at Active Rain seemed to be very negative about putting their listing on the site.

We just had an office meeting this week and the agent representative for our branch office stood up and mentioned how we all should look into getting our listings on Zillow for the added exposure.  Several agents that are looked up to also mentioned how they have been promoting their listings on Zillow.  Not a single negative thing was mentioned. It was all positive. 

I've noticed that slowly but surely, Zillow is picking up more and more listings.  From my little window of the world, I get the feeling that most agents will soon be jumping on the bandwagon and will use the exposure on Zillow as a talking point in their listing presentations.  Most agents I've talked to think that it's pretty cool.

Zillow made the cover of Fortune magazine which created some nice publicity.  Once they start showing up on the covers of Time and Newsweek, I think they'll have reached the tipping point where the majority of agents will want to make sure they aren't the lone man out.

Love is important for marriage but is dangerous when buying a home.  Even though many people say they are committed for life to their home, most will eventually move  on within 5-7 years due to changes in their life. Many marriages don't even last that long. 

We all know that love can make us do some stupid things.  Don't be stupid and fall in love with your home. Just be really good friends so that when it's time to move on, the break up will be both smooth and profitable.

Love makes you blind to any faults a home might have.  You might be able to look past that steep driveway because you know that your baby with great personality is waiting for you at the top.  Many future buyers will be very shallow and will be attracted by outward physical appearances.  Buyers, like most guys, are pigs.  It takes a special guy to get past the physical in order to discover a great personality. 

Ladies, you might actually see some faults and you think that you will be able to change them once you get married.  Homes with bad bones are like guys with bad character.  Some things just don't change no matter how much love and money you throw at them. It's best to avoid them and move on.

I love unique, but not in a house.  It took me many years to find a wife who doesn't mind my unique sense of humor.  Some homes have a unique charm that resonates with very few buyers.  Think about that going into the relationship.  Sooner or later you will have to play matchmaker for your old sweetheart.  Make sure your sweetheart is not someone only a mother could love.

If you love your home you are going to want to give it the most expensive accessories.  You're not going to buy a cubic zirconium instead of a diamond.  That would make you feel like a cheapo who doesn't really care.  You're going to want your baby to have the finest things in life and be the most beautiful one on the block.  Unfortunately, there aren't that many people who are willing to pay retail prices for all of those diamonds. Many buyers are happy with cubic zirconium.

If you love your home and your home becomes sick, you won't settle on an inexpensive fix just to get by.  You'll want nothing but the finest materials and the most skilled repairmen to work on your baby.  You're going to want the best heat pumps and heaters and the best plumbing that money can buy.

So again, keep it platonic.  Falling in love with your home will eventually lead to a costly divorce.  Save the love and the associated stupid things for your spouse.  The pay back is much more pleasurable.

I think that adding video and audio to a blog will make a huge difference in conversions to real business.

I have a friend, Mike Stewart, who is preaching and teaching this.  It is something that is high on my list of things to do in the next few months.

Mike sends out an email every week or so with little video training lessons that I find entertaining and educational. 

Take a few minutes to watch his latest episode. It's about how to easily add a podcast to a WordPress blog.

Let me know what you think.  Did it give you any ideas on how you could use this to generate business and build relationships?

After four weeks of an intensive participatory broker's training course, I've come to the conclusion that I want to remain a sales agent and want to leave all of the management stuff to my broker.  I'm glad I learned everything and it made me appreciate the great deal I have right now as an agent with RE/MAX.

I never really appreciated exactly what a broker was responsible for and all of the risks that they take on.  You almost have to be crazy to want to start a brokerage of your own. The joke we learned is "that's why they are called broker". Ha Ha.

I kind of thought that it was the same business of selling real estate but you had other people doing it and you made a whole lot more money.  It seemed like the general consensus was that a top real estate agent can make much more by selling than by being a broker. 

I'd rather be out there working and educating the public than trying to recruit and educate some agents.  I guess I'm just not the management type. 

When the equipment breaks down, it's not my responsibility.  When the receptionist doesn't show up, it's not my responsibility.  When a new agent really screws up, it's not my responsibility.  If things really get bad, as an agent, I can just go down the street and sign up with another broker.  No loss of capital.  No huge liabilities. 

