I’m in San Francisco for the third ReBarCamp. As a result I got to hang out this weekend with my friend and partner  Ginger Wilcox, and spend time with her children and my friends Todd Carpenter and Andy Kaufman.

While we were having breakfast this morning Ginger asked me to read the latest post on her awesome “Blog by the Bay“. The title was “Is It wrong to Walk Away from an Underwater Mortgage”, written by George Crowe. The topic of the post was strategic default. The topic is interesting enough and struck a strong enough chord within me to require a response here ( for me, even if not for you )

If you don’t know what a strategic default is, it is a term used by people to apologize for their failure to live up to an obligation they created contractually. In other words, it describes people who are walking away from mortgage loans that they are capable of repaying.The key here is that the borrower has the ability to make the payments required by the loan, but they choose not to.

I am not a fan of strategic defaults. I can understand that people are stressed financially, but the mortgage documents don’t say that you can don’t have to pay if you get upset. I understand that the banks are being seen as the bad guys in the current economic climate, but the documents don’t say you don’t have to pay if you don’t like the actions of the lender. You borrowed the money, you bought something with it, and you’re supposed to pay back the loan.  George quotes a New York Times article:

Back in January Roger Lowenstein argued the case for strategic default in The New York Times Magazine, and he made some pretty good points:

“Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment — surrender of the property. The borrower isn’t escaping the consequences; he is suffering them.”

I am not as familiar with mortgage lending in California or New York as I am in Pennsylvania where we sign a mortgage and a note. The mortgage document is the pledge of real property for the repayment of  debt, and the note is our personal pledge to repay the loan. Under the terms of those documents, the borrower might be liable for a deficiency judgment to return to the bank the funds that they do not recover through the foreclosure process.  But in any case, that is not a discussion of what is right or wrong, only what might be financially expedient.

Then there is the idea that “its only business” which seems to me to be another excuse. When people tell me something is business, not personal, it’s always because they are about to do something unpleasant, and they want to distance themselves from the moral responsibility for their actions. In this case, the term is being used to indicate that the decision here is a financial one, not a moral or legal one. And that’s just not the case. You can’t be moral only when its easy, or you have no real sense of right or wrong.

I don’t pretend to be able to stand in judgement of others or their actions. And I can understand the temptation to walk away from a loan because of the pressures of the economy, but your reaction to that temptation is what determines who you are.
When my late wife’s father passed away, her mom was left with debts from his business. She didn’t own a house, and was not responsible for his debts, but she worked for years to pay off each debtor. Tillie Rosen is an stand up human being. As a widow with limited resources, having only recently returned to the work force in a low paying clerical job, she made good on the obligations of her late husband (only one of e reasons I love and respect her). She could have chosen strategic default to benefit her family but she chose to scrimp and save to pay off the obligations of her late husband because she knew that was the right thing to do .

In a market like that in Marin County where Ginger works and lives, people are struggling to pay mortgages that are currently in excess of the value of their property. That’s a really tough problem, but the property was worth more when they bought it, and will probably be worth more again some time in the future.  Obviously, there is a financial benefit to the borrower if they walk away from the property and then buy another property back at the new lower value and wait for the recovery of the marketplace. But that is a financial decision, not a moral decision.  I wouldn’t blame a homeowner who was underwater and unable to make the payments for defaulting, or for “giving the keys” back to the bank through a deed in lieu of foreclosure. Those are cases of bowing to the inevitable. But for a member of the privileged class, who has a loan that they don’t want to pay, because the thing they bought went down in value? That’s just not right, at least in my opinion. Its not fun, but living up to the promises you make in life is always the right thing to do .

In closing his post George says:

If you buy into the argument that it was the irresponsible and greedy behavior of the banks that brought about the housing bubble and corresponding bust, then maybe it’s fair that they’re left holding the bag. It’s a tough question with no easy answer. What do you think?

Since the banks were not  partners in profit when  properties went up in value during the boom they should not be expected to be partners in the loss of value today. They are lenders, and they lent money to willing borrowers, who in these cases were and are able to make the payments under the terms they agreed to – even if it isn’t the most expedient thing to do, it is the right thing to do.

