And Russ Shaw putting up a picture on bloodhoundblog of someone giving the FU middle finger is professional how? What a disgrace. Now you know why people have such disrespect for REALTORS(R)

Bubble Sitter’s clarity of thought, not once, but twice, goes a long way to disprove the theory that bubbleheads are drunken wife beaters. (we won’t reprint the actual sentence found in comment #3. Since this site isn’t part of the so-called RE.net, we do have some standards).

In the spirit of the Academy Awards, Desperate Agents presents Bubble Sitter with the award for Best Smart Ass in a Melodrama for the line, “Bunch of drama bitches…Shouldn’t you all be out trying to make 6%?”.

Post from: Desperate Agents

The New Sign of Professionalism?

“This is a phenomenon that could be called the growth of state capitalism as opposed to market capitalism. The United States has not ever been on the receiving end of this before.” said Jeffrey Garten of the Yale School of Management.

State-run China Investment Corp. followed up it’s investment in the private equity firm Blackstone Group last June with a $5 billion deal with Morgan Stanley in November that can be converted into a 9.9% stake to Morgan Stanley down the road. CIC closed out the year with an investment of $20 billion in it’s own commercial lender, China Development Bank on New Years Eve.

Following the August mortgage implosion that exposed Bear Stearns’ glut of bad loans, the brokerage firm jumped on the Orient Express and cut a $1 billion mutual investment deal with a Chinese soveriegn wealth fund, Citic Securities Company.

Citigroup and Merrill Lynch have also gone the foreign route, raising over $30 billion from a lengthy list sovereign wealth funds including Singapore’s Temasek Holdings, Korea Investment Corp., Kuwait Investment Authority, Mizuho Corporate Bank, the Government of Singapore Investment Corp., Saudi Prince Alwaleed bin Talal, and the world’s largest sovereign wealth fund – the Abu Dhabi Investment Authority.

The ongoing write down of bad debt will only increase the foreign investment stake in the U.S. financial sector as the fire sale of U.S. assets continues. Does it strike anyone else as ironic that the consumer attitude of mortgaging the house to pay the bills has now been adopted by Wall Street?

Post from: Desperate Agents

The Great Wall Street of China

From the Wall Street Journal Online’s Deal Fees Under Fire Amid Mortgage Crisis:

Merrill Lynch & Co.’s former chief executive, Stan O’Neal, left in October after the firm’s $8.4 billion write-down. He didn’t get a bonus or severance, but he retained $161.5 million in previously earned benefits and compensation because he met the age and service requirement for collecting those benefits. Charles Prince, Citigroup Inc.’s former CEO, lost his job, too. He left Citigroup in November with stock and other compensation valued at the time at $29.5 million, as well as a bonus. He didn’t get severance.

Mr. O’Neal and Mr. Prince — along with Angelo Mozilo, chief executive officer of Countrywide Financial Corp., the nation’s largest home-mortgage lender by loan volume — have been asked to testify about their pay packages on Feb. 7 before the House Committee on Oversight and Government Reform.

All three received letters from Committee Chairman Henry Waxman where he forewarned them,

“You should plan to address how it aligns with the interests of…shareholders and whether this level of compensation is justified in light of your company’s recent performance and its role in the national mortgage crisis.”

Given Waxman’s treatment of the pharmaceutical industry, this could be an interesting hearing providing someone actually shows up.

Post from: Desperate Agents

Congress’ Version of the Dr. Phil Show

The deal is for $4.1 billion in stock. Critics argue that Countrywide carries to much baggage, but there are long term upsides that Lewis is banking on.

Bank of America is nearing the Federal cap that limits banks to no more than 10% of U.S. deposits. Since Countrywide is a thrift, their deposits don’t count against B of A’s deposit cap.

Secondly, B of A acquires CW’s back office. According to CreditSights senior analyst David Hendler, “The technology platform, the people who run it, the hedging, the facilities, the mortgage servicing rights, the origination platform, you know, they are all state of the art.”

Most importantly, this move buys stability, which the lending industry desperately needs. A Countrywide failure would have a far reaching effect that impacts everyone. The options were pray for a government bailout, which wouldn’t fly during an election year, or hope for a saviour. Enter Lewis. With $1.5 trillion in assets, Bank of America is in the best shape to take one for the team. It also buys him more than a few markers.

Sources did deny that the buyout was made possible by earlier cost cutting measures that eliminated hand soap and free soup and crackers for their NYC based employees.

Post from: Desperate Agents

Bank of America to Buy Countrywide

Head soothsayer for the National Association of Realtors, Lawrence Yun, in response to the NAR’s Pending Home Sales Index report that showed a drop in the number of sales contracts entered into on existing homes in November:

“Consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain.”

