Real Estate Zealot

Lean, Mean and Keen will make it

For many it's the best of times....for others it's the worst of times. For some...they have never seen anything close to a down cycle.

Great changes always come to industries during periods of tribulation.  The Real Estate industry, in many cases, is based on models and concepts that are some 50 plus years old. These now can come crashing down. 

As a Metro Brokers agent you are poised to survive.   What was good 32 years ago is even better today. True 100% commissions and no franchise fees is the key to survival.

Companies that have built their empires on 30-40-50% splits (taxes) plus 5-8% franchise fees...depending on these desk fees to pay their bloated cooperate franchisers...are in for a rude awakening.  These shops are typical in training new brokers and keeping non producing real estate brokers from the island of incredible misfits.  There is no question that 10% are doing 80% of the business, with the 90% to fight over the 10% of table scraps.  Those top 10% will get to call their own shots and that will not include supporting the heavy taxation of their franchisers, office owners.  True 100% commissions, fees for services companies with no franchise fees are growing.  These models have worked for 30 years...ask Dave Liniger, and they work today.   Some of the newer companies have succeeded in a faux market place of what could be considered the largest percentage growth of real estate prices and market increase in our history....that is now over...DONE.

Whether you know it, or not, what the world elite power folks are really up to is a world wide rework...be prepared for a 5+ year or better struggle.  This is NOT GOING TO GO AWAY.  This is a world wide political issue and not a country market issue.  This is about shaping world policy.  The financial conditions that we are seeing worldwide, are the result of policies dating back to 1971, at Brenton-Woods, with President Nixon.  While there is no question Bush Jr. is an obedient dunce, Ford, Carter, Reagan, Clinton and Bush Sr. laid the way for the new economics coming our way and most Americans are going to take it Hook, Line and Sinker.

A thinning of the real estate agent herd is absolutely vital to keep the industry buoyant. There are far too many agents chasing too few sales.  Those who can ride out the downturn and have the ability to change and adapt to the new paradigm will do well. Those who believe it's business as usual will fall by the wayside.

There's little question that 2008 was a difficult year and 2009 according to some experts may be even more dismal. The Colorado Market is far BETTER than many areas in the United States. 

Home sales should start to recover as soon as the banks ease credit rules....however that won't happen until the housing market bottoms out. When home sales will bottom out is anyone's guess.

The world is in a state of economic upheaval such as we've never seen before. It's for sure, it's the most interesting of times as we wade into uncharted waters.

Lean, Mean and Keen will make it...the shops that need to suckle the piglets will go away...because all the piglets want is a hand out or to work there for FREE.  We can now see the true professionals shine.

Denver's inventory hits 2 year low and prices trend up 20%

If you were going to bet on a real estate market to come back, sooner and not later...The Denver Real Estate Market has the statistics to lead the way out. 

According to HousingTracker.net, the below charts show the continued improving housing market in the Metro Denver area.  Single Family and Condo inventory is down 22% and prices are up 20%.   This  works in conjunction with reports from The Urban Land Institute as having Denver in it's top ten markets nationwide as well as in it's emerging Trends Real Estate 2009, dated October 21, 2008:
   

• Houston. Stays relatively strong as long as energy stays hot. It makes the top ten for the first time since 1995. Office vacancies drop to 10 percent, “a good buy opportunity,” but apartments soften. Cheap land results in cheap housing, and prices have not gone up dramatically.
• Boston. Job outlook is more favorable than most cities, with office space “tight” in the Financial District and the Back Bay area. New “harborside hotels threaten older product.”
• Denver. The state capital has a major federal government presence, which should buffer job losses. Steady population growth and broadening diversification of the industry keeps the housing market stable. Mass transit should pay future dividends.
• Dallas. Compares favorably to other “hot-growth” markets. Although office vacancies downtown are 20 percent or higher, apartments do well and developers keep building single-family homes.
• Chicago. Apartments do well, but condos weaken as speculators leave the market. Office vacancies are in the low teens, and O’Hare International Airport keeps industrial space in the “global pathway.

