Like a Virgin April 30, 2007
Ever since I started my own blog, I feel like a virgin. It’s like I’m blogging for the first time. I feel so shiny and new. Although, there’s one thing I haven’t quite figured out. Perhaps the multi-bloggers out there can chime in. You see, I’m not quite sure where my blog begins and Rain City Guide ends. Right now, I try to keep the geekier stuff on my blog and the more general interest stuff here. Of course since Rain City Guide has such a large audience, there’s always the temptation to post everything here (even if it doesn’t belong here).
For example, I’m getting ready to start work on the next version of Zearch (codenamed: NIMITZ). I’m thinking about putting my design ideas & implementation notes on my blog. Does it belong there? Well, I think I’ll cross-post things that pass the floor wax and a desert topping test. If it’s geeky and real estate-y or blog-y (BTW - are those real words? It’s so much easier to add a -y than spell out real estate related or blog related) I probably should post on both, but keep the meat on my blog (kinda like what I did with my blogging with Word 2007 post).
I’m sure many folks who participate on ActiveRain face similar dilemmas. The Queen of RE blogging has given me her advice, but I figured more advice is better than less advice. Besides, I don’t have as much dirty laundry to air as she does. I guess I’ll just do what Madonna would’ve done. I’ll just get into a groove and post where it feels so good inside. Ooh baby… Yeah!
Sphere: Related ContentRiding the OC Wave… April 29, 2007
I took a drive last night to meet up with the fine folks at Sellsius and more than a few others at the Rooftop Bar of La Casa del Camino in Laguna Beach. What an awesome spot with an amazing view (unfortunately, I arrived at the bar a little late for getting good photos from the deck and instead you’ll have to suffice with this photo taken directly below the bar to get an idea:
I captured some of the people who showed up in this photo:
(Back row: Laurie Manny of Long Beach, Kaye Thomas of Beach City, Heather, Rory Siems of Laguna Niguel, Joe Ferrara of Sellsius, and myself. Front row: Brian Brady of Amarica’s Most Opinionated Mortgage Broker and Rudy Bachraty of Sellsius)
Some others who showed up (but didn’t make the above photo) included Sarah Washburn of ActiveRain, Tisza Major-Posner of Route66, Loren Nason of Real Estate Technology, Kelly Kilpatricks of Rancho Santa Margarita and Morgan Brown of Blown Mortgage.
I’m a bit late to the game in that most everyone else has covered the event… Suffice to say, I had a blast and heard a ton of great stories! So many of the people in attendance have been living in breathing the RE.net for a while now that they were able to get me back up to speed with all kinds of juicy stories.
Thanks again to the Sellsius boys for organizing the event.
BTW, I’ve added a few more photos from this event on Flickr . 
Blogging in luxury & style with Word 2007 April 27, 2007
Well, I’ve had my own blog for a couple weeks now. So far, I am loving Subtext. Comparing Subtext to WordPress is like comparing a Cadillac CTS-V to a BMW M3. The standard is the still the one to beat, although the race is much closer than you might think it should be. Although it doesn’t have the refinement of the BMW, it does have a close working relationship with the Corvette parts bin and has the potential to be a world beater.
However, during that time, I’ve discovered something even cooler than a V-series Cadillac sitting in my blogging garage and that’s the new Microsoft Word 2007. Think of it as the Lexus LS-460 of blogging sedans.
Anyway creating a blog post with pictures is as easy as using Word (and it creates clean HTML markup too). If you don’t believe me, the View Source command is just a mouse click away. That’s OK, I’ll wait…
Now that I have your attention, here’s a guided tour of how I created this blog post with Word 2007. First, you need put your keys in the ignition and start your engines (or just start winword.exe using your favorite command shell). After your hard drive is done doing its 0 – 60 MB sprint, you’ll see an empty document window.
Now you need to click on the “pearl” (aka the Office button), and select Publish – Blog from the menu. Now that you’ve created an empty blog post document, you need to configure Word 2007, so it’ll be able to post to your blog. If it’s your first time, Word 2007 will prompt you for a Blog Account, otherwise you’ll to click on the manage accounts button in the ribbon (aka where the toolbar used to be) to add your blog. For my demo, I’ll add my Rain City Guide account settings.
From the Blog Accounts dialog, click New and you’ll then see the New Blog Account dialog. Word 2007 has support for Windows Live Spaces, Blogger, SharePoint, Community Server, TypePad, WordPress, and other blogs that support the Atom or MetaWebLog APIs. Since RCG proudly uses WordPress, I selected that and proceeded to the next dialog. (FYI – Subtext uses MetaWebLog)
Then on the new WordPress Account dialog, you enter the blog post url and your account info, click OK and your ready to burn some rubber. Since I’m behind on my quota for my blog, I plan on writing a comprehensive review of what Word 2007 can do for your blog on my Caffeinated Blog this weekend.
Anyway, if you’re a blogging enthusiast, I highly recommend you take Word 2007 out for a test drive. I usually don’t impress easily, but Ecto and Blogjet has some formidable competition now.
Sphere: Related ContentFriday’s Rates…
….are the same as last Friday! I was stalling…almost hoping for a rate change to try to prove my point to Ardell on how much rates can change. Alas…I may have to wait until next week to prove my point. Rates did increase a bit during the week and have come back to the same point as this time last Friday. 30 year fixed rate under 6%–who’s complaining? 