I love what I'm doing even more now that I know how good I have it.  To all the brokers out there, I have some new respect for you all.  Here's to doing what you're best suited for.

Zillow is on the cover of Fortune Magazine. 

Here is the 3 page online story.

I hate that they went and found a Phoenix real estate agent who kind of gives off the stereotypical image of a real estate agent:

Specializing in a planned community near Scottsdale, Barry lords over his territory in a canary-yellow Porsche Boxster whose vanity plate reads SAYSOLD. "It's a realtor thing," he says, half apologizing for, half drawing attention to his chariot

They say that Zillow is working and improving their Zestimates and in just another year people will be amazed at the accuracy.

It sounds like they have the money to do a lot of things.  It should be interesting.

Fair Housing rules are a big deal.  The consequences of not complying can be very severe.  I wanted to put together the information that I had gathered while I was researching Fair Housing rules while commenting on a recent post.

I really don't want to argue or get personal with anyone.  I just want to show what I have found and I would like to know about the findings that others might have discovered. 

A big question that I have always had was it is OK to put yourself out there as a "Christian real estate agent" or other similar monikers.  Here's a transcript from a CNN story that was done last year. The important part I think is:

SHANNA SMITH, NATIONAL FAIR HOUSING ALLIANCE: Well, the Fair Housing Act is very specific in advertising. It says you can't advertise in a way that show a preference, a limitation to any group that's protected under the fair housing law.

So real estate agents, of all people, know this law and know that they can't hold themselves out, for example, as a Christian Realtor, because that could discourage non-Christians and people of other religions from dealing with them.

I'm not certain exactly who Shanna Smith is but it sounds like she might know a thing or two.

Now people say that you can say that you are Christian but you can't say that you will only work with Christians.  It is also stated that you can protect yourself from claims if you post all the Fair Housing logos and claims all over the place.  But there is an article in Realty Times that has an opinion from a big shot at the NAR:

Thorne notified Fred Underwood, Senior Policy Representative Government Affairs, NAR, and asked for the organization's clarification on the issue. He received this answer:

A number of NAR members have recently received promotional emails that link to the website of an organization that advocates activities that discriminate on the basis of religion, and which may, therefore, violate the Fair Housing Act. In particular, the website encourages sellers of real estate to seek and choose buyers who are Christians. The NAR legal staff wishes to remind all members that it is unlawful to discriminate in the sale or lease of real estate properties, as well as in the provision of real estate services, on the basis of race, religion, sex, national origin, disability or familial status.

Here's an article that goes into a little about what might be considered in a court case.

"When you go before a court with a contract," says Thorne. "The court will ask what will a reasonable and prudent person assume from the writing? A person can't say that's not what I meant to say, that they don't want other people. There may be Muslims or agnostics who would go to these Web sites but a reasonable person may take a look and say that doesn't sound right and that's where the problem is."

"A reasonable and prudent person is going to assume that an agent joined this network to work with Christian buyers and sellers," says Thorne. "I would have less concern for members is there were a statement that said something to the effect that 'I understand that my obligation is to work with any buyer and seller in the community as well as Christian buyers and sellers."

On the King County Fair Housing web site they have an interesting explanation that speaks directly to religion and Fair Housing:

You cannot treat Christian customers differently than non-Christian customers. If your company name implies a preference for Christians or if you use symbols such as a fish or cross, you should use the fair housing logo and a clear disclaimer that your company does not discriminate on the basis of race, color, religion, etc. You have the right to identify your own business with the graphics and language of your choice - as long as your actions do not discriminate or create a discriminatory climate based on someone's protected class status.

When developing your advertisements and services, consider: Would a non-Christian feel welcomed by your business? Would a non-Christian receive the same level of service from you as a Christian? You should be able to answer yes to both questions.

Fair housing issues arise when clients believe they have been denied equal service or access because of their religion (or any other protected class). Marketing strategies and signage that make non-Christians feel unwelcome could result a fair housing complaint.

