Case Says the Recovery is Here - 09.01.10 | Real Estate News for Real Estate and Mortgage Professionals

Realist 1: (September 01, 2010 9:27pm)

Crazy as it may sound, The real estate bubble is being re-inflated or at least not allowed to deflate in most areas of the country. All of this in an environment of record or near record unemployment and foreclosures. This is being accomplished by the withholding of large amounts of inventory by Freddie, Fannie, B of A, Citi, Chase and Wells with bailout money. Demand has been artificially stimulated with first time home buyer tax credits and low interest rates that are being artificially created by the purchase of treasury bonds by the Federal Reserve with vast amounts of printed money (this by the way will translate into future inflation).

5pence: (September 01, 2010 6:53pm)

In 1936, Franklin Delano Roosevelt took the podium at Madison Square Garden to deliver a message to his critics. "We [have] had to struggle with the old enemies of peace," he said. "Business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me, and I welcome their hatred."

meandchewwy: (September 01, 2010 6:21pm)

I like "Angry Frank's training for loan officers" that aired a long time ago. It was so so true from an obvious manager that has the experience. I will never forget the impact that had on my LO's. Pick up the phone and make a sale!!!

5pence: (September 01, 2010 5:37pm)

Funny, I was calling them banksters over a year ago. Gangster bankers = banksters lol. It truly fits imho. I wonder if it'll make it into the next Merriam Webster dictionary.

5pence: (September 01, 2010 5:34pm)

I hope so and I think what Cali and CCAP has and is doing is great. Groundswell of appraisers throwing the banksters shackles off all across the country. It's time for professionals to be let back into this business.

W.R.Buchanan: (September 01, 2010 5:33pm)

5P: as far as reputatons go, I think the banksters Reps are in the toilet right now. Congress is starting to see that we are the police and the other AH's are the bad guys. Hence Banksters. Incidentially I heard that term from a construction guy this last weekend and I asked him where he got it? He said they are all crooks and everybody he knew was calling them Banksters. That got around fast huh? If the shoe fits? Randy

W.R.Buchanan: (September 01, 2010 5:28pm)

5Pence: I have to say I personally think the momentum is shifting towards our side. We are seeing positive signs all over the place. the fact they are even having this R&C debate is more than we've been able to accomplish in many years. Also the CCAP is growing steadily and we are being well received here in CA. We are on the short list of 11 congressmen from CA and the fact that they know us at all is pretty good press for an outfit that has been around for only 6 months! I think we are instore for some real progress, as far as the business goes, Maybe it'll even be worth doing again? Randy

5pence: (September 01, 2010 5:12pm)

It'd be a pay raise. I was charging $400-$450 per appraisal and the AMC's are charging $600 and more for the same property. It's been 20 years since appraisers got a raise and 3 years that our fees hae actually dropped. Hoping for the rubber band effect on our fees.

5pence: (September 01, 2010 4:55pm)

We're going to need more respect if we expect to be able to charge hourly. Don't get me wrong, I REALLY like that idea. If we can get rid of AMC's, then we're on the road to hourly fees imho. Banksters have tossed our reputations down the turlets - that has to change first.

5pence: (September 01, 2010 4:50pm)

She's saying along with Richard Hager and others, that what the AMC's are charging for the appraisal is what's R & C in the marketplace. I don't see how anyone could disagree about that. The appraisal fee charged the consumer is on the HUD-1's readily available for all to see.

5pence: (September 01, 2010 4:45pm)

I agree W.R. but the only way we can get an hourly fee going is through a union or a guild. There's no way anyone is going to put up with us charging hourly rates considering the general publics low opinion of us. We need to educate the people about what we really do & how hard & costly for us it is to complete every job competently if we want to be allowed hourly wages. Due to this R & C bullshiite adopted by "appraisers" and now our legislature, we're trapped in fee limiting terms. Until we get enough unity, we have nothing but a few selfless people that go above & beyond the call of duty to make sure R & C is defined properly. Did you know that AMC's had wording in the bill that would make them the "appraiser"? Marion & Co. got rid of that. I agree 100% with Marion and others, reasonable & customary fees for the appraisal has been established historically & documented thoroughly by the HUD-1's. That's what the bill is looking for. It might put AMC's out of business but no tears here

W.R.Buchanan: (September 01, 2010 4:15pm)

5Pence: What Marion Rhodes is saying is kind of Non sequetur. People pay whatever the bank tells them to pay or they don't get none. Also when you factor in that little AMC skim, what actually reaches the appraiser is not indicative of what the client paid to begin with. So how can what the client paid be used as a benchmark? I hear what she's saying, but it doesn't seem like she is making any sense. I think it was you that mentioned a few weeks ago that we as appraisers have be saddled with this "Reasonable and Customary" Dead Horse. Problem is there is no definition of reasonable and customary. Now they want to define it so we can be saddled with it for the rest of our lives? I say "Billable Hours" should be the defintion of reasonable and customary. It is the only system that makes sense and is flexible enough to insure you are getting paid adequately for what you do. I think that pretty much defines "reasonable and customary" Don't you?