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• Fannie Mae Intensifies Penalties for Strategic Defaulters (faarforum.com)
• Most Mortgages in Default Held by the Wealthy (news.firedoglake.com)
• Study: Nearly One in Five Mortgage Defaults Are ‘Strategic’ (blogs.wsj.com)
• Richest homeowners making most defaults (commercialappeal.com)

In a recent post in RealTown, Mike Bowler wrote a post about change in the real estate industry that ended up being more about his preference of educational choices then it was about real change in the industry.

Mike asks the question “Are we at the crossroads where, all companies should just expect agents to go to where the education is being provided versus trying to be all things to all people? ” – and then goes on to say “I think the day of independent contractors depending on the brokerage for any education is nearly gone. Most business models cannot provide all that is needed and should not pretend to say they do.”

He points at the 4000 registrants at the Virtual ReBarCamp saying “it’s obvious that we can learn more from our peers around the country than we can within the 4 walls of an office”. Unfortunately that statement is really a “non-sequitur” – a Latin phrase meaning “it does not follow”. 4000 registrants for a free online experience doesn’t indicate anything more than “if its free its for me” is a philosophy of the masses. And any educator can tell you that the number of people that register has never had anything to do with the quality of the presentations or what the participants actually learned from the process. In fact, since people all learn differently, it would be almost a sure bet that there were as many people that learned nothing from the experience as there were that gained anything from a single channel experience like that.

I think Mike’s perspective may be a little skewed by his passion for some of the new collegial educational opportunities, and I can’t blame him for that. Like him, I’m a big fan of ReBarCamps (not so much on the virtual ones) because they (the real ReBarCamps) are conversations when they are done best – and those conversations are great learning experiences because we never know where they can go , or what we can get from them. The virtual ReBarCamp presentations were, by nature, planned presentations with limited participation from the community, and were in some cases sales pitches for the presenters rather than real educational experiences or collegial education.

As a forward thinking real estate person in a troubled market, change is desired, but is often not what we anticipate. I think some things will stay the same -

• I believe companies that are large enough will provide training to new agents, and opportunities for experienced agents to increase their skill sets.
  • As in the past, smaller companies will rely on third party tools and educational products to help them bridge the gap for their agents.
• REALTORAssociations  will continue to provide educational opportunities for their members through webinars, educational opportunities at conferences and business metings and through 3rd party providers like SMMI , the REALTORS Institute, REBAC, etc.
• National Franchises will provide training for the agents in the offices of their franchisees through a variety of distance learning programs as they are today,
• The best agents will still seek additional education wherever they can find it , and remember that they should always be seeking new educational opportunities.

Unlike Mike, I believe that independent contractors will continue to rely on their brokerages (among others) to provide them with educational opportunities, and that the brokerages will step up to meet those challenges. Though the additional opportunities for agents will continue to morph and change and take advantage of the newest ways to communicate, brokerages, franchise organizations, REALTOR Associations, and other educational providers will continue to provide educational opportunities for our industry. And that is more about commerce than it is about change.-

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I’m a fan of silly things – they usually make me smile , but sometimes I end up just scratching my head and wondering why people do silly things when they don’t intend to. And more and more frequently I see people doing sill things in social spaces.

Your community ( or audience, or market) needs to be the prime consideration when you write or say things, so I am stunned  by many real estate people who  think their audience needs to be interested in the things they want them to be interested in. I reserve  ReReflections for the comments on the real estate industry that are so peculiarly mine that I ‘m not sharing them over at AgentGenius. My social media thoughts are either published there or at www.smminstitute.com or www.buzzbuilderz.com. My blog posts that might be of interest to consumers find their way to either MovePhilly or C21AgVoices. Not because I want my writings to be hard to find, but because I want to be saying things that are relevant to specific readers.

