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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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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In January I returned from the Inman Connect Conference and the ReBarCamp in New York City and had the opportunity to talk to people from all over the country about the real estate industry.

As is the case in a lot of conferences, there was substantial social interaction as well as business networking, but since its January and we’re all creatures of habit – the first question on everyone’s lips was “How did you do last year?”. My answer was always the same, “We’re doing better, but its still not where I want it to be”.

I had to leave the Inman Conference and return to Philadelphia because I had a meeting today with our company’s Sales Managers. In preparation I did a little research so we could talk about how to improve our company’s productivity for the coming year. And I received quite a shock. I found out that I had unwittingly told a little white lie – and because being truthful is really important to me  I want to take the opportunity to apologize right here and right now to my team at CENTURY 21 Adantage Gold.

When I checked the Century 21 corporate web site to see how our company had performed in the comparison to other Century 21 firms in the country, I found that what I thought was actually wrong – we were doing pretty well in a challenging market.;

1. We were in the Top 5 companies in Pennsylvania based upon the amount of Gross Commission earned,
2. We were in the Top 3 companies in Pennsylvania based upon the number of properties we sold.
3. We were in the Top 100 Century 21 companies in the entire country based upon the amount of Gross Commission earned, and
4. We were in the top 67 Century 21 companies in the entire country based upon the amount of properties sold (out of a system with thousands of companies across the United States)

I wasn’t really displeased with the reality, I am just upset that I spoke without having the facts at my disposal. I am really big about writing what you know, not what you think when it comes to blogging , and the same rule should apply to all of our communication. When we speak from impressions rather than facts, we create false impressions – not the least of which take root in our own thoughts impacting our actions and decisions.

As we approach the end of the Tax Credit (About 34 days are left for people to buy), I wonder what we will learn on May 1, 2010. Will we learn that the tax credit was supporting our current activity? Will we learn that the market has recovered enough for the spring to have a reasonable aactivity level of its own? Will we learn that there are enough investors buying homes again that the REO inventory will diminish? What is reality telling you in your market?

As I write this, I am in a hotel in Western Pennsylvania, where ReBarCamp Pittsburgh will take place tomorrow.

I’m writing this post because of a few conversations I had recently with friends of mine. It seems that there was a conversation about whether ReBarCamps served any purpose. Concerns were expressed that the ReBarCamps had become hackneyed, that every ReBarCamp featured speakers who were just vendors trying to sell things to people, and that the same group of people kept showing up to talk. There was concern expressed that  the ReBarCamps were nothing more than a social gathering for some people in the RE.net who knew each other and who kept to themselves during the events,  making them more of an elitist social gathering than an education or sharing event.

I just looked at the RSVPs for this ReBarCamp. it seems that none of the “usual suspects” will be arriving tomorrow. In fact, there are only six people here that I know, and I met two of them this evening, two are past state association Presidents, and two are organizers of the ReBarCamp and they would probably not yet be familiar names to you.

When I heard these statements I was astounded. This will be my 12th ReBarCamp.  I have been all over the country attending these events, and each one has had a different flavor. I have experienced them in San Francisco twice, Fredricksburg, Los Angeles, Phoenix, Denver, Chicago, Virginia Beach, Miami,Columbus, helped organize one in Philadelphia and here I am in today in Pittsburgh. During that time, I only remember two sessions that I felt had commercial overtones, and I walked out of one of those sessions, and in the second one told the presenter that they were missing the point of the event. At those events I have presented or moderated sessions with  topics like social capital (whuffie), social contracts, selling foreclosures, listing foreclosures, the future of the real estate brokerage, short sales and working with banks on defaulted properties among others. Each time , I had little or no idea what I would talk about until the day of the event. I have also participated in dozens of sessions moderated or presented by others. Most of them were interesting or fun, and the others I walked out of and found another session.

I have really enjoyed seeing many of the more experienced social media presenters at a number of the events, but I am excited to see who the presenters will be today. I’ll probably present a session or two, but the agenda will be new and different because the people are new and different.  Even the sponsors for this event are different, though the Social Media Marketing Institute is a “repeat offender” – however as the CEO , I know they will not be pitching a product at the event.

I am friends with the three men who created the first ReBarCamp,Andy Kaufman, Brad Coy, and Todd Carpenter. I don’t think they intended to get rich or famous from the event – they just wanted to try something out and see if people responded. And their creation has become a national event that has educated hundreds upon hundreds of people about social media, real estate, and a variety of topics too eclectic to be listed here.

Anyway, my experience with ReBarCamps tells me that the people that attend today will start the day confused and unsure of what they have gotten themselves into. They will bring with them differing levels of knowledge and different expectations of the days event.  By the end of the day some will be confused, some will be disappointed, some will be enlightened, and some will be engaged. But they will all be impacted by a volunteer driven sharing experience. And at the end of the day I think that’s a good thing.  SO much so that I look forward to doing it again at ReBarCampDC next week and San Diego next month – where new groups of people will hopefully share and learn and become engaged in an event created by and for the community to benefit its members. People keep voting with their feet, by walking into sessions at ReBarCamps everywhere.

