Category: General

At the age of three, my brother was outside one afternoon building a sandcastle and fielding bids from developers to subdivide it into condos. In the midst of this flurry of activity, he spied the family cat, Sam, from the corner of his eye and noticed that the Siamese was in need of cleaning. (How he determined this “need” is still an open debate at family gatherings.) He scooped up the filthy feline beneath his arm and started toward the house. (Most cats choose the time and place that they’ll allow a human to pick them up, and this is usually done with both arms cradling them. So, being hooked under the midsection with a small and somewhat-less-sure arm was surely an affront to this cat’s dignity.) My brother entered the house and made for the bathroom.

Kicking open the bathroom door, he noticed the air was warm and steamy – someone had already run a bath. Happy day! So, he slid open the glass door on the bath enclosure and discovered my dad was already in the water with soap bubbles floating on the surface – someone to whom my brother could delegate the cleaning chore and get back to the sandcastle and developers! Gathering his wits about him, my dad greeted my brother and asked if there was something he needed. My brother simply looked at him, cat still squirming to get free from his captor’s devilishly tenacious grip, and said, “Sam needs a bath.” Before this could register in my dad’s brain, my brother flung the helpless feline into the water with my dad and summarily closed the glass door.

This little family vignette touches upon a number of issues: real estate development, early childhood education, animal rights, hygiene, the fact most grown men won’t admit to indulging themselves in the quiet and therapeutic pleasure of soaking in a tub – my dad will probably kill me for telling this story – and the need to have a fully stocked first-aid kit readily available when you have small children around. However, the most interesting thing about this story is what it tells you about yourself in the real estate process.

1. Concern for the cat: If your thoughts went immediately to what became of the cat after being tossed into the tub with a naked man, you tend to be someone who’s attracted to the purchase side of things; you want to resolve the situation quickly and with the best possible outcome.
2. Concern for the son: If your thoughts went immediately to what became of the boy, you tend to be someone who’s attracted to the listing/sale side of things; you want it off your hands as soon as possible and want the payoff.
3. Concern for the dad: For those precious few who found immediate concern for the dad, you tend to be a loan officer – someone neither the cat nor the son thought much about before everything hit the water but looked to him as the savior of their needs.
4. Concern for who has to clean all this up: Obviously, anyone who made the natural leap to the mess the chaos would leave behind is in title and escrow.

With all that said with tongue firmly planted in cheek, there really is a simple but very important lesson to be learned here. When everyone does their job properly – and doesn’t try to do more than that – the transaction is clean and closes on time. What you do with the family cat and/or the bathtub after the transaction is closed is completely up to you.

Human history is full of examples of people doing something a certain way for hundreds of years, and someone comes along and basically says, “That doesn’t make any sense,” and then showing the world how it really should be done. With the Olympics on everyone’s mind right now, one especially poignant example is the high jump. Before 1965, athletes would get a running start and basically “dive”, “roll”, or “hurdle” over the height marker and try to keep from knocking it off. Then, an American by the name of Dick Fosbury came along with “the move” we see today: run, pivot, and go over the marker with your backside first. It’s called the Fosbury Flop, and it helped him win a gold medal in the 1968 Olympics.

In the real estate world, it’s time to introduce another Flop, if you will (that’s sort of an unfortunate way to characterize it given the fact we’re talking about a POSITIVE change, but I can’t go back in time and ask Old Dickey to give his move a different name – sorry). It’s beaten into every new real estate agent’s head that when they first meet a new client, they are to insist that the client get prequalified for a loan BEFORE the agent takes them out to look at properties. It’s a piece of advice that enables agents to work with serious buyers and buyers to know that the agent is taking them seriously. That’s smart, and you’ll get no argument here on the merits of that advice. However, it’s old advice that needs to be changed.

What if I told you this new advice would:

• Produce stronger buyers (increased negotiation power)
• Provide a cleaner and faster transaction (yes, ESPECIALLY after TRID)
• Enable agents to work with more clients WITHOUT sacrificing the quality of their interaction WITH EACH AND EVERY client

Do I need to go on? If this new advice would do ALL OF THOSE THINGS, would you be willing to give it a listen? I’m absolutely certain that more than the majority of Dick Fosbury’s fellow competitors who were at that now-legendary track meet in 1965 when he introduced the Flop sat there and said, “That’s insane” or “He got lucky”. Let that sink in for a moment, and let me add two questions: (1) How many high jumpers from that 1965 track meet can you name besides Dick Fosbury? (2) How many gold-medal high jumpers today DON’T use the Fosbury Flop?