The one thing that was brought up by the leader of the Christian Real Estate Network was that they are a private group and they can discriminate in who they accept as members as long as they are willing to work with any buyers and sellers.  They actually have a news story on their site where they are quoted as saying:

Most of the network's 400 agents and 60 loan officers are Evangelicals. There are a few Catholics, a fact that is "kind of a little sticky for us," Smith said.  "We don't allow Mormons or Jehovah's Witnesses or a few of the denominations that say that they're Christian but really, most mainline Christian denominations view them as cults," he added.

I'll skip over what he thinks a Christian is and only comment on the part of the Fair Housing Law that I think that this violates.

Sec. 806. [42 U.S.C. 3606] Discrimination in provision of brokerage services

After December 31, 1968, it shall be unlawful to deny any person access to or membership or participation in any multiple-listing service, real estate brokers' organization or other service, organization, or facility relating to the business of selling or renting dwellings, or to discriminate against him in the terms or conditions of such access, membership, or participation, on account of race, color, religion, sex, handicap, familial status, or national origin

Wouldn't the Christian Real Estate Network be considered an organization relating to the business of selling or renting dwellings? 

I'm not a lawyer and I make no representation that I am an expert in this field.  These are just things that I have found through my search for clarity on this topic.

The more I look into this topic the more nervous it makes me about the risks that the Active Rain Community is put in by having things here show a preference to any of the protected groups that are covered by the Fair Housing Act.  It's not about being anti-Christian.  It's about making sure we abide by the Fair Housing Act.  Is it worth taking a chance? 

I'd like to have people post links to other articles that can help shed more light on this topic.  Please, no personal attacks.   I just want to know what is legal and what is not. I don't want to take any chance of violating these laws.  If you know of any experts in the field, invite them to comment.

Honestly, how many agents take the time to look up the sign ordinances for the various communities where they stick up real estate signs?  I usually look around and see what other agents are doing and figure that I'll just do the same.

Our Atlanta Board of REALTORS® has put together some nice tables that outline the various rules in the surrounding Atlanta area.  I was really amazed at some of the details.  I live in Sandy Springs, a recently incorporated city just outside of Atlanta, where they are fining people left and right in order to generate some much needed revenue.  Just about every agent could get fined, and fines are up to $1000. Here are some highlights of the Sandy Springs sign ordinance:

• All signs must be set back 10.5 feet from the curb or right of way.
• No one day directionals for caravan or open houses.
• A weekend directional must have a permit sticker
• No balloons on weekend directionals or a yard sign.

These seem pretty unreasonable to me.  No balloons? No open house directionals?  10.5 feet from curb?

Either they want to raise a lot of money through fines, or they want agents to bribe them with campaign donations in order to get the rules changed.  But that's just my cynical opinion.  I'm sure they just want the community to look nice and not have run away balloons impacting the environment. Right.

I learned about David Lereah, NAR's chief economist, during a recent class that I took.  The instructor put him out as a really smart guy worth listening to.  I had never heard of him so I decided to Google him and see what words of wisdom I might come across.

I was really surprised at the really negative stuff out there about him.  There are actually blogs devoted to keeping up with his activities and statements. A really negative story here that is summed up in the end:

It's not that Lereah is a bad economist; that's not even his job. Rather, his responsibilities are to use the tools of the economic profession, and apply them to shill for the NAR, a trade organization. After all, as Nutting notes,

..there are two universal truths at the National Association of Realtors: 1) It's always a good time to buy or sell a home; and 2) We've seen the worst of the housing market correction.

It's interesting to go back and look at some predictions that were made and see how they stack up with what actually happened.  Of course the housing bubble is a continuing story and no one really knows how it will end up. 

I guess the bottom line is to not put too much stock into predictions even if they are given by a very well educated economist.  It's still just an opinion.