Credit must be given Yun for wising up a bit with his predictions, though. The last line was the smartest thing he has said in a long time. If he keeps this up, he may not have to take that job at the County Fair guessing people’s weight this summer.

Post from: Desperate Agents

Lawrence Yun’s Keen Sense of the Obvious

From Inman News:

Nearly a dozen Web sites that aggregate for-sale real estate listings — including Trulia, Zillow and Yahoo! Real Estate — have agreed to adopt common data standards that will make it possible for brokers to send a single listings feed to multiple Web sites.

The companies partnering to develop the new data standard, which will be based on the XML format and launched later this year, are working with the Real Estate Standards Organization to make sure it is compatible with the existing Real Estate Transaction Standard (RETS). The standardized data format will include price, square feet, bedrooms, bathrooms and additional descriptions of each listing.

Homes.com, Homescape, Oodle, Point2 Technologies, Realestate.com, Vast.com and vFlyer are also adopting the standardized feed format, which is open to “anybody else who wants to join us,” Zillow spokeswoman Amanda Hoffman said. “It’s a statement to the community — we want to make it easier for you to get your listings in front of as many people as possible.”

A spokesman for Realogy Franchise Group said its Century 21, Coldwell Banker, ERA and Sotheby’s International Realty brands plan to adopt the new standardized format.

“The opportunity for such wide distribution of our listings is an important facet of our marketing strategy,” said Realogy spokesman Craig Cuyar in a press release. “It’s clear these partners are attentive to the needs of our industry.”

Greg Swann at Bloodhound has an indepth overview with comments from Zillow and Trulia.

Post from: Desperate Agents

Real Estate Portals To Avoid Beta vs VHS Battle

In this CNBC video, Charlie Gasparino tells of a memo forwarded to him from a BofA employee informing the common folk there that recent cost cutting measures would mean that free soup and crackers would no longer be offered in the cafeteria. Hand soap was also deemed an unnecessary employee perk.

The New York Post covered the story as well:

Bank of America chief Ken Lewis may have taken home $28 million, but he’s still slashing wasteful perks such as free soup and crackers for employees.

The nation’s second-largest bank posted grim notices yesterday around its offices here and elsewhere that it no longer can afford giving employees any freebies.

The notice listed goodies it will eliminate at its employee kitchenettes: soup, crackers, flavored teas, sugar-free hot chocolate and hand soap. The bank presumably will keep hand soap in bathrooms. City laws require it, but not necessarily at snack counter sinks.

“We’ll continue to have plenty of soap in ‘08,” a bank spokesman said dryly.

Post from: Desperate Agents

No Soup For You!

Think about it for a moment. Since August, prices dropped faster than autumn leaves, inventory ballooned from 3000 units in 2004 to close to 20k units today, sales have plummeted to the lowest levels since they started keeping track in 1988, and seemingly half the population has a real estate license. Is it any wonder that agents feel the need to explain to us poor ignorant souls that the media is misleading us and we really ought to be buying?

I suppose in real estate caveat emptor is still the rule, even though disclosures abound to protect the buyer from the seller. But as poetic license flows freely on real estate blogs, only common sense is there to protect the potential buyer from the agent desperate to make a sale in a depreciating market.

Some things you just expect. It’s a scorpion and the frog thing.

What you don’t expect to see is an agent publicly sell out their client on their real estate blog to justify their opinion of the market:

For example, we have a seemingly impossible listing in Encinitas Ranch. It was likely a fraudulent sale that occurred late last year when the home sold at $1.2 million (with 100 percent financing), and had a value of something less than $900,000 (because the listing had gone off market with that price).

Did this agent just suggest that their seller “likely” committed loan fraud?

Post from: Desperate Agents

Flushing Fiduciary

On December 23rd, The Arizona Republic reported “Major real estate broker shuts down“:

RE/MAX 2000, based in Gilbert, is closing its 13 offices around the Valley. An attorney for owner Robert Kline told 12 News Sunday the company was not generating enough sales to meet its expenses because of the Valley’s depressed housing market. As for the timing of the closing, attorney Dax Watson said, “We felt it wouldn’t be fair to our clients to wait.”

On December 24th, Business Week covered the reported shut down with a statement from Re/Max 2000 founder Robert Kline, who said the decision to close became clear when he couldn’t afford to pay overhead expenses.

“The market has impacted us tremendously, and it was something we basically had no control over,” Kline said. “We cannot any longer invest our personal resources into the business.”

Later that day, the attorney that represents Kline stated that RE/Max 2000 wasn’t dead yet, according to another AZ Republic story.

“It appears there may be some opportunity to save Re/Max 2000 and work through some of these issues,” Watson said in a telephone interview with the owners on Monday.

