A client forwarded me the link on Inman News to this broker in Nevada who blames short sale agents and sellers for the mess. 

Prices keep falling because the short-sale agents are listing at 5 to 10 percent below comps in order to try to get an offer, and often are accepting offers at even less. The banks come back at a higher price, and then the buyer walks. The downward momentum has been coming from the short sales, not from the REO listings.

All real estate is local, and perhaps there are many under-priced short sales in Nevada, but isn’t Nevada also one of the highest foreclosure states in the USA? It most certainly is. As a matter of fact, it is the NUMBER ONE ranked state for foreclosures, with 1 out of 97 households with filings, a staggering number when you consider that 2nd-ranked Arizona is at 1 out of 205. 

I commented as follows:

I can only speak for my local market and not the author’s marketplace, but if the claim is true, then all those bank owned REO listings that have undercut the market have taken their queue from short sales.

I find that hard to believe.

Since lenders render a decision based on market activity, I wonder what sort of agent would ever responsibly list a short sale at such a fantasy price as 10-15 % below comparable sales.

What may be closer to the truth is that the author sees short sales selling 10-15% below unrealistic asking prices, which sit and rot while losing the war of attrition with buyers who won’t bite, while short sales are listed and sold at a number in line with actual sales.

“Market value” is what buyers are willing to pay, not what some sellers wish they could get.

Short sales reflect the market. They do not set it.   

I know of no empirical data that suggests that the problem started with short sales. Banks only approve short sales based on market sales. Not asking prices. A short sale could very well be listed 10-15% below the competition. But the competing listings are probably overpriced, because guess what? They aren’t selling! To price a home to sell, you have to look at the sales, not the asking prices. Some of these unsold homes are on their 4th brokerage and are still chasing the market (and not running very fast either). 

I do agree that banks often counter at higher prices, and that is because the historical comparables are from the last 6 months, and when the market is falling, historical look-backs are at a time when prices are higher. Short sales reflect falling prices. They don’t cause it. You can’t sell a house for “below” market value, because guess what? If it were underpriced, the buying public would bid it up. Where do we see that most often? Yup, you guessed it- bank owned foreclosures. Not short sales. 

Market value is only what people are willing to pay. NOT what sellers or their brokers wish they could get. 

With apologies for the political and foreboding overtones of a silent majority lurking, the term applied to the real estate market is quite accurate. Having read Richard Willard’s excellent post on the reaction of people to the “disappearance” of a listing when he and his client strategically allowed to liasting to “expire and air out,” I am moved to share my thoughts and expriences. To understand why people would call only after a listing disappears from the open market, one first has to understand the players involved. 

Lurking is an Internet term for people who read and observe online articles and various media such as blogs and social networks, but do not submit comments or participate. They just read. There is nothing sinister about it, as the term is rather ironic, because the vast majority of any blog post’s readers (like this one) are lurking, as in reading without commenting. 

Real Estate Lurking occurs too. I have clients who do it, and there are legions of others who aren’t even with an agent yet, but just watching. Essentially, they find a house or two that they like and they watch it, almost daily. They are watching for price dops, new photos, and, um, price drops. If a price goes low enough, they may act. They are, essenitally, in a war of attrition with home sellers, because they won’t go forward until prices reduce more. 

Upon occasion, I get a call from a consumer when a house goes under contract or sells, because it disappears from the active listings. This is when the lurker reveals themself. 

The chart below shows the number of unique hits a sample listing get in a week on Realtor.com. Over the course of 2 months, about 200 unique clicks are recorded on the property each week. That is 200 people that actually view the property, not just have it show up in the search results. It might not actually be 200 different people, it could be 65 people viewing it four times each week. But either way, over the same period we averaged about a showing per week. The rest watch and wait. And they represent the majority of people looking at the real estate market online these days. 

The moral of the story is that the lion’s share of would-be home buyers are patiently-and quietly- waiting and watching on the sidelines, waiting for prices to go down even further. They are even willing to risk losing a nice house if it mitgates the risk of overpaying for one. The degree to which they stop lurking and start buying is the metric by which we’ll measure a true recovery. 