Statements of David Lereah posted at David Lereah Watch

"We're going to drop significantly, but it's not a balloon bursting," Lereah says. "This is a soft landing for the housing markets." (Business Week May 23rd, 2006)

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"...housing activity will remain healthy for some time to come." - David Lereah, NAR's chief economist, October 28, 2005

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"The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping." - David Lereah, NAR's chief economist, August 2005

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"We are really on track for a soft landing. There are no balloons popping." - David Lereah, NAR's chief economist, December 2005

Sometimes buyers get the mistaken impression that  if they decide to back out of a contract, that the most they can lose is their earnest money.  I think some agents are under this impression also.  Our Georgia contracts state:

Earnest money...which if accepted and deposited by Seller, shall constitute liquidated damages in full settlement of all claims of Seller...

The key words here to consider are "if accepted and deposited by Seller". 

The seller doesn't have to accept the earnest money in lieu of suing for damages.  What if the earnest money was $1000 but the seller will lose a $25,000 non-refundable builder's deposit for  the new home that they can't purchase now that the buyer has backed out of the contract.  The seller can take the buyer to court for the $25,000. 

If you are a seller and are awarded the earnest money, know that you are agreeing that you are accepting that amount as your total damages and are giving up your rights to sue for more.

Buyers need to know that one little real estate contract can set in motion many other financial decisions by others that are all dependent on that first one closing.  Sometimes the people can pile up some large financial damages and might not settle for the earnest money.  Buyers Beware.  A real estate contract is serious business.

According to Gartner Inc., the number of bloggers will reach a peak next year. The story explains:

The reason: Most people who would ever dabble with web journals already have. Those who love it are committed to keeping it up, while others have gotten bored and moved on, said Daryl Plummer, chief Gartner fellow.

"A lot of people have been in and out of this thing," Plummer said. "Everyone thinks they have something to say, until they're put on stage and asked to say it."

Do you agree?  Active Rain is growing very quickly.  But it does seem like many people start out quickly and then stall out.  I started out last November and thought I would never catch the people who were ahead of me in my state.  But as I kept checking the stats, I noticed that most of the people ahead of me were standing still.

It does take a lot of determination to keep on writing on a consistent basis.  One good thing about Active Rain is the competitive structure that the point system creates.  I see a few people below me who are catching up so I am motivated to keep on thinking of stories and getting them online. 

Like anything, consistency and hard work will prevail.  Do you have what it takes to keep on blogging or are you all blogged out? 

Here's a scary story about the risks involved when buying a condo.  A person I know  bought a townhouse condo over a year ago.  She got it inspected and nothing major was found.  She bought it as an investment. 

After a few months she started noticing cracks in some of the walls and the floor.  Apparently a big water pipe below her unit had been leaking for several months and created some major voids beneath the foundation which created some major settling issues.

Her insurance company told her that it's the condo association's insurance who is responsible.  The condo association's insurance company is avoiding the issue like the plague.  The condo association had water bills for over $50,000/ month for three months in a row for a 30 unit complex.  The insurance company is trying to claim that the HOA was negligent for letting a problem go for so long. 

So the owner can't rent out the unit in this condition and is losing over $1000/month in mortgage payments.  The unit is unsalable.  If the HOA insurance doesn't cover the repair, they'll have to divide the cost over the 30 units in the complex.  What a nightmare.

A few years ago I wrote a poem to my mom. I tried to remember all the little things that stuck with me as I was growing up.  Little things at the time I now see really influence my thinking and how I do things.

 I'm not a poet and I guess you had to be there to understand a few items, but I wanted to share it with the world.

I hope you all had a mom as good as mine.

Thanks Mom, I Learned a Lot

Mom, you did more than you will ever know
I learned so much, by watching you
For you, being good was not for show
Right was right, true was true

In this crazy age where is is not is
and the truth all depends
I can stand firm in my beliefs
and not go off the deep end.

Do what's right, give it your best
It's good for the world and good for the soul
It doesn't matter if no one's looking
Getting to heaven is the ultimate goal

Our difference in belief is only in the details
God is the Ultimate, no matter what name
You say tomato, I say tomahto
Living a good life is the name of the game

The clerk gave you too much in change
I said, keep it, no one will know
You took it right back
because you would always know

Why paint inside the closets? I asked
Who will ever know?
You said "I will,
That's all that matters."

We got food stamps
It seemed like a deal
You reluctantly used them
So we could have a meal.

