Keller is the founder of Keller Williams Realty International, and Jenks serves as vice president of Research and Development at Keller Williams.
You can download the Shift podcasts through your iTunes account by going to the iTunes store and searching for "Gary Keller" under the podcast tab in the business category.
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Some properties are being advertised as a short sale when they really aren't in an attempt to lure bargain-hunter buyers. A new book,Foreclosures, Short Sales, REOs, and Auctions: Tools for Success in Today’s Real Estate Market, published by Dearborn, provides guidelines for using the term correctly. Here's an exclusive excerpt:
There are a number of licensees who are attempting to attract buyers by using the term short sale in marketing property. It is very similar to the furniture stores that are constantly advertising that they are going out of business to draw purchasers. The fact that a home has lost value or that the loan has increased in amount and is now more than the value of the property does not automatically make the transaction a short sale.
It's important that a licensee conduct a thorough analysis, not only of the property value and loans but of the prospective seller’s financial condition as well. As was indicated, according to some licensees who are experts in the field, only a small percentage of short sales are approved by lenders.
What is to be gained by these licensees who advertise properties as short sales when they really aren’t? The answer is attracting more buyers, of course.
Some licensees are describing properties as preforeclosure listing or short sale and use the terms synonymously. Appropriately, a preforeclosure sale of property would involve one where the owner is in default. The property may or may not be worth less than the loan amount.
On the other hand there are owners who are not in default attempting to sell a property for less than the amount of the loan who appropriately call the transaction a short sale.
Is it a short sale if the lender has not approved a sale? How can a lender approve a transaction without having an offer from a buyer? What can be done about these situations? It may be as
]]> simple as indicating a property is a possible short sale. Additionally, standards and rules can be developed to curb the abuses.In May 2008 the NATIONAL ASSOCIATION OF REALTORS® approved new model rules that would allow a real estate practitioner to alert fellow licensees to potential short sales and notify them that it is possible the lender could require a reduction in the gross commission and that the cooperating broker would share in the reduction of the commission received. Each MLS may decide whether or not to require their participants to make a disclosure if it is reasonably likely there could be a short sale.
It is common in short sales for the lender who is considering discounting the loan amount to seek others who are willing to sacrifice as well, including the real estate broker who has the short sale listing.
The question becomes, when the listing broker chooses to reduce his or her commission, is he or she still obligated to pay a cooperating broker the commission published in the MLS? Too often, this issue is left unresolved and harsh feelings develop as a result.
While the model rules do not make it a requirement of submitting a listing to a multiple listing service, it would be considered good practice to place a conditional offer of compensation to cooperating brokers in the “Remarks” section of the property information sheet that clarifies what the agreement with the listing broker is going to be.
Such an agreement could be: “Both the sale of the property and the gross commission payable is subject to lender approval.”
What would put the cooperating broker on notice that his or her commission is truly subject to the lender’s discretion would be the additional agreement: “Any reduction in total compensation by the lender is to be split 50/50 between listing and selling agents.”
Of course the percentage amount of the split is totally at the discretion of the listing broker. The important thing is that the cooperating broker is put on notice up front and if the terms of the agreement are not satisfactory to them they may not show the property.
In the absence of such phraseology in the MLS a diligent agent will want to call the listing agent and clarify exactly what the agreement is before performing actions. No one is required to work for free. If a cooperating broker should choose to show a property whose commission is unclear at best, or is unhappy with any offered commission, he or she could insure the desired compensation by using a buyer’s broker agreement.
This textbook is currently used across the country in continuing education classes for real estate agents and mortgage bankers. Please note that this book can be purchased through RECampus for professional development purposes; however, it cannot be purchased through RECampus for continuing education credit. Visit the Dearborn Education site to purchase the book.
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Gold Award
Prefabulous: The House of Your Dreams Delivered Fresh From the Factory (Taunton Press)
By Sheri Koones
Buy the Book
Judges comments: "It explores in depth the different types of prefab homes available on the market. The amount of information is stunning, making this book a necessity for anyone who is considering building this type of house.”
Silver Award
Creating Value: Smart Development and Green Design (Urban Land Insitute)
By Vernon Swaback
Buy the Book
Judges comments: "With interest in a 'green' environment rapidly receiving more and more attention, this book by a well-known architect is must reading for anyone interested in real estate development. Thoroughly researched and making good use of four-color photographs and
]]> illustrations that allow the reader to see the points that the author is making, it breaks new ground in our understanding of creating value by design."
Judges comments: "This book about Gerald D. Hines and his real estate company stands out because it is written by twelve experienced essayists who have an expertise in architecture and/or business. Thus, they are able to bring a historical insight to their subject that helps readers appreciate Hines' significance.”
NAREE's First-time Author Award
Generational Housing: Myth or Mastery (TABS)
By Carmen Multhauf and Lloyd G. Multhauf
Buy the Book
Judges comments: "By examining and analyzing the different generations in the housing market, the authors show understanding home buyers is far more complicated than it appears at first.”
