I am not unfamiliar with foreclosures. I have bought and sold more than a few, and I do dozens of short sales a year. I don’t for a moment think that selling an REO is simple; yes, they are vacant, but as an investor myself I know that the property has to be managed and overseen. I know some particularly good brokers who sell REO listings. One of them called me once about a year ago and informed me that he was the new agent for a listing I had that was scheduled to close in another 3 days. When I told him this, rather then say “tough luck,” he assisted my client’s attorney and myself in getting the home reinstated and allowing it to close as scheduled. It cost him a listing, but it earned my gratitude and respect.

That said, some REO agents conduct business in an utterly deplorable manner. You probably know the type in your marketplace: one crappy photo taken from the car, no remarks, and no communication. We’ve got a few here that absolutely take the cake in this regard. Talking with some is like dealing with the DMV- rude and arrogant. One won’t even take a phone call to set an appointment to show- he just published the lockbox combination in the agents remarks. At least I can show his listings. And to get a question answered? Forget it!

To those agents who think that the foreclosure gravy train exempts them from acting like a respectful, competent professional, you reap what you sow. Maybe not today or tomorrow, but at some point what you have sent around will come back to bite you. Maybe your asset manager gets wind of your shenanigans. Maybe the bank reorganizes and they start dealing with other agents. It doesn’t matter. At some point, these agents will have to go back to dealing with the rest of us, and it will be that much harder for them because they are no longer practiced in being accountable for their actions.

Like I said, some REO agents are very, very good. But the bad ones are the worst, and their time will come. I just wish it would come sooner in one or two cases!

I blogged recently on the incredible overlap of government and services in New York and how that redundancy adds to the tax burden of New Yorkers. In yesterday’s Journal News, there was a special report on pensioners, that is, retired government employees who are allowed to legally “double dip” and get another government job. One retired Ossining, NY school superintendent with a $165,000 pension is allowed to hold the same position in the nearby Katonah-Lewisboro school district and collect a $235,000 salary, all on our backs. He’s 65, so he also collects social security. I don’t begrudge a good living to anyone, but this is wasteful and has a high opportunity cost.

The waiver in the law that allows this is intended to handle an emergency or hard to fill vacancy. Clearly, it is being abused. There are hundreds of cases like this in schools, county and state government, law enforcement and regulatory agencies.

You can read the entire article here:

http://www.lohud.com/article/2009902220343

We need more reporting like this. There has to be more transparency in how our tax money is spent, and those with their hand on the budget strings need to be more mindful that it is our money and we want it spent wisely or not spent. That is the only way that taxes will not spiral even more out of control than they already have.

If I could work with first-time home buyers all day every day, I would. Given my other responsibilities, such as running a brokerage and servicing 45 or so listings, it is a rare pleasure. Today, I had that pleasure. I have a young couple who both work full time and are both in school part time. We have a pre approval, down payment, closing costs and every pre-purchase necessity well in hand. It’s beautiful.

Queens is not my primary service area, but I am a member of the Long Island Board of REALTORS and the MLS of Long Island, and I know the area fairly well, as my wife is from Rego Park. The great thing about working in Queens is that it lends itself to an energetic, fun day. If there is a gap between showings you can always go to a diner and have some laughs over a cup of coffee. Then after we are finished, I can head over to Flushing to H-Mart, the Korean Supermarket on Northern Boulevard and get all sorts of goodies for my wife and kids- kimchee (I have no idea if that is the right way to spell it), rice cakes, tofu, fresh fruit, and lots of other things that make opening the basement refrigerator an adventure.

First-time home buyers, Queens, H-Mart-so this is shaping up to be a great day, right?

Wrong. Disaster City, and indicative of tough times for both Queens brokers, who need to get their acts together, and sellers, who need a reality check.

Here’s the breakdown. Of the 20 or so 2-family homes my clients expressed an interest in seeing, about three quarters were short sales. 6 listing agents never called me back this week to answer my appointment request. In one case, the office REFUSED to give me another number for the agent, who never called me back or answered my emails. One vacant REO’s agent never gave me the courtesy of a call back with the lockbox information. Another 6 said “Can only be seen from the outside.”  Fewer than 10 listings responded normally to confirm an appointment, and of those, 4 confirmed. Of the 4, we got into 3 (the last one refused us at the door altogether). Of those three, one had occupants who were unaware of a showing but let us in. One had a unit we couldn’t enter, so we only saw part of the house. So, out of 20+ listings we contacted all week, we got ONE appointment where we were actually expected and saw the whole house.

