March 31, 2007
April Fool's Day 2007: Real Estate Parodies & Predictions
Yesterday, a leading real estate technology news service published it's Top 10 predictions on the future of real estate blogging. Preliminary comments agree with Prediction #5:
The blogging community will give voice to those in the industry who previously didn't have one -- making them a force to be reckoned with. This has already happened, but will grow stronger this year. The open dialog will spark change the industry has never before seen.
What role will real estate consumer will play in that revolution, and what are the most effective ways to get homebuyers and sellers involved? Humor -- the kind that has turned political commentary into infotainment -- could be an effective way to attract and engage real estate consumers. So a year after launching our original menu of wikis, which was so serious that it is still password-protected, The Real Estate Cafe's newest wiki has a more light-hearted goal:
Prediction #11: Real estate bloggers and zillions of homebuyers and sellers will pool their wits on April Fool's Day to publish a parody of the current housing market and real estate practices.
Hopefully, like satirical TV programs, there will be some serious content between the laughs. Better still, maybe ordinary home buyers and sellers, turned "radical consumers advocates," will launch some lasting reforms; insuring they have the last laugh. Who says real estate professionals, homebuyers, and sellers don't have a sense of humor? Anyone reading the paper knows that housing prices are a joke. What else about the current housing market or real estate practices makes you laugh (or drives you crazy)?
March 25, 2007
Talking about a (Real Estate) Revolution: Then & Now
Welcome Boston Globe readers, existing clients, and others: Some real estate consumer advocates, like The Real Estate Cafe, have been "Talking about a Revolution" in real estate -- CONSUMER revolution to be specific -- since the early 1990's. Why do you think that alternative, money-saving real estate business models have been slow to capture market share?
The Real Estate Cafe has just launched an experimental new, social networking site to discuss that question and MANY others in coming months. Please visit the site, add your perspective or questions, and even set-up your own page within the new site to share your thoughts, photos, videos, etc. We can't wait to grow this community of web-savvy, do-it-yourself real estate consumers and real estate "change agents" to share moneysaving strategies and opportunities!
Your creativity and friends are needed to join and expand the revolution. Some photos from past efforts are shown in this mini-slideshow as well as a photo of the original Real Estate Cafe, founded in 1995, as the nation's first, internet-based, walk-in housing information center. Last year, our clients saved over $1 million not even counting our commission rebates (see article in Wall Street Journal). If you're buying a home, we'd be glad to chat online or in-person about our NEW menu of fee options, to help you choose the one that's best for you.
March 16, 2007
No Recession but mortgage defaults will drag housing prices down
NPR just posted this link to Robert Siegel's interview this evening with MIT economist Bill Wheaton: Expert: Mortgage Defaults Won't Key Recession.
Thus far there is no audio online and the transcript is pending. So home sellers should recheck the link above before jumping to an overly optimistic conclusion. At the end of January, Wheaton predicted that Housing prices could decline another 20% in Greater Boston and other markets nationwide, particularly those where housing prices were inflated by subprime lending. So home buyers, no need to rush your offers if housing will be a multiyear economic drag, right?
Double Bubble: How counterfeit buyer agents inflated the housing bubble
Yesterday we blogged about the "Mortgage Meltdown" and record number of foreclosures, challenging the media and regulators to investigate how counterfeit buyer agents (a.k.a. double agents) helped inflate the housing bubble. If they do, here's the kind of "glaring" case study they may find:
My so-called buyer's agent (who promptly switched roles at contract signing without explanation), initially advised me to bid $750,000 for my house of choice, which was listed at $699,900. When I told her that such an offer was beyond my price range, she was quite adamant that I not offer anything under the list price. When I finally backed out the deal because of her bait and switch scam, I later heard that the house in question sold shortly afterwards for $682,000--in other words, nearly $70,000 less than the bid suggested by my so-called buyer agent.
This type of price inflation (caused by seller's agents masquerading as buyer's representatives) must have a very distorting impact on housing costs. The economic fallout is enormous: ordinary citizens are forced to move out farther in search of decent, affordable places to live, which leads to a host of problems connected with traffic congrestion, suburban sprawl, etc.
As I perceive it, the real estate cartel's use of dual agency [a.k.a. "designated agency"], which works to the detriment of the average consumer while enriching dishonest agents through the practice of double-dipping, contributes significantly to the manifold problems we see in the residential housing market and therefore should be fully exposed.
The homebuyer above concluded, "Isn't there any investigative team or media personage with the courage and tenacity to shed light on this problem?" We'd like to ask how homebuyer and sellers who have been victims of dual agency, designated agency, or faulty agency disclosure can use social networking tools, like blogs, wikis, and interactive mapping, to expose the problem and prevent other consumers from being harmed? Does anyone know if such an organizing effort is already underway, or have ideas about how to get one started?
March 15, 2007
Ides of March: Beware mortgage meltdown & counterfeit buyer agents
Tuesday's announcement that "lenders began
foreclosure against more than one of every 200 U.S. mortgage borrowers
in the fourth quarter," has the media tracking the "Mortgage Meltdown" and record number of foreclosures, and industry pundits predicting widespread ripple effects from the "Subprime Panic."
