I heard things like, “I wasn’t that surprised by what I heard.  It’s disappointing, but confirmation that we’re doing things right.” Or, “I’m just thankful that I don’t run my business like that.”  Or, “I kind of expected that, but it really doesn’t apply to me.”

Knowledge is knowing a tomato is a fruit.  Wisdom is knowing not to put it in a fruit salad.

Some wonderful gentleman said this in the Gen Y mastermind I attended at the end of the day. It’s simply not enough to say, “I already knew that.”  Of course we know that a tomato is a fruit. Of course we know that the consumer perception of our industry is poor. Of course, we know that we would hear many of the things we heard, but it makes me wonder if  hearing it is enough. I wondered how many really listened. There is wisdom to be gained from really listening. In truth, isn’t that why we attended?

My grandfather was a Congregational minister and I remember his sermons often challenged his congregation. He was tremendously well respected, but sometimes he found that the congregation would become uncomfortable. Sometimes, he even found some resistance to them, but he asked questions that asked for more than passive participation.

I think Hear It Direct is similar in that way. It’s unlikely that an agent that doesn’t value their consumer’s experience would attend an event like Hear It Direct. But, to attend and say thankfully that what we’ve heard, doesn’t apply to our practice is a wasted opportunity.  I can attend and hear the consumer’s voice. But, this isn’t a passive process. I must really listen. It demands of me some self reflection if I am really going to assert that my practice is focussed on the consumer experience.

‘There’s Nothing On the Market’ Ah Ha

My experience as a coach has me sensitive to some of the things I heard. I talk to so many agents about their practice. I work with good, caring agents that are looking to grow and improve their practice. But, I recently have found something unsettling and it was confirmed by the voices of the Buyer Panelist. So many agents around the country are having an ongoing challenges finding homes for their buyers. The inventory is just not there. The buyers on the panel all echoed the challenges:  low inventory, multiple offers, frustration that their market expectations weren’t inline with market realities, and financing that made their offers less than ideal in competitive environments. So… no surprise. We know this.  We are all talking about it.  But, what is the takeaway?

My God, if I have a buyer that has lost in a multiple offer situation in a townhome complex they love, what do I do? Sadly, too often we look at the MLS, throw up our hands and say, “Well, there’s just nothing on the market.” But, when you really listen to these buyers, listen to their frustration and confusion, I have to go beyond, “that doesn’t apply to my practice” and begin to look at the ways I can really provide an experience that does more than satisfy. The agent that really takes their responsibility to find a home for their ready,  willing, and able buyer, would immediately door knock every door in that townhome complex to give them an opportunity to buy in a less competitive environment. It’s beyond Lead Gen. It’s service. And, if I care about that consumer as I say I do, it’s my job.  (My coaching clients reading this will recognize a theme here).

Maybe the agent reading this is thinking, “oh yeah, I always do that.” Perfect. But, I’m fairly certain there are other moments in the HID day that can offer similar moment of new awareness, new opportunities.

‘They Have the Information’ Ah Ha

We know they have access to information and listings. Again, this is not a surprise. The Gen Y panel really drove this point home. The auto drip of listings aren’t enough, and for some on that panel, they found it annoying. I can’t help but listen to that and wonder about the ways the we really provide value. I’ve certainly been someone that automatically sends listings. I think many of my clients like it. But, that’s something I think. But, do they? And, if I remove the access to the information and the access to doors as my value, what is it?

I know from the discussions in the afternoon, that many of us have a tough time articulating that value, and certainly showcasing it to the consumer. I don’t think there was a buyer the entire day that had had the benefit of a Buyer Consultation, and I don’t think that is a symptom of a small sampling. I think that is a real reflection of the industry. Even if you are one of the stellar agents doing Buyer Consultations, one can’t help but listen to these panelists and wonder if we are effectively addressing all of these types of things. Are their words, their voices, their thought processes coming up in my dialogue, or let’s be honest, is it about me, my practice, my service, my knowledge?

