Is a clear sky blue?

Sitting down this morning getting my Fox News fix, I noticed a release by the NAR that has me re-thinking a position I have taken...

Here is the link to the NAR news release. To summarize, the position the NAR takes is that housing will start to pick up in 2008. Existing home sales will rebound, although new homes will lag for another year.

Well, I've been saying this for a few months (go back and look at my Gwinnett Market Reports if you don't believe me). And so, when the NAR says the same think, I need to re-assess my position.

Why, you ask?

Because the NAR started calling the bottom of the market and the rebound before the decline was in full swing. And that really ticks me off. I don't have a problem with putting a good spin on things. We all do it, and sometimes we just need to in order to remind people about the other side of the coin. Whether it is a Buyer's Market or a Seller's Market, it is a crappy market for half of the people in a transaction...

But, it's one thing to put your best foot forward, and quite another to say that everything is always perfect. I run numbers for my market... and I make predictions based on those numbers. When I am wrong, I acknowledge it, and when the news just sucks, I say it. I don't try to speak out of both sides of my mouth just to make sure that I'm covered.

Right now, if the NAR announced that skies were blue, I'd run outside to check.

Keep in mind that I am not only a member of my association in order to have access to the MLS (we don't have to be), but rather, I am currently active in the association (until tomorrow's meeting, I am the chairman of the RPAC committee). No, I'm not being deposed... my tenure is coming to a scheduled end.

So, what do we do about it?

Of the 33.548 real estate agents on A/R... as of a moment ago... I'd bet that the vast majority are members of the NAR. I know that the majority are ticked at the NAR over one thing or another. But, I would bet there are about 50 that are actually active in their local association. I bet half don't even know who is President of their local association, much less the state association.

So, get involved. Make your voice heard [I have NO idea this post was going this way].

And, when the NAR issues these reports, grab some salt, and run your own numbers.

But it's a tradition...

Thanksgiving is a time that we look back over the year and think of all of the wonderful things that we have to be thankful for. It is also a time for us to enjoy being with our families. And, being with family always gets the wayback machine firing on all cylinders...

So, while I was talking with my Mother about Thanksgiving meals, a few interesting things came up... not the first time.

I have spent my adult life being less than traditional. My ex-wife and I used to host our "Orphan Thanksgiving" feast every year. We had all of our friends... and their friends... that didn't have other family in town over for the Thanksgiving meal. We had some pretty big crowds. In order to satisfy the numbers, we often had other things with the turkey... like hamburgers, hot dogs, and lasagna. We would have a lot of the traditional foods, but there were always some "bonus foods."

After we divorced, I kept that little tradition alive for a while. I had friends over, but we skipped the turkey altogether. Pizza was the most prevalent dish served. Of course, the grill was fired up on occasion as well. Nothing says Thanksgiving like a grilled hamburger or hot dog.

Fast forward to this Thanksgiving...

The rest of the extended family was out of town. So, my lovely wife, beautiful child and I sat down for a Thanksgiving meal of... breakfast burritos. Not even turkey sausage in the burritos.

Of course, once again, my Mother was convinced I had committed a sacrilege. But, this is the same woman that used to make 20 courses for Thanksgiving... half of which NOBODY would eat. All in the name or tradition. Nobody wanted the mincemeat pie... but she made it for decades. (She goes out to eat with my step-father now).

"So, Lane, does this have ANYTHING to do with real estate?"

Since you asked... yes, yes it does.

There are a lot of things that real estate agents do because they are traditional. I do some of them occasionally, too. We hold open houses, place newspaper ads, fax things to people, and talk about being number one in customer service in our ads.

But, those aren't always productive. Open houses don't sell houses. Newspaper ads are shown to be a weak draw for a property (at best). I am working to be paperless, since all of the faxes make more paperwaste than anyone outside of this business can imagine. And, "1 is NOT the loneliest number" anymore... every agent in the country is number 1.

But, that is the way many agents have always done business.

According to the NAR, about 4% of us blog. Despite attending the convention last week where EVERYONE was talking about blogging, I don't think more than 10% ever will. And that will take a decade.

Customer focused websites? Client focused marketing? Rare at best. As an industry, we have gotten in to the habit of putting ourselves at the center of our universe.

It's a tradition.

If you are looking for a non-traditional agent, one that isn't afraid to turn things upside-down for better results, let me know.

GarageHomesUSA.

Wandering through the DoJ website

What is it going to take to make them happy? Did someone at the DoJ have an unsatisfactory experience with a real estate agent? Or is it simply that they know our approval ratings are down there with our Democrat led Congress (which would love to have even the dismal ratings of George W. Bush), so we are an easy target?

