Morris Massre's Blog

Thoughts on South Florida Realty and the Planet in General

Death of a realtor

It was only a matter of time, the death of the realtor as we know it. I know this because I am one. There was once a time when the majority of the public counted on realtors for help. But, over the last decade the real estate landscape has been altered by factors that realtors simply have no control over.
Does the public really need realtors anymore? Only those that are either too busy or have no knowledge of the business hire realtors today. The factors that have contributed to our downfall and the way in which we do business are as follows; Tighter lending rules by banks. Before the housing meltdown everyone was lending money like it was going out of style, but banks today are much stricter because they do not want to get burned again. If you cannot get a loan you cannot buy a home. This leaves realtors with mostly cash buyers that are hard to come by. Lenders are tightening the noose even more in 2014 as evidenced in this article from HousingWire.com. http://www.housingwire.com/articles/28192-headwinds-ahead-for-housing
Buyers and sellers alike also have a great deal of access to realtor’s listings in the MLS via websites such as Trulia and Zillow. Sellers can even advertise on some of these housing sites, which begs me to wonder why on earth would the websites that are trying to help realtors actually hurting them?
The internet, of course, opened up all kinds of doors for buyers, renters, and sellers. Instead of calling an agent they can simply go to any of a numerous real estate sites and conduct a search on their own, study photos and videos, investigate taxes and maintenance fees, and even make an offer. This essentially eliminates the Multiple Listing Service that agents use because those same listings are taken from there and posted on these various sites while we as realtors still have to pay dues to the local, state, and national boards.
Unscrupulous realtors who only look out for themselves are a back breaker for any of us who take this business seriously and treat it with the utmost professionalism. Unfortunately, there are way too many of them, especially in South Florida because this area of the country is ripe with fraud. As an industry we also make it too easy for anyone to obtain a license. It is not about the quality of the realtors out there, but for those at the state level, the quantity of agents they can collect dues from. These same realtors go so far as to charge a very low fee for service for sellers who want their home listed in the MLS, but want to save the 3% on the selling or listing side. Every time one of these realtors collects $250. to list a home in the MLS they are hurting the another realtor that much more.
The fickle housing market has a tendency to change like the weather. I have come to realize that America’s economy depends heavily on the housing market because the industry employs so many people on so many levels that most people do not even realize. Every time the market takes a nose dive every realtor and those they do business with feels it. It has a negative trickle down affect. What else can a realtor do when the market tanks? There is no golden parachute for us. We have to wait it out and hope the market makes a comeback as quickly as possible.
If a bad economy coincides with a housing meltdown, as we discovered in 2006, then we have a recipe for disaster. The downturn can last for years. When this happens most realtors who cannot wait it out leave for another industry, usually something that just pays the bills because they are not qualified for anything else. And since housing dictates a large part of the economy, one cannot rehabilitate without the other.
Lastly, greed comes to my mind when I think of our death. A buyer always wants a property for as low as he can get it, even if it requires dirty tactics. The seller wants more than his property is worth. It is a never ending cycle in which the hired realtor is always trapped in the middle. What matters is what is fair and how it will affect those in your neighborhood later on down the road, but everyone is always thinking of himself. If things do not go their way then the realtor is to blame, so next time they attempt a sale on their own to eliminate us and try to make even more money off of those unsuspecting buyers.
Everytime you eliminate a realtor from your property sale consider this; You have just put a small business out of business and small business is the backbone of this country. Without small business you are left with nothing but big box stores and the internet.

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Filed under: Real Estate, South Florida, Thoughts on Life, , , ,

Housing’s Perfect Storm Erupts in Florida

South Florida's Perfect Real Estate Storm

South Florida’s Perfect Real Estate Storm

Housing Perfect Storm is Upon us

Housing Perfect Storm is Upon us

Welcome to Florida; The Hurricane State

Welcome to Florida; The Hurricane State

Some thought Hurricane Wilma of 2006 fame was the perfect storm that started the housing meltdown in South Florida.  Well, if you coupled that with mortgage fraud, rising home prices that were out of control, and unscrupulous realtors, mortgage brokers, and appraisers, then maybe it was.  I believe that it was simply the beginning of the end.