I Wanna Talk About Me

There is a country song by Toby Keith that has been running in my head since yesterday. I can’t help but picture these consumers singing the chorus to the audience. The panelists were so forthcoming, and appeared to lack any reticence to share their experience. I hope I hear them. I hope I really listen.

I wanna talk about me
Wanna talk about I
Wanna talk about number one
Oh my me my
What I think, what I like, what I know, what I want, what I see
I like talking about you you you you, usually, but occasionally
I wanna talk about meeeeee
I wanna talk about me

On October 1st, Hear it Direct makes it’s Orange County debut.  How could I miss it in my old neck of the woods?

If you’ve never heard about Hear it Direct, it’s time to get acquainted with this unique conference.  Most of us have attended conference sessions about the latest social media tools, the never-ending syndication debate, or the speculations regarding the future of the brokerage model.

But, when was the last time you heard from the consumer?  Their perspective?  And not the one that loved you, but maybe the one that didn’t choose you, the one that chose to leave your beloved website, chose not to call you, not to hire you.  Why?  What motivates them to hire, to connect, to feel trust?

If you are in Southern California, you have the very fortunate and unique opportunity to hear from the people that you work with everyday.  This is your audience.  We all struggle with where to spend those hard earned marketing dollars.  This is not marketing.  This is your potential client.  Hear their voices, their expectations and you can make decisions in your business that speak to those needs.  Panels will focus on luxury consumers, Gen Y, Buyers and Sellers.

You will be around some of the very best and brightest in the industry.  The discussions that will happen around the content will likely be as valuable, if not more so, than the content itself.  Few things would inspire me to make the trek back to OC only six weeks from my departure, but this is it and I invite you to join me.

I’m including a link (It’s an affiliate link for full disclosure, but don’t be too excited for me.  It may cover one day of a babysitter, if I’m lucky.)  But, the real upside is for you,  a $50 discount code to the event.   Enjoy, and you’re welcome.  ;)

Click Here to Attend

Discount Code for your $50 off:  ’lins’

And if my words have failed to convince you to attend, my friend and the emcee of the day, Jeff Turner, does a much better job of articulating the importance of the event.

And if you’re curious about the look and feel of the Hear it Direct, this peek at the Charleston South Carolina event may give you some insight.  Look forward to seeing many of you there.

After much consideration over the last year, and in earnest the last couple months, I’ve decided to leave Orange County.  It’s been no small decision and one that I’ve considered carefully.

The last few years, I’ve seen some changes in my personal life and now, as a single mother of 3 kids, I’m looking for the best place to provide for them while still allowing me the time that I need to do my most important job… be their mom.  I’ve considered several places, but there has been so much about Texas that was appealing to me.  I evaluated cost of living, communities, housing, schools, and taxes over the last year and ultimately decided to make The Woodlands home.  I think the endless trees also might have appealed to the Oregonian in me.

The word that seems to come up every time I talk to anyone about Texas is ‘opportunity‘.  I hear it over and over again.  It’s been a word that has been on the endangered species list in California for some time.

In the days ahead I will launch a new site in which to share the journey of my move.  A REALTOR® on the move will be fun stuff.  Lessons learned so far:  1) My father’s sage advice “budget twice as much as you think necessary to move” might have some validity, 2)  One will need more boxes than one might think, and 3) Block out an entire day to turn on and off utilities because those aren’t 15 minute phone calls.  When the electric company says to call back later because they have high call volume, just know that’s a standard message.  I’ve yet to hear the message altered no matter what time of day I call.

I leave mid-August.  Lorie, my business partner will maintain our business and continue to serve the wonderful clients and friends that I’ve had the good fortune to work with over the last nearly twelve years.  It’s been my pleasure.

Happy Trails.

Compounding an already impossible problem, some homeowners also have an Option ARM that has reset, or is about to.

The Federal HARP (Home Affordable Refinance Program) was announced in early 2009, but few were able to take advantage of the program and one of the primary challenges were the limitations around loan-to-value requirements.