Here are the Urban Land Institute ratings for Metro Denver Commercial properties. Commercial/multi-family investment, No. 10; commercial/multifamily development, N0.21; for-sale homebuilding, No. 21; office properties, No. 8; hotels, No. 11; and industrial, no. 10.

Notice how all the above categories had to do with ROOFS OVER OUR HEADS?  The only coming "softening markets" in Denver, will be in some Commercial sectors, mostly retail... will be heading towards the skids in 2009...I ask myself,  "how many Tokyo Joe's, dry cleaners and nail salons does the average consumer need?"  People who specialize in Commercial real estate forget that the number of human beings in the Denver Metro area needing a roof over their heads has increased and not decreased.  We hardly need any more of any commercial retail or office real estate!  

Now let's illustrate that real estate is local!  The above charts give a 50,000 foot view, so let's take a look at what this really means to the man on the street.  Total Housing units, sold, under $200K located in Cherry Creek School district, city of Aurora.

From 1/1/08 to 12/1/08

Total Sold 920 (83.63 per month pace)

Avg List Price 156,353

Avg Sold Price 140,144

Avg Sold to List 89.63%

Avg DOM 76.98 days

 

From 1/1/08 thru 5/31/08

Total Sold 430 (86 per month pace)

Avg List Price 157,148

Avg Sold Price 141,709

Avg Sold to List 90.17%

Avg DOM 83.10

 

From 6/1/08 thru 12/1/08

Total Sold 460 (76.66 per month pace)

Avg List Price 155,656

Avg Sold Price 138,771

Avg List to Sold 89.15%

Avg DOM 71.61

 

From 10/1/08 thru 12/1/08

Total Sold 107 (53.5 per month pace)

Avg List Price 157,510

Avg Sold Price 139,877

Avg List to Sold 88.8%

Avg DOM 63.16

Ok and now compare to last year at this time.  Despite the press, despite the stock market and despite people who don't know how to obtain data.  Prices are UP, and Days on the market are down.  The decrease in inventory is having the effect that it should..more demand.  More demand means higher pricing and fewer days to sell.

From 10-1-07 thru 12-1-07

155 Sold

Avg List Price 146,969

Avg Sold Price 135,264

Avg Sold to List 92%

Avg DOM 79.49

AfBA title insurnce save consumers money with low overhead and 10 year reissue rates

BrokerIPTV: Today, we are talking with John Clikeman managing partner of AfBA Meridian Title and Escrow and John, welcome to the show.

John Clikeman: Thank you.

BrokerIPTV: Glad you are here.

John Clikeman: Nice to be here.

BrokerIPTV: Now you operate one of the larger real estate broker owned AfBA title insurance companies in Colorado, Meridian Title and Escrow Talk a little bit about that.

John Clikeman: Well, an Affiliated Business Arrangements AfBAis basically a concept where the broker owners of the real estate office or real estate broker become actual owners in the title insurance entity and therefore, are able to refer business to their, in effect their own company and of course, but subject to all the RESPA and Colorado insurance and real estate requirements, disclosure requirements, etc., but it is basically a vehicle for members of the real estate community to in effect create some additional corollary income in the real estate pursuits.

BrokerIPTV: Now, this obviously has worked out fairly well for you?

John Clikeman: So far so good. It is a little slow right now; we would like it faster, but...

BrokerIPTV: You are right.

John Clikeman: We are living through it.

BrokerIPTV: Yeah. Now, are you seeing an increase in AfBA membership?

John Clikeman: We are. I think that has got something to do with the fact that the market is changing and I think the realtors are looking for different things to be able to offer to their customers, i.e., the one stop shop concept and also to be more conscious of how they can deal with the consumer on a more consumer friendly basis; that pertains a lot to the title insurance rate structures.

BrokerIPTV: I am glad you brought that up, because obviously you have got an advantage if it is all housed internally and it's real estate broker owned and you obviously don't have some of the overhead costs that other title insurance companies have and therefore, you can pass that onto the consumer, correct?

John Clikeman: Yes, that is part of the benefit. So, we try to keep the overhead factors comparatively very low. There is not a lot of brick and motor issues. There is... our owners are really the sales force for the company. So, we don't have extra overhead to go out and buy... not buy, but to bring in a sales force as such; we have a built in sales force.