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The following is excerpted from Financial Shock: A 360-degree Look at the Subprime Mortgage Implosion and How to Avoid the Next Financial Crisis (Pearson Education, 2009) by Mark Zandi, chief economist and cofounder of Moody's Economy.com. Here are four policy changes Zandi recommends to prevent the next financial crisis. Read all 10 in his book.
Policy Step #1: Adopt a voluntary mortgage write-down plan
Many troubled mortgages could be salvaged if lenders would agree to modify them, typically by reducing the principal owed. The borrower would get to stay in the house, the lender would avoid a costly foreclosure, and the economy might avoid falling into a destructive self-reinforcing cycle in which house price declines beget foreclosures which beget still more price declines. Thus it seems both reasonable and urgent to encourage this wherever possible.
While there is no silver policy bullet that will address this problem, a number of proposals have circulated that could help. Most involve a small commitment of taxpayer dollars.(1)
Passage of an effective mortgage write-down plan faces several hurdles, including reasonable concerns that it would end up helping those who least deserve it. Lenders who faithfully observed sound underwriting methods would not benefit; nor would those homeowners who are working hard to keep their mortgages current despite financial strains.
The counter-argument is that the housing problem is so serious that it threatens the honest and
]]> diligent as well as those who made big mistakes. The cost to the overall economy in lost jobs, wealth, and tax revenue if troubled borrowers do not receive financial help will almost certainly be greater than the cost of bailing them out.Although there is no guarantee that such a plan will be adequate to the problem, it is worth the effort.
Policy Step #2: Establish clear mortgage lending rules
A number of steps have been proposed that could prevent a repeat of the housing meltdown once the current crisis is past. Most notable would be the Federal Reserve’s adoption of clear guidelines for appropriate mortgage lending: Under the Fed’s proposed rules, lenders must consider the borrower’s ability to repay and also verify the borrower’s income and assets. Prepayment penalties are barred if a homeowner refinances within 60 days after an adjustable loan reset, and borrowers must establish escrow accounts for taxes and insurance.
These commonsense lending rules would apply to all mortgage lenders given the Fed’s broad authority.(2)
Policy Step #3: License mortgage brokers
There is widespread agreement that all mortgage brokers must be licensed. Unregistered brokers were among the most unscrupulous lenders during the housing boom. State banking regulators are working to set tougher standards for brokers by requiring applicants to pass proficiency tests and to be fingerprinted by the FBI.
State regulators have also launched a nationwide lender information system: an Internet database with pending enforcement actions and background data for all licensed mortgage brokers and lenders.
Policy Step #4: Expand data collection
A lack of timely and accurate information hobbled policymakers’ ability to respond to the subprime financial shock. Data on mortgage delinquencies and defaults comes from a variety of mostly private sources, making it nearly impossible for regulators or others to see the crisis as it grew. No government agency tracks the number of mortgage foreclosures, for example, and the various private sources of such information are limited in various ways.
A ready mechanism for expanding the government’s data collection already exists under the data collection efforts required by the Home Mortgage Disclosure Act. HMDA requires most mortgage originators to report some information on all loan applications and approvals. This includes data on the lender, location, income, and ethnicity
of the borrower, whether the loan is a first or second lien, whether it is a purchase loan or refinancing, as well as the loan’s amount and its interest rate.
Reporting requirements should be expanded to include mortgage servicers, who in most cases are also the lenders already reporting under HMDA. Servicers can provide information on delinquencies and defaults as well as on whether various types of loans and borrowers are having credit problems. Reporting under HMDA should be more frequent—it currently occurs annually—and data releases should be accelerated.
The HMDA data for 2006 wasn’t fully released until the Fall of 2007. More frequent updates and more rapid reporting would help policymakers and lenders spot credit quality problems earlier and allow them to respond better to developing problems.
Endnotes:
(1) Most notable include the plan cosponsored by Congressman Barney Frank and Senator Christopher Dodd described in Chapter 13 (see inancialservices.house.gov/FHA.html). FDIC Chairwoman Sheila Bair has also proposed a write-down plan (see www.fdic.gov/consumers/loans/hop). Zandi has also put forward a proposal (see www.economy.com/mark-zandi/documents/Home-Appreciation-Mortgage-Plan.pdf)
(2) As discussed in Chapter 10, the Federal Reserve was granted this authority under HOEPA.
By Melissa Dittmann Tracey
If you haven't already, be sure to check out our book review on Leadership and the Sexes. The Weekly Book Scan talked with the book's author and gender expert Michael Gurian to gain more insights into how the sexes communicate differently.
Do your findings on gender differences among leaders in the workplace apply to other relationships too—such as real estate professionals' relationships with their customers?
