I have an idea for Uncle Sam to pursue in stimulating the economy. I feel that this idea has not been tried by any administration in the 232-year history of our republic. This policy should be embraced in a bi-partisan manner and should appeal to both free market conservatives and more socially inclined liberals. It’s really quite innovative, if I do say so myself. Here is what I think that the commerce secretary, treasury secretary and all the other big cheeses should implement immediately for the next 90 days:

Shut up.

Just shut up.

D-d-d-d-d! Not another word. Shush. Please. I want to hear crickets chirp in a distant valley.

Now hear me out, Mr. Bernanke, Paulsen and Co. I am in the trenches. I speak with buyers, sellers, borrowers and investors every day. Here’s what I have found out: Every time you stand in front of a microphone you TALK PEOPLE OUT OF ACTING IN THEIR NATURAL TIMEFRAME. Yes. Each statement you make about what you’re going to do to get this economy moving again automatically convinces a huge number of people to wait and see another few months before they act. Wait and see is killing commerce in the housing sector, you dopes.

• “Rates have been lowered for the 50th time to .0000025? I’ll wait and see if they lower them again.” Rates aren’t low enough? Draconian underwriting is hurting borrowers, not high rates!
• “They aren’t buying bad loans with the $700 million after all? I’ll wait and see what they do with the money.” How can people be confident in rescue plans if you don’t keep your word?
• “The government just socialized the banks? I’ll wait and see if that works.” Why was this necessary?
• “Auto executives are going to ride their bikes to Washington next time? I’ll wait and see how that goes.” Why should we pay the bill for 40 years of crappy energy/nonexistent policy?
• “Why should I sell my lis pendens house? Obama will save me!” Puh-lease.

If you screw up a haircut badly enough, you can’t cut your way out. Sometimes you just have to look stupid for two weeks before you can fix it. You just have to grow it out. After you grow it out you can start over.

Get the picture? People aren’t buying houses because they are having babies, getting married, sick of living with their in-laws or other normal reasons because they are so completely freaked by the Jeckyll and Hyde posturing coming out of Washington.  I know these bozo politicians act like they are trying to DO SOMETHING, but their efforts are sabotaging what really needs to happen, which is to have consumers return to the marketplace with a modicum of confidence.  And at this point, with the economy looking like it lost a fight with a blind psychotic barber, everything proposed is making people sit on their hands a little longer at a time when we need them to get off their tushes. 

Let’s just be at peace with looking dumb for a little while, as if we gave ourselves a bad homemade haircut. Maybe the lesson will take this time.

Maybe in your quiet time, Uncle Sam, you can figure out a way for Fannie, Freddie, Madoff, Sub-prime, Lehman Brothers, Meryll Lynch, Bear Stearns, Countrywide, Ameriquest, and the rest, all of which came home to roost within 18 months of each other, to NEVER OCCUR AGAIN. All of us worker drones in the trenches will do the rest. You’ll see.

When our company was based out of our home, someone told me that they could never work from home because they didn’t have the discipline. “You don’t need discipline to work from home,” I replied, “you need bills.” With 4 little ones, bills we have.

Of the four, for the next 30 days two of them will be 4 years old. In 2004, Catherine was born in January, and on December 18, 2004, Gregory came into the world. In spite of his mother’s assertion that it was genetically impossible, he entered with red hair.

Those of who have children know what I’m talking about. I can’t work hard enough. No client is too much. No stage fright or call reluctance will totally stop me from getting out of my comfort zone. No loss mitigator will get me discouraged. Gregory probably won’t appreciate these things until he’s far into adulthood, but I’m not looking for that. Knowing he’s the beneficiary though, does add joy to work that is sometimes not very joyful, especially in this market.

 Happy birthday, Gregory. I hope I can tell your children all about you.

This is a rather strong opinion and I welcome an opposing point of view, but I can’t see losing the argument.

First, a question:

Would you choose a surgeon because he has a yellow Labrador? No? Why not?