5pence: (September 01, 2010 4:00pm)

@joe : I got that Singapore info from Bloomberg Businessweek, May 3-9 edition.

5pence: (September 01, 2010 1:23pm)

cpappraisal : I'm re-thinking Singapore. 93 inches of rain a year and 50% of their drinking water has to be imported because they have no lakes, rivers or other sources of fresh water. Might be a nice place to visit tho when the sun is shining. Measuring houses in the pouring rain isn't all that appealing lol

joecolorado: (September 01, 2010 12:39pm)

having an MBA is just another level of education that you have succesfully conquered,it doesnt mean that you are smart it means that you have advanced to a higher examination level successfully. Einstein told people that he didnt have to know and remember each and every formula,he just had to remember in which book it could be found.I know an MBA that I wouldnt let butter my toast in the morning without explicit written instructions,and several successful high school graduates that would put the MBA to shame using common sense.

5pence: (September 01, 2010 11:55am)

So, how about that tax credit

5pence: (September 01, 2010 11:43am)

Hey guys, I just noticed "The Appraisal Show" to the right. Pretty cool - thanks B & F

5pence: (September 01, 2010 11:37am)

Many believe the fee schedule established by the VA is a legitimate benchmark for appraisers to use when setting fees. Others, such as Marion Rhodes, a Certified General in NE Pennsylvania, argue that what borrowers are willing to pay for an appraisal in the marketplace more accurately reflects customary and reasonable. “What a borrower pays for their appraisal, as noted on line 804 of the HUD-1, is the only accurate evidence to determine what is customary and reasonable,” said Rhodes. “It is a price borrowers pay and as such is acceptable in the market place.” Rhodes, who was one of a handful of appraisers who worked with Congressman Paul E. Kanjorski’s office at crafting the appraiser-related language for the FIN-REG, says that this fee data is available by surveying HUD-1 Forms & that appraisers ought to be pressuring Congress to gather & publish this data as evidence of what is customary and reasonable. SHE'S IN WASHINGTON RIGHT NOW. I HOPE SOME OF YOU SENT HER INFO REQUESTED.

5pence: (September 01, 2010 11:29am)

Good morning guys, loved that breakdown of TBWS SS Eye opening lead calculator. Almost makes me want to be a broker. The way it's laid out it seems doable. I'm much more impressed that manufacturing is up than Case's report. The Case report doesn't include co-ops, condo's or townhouses & new construction and the data is from June-before the tax credit expired. Also Cali was, and might still be, offering a state tax credit of $10,000. With those kinds of credits it's no wonder Cali is up. With all those credits it appears like a fire sale on prices so people jump in. That might not be in their own best interest-time will tell. Those large credits for buyers kind of skews the real market. The next quarterly reports will more reveal the "real" market. Amazing how the USA is more into fantasy than reality, almost as if the truth is too painful to bear. Really?? So the bandaid comes off slowly & as painfully as possible. But, still, I'm amazed that manufacturing is up as high as it is.

frankgaray: (September 01, 2010 10:40am)

W.R.Buchanan - It's not 4.3 leads a day, it's 4.3 meaningful conversations a day. We can all muster up conversations with people. 5 meaningful conversations a day M-F is 100 in a month. Be consistent and ask for the referral and it works. I know first hand from experience. For you it may be more than that, but, at least you know where you stand. Heck you may need 40 meaningful conversations in a day. There's where your focus needs to be - having those conversations. Remember "If you think you can or you can't, either way you're right".

W.R.Buchanan: (September 01, 2010 9:51am)

Lawyers $300-600/hr, CPA's $250/hr, Plumbers $95/hr, Car Mechanics $99/hr, all of these people are charging, and NOT negotiating, professional fees for professional services.Compare that to a $250 fee for an appraisal that takes you 10 hours to complete when a everything related is factored in. Your overhead is everything it costs you to do your work, and also includes everything it costs you to live too. This second part is often overlooked. You can't live on $30/hour in a self employed situation. You can just barely live like a human on $75/hr. Run the numbers on paper guys, if you are working for less than $75/hr you are going broke. You can't make up the difference in volumn. This business ain't a used car lot and you ain't Cal Worthington. You can't just "eat a bug". But if you keep selling short you may have to, you won't be able to afford food.