It not a new phenomenon but before the advent of social media, we needed to be present to hear real estate agents say silly things. For example, an agent might tell a client whose listing was expiring “You can’t list your property with someone else – I’ve really spent a lot of time working on it”.  Why does the seller care? Their property isn’t sold and their needs are not being met. and they still needed to sell the property.  A more relevant tactic would have been to give them a reason to stay listed that made sense. Perhaps a discussion of their pricing and marketing position combined with a comparison of the marketing efforts  of the current and prospective real estate companies.  It might not have convinced the client to extend the listing, but at least the conversation would have been relevant instead of simply self-centered.

Today, poorly informed  agents who use social networks to broadcast commercial messages make their lack of thought a public spectacle. The “Facebook listing” is an iconic example of abuse.  With listings reiterated in thousands of places through IDX feeds and listing syndication, putting listing information or open house information in a social environment demonstrates not only a lack of concern for the other members of your community, but a lack of respect for your “friends”.

By demonstrating lack of relevance in your content, and a disregard for the social context, you demonstrate disrespect for your ‘friends’  that results in a dismissal of your message and a reduction in your online relevance .

Recently, I saw an interchange on Facebook that went like this:

When I read this he sounds like a multi-level-marketer talking about “income potential” . No one cares what you make (unless you’re paying their bills) – they care about things that impact them or your relationship with them. Not to mention the fact that the whole response might have been better placed as a message rather than a wall post.

And while we’re talking about advertising disguised as social interaction – how about this;

Where is the engagement in this blind solicitation? Who could be silly enough to think that this person cares about their career ? This could easily have been lifted from a bus bench billboard – is that what we perceive our social network values?

I think that talking about work in social settings can be appropriate , just as it would be in face to face settings. For example, you might say in a social setting that you had a tough time working with sellers to obtain a listing, but you probably wouldn’t whip out a flyer for the property and give it to the guests.  If we could just take a moment to think about whether we would do something in person that we’re about to do on-line, it might really improve the quality of our communications, and the bonds we have wth our communties,

Its the middle of a really busy work day, so obviously I need to check out what my friends are doing on Facebook (I am after all an American). And there is the lovely Brandie Young on my live feed Asking

Like this? Want to do something about homelessness in Austin, San Antonio, New Orleans, Providence, and Nashville?

Because that’s really a hard question to say “No” to (and Brandie is the type of woman who just makes you want to say “Yes” to her requests) I clicked on her link and saw the slideshow below – a compelling story I think.

Then when I looked even further, I found out that Brandie (who still totally rocks) had built this awesome slide show at the request of Lani Rosales who had aksed a number of people to step up and participate in a unique event. But let me have her tell you about it in her own words from her New Media Labs Blog

PLEASE use one of these slideshows in your own blog:

For the first ever social charity presentation roundup, several people (even some not in Austin!) stepped up to bat to put together various slideshows based on facts provided by Alan Graham of local non profit organization, Mobile Loaves and Fishes, serving the needs of the homeless.

Now I told you Brandie Young ROCKS, and this new information did nothing more than remind me that Lani Rosales also TOTALLY ROCKS.  Makes you feel good to know that two women who are totally adorable and smart, and hot, are also so thoughtful , generous, and gracious… (Dontcha Wish you knew them too?)

Now go out and do something to make them feel good about this..

In a recent search, I noticed a post by another brokerage firm about a relationship with RealtyTrac that was promulgated by their national franchise. .

It reminded me why I hate salespeople sometimes.

This post would indicate to a real estate consumer that the agent and firm had some benefit through the publication of their third party information, and that this would make them some kind of foreclosure experts. And while the writer is a pleasant enough person, and just trying to create a business advantage for themselves, its just nonsense, and its frankly misleading – though I will give them the benefit of the doubt and assume that it is unintentionally misleading.

I have been selling foreclosures for 21 years in Philadelphia, Bucks, Montgomery, Delaware and Chester Counties, and for the past year or two also in Burlington, Camden and Gloucester counties in New Jersey. I have also been an active real estate investor for even longer than that, so I think that I would be considered an expert in the marketing, purchase and sale of foreclosure properties. From my experience I know that , for the most part third party relationships like the one touted by this broker don’t work. And I know that for the past 21 years, most of the calls from services like these that I received were from people that were calling on outdated properties that were published long after they were sold and settled.

