Jaime Tineo

Perhaps hate is too strong of a word. How ’bout cringe at the idea of interacting with many of them.

You as the customer may have the good fortune of only having to deal with a handful of realtors, but I on the other hand, have the unfortunate task of dealing with the entire lot. By far one of the most unpleasant part of being a real estate agent–dealing with unpleasant agent. You see, in Westchester County like in most parts of the country, we professionals practice real estate under the law of reciprocity. That means that I can sell other agents’ listings and vice versa; other agents can show and sell my listings and we would share the commission. It’s actually a great concept and works well when everyone adheres to the rules. (whole other post on this topic). Don’t get me wrong. It’s not that realtors are better or worse than any other “professionals” out there. Just as there are horrible realtors, there are horrible doctors, lawyers, teachers, and even police officers. By the same token there are fantastic real estate agents, attorneys, teachers, and police officers. But since I don’t work with them all the time, I can only comment on what I have personally experienced.

I don’t know why many of them even bother to wake up every morning and pretend they actually work. I know that when I call an agent to find out more information about a home, the voice on the other side is so somber and depressing that I just feel like hanging up before I catch whatever miserable Plague they’re spreading. Imagine that Ben Stein just found out he was adopted, his kids were not actually his, and that his house was getting foreclosed. That would only be a tiny hint of some realtors's attitude and demeanor. Here's a glimpse!

It’s pure toxic! And if this is how they make me feel over the phone, I hate to see what they’re like in person. Makes me wonder if these types of realtors only speak to other realtors like this, or is this how they communicate with their clients as well. I could only imagine! I’m a buyer and I’m looking to spend $700,000 on a home, and get the Grim Reaper on the other end of the line. Yes, exactly what I’m looking for at 9 o’clock in the morning. If they hate they’re jobs so much and it makes them so depressed, why even do it? There is a bright side though. If my competition doesn’t care enough to exude confidence and excitement in front of their clients, then a simple “hey, how can I help you?” and a smile will have clients making a line for me to assist them.

To Agents: I don’t expect agents to be the Emeril Lagasse of real estate and dial it up to 10, but for the love of something, show SOME enthusiasm even if it’s to me, your fellow colleague. I realize the market sucks, but so what! Does your attitude need to reflect market conditions? Find something to get excited about. It’s not difficult if you like what you do. Don’t fake it, though. People can see right through it. If you don’t like what your doing either adjust your attitude a or find another career. It’s that simple. No one wants to hear about your problems, least of all your clients or potential clients. Keep your problems to yourself. The client did not come to you so you could depress them (everyone has problems, don’t act like yours are more important). The customers came to you to help them spend $700,000 on a new home. If that’s not motivation enough to express some excitement and specially enthusiasm, then TEXT me their contact information and I will show your clients the meaning of a positive attitude.

That is the question of the hour. I'm not an economist nor do I like to make predictions about the future. I will leave that to the quantitative analysis genius paid to that.

So I will try to make a observations based on the theories of one, Stan Liebowitz, Professor of economics at the University of Texas, Dallas. In his article, Mr. Liebowitz suggests that the sub-prime loans were not the only cause of the market collapse. Based on his analysis of the Mortgage Bankers Association data, the foreclosure rate on PRIME loans grew by 488% and accounted for 51% of all foreclosed homes. Compared to SUB-PRIME loan foreclosures which only grew by 200% in the same period (from Q3 2006).

Professor Liebowitz further suggest that the greatest factor impacting foreclosures today is negative equity or low Loan-to-Value ratios. (which is not that great of a revelation). He backs this theory up by citing the although only 12% of homes had negative equity, it made up 47% of all foreclosures. Furthermore, he found that the upward rising interest rates only had a significant impact of foreclosures after an increase greater than 4% and even then the increase of this level only accounted for 8% of all foreclosures.

On Government:

Professor Liebowitz suggests that government solution of throwing money at the problem is "poorly targeted", because although the Federal Reserve's action has ultimately reduce interest rates, "low interest rates induce refinancing more than they do home purchases." He also indicates that the house prices have almost reached bottom because "current prices are approaching their long-term, inflation-adjusted pre-bubble level."

A couple of important points that should be pointed out in this article:

• The data indicates that enforcing the Debt to Income ratios back to the normal levels of 31% will have very little effect on the foreclosure problem.
• Tighter regulations around subprime loans would have not prevented the mortgage meltdown.
• Stronger underwriting standards are needed instead.
• Foreclosures will eventually go down when the housing prices stop falling and unemployment rates start dropping.
• Establishing a regulations for a course of action for lenders when borrowers default.
• Forcing a larger down-payment on home purchases.

