Monthly Archives: March 2007

April Fool’s Day 2007: Real Estate Parodies & Predictions

Aprilfoolpredictions2007
Yesterday, a leading real estate technology news service published it’s Top 10 predictions on the future of real estate blogging.  Preliminary comments agree with Prediction #5:

The blogging community will give voice to those in the industry who previously didn’t have one — making them a force to be reckoned with. This has already happened, but will grow stronger this year. The open dialog will spark change the industry has never before seen.

What role will real estate consumer will play in that revolution, and what are the most effective ways to get homebuyers and sellers involved?  Humor — the kind that has turned political commentary into infotainment — could be an effective way to attract and engage real estate consumers. So a year after launching our original menu of wikis, which was so serious that it is still password-protected, The Real Estate Cafe’s newest wiki has a more light-hearted goal: 

Prediction #11:  Real estate bloggers and zillions of homebuyers and sellers will pool their wits on April Fool’s Day to publish a parody of the current housing market and real estate practices.

Hopefully, like satirical TV programs, there will be some serious content between the laughs.  Better still, maybe ordinary home buyers and sellers, turned "radical consumers advocates," will launch some lasting reforms; insuring they have the last laugh.  Who says real estate professionals, homebuyers, and sellers don’t have a sense of humor?  Anyone reading the paper knows that housing prices are a joke.  What else about the current housing market or real estate practices makes you laugh (or drives you crazy)?

Last year, our April Fool’s Day post asked:  Is designated agency an April Fool’s Day joke?  Use this "April fool’s real estate" keyword search on Google to see what others have done in the past.

Posted in "We" companies, Humor, Writing tools

april fool’s day contest

Posted in Uncategorized

Show me the money

Show me the timesheet!

Show me the rebate?

http://www.realestatejournal.com/buysell/openhouse/20070328-kim.html

Posted in Uncategorized

Live rent-free?

Posted in Uncategorized

Buyers Advantage

Posted in Uncategorized

Talking about a (Real Estate) Revolution: Then & Now

Consumer_revolution040293
Welcome Boston Globe readers, existing clients, and others: Some real estate consumer advocates, like The Real Estate Cafe, have been "Talking about a Revolution" in real estate — CONSUMER revolution to be specific — since the early 1990’s. Why do you think that alternative, money-saving real estate business models have been slow to capture market share?

The Real Estate Cafe has just launched an experimental new, social networking site to discuss that question and MANY others in coming months.  Please visit the site, add your perspective or questions, and even set-up your own page within the new site to share your thoughts, photos, videos, etc.  We can’t wait to grow this community of web-savvy, do-it-yourself real estate consumers and real estate "change agents" to share moneysaving strategies and opportunities! 

Your creativity and friends are needed to join and expand the revolution.  Some photos from past efforts are shown in this mini-slideshow as well as a photo of the original Real Estate Cafe, founded in 1995, as the nation’s first, internet-based, walk-in housing information center.  Last year, our clients saved over $1 million not even counting our commission rebates (see article in Wall Street Journal).  If you’re buying a home, we’d be glad to chat online or in-person about our NEW menu of fee options, to help you choose the one that’s best for you.

Posted in Change Agents, Commission Reform, In the News, Inside The Real Estate Cafe, RECALL: Real Estate Consumer Alliance, Unbundling the Commission

Bungee Jump pricing

Call it Retail 101: Low prices attract shoppers. Increasingly, real
estate agents are coaching home sellers to list their homes at an
asking price that clearly undercuts the competition. Agents have taken
to calling it ‘drama pricing.’ Others, the ‘eBay effect.’ Either way,
the logic is simple: In a housing market with a glut of properties for
sale, an unusually low price is a surefire way to make your home stand
out and attract more prospective buyers.”

“One homeowner who recently adopted this strategy said her real estate agent referred to it as ‘the bungee jump.’”

“‘You go down and then you get sprung back up,’ said the seller, who
did not want to be identified because the deal has yet to be completed.
‘You would rather have that effect than overpricing your home and
getting no bids at all.’”

“Realtors said many sellers are reluctant to take ‘the bungee jump’
for fear the offers will come in lower, not higher, than the asking
price. Still, with the housing market slack, more and more sellers are
willing to give it a try, Realtors say, particularly those with homes
priced between $500,000 and $1.5 million.”

“‘When buyers see good value, they will come and they will buy with
a sense of urgency,’ said Cara Moxley, a Realtor in Summit. ‘Ultimately
those underpriced homes bring more, even beyond most sellers’
expectations.’”

“‘I take pains to help clients understand that the rationale behind
a lower list price is to maintain a position of negotiating strength as
a seller,’ (realtor) Howard Bunn said. ‘A low price pits the buyers
against one another. They must compete or lose the house. A higher list
price pits the potential buyer against the seller and the seller is
then playing defense, negotiating with a buyer who knows he’s operating
alone and not concerned with the actions of excited other buyers.’”

“Still, Bunn said he always cautions sellers never to list their
home at a price they would be sorry to sell at. As with any real estate
deal, a seller is under no obligation to accept an offer. But once the
asking price has been set, there’s no going back: It won’t help sell a
house to later raise the asking price.”