Third party listings of foreclosures have a number of problems. As I mentioned, their information is often outdated.They often provide too much information seeming to provide value but muddying the waters for most consumers – for example “pre-foreclosure” data which is useless to most of their subscribers. The source of the information is not disclosed in many instances, and is therefore questionable. For real estate professionals, the third party information is less accurate than the Multiple Listing Service .

I understand the need for the third party company to sell subscriptions, and their right to advertise and boast about their services to do so. And I understand the need for the national franchise to create affiliate relationships to obtain income opportunities and to position themselves as providing value to their franchisees, I even understand the writer pimping this out as a benefit to the public – but it is indicative of their lack of understanding about the product and the foreclosure product that they even do so. It just burns me up that they are so busy posting something to appear at the front of the pack, that they don’t take the time to actually determine if it accomplishes that before they publish.

As salespeople I think we have an obligation to balance our need to market with the need to be genuine and transparent. Its too easy to lay claim to expertise when you’re writing alone in your home or office. Don’t just claim a position, have the position. Be the expert you claim to be – or claim to be the expert you are.

Image via Wikipedia

I know that this is my platform for writing about the real estate industry, bt today I just want to use this for a quick rant.

In his blog TechCrunch, Michael Arrington recently wrote a great post about Facebook’s refusal to deny a platform to Holocaust denial. The post is well written and cogent, and I hope that you already took a moment to read it via the link I provided above.

Though I agree with Arrington’s position and the points he makes, I didn’t start writing this just to parrot those points, but to express something that occured to me as I was reading the post.  I think that I understand why an organization would not want to feel that they were limiting the right of an individual to to express their opinions, no matter how bizarre, or outright wrong those opinions might be. After all, we live in a country founded upon the precept of free speeech. But does that mean that you are obligated to provide a platform for someone to express an opinion you find reprehensible? To paraphrase and old cliche, “If someone were shouting “fire” in a crowded theater are you obligated to provide him or her with a bullhorn?”

I respect Facebook’s desire to rise above the issue, but should they do so at the expense of their own moral values. As Arrington points out so eloquently “Holocaust denial is a seed. A seed that will grow into a fully bloomed second Holocaust if ever allowed to germinate. And Facebook is providing the fertile ground and watering needed to do just that.”

I understand the dilemma on a theoretical level – If we ban holocaust deniers, should we not ban the flat earth society or groups that think we didn’t really walk on the moon or even groups that think there was a federal/mob/communist conspiracy to kill JFK?  I don’t think those are really the same thing. I do think we can ban hate grops of ay sort from platforms that are privately owned, even if they are accessed by the public. In fact, I think that we have an obligation to ourselves and our society to do so.

My father-in-law was one of the American troops that liberated the death camp at Dachau. My Uncle’s mother was killed at Auschwitz. My Great Aunt died during the holocaust in Jedwabna Poland. I don’t need anyone to assure me that the Holocaust happened. And painful though it may be, I do agree that Holocaust deniers have the right to express their misguided bigoted opinions. But I don’t think that anyone is required to facilitate the replication or proliferation of those lies. And I don’t think that Facebook is provided any moral high ground when they do so.

Image via Wikipedia

September 11, 2001 – was a world changing day. I remember going to work in my car listening to the Howard Stern show on the radio, when Howard started talking about a plane running into the World trade Center. The first thought that went through my mind was that a small plane had run into the huge buildings, but when I walked in to my office, everyone was talking , huddled around a small television, looking at the video of the first plane hitting the towers.

I remember clearly the shock, and the endless news coverage of this incredible disaster, The day seemed to be an endless series of shocks as the information about the other planes and their fates unfolded. With family in New York and the Washington D.C. area, we were frantically calling to see where everyone was, breathing easier as we located each family member, our sadness deepening as other families were shown on the news, frantically trying to locate fathers, mothers, sisters, brothers, sons and daughters. The search for survivors was dramatic and disturbing and the firemen raising our flag in the rubble created a scene for our generation as memorable as the flag raising at Iwo Jima was for our father’s.

