Monthly Archives: November 2012

Light at the End of the Carpal Tunnel?

Catch a grizzled old Real estate veteran on the street and he might regale you with stories about the good old days when he bought his first house for $19,000 and the whole process consisted of a firm handshake and a contract written on a cocktail napkin at the old Catalyst happy hour.

Catch a glimpse of a modern millennial Realtor armed with iPhone, Bluetooth, e Fax, Docusign, Zip Forms, Cloud Computing and Apps galore – all available at the touch of a finger and he probably doesn’t have time to talk – much less regale you.

Even with all the  “labor-saving” paperless options tech keeps inventing,  most of us are still fumbling with armfuls of escrow files – thicker than War and Peace and the Urantia Book combined. Tomes of real paper so heavy that a chronic new disability syndrome – Realtor’s Elbow – has become the leading cause of increased chiropractic visits in the State of California.

Catch a buyer coming out of an escrow sign-off and you’ll likely be met by a hypnogogic stare and a few unintelligible mumblings about loan documents, escrow provisions and supplemental tax installments. Perhaps you’ll notice a bit of drool trailing down his chin as he clutches his closing file in one hand like a 10 pound dumbbell while his other “writing hand” looks like it’s frozen into the kind of fetal position that can only be achieved by squeezing a cheap plastic pen too tightly for more than an hour.

I suspect we won’t be returning to the good old days of napkin methodology any time soon. My how things have and haven’t changed.

I’ve seen it hundreds of times. Buyers arrive for their sign-offs in good spirits. Convinced they have already slogged through the hard part of buying a home. Ready for the birth-like catharsis of home ownership sealed by their own official John Hancocks (a.k.a. wet signatures).

Ten minutes into the sign-off, as mind-numbing page-after-page is placed before them to read, understand and sign in rapid succession, their eyes begin to glaze over. Their signatures grow erratic. Their guilty consciences begin to nag them: “Should I actually read all these documents that have to do with one of the most important things I’ll ever do in my life? Am I signing my future away without knowing it? Who comes up with all this stuff – the Center for Cosmic Redundancy?”

Slowly, inexorably, most buyers succumb to the glacial onslaught of paperwork. First they take on the likeness of a burned-out bureaucrat in an Anton Chekov short story. Then they plunge into the puddle-like, helpless state of one of Kafka’s characters – cast in a maze-like, myopic nightmare.  In the end their tunnel vision simply gives up and becomes one with their carpal tunnel syndrome.

Ok, so maybe I’m exaggerating a bit. But you get the point. Real estate is one of those strange post-post-modern intersections (like medicine, insurance, the law) where well-meaning consumer protection, obsessive litigious tendencies and paranoid
cover-your-ass-props all meet in one inglorious orgy of time and paperwork.

The ultimate irony of our infinitely less than perfect system is exactly this: The more documents there are to read, the less people actually do read and understand for themselves. The more we try to protect ourselves from ourselves, the more likely it becomes that we’ll catch ourselves inside Joseph Heller’s Catch-22.

But don’t give up hope. Call me or e mail and I might be able to give you a few tips on
how to get through the sign off process a little more gracefully while you discern more of the right stuff from all the written stuff you are going to get inundated with soon enough.

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Synapse Crackle Pop

Synapse! Crackle! Pop!   Rice Krispies!!   Or Rice “Bubbles” as they are known in Australia.  The cereal, serial and surreal breakfast of champions.  There’s been no lack of neurons firing this week here at real estate of mind central – with the election and all.  Tough to decide what to pick out of my own brain.  I’ll just give you a few quick cliffs notes rather than the full fiscal cliff version.

Does this sound familiar? From CNN Money: “Buyers were snapping up homes faster than developers could build them. Investors grabbing two, three, four each, hoping to cash in on skyrocketing prices.”

“But then the music ended. Prices started to slide. Developers were stuck with empty buildings. Homeowners saw their wealth begin to slip away.“

Buying frenzy?  A dangerous game of musical chairs?  United States – 2007?

Dystopian ghost-tracts littering the landscapes of Florida,  Las Vegas and the Central Valley?

Nope. Been there. Done that.