Gurian: This book is for any male and female interaction at any level. When we looked at the companies that provided quantitative data to us for the book, they were using it at all different levels. It's not just training CEOs, but they are training everybody to understand the gender differences. There is an immersion in the culture that transfers to a real estate office or even just a single practitioner to get training in it. These are hard-wired gender differences, and understanding men and women better and getting the tools to improve your communication will make you more effective.
Is there a risk that these findings on gender differences can be used as stereotypes in the workplace?
Gurian: There really needs to be some immersion in it. If the company or individual, does not immerse themselves in understanding it then they will be prone to stereotype. There's so much popular information out there and you can scan an article and in two minutes and believe you understand men and women. That leads to stereotypes.
Think about marriage: You don't Google three tips on marriage and assume you've got it. It's ongoing in developing the relationship and you're constantly gathering data and relational information on each other to do better.
This [gender research] is a million years of human history and brain development. The craft of this book is that it allows for real estate professionals to immerse themselves on how to negotiate and communicate differently, it outlines the sources in the brain, and provides communication tools. It won't leave you stereotyping, but if you just go to one article, you might.
Learning to become strong negotiators is an important skill for real estate professionals. What are some key ways that men and women negotiate differently?
Gurian: There are lots of levels to this [NOTE: If you own the book, see Chapter 5 and the communication tools in Chapter 6]. When men and women are in a negotiation, there's a different biochemistry at work.
When it's a more intense negotiation, testosterone—an aggression chemical—goes up in men. So we might do knife gestures, pointing the finger at the person or a knife gesture at the contract, or we might interrupt the other person more.
At the very same time that men are getting more aggressive, women want more signals of
]]> stable bonding. They may not be paying positive attention to this guy because he seems too aggressive.So this brain chemistry creates a mismatch in negotiations. When a negotiation falls through, they may not know why a deal went sour. A lot of deals get lost this way.
What can you do to improve your negotiations with the opposite sex then?
If you alter your skill-set you can become better negotiators. In a negotiation, men will realize they need to nod more when women are talking and not squinting or frowning, which can be viewed as aggressive behaviors.
Men need to ask her more questions (such as what did she like about that room?). Men need to realize that sensorial details are really important to her, whereas these sensorial details tend to be of less concern to males.
When testosterone levels go up in a negotiation, men can bring it down by being self-aware of their behavior. They can go back to asking questions and work on building rapport; otherwise they may lose the deal.
On the female side, they might tend to use a lot of words. At a certain point, the male brain will start zoning out. Women can realize this and get back to the facts and data.
By learning the biochemistry, we can adapt to one another. We don't change ourselves. We can be successful as man or woman and be authentic and develop a skill-set that fits this type of man or woman.
But is there any conformity that needs to take place to become gender-neutral in the workplace?
Gurian: It's about balance. Through understanding, we can view these brain scans and we can gain balance by understanding the differences. We can then develop new skill-sets and tools to deal with the differences. The book is divided into these areas.
We can key into the main differences we face and create applications that fit individuals and our teams. First, we understand men and women like never before, such as with conflict resolution and negotiation. We then can start applying this into all of our relationships.
The ultimate goal is balance and trying to get everyone working together on male and female teams. One way to balance it is to create these male-female teams. It's very simple. By putting the two together, you get the advantage. For example, in a negotiation, it would be good to have a male and woman negotiation team on your side. Women pick up more facial cues.
In your book, you reference gender-balanced meetings. What are a gender-balanced meetings and what are a few ways leaders can make their meetings more gender-balanced?
Gurian: You have a male leader of 10 people but you only hear from three people at the meeting and those are three guys. Why do we hear from them? Their testosterone goes up and they become more aggressive. This could be true for a male or female leader. But then you have seven people you did not hear from. That's an imbalanced meeting.
If a female is leading a meeting, she may talk a lot and use all words without any graphics or charts. She probably lost the two or three males in the room. They aren't "word" people. That's imbalance.
The men may be tapping their pencils or their eyes glazing over. The woman doesn't understand that and gets offended. She doesn't realize that men are going into rest state – we have brain scans in the book that show male's rest state. The female brain doesn't do that, though.
So the meeting then becomes a conflict because she feels she isn't being treated very well.
Meetings are a crucible of difference. In a gender-balanced meeting, everyone understands each other. The female leader brings in more graphics and those guys who zone out are allowed to move around and keep their brains alive. And the male leader will not allow others to keep interrupting women when they are trying to talk. This all helps to create more balance.
Do personality conflicts in the workplace often stem from gender misunderstandings then?
Gurian: Some of it is just personality conflict or personality frictions. Personality is hard-wired, just like gender is. Everyone brings those in and some may be an extrovert or an introvert and the conflict may not relate to gender at all. A lot of personality conflicts deal with projection. A person is working with someone else and is projecting onto that person because that person may remind them of a person they were hurt by. But yes, some grow from these gender differences.