Today we have a perfect storm of other sorts.  I like to think of it as the perfect storm for our housing recovery.  Whether or not you like it makes no difference.  Housing is the single factor in the US economy that dictates whether or not we fail or succeed economically as a country.  Not Wall Street, not the auto industry, and not banking.  This is why everyone should be paying close attention to the market, especially here in your own backyard.  Housing’s success or failure has a domino affect on America’s economy.  Choosing to ignore it is simply not the right attitude. 

Sometimes I wonder if the Native Americans had it right all along because they had no concept of ownership of any kind, including their own country.  This is why they never had to worry about defaulting on a loan.  They shared in everything willingly.   And that is why it was so easily manipulated away from them though.  On the one hand they never had to worry about a mortgage payment, insurance, HOA dues, or even cutting the grass.  On the other hand, this type of cultural mentality led to their loss of land.  One could argue that there simply were not enough Indians to stop the influx of White immigrants flowing into the country and that it was bound to happen anyway, but if there were some kind of national government in place perhaps a deal could have been arranged to avoid the takeover. There is no going back now and we have to live with the current economic conditions.   

But Indians did not use money at the time, so an economic collapse due to housing would have been impossible.  But it sure would be nice to not have to think about money or bills for a while.  Today’s society has no concept of sharing because we are all out for ourselves when it comes to home ownership and getting the best deal possible.  Nobody cares about whether or not the sale of their over-priced home will have impact on the rest of the community as long as they get what they want.  Hopefully, we have learned from our mistakes and will be more conscience of  our actions in the future. 

What South Florida is experiencing now is not unlike pre-meltdown housing numbers, but make no mistake about it, everything has changed in the way we conduct business.  The perfect housing storm arises first from rising seller prices.  Although not enough to bring a lot of homeowners from the abyss, it is still enough to rescue many others.  Another factor that has been taking hold are buyers who are coming to the US to invest for various reasons, although mostly political.  All of the political and economic unrest in various parts of the world have led to foreign investment in US housing.  These buyers are coming in droves too, and this has led to a shortage of inventory, thus driving up demand and prices.  In particular, Canada, Venezuela, Argentina, Brazil, and China are the biggest movers and shakers in the home buying business. 

American buyers, on the other hand, are driven more by simple economics like interest rates.  Foreigners do not have to worry about that because they buy with cash, but with Americans who finance it is the single biggest factor in the purchase of a home.  Give out zero percent interest rates like the auto industry and the run on housing would be so great that we would surely run out of homes to sell in record time. 

So, given the fact that we have a great deal of buyers for homes, low interest rates, higher home values, and a shortage of inventory all point to a housing perfect storm.  This time, however, it is all for the better. 

 

 

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South Florida Shadow Inventories Leave More Questions than Answers

The debate as to whether or not South Florida’s struggling housing market is back on track or not is still up in the air as far as I am concerned.  If you asked one hundred agents here you would get a different answer from them all, but most would hinge on either a big time yes or a slowly but surely approach.

The problem with getting an accurate account of the recovery is simply tied into the shadow inventories, or the foreclosed homes that the banks are holding back on so as to not flood the market.  By doing so, the real estate market is left with a smaller inventory of homes, which generates multiple offers and higher demand.  Personally, as more of a listing agent than a buyer’s agent, I like the idea.  However, I do not like the false hope that it provides my customers.  Let’s face it, getting a loan today is like pulling teeth, so continuing to lower interest rates can only go so far.  So that pretty much leaves sellers with a whole lot of investment buyers, most of whom are foreigners.  On the other hand, if the market were to be saturated with thousands of foreclosed homes that would be a disaster as well.  Buyers would indeed come out of the woodwork like roaches, but their offers would be lower than usual, thus leaving the traditional sellers on the outside looking in because they are not the better deal.  This would probably also kill short sales since they close so much faster. 

