Russell Shaw of AgentGenius passes on a powerful email being sent to agents on how to deal with Bank of America’s difficulty with short sales- don’t send them any new mortgage business.

My comment was as follows:

Well, it isn’t surprising that this letter is being distributed. I haven’t gotten one but you reap what you sow. There was a time when Countrywide was the Grinch of short sales. When they were acquired by B of A people thought things might get better, but they didn’t. It should only take as much time to approve a short sale as it takes to underwrite a mortgage- the process is analogous. That we have to drag the lender, kicking and screaming, to get more money than they’d get if it went to REO explains how this industry thinks. It also explains how we got into this mess.

I have blogged about how lame the banks are about short sales here. 

Bryant Tutas was a frequent commenter on the story and pointed out that an organized boycott would be illegal collusion. He made some other good points here. Yes, part of the problem is lame agents. But it is hard even for a good agent when the lender won’t cooperate. I have dynamite people ( a NY law firm) doing my short sales and we get frustrated with all the stonewalling, red tape and delays. 

Are you, like me, just a little burned out on networking websites?  I Tweet, do Facebook, and LinkedIn ; there are dozens of others. I’ve been hyperactive on on Active Rain lately.  I have a YouTube channel. A Technocrati profile. Digg. Reddit. In real estate I’m on Zillow and Trulia, and that is just the tip of the iceburg. We don’t do this because it’s fun by and large. It is work, and we labor to maximize search engine optimization, to get found,  cultivate readership, and develop clientèle. Writing the blog is fun and relaxing. The other stuff is work.

Enter this morning’s email from Plaxo. I registered there years ago at the behest of a former co worker. Since then they’ve spammed emailed me for years. I ignored it until this morning when I broke down and linked Plaxo with my Facebook to minimize my efforts (I hope). Will it help? I sure hope it will. It can’t hurt. 

When I see other people who seem to have the whole networking widget universe set up with aplomb I must admit that I get a little jealous (Damn you Somers team in Philly! Damn you!). I just don’t want to do all the work. And don’t get me started on Typekey, WordPress, signing into things with my Yahoo!, Google, AOL, or other established account. I know the importance of this stuff, but I have to earn a living. And these children want to play with Daddy. 

Of course, when I finally get my act together with all these buttons, widgets, profiles and other cyber paraphernalia, it will go the way of Friendster or LiveJournal. A pimp’s work is never done.

If you’ve ever driven on any of the Westchester County Parkways, perhaps you’ve seen a quasi-official looking blue and white truck with the initials H.E.L.P. on the side. That stands for Highway Emergency Local Patrol, and they go around aiding people with car trouble. I have no idea what the cost is the the taxpayer; I do know that I ran out of gas Tuesday. 

I was driving down the Sprain Brook Parkway, right next to the reservoir when I saw I was on fumes. Just as my mind began to race about the next exit, I felt that hesitation. I coasted to a stop, dry as a bone. I was angry with myself. Trying to do too much for too many in too short a time, I was supposed to meet with a client at a construction site. And it was really cold out. 

After calling Ann & Ronnie (our admin), we found that there was no number for these guys. You have to call 911 and they send them. So I did. And the guy came. Two gallons of gas, courtesy of the taxpayers of Westchester county (the friendly snickers were free), and I was back on the road. I would have taken better photos, but I was too much of a wimp in the cold, so everything was from the drivers seat.  

One of the most common questions I get from buyers about an area they are considering is the following:

How good are the schools? 

It is a fair question. It factors in to their quality of life, the future welfare of their children, and resale value of the home they are considering. I also can’t answer the question. It is a fair housing issue, and licensees who recommend one town or district over another may in engaging in illegal steering.

So what are we to do? Well, silly as it may sound, while licensees ought not compare school districts, we can give our clients sources of the information they seek. It actually makes some sense; we don’t answer legal questions either, but we can refer people to a lawyer.