We were at war and we learned to live with changes in the way we travel. We got used to increased security at the airports, going through metal detectors, removing our shoes, not carrying liquids, and getting to the airport with plenty of time to spare for the security process. With the economy occupying so much of the news and our lives, we take a lot of things for granted.

After speaking at ReTechSouth yesterday, today was the day to fly home. The people who held the event had arranged for a van to take us to the airport, but the driver needed to fill the van and the trip was 45 minutes long. As a result I arrived at the airport a little later than I would have liked. The airport is rather large, and I had to ask for directions in the terminal. After getting the directions I was focused on finding my way through the atrium to go through the normal stages of security, when I heard some clapping off to my left. I stopped and looked to see what was happening and search for the celebrity that caused such a stir.

I was moved as I saw a column of uniformed men and women making their way through the atrium as the people around them applauded and waved. With a lump in my throat I put my bags down, stopped and started clapping myself.

Its been over 7 years since 9/11, but every time I see someone in uniform, I keep having the impulse to stop nd thank them for their service or ask them if I can buy them a drink or a meal, or do something for them, but my innate sense of shyness stops me from bothering them. However that doesn’t mean that I am not grateful to each and every person who endures hardship so that the rest of us don’t need to. Today was a chance to publicly do something small to show that gratitude and appreciation. This post is just another way to accomplish that . I hope tomorrow brings another chance like these.

Image by reeltor99 via Flickr

2008 was a tough year. And its not one I’m sorry to see leave.

The challenges we face in business are just  part of our business, which is now and has always been cyclical. But  2008 will always be the year that I lost my best friend, suddenly, without explanation (not that an explanation would have helped) and without reason that I could understand. It was a year that made a change in my life that I still find myself struggling with, and would seem to have little to redeem it.

Time is very subjective for me. It seems like I have been without my beautiful wife forever, and yet when I think about something that happened in  July when she was still the vibrant funny presence in my life, it seems like just yesterday. I find myself thinking about that and about this major change in my life often these days. It was during one of those long ruminations I realized that many of the people that I find my support from weren’t even in my life a year ago.

I “talk” to people every day that make me laugh, provide support, make me think, and help find things that interest me. I am invested in their lives and hurt when they hurt, cry and laugh when they cry and laugh, and seek their opinions and approval. I smile when I make them laugh, and I am proud when they are noted for their achievements. People like Ines, Ginger Wilcox, Benn & Lani Rosales, Jeff Turner, Teresa and Jack Boardman, Chris Griffith, Kim Wood, Sarah Cooper, Jonathan Dalton, Kris Berg and so many others who reach out to me regularly and make my life a little brighter.

A year ago I was aware of the RE.Net but not fully engaged. And when I became engaged, I found a world full of people to connect with, who had much to offer. I just wanted but I did find a need to share how grateful I am for my social media friends and acquaintances (yes they are “real” friends even if the roots of our relationship began in the virtual world).

So what does this have to do with 2009 being a better year? I just returned from Inman Connect in New York, where some of the predictions for the coming year’s economy were grim but the bloggers and social media types that were present were telling me that they were finishing a pretty good year. There were stories of international buyers, and community members making referrals, and people contacting them because they had written reviews of places they ate, or shopped, or worked.

The opportunities in the market may have gotten smaller, but the population fo real estate agents has also. And there are more and more people who are learning that by being good members of their communities, and participating in social media in a meaningful manner, they will be the consumer’s choice when the consumer needs them.And of course, there is the other important social media marketing feature – it costs so little, and returns so much. Unlike traditional interuptive marketing, the more you do , the less it costs.

So embrace your community, and as you give love, you will get love, and on the way, probably increase your business opportunities. But you will increase the people that you interact with. I only hope, for your sake, that they are as special as the people I found to interact with in my world.