The opportunity to hear me expel hot air in front of a crowded room is something that I KNOW some fellow agents are dying to attend. Just the sound of my whiny, nasal voice and suspect diction are a delight to trainwreck aficionados. So, if you are a masochist or considering penance for past sins, you’ll have two chances to hear me blather this month. Both events are geared toward fellow agents. 

On June 2nd, I will be on a panel moderated by Derek Overbay entitled “Getting Real About Online Marketing” at the Monmouth County Womens Council of REALTORS. Other panelists include Nicole Beauchamp and Walter Burns. The event starts with breakfast at 8am and speaking begins at 9am. The location is 123 Long Monmouth Rd, West Long Branch, NJ. 

On June 15, I will be on a Mastermind Panel entitled “Will You Still Be in Business in 2012?” with Heather Harrison, Mark Seiden, and Michael Shappot. It will begin at 8:30 am and be held at the Elmwood Country club at, 850 Dobbs Ferry Rd in White Plains, NY. 

Breakfast is the most important meal of the day, and I am, in all seriousness,  very honored to be speaking at these events with such distinguished colleagues. 

In case you wonder, I do practice my schpiel for these events. I sometimes use video to perfect my craft, but upon occasion the practice gets interrupted before I can start, such as the example below. 

It seems that the older I get, the more meaningful each Memorial Day becomes.

When I was 23, it was a day off, and the marker for wearing summer clothes.
When I was 33, it made me a little nostalgic for my father, who passed away when I was 25. 
Now that I’m 43, Memorial Day is a day of reflection and gratitude.

This might have to do with my own growing awareness of my mortality, but it is deeper than that. Life experience teaches you things, and among the lessons I have learned is that even veterans who make it home uninjured physically still have things to deal with. It could be lost time, trauma, or the death of a close friend. They can’t pretend what they went through never happened. 

My own father, who served in two wars, couldn’t wake up the way you and I do. He woke up violently, as if he were having a nightmare or expecting a bayonet in his face. I hated waking him up from a nap or on early mornings. I never understood as a youth what it meant. After he passed, we found out, quite by accident, that he won a Bronze Star at Inchon. He never spoke of it to us, and explained the events once to his brother. That was it. 

I’ve thought quite a bit about the 60 Minutes story Sunday of Sal Giunta, a 26 year old Medal of Honor recipient, who is still adjusting to life after combat. He is is the first live MOH recipient since Vietnam, is uncomfortable with his fame, doesn’t consider himself a hero, and would trade it all to have his two friends back who perished the night he won the medal. 

Honestly, I wish I could give the guy a hug. I wish I could give my dad a hug. I wish I could express my gratitude to the men and women in uniform who sacrificed so much so that I could live in this free society. We read so many stories of our returning vets who have lost houses, had issues with the VA or not been treated as they should. It is heartbreaking. We should be thanking them, not subjecting them to more hardship. 

There is one thing I am going to do in my little corner of the world to make a difference to a veteran in the next 12 months. I will list and sell one veteran’s house in the next year pro bono. They have to have a special need of some sort (it can be financial) because it is a waste to do it for a vet who is flush with cash or in a short sale, but so long as there is a DD-214 and the possibility of an equity advantage I’ll get it done for this veteran gratis as my way of giving back. I can do this for one veteran (or their survivors), and it can be in any of the following counties: Westchester, Rockland, Putnam, Dutchess, Fairfield (CT), Bronx, Queens, or Orange. There is minimal small print to the offer, because I can’t guarantee that a buyer brokerage will be cool with forgoing their end, but there will be no listing commission. 

If you know of a veteran who needs to sell and a pro bono arrangement would make a difference between hardship or not, please let me know via phone or email. 

If you are a fellow broker-owner, you feel like following suit and such an arrangement would not be an undue burden to the sustainability to your business, I encourage you to join me. 

Seth Godin’s 61 word post from 10 days ago is, in my view, the greatest economy of words on a deep throught I have read in quite a long while. You should really read it, print it, and tape it to your monitor or mirror. No blanket statement covers 100% of reality, but I concur with his observation; all worthwhile things have their price. 

While we all expound and trade ideas on how to work our businesses smarter, more efficiently, and with ever greater return on effort and investment, there is one thing that gets oblique reference but is seldom discussed head-on: 

Hard work. 