This is after a week of trying to get in for today, Sunday, the biggest showing day of the week. I have a few observations:

• That many short sales indicates that these sellers all bought relatively recently with over leveraged sub-prime loans. Many had little or no money invested. It shows- they act like people with no skins in the game.
• Listing brokers aren’t just throwing mud on the wall to see what sticks, they are throwing poop. “Can only see from the outside” ?? This is allowed?
• Listing brokers are not educating their clients that they cannot sell the house if reasonable requests to show are not accepted. In a short sale, showings are to be treated as being of an urgent nature.
• Many listing agents just flat out stink. Sorry. Sue me. If you can’t call me back for a week or inform the tenants that I’ll be there to show the house, you suck. If the code of ethics didn’t forbid it, I’d name names just to shame them into cooperating.
• Some REO brokers have become so stinking lazy and unprofessional that if I knew who their asset manager was they would be in for a hell of a lifestyle and attitude change.
• In Westchester and the northern counties, if a listing is not available for showings for more than 72 hours it has to be taken off the active market temporarily. There apparently is no such rule in the Long Island MLS. The downside of that is that consumers see an active listing, assume it to be available to see, and when their buyer agent can’t get them in, they look ineffective. Some frustrated buyers will then call the listing agent directly, who in some cases will then kick it into high gear to get both ends. This is not cooperation, it is racketeering. 

My buyers will be fine. They heard my cell phone conversations with some of these offices and I cc’d them in on some emails. But what of other buyers who are caught up in this? Here we have a slow sales cycle, and the broker’s aren’t facilitating what few opportunities arise, to their own detriment and, worse, the detriment of their clients. Have they lost their minds? Don’t they have any idea how much damage this causes?

I recall reading a letter from my father written in August of 1945 to his parents on the news that the Second World War was over. He said that the feeling among the men was not one of celebration or joy, but weary relief. My Dad was in the Signal Corps on Leyti Island in the Pacific Theater. He, like many Americans, bowed his head in thanks when the Japanese officially surrendered on the USS Missouri.

On the Missouri that day of the surrender was a young marine who would move back to the USA and live in Yonkers, NY, just a few miles from where my father and mother raised my brothers and myself. Our families would be a few zip codes apart. My Dad never met this Marine. I met him just shy of a year ago.

Once a Marine, always a Marine, and this Marine, now this dignified octogenarian was in, to use his own words, a pickle. He was in the car business for many years, raised a son and a daughter with his beloved wife, and by the time they were retired, their home was paid for. However, she became terminally ill a few years ago, and the Marine did everything he could to get her better. He borrowed every cent he could on the house to pay for a cure, but a remedy, as many of God’s answers are to our ears, not the one he sought. Then, when the rate adjusted up and the economy shifted down, he found himself drowning in debt.

I will never forget our first meeting. Walking through that house and hearing his story and how he got where he was struck me as the ultimate irony. I remember thinking that this guy right here is a HERO, and he deserves better than this. Each room had a story. Even his workshop, where he made model planes, gave me a tangible awareness of his family’s 50 years of happiness there. As bad as the circumstances were, he wasn’t a victim. He just wanted to know a plan to make things right. The only way out would be a short sale, and I promised him my best. 

I will tell you now that this has been one of the hardest files I have ever worked on, and it has taken me and his attorney a full year and two buyers to get this short sale approved. It has been so hard that I am even reticent to write this post for fear of jinxing the good news, but I can’t be silent. I took this file extremely personally, because this is how I would want someone to treat my father. This is also one of the very few times I had a client who had every reason to be high maintenance and difficult who instead always spoke to me like I was a boxer returning to his corner. We were on the same team.

Moreover, I feel that I owe my client a debt of enormous gratitude. As hard as this was, and as beleaguered as I feel right now, I know this my experience is NOTHING compared to what this Marine has been through. My Dad and my client had a far better reason to be weary in August of 1945.

A local lender has informed me that the the minimum FICO score for an FHA mortgage is now 620. I remember vividly getting people approved in the 90’s with scores barely above 500. It didn’t happen routinely, but 580 did.