There is an interesting report called "Competition in the Real Estate Brokerage Industry" that is a pretty interesting read... ok, not that interesting as a read, but interesting to look through because of the way things are presented. I'm going to give my personal impressions after spending the morning looking through it online.

• They really don't like full service brokerage. At every opportunity the report bashes full service brokers.
  
• The data that they use often contradicts what they are trying to point out. Some examples of this would be that there isn't sufficient competition in the industry either at the brokerage level or at the sales agent level. But, the report begins by stating that there are no significant barriers to entry to the sales agent level, and few barriers to entry for the brokerage level. It also states that there is a lot of fluidity in the industry. Finally, it states that competition is fierce... but apparently not fierce enough, because it says that competition is needed to bring prices down for consumers.
  
• More and more consumers are choosing to utilize full service brokerage models... even though there are more brokerages offering other than full service options.
  
• There are very few mentions of limited service brokerages offering fewer services for consumers... but plenty of mentions of consumers saving money by utilizing flat-fee or limited service brokerages.
  
• Commission rates have been going down, but not fast enough for the DoJ. Because home prices were rising, average commissions were still increasing. But, because of the low barriers to entry, the increased competition led to the pie being split more ways. One has to wonder if the DoJ wouldlike to see more agents (more competition) or fewer agents (less competition, but perhaps ?more reason to cut commissions?).
• The DoJ asserts that the MLS is imperative to consumers, but decries the fact that it is owned privately.
  

I was really disappointed. There are so many contradictions, yet in EVERY case, the DoJ asserts that the real estate industry is flawed. The price that is agreed, even though there is fierce competition from many players, must not actually be fair... and is a result of a restraint of competition. The restraint of competition is because there are too mazny competitors...

It goes on...

I think there is someone at the DoJ that dealt with a crappy agent and has decided to go after the entire industry.

Buyers are liars... or not so much

I know, I know. It is one of those pervasive statements in real estate. Everyone in the business says it.

Buyers are liars.

But, are they really? I don't think so. My buyers tell me exactly what they want, and then they buy it. When they don't, I eventually figure out I'm not listening. Occasionally, I figure out that they really don't know what they want... or maybe they know, but just don't know how to communicate it.

Usually, when I fall back on the "Buyers are liars" line, I find out that I am putting my desires in place of the buyer's desires. That might be the toughest thing to stop. I have to take off the "Lane glasses" and get back to being a conduit for my client.

Here are some of my filters...

How could anyone want less than a two car garage.

Twisty driveways suck.

Kitchen appliances come in three colors, black, stainless steel, and "in need of replacement."

TVs, even flat screens, do not belong above the fireplace.

While I have a reason for every one of them, my buyer's might not feel the same way. I have to constantly STOP filtering my clients desires through mine. It is human nature to put our own spin on what we see and hear.

Oddly, they stop lying to me when I start listening to them again. I think I get better at this every day.

Feel free to drop in to my new website and take a look. I'd love to hear your reactions. It's still under construction, so pardon the dust.

X Prize

So, how many of you have heard of this? The X Prize.

Back when I wrote the A-Z series, it was my back up plan for the letter X. Currently, it doesn't have much relevance to real estate, but one day it might.

The original X Prize was $10,000,000 to be awarded to the first entrant to launch a craft in to space, and then turn around and do it again with the same craft within a short period of time. Another current X Prize is for Genomics.

The X Prize that grabbed my attention is the Automotive X Prize. The basics involve developing a car that is capable of at least 100mpg, can carry 4 people, and emit under a certain amount of pollution... and it has to be marketable to real people. No carbon fiber, $1M concept cars that look like a cross between a VW Bus and a bar of soap. Think about something more like an accord that has some evolved technology and can be sold for under $30k. I've even decided how I think it might be possible...

"But, this relates to real estate how?"

I'd love to see an X Prize that involved low cost building designs for developing countries. Of course, I'd like to see this developed in a manner that it could positively impact local economies, providing jobs and profits...

Just a thought... and this isn't what I would do with the money.

Lane's "Crazy Idea of the Day"

Barely after midnight, and I have already had my best crazy idea of the day...

In almost every form of motorsport, the drivers are festooned with the names of all of their benefactors. As Kurt Busch stands in Victory Lane, chugging a Coke, wearing a Miller hat, and holding a quart of Mobil1, all of us know that they pay his way. Of course those are the best products on the planet... they pay his check.

When Jimmy Johnson talks up Lowe's, or Jeff Gordon mentions his new energy drink, we know why. There is no question.

But, what I want to know is...

Who spent the big bucks for Hillary Clinton? What about Fred Thompson? John McCain? Barack Obama? Who paid for their last elections, and who is funding them now?

Maybe politicians should get nifty suits like NASCAR drivers. It would be interesting to see who's name shows up where.

Wouldn't that be fun?