How can this apply to mentoring relationships in the workplace?
Gurian: It's best to have men and women mentors in the workplace—men mentoring women; and women mentoring men. We really want same sex and cross mentoring. One reason is that men tend to mentor toward promotion and hierarchy climbing, whereas women's mentoring tends to be more psychosocial. Women read signals of other people better so they might get better results by teaching how individual relationships interact better to have more success. Men, on the other hand, mentor to climb to the top of the company and women need that kind of mentoring too. So we train people that good mentoring systems include both men and women.
What prompted you to explore this topic in a book and training manuals for companies?
Gurian: In 1983 in graduate school, we were being taught about gender roles. While it was valuable, we didn't look at natural differences between men and women. I lived in many different cultures as a child and in every culture I noticed that boys and girls had certain characteristics and it didn't matter the culture they were from. With gender roles, society decides that. But I wanted to explore what goes on under the surface.
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Quick Skim
From the Book: 5 Ways Men and Women Communicate Differently
At times, men and women may seem like they really are communicating from two different planets. Why is that? Blood flows differently to varying parts of the brain in males and females, making each gender better at processing certain types of information. The book outlines several of these differences and offers tips to account for these differences and deter misunderstandings.
Here are five differences presented in the book.
1. Women's brains are always "on." Females might appreciate this: "There is more neural activity in the female brain at any given time than in the male brain, as evidenced by 15 to 20 percent more blood flow, with more brain centers 'lit up' in a scan of a female brain than in one of a male brain," according to the book. The female brain tends to be more constantly active, while the male brain is prone to “zoning out” or “blanking out” during conversations. To avoid a zone out, men might unconsciously start an activity, such as tapping their pencils, gazing out the window, or swiveling in a chair.
A woman, particularly during negotiations, might perceive this as he isn’t listening or doesn’t care about what you’re saying. But men’s brains are wired to listen differently than women; men often hold less eye contact and have sporadic “zone out” moments, which might require a little repetition to key points.
2. Men just want the facts. Men usually ask fewer questions to stimulate conversation in their work relationships and often end conversations more abruptly than women, the authors write. Men tend to be more data and fact driven and stay on topic, not getting as personal in conversations as women. That’s because men have six times gray matter in their brain that is related to cognition and intelligence than women. Realizing this, women in conversations with male bosses or clients might want to keep their interactions more targeted to the specific
]]> outcomes and fact-focused, and ask what he thinks, opposed to what he feels.3. Women focus on friendship first. Women don’t tend to go into a transaction focused on the final outcome but wanting to build rapport and learn more about the client first. That’s because women have higher levels of a bonding chemical called oxytocin, which makes them to want to spend more time talking about individual emotions and memories than men, according to the book.
“Women tend to build relationships when they sell: their speech is geared toward being inclusive and more relational; they ask more questions, they try to get to know the person on a personal level, and they use tag endings (‘It's a nice day, isn't it?’) that compel the other person to communicate back,” the authors write.
Therefore, men wanting to have better conversations with women should try to make an emotional connection – ask how she feels about the home – rather than limiting it just to the facts.
4. Men take it one task at a time. Men tend to like to focus on one task at a time, whereas women’s brains are more geared to multitask. The female brain is wired for constant multiconnecting of information and responds best to talking about emotions, memories, as well as their present task, the authors write.
The male brain, on the other hand, might find all the multiconnecting over stimulating. His brain is wired to focus on what he's doing now and to get it done. Women have nearly 10 times more white matter in their brain related to cognition and intelligence than men have; the white matter allows them to connect information between different brain processing centers more easily than men.
5. Women remember the little details. Females can generally remember more physical and relational details than men, such as the color of the home, the flowers on display, and the emotional connection or experiences of whom they were speaking to. Females’ hippocampus, a memory center in the brain, has more neural pathways to the emotion and sensory brain centers than men. Therefore, women tend to do better in recalling specific details of situations and events and read gestures and faces better than men.
Knowing this, can be used to your advantage in a negotiation, as the male is more wired to focus on the facts, the female’s strength could be to read the body language and interpret the direction of the negotiation.
Sneak Peek
"For a few decades now, our corporate world has done a lot of wonderful things in the area of gender roles, but we are also stuck in many ways. We've avoided dealing with the lighthouse of gender biology—we've been afraid of it—and so we've been navigating without its light. In today's corporate world, power, leadership, control of assets—all are in flux, and economic pressures, globalization, media, the Internet are all affected by gender, even when we don't realize it. We need to be gender intelligent, even a little bit revolutionary! We need to move beyond both the traditionalist and feminist frameworks and look at the light that human nature itself is providing to all of us, now more than ever before: that light that can help guide every leader to the best possible outcome."
About the Authors
Michael Gurian is a New York Times bestselling author of more than 20 books, including The Wonder of Boys, Nurture the Nature, and Boys and Girls Learn Differently!. He is the co-founder of the Gurian Institute, which conducts brain-based research and provides education and training on gender issues.