Here are some good sources of information on school districts: 

• Westchester School District Report Cards– published by the State of New York.
• National Center for Education Statistics– published by the US Department of Education
• Westchester School District Profiles– map based, put out by the Westchester County government. Mostly census data. 

• School Digger
• Public school review
• New York Public school rankings

If you Google school rankings there are lots of results, but I’m not sure of their data source. Caveat emptor. I’d start with the first three.

 

I have a deal going on one of my listings. December deals are special, and there are a lot of moving parts on my clients’ part, so I thought I’d reach out to the buyer agent to check status. She’s been good about contact, so I wondered why we hadn’t spoken in a few days. A man answered her phone. 

It was her husband. She just had a baby. They were still at the hospital. 

Since Ann and I have been down this road four times, I congratulated him heartily and asked for a call back whenever Lora was up to it. I didn’t expect anything for a few days.

I wasn’t finished with my calls, so made another call to an office. The phone rang awhile, then a woman answered. She wasn’t pleasant. “We’re closed! It’s Christmas Eve!” she said indignantly. “Merry Christmaaaasss,” she said, in a saccharin voice, then hung up. This is a respected company in an affluent area. If it were my firm, this woman would have been given her license and shown the door. 

Moments later, my phone rang. It was Lora, calling from her hospital bed. We handled what we needed to handle, I congratulated the new mommy, wished her a merry Christmas, and we agreed to speak again next week. I was blown away. 

One woman is in the comfort of an office and hangs up on me. Another calls from the hospital after giving birth. What a contrast in dedication. Hats off to Lora Giordano, who gets it. I don’t care if I am plugging a competitor, I am acknowledging the dedication of a colleague. I have seen 4 babies come into this world, and it is no picnic. I am still amazed. Way to go that extra mile, Momma bear. Way to take care of that new cub. I applaud you.

Ossining Christmas Vigil: Lighting the Way for Santa

One of the really cool local traditions in my old neighborhood on Osage Drive and Susquehanna Rd was to put rows of candles out along the street to light the way for St Nicholas. As I was driving to my office on an elf errand around 11:30pm, I drove through the street to admire the view of the Holy Child’s birthday candles. The photos do not do it justice; in person it is breathtaking.

This one is the view from Pleasantville Road as you turn in to Susquehanna Road. 

The candles light the way for St Nicholas

He won’t have any trouble finding this house. 

This was truly impressive in person. 

Prior to snapping this one a car drove by. People actually drive through the neighborhood to see the candles. 

You can see them winding down the street until they are out of sight.

In all, residents from six separate streets participate. It is no easy undertaking. Each bag has to be filled with sand, the candle has to be placed in correctly and then lit. Few go out, even in the wind. Doing 20-30 of these in the cold isn’t fun. But they do it. 

There is something quietly stunning about it; very few people do the Griswald house lights on this night, but almost everyone does the candles on this one night of the year. Call it lighting the way for Santa or birthday candles for Jesus, it is a sight to behold. It is one of the special things about the place where I grew up.

Merry Christmas, and peace and prosperity to you in 2010.

It can be confusing to understand the health of the economy from the media. As the screen shot from my news feed shows, there are seemingly completely contradictory stories on the U.S. real estate market. I’ve put red next to the “bad” news and a green mark next to the good news. One headline has things jumping up 55%; another says new home sales are down 11%. No wonder people are finding that making sense of it is not easy.

Here are a few things to consider:

• First, all real estate is local. One region can have a spike upward while overall the country can be down. New York is not Miami or Las Vegas. For that matter, the Bronx is not Bronxville. 
• There are different sectors in the market. Resales are not new homes; they are pre existing homes. In a down market, few people build new compared to the number of folks who are picking up pre-owned foreclosure properties which were built decades ago. 
• There are different metrics, such as price and volume of transactions. Prices can be down, but the volume of sales can go up. 
• Prices can go up, and the volume of sales can be depressed. 