What are we doing here? Looking at the housing landscape...

This morning, the NAR kindly sent me this little update through the Real Estate Insights eNewsletter. It explains, quite well, the steps that we will need to move through before the market stabilizes, both locally and nationally. And then, this afternoon, in my REALTOR(R) Magazine Daily Online, I got this story.

Both have something underlying that I think is very important. Congress needs to stay out of the mortgage meltdown issue. While there might be a need for revision of the jumbo loan limits for some high priced markets, anything beyond that will have unintended consequences that would be bad for the housing market. (BTW, unintended consequences seems to be my comment theme of the day) In the second story, there is a mention of Barney Frank calling for more regulation of the mortgage market. He feels it would increase confidence... and it may. But, it would also increase compliance costs, and slow funding. And, as we know from the myriad of regulations that abound for everything the government want to protect, those that mean to be unethical will still be unethical. Those that are hell-bent on buying something they can't afford, will... and they'll still default. But, there will be those on the margin that won't be able to buy their dream home because there is another point of interest, since the regulation means more costs for the lender.

And, as well highlighted in the first linked article, the correction is underway. Before Congress could even think of acting, the market started to fix itself. Is it going to hurt people? Absolutely. Will it hurt people that were responsible in selecting appropriately priced homes and financing products? Not so much. Mostly, the people that will be hurt are those that used products that they didn't understand to buy houses they really couldn't afford. Some did it in ignorance, but many just didn't care or didn't think through the logical conclusion of their actions.

Am I mean to say so? Maybe. But, that doesn't mean I'm wrong.

The good news is that the needed steps are happening (without Congress critters, thank you very much) and the housing market is correcting. Deals are staring smart buyers right in the face, and those deals are selling. As we look in the rear-view mirror of market reports, we can see that the worst is over in many places... and other places still may have some correcting to do.

I like to hang it out on my market reports. For Gwinnett County, I'm calling the bottom of this cycle to be in the next six months. Of course, I might not really see it for a month or two after it passes. And, if something wild happens, all bets are off.

Y is for Youth

Welcome to the home stretch... and I do mean streeeetch.

If you've been following along, you know that I have been running a series of posts going from A-Z. I am almost done, even though I don't know what Z is going to be yet...

It's Y time!

Youth... and real estate... how am I going to tie them together?

OK, I got it.

Again, anyone that has followed along knows that I am a car guy. Well, here's a shocker, I'm a NASCAR fan as well. While I'm not really a Michael Waltrip fan, he did something back during the week leading up to the Daytona 500 that gave me a lot of respect for him. (I can hear you asking yourself where youth and real estate are going to work their way into this little story)

As any race fan knows, teams look at rules differently that the rest of us. We see rules, and we look for ways to comply. They see rules, and they look for loopholes. The object isn't to cheat, but rather to exploit the weaknesses in the rules. I have a little bit of racer in me, too. However, I don't have the same type of risk that the racers have. If I really stretch out here, I might point out that any lawyer with a contract in front of him is thinking the same way a crew chief is with a rule book... but I digress.

Back during the 2007 Daytona 500, Michael Waltrip's crew chief pushed several rules too far. He lost points, he lost money, and he lost competitiveness. But, he lost something else. At a news conference, he was asked about his infraction, and how it would impact the future of his team for the season, as well as how it impacted him. Keep in mind that all of the teams view the holes they find in the rules to be where competitive advantage lives.

Michael Waltrip explained that when he got home, he had to explain to his young daughter what happened. She looked at him point blank (and he said she had tears in her eyes) and asked him, "Daddy, are you a cheater?" He started to tear up a little as he related the story. (maybe I'm a sucker, but I bought it) Keep in mind that MW isn't just a driver that shows up and drives the car, he owns the team. If the team is cheating, he's a cheater. He had to tell his little girl that he was a cheater, that he got caught, and that it was wrong.

I don't know about anyone else, but I think that might be a harsher punishment than a $50,000 fine.

So, I'm almost to the part where I tie this up in a neat little package.

In the eyes of a child, there is right and there is wrong. Kids don't deal in gray. If you break the rules, you're a cheater.

What about in real estate? Can we stand up to the scrutiny of a kid? When we deal with our clients, our customers, our vendors, do we deal as honestly as we can? Do we disclose the problems we find? Do we tell our clients that they need to stop looking for a way to game the system, and take the lumps? Do we deal with all parties honestly?

Forget about agency rules. Forget about the NAR Code of Ethics. Forget about HUD law. Think about your kids. Are your's the actions that you expect from your kids? More importantly, are they the actions of which your kids would be proud?

I know that my dad did things in his life of which he would not approve had I done them. However, I also know that on balance he led a life that he would approve of had it been mine. I hope that I am able to offer as good of an example for my son.

