Deeper Thoughts
Below Market Rents And Asking Price
June 18th, 2008 Deeper Thoughts atholkay 6 Comments »
So I’ve been looking and looking at investment properties on the MLS with a more serious eye. Here’s a little phrase and it’s cousins I see popping up over and over.
“Rents could easily be more”
“Rents are below market”
“Increase the rent for excellent profits”
“Unit occupied by owner would get crap load of rent, no seriously it could, I’m telling ya, a real crap load.”
So maybe I’m just new to this game…
…but if all you had to do to convert the property to a cash cow was jump the rents up, why doesn’t the present owner get it together and get the increased rents?
You certainly can’t base your offer on these rent folk tales the seller is telling. We don’t write up an offer sitting around the campfire making smores. Work with the actual current figures – even if you know that yes indeed the rents are below market. Just shut up on that, and say over and over “these are the current rents we have to send to the lender for mortgage approval” until they stop saying the rents are undervalued.
Maybe the landlord is just simply incompetent or too cowardly to approach the tenants and tell them the rent is going up. It’s not up to the buyer to offer a great wad of feel better cash to the seller for this behavior. We’re not offering $250,000 and an extra $25,000 for the sellers boo-boos.
If the seller wants a premium asking price, they need to offer a premium package of maximized rents and a well maintained property.
If It’s Such A Great Investment Property Why Are You Selling?
June 15th, 2008 Deeper Thoughts atholkay 7 Comments »
I’ll spare you the CAPS LOCK ON remarks and covert them to lower case…
“Great investment opportunity, stable tenants, and easy to rent. New paved parking area, near bus line, and good neighborhood.”
Hmmm, photos are nice. Asking $400,000, six units, looks like $700 each month, tax $7000ish… crunch, crunch, crunch… hmmm not terribly exciting cash flow so far after the mortgage is paid.
“All tenants pay electric, hot water, phone, washer/dryer hook-ups in units”
Hmmm not bad, LOL at letting us know the tenants pay for their own phone line though.
“Owner pays heat for five units.”
Come again?
“Fuel: Oil”
…
And I bet the tenants are just toasty warm in winter.
Legalized Parking Lots To Sleep In Your Car After Foreclosure
May 21st, 2008 Deeper Thoughts atholkay 3 Comments »
“There are 12 parking lots across Santa Barbara that have been set up to accommodate the growing middle-class homelessness. These lots are believed to be part of the first program of its kind in the United States, according to organizers.
The lots open at 7 p.m. and close at 7 a.m. and are run by New Beginnings Counseling Center, a homeless outreach organization.
It is illegal for people in California to sleep in their cars on streets. New Beginnings worked with the city to allow the parking lots as a safe place for the homeless to sleep in their vehicles without being harassed by people on the streets or ticketed by police.”
So how bad does bad get?
“Linn Labou, 54, lives in her car with four cats.”
Oh wow. Just wow.
The irony is that it’s probably illegal to keep an animal in a car like that.
Putting a Human Face on Foreclosures
May 18th, 2008 Deeper Thoughts atholkay 1 Comment »
I was mailed this as a BMPOTD submission. And yes true story, this is a house going into foreclosure. Yes that may be the very last Christmas Tree that little kid ever gets to see in “our house”. Yeah it’s a bad photo, I just don’t want to pull the trigger on this one.
About 30% of the population are going to be renters their whole life, and they didn’t bother trying to buy a home during the bubble. For them, the bubble is something that happened to other people.
But about 5% of the population who never had a hope of buying a home, were told they could suddenly afford a home by a small army of realtors and mortgage officers. Now even if your common sense tells you that you can’t really afford something, if a bunch of suits tells you that you can, and your wife makes goo-goo eyes at you, and you’ve been told since birth that owning your own home is your ticket to a good life and a happy retirement…
…well, you sign the papers.
“Denial is a defense mechanism‘ postulated by Sigmund Freud, in which a person is faced with a fact that is too uncomfortable to accept and rejects it instead, insisting that it is not true despite what may be overwhelming evidence.”
Then when your guardian angel goes off duty and the shit hits the fan, you have some other papers to sign.
But the majority of people affected by foreclosures didn’t actually get a choice in the matter. Mom and Dad made the choices. Suddenly life was really good and you had your own room, then there was all that yelling and screaming. Now you live with your Mom at Aunt Jessica’s and you see Dad on the weekend. Except this weekend he didn’t come.
Of course if you’re the Dad… the suck is that you brought the damn house for your family. Now you don’t have either one.
When other people talk about bankruptcy, they are talking about losing all your money. When you talk about bankruptcy, you talk about losing everything you had.