I remember finding a letter from 1945, written by my father from the South Pacific at the end of the 2nd World War. Japan had surrendered, and he was sharing with his parents that he and his fellow soldiers were not so much jubilant as they were exhausted. He wondered aloud about the future of mankind with such powerful weapons in the hands of mere men. It was a very unique look into a time in my Dad’s life I would never otherwise see. He was 24 at the time; I was 32 when I read the letter. For the first time, I related to my father as a young man with an unknown future. 

Flashing forward to today, so many of us are creating a body of work online that will not be stored in an attic, but will last in perpetuity. Blogs, postings, Tweets, and Facebook will give our children and grandchildren enormous access into our thoughts. Some will actually know how it was for us when 9/11 occurred, Barack Obama was elected, and when they were born. Can you imagine?

Can you imagine knowing JFK’s personal thoughts during the Cuban Missile Crisis? Jackie’s feelings when she was newly widowed? What about Thomas Jefferson’s feeling on July 5, 1776? If Christopher Columbus could tweet on a blackberry, what would he have told us? Or Martin Luther? Charlemagne? Francis of Assisi? What if you could learn about your great grandfather, or your great great great grandmother? 

Knowing my mother’s thoughts when Pearl Harbor was bombed, when my father proposed, or when her dad died would be extraordinary. Understanding my father’s feelings when he was a GI in a tight spot, when he was working in the Great depression, and how he felt when I was born (he was 46) would be enormous. I have always wondered what my grandfather Salvatore experienced at Ellis Island when he arrived from Sicily.  

Future generations will know all of this. Your great great great great great grandchildren will know you. I don’t know about you, but that’s part of the reason I write. I’d like to build a company my children, if they chose, could run. If they knew that it just didn’t appear, that it wasn’t all easy, and what challenges I faced, it would make a difference in their stewardship. It might also tell them something about their father they might not otherwise know. 

Thanks to Matt Goyer for starting this group. Here are links to my two Redfin Posts:

Why Redfin Won’t be Redflop

Redfin Redux

There have been a number of posts on Redfin, and they even have a channel on Active rain now. I hope this group will foster civil discussion on the company and how it does business. I am a Redfin Partner Agent in New York and I have had a very positive experience with the company since March 2009. 

I had two accepted offers today, one on a listing I am selling and another for a buyer I am representing. Here’s a coincidence: They are on the same street in New Rochelle, less than a mile apart. They are completely unrelated deals. 

Another offer was presented on behalf of my buyer but we havn’t had a response yet. Two accepted offers and the possibility of a 3rd in one day doesn’t make me a great agent. But it does speak to the fact that people are no longer sitting on their hands. 

Word is out that now is the time to buy. Rates are fantastic, sellers are motivated, and prices are way down. The holidays are apparently not a deterrent to the pool of active buyers out there. Of course, Sundays get more husbands out with their wives when the Giants and Jets stink. 

I completed the old 2 weekend Forum in Philadelphia in December of 1989. I then did the 6 Day in the summer of 1990. I don’t know how many seminars. 20? I suppose in a community that is pushing 170,000 with such diverse groups as Autistic Spectrum Disorders ,  Dog Lovers Group and my personal favorite, 40 Somethings , that I’d come across a few Landmark Alums.

I still draw on the insights and distinctions I got from the training in my daily life. In this business, you draw on every resource. 

I just have one thing left to say:

Werner Erhard. Werner Erhard. Werner Erhard.

I’m with Susan Mangigian: Carpe Diem! Or, as they used to remind us, this isn’t your practice life. 

Now that Greg Nino and Bob Haywood have blogged recently about Redfin I thought I’d add my own 2 cents. Why not? I’m a Redfin Partner Agent. I blogged a earlier this year about the firm when I wrote Why Redfin Won’t be Redflop. 

I was contacted by Redfin’s area manager, Michael Daly, earlier this year around March. He found me through my Active Rain profile. It has translated into about 10 closed sales for the company thus far in 2009. I paid a 30% referral fee, which included a small commission rebate to the client in each transaction. We have another 4 deals under contract and about half a dozen serious buyers we are working with. 