I remember in 2006 and prior to when all the media could talk about was when the bubble was going to burst on the housing market.  Nobody paid attention to the warnings.  It was as if they wanted it to happen so that they would have something to talk about.  But now all they can talk about is the so called recovery.  What will the media talk about when that happens?  Make no bones about it – this is indeed an investor driven real estate market and without investors as buyers the South Florida market would look like Detroit.  It will lead to another bubble, however, that of the rental market because the area is being flooded with rentals now and landlords are gouging like tomorrow will be the end of the world.  It is sad at how people take advantage of others in their most time of need.  John Steinbeck’s, “The Grapes of Wrath” is a classic example of how the market collapsed during the depression and how those with took advantage of those without. 

So, as far as I am concerned the real estate recovery has to be divided into different parts of the country.  Some are better off than others, but Florida has a long way to go because it was probably the most greedy during the heyday.  The deeper you go into a real estate tragedy in terms of pricing and inventory, the longer you have to climb out.  Only time will tell how Floridians will bounce back from the deepest depths of the real estate abyss.  No media giant can ascertain that.

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Rebuilding America’s Real Estate Market Begins in its Downtowns

1950's Columbia

A vintage 1950’s era black and white photo of Main St. in downtown Columbia, SC tells a story of a city’s past. You will notice the hustle and bustle that used to be. The other is the new Mast General Store that now occupies what used to be Lourie’s Men’s Store in the downtown area today. With the advent of the suburbs and malls people slowly moved out of the city and the downtowns across the country began its slow decent into oblivion. I vividly remember as a student at the University of South Carolina in the 1980’s how dead the area was. And I often wondered what it would take to bring it back because the suburbs were actually too far away as the college campus was downtown. I figured that something like South Beach in Miami would have to happen. That took lots of cafes, bars, and retail, something Columbia was seriously lacking.

What it takes are some smart and gutsy business people to come in and take a chance by opening a business there. Well, this finally started to happen last year when Lourie’s Men’s Store, a staple of the downtown area for years, finally closed its doors. Businessmen and politicians from the area stopped shopping. But low and behold, the Mast General Store took a chance and took the bottom of the old store and The Lofts apartments took the top. By doing so the two managed to bring people back downtown. More and more young professionals who are more and more disenchanted with the price of gas are making the move to downtown and walking to work. It seems that hybrids and smaller cars just were not working anymore. As it turns out, the apartments are renting at a fast pace because the demand has returned.

Now, some may call this gentrification, but in the case of Columbia, it can’t be because nobody was living there anymore. This, however, may now be the case in Miami, Florida.

I bring up Columbia as an example of what can be. I now live in Pembroke Pines, Florida, a suburb of Miami, and found that this too can happen in downtown Miami. If you have never been there, the heart, Flagler St., isn’t much to look at and pretty much shuts down after 5pm. My grandfather used to roam these streets in the 1940’s as a carpetbagger and the place used to hustle. He would not recognize now. But the good news is that others like me are starting to recognize the potential in the downtown area and are taking a chance in bringing back some of the old buildings by converting them into apartments, much like the The Lofts. One such building is Flagler First, a loft style apartment building exclusively represented by Fortune International Realty. The prices are more than reasonable and start at $94,000. for a loft or one bedroom. (See photo)

Flagler First

This too is a prime example of young professionals making their way back into downtown areas to be closer to work. And the main reason, besides the drive, is the price of gas. Everyone has now realized that the price is what it is and it’s not going to change. Wishful thinking. Now comes acceptance. Why buy and smaller car when you can just sell your bigger house in the suburbs, get rid of your car altogether, and walk to work? The savings are incredible when you think about it. In this case, gentrification may actually be a good thing. How else are you going to bring downtown Miami back?

If you think that this may be you and you are considering this type of move, contact me, Morris Massre, for more information about Flagler First and a viewing. You will be surprised at what can be. Visit my website for more information about me and other properties at http://www.myfloridarealty.net

The Lofts Apts.

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Realtors Not Dead Yet

I sometimes wonder if realtors really are a dying breed.  In the old days before the internet people would always look for an excuse not to use an agent, but in the end always did.  Today they don’t even have to use an excuse.  There is plenty of free help out there online and television on the nuances of selling or buying a home.  And we do not help ourselves by giving anyone with a breath a license in a week.  I can’t think of any other business that does that.  You should have to earn it and go through much more rigorous training.  This will weed out the deadbeats.