X is for Xenophobia

I think I was at E when I figured out what the subject of this post would be. As I was writing about ethics, I knew that I would just have to do this post. However, I'm going to stretch the definition to fit my needs.

Simply put, xenophobia is the fear of foreigners, or more commonly, the fear of those that are different. Despite the etymology of the word pointing more towards birthplace or culture, I will be using the looser definition.

Like Garth in Wayne's World, as he was speaking to Rob Lowe's character after the basement show goes big time, I think that we all fear change to some degree. As a great example of this, take a look (or better yet a listen) around you. People reach a point where they simply stop dealing with change as easily as they had previously. Not all, but many seem to hit that point in their senior year in high school. People that graduated in 1973 will think that good music largely stopped then. The same for 1983, 1993 or 2003. Or even 1923. At some point later, hair seems to get stuck in the timewarp next to the music collection (I don't mean losing it, I mean not wanting to change it)... clothes, too. I still hate wide ties, and my Dad could never understand narrow ones.

OK, I hate all ties, so nevermind.

Left turn, and back off my tangent...

Many, if not most people fear change. Looking at it more deeply, we fear that with which we aren't familiar. Personally, I think that is the basis of xenophobia. But, like the fear of sashimi, there is something to be learned by overcoming that fear. I think that what we can learn is that there isn't anything to fear. Those we fear are pretty much like us. They might look different, eat differently, or even love differently... but so do we when looked at through their eyes.

"But Lane, how does this apply to real estate?"

I promise that I had this coming a LONG time before this, but just today, Eric Kodner and Charles McDonald had GREAT posts (with excellent comments as well) about Fair Housing and the practice of real estate. The "X word" even showed up in the comments.

The point for real estate agents is that we CAN'T be xenophobic. Furthermore, we can't let our sellers be xenophobic. And, if our buyers are xenophobic, we can't let that influence the way WE do business. Xenophobia, bigotry, racism and prejudice aren't illegal (long comments about that...) but that doesn't mean they are ethical. And, acting upon those beliefs or fears CAN be illegal, as well as unethical or immoral.

But, getting past xenophobia CAN be fattening. Think of the amazing foods. Beef Momo from Tibet is amazing. Nigiri Maguro (tuna on rice sushi) with a hint of wasabi is great with saki. And, don't forget a rib sandwich on white bread from Fat Matt's Rib shack on Piedmont Avenue in Atlanta (go at night, catch live blues). Skip lutefisk... lye is NOT a seasoning.

Keep it real.

W is for Win... and Win

One of my favorite things about residential real estate is that everyone can win. Think about it. We have a seller. The house is generally no longer serving their needs. Maybe they are leaving the area because of a new ob, a transfer or retirement. They might be having a new child, kids moving off to college, or moving up to a new house because of a promotion.

I know, sometimes people are moving because they can't afford the house, or they got laid off. Companies move, and people don't want to, but have to. But, I've found that most of the sellers I've dealt with are happy to be moving. Most have enjoyed being in their home, but are ready to begin in a new place, and genuinely excited.

Next up, we have a buyer. Maybe they are transferring, or having a new child, or shipping one off. They might be retiring, or celebrating a big promotion. But, it's all of the same stuff that motivates people to sell, and like sellers, most are excited and ready to begin a new stage in their lives.

Then comes the offer, inspection and negotiation. We have closings and loan applications and second thoughts. This is where the trouble lives, deep in the shadowy liar of other stuff that needs to be done.

Usually, when the buyers send over an offer that the seller accepts, everybody is happy. Then, something occasionally infects someone. Inspection negotiations, or some last minute surprise pushes out the trouble monster. He tries to turn the win/win into a win/lose. That is the point a good agent needs to step in and try to tame the trouble monster.

This isn't tennis or football. Real estate is not a hockey game. In order for there to be a winner, there does not have to be a loser. Everyone in the transaction CAN get what they want. And don't forget, Karma is a witch. If one feels the need to make the other party in a real estate transaction a loser, someday, it will happen to you... and Karma also loves a pile on. Even in the same transaction, beating up the buyer or seller over the inspection might mean that the seller or the buyer beats back before closing... or even not closing. Then we have the worst outcome. Lose/lose.

I don't need bad Karma.

R is for REALTOR(R)

I know I'm being picky, but this needs to be said.

All REALTORS(R) are real estate agents, but all real estate agents aren't REALTORS(R).

One becomes a real estate agent by passing a test. One becomes a REALTOR(R) by joining the National Association of REALTORS(R). In order to join the NAR, a REALTOR(R) must attend special ethics training, and agree to abide by the NAR Code of Ethics. As a consumer, if interested in what this means, feel free to look at the NAR website for more info.