And now people are standing in lines to pick over your carcass…
India Makes The Case For Going Wireless
May 13th, 2008 Deeper Thoughts atholkay 2 Comments »
Nuff said…
Hat tip to Pink Bunny Ears
Is Real Estate Photoshopping EVIL?
May 5th, 2008 Deeper Thoughts, Photography atholkay 3 Comments »
Bill Rubin tosses me a softball in the comments…
“Athol;
Just a question since you are the photoguy 
There has been some discussion in the Professional Standards Forum at NAR about artificial enhancement and modification to property photos which might present a false picture to the consumer.Do you think that framing the shot so that the power lines don’t show might be a violation of the Code of Ethic’s true picture requirement(Article 12)?
I’m sort of “on the bubble” about it - If the power lines were photoshopped out, I would think that the agent was doing a bad thing, but framing it without artificial modification would seem to be acceptable because this is really what the property looks like when viewed from a specific angle (though the viewer would need ot have your car parked in the driveway) - So what do you think?”
Firstly, I think you’re misreading the phrase “true picture” as “true photo”. Once you’re into the breakdowns of Article 12 there is absolutely nothing about standards of photography. Nothing, nada, zip.
As far as I know, NAR has zero standards directly applying to photography, which a huge problem, and one of the reasons we are awash in such disgustingly poor photographic efforts from the vast bulk of realtors. It’s my semi-private cause to see that righted.
That being said, you basically have the right understanding of photo modification ethics. Once you start screwing with material facts, and editing out things to make the structure look more physically sound than it is, then we’re misrepresenting the property. We’re lying. That way ends in lawsuits, drama, tears and Ramen.
As I recall from pre-licensing class, what I do, and I argue I do pretty well, is the photographic equivalent of “puffing”. Careful cropping, flattering angles, well lit and attention to detail. It’s what I’m paid to do. Quality photography is used in every other single sales profession and there is no excuse for not using it in real estate sales. Buyers should be aware that the listing agent et al are out to actively pitch the house. If they aren’t actively pitching… the door is thataway.
puffing n. the exaggeration of the good points of a product, a business, real property, and the prospects for future rise in value, profits and growth. Since a certain amount of “puffing” can be expected of any salesman, it cannot be the basis of a lawsuit for fraud or breach of contract unless the exaggeration exceeds the reality. However, if the puffery includes outright lies or has no basis in fact (”Sears Roebuck is building next door to your store site”) a legal action for rescission of the contract or for fraud against the seller is possible.
If buyers need to see a fugly photo of the house before they go on a showing appointment, then they can Google Earth it. Heck, maybe their buyers agent that my seller pays for could do it for them. I dunno what more to do for them really. Maybe I should sue my wife for wearing a push-up bra and lipstick when we were dating, but what would be the point?
<— Fugly photo of house with tree and power lines. I’m hiding this how?
To not mince words, the biggest “artificial modification” is the humble flash bulb. Photography is all about light. Numerous I’ve times walked into depressingly dark rooms, and simply used the on camera flash and voila… the photo looks well lit and warm.
Also to be honest, the good photographers, and I mean the really good ones, can simply do things in editing and in setting up that defy detection to the untrained eye. I’m not talking about “the power lines got removed”, or “the divots in the lawn got repaired”, that sort of thing is for chumps. No need to try and ram home the power of photoshop like a Freshman with the rock.
Pros just get you with deftness. Like the gentle arc of the ball off a long fadeaway jumper. Butter smooth shots that bypass the buyers defense shields and can simply make them fall in love with a property before they even set foot in the house…
…swish… nothing but net.
Happy 1 Year Blog Day
March 12th, 2008 Bad MLS Photo of the Day, Deeper Thoughts, Good Vibes, Photography No Comments »
Well… actually that was March 9, but if I actually celebrated that date on time the rest of the family would wonder why I could remember that date, but not their birthdays. So celebrating two days late… as is my idiom.
So one full year plugging away at Reagent. Notable high points that can be measured….
Winning the Carnival of Real Estate. CMA vs Zestimate - Just The Facts Ma’am. Pretty much after that post the venomous assault on the accuracy of zestimates all but disappeared from the real estate blogs. I’m still waiting for the gift basket from Zillow for that. Bastards.
Winning the Consumer Orientated Carnival of Real Estate. A Dumpster is Cheaper Than Selling Your House. Just a fun piece.
Getting in the L.A. Times. I Get Mentioned In The L.A. Times. Did I mention I was mentioned in the L.A. Times? Just mentioning it.
Cracking 50,000 visits in the first year. It’s in the footer on the bottom left. It’s not monstrous numbers, but respectable.