We work with a number of “insane” and “lucky” real estate agents who have vastly increased their production with this advice. Additionally, we have a long list of clients who looked convention in the face . . . and laughed all the way into their new homes with less stress and the satisfaction that they got the best possible deal on their purchase.

Are you ready to test your sanity and your luck? This entire article may have seemed like a big tease, but I’m confident that when you call me and I explain it to you, you’ll understand how truly serious I am about this. When you implement this advice, and someone says, “That’s not the way you’re supposed to do it,” just smile and say, “Everybody laughed at Dick, too.”

After having a flat tire repaired recently, I opened my car door to find a largish sheet of paper set over the floor mat of the driver’s side. At first blush, one would think that this is their way of saying, “Hey, we realize we’re pretty messy – it’s sort of your car’s fault – but we didn’t want to get your car dirty and have to pay for a carpet cleaning.” Good form. What was actually written on the paper is what made me laugh: in big letters right smack in the middle were the words “Eco Barrier”. Eco barrier? Are they trying to tell me that the mechanics are wearing hazmat suits and walking through toxic waste and biological ooze that would best be kept from making contact with the carpet in my car? If that’s the case, is a piece of bleached white paper really going to act as a “barrier” against such an eventuality? One word: marketing. Someone in the corporate office was sitting there thinking, “There will be people stepping into their cars, reading the words ‘Eco Barrier’, and saying, ‘Thank all that is holy that they spared my car from possible toxic contamination.’ I should get a healthy raise for that little piece of brilliant word play. That’s way better than Bob’s idea of writing ‘Stain Stopper’ on the paper mat. Way too pedestrian!”

Marketing makes sure just the right word or words are used to paint an enticing picture. For example, that gas-guzzling, blind-spot-the-size-of-Texas vehicle that is so ever present on the road isn’t called a PSW (Pregnant Station Wagon); it’s called an SUV (Sport Utility Vehicle). Although the name may be completely off the mark, we want to feel like it perfectly defines our tastes and who we are. But seriously, who are we kidding? If going to the grocery store and taking up two parking spots – because you can – is an NCAA-sanctioned sport, then okay. Or, if driving around the block by yourself to a Pilates class is classified as a utility, fine.

Clothing companies employ armies of wordsmiths to come up with thirty-seven different names for the color red. They’re not about to tell you that the shirt is “orangeish red” – if they did, they could only charge you a mere fraction of the price they’re trotting out there. The shirt you are considering is “heather cayenne”. “Heather cayenne? That color could only come from blind monks who dye each yarn by hand high up in the Andalusian mountains and carry them by mule down to the nearby town to sell in the market square. At $274, this T-shirt is a steal. I’ll take two.” That may not happen with anyone you or I may know outside of Hollywood, but it’s the stuff of marketing folks’ dreams.

As a result of numerous things that have happened and continue to happen in the world, we’ve been “marketed” to believe that paying cash is best. I’m not here to tell you that buying things with cash is evil and that you should put everything on a credit card – certainly not. But there is a very good argument to be made – and one that can be supported with data – that paying cash for a house isn’t always the smartest move when one of your goals is wealth building. With interest rates at record lows compared against a very conservative investment strategy, someone who has enough cash to purchase a house outright is better off taking on a 30-year mortgage and making their mortgage payment out of the proceeds of their investments – and still be better off. Added bonus: you get the tax advantage of writing off the interest each year. Having your money more readily available allows you more security to handle unexpected costs and emergencies; if you’ve paid cash for the house, you can’t pay for those emergencies – your money’s “in the walls”.

This doesn’t apply to everyone, of course, but it is something a lot more people should consider. Come in and we’ll help map it out for you. If you want, you can sit on an Eco Barrier – we can’t always vouch for who sat there before you.

Before you read the following, I need to make it known that I have nothing against home appraisers. Many are fine, upstanding members of the community who uphold the Constitution of the United States, and many help elderly people safely cross busy intersections. Are we good? Okay.

There’s a recent trend out there in the real estate/mortgage world that’s a bit . . . troubling, and it has to do with the appraisal process. As you have already seen, it seems like for the last little while, appraisals have been taking longer, and they’ve been throwing a wrench into the underwriting portion of the mortgage process more often than in the past. In essence, with new guidelines, appraisers have felt like their job has gone from being someone who demonstrates the value of the home on the day of appraisal (that’s not a direct quote from their job description, but it’s close) to a full-fledged home inspector. (I’m not here to argue whether this is justified or not; I’m just telling you what we’re seeing.)