Not only are all real estate agents not affiliated with the NAR, according to the NAR, only about half are. And yet, the very vendors we deal with, as well as consumer experts (like Clark Howard) use the terms REALTOR(R) and real estate agent interchangeably. I'm just picky, personally. However, I have been through the NAR ethics training, and I feel that it is my duty to deal with ALL others in a transaction in an ethical manner. I pay my dues (one reason that many choose not to join).

To be sure, I want to state for the record that there are MANY fine real estate agents that are NOT members of the NAR. Their personal ethics are as good as any member of the NAR. There are also REALTORS(R) that are far less ethical than the NAR Code of Ethics require. (At this point I would like to say that any consumer should get to know their real estate agent, whether they are a member of the NAR or not, and make sure that their agent is really working on their behalf). A big advantage of working with a REALTOR(R) is that there is an extra layer of accountability. Not only am I accountable to the the state real estate commission, but I am also accountable to the local and state associations.

I am a member of the DeKalb Association of REALTORS(R), as well as the Georgia Association of REALTORS(R), and the NAR (it's a package deal, really).

E is for Ethics

As if it is an oddity, I'm going to step out on a limb, and make a couple of strong statements... then we'll see if I can back then up. The first statement is:

At the core, ethics are a fixed behavior.

I do believe that ethics are learned, but I think that they are learned young. We could have a whole Nature vs. Nurture argument here, but the main point isn't much different. By the time someone is old enough to get their real estate license, their ethics are fairly fixed. Of course, I do think that people can change, but... they aren't going to go to a 4 hours NAR ethics class and "see the light" and leave as an ethical REALTOR(R), unless they were an ethical person when they walked in the door. If they were likely to lie or cheat before the class, they are likely to lie or cheat after the class. If they were a Boy Scout or Girl Scout and adhered to their Oath before the class, they will still do that after the class.

Stupidity, Laziness and Ethics aren't mutually exclusive.

A very ethical REALTOR(R) can be a terrible agent to hire. Not because of the NAR Code of Ethics, but just because they aren't very bright. They might also be lazy. Personally, when I am looking for a person to represent me, I want someone that is honest, smart, and hard working. And, I mean all three. Think about it for a moment... ok, do you want someone that is unethical, but smart and hardworking? They will find creative ways to take your money. Do you want someone that is ethical, stupid, and hardworking? All burnout, and no launch (drag racing metaphor, they can spin the tires, but never get anywhere). What about someone that is honest, smart and lazy? This one might be able to do the trick, but only if they have a great system, and people in place to fix their weaknesses... but probably not. Intelligence, ethics and ability to get the work done are the three legs of the stool.

Ethics, Honesty and Political Correctness sometimes clash.

OK, here is where I will try not to get myself in trouble. Raise your hand if you know what steering is. The problem is that it is unethical, according to the NAR as well as the state real estate commission to steer, but one can be guilty of steering if one shows properties to a client that they ask for. Let's say you are working with a client that has a couple of small children. This client asks to see properties that are in neighborhoods where the majority of residents are also families with children. As a REALTOR(R), you know of a couple of subdivisions that are just loaded with kids... and there are four homes for sale that fit their needs. You take your buyers there, and they buy a house. By a strict interpretation of ethics guidelines, you have committed the sin of steering. The properties you were showing were picked based on familial status. In order to avoid steering, you'd have to show homes ONLY based on features of the home, so you'd have to offer a selection of properties that might fall outside of the "family friendly" guideline set about by your client. The reason I picked the familial status is that it is the one we don't ever think about. We have race and nationality and religion at the forefront of our minds, but that familial status can creep in and catch us unaware. Especially when we are looking at it from the family friendly side of the equation. Whats worse is that we really aren't supposed to answer any questions about those subjects unless we are referencing statistical data... and even then we are on shaky ground. That means that if I answer a direct question from my buyer, I might be considered unethical... not to mention politically incorrect (and I don't mean in the Bill Mahr, totally PC politically incorrect way).

So, you might find that your ethical, honest and hardworking real estate agent is dodging questions...

Are we our own worst enemy?

I think in many cases the answer is yes... we are.

I recently signed up with a site called Hungry Agents. It was recommended to me by another agent. But, as I looked over the way they do business, something occurred to me. Their business model commoditizes real estate agents. They also don't seem to be aware of the difference between real estate agents and REALTORS (R), but that is another post (one day).

For those that aren't familiar, the basic premise of the business is that sellers sign up for the service. They put out the selling of their home to bid by real estate agents. There is a form online that real estate agents fill out stating what percentage we are willing to take the listing for, as well as the percentage that we suggest be passed along to buyer's agents. There is a minimum level of service required for the percentage we quote.

All of that is fine and good. The problem is this...