The best planned military operations presuppose sacrifice on the part of the personnel. 

The best play in football presupposes almost superhuman effort, incredible athleticism, and execution in the face of strong opposition. 

Maps don’t take into account rough topography, inclement weather, and random accidents and breakdowns, but you know they are a reality. 

Doctors and lawyers labor through years of education, testing and training to earn their position in life. 

And, just like getting through college or reaching the apex of any endeavor, nobody succeeds in real estate without hard work and the mundane, day by day grind of consistent effort. You have to work hard in this business if you want to make it. Some short term success can occur with events that look like luck or ease of effort, but long term success doesn’t. Hard work and success are Siamese twins in this business. 

Many of us work hard, but in an anecdotal sense. We’ll take time away from our family on a Sunday night to show a listing, or stay late on the phone babysitting a client. Planned hard work is another matter. I’ll give an example: since August, 2005, no home in Westchester County has ever expired off the market that has not gotten something in the mail from me. That’s my niche. And either myself, Ann, or our admin have hand addressed our expired mailer virtually daily for 5 years and 9 months- it is our way of shoveling coal into the company engine. And as I approach my thousandth blogpost on this platform, I know that I have more than one shovel in the coal.

Are expired mailers mundane? Good God yes! Blogging isn’t always easy, or nor is biting my lip with clients or the hours I log. And most championships are won in practice. As I was reminded of my old high school wrestling coach’s words of 25 years ago, it isn’t the will to win, it is the will to prepare to win. 

Plan your work. Work that plan and work smart, by all means. But work hard, daily. Do the same thing for 365 days in a row religiously as if your children’s food and clothing depend on excellence in that one, daily event, difficult as it may be. You won’t recognize your business in a year. 

I recieved a call on a listing from someone who wanted to see one of my listings this weekend. I am booked, and with a holiday weekend, I didn’t have an available agent in the firm on short notice. Being the mensch that I am (and keenly aware that I work for the seller, not myself), I dutifully researched a local agent with another firm and asked her to take the referral. 

The same buyer called me today, asking about the house, and he did confirm that he got a call from the referred agent. He asked if she was with my firm. I explained she wasn’t, but that was better for him in terms of representation. Then he explained that he had an agent, but she wasn’t available today, and that’s why he called me. 

Shame on me for forgetting to ask if he was working with an agent. It amazes me how often the bread lands on the buttered side down with this issue-invariably, if I forget to ask if a consumer has an agent, they do in fact have representation already. 

Inasmuch as I appreciate that his logic was that as lister I have an interest in showing him the property, I explained that if he needed an alternate person to unlock the door of the place, his call should be to his agent’s office, not mine. I have no problem with helping, but I am not going to deal with another agent’s client directly unless that brokerage authorizes me to do so. Moreover, there has to be someone else on that agen’t team who can help. They have to do some of the heavy lifting. As a matter of fact, finding out that a buyer already has an agent when you meet them at a showing is not good, not good at all. 

Consumers need to know that if they have an agent, they should use their agent. They have to schedule through them, and they have to use them for the whole process. A buyer agent fee is not a royalty paid because the buyer signed a piece of paper with you, it is earned by doing one’s job from opening the door onward. 

Some firms have a reduced commission if they showed the buyer a property and the buyer agent shows up on the scene later. I am reticent to go there; but if these buyer agents felt it in their wallet, they might do a better job of educating their clients. 

I have written before that I do not recruit or solicit first-time investors. Real estate mistakes are expensive, they can ruin you, and I don’t want to go head to head with a newbie who won’t take my advice, gets hurt,  but still reserves the right to blame me. Not my idea of fun. 

There is a home that is in the final stages of renovation in my marketplace that I am well familiar with; I looked at it when it was on sale in 2007, and I showed it as a bank-owned foreclosure last year. The investors I showed it to passed on it. 

A Lesson for Would Be Investors: If the home is listed on the MLS for 30 days or more, then the savvy investors who flip or rehab and re-sell deemed it not such a great bargain. Most amazing bargains never make it to the open market. 

So the home sold to a first-time investor, and I was referred to the person as a possible listing broker. They interviewed two other agents, and wanted my price quote. They did not like my number. It didn’t give them the profit margin they were shooting for. 