BrokerIPTV: Right. I don't think people know, but how wide of a... or how wide of a range can there be in title insurance costs?

John Clikeman: It can be pretty dramatic when you get into talking what we call reissue rates. Say some companies and these are the underwriters that have the rates filed with the Division of Insurance, but some reissue rates go back as little as two years, some go back three years on a tiered basis. There are underwriters out there that go back six years and then there is also I believe one underwriter in Colorado that goes back actually 10 years on a reissue rate and we, fortunately for Meridian Title and Escrow, have three separate underwriters at this point and we do have the ability to offer that ten year reissue rate. For instance, if you have a title premium that would normally be $2000 on a transaction and it doesn't come into that ten year reissue rate time period, that's what you are going to pay. If you do have one that comes within that timeframe or goes back that far, you are going to pay a $1000. So, you have a basic 50% savings, which can be significant in a real estate transaction.

BrokerIPTV: Final question; Department of Real Estate every year, beginning a new year, we have got new rules, we have got regs[Phonetic], we have got changes to the contract. Disclosures are going to be big again this year. They are really trying to spell out the broker duties with the disclosures and they are really trying to tell the consumer what?

John Clikeman: Well, it looks like where they are going with all this is they want the consumer to be more educated and knowledgeable about the rates, fees, the new RESPA rule was just put into place, that was intended to simplify the process; I am not quite sure it is doing that, but they want the consumer to be more, I would call it, educated in what they are really getting into. Frankly, I am not sure the consumer does understand title insurance all that well, but at least on a rate structure, the goal there is to get people to understand what their options are and do some comparisons.

BrokerIPTV: And they really want to make it clear that agents do not shop around for rates on behalf of the client. John, thanks so much.

John Clikeman: Thank you.

BrokerIPTV: Appreciate you being with us.

Metrolist MLS system strives to be the heartbeat of real estate transaction

BrokerIPTV: Today we are talking with Bruce Gardner, a real estate practitioner with Keller Williams and a member of the board at Metrolist. Bruce, welcome to the show.

Bruce Gardner: Thanks Dan.

BrokerIPTV: Thanks for being here. Metrolist obviously has spent an enormous amount of time and effort in Prime Access and getting up to being very Web 2.0 these days for people in the real estate business and so forth. Talk a little bit about how that is going.

Bruce Gardner: Well, the way we see it is that Prime Access will be the central point of our vision for the future. Web 2.0 concepts are about interactivity between users of the system and we see Prime Access as the heartbeat of that interactivity.

BrokerIPTV: Now, we have got a lot of different tools that are very Web 2.0 for people whether you are talking about documents online or whether it is online management or you can upload disclosures and so forth. Talk about some of those different features.

Bruce Gardner: We have a number of features that are coming online, but the key concept for us Dan is that we see the MLS of the future as the heartbeat of the real estate transaction. So, what our company, Metrolist, wants to do is be more involved with the transaction life cycle, be involved from more in the beginning to more at the end and step beyond just the data entry or database system.

BrokerIPTV: And you are talking about incorporating what, the title company in there, the mortgage company, how would that all work?

Bruce Gardner: Again, the vision for the future of MetroList is to tie all of the players in the transaction together, so that the realtor can do a single point of entry with the information on the property, the other components of the transaction can access that information through the MLS system, and work on a single platform, which will allow each of these players to be more efficient and more effective.

BrokerIPTV: What has the response been to a lot of these different features?

Bruce Gardner: We have had overwhelmingly positive response. Everyone seems to really like the new tools and the new direction of our company.

BrokerIPTV: I know a lot of realtors are kind of resistance against change. I actually have a couple of realtors in my office who are still using the really old system, before the standard www.mymls.com. Are people starting to move over from mymls to Prime Access?

Bruce Gardner: Well, it is a good question, because I don't think it is just realtors that are hesitant to change; I think it is people in general, but what we are really seeing is an adoption of the new Prime Access system and transition through, but keep in mind, Metrolist is one of the only companies in the country, MLS systems in the country, that offers this level of choice to their users. Our users have three different access methods to the MLS data, the old system, the current mymls, and the new platform called Prime Access. In addition to that, we have created interconnectivity so that our users can choose to use a front end software solution by a different vendor if they would rather do that too.