Simply stated, if your mortgage was more than 125% of your home’s current value, you were simply out of luck.  And, in many places in Orange County’s housing market, we’ve seen as much as 50% of property values simply disappear.

Who Is Eligible for HARP 2.0 Refinance

Reach out to your lender for specific questions, but some of the things you’ll want consider to determine whether or not you might be eligible for a HARP Refinance are the following:

• You cannot have made more than one late payment in the last 12 months, and none in the last 6 months
• The loan amount cannot exceed current conforming loan limits.  California’s upper conforming loan limit is $625,000.  I actually have some comments about these high loan limits….but that’s another post I think.  ;)
• Your existing loan closed prior to May 31, 2009.
• You’ve not done a HARP refinance.  If you took advantage of HARP 1.0, you are not eligible for HARP again.
• Second mortgages are allowed, but the second must approve.
• Second homes and investment properties ARE eligible.
• You may not use HARP if you have an FHA loan.  For those homeowners, try the FHA Streamline Refinance Program.
• There is 105% loan-to-value limit if HARP is used to refinance an adjustable rate mortgage or an Option ARM.
• Loan is guaranteed by Fannie Mae or Freddie Mac.  This is has nothing to do with who you make your mortgage payments to.  To find out if your is guaranteed, check Fannie Mae and check Freddie Mac.

I know this is some downright gripping reading, but I suspect if you are one of the homeowners that can benefit from a HARP refinance, you may very well be on the edge of your seat.  If you have questions, if you are curious about your eligibility,  don’t hesitate to reach out to us.  If we don’t know, we’ll point you in the direction of the lenders we trust to help you get to the bottom of it.

For the Rancho Santa Margarita residents that have been driving to Laguna Hills or Foothill Ranch for that In-N-Out fix, you’ll soon be able to save that gas money and stick around your own stomping grounds.   After two years of discussions,  according to the Orange County Register, today the Planning Commission gave the green light for the popular burger chain to establish a new location near the car dealership and the 241 toll road on Santa Margarita Parkway.

It appears that residents and city officials approached In-N-Out to establish a location in Rancho Santa Margarita.  Much of the delays have been centered around the traffic impact for the city, because anyone driving by those burger joints will consistently see cars lining up around the block.  Sounds like this location will be big enough to handle the demand.

My heart goes out to McDonald’s up the block.

No word on timing just yet, but whether it’s Protein Style, Animal Style, the 3 x 3, or the Double Double you crave, the wait will soon be over.  As for you diet conscious, calorie counting folk…this could be a problem.

Mello Roos has never been a legal tax deduction, however homeowners have routinely been jotting down ‘property taxes’ in a lump amount since the Mello Roos Act of 1982.   And until now, the Franchise Tax Board  has not pursued taxpayers for this, um, indiscretion.

For the 2011 tax year, you’ll want to be mindful of a significant change when filing.  I’d suspect Governor Jerry Brown is looking for funds, and this is clearly an opportunity that has been missed over the last 30 years.  This year, a new computer system will be used to allow the Franchise Tax Board to distinguish between deductible, and non-deductible portions of your property tax bill.   Of course, you will have to consult with your CPA, but if you’re curious about what is generally considered tax deductible and what is not, the Franchise Tax Board has been kind enough to share a sample property tax bill and the breakdown.

But Their May Be Hope Yet…

Assemblymember Jim Silva (R – Huntington Beach) has introduced AB 1552 that would allow one to deduct their Mello Roos.  In his Press Release dated 1/26/12, he stated, “”The state is always looking for ways to capture more and more taxpayer money and this is a new low. By going after Mello-Roos fees, the state is actually taxing a tax. It is another way to go after Californians’ wallets and must be stopped.”   Jury is out just yet, and I’m not that optimistic that our financially challenged state will pass up the opportunity for potential income, but we’ll be watching out for it here.