Now, I’m not going to beat the drum too loudly here folks, being the cautious real estate soul that I am,  but it finally does seems like housing markets around the U.S. are rounding the corner.  Passed the bottom. Beginning to head slowly-but-not-so-surely back up that I recommend wishful Sellers start looking for 2006 Median Price Points anytime soon. (Think 5 years down the line – maybe – the pendulum has a long way to swing. )

But how about China – circa 2012?  What goes around comes around? Karma?  Deja Vu all over again as Yogi Berra would say?

Perhaps this could qualify as a weird remake of The China Syndrome.  Jack Lemmon, Jane Fonda and Michael Douglas hook-up with Tim Geithner, Hank Paulsen, the gang at Lehman Brothers and the 25 member ruling politburo of the Chinese Central Committee?

Goes something like this:  The world’s run-away economy overheats. The global financial meltdown reaches critical mass.  It all begins to burn a hole through the middle class  – inexorably heading down, deeper and deeper towards China – where all those cheap exports to the US are starting to dry up.

Faced with a rapidly cooling economy the Chinese government does what so many others have done before – they drink the Kool-aid.

Lending restrictions are loosened.  Billions are encouraged to borrow trillions. Real estate and housing are pushed to the forefront.  Creating jobs. Increasing demand for steel, coal and construction equipment.  Keeping the economy moving ahead at an overheated, unsustainable pace.

A massive house of cards built on ballooning debt, financial speculation, officially sanctioned greed and the prevailing belief that “real estate never goes down.”   Sow the wind and reap the whirlwind.    It always comes full circle.

The solution?  Tighten credit. Crack down on speculators. Enact more regulation to limit the opportunities for the middle class to jump on the gravy train.  Cut off the flow of free money, in the form of debt, that’s being handed out like Halloween Candy. Then charge the Catch 22 off – back to the people.

Now that things are getting better here – perhaps the U.S. can start exporting boatloads of short sale negotiators, foreclosure experts, customer service reps, collection agencies and loan modification processors to China.  We won’t be needing them much longer.  We can do our part to help China bailout out of its own underwater real estate market while we help equalize the trade balance at the same time.

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Are Realtors People Too?

We spend the majority of our headspace at Real Estate of Mind musing about  Realtors and the interesting relationships they develop with that vast sea of  clients  swimming around in the infinite milieu of  “the marketplace.”

Realtors go about their work.   People go about their lives.  Occasionally that work and those lives intersect.  Overlap for brief, intense periods of time while humans navigate the large transitions that inevitably accompany the process,  when the places they sleep, eat, make love and otherwise “live” in,  go through profound changes of address.

But what about Realtors and the relationships they develop with other Realtors?  What fascinating world of exploration does that notion conjure?

Is real estate just business? Done strictly by the book? What book?

Aren’t Realtors people too? Humans with their own lives? Navigating their own way?  Who talks to and about Realtors more than other Realtors?  Can someone who isn’t a Realtor really understand what it’s like to be a Realtor?  In the immortal words of the ten year old that resides inside me:  “Doesn’t it take one to know one?”

I always have to be a little careful around these sensitive subjects  – having once been charged with a serious breach of ethics, when another Realtor took offense because I suggested, kinda humorously but kinda seriously, that all Realtors ought to carry a moral compass wherever the go.

But…here I go…once more into the breach dear friends… mind wandering in the wilderness looking for true north.

Realtors are an incredibly interesting species.  We’re part of a fraternity. Or sorority. Or a co-ed fraternity sorority.  We’re intense competitors and we’re willing or unwilling colleagues at the same time. No two relationships between Realtors is ever the same.

We negotiate with each other. We exercise professional courtesy. We sniff each other out.  We facilitate solutions.  We pee in corners. We occasionally behave badly just as we rise to occasional gracious heights with the help of our better angels.

Some Realtors are grinders. Some are giving.  Some are pleasant. Some always sound like their dog just died.  Some like to blame everyone else. Some seem convinced the “glass is half empty” – that neither life or real estate were meant to be happy occupations.  Some always seem to be surfing a perpetual wave of inexhaustible optimism – good or bad market –  you couldn’t tell if it was 2005 or 2009 by listening to them.