Co-author Barbara Annis is the CEO of Barbara Annis & Associates, a company devoted to gender diversity research, and she has more than 20 years of experience as a specialist in workplace gender issues.
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The following is excerpted from Sustainable Housing and Building Green (Dearborn, 2008) by Marie S. Spodek and Ken Deshaies.
Audits in the Real Estate Transaction
Energy audits are an excellent source of additional information to help sellers, builders, and buyers make quantifiable decisions when buying new appliances or a new home. Tenants also benefit because energy audits allow them to choose energy-efficient rentals. (VIDEO: Watch an energy audit in action.)
Role of the Real Estate Licensee
Essentially, licensees should be the “source of the resource, not the source of the information.” Real estate licensees should not hold themselves out as experts, and they should not promise savings or results from an energy audit. To avoid any hint of impropriety, agents should never accept a “referral fee” from any of these companies or sell any of the products without fully disclosing any relationship to the company. Even with full disclosure, licensees should avoid
]]> “requiring” the purchase of any product or service with which they are associated.Useful for Sellers
Real estate agents should encourage sellers to consult the HES Web site. Based on life cycle and energy costs, sellers can determine which appliances to pack up and move and which to leave behind, avoiding moving costs as well. The site might help a seller to recognize whether an appliance or feature adds to or detracts from the asking price, especially in relationship to competing properties. Also, some of the information can be entered into multiple listing service (MLS) information that can be used by buyers and appraisers.
Buyers and sellers do ask real estate agents for hiring recommendations, however. Agents can provide several options but should avoid making any specific recommendations. Agents can say, if true, “Here is a list of energy auditors used by other real estate clients. Please ask for references and follow up by calling each of the references.”
Useful for Buyers
Real estate agents can help their buyer clients make better informed decisions in a quantifiable manner about whether to buy an energy-efficient home or a traditionally built home. Builders and their buyers can consider the impact that the latest in energy technology might have in order to decide what they want to include in their homes, especially when considering asking for some of the personal property such as refrigerators, freezers, washers and dryers, and so on. This analysis provides the data buyers need to make decisions and to decide on trade-offs, such as paying a bit more for a home with energy-efficient appliances with the expectation that they will have lower utility bills as a result.
This textbook is currently used across the country in continuing education classes for real estate agents and mortgage bankers. Please note that this book can be purchased through RECampus for professional development purposes; however, it cannot be purchased through RECampus for continuing education credit.
Quick Skim
It’s time for cities to get walking, not sprawling, writes Christopher B. Leinberger in his new book The Option of Urbanism: Investing in a New American Dream (Island Press, 2008). Not only are buyers demanding it, but cities need it to thrive. Walkable urbanism is when everyday needs—such as parks, shopping, work, and schools—all fall within walking distance (a quarter to a half mile) or are easily accessible by transit from your home. Properties in walkable communities tend to command the highest prices, anywhere from 40-200 percent more than drivable single-family housing. His book makes a solid case for why and how cities can make themselves more walkable.Buy the Book
From the Book: 5 Ways Cities Can Become More Walkable
Walkable cities tend to have easy public transport and lots of shops, making for a highly desirable place to live. However, demand for housing in these places often outweighs the supply. Here's what cities need to do to encourage more "walkable urbanism" developments.
1. Change zoning. True walkable urbanism requires high popular density, which often runs counter to zoning codes. Zoning laws also traditionally have set out to keep industrial and retail away from housing, which must coexist in a mixed-use development. Communities can adopt a new planning process that involves property owners, neighbors, retailers, developers, and planning and elected officials working together in bringing these often-complex developments to reality. Some cities are developing form-based codes that are not based on use (which is often the case with traditional zoning), but on the form of the building. These form-based codes are then implemented through an overlay district, which is placed on top of traditional zoning maps.
2. Invest in transit. The best way to encourage walkable urbanism is through transportation investment. "Transportation drives development,” Leinberger says. Often times, the transportation or rail station comes first, and then the development. Leinberger points to Washington, D.C., with its commuter Metro rail line, as a good example of how transit can foster the development of close-knit communities around it. Transit connections and bus and trolley circulator systems are ideal for walkable urban development.
3. Educate the financial community. Multi-use projects tend to be more costly due to multiple-story construction and top-notch finishes, Leinberger writes. Construction budgets
]]> must be 20-40 percent higher than for standard suburban projects. Therefore, more equity needs to be invested but it will not be recovered as quickly as traditionally financed projects, which can pose problems. As such, financial institutions need to embrace the need to invest patient equity, which runs counter to traditional development financing structures by not having a defined paypack period.4. Revive old developments. Walkable urbanism developments can bring abandoned or declining retail centers back to life, particularly using the overlay zoning mentioned above. Obsolete commercial strips that are declining in value or abandoned may be prime spots for redevelopments. But cities must demonstrate to the private development community that there's a market for these types of developments. Use market research to determine what is feasible and what's in demand in your community.