“‘That kind of pricing is the devil’s workshop and will lead at best to a severe loss of credibility,’ he said.”

“There’s also some risk for a buyer in this situation, Realtors say.
Make sure you’re not the winner who ends up feeling like a loser in the
morning because you overpaid for a property, said Lorrie Cohen, a
broker in West Orange.”

“‘People always want what they can’t have, and they get caught up in
the frenzy of this bidding war and they get the house, but the next day
they wake up and they say, ‘What did I do?’ Cohen said.”

Posted in Uncategorized

No Recession but mortgage defaults will drag housing prices down

NPR just posted this link to Robert Siegel’s interview this evening with MIT economist Bill Wheaton: Expert: Mortgage Defaults Won’t Key Recession

Thus far there is no audio online and the transcript is pending.  So home sellers should recheck the link above before jumping to an overly optimistic conclusion.  At the end of January, Wheaton predicted that Housing prices could decline another 20% in Greater Boston and other markets nationwide, particularly those where housing prices were inflated by subprime lending.  So home buyers, no need to rush your offers if housing will be a multiyear economic drag, right?

Posted in Price trends, Real Estate Bubble, Timing the market

Double Bubble: How counterfeit buyer agents inflated the housing bubble

Doublebubble1_2
Yesterday we blogged about the "Mortgage Meltdown" and record number of foreclosures, challenging the media and regulators to investigate how counterfeit buyer agents (a.k.a. double agents) helped inflate the housing bubble.  If they do, here’s the kind of "glaring" case study they may find:

My so-called buyer’s agent (who promptly switched roles at contract
signing without explanation), initially advised me to bid $750,000 for
my house of choice, which was listed at $699,900. When I told her that
such an offer was beyond my price range, she was quite adamant that I
not offer anything under the list price. When I finally backed out the
deal because of her bait and switch scam, I later heard that the house
in question sold shortly afterwards for $682,000–in other words,
nearly $70,000 less than the bid suggested by my so-called buyer agent.

This type of price inflation (caused by seller’s agents masquerading
as buyer’s representatives) must have a very distorting impact on
housing costs.  The economic fallout is enormous: ordinary citizens are
forced to move out farther in search of decent, affordable places to
live, which  leads to a host of problems connected with traffic
congrestion, suburban sprawl, etc.

As I perceive it, the real estate cartel’s use of dual agency
[a.k.a. "designated agency"], which works to the detriment of the
average consumer while enriching dishonest agents through the practice
of double-dipping, contributes significantly to the manifold problems
we see in the residential housing market and therefore should be fully
exposed.

The homebuyer above concluded, "Isn’t there any investigative team or media personage with the courage and tenacity to shed light on this problem?"  We’d like to ask how homebuyer and sellers who have been victims of dual agency, designated agency, or faulty agency disclosure can use social networking tools, like blogs, wikis, and interactive mapping, to expose the problem and prevent other consumers from being harmed?  Does anyone know if such an organizing effort is already underway, or have ideas about how to get one started?

Posted in Defensive Homebuying, Dual Agency Detective, Foreclosures, RECALL: Real Estate Consumer Alliance

Friday Link-O-Rama

Sameoffice1
Tuesday’s announcement that "lenders began
foreclosure against more than one of every 200 U.S. mortgage borrowers
in the fourth quarter," has the media tracking the "Mortgage Meltdown" and record number of foreclosures, and industry pundits predicting widespread ripple effects from the "Subprime Panic."

Steven Pearlstein of the Washington Post estimates that "…1.5 million Americans may lose their homes to foreclosure and …hundreds of thousands of homes could be dumped on an already glutted
market."  Pearlstein concludes, "What we have here is a failure of common
sense. …It’s not a whole lot more complicated than that." 

But some
real estate consumer advocates say the story is more complex. They’re calling for the media and regulators to investigate the role dual agents (a.k.a. designated agents) played in creating the real estate bubble and the growing foreclosure problem.  During the housing boom, little attention was paid to the conflicts of
interest
which occur when large real estate agencies try to represent both home buyers and sellers in the same transaction. But one leading consumer advocate predicts homebuyers will take legal action when they realize they have been betrayed by counterfeit buyer agents:

As some home owners get
"upside down" on their equity, or lose their homes by foreclosure, you
may start to see a rash of litigation against the real estate "agents"
who sold them their homes.  Probably the vast majority of real estate
agents acted as "buyer’s agents" in the transactions, so there is
likely the possibility some of these "buyer’s agents" didn’t really
perform up to their expectation of "protecting" the interests of their
"buyer clients." 

In coming days, we’ll expose the conflicts of interest designated agents would prefer to paper over and the heartbreaking failure of the real estate regulatory system to protect ordinary homebuyers and sellers.  If you’ve been a victim of dual agency, designated agency, or other deceptive real estate practice, or know someone who is writing about the same subjects, please let us know.  If you are in the housing market now, BEWARE designated agents; and demand a real buyer agent, like The Real Estate Cafe, who can help you save tens of thousands of dollars.

Posted in Defensive Homebuying, Dual Agency Detective, Foreclosures, RECALL: Real Estate Consumer Alliance
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