Perhaps we are our own worst enemy too.  Cutting commissions, shafting our brethren, seeking out shortcuts to get rich quick, breaking all the rules and laws, and so on.  I liken this to when I was a kid.  My parents were in retail and had lots of competition who were always doing the same exact things just mentioned.  So my father took it upon himself to contact each of his competitors and offer a solution to the war.  Why not everyone just carry the same items at the same price and let the customer decide for himself who he or she wants to buy from?  This same philosophy can and should apply here.  Yet it doesn’t because everyone is looking out for him or herself.

If we band together and give the customer the service and attention they deserve they will stick with you.  No need to sell yourself short.  The more you do, the more respect you lose from the customer.  Once the public realizes this, and they will, they will come back to using agents the way they used to.  Afterall, how much attention can a computer give a customer?  As far as customers are concerned, the only good a computer should do for them is give them information on all of the qualified agents in their area.  If a client took the time to research who they are interviewing and eventually hiring they just might eliminate a lot of headache later on down the road.  Anyone can claim they are a “specialist,” but we all know that’s just branding.  Does the customer know that?

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Understanding Florida’s Landlord/Tenant Act

This nifty little disclosure has literally gone from two pages to eleven overnight.  What once was used simply to protect the tenant from losing his or her security deposit has now gone to protecting both sides.  Afterall, landlords seemed to be getting the short end of the stick on this one time and again, espcially with all of the tenants refusing to pay rent in the event of foreclosure, short sale, or even a simple modification. 

I have since come to find out that a rental agreement between a landlord and tenant and an agreement between landlord and bank are two different things and should be treated as such.  Just because a landlord may not be making his or her mortgage payments does not relieve you of your duty to pay rent as stated in your lease.  It is your duty or your agent’s to check on the property’s status beforehand.  Why get yourself into something that is already in trouble?

But it gets better.  Included in the Act are both sides obligation to maintain the unit, the landlord’s access to the unit, termination of an agreement, holding over, prohibited practices, and my favorite, choice of remedies upon breach or early termination by tenant.  This last one has been ignored forever, but now a landlord can charge for liquidated damages for either in the amount of two month’s rent. 

Is that fair?  Absolutely.  My advice to all tenants now is to read every page of this act before signing a lease in the state.  It is so much more detailed and goes beyond the scope of a simple security deposit.  That is provided your agent gives you one.  Be sure and always ask for the landlord/tenant act before signing a lease in Florida, whether it’s from an agent or a by owner.

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Once Upon A Real Estate Time…

I ruled the rental world of South Florida with an iron fist.  When times were good, nobody wanted to touch rentals or property management.  It was beneath them.  And I thrived because I was the Wal-Mart of real estate rentals. I went where nobody else wanted to go.  And it paid off.  But as soon as the market tanked everyone was now a rental specialist.  Now these realtors were dipping into my territory and profits and there was really nothing I could do about it except keep giving out my superior service and keeping my clients informed that I was in it for the long haul and would never abandon them.

And four years into this recession from hell I am still here plugging along and my clients appreciate it.  They know that if I can hang in there and still at least help them through all of this then there is hope for us all.  The only thing that can set you apart as an outstanding realtor is service, especially now.  And yes, it is a cliche for most, but this is a philosophy I have always adhered to, not something that I came up with now because there are no other tools.  My clients speak for themselves and as professionals you too should strive to keep your clients happy and informed by always going the extra mile for them.  It always pays off in the long run.

However, it doens’t always work that way.  I thrive on referrals and the only way to get them is to impress your clients with superior service.  Others don’t so much.  This is why I make it a point to insist that my potential clients read my resume, call my references, and read my blogs.  How else are you going to know anything about your agent?  Just because an agent has a big, fancy ad in the paper or glossy magazine does not make them a specialist.  Do your homework.  The hiring of an agent, including one that specializes in rentals and property management, is just as important as a sale, and therefore, should be interviewed thoroughly.

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If it’s too good to be true, don’t do it

Homeowners facing foreclosure are prime targets for scam artists. The U.S. Federal Trade Commission identified 71 companies running suspicious foreclosure rescue ads, and the Better Business Bureau counts foreclosure rescue rip-offs among its top 10 scams. Understanding how these scams work can help you avoid becoming a victim.