This is resulting in an appraiser writing her/his report pointing out the reasons for the appraised value of the home and making note of particular items that positively or adversely affect that value. We’re still good there. However, in order to cover themselves, they’re taking more photos of the home than the paparazzi after a Taylor Swift concert, and they’re including them in the report. More often than not, while those photos aren’t even referenced in the narrative portion of the report, the mortgage underwriters are seeing all of these “unrelated” photos and using those photos in their decision concerning the underwriting process. In other words, an underwriter may see a “crack” in a wall and hold off on giving an approval by citing concern for that crack – many times, it turns out that it was a bad photo to start with (there’s a reason these folks make their living as appraisers and not paparazzi), and the “crack” was a shadow or a bad paint job; nothing structural, of course. Nevertheless, what the underwriter has seen can’t be unseen, and it has to be addressed and/or explained – this takes considerable time in an already tight post-TRID escrow. Ouch!

While none of us can tell the appraiser how to do her/his job (that change has to be made by someone much higher than you and me), we would advise a seller to take extra time the day before the appraisal to make sure things in the home are organized and more positively “presentable”. The better the photos look, the more favorably the underwriter will look upon the appraiser’s report. (I know that sounds weird, but there you have it – many things in this world don’t make perfect sense.) As for us, we’re ordering appraisals much sooner than in the past to have as much time for you to respond and correct before the closing date. I realize that’s not doing anything to change the situation, but this reminds me of the motto for the Navy’s destroyer, the USS Forest Royal: Praemonitus, Praemunitus – it means, “Forewarned is forearmed.” Make sure you pronounce the Latin correctly or else you might be saying, “I’ll take the full body wax,” and that’s not going to help anybody.

I am certainly not the smartest person in the room. On occasion, I am the smart aleck in the room, but that’s a whole other topic. At any rate, in my time here on this planet I have come to learn a number of things that help me to know that the world is in balance, if only precariously. These little things are the constants in life that we can count on like gravity keeps us from floating up in the air and water is wet. Without them, we feel a certain uneasiness. Let me share them with you:

1. Asparagus will have a lingering effect, if you know what I mean. Try as you might to dilute it with large quantities of alcohol or a cherry Slurpee, that little green vegetable’s odiferous power will not be masked.
2. If a man has a mustache – with no other facial hair – it’s a 98.72% likelihood that he’s a cop or a firefighter . . . or it’s Tom Selleck reprising his role in Magnum P.I. Little known fact: Salvador Dalí went to his college career advisor to ask about how he could become a police officer and found that the waiting list was three years long, but there were immediate openings in the “eccentric artist” department.
3. When you walk into a men’s public restroom, two out of the three seats in the stalls will be left in the up position – the one that’s not was last used by a man who’s been married for more than five years.
4. You will never become a millionaire, lose seventy-five pounds, or grow your hair back as a result of something you received through junk mail or a mass email.
5. Regardless of your college major and the subsequent career field you pursue, the things you learn in your Political Science 202 class will only come in handy when watching or competing on Jeopardy.

I defy you to prove these universal constants wrong. Sure, you’ll come back and say things like, “Hall of Fame pitcher Rollie Fingers had a handlebar mustache, and he was never in law enforcement or public safety.” Bear in mind, though, that Mr. Fingers and others of his mustachioed ilk comprise the other 1.28% – I have statistics to back me up. What have you got?

Just as there are constants in the world that we universally understand and accept, there are also misconceptions that exist and need to be righted immediately. Of course I’m talking about the real estate/mortgage world – this isn’t a newsletter for chefs who like extreme sports (unless they’re looking to buy or sell a house). In last week’s newsletter, I touched on a big one: you don’t have to amass a 20% down payment to qualify for a home these days. I know I made a big deal of that last week, but it bears repeating (and I’m the one writing the newsletter). Here’s another HUGE misconception: the only way to get into a home with prices on the rise is with the help of a down-payment assistance program. HUGE misconception! I am not implying in any way that DPA programs are bad; I’m only saying that the funds available in those programs are limited, and the DPA doesn’t always work out in the end. There are products out there that are NOT down-payment assistance programs that require NO down payment; there are others that only require a 1% down payment with the lender giving 2% toward the down payment. Those are constants in our current universe.

In closing, my recommendation is that you take comfort in these simple truths that I have outlined and this new information I’ve shared. Lay your head on your pillow tonight and dream sweetly of a world that makes sense in its own weird way. And if in those dreams you suddenly find yourself on Jeopardy competing against Tom Selleck and Salvador Dalí, rest assured they won’t know Plato’s Theory of Forms either.