Actually getting a monthly writing gig with the Arkansas Realtor Association. The Arkansas Realtors® Association Leaves Me Voice mail. I’m now doing a monthly photography article for them that actually gets printed in real magazine format. Like a grown up.
Page Rank of 5. Click on the link to www.iwebtool.com to see where Google thinks I am. Though I just checked and half the data centers are down and strangely two of them think I’m PR7. Which I tend to disbelieve.
That being said, a lot of the good stuff – the really good stuff - isn’t measurable.
No doubt I’ve become known for a single post topic. The Bad MLS Photo of the Day. Sparking many copies…
MLS Trash Can, Horrible MLS Photo of the Day, Worst MLS Photo of the Day, Terrible MLS Photo of the Day to name a few.
Am I offended by this? Not at all, it’s flattering and I’m always happy to see a new bad photo post theme. I don’t own the post format of “bad photo + mockery”. I’ll claim I do it best, but it’s not mine alone.
Every time someone new does a bad photo post, it means that the message is getting through and spreading nationwide that bad real estate photos need fixing, and can be fixed. If you want to run bad photo posts… do it! I just ask people to not copy the name exactly.
It’s a quiet revolution based on laughter and awareness rather than threats, fines, lawsuits and drama.
I’ve influenced thousands of agents improve their photography or decide to use professional photographers. Not a day goes by now where I don’t get email of new bad photos, or something that says “we’re all laughing at your blog in the office”. I’ve even had emails asking if they can use the blog in their training classes and conference presentations. (Of course you can!).
My favorite ones are comments and emails where someone says thanks for helping them do better with their photos. There’s not a stat counter for that, but it makes me happy knowing I helped someone do better.
And of course a huge round of thanks to everyone that has commented, linked, linked back, emailed, phoned and emailed me photos over the last year. I’d love to pretend that this blog was some sort of juggernaut “bigger than me” now, but… well it isn’t. It is my blog for better or worse.
But at the same time I deeply know that the majority of my success has simply been emailed to me from others. I’m stunned, saddened and laughing my ass off each day by what people email me as realtor photographs.
There are simply too many people to link to…
…if you know me, and I know you… thank you.
Real Estate Buyer Broker Agreements in Connecticut
March 11th, 2008 Connecticut, Deeper Thoughts No Comments »
“Hi I am new to Connecticut and I am looking to buy in the New Haven area. I saw you blog and I was wondering if you could give me some quick perspective. My wife and I have been in contact with two agents in the area and we have been shown a few properties by each. They are now looking for us to sign on with them such that they would be our exclusive buying agent. My understanding was that as a buyer I did not have to sign on with an agent, however they are each suggesting that that is standard practice. Can you give me some help in letting me know if this is normal?”
The short answer is … yes it is, it’s Connecticut Law.
The longer answer…
In Connecticut real estate agency law is quite defined when it comes to showing properties. Any agent can acting on behalf of the seller show any listing their brokerage has to a potential home buying customer. The fact that the agent is working for the seller is required to be disclosed to the customer.
So pretending for a minute you were buying in Bristol…
I am a Prudential agent and can therefore show you any Prudential listing in Connecticut. But when I do show you property, I would get you to sign a disclosure form that I am in fact working for the seller. Basically I would owe you nothing beyond basic honesty and fairness, though I would be likely to be quietly milking you for information that would benefit the seller should you actually make an offer. I’d likely be drawing better attention to the good points of the home, and while not lying about the bad points… not exactly bringing them up.
What I could not do however is show you a RE/MAX, Coldwell Banker, Century 21 listing. Seriously.. it’s illegal.
In order to show you another brokerages listing, I would be required by Connecticut Law to have you sign for a Buyer Broker Agreement. The Buyer Broker Agreement is usually pretty straight forward. The buyer and the agent agree to work together for a certain time frame and sometimes in a certain geographic area. The buyer agrees to look for a home actively, and the agent agrees to work for the buyer.
So if we had a signed Buyer Broker Agreement together, even when I am showing you Prudential listings, I’m working for you and not the seller. Rather than trying to “sell” any one particular home, I’m just doing my darnedest to get you all the information that you could want (good and bad points) and trying to position you to be able to make the best offer you could on the home you do decide to write an offer on.
The Buyer Broker Agreement also covers the agents ass in terms of getting paid. I can go into all the ways agents can get screwed out of getting paid, but loosely summarized… showing homes without a Buyer Broker Agreement, or playing Wii Tennis… it pays the same.