5. Manage and maintain walkable urban places. This type of construction can be difficult and complex to build. Therefore, the complexity in developing these communities has led to the creation of a group to help manage it—nonprofit business improvement districts. Leinberger says the BID is like the "mayor of the walkable urban place" and its main obligation is to the property owners of the development. BIDs raise operating revenues by having property owners voluntarily raise their property taxes by 5-10 percent. In return, BIDs can help maintain properties, keep them clean, safe, and help prevent noise, parking overflow, cut-through traffic, or other common problems that often plague these types of developments.
Sneak Peek
“The ultimate irony is that Manhattanites, who live at 800 times the average U.S. density, have the smallest ‘ecological footprint’ per person in the nation and have the most expensive real estate prices (by the absolute dollar as well as on a price-per-square-foot basis) of any place in the country. These issues are connected.
"Many Washingtonians, Santa Feans, Portlanders, and a growing number of people throughout the country want to enjoy the pleasures and opportunities of walkable urbanism; Luckily, this is environmentally responsible and people are willing to pay a significant premium to do so.
"Walkable urban development is already a growing part of the American built environment, in spite of the legal, financial, and other obstacles. It will even become part of the next American Dream over the next generation. The only question is whether the market will just take its course over many decades or whether walkable urbanism will be part of new American domestic policy to speed up the process. Either way it is coming – all eyes to the future."
About the Author
Christopher B. Leinberger is a developer and professor who focuses on strategies to making progressive development profitable. He is a Visiting Fellow at the Brookings Institution and a founding partner of Arcadia Land Company, a real estate development firm.
Here are the latest top selling books in real estate from Amazon.com:
1. The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It, By Robert J. Shiller
2. Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis, By Paul Muolo and Mathew Padilla
3. Financial Shock A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis, By Mark Zandi
4. Rich Dad's Advisors®: The ABC's of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss, By Ken McElroy
5. Real Estate Investing for Dummies , By Eric Tyson and Robert S. Griswold
6. The Pre-Foreclosure Property Investor's Kit: How to Make M Buying Distressed Real Estate -- Before the Public Auction, By Thomas Lucier
7. Home Buying For Dummies, 3rd edition, By Eric Tyson and Ray Brown
8. SHIFT: How Top Real Estate Agents Tackle Tough Times, By Gary Keller, Dave Jenks, and Jay Papasan
9. Cadillac Desert: The American West and Its Disappearing Water, Revised Edition, By Marc Reisner
10. Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days-Investing Without Losing Series , By Don Sausa
The new fiction novel, Red Hot Property (Infinity Publishing, 2008), follows the adventures of four rookie real estate agents as they embark on their careers, juggling work demands and weaving their way through the mystery and danger that sometimes looms.
In recognition of REALTOR® Safety Week , which kicked off yesterday, we talk with the book's author Devin O'Branagan, a real estate practitioner with ERA Tradewind in Longmont, Colo., about why she wrote the novel, which brings real estate safety to the forefront.
The book is a fictional account of real estate agents just starting out, but as you point out, the book is also a cautionary tale to those in the industry. What was that cautionary lesson that you wanted to get across to your peers?
One of my main reasons for writing this novel is the issue of safety. I hope this will shake up my fellow REALTORS® a bit and cause them to place a greater emphasis on safety. I see this all the time in our industry — and I'm guilty of this too: We take big risks in our job. I just think we're too trusting. Every day we see real estate agents take some of the same risks of the characters in the book — we're running out the door after a call to meet clients we don't know in an area with no cell phone service.
I wanted to dramatize some of the dangers of our profession in the book because I thought it would have a much greater impact than a how-to list of safety tips. I long ago learned that people are often affected more emotionally by the dramatization of an event. If the reader came to care about these characters and then were blind-sided by what could happen, maybe they would suddenly realize that it could happen to them too.
In the book, the characters are exposed to dangers that real estate practitioners sometimes face, such as at open houses. Are any of these situations based on true stories?
Some of it is based on true stories. For example, when one of the main characters is attacked by a dog at a showing, there really was an incident of a real estate agent in Denver where a dog grabbed her by the throat.
These kinds of dangers can happen in this profession. There are sexual assaults, robberies,
]]> and murders that do happen. Some agencies are now requiring the buddy system, but most of us work alone and are solo agents so we just have to do the best we can. We put a lot of trust that it's going to be all OK and, unfortunately, that's not always the case.I started collecting anecdotes 10 years ago when I started in the real estate business. I keep a notebook with me, and I've collected anecdotes from the news and also other agents. At every closing, I ask agents to tell me the funniest, saddest, and scariest thing that ever happened to them. I then have fictionally translated all of these anecdotes that I've collected and many are included in the book.