There are some wonderful Realtors I’ve had 20 successful escrows with over the years.  Others?  Well, let’s just say – I cringe at the thought of a few that might show one of my listings and actually write an offer – necessitating a prolonged period of close interaction on behalf of our respective clients.

And yes, our code of ethics says you shouldn’t say anything bad about another Realtor but that doesn’t mean there aren’t other forms of expression available. I  confess I’ve heard Realtors hum the Wicked Witch of the West theme or the first few telltale bars of “Jaws” when another Realtor’s name came up in conversation.

When those competitive juices really get going – Realtors can dig deep into their private bag of tricks trying to out-do, out-manuever, out-posture and in some cases out-spend each other – searching for new and better ways to monetize the Machievellian urges welling up from within.

How do Realtors diss other Realtors – both subtly and not so subtly? Here are a few of my favorite ways:  They try to out-car them.  Out-cool tech headset them.  Out-paperwork them. Out-award them. Out-real estate jargon them. Out-client name-drop them. Out-Realtor designation them. Out-my time is more valuable than yours them.  Out-I don’t work on weekends them.  Out-my brokerage is bigger than your brokerage them. Out-don’t bother to return a phone call them.  Out-sales volume them. Out-I’ve been doing this longer than you’ve been doing this them.  Out-success guru them.  Out-data base them. Out-go on vacation in the middle of a transaction them.

There are a thousand ways to try to out-Realtor other Realtors. But the very worst thing you can say? The harshest criticism you can hurl in another Agent’s direction?  Simply say: “You don’t have any client control.”

Client control. An interesting concept. Fraught with implication. We’ll explore the subject further next week.

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Of Two Minds:   Getting Your Yah-Yah’s and Your No-No’s  Out 

Dear Tom:

We’ve been back to the same house a few times and we think we want to make an offer. Every time we visit though, we notice a strange feeling that’s difficult to describe. The house doesn’t show very well. The Sellers don’t seem interested in giving it any curb appeal or cleaning it up. They act like they don’t really care if it sells. Why put a house on the market if you don’t want to sell it? This has given us pause and we can’t quite get over the hump. There’s something invisible holding us back. Any thoughts?

ON HOLD

DEAR HOLD:
Hang on a second… I know I’ve experienced the same nagging voices in my head dozens of times. What exactly are those Sellers trying to tell us anyhow?

Ah, bingo! Thanks for waiting. I think I’ve got it now. Hopefully I can explain “it” in a way that makes sense.

You are intuitively picking up on hidden clues the Sellers have left littered around their house like brightly colored Easter eggs. And your own sense of disconnect is rising in direct proportion to their heightened state of ambi-valence. (Note that I’m using a hyphenated “ambi-valence” here to illustrate the concept a little better.  Think flip-flop, push-pull or yes-no-maybe.)

The definition of ambivalence is: ” simultaneous and contradictory attitudes or feelings towards an object or action.”  Ambi-valence expressed in the most basic fundamental real estate terms sounds something like this: “Yes! I really want to sell my house!! But to tell you the honest truth, there’s something in me that doesn’t want to let it go!!!”  And I’m going to make sure that Buyers get the message!!!! One way or another!!!!!”

Ambi-valence comes part and parcel with lots of big life changes and home sales.  Sometimes the underlying cause is obvious – like divorce situations where one spouse still lives in the house and doesn’t want to leave. The house is really only half for sale. The other half may see it as a demonstration lab for all the unresolved emotions still roiling around on the ex-homefront.

Often,  Sellers are uncomfortably unaware of their own deeper feelings. The ones that are silently shouting behind closed doors. All walled and balled and locked-down inside them. Perhaps they aren’t in touch with their own grief about leaving a place they’ve loved and nurtured. Or their own fear about life’s scary changes. Or their anger about the unfairness that’s forcing such an unexpected passage. Perhaps they are having trouble packing up and organizing all their old baggage.

Offering a home for sale and putting it on display to the world affords Sellers all kinds of creative opportunities to express subtle emotions and mis-directions they might not even know they are entertaining.  There are plenty of ways they can get their yah-yah’s and no-no’s out.  The ambi-valence list is legendary.