We didn't have plumbing and all sorts of riches
But we did have a home and a family
Yes it was rough, with all the crashing dishes
But when I look back, it hasn't bothered me

Some people fear losing it all
Never trying much, avoiding a fall
I know first hand, you can be happy with little
Take a big risk and play a big fiddle.

You didn't push, you didn't meddle
You let me be whatever I wanted
I didn't know what I wanted to be
The choice was mine, I was totally free

You scraped and saved to buy me a clarinet
Then listened patiently as I squeaked and moaned
You came to my concerts to hear the band
I loved making music, it touched me deep

You planted a garden, your flowers did bloom
A lot of hard work, you reap what you sow
Picking a salad and making the dressing
A vine ripe tomato, oh what a blessing

We had only a few toys, it didn't matter
A pile of dirt, a bucket of water
Was all that was needed
for a day full of fun

Off to the woods for a day of adventure
Raspberry picking and poison ivy for sure
Jelly and jam boiled and bubbled
for a taste of summer in the middle of winter

Peeling apples, stealing a slice
Making pies was really nice
Apricot, rhubarb, cherry  pie
Poppyseed, nut rolls, my oh my

You didn't go to college or high school at all
but you're smarter than most everyone I know
To the library you took me and taught me to read
My love of books really does show

Thank you Mom, you showed me what matters
I just wanted to make sure you know
Your spirit lives on in me and my kids
I love you always, thank you so much.

I'm in my third week on my broker's prelicense course and have really been enjoying it.  There are about 50 people taking the course.  They all seem to be really  good and honest professionals who really want to learn.  Our class format allows a lot of student discussions on the topics that we cover.  We've had many lively discussions of various real estate topics.  Most of them relating to ethics. 

On the surface, everyone sounds so honest and ethical.  I really feel that everyone wants to do the right thing.  We all ask detailed questions and everyone seems like their intent is always to consider what the ethical thing to do is.  Listening to our discussions make me proud of the people in our industry.

But one thing really troubles me.  It seems that ethics is easy to talk about but when money is involved, things kind of change.

At the beginning of the course we as a class all agreed that if your cell phone went off during class, you would donate $25 to a particular charity that we all agreed on.  We elected a specific person to collect the penalties.  But it seems that some people were all talk and no action when it came time to pay the piper.

My phone went off the first day for a brief moment.  I think only  a few people around me even noticed. I was tempted to let this slip by but I felt compelled to come clean and pay my $25 fine at the next break.  The instructor pointed out to the class that they had their first $25 for our charity.  The next day the same thing happened to me and I felt that I should pay again.  So I forked over $25 even though I don't think anyone would have said anything.  I didn't like paying the money but I felt clean and relieved.  I had fulfilled my committment that I had signed on to at the beggining of our course.

Since then, about 7 phones have gone off during class.  Not a single individual has stepped forward to pay their fine.  We talk about ethics in just about every class. When it comes to money, do people change their tune?  This really disturbs me. 

Many buyers are looking for a deal.  Georgia is third in the nation in foreclosures so you would think that banks would do their best  to get their REO homes sold.  You would also think that banks would demand the best services from real estate agents in order to maximize the amount they can salvage from a bad situation.  They are professional business people, aren't they?

My typical experience with helping buyers pursue foreclosures is usually one of frustration.   In my city, there are maybe 4 agents who get most of the bank foreclosures to list.  They are REO listing specialists. From the few closings that I have had with them, they seem to get a full commission.  From my perspective, it seems that they do as little as possible.  I often wonder why a bank would pay full price for such little service.  So am I must be missing a key piece of information?

First, the listing usually has only one picture of the house.  It's usually not a very good one.  Many of the listing remarks are the exact same comments that are used for every single home.  Usually something about being sold as-is, where to fax offers, and maybe something about serious offers only.

The homes are always in terrible shape.  Sometimes it's just dirt and dead bugs.  How much would it cost to clean it up just a bit?  Do the banks not know that a clean home will sell for much more?

Forget about trying to get the listing agent on the telephone in person.  If you are lucky, you might actually get a live person on the telephone who will only be able to tell you if it is still available and where to fax an offer.  Most of the time you'll get a message machine and probably will never get a return phone call.