Have you ever encountered a safety issue while you were working?
I walked into a listing once to show a home when a man was still asleep and he went for his gun. I had the showing all set but when I went to show my clients the finished basement, we found a man asleep. He was startled and he didn't speak English either so he didn't understand. It was terrifying, particularly since in my state of Colorado, it is a "make my day" state, where you can legally use force against an intruder if you feel threatened.
Why did you use four rookie real estate agents as your main characters? Do the less-experienced tend to be in more danger?
Not necessarily. When I was a rookie, I was much more careful. When I became more experienced, I became more casual about it all. But I used rookies in the book mostly for reader identification. I wanted the book to have wide appeal to a general audience and I thought for a reader, the best way to get into the story about the profession is through the eyes of someone learning it.
While this is a fiction book, it provides a lot of insight into the daily job of a real estate agent, from all the details that go into marketing a property to going after listings and the selling process. Was that one of your goals?
Yes, definitely. We are a very misunderstood profession and a lot of people don't get what we do. It's much more complicated than what they imagined. I've heard from others who said that it has made them rethink all the money within the real estate industry and has given them insight into all of the expenses involved on the agent's part in marketing. Based on the feedback I've received, I've achieved what I've wanted to with this book: Respect more for the profession and a greater understanding of what we do.
How did you get the idea to write this book?
What started me with the book is a line that I got from my own experience. It's when I was just starting out as a real estate assistant about 10 years ago and this real estate agent came up to me and said: "You are a red hot property with lots of curb appeal and you show real well." I wrote it down and it's in my book.
I understand that you are working on a sequel to this book — what will the follow up book be about?
I'm working on a sequel that will follow some of the same characters and their careers after being a rookie. The next book will deal with the mortgage meltdown. When I started the original book, the mortgage crisis wasn't in full swing yet. If the sequel is successful, I might make this into a series.
Did your previous novels focus on real estate too?
This is my third book. The other two came before I was a real estate agent and were horror novels (Spirit Warriors and Witch Hunt). That's not a road I wanted to go down but the publisher wanted me to. After those two novels, I became disillusioned and quit writing. But after all these years in real estate, I kept coming upon these humorous or scary anecdotes, and I would tuck them away into a notebook and I turned them into a novel.
After I finished the book, I took it to some big publishers since I already had an established track record, but I received several responses that nobody wanted to read a book about real estate. They said that if you turn it into a romance novel, then they'll know what to do with it. I had to change my first novel into a horror novel, which I didn't want to do, and I did not want to take this great novel and make it a romance novel. Luckily, I found a smaller, family-owned publishing company, that offered me the creative freedom I wanted, and I didn't have to change the book into something I didn't want to.
What response have you been getting about the book?
This book is something that those in the real estate industry can relate to – balancing family life and other demands such as keeping your integrity, dealing with clients in stressful situations, and taking care of your — and your client's — safety. This also comes with all the humorous, goofy, and craziness that is unique to our profession.
I've been getting great feedback. I have been asked to do book signings in real estate offices, speak at sale's meetings, and some real estate schools have contacted me because they want to make the book recommended reading to their students.
For more information about O'Branagan's book or to purchase it, visit the Red Hot Property novel Web site.
Here are the latest top selling books in real estate from Amazon.com:
1. The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It 
2. The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It (Kindle Edition)
3. Rich Dad's Advisors®: The ABC's of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss (Rich Dad's Advisors)
4. The Pre-Foreclosure Property Investor's Kit: How to Make Money Buying Distressed Real Estate -- Before the Public Auction
5. Home Buying For Dummies, 3rd edition
6. Real Estate Investing for Dummies
7. Real Estate Finance & Investments (Real Estate Finance and Investments)
8. SHIFT: How Top Real Estate Agents Tackle Tough Times
9. Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis
10. What Every Real Estate Investor Needs to Know about Cash Flow... And 36 Other Key Financial Measures
Quick Skim
Slowing home sales, a tightening credit market, record-high foreclosures — how did we get to this point? Richard Bitner's book Confessions of a Subprime Lender (Wiley, 2008) gives a close-up look at how the worst credit crisis in modern history came to be. Bitner, who founded a subprime mortgage company in 2000, left the business in 2006 after foreclosing on a subprime borrower that never should have been approved for a loan in the first place. While being careful not to blame any single source, Bitner gives an interesting view on what went wrong in the subprime mortgage market and how to fix it.
From the Book: 5 Reasons the Subprime Market Crumbled
In 2000, as housing prices grew out of reach for buyers, more creative financing crept in and subprime lending became big business. Wall Street wanted its hands on more of these loans, and the hot housing market spawned a wave of new subprime companies. By 2004, 75 percent of borrowers were buying a home without using a down payment or proving income.