Mysteriously there’s never any time to wash the dishes or make the beds.  Somehow, the lawnmower broke and I can’t find anyone to fix it.  I really did mean to change that old kitty litter box but somehow I forgot.  And let me just say that I don’t care whether anyone likes my antique doll collection. Or the black paint in the bedroom. And why should I get up off the couch while Wheel of Fortune is on, just because someone wants to come through the house?  If they really like it, they can see past it all. If they really want it, they can make an offer.

HOLD, it is almost impossible to separate the sale of a home from the larger changes Sellers are going through. If Sellers aren’t dealing with their transition issues gracefully or if they are ignoring them altogether, you are probably going to find yourself on the receiving end of some ambi-valence.

What can you do about it?  You have to become a little ambi-dextrous and go through a few mental gymnastics to dodge the stumbling blocks they toss in your way.  Start by checking their emotions at their door next time you walk through the house.  And don’t forget to check-in with your own while you are at it.

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Heading Down The Home Stretch for 2012

Here we are. Almost Thanksgiving.  Heading down the home stretch of Real Estate 2012.  My how time flies when we are having…having…whatever this is that we’ve been having.

Still doesn’t have a name that quite captures its strange essence does it?  Kind of a recovery that’s still in recovery.   But at least we can use the word recovery now.  We’re making progress.  That’s something to be thankful for even if we haven’t gotten completely past the point of worrying about a relapse.

Has it really been five years, going on six, since the market peaked, the bubble burst and we all began the long, drawn out process of erasing everything we thought we knew about real estate?

Redrawing the boundary lines. Gerrymandering the process.  Reinventing the real.  On the fly.  In full-tilt, pendulum-swinging boogie.  Rube Goldberg and his Merry Band of Tinkerers continuing to madly tweak the cogs and levers and gears of the economy’s perpetual motion machine because it can’t stop long enough to be intelligently rebuilt from the ground up.

We’ve been busy looking for all those illusive long term quick fixes.  Or at least some way to punt the can far enough down the road so everyone has time to suck in a big cleansing breath and issue a huge sigh of relief, before having to head back out, trekking toward the far country of a decidedly uncertain future again.

So let’s stop in to see what condition our condition is in.  This week and next, we’ll take mindful inventory (remember that word – inventory) of a few developments that have taken place this year.  Chronicle some of the hits and misses that mingled closely with our hopes and fears.

First, let’s look at the big board that monitors Real Estate’s vital statistics:

Number of Home Sales Up? Check.  Median Prices Up?  Check.  Average Prices Up?  Check.  Average Days on Market Down?  Check.  So far so good.  All sounds pretty healthy doesn’t it?  (See yesterday’s Sentinel Article on local market trends.)

Interest rates?  Still hovering near historic lows.  What’s not to like about that?  Is the credit crunch improving? Loans do seem to be getting easier.  Mortgage Brokers are figuring it out.  Assuming of course, that the entire system doesn’t start making wholesale changes again on a daily basis – knock on wood.

Maybe we are just getting more used to the torture. Resigned to the fact that the loan process is just going to take longer and there are just going to be a lot more hoops to jump through. Maybe the new norm should be harder. That’s ok – as long as we know what to expect and can prepare ourselves.

The distress market?   Becoming less of a shock to the system.  People are less guilty about walking away from their bad debt.  Less worried that they’ll never buy another home.  Less convinced that their credit scores are what defines them as human beings.  Everyone has struggled or knows someone who has struggled mightily.

Short sales are still part of the vernacular and they are still certifiably crazy.  But there have been a few incremental signs of improvement in the last year.  Occasionally it almost seems like there’s a hint of intelligence operating behind the curtain on some short sales.  A collective brain that understands what it is doing – even if it isn’t doing it very well.

REOs?  Yep.  There have been plenty of these odd and ugly ducks in the marketplace this year. There’ll be more in 2013 and beyond. And they’ll keep coming until the huge buried backload of toxic loans has been flushed through the system.

As long as there is a huge shadow inventory hanging out there in the ether, real or imagined, the market can’t improve beyond a certain point.  The spectre of too much potential low-end supply will exert an invisible gravitational pull and hold rising prices in check.

More next week.

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