The variations are seemingly endless, but one popular foreclosure scam involves a representative of a so-called foreclosure rescue company promising to negotiate a deal with your lender. The rep, vowing to take care of everything, will instruct you not to contact your lender, lawyer, or credit counselor during the supposed negotiations. The more brazen ones will even tell you to pay your mortgage directly to them.

Once you pay an upfront fee or hand over a few months’ worth of mortgage payments, the scam artist will disappear. You’ll be left with an emptier wallet and a mortgage that’s in even deeper trouble because no deal was cut and no payments were made on your behalf. According to John Riggins, chief executive of the Fort Worth, Texas, office of the Better Business Bureau, upfront fees can range from $500 to $5,000.

Rip-offs come in many forms

A bankruptcy foreclosure scam can involve a promise to fend off foreclosure in exchange for an upfront fee. Instead of getting you legitimate relief, the fraudster will pocket the fee and secretly file a bankruptcy case in your name. The scam may seem to work initially, because a bankruptcy filing will stop foreclosure proceedings temporarily, but they’ll resume. Compounding your problems, a bankruptcy can mar your credit report for 10 years.

Another common scam, called the bait-and-switch, results in a scam artist taking ownership of your home. You sign documents supposedly for a new loan that will make your mortgage current. What’s really happening is you’re signing over the deed of your house. In this scenario you would still owe on your mortgage but no longer own the home.

In a rent-to-own scheme, you’re told to surrender a home’s deed as part of a deal that lets you stay put as a renter. The scam artist, perhaps claiming to be able to refinance at a better rate with you off the title, promises to sell the house back to you in the future. However, terms of the deal may make it all but impossible for you to repurchase the home, or the scammer may get you evicted by raising the rent beyond your means. Either way, you end up losing the home while remaining on the hook for the unpaid mortgage.

Look out for red flags

Being aware of the warnings signs can protect you from foreclosure rescue scams. Red flags (http://www.loanscamalert.org/things-you-should-know.aspx) include:

·Demands for high upfront fees.

·Guarantees to stop a foreclosure.

·Instructions to make mortgage payments to someone other than your lender.

•Pressure to sign over a deed.

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Landlord/Tenant Responsibilities

Anyone out there acting as a realtor or those practicing leasing on their own should know this;  tenants will always try to get away with as much as possible on a lease agreement simply because they either do not trust the landlord or just want control.  One of my favorites is when a tenant will want a clause written in a lease where they have the ability to repair anything that breaks down and bill it to the landlord. 

This is taboo as far as I am concerned.  It pretty much leads to the tenant simply calling anyone they wish to in the phonebook without a care as to how much it’s going to cost.  Most landlords, at least the experienced ones, always have someone that they work with that won’t rape and pillage them for a repair.  That is why this should never be allowed by a tenant. 

On the other hand, if you have a deadbeat landlord that never repairs anything, that’s another story.  But how is one to know that?  That is where your agent comes in.  If I had a landlord that I knew was a deadbeat I would do everything in my power to give the tenant the authority to make the repairs responsibly.  Other than that, your next best bet would be to hire a property manager.  As one myself, I have a handful of vendors that I specifically use for these purposes and because of my constant stream of business I get preferential treatment and prices.  Always look for  these types of clauses in the lease or agreement.

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This Realtor Likes Velma Hart

I was astonished today when I turned on the news and watched this woman finally stand up to the President in disgust.  Her comments were clear, well thought out, and to the point.  How refreshing.  Finally, instead of praising and kissing his behind someone has the guts to confront the President and ask him point blank what he is doing about the current state of the economy.  What surprised me even more was the way in which she delivered her questioning and lecturing.  Not a hint of disrespect, but more like a parent expressing her disappoint in her child.  She did not fumble her words in the least.  Nothing could be more disconcerting to a man in this position of power.  How humbling it must have been.  Maybe now he’ll get the message.  If you haen’t seen my new hero yet, take a minute to view this Youtube vido link.

http://www.youtube.com/watch?v=BnMMo8lVG5M

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