No doubt that newly detected pulse was directly related to Re/Max International founder and chairman Dave Liniger’s decision to fly to Phoenix on Christmas Eve, where he then met with the owners planning to shut down one of his franchises.

According to the Phoenix Business Journal:

“He got down here quickly,” said Jack Farrar, a spokesperson at Re/Max’s corporate headquarters in Denver. “He wanted to talk to the agents.”

Farrar also assured customers that all current contracts would be processed.

“All contracts that are in place will not be affected and no escrow money has been compromised,” he said.

“No escrow money has been compromised.” WOW. The fact someone felt the need to assure clients that no crime was committed has got to be unsettling, particularly to those agents that told The AZ Republic that they are owed $111,000 in commissions.

Agent Steve Russell works with his mother, Sandy Koeppen, also an agent, and between them they say they are owed $11,000.

“My kids didn’t even end up with any Christmas presents,” Russell said. He told his four children they’d have to wait until he does a closing with another company.

Today Phoenix agent Jonathon Dalton reports that ReMax 2000 plans to keep 5 offices open, and that attorney Dax Watson asked the Arizona Department of Real Estate to conduct an audit to further assure all involved that funds are present and accounted for properly.

Rumor has it that when Robert Kline was asked this morning how things were going after a crazy week, he replied, “I’m feeling better. Think I’ll go for a walk.”

Post from: Desperate Agents

Bring Out Your Dead – But I’m Not Dead Yet!

David Lereah, AKA “Baghdad Bob“, who hasn’t met a South Florida condo he doesn’t think you should buy, resigned the NAR position in April. His successor, Lawrence Yun, stepped right in and didn’t miss a beat. They won hands down. Countrywide’s Angelo Mozilo was a brief consideration, but naming Mozilo without calling out the CEOs of every Wall Street firm that financed him somehow seemed hypocritical.

But back to the NAR’s paid shills. It seems inconceivable that two men smart enough to extract a decent paycheck from the country’s largest wolf-like political lobby dressed in sheep-like real estate agent trade group clothing could be so a) stupid, b) consistently wrong, or c) deliberately misleading.

Mr. Lereah is the genius who, in 2005, penned, “Are You Missing the Real Estate Boom?: The Boom will not Bust and Why Property Values will Continue to Climb through the End of the Decade and How to Profit from Them“.

In September 2006, NAR reported,

“Total existing-home sales — including single-family, townhomes, condominiums and co-ops, dipped 1.9 percent to a seasonally adjusted annual rate1 of 6.18 million”.

Lereah’s take?

“This is a lagging indicator and the worst is behind us as far as a market correction — this is likely the trough for sales.”

He was only off by a mere 19%. ‘Nuf said.

Mr. Yun experienced his own moment of forecasting brilliance in 2005 in an interview published by the Northern Virginia Association of Realtors:

The chance of a housing price decline in the DC area is close to zero, in my view. I anticipate that prices in DC will outpace the national average price growth. DC prices will rise at close to a 7 to 10 % rate of appreciation. That’s not the 20 to 25% rate we’ve seen in the past, but it’s still very respectful.The chance of a housing price decline in the DC area is close to zero, in my view. I anticipate that prices in DC will outpace the national average price growth. DC prices will rise at close to a 7 to 10 % rate of appreciation. That’s not the 20 to 25% rate we’ve seen in the past, but it’s still very respectful.

Then more recently:

Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.

With only a few exceptions like Portland and Austin, nothing has stabilized. Need proof? Take a look at the recent Case Shiller Index.

Daniel Gross of Slate says it best in Worst. Forecasters. Ever?

But within the fraternity of financial and fiscal forecasters, the seers at the National Association of Realtors—longtime chief economist David Lereah and his successor Lawrence Yun—may be uniquely ill-equipped to deliver sobering forecasts. They work for a trade group whose mission is to buck up the spirits of real-estate brokers. And real-estate brokers—who live to sell, promote, and market—are constitutionally disinclined to hear anything but good news.

And now the flack is coming from abroad. From the TimesOnline:

Nar’s forecast for this year was again way off the mark. Existing home sales were expected to end 1% lower than the 2006 total, while new-home sales would fall by 9.4%. Nar then cut back its forecasts for nine months in a row. It now expects existing-home sales to fall 12.5% to the lowest levels since 2002.

There was one comment on the Times’ site that lent support to the NAR mantra of “buy now”:

It’s a new paradigm, and everybody who doesn’t buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase. Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas. This asset bubble is different than all of the others – it will never slow down, or pop. The gains are permanent.

Greg Swann, Phoenix, AZ, US

Only one question remains – was that written by the real Greg Swann or the Fake Greg Swann?

Post from: Desperate Agents

2007 Desperate Agent of the Year