All that the seller sees is the percentages that the agent quotes. They don't see the agent, their prior performance, what else they might do (the minimum standards are pretty slim by my standards) or anything else. The listing is reduced to only being about the percentage.

My firm offers an "unbundled" service option for $3100 plus buyer's agent commission (we always recommend 3%, but the sellers have the option of making it higher or lower). With the exception of a CMA, the unbundled program offers the minimum basic services required by Hungry Agents. But, for a traditional listing, we offer a lot more services. I would bet that just about ANY full service agent offers way more service than is required by Hungry Agents. But, the problem is that sellers using a service like this see EVERY AGENT as offering the same level and type of service, and EVERY AGENT as being an interchangeable cog that functions the same. We are a commodity. Our service is nothing more than the service of our least capable competitor. Like gasoline.

As I said in Do you have a Unique Selling Proposition, if we don't differentiate, we are a commodity no different than gasoline or concrete. And, for commodities, the only way to set one provider apart from another is price. That is it. The worst thing we can do is turn our service into a commodity.

Final note... I don't really mean to pick on Hungry Agents. I am sure that they are not alone. In fact, there are a lot of companies that are also commoditizing our service. They don't separate themselves from the crowd, and so all they do is cut price. The only reason I highlights HA is that they were the unfortunate souls that sparked the thought.

Answers to questions I can't answer

I've been asked a question about a particular area that I just couldn't answer. Ok, I could answer, but at the peril of losing my license. You know the questions.

Here is another tool in the arsenal I give to clients to find out before moving what the pitfalls and pluses are regarding specific areas.

City-Data.com

I've found that it is better than a lot of other forums. Of course there are people on there that are alarmists or apologists, just like any other member driven media, but if your clients are able to look past the extremists, they should be able to see some good information.

As a real estate agent, there are things that I can't do. One of the stickiest is called steering. Basically, this means that a client is only shown property in a certain area, or not shown property in a certain area because I think it would be more comfortable for the client. The reason that it can be sticky is, as a real estate agent, we are often asked by our buyers to only "show houses in _(insert racial/religious/cultural/ethnic/other group identity here)_ type of area" or "don't show me houses in ..." blah, blah, blah. You get the idea. If I comply with that request, based on the language of the request, I can lose my license. Can you find an agent that will do as you've asked, based on that or a similar conversation? Absolutely. But, it won't be me.

If a client asks me to show them homes in a particular subdivision or neighborhood, I CAN do that. But, the toughest question is "Can you find me a home in a family friendly subdivision?" It's tough because it is a technical violation of the ethics rules of the Georgia Real Estate Commission for me to used familial status as a determining factor in selecting homes to show. However, the way I would handle it is to ask questions... legal questions. The first one is"

What do you consider family friendly?

Based on that, we can find the right house. We can talk about schools, recreational opportunities, traffic flow, and other factors.

Luckily, there is no danger in telling me you want car friendly neighborhood. Neither car people, nor non-car people are protected groups... yet.

Eminent Domain Abuse

This should be one of the keystone and defining issues for the NAR. I know that the NAR and some of the state associations are working (too) quietly to curb governmental abuses of the Power of Eminent Domain.

If you are unfamiliar with Eminent Domain, it is the power that governments of various levels have to condemn private property for public usage. Don't be thrown off by the word condemn, it has needn't have anything to do with condition of the property. Some examples of non-condition related, proper eminent domain would be property needed to build or expand roadways, public schools, or other needed institutions, like fire stations, police stations, etc. Occasionally, eminent domain is used to correct a blighted area. However, that has not been that common, and usually involved abandoned property, rather than taking property from an active owner.

But, in the last decade or so, there has been an acceleration of governmental use of the power of Eminent Domain. Often, this hasn't been about roads, water facilities, police and fire stations, or other legitimate public uses. It has been stretched by courts and governmental authorities for such purposes as shopping centers, more expensive homes, high rises and other private uses. Just do a Google Search for Eminent Domain Abuse. Oh wait, I did... The Castle Coalition has an interactive map that allows one to view highlights (lowlights?) of abuses by location. Here are a few from various sources.

From CBS News:

Jim Saleet worked in the pharmaceutical industry, paid off his house and then retired. Now, he and his wife plan to spend the rest of their days there, and pass their house on to their children.

But Lakewood's mayor, Madeleine Cain, has other plans. She wants to tear down the Saleets' home, plus 55 homes around it, along with four apartment buildings and more than a dozen businesses.

Why? So that private developers can build high-priced condos, and a high-end shopping mall, and thus raise Lakewood's property tax base.

The mayor told 60 Minutes that she sought out a developer for the project because Lakewood's aging tax base has been shrinking and the city simply needs more money.

As much as I hate to pile on Wal-Mart (nobody is forced to shop there, people do it because they want to), they have been at the center of more than their share of Eminent Domain cases.