The good news is that the Buyer Broker Agreement is not a high stress legal document to sign. It’s just the nuts and bolts real estate paperwork in Connecticut for when you go shopping for a home.
Loosely summarized the BBA says…
“Do you wanna have my help finding a home?”
“We agree to work together for _________ time.”
“We agree that I’ll be working for you and not the sellers, and I’ll tell you everything”
“We agree that if you guys buy a home using me, I can get paid”
The other good news is that in Connecticut, 99+% of the time the way the buyer agents are paid is through the co-broke, so we’re not even talking about an out of pocket expense for using a buyer agent.
Hope that helps!
HUGE Pro-Consumer Connecticut MLS News!
March 6th, 2008 Connecticut, Deeper Thoughts, Geekage and Blogging, Photography No Comments »
I’m doing back flips here! Direct from my email…
“Dear CTMLS Participants & Subscribers,
I am pleased to report that CTMLS has doubled the total number of photos allowed on MLXchange to twenty!
Many of you have asked for more than ten photos over the past year, so CTMLS purchased the extra space to allow twenty - which should meet just about everyone’s photo needs! With the launch of CTReal.com, the official search engine of both CTMLS and the Connecticut Association of REALTORS®, Inc. later this month, all twenty photos will be available to the public. Make the most of it - it’s FREE!
It’s one more benefit of the Statewide MLS… keep your eyes peeled for more news coming soon!”
BOOM! Twenty photos per listing. That is a massive change from just ten photos. This will completely alter the way photography will have to be done for listings. In one sense my workload just doubled, but on the other hand my work just got twice as important.
Agents simply cannot hope to squeak by on 5–6 photos any longer. Buyers will simply think you are hiding something from them. For smaller homes 20 photos is going to mean multiple photos from different angles on some rooms. You’re going to have to show everything.
And I mean everything.
The public website CTReal.com – unfortunately nothing to show but the “in development” placeholder as yet – could become the ultimate Connecticut real estate public search platform.
This is a serious kick in the face to Realtor.com et al. Why pay for enhanced listings etc if the public can go straight to the firehose and get it all direct from the MLS public site. If the public MLS site can gain traction with the public, it will ultimately deep six all the third party vendors depending on listing feeds etc.
Of course I’ve said all this before… check out Just Make The MLS Open To The Public And Be Done With It Please. written back in June 2007.
…The solution is painfully simple. The MLS systems simply need to be made fully public on a public “read only” level and an agent “read/write” basis.
Charge the public $20 for a years public membership and the MLS’s will make a ton of cash. It will kill off all the third party listing companies. It will destroy claims of hiding information. It will destroy all the lead selling pirates. Even the Department of Justice thinks that the MLS serves the public as a cost saving measure. It’s a rare benign monopoly, that’s why the DOJ sues NAR etc to get discount brokers fully enfranchised as MLS members…
It may not be exactly as I wrote (LOL I said charge $20 for it!), but the general thrust is the same. Let agents have read/write privileges and let the public have read only access. How much the public gets to see I don’t know as yet, but 99% of what they want to see is the price and the photos anyway.
Unquestionably this is good both for consumers and Connecticut Realtors. This goes a long way to creating an efficient 21st Century marketplace to buy and sell real estate.
McFail at Math?
February 26th, 2008 Deeper Thoughts, Humor No Comments »
Okay so I’m a big heap of lame.
Jen is working late tonight so I’m cooking… actually for goodness knows why I’m on a serious fish kick, and even though part of me wonders if a Filet of Fish from McDonalds actually contains any actual fish, I’m having an overwhelming compulsion to eat two Filet of Fish.
The hard part is convincing my two darling little freaking salad munchers that we should eat at McDonalds, without allowing them to talk me into driving for 20 minutes to the McDonalds with the really big play place off exit 25 on I-84. I’m not driving a long ass way for “fast food”.
Anyway… the joys of my life want Chicken McNuggets. One wants 10, the other 6, with Bar-Bee-Queue Sauce the little one explains firmly as if speaking to someone venturing into McDonalds for the very first time unsupervised.
Honey… trust me, I’ve been there. Heck… I’ve even worked there. Heck, I’ve even been fired from there. Though I maintain to this very day that wouldn’t have happened if they had bothered to train me where the pull switch was located for the over the grill fire extinguishers.
True story by the way. Shut down the whole store for a night.
Anyway…
I need 16 McNuggets.
I can get a 6 and a 10 pack, but that comes to fifteen cents more than the 20 pack which costs $8.09.
Hang on.
Dollar menu… 4 pack… $1
4 x 4 = 16 McNuggets = $4 = LMAO I WIN!!!
McDonalds you McFail at math.