Steven Pearlstein of the Washington Post estimates that "...1.5 million Americans may lose their homes to foreclosure and ...hundreds of thousands of homes could be dumped on an already glutted market." Pearlstein concludes, "What we have here is a failure of common sense. ...It's not a whole lot more complicated than that."
real estate consumer advocates say the story is more complex. They're calling for the media and regulators to investigate the role dual agents (a.k.a. designated agents) played in creating the real estate bubble and the growing foreclosure problem. During the housing boom, little attention was paid to the conflicts of
interest which occur when large real estate agencies try to represent both home buyers and sellers in the same transaction. But one leading consumer advocate predicts homebuyers will take legal action when they realize they have been betrayed by counterfeit buyer agents:
As some home owners get "upside down" on their equity, or lose their homes by foreclosure, you may start to see a rash of litigation against the real estate "agents" who sold them their homes. Probably the vast majority of real estate agents acted as "buyer's agents" in the transactions, so there is likely the possibility some of these "buyer's agents" didn't really perform up to their expectation of "protecting" the interests of their "buyer clients."
In coming days, we'll expose the conflicts of interest designated agents would prefer to paper over and the heartbreaking failure of the real estate regulatory system to protect ordinary homebuyers and sellers. If you've been a victim of dual agency, designated agency, or other deceptive real estate practice, or know someone who is writing about the same subjects, please let us know. If you are in the housing market now, BEWARE designated agents; and demand a real buyer agent, like The Real Estate Cafe, who can help you save tens of thousands of dollars.
NPR Talk Show Alert: Subprime Panic
Ides of March NPR Talk Show Alert: Subprime Panic.
If you live in Greater Boston, you can listen to the live talkshow on Thursday, March 15, 2007 from 10-11am on 90.9FM, WBUR or the rebroadcast from 7-8pm. Elsewhere, you can also listen to the live broadcast online at OnPointRadio.org or download the podcast at your convenience.
See related post: Ides of March: Beware mortgage meltdown & counterfeit buyer agents and email us if you would like to participate in an upcoming "Bubble Hour" to discuss this program or other news documenting housing price trends. Please let us know if you'd prefer to chat online or in-person.
March 05, 2007
Creating a real estate version of (Product)RED
As real estate wealth has soared by trillions of dollars annually, the internet has made it possible for agents to realize unprecedented levels of success. So maybe it shouldn't be a surprise that a lead story last week discussing the book Billion Dollar Agent, asked whether that sales threshold has become the real estate industry's new standard for success.
Against that rising tide, other real estate innovators have chosen to compete on another measure of their success: consumer savings. In fact, a half a dozen who (like The Real Estate Cafe) have surpassed one million dollars in consumer savings were featured at a press conference hosted by the Consumer Federation of America in December 2006.
Could the industry's next measure of success be business models that help homebuyers and sellers save money AND save lives? What it would take for the real estate industry as a whole or individual innovators to create a real estate version of (Product)RED, the highly visible fund raising campaign for the Global AIDS Fund? Whether operating independently or from within that campaign, wouldn't donations from moneysaving or traditional real estate business models help (Product)RED turbo-charge it's mission?
To help seed that discussion and build some momentum, The Real Estate Cafe would like to invite billion dollar agents, alternative business models, as well as real estate consumers to begin brainstorming about how they can respond to the AIDS pandemic. One possible response -- an annual, friendly fund raising campaign for AIDS orphans called "Million Dollar March" -- is described in an earlier blog post, "Building a Real Estate Philanthropy Dream, ASAP." My hope is that real estate industry and millions of consumers will be inspired by the vision and passion Oprah's recent television special,"Building a Dream," to create and pursue their own philanthropic dreams. Your ideas and examples of initiatives already underway are invited.
March 01, 2007
Building a Real Estate Philanthropy Dream, ASAP
For many, March 1st is the unofficial kick-off of the Spring homebuying season, but for The Real Estate Cafe it's even more significant for three reasons:
1. Twelve years ago today, March 1, 1995, The Real Estate Cafe signed it's original lease at 221 Concord Ave, Cambridge, MA. With that leap of faith,we became the nation's first internet-based, walk-in housing information center. At the time, high speed T1 internet connections were rare and no one -- not even real estate agents -- could access the MLS on the internet.
2. We'd like to use that anniversary to take another leap of faith: we'd like to invite you to help relaunch the Million Dollar March. Originally submitted to the MIT Ideas Competition in September 2003, the proposed Million Dollar March is:
A friendly, annual fund raising competition to demonstrate how local communities across the United States and other countries can use real estate related revenues and savings from e-commerce real estate transactions to provide shelter subsidies for AIDS orphans through ASAP: AIDS Shelter Alliance Partners.
This year we may use innovative collaboration tools like a wiki or SecondLife.com to invite thousands of homebuyers and sellers, as well as real estate innovators, around the country to participate in the campaign by (1) contributing their own ideas, (2) organizing their own local fund raising campaigns, and (3) signing donation pledges (see PledgeBank idea starters below).
Alumni fund raising model
Citywide fund raising model
3. For our part, The Real Estate Cafe is using our 12th anniversary to announce our new menu of fees, our first rate increase in approximately a decade. But don't let that discourage you: if you agree to donate 10% of your rebate to non-profit organizations, you can lock into our longstanding rate of $100 per hour. (A minimum of $1,000 must be distributed to one or more non-profit organizations serving AIDS orphans through ASAP: AIDS Shelter Alliance Partners / Million Dollar March.) Why focus on AIDS orphans? Watch the rebroadcast of Oprah's special "Building a Dream" this Saturday, March 3, or read this blog post on six "megaforces" facing the global community.