From Reclaim Democracy:

But if the city of Denver has its way, these small businesses will be evicted to make way for a Wal-Mart super-center. The city's Urban Renewal Authority has threatened condemnation if the property owners refuse to sell and has offered Wal-Mart $10 million in public subsidies.

Wal-Mart leads the pack in attracting subsidies, this year collecting $10 million in Denver; $500,000 in Dallas; $36.7 million in Scottsdale, Ariz., (as part of a shopping center that includes Lowe's); $9 million in Bartlesville, Okla.; and $17 million in Lewiston, Maine.

Just wander around that search and you'll some surprising things. The most important reason the NAR needs to be involved is that we represent people. And these people are buying their dreams. What good is buying the dream if the government can come along and decide that they can get more tax dollars if they just take away someone else's dream?

I'll step down from my soap box for a few minutes now.

Are there just too many real estate agents?

OK, stick with me here for a few minutes. I think this is becoming a more valid question. Looking at the most recent numbers I could find in a quick internet search, I found that there were over 1.3 million REALTORs (as of November 2006), and that doesn't count the ones that aren't NAR members.

And, those agents averaged 12 sides per year. Link to source here. Their average income was about $49,000. I chose this source for this, since it didn't normalize for a mythical 40 hour week. In reading a little background, I ran across a NAR paper that showed membership to be around 1 million members in 2004. If that is the case, there was almost a 30% increase in our ranks in under 2 years.

In other reading, I'v heard that 80% of agents fail and drop out in their first year, and that 80% of the remaining agents drop out in the next 4 years. That means that 96% of new agents are out of the business in 5 years. This tells me a few things. The first thing it tells me is that agents are not prepared to be in the market when they become licensed. They are obviously not trained on how to run a business. And, I would guess that a lot of them aren't that well trained to do their jobs, either... there simply isn't enough time.

I think that this is one of the main reasons we have such a low opinion with the general public. Look from their perspective. They had a very good chance of dealing with an agent that didn't have enough training to handle their needs, or be able to efficiently run their own business. Face it, how many times have all of us dealt with an agent that just wasn't making it? Further, how many times have each of us had to step in and make sure that the other agents job got done so that we could get paid? But, the point remains that there are too many agents that don't have experience, support, or training. Some are just plain dumb... not nice to say, but we've all dealt with at least one.

I think that there are a couple of things that need to be done to address this. The one that I don't like is that the various states could make licensing more difficult. I don't like that because I am a libertarian and dislike the government taking too much of a role in my business. What I DO like is the NAR making membership more stringent. I've said it before. Perhaps there should be an apprentice period with required training in order to be a member. I like that better, because the NAR is a private organization, and it would allow REALTORs to really be set apart from non-member agents.

Doing something along this line would make being a REALTOR more valuable, as well as deliver a better quality experience to our clients by making those that do become REALTORs better trained before dealing with their own clients.

Being a REALTOR shouldn't be something that can be done on a whim with no real experience.

Does this mean I'm actually Green?!?

I have been reading a bit about green construction, and green living, and green (yada, yada, yada fading away...)

Let's see. I changed my lifestyle in part so that I wouldn't have to drive an hour to work every day. In doing so, I cut the number of miles I drive by quite a bit. I also cut dramatically the amount of time I spend sitting around with the engine running.

I've always felt that 78* in the summer for the A/C, and 68* for the heat in the winter was appropriate. But, is because I'm cheap, and it just seems that when I am out in the 100*/100% humidity Atlanta summers, coming in to 78* feels just as good... and it doesn't slap quite as hard when I have to go back out.

I turn off lights when they aren't being used.

I keep my tires properly inflated.

I insulate. I caulk. I don't water... ok, I rarely water the lawn. My truck is usually not THAT clean. I don't over-mow my grass.

Of course, on the flip side... I Jeep.

But, then one could argue that it is the ultimate recycling project.

But, back to the good side, I've always recycled. In fact, I practice what s called pre-cycling. When buying things, we look for items that will be easily recyclable, or can have a second life in some other way. As my son would say (quoting Builder Bob), "Reduce, Reuse, Recycle."

Maybe it's time to bury Dual Agency

First, let me say that I work for a brokerage that does NOT allow dual agency, but does allow designated agency. Dual agency is when an agent have contracts for representation with both the buyer and seller. In other words, the agent is bound by fiduciary responsibility to represent the needs of both the buyer and seller above all other.

Second, let me say that I work in a state which does allow dual agency, if it is disclosed on the contract to all parties.

But, as I look at the landscape, I see something I don't like. I don't like the idea of dual agency. And, further, I think it is time that the NAR step up and stop the practice among its members. I don't want to see the government take the lead, and I don't want to see any law passed. I want OUR trade organization to voluntarily stop this practice, and then tell the world that they have done it, and why.