If you have questions about Mello Roos in Orange County homes, don’t hesitate to reach out.  For tax advise, please reach out to your CPA.  My suspicion is that this won’t be the first time they’ve fielded this question.

My opinions about this discussion continue to evolve.  But, yesterday I had an experience with Zillow that had me fired up, so much so that I’m breaking my blogging silence.

Hey, I’m the Listing Agent!

One of the themes in the syndication discussion centers around the idea of clearly identifying the listing broker.  I abhor paying Realtor.com to ‘enhance’ my own listings.  I pay them so that I may give them the very content that makes their site worth visiting in the first place.  But, I am unwilling to have a contact form next to my own listing that goes to another agent that may, or may not, know anything about the area.  And, they certainly won’t know enough about my listing to be truly informative when that buyer inquiry rolls in.  As a matter of fact, knowing the stats on REALTORS  responding to internet leads, they may not even respond at all.  THAT does not serve my seller.

Let’s be clear and honest.  Unless you’re the listing agent, a buyer inquiry on a property is a lead.  But, when you are the listing agent, that inquiry is an opportunity to serve your seller and sell their home.

I know, everyone can scream and holler about dual agency.  I’ll let you all work that out in the Facebook Raise the Bar Group.  But, Ken Brand, brilliant guy that he is, noted that you could also avoid the ‘risk’ of dual agency by allowing another broker to put his sign in front of your listings.  Ludicrous, right?  We advertise on and offline to sell our listings.  Handle the dual agency issue how you will, but let’s not say that just because I want my name on my listings in these syndication sites, I’m just looking for dual agency opportunities.  I actually care about serving the seller.

Tsk, Tsk Zillow

A couple days ago, we activated a new listing.  As part of my listing presentation, we always discuss where buyers come from and what we do to reach out to those various segments.  In the 2010 Buyer and Seller Report from the National Association of REALTORs, they reported that 38% of buyers found their home on the internet.  Once I have listed a property, I provide the links to many of the places the seller can now find their property online.  They’ll likely go looking for it anyway, so I’ll save them the trouble and shoot over the links.

While in the course of this little project, I find our listing on Zillow.  Just one problem….someone else is noted as the listing agent.   I know about the ‘premier agents’ that are listed next to my listing.  No big deal.  But someone else is the ‘listing agent’?  I don’t think so.

Zillow was very responsive when I called.  They immediately ‘reclaimed’ the listing for us.  But, of course I wondered, how does this happen?  Who is responsible for policing this?  How often does this go on?  She said that it was being flagged and noted that this gem of a company had claimed 730 listings.  730 listings?!

Zillow sent me a follow up message later in the day, “Thank you for notifying us regarding ReeBroker CA claiming your listing. We have removed the listing from this users account and are handling this issue appropriately.”  I guess I’m wondering what ‘appropriately’ means.  Have 730 listing agents not noticed that someone claimed their listing?  Has anyone else notified Zillow that there is a problem?  How easy is it to claim a listing that is not your own?

The experience made me aware of how much I do care about being the listing agent on MY listings.  I can live with other ‘area specialists’ next to my listing, but this?  Yeah, this is putting your sign in front of my listing buddy, and that’s not happening.

Is IDX Different?  Maybe Just a Little

In many ways, IDX and syndication can be looked at in the same way.  I guess I see one difference.  These heavily trafficked sites are  well known, national channels that buyers visit early in their search.  And really, I think they do offer tremendous exposure for listings.  If 38% of buyers found their home online, then I think it’s fair to say that the seller is reasonable in the expectation that their home is easy found on these sites.

IDX is used on websites that must be promoted locally by that agent or broker.  The work they do to promote that site and generate traffic is to generate buyer and seller leads.  Am I as concerned about making sure that my seller is served in the same way on those sites?  No.  They do get exposure and that agent is generating business from their efforts.  Super.  But in the heavily trafficked national sites, you betcha, I want to have the opportunity to support my seller when a buyer expresses an interest in his home.