Now, before I go on, let me ask you: would it kill you to have 10 sales referred to you in the next 6-8 months? No advertising, no bird-dogging, just an email telling you to contact Joe Buyer. Yeah, that would really suck. Another Active Rain horror story. 

I have met Glenn Kelman, CEO of Redfin, twice. He’s a nice enough guy, certainly committed to the oft-heard “Transparency” mantra, which I believe they are serious about. Glenn is also clearly regretful of Redfin’s initial splash, which was arrogant and adversarial toward the industry model. This haunts the company more than anything else. It is their Original Sin. And you never screwed up in your first year of real estate. Right. But some of the things they are criticized for aren’t what they appear to be. Their anti-short sale stance is ill advised and bad publicity, but they didn’t complain when I sold one. They want to stick with prices above a certain number, but if you go below it they either waive or reduce their referral fee. Those BASTARDS! 

I dislike firms which are called alternative models in polite company, not because of their methodologies, but because their agents suck. Crummy agents crew up deals. Bad agents tend to gravitate toward alternative models because of guaranteed pay, their gimmicks, or both. What is different about Redfin is that their agents don’t suck. As a matter of fact, the people whom I have dealt with are pretty good. 

This isn’t to say that as a partner agent I drink Redfin Kool Aid in the morning. I don’t think everything they do is wonderful, and if I have an issue, I contact Michael Daly and we speak. Glenn Kelman’s door is opened if the need arose. One thing I’d like him to do is make the site a little warmer and fuzzier. He can be such a CEO sometimes. I’m in sales. You can’t deny the emotional part of the biz. 

But some things they do will improve the industry better if we stop half a second and learn. 

• It takes guts to survey every client and publish the results. 
• They do IDX and home searches better than anyone I have ever seen.
• They track every single referral. No one gets lost, misplaced or forgotten. 
• Bad agents get sacked. 

While going through some old archives to rebut some gnu who feels agents are overpaid, I found the following passage, which I authored on May 1, 2006, on another blog. This was over a year prior to the sub prime collapse of 2007 and the Fannie/Freddie crisis of 2008. 

The sales statistics for homes sold in my area for the first quarter of 2006 are out, and sales are down from the first quarter of 2005 by 14%. This, coupled with higher interest rates means that the pool of buyers is shrinking, which suppresses appreciation. Add to this the growing inventory from the lower sales rate, and, all together now, the boom is over. Oh, one more thing: in the next 18 months, millions of variable rate mortgages which started out as fixed for 2, 3 or 5 years will hit their adjustment period. This will flood the market with even more inventory as people try to jettison mortgages which they can no longer afford. Foreclosures will spike, putting more properties up for sale, and the bank-owned REOs will elbow out a significant number of regular folks who wish to sell and who may find themselves unable to get the price they need.  Guess when this really hits the fan? 2008, which, by the way, is a presidential election year.

If you don’t want Hillary to be president, you better pray hard that they catch bin Laden, because that’s the only thing that will turn things around for this administration.  

Of course, Barack Obama was on no one’s presidential radar in May of 2006. Moreover, nobody could have predicted the house of cards that Freddie and Fannie were. As significant and unpredictable as those things were, the writing was on the wall anyway. There would be no soft landing. 

I’ll finish my answer to the person who feels that licensees are overpaid and post it soon.

There is an article in today’s NY Times asking the old question of whether using a broker is right for some home sellers. The piece invited comments, and I shared my thoughts. I’ll adapt them for this post. 

I am a broker who does business in Nyack, where the first two homes in the report are located. Ms Corvino’s issue (she has elected to sell her own home after 230 days with a broker) is not whether or not she has an agent; it is the fact that the home is overpriced, and not by a little. MLS records indicate that she bought the home in late August of 2005, literally the apex of the market bubble, for $810,000. MLS records also have her giving herself almost 10% appreciation in her 2008 attempt to sell when she listed it for $892,000, and at some point she lowered to (hold onto your hats, folks) $880,000. In reality, the value was most likely in the low to mid 700’s and may even be in the 600’s as I type this. Real estate didn’t go up 10%, especially if the home was not renovated. It went down 10%. 