Would you invest your money with a stock broker because he wears a cowboy hat? No? Why not?

How about choosing a babysitter- would you entrust your Most Precious to someone because they can’t peel a phone off their ear long enough for someone to snap their photograph?

Surely your criteria for choosing a professional has more substance. However, we have colleagues out there that think that they are going to get lots of business from being the Cat Lady, the 10-Gallon Hat Guy, or the Dude Who is so Busy he Can’t Hang up the Phone Long Enough to Say Cheese.

I know that marketing ourselves is sort of like running for office. And I appreciate that it isn’t easy to stand out from the crowd. But I also know that ours is a profession, and we should comport ourselves with the same dignity as physicians, CPAs or attorneys. Does mean we have to be bland? Of course not, but there is a vast divide between being boring and a cliche cheeseball.

I truly believe that the biggest PR issue the brokerage community has is the public’s difficulty in reconciling our typically amateurish hype with the anecdotal examples of incompetence floating around out there, and cheesy marketing is part of the problem. We are in business, as a matter of fact a real and profitable one when done right, yet we act like we are running for office or auditioning for a reality show. That’s not business-like. If I overhear a guy in a waiting room flip a page and mutter “I would never do business with that idiot” I know he’s reading a real estate magazine. You might think that some people do business with you because your cat is cute or you angle your Blue Tooth in every picture, but I’ll bet that for every deal you think you get because of those things, you are losing far more. And it is my view that you aren’t losing business just for yourself, but that you are making it that much harder for the rest of us.

Two closings scheduled this week. How tough is the market? The one Thursday is a co op purchase that we have been working on since the Summer. It should have closed last month but problems arose between the lender and the co op board that have finally been resolved. Friday’s closing is a short sale that was originally listed in March of 2007. I could write a book on that file alone- deals died, two lenders, severe hardship, and plenty of angst. Nonetheless, a closing is a closing, and the timing is very welcome. Thank you Santa Claus!

Perhaps I am a little jaded by the large number of short sales I am doing, but is anyone living within their means? I run into too many people who put granite counter tops ahead of saving for retirement, or new bathrooms ahead of college funds. When the creek ran high they had no reserves. I think the real issue is that as a society we are addicted to excess. There are no reality cable shows on saving money, just shows on punking up the car, jazzing up the bathrooms, upgrading the kitchen, and buying a dream house, balance sheet be damned.

The same goes for the government. I heard on NPR yesterday that California is in the red for $15 billion in 2008 and is projecting a $27 billion deficit for 2009. They are running out of cash to run the state so severely that they only have a few weeks of available liquidity. My own state of New York has a deficit, and supposedly conservative Kansas of all places is also among dozens of states in the red. The TARP funds that were supposed to purchase toxic mortgage securities are now used for buying stock in banks, bailing out dysfunctional US car companies, and who who knows what else, while we just sit and vote these jerks back in office term after term. This is the hugest bait and switch in the history of free markets. If the government is this irresponsible, and huge companies are this inept, is it any wonder that Ken and Barbie can’t make ends meet either?

I am too busy to storm the Bastille. However, we should all do whatever we can in our own way to buck the trend. I have no bullet point resolutions at this point, save for the fact that my fiscal attitude for 2009 is far more reserved than it was for 2008. Perhaps if everyone is more pragmatic going forward, the recovery will be more solid and built less on fragile Galbraithian feaux commerce.

I cannot speak to the Wall Street side of the matter, but it was bad loans that started the dominoes rolling in the current down cycle we are all working through. I therefore have little confidence in the lenders’ judgment, especially where it concerns working out a short sale. I have done dozens of short sales; very few go smoothly. I have an outstanding attorney deal directly with loss mitigation because he gets his calls returned faster than I can and he has been doing this for over 15 years. At any one time we have about half a dozen short sale workouts in the pipeline.