Maybe it’s a subtle difference, but to me, it’s significant enough.

The image in this post is from a 2006 ad campaign from N.A.R. stating ‘It’s a great time to buy or sell a home,’  and sadly states that ‘Prices overall have stabilized’.  We all know how that panned out.  In 2006, it was however, a great time to sell.  Is it ever a good time to both buy and sell?  The reality is that it’s one or the other.

It’s Not a Great Time to Sell

Most homeowners certainly are getting this message. In most cases, those that elect to sell are finding themselves with circumstances that force their hand.  Today’s seller find themselves with no alternative other than to sell, whether it’s significant negative equity position, job loss, divorce, job relocation, or some personal set of circumstances.  In very few cases do we find that they elect to sell today if they don’t have to.  With so many hardship sellers on the market, the downward pressure on pricing continues, making it far from an ideal time to sell.  But for the buyer, this is creating the very environment that makes it a good time to buy.

It’s a Great Time to Buy

Why now?  What makes this particular time to buy attractive?  There are a number of articles talking about the reasons to buy right now but here are a few in particular that I think are worth considering:

• Prices have taken quite the tumble in Orange County and depending on the area have fallen 25 to  50% from the market highs.  There are good deals to be had in every price range.
• If you can manage to get a loan, interest rates are still very attractive, for now.
• Houses love inflation and with a good deal of speculation about the likelihood  for inflationary conditions, we are beginning to see cash purchases are on the rise.  This may be considered an excellent hedge against inflation.

It’s Not Going to Be Easy

The real winner today is clearly the guy with cash.  Cash purchases take out much of the uncertainty in the transaction process.  There is no need for a mandatory appraisal, no underwriters to approve the process, no need to confirm  that the condominium complex complies with FHA guidelines (many don’t), and often cash purchasers have a larger ‘pain threshold’ when it comes to dealing with the cosmetic issues or problems that arise in an inspection.  This puts the cash buyer in an excellent position to negotiate.

Qualifying for a loan today is a far cry from what it was a few years ago.  Buyers will generally have to have great credit, good debt-to-income ratios, documented income, cash reserves, and a solid job history.  While there are still programs for the smaller down payments, like FHA, be prepared to pay for mortgage insurance.  There has never been a more critical time to make sure you are working with a savvy lender.  The documentation required, the tax returns, the bank statements, the investment statements, the verifications of employment and rental history, and potentially the promise of your first born child, will try your patience.

The inventory limited and is often distressed.  Those purchases come with their own hurdles.  Short sales are still a painful and uncertain process.  Bank owned homes currently make up a small portion (2.5 to 10%) of today’s Orange County market. Many homes need some work.

One Last Thing…It’s Not a Good Time to Flip

I wouldn’t plan on buying unless you are willing to own as a long term strategy.  While I think we’ve seen the big fall in prices, there is nothing to say that prices should be considered stable either.  But timing the bottom is tough if you are borrowing money.  If interest rates rise, even if prices decline, the net effect on affordability is a wash.  Find a home that you love, that meets your needs for the long term and get comfy.

No Surprises Here

When I wrote about the upcoming letter yesterday I wondered about the purpose of this outreach given the fact that the difficulties processing short sales are already widely known to those called out in the letter including, ‘regulators, elected officials, nonprofits, business organizations, companies…’ and any individual who has been a party to a short sale transaction since 2006.

Much of the letter paints the well known picture of the crisis, and none of this is new information.

What’s the problem?  For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures.  Many homeowners have second mortgages, which further complicate matters.  Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process.  Poor and slow service by many banks and servicers has only exacerbated the problem.  Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times.   These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.

We Know the Problems, What’s the Solution?

Yesterday, without knowing what the letter contained, I found it interesting that C.A.R. would need to resort to this course of action to effect change.  Clearly, earlier methods have not created significant impact on the problem since the early stages of this crisis in 2007, so what is the goal of this campaign?  And how are we justifying the use of member dollars?