But by 2006 the subprime market started falling apart; Borrowers were defaulting on loans and subprime companies were going out of business. Bitner says these are some factors that caused the subprime market to crumble:
1. Greed. Mortgage brokers made more money if they sold loans with higher fees and interest rates. So borrowers would often be steered toward riskier products, even if a more traditional (and less risky) loan were available. "My income was directly proportional to the revenue I generated, and subprime was three to five times more profitable than any other type of loan we securitized," Bitner says. "I saw no logical reason to sell something that made less money and carried no competitive advantage."
2. Rampant fraud. Bitner estimates that more than 70 percent of all brokered loan applications submitted to his company were in some way deceptive, which meant everything had to be double-checked and verified. "The practice of massaging loans, making them appear different
]]> from what they are, became standard operating procedure," Bitner says. "With little accountability for their actions, brokers [were] left to decide how far they're willing to go."Common cases of fraud included altering income documentation, giving a borrower an adjustable rate mortgage without explaining how it works, or disclosing lower rates and fees to a borrower but then increasing the figures right before closing.
3. No standards. Everyone wanted to cash in on the subprime business, even if they didn't know how the business worked. "With few rules and minimal consumer protections, abusive behavior flourished," Bitner writes. The number of mortgage broker companies increased by 50 percent between 2001 and 2006, peaking at 53,000 in 2006. Meanwhile, the number of new loan originators working for mortgage brokers grew by 100,000.
Yet no national standard existed for licensing mortgage brokers and loan originators. Bitner says the industry needs to raise its standards and develop a system for accreditation. "The recent debacle has given brokers a reputation similar to used car salesmen," Bitner writes. "Although the bankers and brokers associations don't have a history of working together on issues, a collaborative effort to accredit loan originators would be a key step to rebuilding credibility for the industry."
4. Securitization of mortgages. Mortgage securitization fragmented the industry, Bitner says. Previously, banks would provide the money to fund a mortgage, but with securitization, the funding got divided into several components.
Here's how it works: Brokers originate the loan, a mortgage lender funded it, and a lender then sold it to another financial institution or used an investment bank to package it into a mortgage-backed security. Investors then bought them for their portfolio. "The problem in today's housing market exists because the investment banks packaged high-risk loans into securities and the rating agencies assessed them as investment quality," Bitner writes. "If the investors who purchased the securities understood what they were buying, the outcome would likely have been different."
5. Ultra-relaxed underwriting standards. As the subprime market took off, a pricing war among subprime lenders emerged. In order for lenders to keep their revenues up, they needed to fund more borrowers, leading to less restrictive underwriting. "It's easy to lose sight of what constitutes a good credit risk when you spend all day looking at marginal deals," Bitner writes.
Indeed, riskier products emerged, such as loans that required no down payment, proof of income, or even a history of paying rent. One loan product even allowed borrowers with credit scores of 580 and a 90-day-late payment in their housing history to qualify for 100 percent financing.
Sneak Peek
"During the first six months in business, I felt no more qualified to pilot the Space Shuttle than to be the president of a subprime lending company. Seven years in mortgage banking provided a solid foundation, but coming from the ranks of companies like GE Capital, my schooling was largely driven by a conservative mind-set. Lending money to borrowers with bad credit was never a part of the curriculum. When I first learned about subprime mortgages, the high-risk nature of the business made me think it was best suited for those who suffered from low morals or head trauma. Lending money to people with bad credit just seemed like a terrible idea. It wasn't until I got a taste for this business that my feelings started to change."
About the Author
Richard Bitner has more than 14 years in the mortgage industry. In 2000, he founded Kellner Mortgage Investments, a subprime mortgage company with 65 employees and $225 million in annual loan volume. Bitner got a distaste for the business in 2006, leaving his business about a year before Kellner closed and the subprime market started to crumble. He is now the managing director of Housing Wire. Visit his blog: www.lendingsanity.com
]]>Here are the latest top selling books in sales and marketing from Amazon.com:
1. Yes!: 50 Scientifically Proven Ways to Be Persuasive, By Noah J. Goldstein, Steve J. Martin, and Robert B. Cialdini
2. The Tipping Point: How Little Things Can Make a Big Difference, By Malcolm Gladwell
3. Influence: The Psychology of Persuasion, By Robert B. Cialdini
4. Predictably Irrational: The Hidden Forces That Shape Our Decisions, By Dan Ariely
5. Nudge: Improving Decisions About Health, Wealth, and Happiness, By Richard H. Thaler and Cass R. Sunstein
6. Sway: The Irresistible Pull of Irrational Behavior, By Ori Brafman and Rom Brafman
7. The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly, By David Meerman Scott
8. The Mary Kay Way: Timeless Principles from America's Greatest Woman Entrepreneur, By Mary Kay Ash
9. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, By W. Chan Kim and Renée Mauborgne
10. Principles of Marketing, 12th Edition, By Philip Kotler and Gary Armstrong