Given the fact that she purchased the property with a piggyback 2nd mortgage with a balloon payment, she is most likely upside down, which would make her, at best, a short sale. The fact that she can make a website and pay for a fancy yard sign will not ameliorate the mathematical challenge she faces. So while she attempts to “save” 40k in equity which no longer exists, a default on the balloon could become a financial catastrophe. I’ll bet her broker advised her to lower her price and she demurred. Brokers often tell sellers what they need to hear, and we are dismissed for trying to make a quick buck. 230 days later, she will sell her own overpriced, outdated home on Facebook. I’ll look for that follow up report in the coming weeks on the Times.

This Times article will no doubt get many eyeballs on the lady’s home (it got mine- check out 46Voorhis.com), but unless she can lower her price, she’ll have to face the reality that the public is ambivalent about the debt structure that determined her pricing strategy. I have blogged about this very fact last month. WebMD.com is not about to replace physicians either. 

This For Sale by Owner is missing the first rule of home selling, which is the price the house right. A good broker would help her price the place, deal with a short sale if need be, and help her avoid a balloon payment default. Serious business, folks, and not something you can avoid just because you know how to make a website. So long as sellers are their own worst enemy, good brokers will gain market share. There are too many moving parts in a real estate transaction for the industry to mirror travel or discount stock brokers. A good broker remains worth their weight in gold. 

Given the number of blogs on the difficulties agents experience on short sales, I thought I’d take another shot at a canard that banks are now using to justify more delays, and that is the following:

“The investor is reviewing the file.”

This is typically followed by 60 days of nothing. 

Now, I don’t argue that the investor is reviewing the file, I simply question the wisdom of the investor reviewing one file at a time. 

Let’s go back to mortgage 101: when a mortgage application is underwritten, it is reviewed by an underwriter to ensure that it conforms to the standards of the investor, which for example, could be Fannie Mae or Freddie Mac. Fannie and Freddie then buy these loans by the thousands in bundles. If Fannie Mae and Freddie Mac manually reviewed every new mortgage application one at a time we’d just be getting around to closing all the contracts written in 2007. It is utterly absurd for them to do so. Commerce would cease.  

We have read a great deal on how the Obama administration and others are working to streamline short sales. Well, I don’t personally see, nor have I read, any examples of the system getting any better. None. 

It should take as much time to approve a short sale as it does to underwrite a mortgage application. The process is parallel to approving a loan.  Once title is run and there are no other liens, they should issue an approval or denial, period. It completely analogous to verifying borrower qualifications, appraisal and title on the buying side. The bank negotiator is reviewing the borrowers finances, verifying hardship, and getting the home appraised.

It’s simple. It has always been simple.

The only difference I can see is that the lenders have to be dragged, kicking and screaming, into taking a loss that, were the home foreclosed, would be far larger. Of course, once the bank does take back the house they are in a hot hurry to sell, to the point where they bully the buyer like an abusive relationship. These are the same buyers who have to sit on their hands for 4-6 months waiting for the bank to take a smaller loss in a short sale. 

It is a mystery why banks resist short sales with such passion. They have enormous culpability in current market conditions. There is a word for people who would set your house on fire and then trip you when you run for a fire extinguisher, but I won’t repeat it here. We’ve got to stop the barriers, impediments, obstacles and straw man red tape delays so we can begin a more meaningful recovery for earnest homeowners who have lost their jobs and equity. We are minimizing lender losses for goodness sake. It only makes sense, but asking the industry that screwed everything up to use common sense is a muse anyway. 

Now someone please show this blog to Mr. Obama.  I’m going to go watch Fight Club. 