As a person with of the libertarian persuasion, I don't like to see the government constantly stepping in to the relationship between service providers and the clients/customers. In fact, I think that licensing requirements for real estate agents should be relaxed or eliminated... but that is for another blog post (please save the comments on licensing for the post I'm sure will follow soon).

But, as a REALTOR, which promotes the ethics of its members, I can't see a way to reconcile dual agency with fiduciary responsibility. How can we represent two opposing parties and keep both of their best interests at the forefront? Obviously, we can work towards a win/win situation, and personally I try to do that anyway. But, when push comes to shove, and when a problem arises, what is good for one party will often be bad for the other. If there is a financing problem, and the buyer needs more time, but the seller may be better served to move on, or there is an inspection problem, and the buyer should move on, but the seller needs THIS buyer, the agent WILL be in a position that requires them to pick which party they are going to truly represent.

Obviously, we go through many transactions that don't have these issues. In fact, the majority don't have issues. But, the point is that I seldom get a memo at the beginning of a deal saying that I am entering a troublesome situation. Usually we only know we have a problem when we are in the midst of stepping in it. At that point, if we are "representing" both parties, we already have a problem. What does one do then? Pick a side and call another agent in to help? But, the original agent already knows more than they should about the other party. Not a good solution.

The bottom line is that if we, as REALTORS, are to truly serve our clients needs above our own, we need to begin by not allowing dual agency among our ranks. Then we need to spread the word that REALTORS are leading the charge for ethics in real estate transactions.

Walk the talk.

I look forward to your ratings and comments.

We specialize in American, Asian and European Cars and Trucks

I've seen several shops with that very "slogan." But, what does it mean?

Nothing.

It doesn't mean a thing. Aside from cars and trucks made in Asia, Europe and America, what are there. I suppose there could be some cars made in Africa (ok, I just checked, and aside from cars that are also manufactured in other countries {Toyotas for example} there are VERY few made there... but Superformance is a VERY cool company) but not in a high enough quantity to be of issue here in Atlanta. There isn't anything happening in Antarctica... or Greenland... and not many Australian cars come here.

Back to the point.

They are saying that they specialize in EVERYTHING. If one specializes in everything, they really mean that they specialize in nothing. I mean, really. How can you specialize in everything?

Now, let's tie this back to real estate.

Have you ever seen an ad that said "I specialize in Buyers and Sellers"? I guess that means that they will deal with anyone but lookers... But, isn't that what everyone else does? Are you truly a specialist if you think you do EVERYTHING? The short answer is NO. the long answer is No, you are a generalist.

Why not just say that you generalize in everything?

Maybe we should try a little truth in advertising. Sam's Club here in GA had to change their name. They had called it Sam's Wholesale Club, but they sold to the public (that would be the definition of retail, BTW). Even though they argued that they only sold to members, it was determined that since they were selling primarily and by a wide margin to non-resellers, they were a retail outlet, and not a wholesaler.

I think that people who "specialize in everything" should be held to the same standard.

The "Dirty Little Secret" that FSBO companies won't tell you!

I keep seeing and hearing about "dirty little secrets" that real estate agents won't tell their clients. Most of them turn out to be pretty stupid points. However, today while going through my morning routine (dead-heading, so my brain needed something to do) I thought of the dirty little secret that FSBO companies don't tell their customers. We all know what it is, but many of us just might have never thought of it this way.

They don't care if you sell your house using their service.

That's it. It doesn't affect their business plan if you sell or don't sell your house through them. They only care if you list your house through them. Their business model is only dependent on you paying $499 (or whatever amount) upfront, and then going on your merry little way. They need as many people as possible to pay the $499 and go on their merry little way as possible.

Sure, they need somebody to actually find a buyer through their service occasionally, but as long as they have enough sales for a few testimonials, they'll be OK. And, they don't care if you sell in 6 days, 6 weeks or 6 months. In fact, some of the companies would prefer that you not sell right away, as they'd love to get another $499 out of you to list again.

Let's compare that to a traditional full-service, commission based real estate agent. No sale = no money. That's right, I don't get paid if you don't sell your house. Let me say it again, I don't get paid if you don't sell your house. I talk with you about pricing, we prepare a marketing plan, and we market your house. After we find a buyer, we help you negotiate the sale, and then we make sure that the buyer follows through. We also make sure that you (the seller) don't run afoul of any rules, or mistakenly breach the contract as we move from contract to closing. We are there to protect you, and help you. We are there to make sure that everything runs smoothly.

Where is the FSBO marketing company? They cashed your check, and they are hoping that you don't call, because it takes time away from getting $499 from someone else.

Please don't forget to rate this post. Thanks.