I find this ironic: rates are fantastic and prices are down, but if someone gets caught in the undertow of the recession they can’t take advantage. It’s like cheap real estate on the moon; all you need to do is figure out how to get there and it’s yours. These people pay taxes to bail out the lenders to the tune of almost a trillion dollars, and what do the lenders do in return? Shut them out. It is just another sign that, stimulus program or not, the lenders don’t want to extend credit.

The FHA program was not broken and didn’t need repair. I am not a “storm the Bastille” kind of guy, but it is a disgrace if lawmakers allow this to stand. I support the banks eliminating bad loans, but I don’t support them only making loans to the elite. FHA is for the little guy. At least, it was.

Inman News has been running stories this month about the supposed controversy and big changes coming to how real estate professionals are paid. Here are some of the headlines:

• The industry debate over compensation
• 6 percent is dead
• A fee-for-service future
• End of the independent contractor
• ‘Offer of compensation’ must go

Did I not get the memo? I’ve heard lots of talk about the Stimulus Bill, Alex Rodriguez taking steroids, and how much of a lock the late Heath Ledger is for an Academy Award, but I never heard that there was a revolution coming in how real estate brokers are paid. I don’t begrudge the frown on the face of a home seller when I sketch out a net sheet on what they can expect in proceeds after their sale. That line item with the broker fee is far larger than the New York Transfer Tax in my figures. But most people agree- that’s baseball! By the time the pie is split between 2 companies and two salespeople, nobody is getting rich on that one transaction. Moreover, when people see the offer of compensation offered by recent sales, they know that it is suicide to offer a smaller commission to buyer agents.

Most of the Iman articles are very long on assertions, but very wanting in facts or a plausible, logical case. For instance, in the article  Offer of compensation’ must go, the author asserts that the MLS inventory ought not have a commission offered to buyer agents. Instead, those agents should be paid by their buyer clients, who will be “empowered,” because the seller isn’t paying the commission. I respectfully disagree. If buyer agents were paid by buyers, buyer agency would virtually disappear; no buyer wants to pay another fee above the largest expenditure of their life when they could have gone right to the listing agent and saved that fee right off the top. Right or wrong, that is human nature.

There is no more controversy about how agents are paid today than there was in 1996 when I was first licensed. You have a small percentage that doesn’t want to pay a commission, and the rest who feel it is the cost of doing business the right way in the largest transaction of their life. However, if you want to get clicks and comments, publishing these articles in a series to as to contrive a movement that does not exist might get you more water cooler attention.

Not long ago, I wrote a post entitled “Brokerage is Alive and Well.” In it, I briefly discuss why real estate brokerage has actually thrived in conditions that have virtually destroyed the brokerage models of other assets, such as stocks. While I in no way would poo-poo any change that might affect my livelihood, I have yet to see the evidence that there is any substance to the controversy other than an effort to stir the pot.

The market is efficient. If there were a better way of structuring real estate brokerage, a new model would have taken root and grown organically rather quickly. It hasn’t. A few well -capitalized ventures such as Foxtons and Iggy’s House  have made waves, but they dried up when the investment capital ran out, because they weren’t profitable on their own merit.

And if something is not sustainable by it’s own merit, it will not bring about the change that some claim is coming.

Many who grew up in Ossining, NY like I did will remember an old, overgrown algae-covered man-made pond near the Chilmark Shopping Center known simply as The Reservoir. It was the Village’s water supply for much of the pre-World War II era, was then was replaced by water towers, and in subsequent decades became a derelict mess. When I was growing up in the 70’s and 80’s the Reservoir was used for skating (AT OWN RISK, as the sign said) and hanging out.

The water towers had their share of graffiti, and nobody really knew what good the Reservoir was. I learned to skip rocks there,and I spent many hours of my youth sitting quietly, watching the water, either alone or with some friends after buying baseball cards and candy at Chilmark Pharmacy. In the Spring and Autumn when the foliage wasn’t too thick we’d ride our bikes around it. I had a 5-speed with high handle bars and a banana seat. 

In the earlier part of this decade, the Village cleaned the place up,  added a blacktop ring around it for walking, installed some park benches & tables, and dedicated it as Reservoir Park. An aerator was installed for the algae, and the towers were repainted. Mayor Perillo was vilified by some for the improvement expense, but most, like myself, applauded the move. It is an extremely popular place to sit, walk the dog, stroll the kids, and spend quiet time. The SKATE AT OWN RISK sign is long gone, replaced by 3 LAPS = 1 MILE.

More thoughts here.