Hat tip to SM for sending this along, from the AP:
WASHINGTON (AP) — The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the housing bust.
Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval.
The state plans are projected to help at least 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.
President Barack Obama unveiled the state assistance effort in February. Since then, state agencies have designed their own approaches, largely focused on borrowers who owe more on their properties than their homes are worth or those who have lost their jobs.
Officials say the state efforts could be used to make changes to the administration’s broader mortgage assistance plan. The state agencies are planning to work with local housing groups to put the plans in place.
The largest recipient of the funding is California, which will get nearly $700 million to assist about 38,000 borrowers. Florida is getting the second-largest pot of money, $418 million. That will help about 30,000 borrowers.
Michigan will receive about $155 million to assist 16,000 borrowers, while Arizona will receive $125 million for 4,000 borrowers. Nevada will receive $103 million for about 5,000 homeowners.
Besides these states, the Obama administration is providing an additional $600 million in financial support to help homeowners in states with high rates of unemployment.
Those states — Ohio, North Carolina, South Carolina, Oregon and Rhode Island — have submitted plans to the Treasury Department. They are being reviewed now, with approvals expected in August.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, which have met with limited success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration’s main mortgage modification program have dropped out, officials said this week. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
Every agent should offer every program, and let the client decide.
If every agent had a fee schedule that detailed what they charged (and what you got) for their commission-only, flat fee, rebate, and hourly programs, it would also encourage the consumer to shop around.
The paranoia about collusion and price-fixing would still permeate the space, but you’d probably see agents willing to work for $10 to $400 per hour (though I like clearfund’s idea of $975/hr!) . The agents who could justify their fee would lead the way, and those that couldn’t would need to charge a lot less, or get a different job.
The best agents would work with the commission-only clients, and have their assistants work with those who chose the alternative programs. If the consumer paid their agent on an hourly basis like other people, then that should include the normal 40-hour work week, right? Most agents don’t want to work nights and weekends, and, if paid hourly, would probably want it to be a typical 9-5 job, in a marketplace that goes around the clock.
A relatively minor adjustment, like having agents providing a fee schedule for all programs, would shake up the industry – but would it be enough? It wouldn’t eliminate the scumbags and sleezeballs, where the change is most needed. How do we clean house?
It was suggested that the real estate industry is ripe for a big player to change everything. Merrill Lynch tried it and lasted about a year, and the old Great Western Bank had a cup of coffee in the residential real estate business. Both couldn’t get out fast enough. Zip Realty and Redfin have both been around for years now, but we just covered their local production; they have barely made a dent.
If someone could blow up the current model, it would be Google. They have the name recognition, and could design the perfect public-MLS website that included all the extras, like videos, agent reviews, and quality valuation models. But that only covers the front end, the home searching. If they also had negotiators on staff and available by phone, email, skype, etc., it could change everything.
I sold a house to a doctor whose specialty is radiology. He works for a company that contracts with hospitals around the country, and when they need an expert opinion, they upload the x-rays, and he tells the local doctors what to do over the internet.
If virtual radiology is possible, then virtual real estate can’t be that far off.
But it would take a company who recognizes that the breakdowns occur at the meeting of the minds/follow-through to close stage. If Google combined the super-hot website with a limited real estate brokerage whose role was assisting with negotiating the deal and getting it to the finish line, it would change everything.
The website should still have an option for the seller to offer compensation/rebate to the buyer. If you had a specialty agent that provided valued help along the way, the buyer could use the seller-compensation to pay the agent if they didn’t opt for an alternative plan. Or if the buyer was on their own, and was comfortable with the Google-negotiated deal, then they could keep the seller-compensation as a rebate or apply it towards closing costs.
An excerpt on the Seahaus condo development in La Jolla, a Barratt American project:
Instead of sawn wood or steel beams, Seahaus’s skeleton is made of “parallel strand lumber” beams — long strands of wood from small trees glued together to make beams. The homeowners’ lawsuits allege that the developers knew the rainy winter of 2005 was exposing the buildings’ frames to rain, that they knew the beams could become an unglued mushy mess.
“They told me everything was going to be top-of-the-line, it was going to be nice, it was going to be great,” Alkasabi said. “But this place is full of nightmares.”
Alkasabi said he was told before he bought that the structure would be framed with steel beams, not the strand lumber. The condos would be soundproof and top-of-the-line, he said.
Alkasabi said he’s seen mushrooms grow out of stucco because of moisture inside. He refuses to walk under certain corridors. Inspectors found three colors of mold growing in his living room wall, he said. When he complained about a construction issue in one of his units, he said, the developers quickly planted a palm tree squarely in front of his view.
After reviewing a few beams in 2005, an engineer found some of the beams had expanded due to the rain and were “delaminated” — bending and splintering. The engineer recommended a few beams be replaced in a March 2005 memo, according to documents filed in court.
But the homeowners want to know: What about the rest of the beams the engineer didn’t look at?
“They came out, reviewed a few, but they did not look and inspect the hundreds that were out there,” said Mia Severson, attorney with Aguirre, Morris and Severson, which is representing the homeowners on the more recent suit. “The question becomes now, how structurally intact are the beams now?”