In my experience, the weak link is the appraisal or BPO. Demonstrating hardship is typically not difficult. Getting an offer is more of a challenge, but we are getting them. Unfortunately, once we get to the appraisal the real challenges arise. Most of the time, the lender inexplicably gets as appraiser from a far away place, sometimes two counties away. Why? We are in the suburbs of New York City, not a remote rural area. There are dozens if not hundreds of appraisers who know the local market. Calling in someone from Long Island or the Catskills (I am not exaggerating) seems ill-advised. So what happens? The appraisal comes in $50,000 higher than the multiple offers we have, and the deal tanks, often putting my seller client in a precarious position.

Bringing in an appraiser from outside the market is a deplorable move. They aren’t more objective, they are simply more unfamiliar. Instead of evaluating what is right before their eyes, they submit a robotic valuation based on raw square footage and what few “comparable” sales recently closed, while ignoring the gigantic unsold inventory which is rotting at their “market value” as well as the significant repairs often needed on the subject property.

The lenders are not doing themselves any favors when they do this. If the workout fails to close, they have a non-performing loan for another 3-9 months, the property falls into more serious disrepair, they incur more legal fees, and the HOUSE SELLS 6-12 MONTHS LATER for $50,000-$100,000 LESS as an REO. Meanwhile, I have wasted my time and my client suffers the humiliation of a foreclosure even though they made a good faith effort to do the right thing.

This is not loss mitigation, it is loss enhancement. Lenders do not seem to grasp that prices are coming down, that we have years of unsold inventory piling up, and 80 cents on the dollar today is better than 60 cents on the dollar in 90 days. By far, the biggest offender is Countrywide. Other lenders are not faultless, however, and I really don’t have a solution. This should be common sense, but anyone who has dealt with some of the drones in loss mitigation know that common sense is not common, it is rare.

Our MLS listing agreements have a clause in them stipulating that no matter who finds the buyer that the listing broker is protected for their commission. There is an additional part stating that all offers must go directly through the broker. For the first time in 13 years I have found someone who cannot grasp this.

Just over 3 months ago I took a listing that was in dire straights: months in arrears, a foreclosure was imminent, and they had only been there a year. Their prior broker, also their attorney, was unsuccessful in selling the place. They had a few limitations on showings which should have been a red flag: nothing before 3:30 (except Wednesdays) & 24 hour notice because of their 2 pit bulls. This is not the way to avoid foreclosure.

As we went along, it became a nightmare. The woman’s 3 live-in GROWN children were USELESS in lending a hand for showings and weekend mornings were sacrosanct because of their precious sleep. We are talking about 20-25 year old adults. 12 out of 13 showing requests were denied. The 13th couldn’t get into some rooms. Get the picture?

Strike one: The client calls me 60 days in to cancel the listing because I am not doing anything to sell the house. I refuse, and tell her I cannot sell what she will not show. We then began a multi-week suspicion-fest where somehow it is my fault this woman’s life is a shambles.

Strike two: conceding that I won’t cancel, I am informed by my dear client that while I have been banging my head for months, she has contacted someone who saw the home prior to her listing with me and that she was selling to them for $100,000 less that the price I am killing myself to push. Would I accept 1/5 of my agreed upon commission since I hadn’t done anything to sell the house? Why should I subsidize her poor judgment and bad decisions?

Strike three: I call her attorney to ask what the hell is going on. He has already sent out contracts. But, being the nice guy he is, I am named as the broker of record…would I accept a smaller commission, though? I faxed him an invoice for my full commission.

Strike four (who said this was baseball?): The listing is now expired and I am called by Oldest Son, he of the locked bedroom and weekend morning beauty sleep, asking me to take the pending listing down so they can re-list with another broker. Now, these have been nightmare clients and jettisoning them is probably smart, but how dumb do I look? How do I know this isn’t just a ruse to get out of paying my fee?

After much acrimony and back and forth, I am finally permitted to contact the buyer. It is true- he won’t be going forward. Why? “That woman was impossible to deal with.”