Many of the loans in question are no longer owned by the original lender.  Many loans when through the securitization process and became a part of residential mortage-backed securities making it incredibly difficult to negotiate.  Servicers, with little vested interest, are left to deal with the processing of payments, collections, and act as the primary points of contact for short sale negotiations.  There is no question that it has become a nightmare for all parties.  So what is the solution?

Given the expenditure by C.A.R. for this campaign, I would have liked to see something significantly less ambiguous than the following that appeared in the closing paragraph of the LA Times:

Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale.  Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program.  We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues.  We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.

So What Was The Real Purpose?

None of those suggestions are particularly new and after 4 years with little improvement, it might be time for some more aggressive suggestions if we are really intent on creating some significant impact.  Given that we didn’t see that here, I’m left wondering what the real intent was for the campaign.  Was it PR for C.A.R. to say, ‘hey, we’re doing all we can and it’s not working’?  Is it to call more attention to the crisis and put pressure on those that have influence?  But without some real concrete suggestions, I’m at a loss as to see how this sheds any new light on this long-standing problem that is certainly at the center of the national housing crisis.

March 9, 2011

Dear Linsey,

As you may know, C.A.R. has been working on numerous efforts to address your concerns about the difficulty of working with short sales.

To that end, I want to give you advance notice of perhaps one of our most visible activities to date, and one that may be a first in C.A.R.’s 100-plus-year history.

Tomorrow, C.A.R. is placing an open letter advertisement in California’s seven largest daily newspapers, calling on lenders and industry regulators to streamline and improve the short sale process.  C.A.R. is taking a leadership role in this effort by getting this letter published and pointing out lenders’ and servicers’ unworkable short sale processes.  We’re also appealing to various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals to join us so that more families are able to arrange a short sale, rather than lose their homes.

In the letter, I write, “With the number of homeowners who owe more than their mortgage is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012.  Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.”

The open letter will appear in a full-page advertisement in tomorrow’s Los Angeles Times, San Francisco Chronicle, San Jose Mercury News, Sacramento Bee, San Diego Union-Tribune, Bakersfield Californian, and Fresno Bee.  If you live in one of those areas, I hope you can pick up a copy of one of those newspapers tomorrow and read the open letter.  If not, we’ll be sure to post it on car.org.

Help us spread the word further by leveraging your relationships with your local paper and asking them to publish it.  Or post it on your website, if you have one, to reach your clients and other consumers.

Sincerely,

Beth L. Peerce
2011 President
CALIFORNIA ASSOCIATION OF REALTORS®

 

Later I received another email from C.A.R. Newsline that goes to members stating,

“The open letter addresses the following topics: The benefits of doing a short sale rather than a foreclosure; the inconsistencies with short sale processes at banks; the challenges of working with multiple lien holders; and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.”

Scratching My Head

While I applaud the effort to address the issue, there are a few things that leave me a little perplexed.

First, the negative equity situations, and need to negotiate short sales for sellers, began in 2006 and certainly began in earnest in 2007.  We have seen four years of sellers, buyers, and the real estate community suffering through long, painstaking processes that have seen very little improvement during that time.  After four years, the fact that C.A.R. has resorted to taking ads out in major newspaper publications implies that C.A.R. is finding that they are out of alternatives to influence significant change.

Secondly, it’s interesting to me that the Orange County Register has been omitted from the newspapers they chose to utilize for this outcry.  Given the fact that 30 to 50% of the active listings (depending on city and price point) are short sales, this sizable market seems be a place to have had such a discussion.

I’ll be interested to see the piece when it comes out tomorrow.   Ms. Peerce says that the attempt is to appeal to ‘various constituencies, such as regulators, elected officials, nonprofits, business organizations, companies, and individuals’, as well as banking institutions and servicers.  But this problem has been well known by all of these folks for a very long time.  If earlier attempts to streamline haven’t made any headway, I’m not sure how this will improve things.

But, there’s no question, I’d be happy to see it.