If you just look at the comps on paper, there was the similar REO sale a few doors down (which we saw) that closed last month for full price, $792,000, but it was on the golf course, down off La Costa Ave.
The inferior location might not be obvious to an asset manager with 300 files on their desk, who is looking to make a quick decision. If the initial appraisal or BPO only included a few “positive” photos, the true condition of the home might not be obvious either. But if there was a video presentation to pick up the good, the bad, and the ugly, the price might be sharper – here’s an example:
Yesterday in Part 1, we saw that that more and more real estate websites keep rolling out.
Is that the future, more gadgets? Undoubtedly there will always be more new websites to empower participants with more information. Is information all you need to successfully buy a house?
Let’s break down the home-buying process into two steps:
1. Information-gathering/search for home.
2. Meeting of the minds, and follow-through to close.
It used to be that realtors had a stranglehold on the homes for sale via the private MLS, and you needed an agent to be able to find a home. Now you don’t – and the agents whose skills are limited to house-searching will be helping only those buyers who can’t/won’t search themselves. Have you noticed how much the younger folks are addicted to the internet? Expect that the realtor population will dwindle significantly in the future.
Buyers are able to do their own home-searching, and educate themselves tremendously about market values. They know more than the sellers, and usually more than the agents – because the buyers have more at stake. But is that enough to make the deal?
I say no.
But first let’s note that any home seller can put a sign in their yard and sell their house without a realtor, if they don’t care about selling for the buyer’s price. Have you seen a lot of those sellers lately? Me neither.
Future home buyers will struggle to achieve a meeting of the minds with the seller at an acceptable price, but a third-party canassist. In a down or flat market, the buyers are willing to hold out, it would only be in a rapidly- improving market that buyers might compromise on price, and meet the seller’s demands – unless the house was so unique that the buyers had to have it, regardless of price.
Because the market will probably be choppy for years to come, how will this third-party evolve beyond today’s model?
Three ideas:
1. Specialized buyer-agents with exceptional skills/experience (Nordstrom, Four Seasons)
2. Listing agents who push for dual agency (Wal-Mart)
All three exist now simultaneously in other industries, and it’s up to the consumer to decide which is the best fit for them.
A. If you want personal attention and assistance all along the way, with assurance that when it comes to crunch-time your agent will be there to properly guide you and the transaction, then #1 is for you.
B. If a buyer is satisfied with their own level of market knowledge gained from the internet, and doesn’t mind getting minimal representation, then going direct will become more popular in the future – primarily because the listing agents will be pushing for it. Leftover agents from today will still have a shot at selling other agent’s listings, but only if the buyers are willing to pay a higher price – which will be less likely in the future.
C. The third option is in the works. The MLS entities are currently bonding together to create a state-wide MLS. This will lead to the possibility of an agent working the entire state of California, and providing expertise over the internet to be the third-party to make the deal anywhere.
The next step, Part 3, will be how agents get paid. I don’t think most people mind paying for assistance, it’s paying for what you need that is hard to identify. There will also be crossover between A, B, and C above that, if the pay scale was clear, would enable clarity and flow.
Hat tip to Susie for sending this along, from latimes.com:
Anyone who has ever had a beef with a real estate agent should take a look at the website ReallyRottenRealty.com. It’s all in fun, but the name suggests what some buyers and sellers believe to be true — that their agents failed to earn their pay for one reason or another.
“Want your home advertised by a professional?” the site asks.
“We believe in the three P’s of real estate marketing: put, put and pray. Put a sign in the yard, put it on the multiple listing service, and then pray someone will come along and buy it.”
Bill Petrey of Agent Harvest, the site’s creator and owner of a free agent-finder service that helps buyers and sellers find top producers in the Dallas-Fort Worth area, says other real estate agents have been remarkably restrained in their response to the site. “No one’s tried to shoot me or string me up,” he says.
Judging from the number of sellers and buyers who have used the website to vent, though, maybe agents haven’t barked back because buried in Petrey’s parody is a lot of truth. Among the site’s statistics:
— Longest listing on the market: 2,778 days. That’s seven years.
— Number of listings with no photo: 2,048. If there’s no picture, how are people going to see what the place looks like? The whole idea of listing houses on the Internet is to allow people to search from the comfort of their homes or offices.
— Number of listings with one photo: 2,745. See above.
— Number of agents who claim to be ranked No. 1 in Dallas: 2,320.
“My goal with the site is to poison the well, so to speak; to make people more aware of just how bad a real estate agent can be,” Petrey says. “Consumers need to understand that it’s really worthwhile to look for a good agent, and not let an agent get away with the things they’ve gotten away with in the past.”
I am proud to have Bryce Lucore, a fourth-generation local realtor, be part of Klinge Realty. Here’s a story about his great-great-grandfather, who was born in 1868 and moved to Oceanside in 1928. He was one of a couple of Realtors in Oceanside at that time. He sold property for 40 years in Oceanside/Carlsbad and when he retired at 99 he was one of the oldest active Realtors in the nation. (this article from 1964 – check his quotes in second column!):