A lesson for Would Be Investors: The buying public does care a lick about what you want or need. 

There were some emotions about our meeting. The folks are personally invested and subjective about their property, and that bias clouds their judgment. They don’t see that time is their enemy, or how a stale listing can doom their investment if it does not sell in an expedient fashion. 

A Lesson for Would Be Investors: Never get emotionally attached to an asset you are buying and re selling. The property is not your friend. The numbers are. Math should dictate your actions, not personal bias. 

The people have done a fabulous restoration of the home. It is a credit to the neighborhood. They should rightly be proud of what they have accomplished. And they should make a profit. But how much profit? I’ll give you a hint: Not as much as they’d “like.” Only what the buying public will pay. 

A Lesson for Would be Investors: “Pigs get fat. Hogs get slaughtered.” -Scott Forcino

If the house goes on the market overpriced and they chase the market, these folks will see their carrying costs pile up while the buying public watches the house sit unsold, asking what is wrong with the place that it won’t sell. In a war of attrition, the buyers win. It costs them nothing to sit and watch. 

A Lesson for Would Be Investors: Time is your enemy. 

My fear is that if this project becomes unprofitable or stresses them out over a long period of time, their real estate investing career will be short. And that will happen if they don’t price it right from the start.  Great effort will be squandered, and the mind boggles at the financial damage. 

A Lesson for Would Be Real Estate Investors: High bidder gets the house-including the current owner. 

My choice is simple. Take the listing priced right, or tell them to use another broker if they aren’t going to take my advice. 

And that, my friends, is why I do not recruit first-time real estate investors. Westchester is expensive, and mistakes cost dearly. I want graduates of the school of hard knocks as clients, not freshmen. 

I understand the importance of voice mail. As a broker, I value it as a tool to retrieve and leave messages since I and my fellow agents cannot always be available to answer calls.  

Some of the messages I get are priceless. Greetings amuse me too.  

Like, for example, the agents who have a 90 second voicemail greeting about their integrity and commitment to follow up who take a week to call me back. That is always fun to sit through. 

I also get messages from folks who feel that their first name is ample information for a complete, thorough follow up since we met for 5 minutes last week. Or better yet, the guy who tells me how important it is that we speak ASAP but neglects to leave his phone number, leaving me to jump through forensic hoops. And you have to love the people who don’t disclose they are an agent until you call them back. 

That does not mean, however, that I have the hang of it. Far from it.  As a leaver of messages, I leave quite a bit to be desired.

My offense is a Jackie Gleason-like, hemana hemana stream of consciousness yapfest that people have to endure which never seems to come out right upon reflection after I hang up. It is typically long, stuttering, and completely unlike me because the silent absence of a pulse on the other end gives me no feedback as to whether I should zig or zag in my tone, pace or delivery. In rare cases where the menu allows me to review my message, I cringe when I hear myself, and I almost always delete. 

My solution is what I prefer when my own recieved calls go to voicemail: a name and number, or, better yet, a missed call on their readout will also suffice if we are familiar. So if you ever see a missed call from me, just call me back. Ignore the message- we’ll catch up when we speak in person. It’s better that way!

According to the Journal News, the legendary Leatherman will be reburied today in a more fitting place in Sparta Cemetary, further from Route 9. His original burial place was mere steps from the ever widening highway. The controversy that stemmed from the issue is now meaningless, as the Times reports that little more than coffin nails were found in his burial site. 

Scientists hoped to study his remains for some clues as to his ethnicity and medical condition, as the mysterious man was known to speak a French and little English, and made a 365 mile loop every 34 days between the Hudson Valley and Connecticut for decades, living off the land and the kindness of locals. Some people objected to the exhumation and especially the analysis of his remains, but no remains could be found. 

I drove past Sparta Cemetary this past week and saw the tent up where they were doing their work, and figured that I would see a story about it in the media shortly. He may be back with the Earth, but the Leatherman remains a fixture in local lore, and while other kids heard dumb stories about the New Jersey Devil if they got lost in the woods, we heard stories of a kindly soul who helped others in his wanderings, and our guy was rooted in true events. 

Godspeed Leatherman, wherever you are, and we’ll never forget you.