When you fax over an offer, usually you won't get any confirmation that it was received.  You'll be able to leave a  message but who knows if anyone will ever listen to it.

Forget about any quick response.  Usually 48 hours is the turnaround time.  If it's a Friday afternoon, it's probably going to be Monday afternoon before they look at your offer. 

One would also think that a quick closing would be desirable for the bank. I once had a cash buyer who wanted to close in seven days.  I was once told the bank needed at least 21 days to process it through their system. Seven days was totally unacceptable.

I know it's not only me who runs into these problems.  I get buyers who call me to recruit my services because they just can't get anyone to call them back when they call the listing agent directly. 

So what am I missing?  To me, there  seems like a great opportunity for an agent to provide better service to banks in the sale of their REO homes.   Is that market completely different than the average retail market or do banks really don't care about getting top dollar for their homes? 

An article in Fortune Magazine just came out about how Zillow hopes to change real estate.

I thought it was interesting how they say one would have to gather all the information to come up with a good price.  They say it is unrealistic, which is why we use agents. 

This might be a very good article to have available for clients who bring up the Zestimate.

The entire article is a good read.  I pasted what I thought was the most useful part to give to clients.

The big idea behind Zillow is to make real estate more like a stock exchange, a transparent market where all information about every property is readily available, and as a result pricing is perfect. The problem with building such a system, Barton explains, is that "the best information about the real estate market is locked up in people's heads. It's happening in conversations in backyard barbecues."

For a buyer, the best way to root out the true value of a property is to tap into that communal knowledge, interviewing neighbors about how well the home has been cared for, barking dogs, loud buses, crime, buzzing power lines. For a seller looking to price a home properly, the key is knowing how many people showed up at every nearby open house for the past six months, analyzing overbids and price reductions, knowing the average time on the market and walking through every comparable home that has sold recently.

Doing all that legwork is unrealistic, of course, which is why we use agents. If Zillow does what Barton and Frink say it will, however, all that information will be as readily available as the number on the mailbox.

Just this past August I paid over $3/gallon for gasoline.  Yesterday I filled up for $1.89/gallon.  I was wondering about how I might lock into this relatively low price level.  I can't predict the future, but I feel that gas under $2/gallon isn't going to last long.

Assuming that there aren't shortages, I'm really only concerned about keeping up with the price. So instead of incurring the costs of stockpiling gasoline in my backyard, I found an easy hedge against rising gas prices. 

There is an ETF (Exchange Traded Fund) called USO (United States Oil).  It pretty much follows the price of oil.  It holds various types of oil, gas, and petroleum based assests.  You can buy it like any other stock.  I have an etrade account and it costs me $5 to buy and then $5 to sell. The annual fund expenses are 0.5%.

I figure that I spend about $2500/year on gasoline.  So if I buy $10,000 worth of USO I'll effectively be buying 4 years worth of gas at today's prices.

When gas goes up to $3/gallon and everyone is screaming, I'll be paying the same but I'll have my USO stock go up in value to cover the difference.  It'll be like having my own strategic reserve, but I won't have that smelly gas on my hands. 

I've always wondered how something as ugly as the mansard roof could have come into style.  Maybe I'm being a bit too harsh.  There are some nice looking mansard roofs but when the stlye is done on an inexpensive home many times it is just flat out ugly. 

Like many things, architecture has sometimes been driven by the tax structure in place.   For a certain time in France, people were taxed on the number of floors below the roof line.  So by lowering the roof line straight down, one could get an additional  story on their building tax free.

I heard that in Savannah Georgia they used to tax people on the number of doors in their home.  Therefore closets were very rare and instead people used armoirs.  It also created the use of floor to ceiling windows.  People would raise up the tall windows and step out through the window instead of a door to get out to the patio or fornt porch.  I heard the same thing about homes in New Orleans.

Some say that a driving force for the  shotgun house  was the tax on the frontage of a home.  These homes were very narrow and built deep.  You could fire a shotgun through the front door and straight out the back door.

I'd be interested to hear any other housing trends that were driven by the avoidance of paying taxes.