BrokerIPTV: Now the old, old access, is that going away?

Bruce Gardner: Well, eventually, it will; yes.

BrokerIPTV: Yeah and then eventually, everyone will phase from mymls into Prime Access?

Bruce Gardner: Absolutely.

BrokerIPTV: All right. Do you have a specific feature that you like the best?

Bruce Gardner: Well, the new features what I really enjoy is the Microsoft mapping feature, which allows us to really not only do a search based on the location, but then transition over to a satellite view. You can actually see the property from a satellite view, look at it on a 45 degree angle, and learn much more about the property than you would through a static database system.

BrokerIPTV: I like that as well, because when you pull up and you are searching for a home for a buyer and you have got all of your actives down there at the bottom, you are trying to see on the map how close in proximity they are to each other, so you don't have a drive all the way over here and a drive over here; if you see them all bunched, you are kind of happy and say, "Okay, we know where we are going." So, that is a favorite feature of mine. There is a lot of stuff that is in testing still from Metrolist and Prime Access to support the whole transaction lifestyle. Talk a little bit about that.

Bruce Gardner: Well, on the front end of the transaction, we are looking at integrating CRM customer relationship tools into the system, so a user can start to work with the data that is specific to a client and then connect it and marry it to a property that they end up wanting to buy. On the back end of the system, we are also looking at integrating... we already have integrated Instanet contract software, allows the user to do the contract online, manage that paperwork all the way through the transaction, and then store it after the transaction is closed indefinitely.

BrokerIPTV: Wow! That sounds great. Bruce, thanks. It is terrific information. Appreciate you being here.

Bruce Gardner: All right Dan. Thank you.

Metrolist's Prime Access teams up with ListHub for property listing syndication

BrokerIPTV: Today we are talking with Bruce Gardner, a real estate practitioner with Keller Williams and a member of the board of Metrolist. Bruce, welcome.

Bruce Gardner: Thanks Dan.

BrokerIPTV: Hey, in a previous segment, we were talking about Metrolist and their whole ability with Prime Access to really move into Web 2.0. One of the great features is that, now your listing on Metrolist can also get pushed out all over the Internet to a variety of sites. Talk a little bit why that's a good thing for the realtor and their listings.

Bruce Gardner: Well, it's a matter of exposure. What we want to do is allow the realtor, the user of our Metrolist system, to expose their listing to a variety of different channels.

BrokerIPTV: Now, I am sure people have been on Metrolist and they have seen the word ListHub, but they didn't know what that is; can you explain?

Bruce Gardner: ListHub is a service that a user can choose to use, that allows their listing information to flow into other major national websites like Google, Trulia or Yahoo, other major channels where the consumer is searching for listing data.

BrokerIPTV: All right. Now, I have heard consumers say, "Well, that's nice that you have access to the MLS in Metrolist as a realtor, but you know where should I be? Where should I go? Shall I be on realtor.com?" but www.recolorado.com is an option for consumers that is like the Metrolist MLS, correct?

Bruce Gardner: That's correct. It has current Metrolist MLS data in it. It was established as a member benefit and allows the public to access that data. So, this is a free service that's available to our members and our users to access their... to expose their information to the public.

BrokerIPTV: They can see some of the same data that we are seeing?

Bruce Gardner: All of it.

BrokerIPTV: All of it.

Bruce Gardner: Not all of the listing data, but all of the general data about each property.

BrokerIPTV: All right. Now, we know about realtor.com and www.recolorado.com, we just talked a little bit, but talk about those partnerships, because I don't think everyone knows that when they put a listing up, it automatically goes to those two sites.

Bruce Gardner: Well, it's really the future of the MLS and property data. The public expects that they can have access to that information and we are giving that information automatically. So, it flows through these different channels into these advertising mediums.

BrokerIPTV: All right. So, if a realtor puts up a listing on the MLS and ListHub goes ahead and pushes that out, where does that go, to what type of sites, where can they find it?

Bruce Gardner: Well, they can go to the ones that we just talked about Google, Trulia, Yahoo, there are a number of other sites that they can look for it also.