W.R.Buchanan: (September 01, 2010 9:38am)

At my appraisal business we have adopted a $75/ hour fee structure. Based on 5 hrs to complete a regular appraisal that's $375. And that is just to start IE:tract house with all comps in the tract. More complex assignments are quoted at $75/hr, and if the job takes 7 hours then $525 is the fee. We don't get every job, but my experience in quoting work in other businesses states that if you are getting more than 50% of the jobs you quote, you are't charging enough. I am encouraging everyone in this business to start pushing the hourly fee structure on your clients. They can only say NO for so long, and as attrition takes more of the competition out of the game our postion will become stronger. If Most Appraisers were going to hourly fees, when the workload exceeds the available pool of appraisers then the leverage shifts to our side. If the hourly fee structure is already in place then, we can start making the type of money our training and job requirements should be demanding anyway.

W.R.Buchanan: (September 01, 2010 9:20am)

One of the biggest problems we face as appraisers is the guy who is strapped for cash, and only has appraising as his source of income. This is the guy who is still doing full appraisals for $200-300. THIS DRAGS THE MARKET PRICE FOR APPRAISAL SERVICES DOWN, AND SCREWS EVERYBODY. And the banksters love it! The form discussed today by F&B also has a place in appraising. You need to have a seroius look at your overhead and what it costs you. And then see how many $200 appraisals it will take to make enough money to pay your bills. Toilet paper included. Yes everything you spend money on is your overhead! Figuring that you can live on $20-30/ hr is a joke, and you are full of crap if you think you can, and you are screwing the rest of us who have figured out we can't. If you can't make it as an appraiser charging full fees, then get a part time job doing something completely dis-related. Figure out something else to do to carry you over so you don't keep killing this business!

W.R.Buchanan: (September 01, 2010 9:06am)

Frank and Brian: I finally figured out where you're located? SF /Bay Area? Good to hear you're suffering with the current political climate in CA too. I would like to say that your show today along with the handy proposed income form was a cool thing. I think the numbers are going to be a little more shallow for the vast majority of people than the example, but what the hey. The stumbling block will be the 4.3 leads a Day number, which has to be there EVERY day, and we all know it ain't gonna be. I'm an appraiser so this doesn't affect me as directly as you guys, but I understand sales technique better than most, and the first tool people need to look at in sales is a "realistic sales goal". People who set unachievable sales goals, that they in fact don't achieve, are just setting themselves up for a short lived career. Nothing reinforces success more than success. Nothing Kills success faster than failure. All of you guys out there need to be very realistic about your income goals

TheDz: (September 01, 2010 8:56am)

Where is the info regarding Big Money for Countrywide customers???

cpappraisal: (September 01, 2010 8:25am)

jcollins-We study the sales history of all comparables withing the subject's market area sometimes going back years to see the difference in sales prices.

W.R.Buchanan: (September 01, 2010 7:59am)

Barbara: consider what I just said and look around you. You will be surprised at the number of one trick ponies out there. Just about 90% of the whole group I'd say. Randy

jcollins: (September 01, 2010 7:57am)

SANDERSLOANQUEEN: click the banner to the right.

W.R.Buchanan: (September 01, 2010 7:54am)

Barbara: That last little statement you made about an MBA not guaranteeing any brains? Well if you only realized the ramifcations of that statement. In any field of endevor 90% of the meaningful work is done by 10% of the people. Of that 10%, only 10% of them, actually know what they are doing! Notice I said "any field of endevor". What that means is just because you have a MBA in BFD doesn't mean you know how to tie your own shoes. Those are two entirely different areas of knowledge. Example: Obama is supposed to be some HI End Law Scholar, with all kinds of rags on his wall extolling his competance and knowledge. I'd bet he doesn't even own a CAR! And if he did own a car, he damn sure wouldn't know how to change the oil in it. Having expertise in only one subject does not a smart man make! Diversity is the key to optimum survival. I say,,, " it's not how well you do what you know how to do. It's how well you do what you 'don't' know how to do!" Randy

SANDERSLOANQUEEN: (September 01, 2010 7:54am)

I wanted to preview the info about Big Money Countrywide story but no such website www.GoldShow.tv

jcollins: (September 01, 2010 7:49am)

cpappraisal: how do appraisers come up with site/location value? As greenbelt, river access, veiws. Alos, Brian forgot the CW story AGAIN :) he did say it is in the REMAX GOLD SHOW

cpappraisal: (September 01, 2010 7:44am)

Frank and Brian-Still no story on Countrywide?

jcollins: (September 01, 2010 7:37am)

I heard a rumor yestarday that HUD is comming out with it 100% loan for first time buyers. Has anyone else heard this?