And the most important excerpt from this entire article to me is this paragraph below:

"...the important factor is whether or not the homeowner currently has or ever had an important financial stake in the house. Yet merely because an individual has a home with negative equity does not imply that he or she cannot make mortgage payments so much as it implies that the borrower is more willing to walk away from the loan."

This is so important and speaks volume about the homeowner psyche these days. While conducting my own in-depth "research", I found that many of the foreclosures happening in this area are voluntary. The owners have the ability to pay the mortgage. However, they feel they were duped because their home did not appreciate like everyone else who purchased a home before them. They did not get wealthy like the house flippers on tv. Other people made money in real estate without investing anything, and they didn't. Therefore, if they did not have much stake in the home, then they walk away from it or simply stop paying their mortgage.

Interestingly enough, what this article fails to point, as do most people commenting on the article, is the complete disregard for the "contract". Let me explain. Remember the days where if you wanted a loan, you went into your local bank and asked for a loan. Remember the days when you looked your local banker in the eye. His name is Bob Smith who's kids go to school with your kids and you see at church every Sunday. Remember when you shook his hand while promising to repay the debt. Do you remember that? If you had negative equity on your home, will you go to Bob in person and tell him that you can't pay the loan you promise to pay back? Or will you stick it out and do as you promised? After all, a person's word still means something, right? Or perhaps you prefer to send him an email or a text message.

I think this is what's missing from the real estate meltdown equation. Yes, interest rates, bad loans, poor regulation, scrupulous loan officers; all of that had an impact. However, because we no longer form a personal bond with our banker because of something called the "Internet". Because of the lack of face to face interaction between the banker and borrower, most no longer associate the debt to Bob. There's no longer that need to maintain "good standing" with Bob anymore. You won't ever see Bob again. Besides Bob's bank doesn't even own the loan any more.

As expected, home sales are down again in the second quarter of 2009 in Westchester County compared to same quarter last year, approximately 31%. However, second quarter sales were up to 1227 from the first quarter's dismal total of 850 total units sold. We would like this trend to continue for a couple of quarters in a row.

And on a surprising note, according to the local board of Realtors, this is the first time in its recorded history that the median sale price of a 2-4 unit multi-family home ($344,750) fell below the median price of a condominium ($375,875).

source: wcbr.net

Knock , knock. Who's there? it's me, the same house again relisted at the same price withe same pictures. Who do you think it was?

It pains me to see when a homeowner has just been convinced by their agent to relist their home again after 6 months of stale-ability. (actually it pains me more when another agent picks up the listing at the same price it expired at) . "But we're going to relisted again to show it as a new listing", says the agent. Perhaps someone hasn't seen it before. Why, why, why do homeowners agree to this? C'mon folks, that wasn't why your home didn't sell. You know why it didn't sell! Relisting again as a 'new' listing after 6 months is not going to make a difference.

The concept almost has an oxymoron (2 opposites put together) feel to it. Doesn't it? The home still looks as stale as it did the 6 months ago. The only difference is that before it was overpriced, and now it's REALLY overpriced. And there is such a thing as being the lowest priced overpriced home in the area.

Buyers don't bid on overpriced homes. The first thing the buyer is going to ask the agent for is a listing history. "How long has this home on the market?", the buyer asks. Buyers today are more educated about the homebuying process than ever before. The buyers in fact could be better informed about the market than you are. They've actually seen all 30 houses for sale in your neighborhood. They've been watching your home drop like a GM stock. Waiting for the right time to dive in and scoop it up at a rock bottom price.

So, when your agent asks you to relist the home at the same price. Stop, think, and get a different opinion. Hopefully, it's from me.

The plan seems very comprehensive. Comprehensive on screwing the people over, just one more time.

No $15,000 tax credit for home buyers, although the existing $7,500 credit won't have to get paid back.

All kidding aside, I knew the $15,000 tax credit was going to be a boost for us agents, but more importantly I think we all saw it as the key to lowering inventory and thus stabilizing the market. Wishful, thinking I know, but that was what I was hoping it would do. But it doesn't matter anymore. The good thing is that at least the rural and underserved areas will get what they've been waiting for...high speed internet access for the computers they can't afford...yeah!

Highlights of Economic Recovery Plan

Spending

Taxes

Individuals:

• $500 per worker, $1,000 per couple tax cut for two years, costing about $140 billion
• Greater access to the $1,000-per-child tax credit for the working poor
• Expansion of the earned-income tax credit to include families with three children
• A $2,500 college tuition tax credit
• Repeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over time

Businesses:

• An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two
• Bonus depreciation for businesses investing in new plants and equipment
• Doubling of the amount small businesses can write off for capital investments and new equipment purchases
• Allowing businesses to claim a tax credit for hiring disconnected youth and veterans

Source: WSJ --http://online.wsj.com/article/SB123202946622485595.html