BrokerIPTV: And again they are probably saying to themselves, "What benefit is it of... to me to be on Trulia or Google" or so forth?

Bruce Gardner: Well, the benefit is really value proposition that they offer to their client. The client really expects to be able to find their property data when they list their home in these other channels and we allow that to happen through the Metrolist system.

BrokerIPTV: And it's exposure, exposure, exposure...

Bruce Gardner: Exactly.

BrokerIPTV: All right. And imagine this all fits into the grand vision of where Metrolist wants to be and wants to go.

Bruce Gardner: Correct. Metrolist vision of the future is that we want to increase our value proposition. We want to give professional grade tools to our users that allows them as a realtor to be more efficient, more effective, and more productive so that they can give that value proposition to their client. That value proposition will allow Metrolist to grow as a company.

BrokerIPTV: Bruce, good information. [Voice Cross Over] Thanks so much. Appreciate you being here.

Bruce Gardner: Thanks Dan. Thanks for having me.

BrokerIPTV: Okay.

RESPA changes-consumers to shop title insurance costs and sign more paper!

BrokerIPTV: Today, we are talking with John Clikeman, managing partner of AfBA Meridian Title and Escrow and John, welcome to the show; thanks for being with us.

John Clikeman: Thank you.

BrokerIPTV: You know in a previous segment, we ended talking a little bit about a lot of RESPA issues, a lot of disclosure information, wanting the consumer to know more, wanting the consumer to go out and investigate things for themselves and of course this morning I read an article in Inman talking about HUD and HUD is making a real push to get consumers to shop for loans and Title Insurance. Will that work John?

John Clikeman: Well, I think it is a lofty goal at this point. I think it is important that the consumers actually realize that there are big differences in cost, not only on the loan side, but on the title insurance side. I think what HUD and RESPA is all about is making sure a consumer at least comprehends that there is available many different types of rates out there and they should be educated about those to make, I guess you would call it, an informed decision.

BrokerIPTV: You stick a GFE, a Good Faith Estimate, in front of somebody, it is two pages; apparently, it is going to go to three pages. I think the purpose of that was to make it simpler, but I am not sure that going to three pages actually accomplishes that. I mean do you find that most people kind of have that glazed over look in their face?

John Clikeman: I would say so. [Inaudible] I don't think that there are that many people who are in real estate, standard residential real estate transaction that totally comprehend it. I think most people if you are a seller, what do you want? You want your property sold, you want your proceeds, and you want to go on buy another house. As a buyer, you want to get the deal done, you want to get your loan closed, and move on. So, there is a problem there. I mean... I think they are trying to address it. I am not sure what they have done so far is solving what they are trying to do. It might be even complicating it [Voice Cross Over] more.

BrokerIPTV: Yeah. Coming in 2009 another change is that they are trying, at least in the real estate contract, to let people know that title insurance is just not the sole discretion of the seller anymore, that they buyer can purchase their own title insurance, they should be encouraged to check out title insurance and various rates and so forth; your thoughts on that.

John Clikeman: Well, again, I think that is a good goal. I think what you are going to see, the evolution of that, would be offers are going to be made by buyers, where it will actually be specified in the contract, which title company they want to use. So, it becomes a contractual issue and the assumption there would be that the buyer again has actually gone out and done his or her homework and done his shopping and selected a title company that is more attractive to the buyer from the rate structure. So, it is... the offer is made with the title company designated. That is not the way it used to be in Colorado. It used to be where the seller pretty much controlled that.

BrokerIPTV: Well, if the seller is paying for the title insurance, do you find that most buyers really care?

John Clikeman: Traditionally, honestly, no.

BrokerIPTV: Okay.

John Clikeman: I mean title insurance is a pretty generic thing. I mean you don't get different product by going to a different title company. You might get different service, you might get different rates, but the product as such is standardized. It is all the same stuff, so...

BrokerIPTV: And until recently we had some title companies that just ended up closing their doors prior to transactions closing, which was even more important that you picked a stable title insurance company.

John Clikeman: That is correct.

BrokerIPTV: John, thanks so much; really appreciate you being here.

John Clikeman: Thank you.