Today is the 5th birthday of Gregory, our 3rd Treasure. Gregory is on the spectrum for Autism, and attends a special school with an extensive ABA (applied behavioral analysis) program. It has help him enormously. He is great with eye contact, affection, and being “there.” We are still working on boundaries, executive functions, and meaningful speech. 

Gregory looks almost exactly the same as I did at his age. It is really uncanny. That is a hell of a trick to pull off when your mother is Korean. It will be “that” month in our house until January 14, when Catherine turns 6. They’ll both be 5 until then. 2004 was quite a year. 

Gregory’s special needs have posed quite a challenge to use. Managing expectations is difficult, because sometimes he amazes us and other times we unintentionally do things for him he ought to do himself. Patience.. you don’t know patience until you have a child with special needs. Sleepless nights (children like Gregory have unreliable sleeping habits) are growing less common, but his knack for timing is amazing. He seems to know what mornings I need to wake up early so he can wake up at 3am and play, loudly. 

Through it all, his mother has been his greatest advocate. I work out there in the field while she mans command central for the business at home, often with all 4 home from school. You don’t know multi tasking until you’ve seen double jointed, ambidextrous Renaissance Mom at work. 

So happy birthday to you Gregory. We love you very much, and you are 25% of the reasons that Dad and Mom work so hard. I hope you understand that someday. 

When I graduated college in 1989 (ouch), I decided that I wanted to follow my older brother in sales. So, I interviewed insurance companies and financial planning firms, only to find that I was ill-suited to that industry. I was advised to make a list of my 100 closest friends and relatives and tell them I was in the insurance business. I wanted no part of that embarrassment; I went into sales for a publisher. After Catholic school from grade 2 to my BA, I’d still rather talk to nuns and principals than solicit friends and family. 

Nuns. Franciscan nuns. 

In Philadelphia. 

In 1996 I was convinced by a college roommate to get into real estate with him and his father. 

In Rochester. Where I knew nobody. Even if I did have the cajones to contact my sphere of influence , they were 300 miles away. I didn’t even know any of the nuns. 

Fast forward to 2009. I’ve been back home in Westchester since 2000, I have been on Active rain over a year and Facebook for at least 6 months. Facebook has been a virtual college and high school reunion for me, and it has enabled me, effortlessly, to reconnect with old friends, some of whom have real estate needs they have shared. 

The first closed yesterday. An old wrestling teammate from high school, whom I haven’t seen in person since 1989 and lives in Maryland, referred me to his younger brother. Michael and Stephanie are recently married and had been through at least 2 other agents. They made a couple of offers, but nothing panned out. Michael is not his older brother; he’s deliberate, cautious, and reserved. He also had suspicions about the agents whom he was dealing with, for good reasons. 

Given the nature of the referral, trust was not an issue. Plus, it helps that I know what I’m doing a little bit. We made an offer on a short sale several months ago, and it was not an easy process. But I did my job, we stayed in communication, they used the attorney I referred, and together, we got through to closing with a happy successful closing. 

There is a nuance to using social networking that is for another post; however, I have to say that the medium has more than potential, it gets results if done right. Return on investment: Pretty high! 

I’ve got Croton on Hudson on the mind lately. It isn’t because my older brother has lived there for 30 years or because I camped at Croton Point Park as a young scout dozens of times. It could be because the only Bed and Breakfast in all of Westchester County is here, or maybe the numerous excellent restaurants. The real reason Croton is on my mind is because I’ll be leasing office space there in the near future, and I intend to do more business in the area in 2010.

Downtown Croton is idyllic- small shops, food, boutiques, and towny-type places that date back prior to my youth.    

 The Village has one of the biggest train stations on the Hudson line of Metro North. It is a major interchange, and even Amtrak stops here.  

The views of the Hudson River from many points on the Village are breathtaking, and I think we get a little spoiled after seeing it every day.

If you want to know more about Croton, the NY Times did a very nice piece on the village last month, and included a very good slideshow also. I highly recommend them. Of course, I like my own photos of the place.