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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.

I spent several days last week teaching the SMMI CSM course to a group of top agents in Chicago. I left there Saturday to attend the wedding of my best friend’s daughter in Sarasota Florida, but I find myself in Tampa this morning waiting to fly back to Chicago for ReBarCamp Chicago,

You may be familiar with the concept of the ReBarCamp – an “unconference” where the participants set the agenda after they arrive. The concept was borrowed from the IT industry, and has taken hold in the Internet space referred to as the RE.net. Recently we held on in Philadelphia, last Friday saw one in Boston, and today is ReBarCamp Chicago.

ReBarCamp Chicago is an important event for a number of reasons. The first and most obvious is that I will be there (otherwise I might not be writing about it). But seriously, the venue itself is pretty impressive. The event is being held at the Chicago offices of the National Association of REALTORS (though they are not the creators of the event, and the volunteer event is not a function of the association). For an organization of the stature of NAR to host such an event says volumes about the organization’s willingness to embrace change and technology while supporting the efforts of its members to spread knowledge in this peer based type of event.

Perhaps I am so impressed by NAR’s willingness to provide the venue for this event because they have so often been the target of criticism in the Re.net, often without justification on the part of their critics. Even with that history, the association has shown themselves to be more than willing to reach out, communicate, and try to involve their members in all levels of their operation. I am sometimes accused of being overly supportive of NAR, but I really can;t help it. They give me so many reasons to support them.

Anyway, if you are near the association offices on Michigan Avenue today, i hope that you’ll try to stop in and participate in the ReBarCamp. It looks like there will be quite a group of Web 2.0 and social media participants here for this centrally located event. At last check, Teresa Boardman from St Paul Minnesota, Ginger Wilcox, Mike Simonsen, and Andy Kaufman from the San Francisco area, Sarah Cooper from West Virginia (of Real Estate Shows fame) and my friend Kim Wood, from Chester County Pennsylvania. In addition, you have some home grown Chicago celebs like Todd Carpenter (NAR’s Social Media Marketing Director), as well as Rich Rogala and Matt Dollinger, performance coaches at @Properties in Chicago. And of course there will be lots of new friends there that I haven’t even met yet.

I hope you’ll be one of them.

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Tomorrow morning I fly out to Atlanta for ReTechSouth.

The conference has grown into a pretty substantial it event describing itself as;

A place where agents, brokers, lenders, builders and many other real estate industry practitioners could join together to collaborate on how technology can improve business

Sounds pretty good doesn’t it? And I’m very impressed by the people that will be speaking at the conference, Jeff Turner, Ginger Wilcox, Teresa Boardman, Kelley Koehler, Ines Hegedus-Garcia, Todd Carpenter, Joe Ferraro, Rob Hahn, a ton of other great speakers, and (less impressively) me.And, for people that really know their stuff, there is an opportunity to meet the real BoomerJack Boardman. Obviously, the level of information to be passed here is only surpassed by the multitude of awesome social networking rock stars (your author not included).

I’m very excited because I’m moderating the Cage Match of the Century – a ginormous stupendous spectacle of a debate between those two Web 2.0 giants, Joe Ferraro of Sellsius.com fame, and Rob Hahn A.K.A. The Notorious R.O.B. And you dear reader are going to hear about it first right here!

On Friday at ReTechsouth, Joe will be the Pasha of Positivity, arguing the Pro stand on every question while Rob (a usually bright pleasant and positive gentleman) will become the raging Ninja of Negativity! Based upon their thorough and exhaustive academic and practical backgrounds, they will enlarge the mind through their exploration of four important questions:

1. Should Agents Blog?
2. Is there a Place in Social Networking for Shameless Self-Promotion and Advertising?
3. Does Size Matter? AKA Your Importance in Social Media is determined by the size of your…. followers
4. Nobody needs a broker!

From the conference calls to set this up and choose our topics, to the emails we have exchanged, colored by my own opinion of these two smart guys, I anticipate a ton of fun and even more information. So if the idea of two attorneys fighting while moderated by a seasoned real estate broker (someone spilled pepper on me this morning) is at all intriguing to you , I hope you’ll be there when we kick it off Friday at 11 AM on the main stage.

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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?

I found this fascinating quote today in a blog published by ELYAC Realty Los Angeles Real Estate Agent, Home Loans, Mortgage Brokers:

Here’s a surefire way to start an argument: Suggest that the housing market has reached bottom. To be sure, the near-term outlook is still grim, and nobody is forecasting a rapid nationwide rebound. But there are signs that the overbuilding and speculative pricing that inflated the bubble are working their way through the system. In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms. Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up. “The indicators are starting to look better,” says Adam York, an economic analyst with Wachovia.ELYAC Realty Los Angeles Real Estate Agent, Home Loans, Mortgage Brokers, Oct 2008

It sort of amazes me that it takes a broker in one of the most challenged markets in the country to write about how the market may be turning around, and talking about how the market in Philadelphia has been listed as one of the 7 markets in the country poised for recovery. Just goes to show that though the real estate market may be local, the real estate media is certainly national in today’s world.

You should read the whole article.