Image via Wikipedia

If you follow me in the world of social media, you know that I am a Twitter person. I listen, I comment, and I enjoy watching the stream This morning someone wrote “If Realtors are really successful, why are so many homes on the market. Either you can sell or you can’t. ”

I don’t understand what he is talking about, or the correlation of inventory with the impact of using a REALTOR. The purpose of selling a home through a real estate professional was never about just selling the home. It was about selling the home for the best price with the best terms possible, in a smooth and secure manner minimizing the risk of potential litigation.

In a market where demand outpaces supply (commonly referred to as a seller’s market) the need for a real estate professional is often less obvious because consumers confuse getting it sold with getting it sold properly (as I defined it above). And because of that confusion, the value that the professional adds to the transaction seems to be obfuscated by the market activity. (I know its a big word – I usually eschew obfuscation, but Google the word if you need to)

In a market where the supply outpaces the demand (commonly referred to as a buyer’s market) the seller’s need for the services of a real estate professional becomes more obvious because it is more difficult to find the qualified buyer to purchase the home for any price, let alone the best price for the seller. But that same price pressure often leads the seller to the mistaken impression that the best strategy is to sell the property without professional assistance to allow them more room to negotiate. But that doesn’t make the need for a REALTOR any less urgent, or the impact on the transaction of the professional’s services any less crucial.

In fact, I would suggest that the absorption rate of even the slower market would be negatively impacted by the removal of the REALTOR’s services. Perhaps the best analogy is that of a room that is dimly lit by a few candles. The argument made by my twitter bud seems to be that the poor lighting in the room is due to the presence of the candles, when without their illumination, the room would have been in deeper if not total darkness.

I don’t know why REALTOR bashing is so popular, except that it is always easy to bash a class of people. Professional goups are faceless and do not respond to small slights like these, and these unsupported statements, fallacious as they are, create untrue impressions in those who read them. And when the market is tough, and people seek to blame someone, faceless groups become an easy target.

So if you are a REALTOR, and struggle against a slow market in your area, be proud of the positive impact you have on the ability of your buyers and sellers to make the moves they need to make in their lives. And if you are a consumer, struggling against that same market, hold your agent accountable to do what they can, and to (perhaps as importantly) explain to you what they are doing and why, but don;t blame them for the vagaries of the marketplace, anymore than you should give them credit for the better marketplaces we have experienced.

It seems that everyone is always trying to improve on the poor old “For Sale” sign.

I was reading a recent Blog at Sellsius which speaks about  Custom Fit Realtyin Wisconsin who  is using Matrix codes on its house for sale signs to reach mobile users. The company’s new technology allowing buyers to take a photo of a “For Sale” sign on a house, and then get taken to the property information through their smart-phone browser.

I’ve got to say I was underwhelmed. While this latest piece of technology is pretty neat, and one that I would want to try just because I like to play with toys. I don’t think it ie unique or even new. People have been inventing ways to disintermediate the salesperson as long as there have been sales signs. Without thinking deeply I can think of…

• “Talking” Houses – FM transmitters that play the property information for the potential buyer. This is actually more efficient since almost every auto today has an FM receiver, while not every phone is a smart-phone.
• Property Brochure Boxes – OK , so this is a little Lo-Tech, but come on, its doing the same thing isn’t it? And it has the advantage of being a little more durable and easier to share than the site on a cell phone.
• Marketing Voice Mail Boxes which use a code number on the sign to allow people to call for property information. Again, every mobile phone user can do this, while the smart-phone, though more common is not yet ubiquitous.
• Single Property websites posted on the property sign
• MLS number and Company Web site printed on Yard Sign Riders

All of these marketing support systems have one thing in common however. You need to have located the property, and be sitting in front of it to utilize them. So the marketing system that worked here is obviously the Yard sign – the original real estate technology to advertise a property for sale. (In all fairness, they might have located the property through print advertising, but if they had called the office or seen the property on a website, they would have already had the information these systems provide)

 We need to remember that the purpose of a real estate brokerage is to make money, and that under the most common current business model, that means that our sales associates need to interface with consumers at the earliest possible point in the sales curve. So why would we want to provide them with yet another method of avoiding contact with a sales associate , who should  be able to provide them with better information than a website , pre-recorded message or property flyer?