Joebob: (September 01, 2010 7:37am)

Went to another computer system...can "discuss".....cannot view! FYI

Joebob: (September 01, 2010 7:27am)

Wow...froze my system, now can't view....all ok????

debtdoctor: (September 01, 2010 6:54am)

The Case study simply shows that more high priced homes are selling than lower priced homes, NOT that prices of properties are rising. BERUT is accurate that the smaller sampling skews the stats even more. Foreclosures and short sales first swept through the lower priced homes, and continue to move up the ladder, as the lower priced homes did not sell (conventionally- arms length trans.), the buyer pools for the higher priced homes diminished. Average prices may be up, but how about volume? We got that answer last month. Looking at the higher average price as a positive sign is like stock market investors forgetting horrible news (such the failure of state and national government economies) by the very next day. What percentage of purchase transactions are distressed sales? This should be a primary indicator.

JDrobeck: (September 01, 2010 6:46am)

Considering 10% of us do 90% of the biz out there. I think you lost 90% of your viewers when you started talking about percentages and ratios. Most have no clue what those are. . . .

frankgaray: (September 01, 2010 6:34am)

BERUT - Then using the calculator we've provided for download you'll have to lower one or more of your conversion ratios to establish how many more meaningful conversations you need to have in order to achieve your goal.

BERUT: (September 01, 2010 6:32am)

The Case Shiller Study, hmmmmmmm, one month does not make a trend but worth watching. I am a bit doubtful considering this was a June study in a month that had a hude down turn in sales. When you are sampling a smaller number it isn't hard to get skewed numbers. Which only leads in to your sales is a numbers game. When things are tough in the sales business you have to increase your numbers, to get more business you have to speak with more people who can use you and your service/business. Finding people who can use a new mortgage ain't difficult, converting them into commissionable business is getting harder.

frankgaray: (September 01, 2010 6:24am)

Countrywide story! I'm an idiot! I promise you will have it tomorrow. In the meantime you can catch it on our RE/MAX show at www.GoldShow.tv

ChiTownGirl: (September 01, 2010 6:14am)

Hey Frank & Brian - thanks for your show - I really appreciate the knowledge that you pass on to all of us. What about the Countrywide story?

barbara: (September 01, 2010 5:43am)

I can't imagine how California values would ever "recover," without the enabling programs like the Pick A Pays. But then after the S&L debacle of the late '80s, I would never have guessed the idiots on Wall Street would have ever sold negative am again either. Just goes to show that an expensive MBA doesn't guarantee common sense!

frankgaray: (September 01, 2010 5:40am)

RocknLPE - Dang it! Ok. I'll put it in tomorrow. In the meantime go to www.GoldShow.tv and the story is there on the show we do for RE/MAX. Thanks for the reminder.

RocknLPE: (September 01, 2010 5:37am)

Hey...what happened to updating us on yesterdays forgotten story 'Big Money For Countrywide Customers'????

Bono Vox: (September 01, 2010 5:32am)

Three thoughts: 1) I've seen a ton of successful LOs who couldn't take a loan app, but no successful LOs who couldn't get leads 2) Yesterday's heading was "Big Money for CW Clients" but there wasn't any such content 3) OMG! I never noticed how much your theme song sounds like the Buffy theme song! Sarah Michelle Geller to do a cameo?

frankgaray: (September 01, 2010 5:18am)

gsuarez1 - Point taken, but our point is, it doesn't matter how smart you are at taking loan applications. You need leads. Nothing happens without a lead. And "Leads" are the start of achieving our income. We can't make one penny without first getting a lead. So the form lets you go from what income you want all the way down to how many meaningful conversations you need to have in a day to achieve it. Look at the forest, not the tree.

gsuarez1: (September 01, 2010 5:13am)

Sure our profession has an undeniable sales aspect, but are you serious that "filling out a loan app" doesn't take a rocket scientist? I have news for you; if you want those loan applications to close so you and your business partners can get paid then you better make sure you know loan guidelines and loan programs. The loan technician that is straight up with his customers and business partners and can consistently close the deals he says he can will out produce the marketing guru that takes as many apps as he can and throws them against the wall to see which ones stick. It’s the few that are capable of excelling at marketing and mortgage knowledge doing both that truly stand out in our industry.

debtdoctor: (September 01, 2010 4:55am)

ok guys, I signed up for the first time here because I could not stay quiet on this one.. The sales prices are calculated by taking the average of the overall sales, meaning it has little to do with any individual property (or group of properties) increasing in value. Currently, it has more to do with distressed sales moving up the price range in value. I see this often printed in the paper as news in our local market-“sales prices increasing”. The stats are usually put out by various Board of Realtors (so called experts, of which I am supposedly one), who clearly have an obvious motivation to put a happy face spin on a not so bright situation. Sorry to rain on anyone's parade, especially a sage of Mr. Case's stature.

Broker in RIC: (September 01, 2010 4:35am)

I would say that anyone who is converting a meaningful conversation into a real lead at 50%+ either is a rich, rich person, or isn't talking to enough people.