How about those SEO tweaks? April 26, 2007
I thought about labeling this post “Does SEO work?” or something similar until I realized that is just stupid. SEO stands for search engine optimization and not only does it work, but in many ways, it is the basis for why blogs work so extremely well for promoting yourself as an expert within a niche topic (as Rhonda has done… Or even a nationally recognized expert!)
So where am I going? I recently had another meetup with my project blogger and I realized I hadn’t made some simple SEO-related tweaks to his wordpress blog that I made to RCG last December. The tweaks I made were to:
- edit the title tag of all my posts
- add keywords to the blog
I gave one update to this post, but essentially failed to follow through, so I’m hoping to remedy that right now.
First, I’m a bit surprised that many of my one week observations held steady. For example, RCG is still the #1 result for [Agent Recommendations]. Also, RCG has essentially dropped off of Google’s radar for a search that used to be our #1 organic traffic generator: [Seattle Real Estate]. My expectation was that Google’s algorithms might be temporarily confused by my changes to the site, but that they would pick up our new configuration after a while and continue to drive us traffic on this key search term. No such luck after four months.
As a matter of fact, I’m pretty sure that Google is still somewhat confused. My logic stems from the fact the page Google has decided is most relevant (using this search term) from RCG changes on a weekly basis. This week it is the link to Robbie’s articles which shows up somewhere down the middle of the page (if you show 100 results per page on Google as I do)
However, the real genesis of my SEO tweaks were to see if I could get the “other” search engines to send RCG a higher percent of our organic traffic. The idea is that Google was sending about 92% of the organic traffic to RCG and I wanted to see if I could get MSN and/or Yahoo to send more. As you can see from this Google Analytics chart for stats from the month of March, 2007, I failed:
Google sent 91.73%, or approximately 92% of all organic traffic to the site in March of 2007, which means there was essentially no change at all! In other words, the SEO-related changes I made did not have the intended effect of increasing the percent of organic traffic that RCG received from non-Google sources.
However, I’d be ending too soon if I made it sound like the SEO changes were not beneficial. Here is the marketing summary from Google Analytics for the month of March 2007 compared to the month of November 2006 (i.e. well after the changes to before the changes!).
What you see is that our visitors from organic sources is up 138% between those months and the visitors from organic Google searches is up 139%. This is almost double the increase from “referral” sources which makes me think that the changes I made to the site were effective and not just background growth!
(Of course, it can’t go unnoticed that the Seattle Bubble sent us over 2000 visitors in March. Wow! That’s well worth a juicy link to the most bubblicious real estate site in Seattle. )
Also of note… Google really seems to like our article on moving to Seattle. I love that my “little bit of serendipity” has turned out to be so helpful. You can never tell what post is going to kick start an interesting conversation.
Finally, as a treat, I thought I would present the chart that never fails to impress at my seminars. In March 2007, there were almost 25K people who came to RCG once and never returned. 
(that is NOT the impressive part…). On the flip side, there are over 1,800 people who have visited the site more than 200 times.
For the RCG contributors (and commenters!) who wonder how widely that your stuff gets read, realize that there are a HUGE number of people who read without ever letting their presence be known. If you fall into that category (at least 95% of the regular readers do), feel free to introduce yourself in the comments any time! (The first comment is free.)
So, to wrap this up as a “project blogger” post… I’d highly recommend that anyone starting their own blog get Google Analytics. It’s free, easy to use, and provides a wealth of information about how people use your site!
Two offers to refi in one day…just how lucky can a gal be?
In our mail today, we received two very attractive offers to refinance our current mortgage. Wow, how 
exciting! Here are the details:
Offer One–This is your “Final Notice”
Reducing our current mortgage rate to 1.75% for 5 years. A Senior Rate Reduction Consultant is waiting to assist you. The APR on this offer is 6.308%.
This offer will expire on May 14, 2007. Here’s my favorite part: No other notices will be issued and no representatives will call you. (Darn…the clock is ticking!)
Offer Two…Takes the Cake! (It’s even printed on pink paper)
“Your Mortgage Master loan in the amount of $375,000 can be restructured to a (you better sit down for this one) a 10 year payment at only $79. This is not a typographacial error. Your payment rate is only 1/4% and is fixed for 10 years….
Call us today and have no house payments until June 2008“.
Of course I had to call them! The gentleman was very friendly (much nicer than the chaps I dealt with trying to help Jillayne uncover the Vacation Mortgage). First you must meet their guidelines. “Slick” tells me that one of their biggest “catches” to get around is loan to value…lucky for me, we meet the 70% or less LTV requirement. You also must have credit scores of 680 or better and not plan on moving for 3 years or you’ll have the opportunity to pay a prepayment penalty.
Me: What is the rate based on?
Slick: 0.25% interest only
Me: I mean, what is the base rate? How much is the deferred interest?
Slick: Wow, you seem to know a lot! 6.750%
Me: At what point does the mortgage recast?
Slick: 150% (yep…that’s what he said….150%). I can’t believe it either!
This means that every month you make the 0.25% interest only payment of $79; the difference between that and the fully amortized payment is tacked on to the back of your loan. This difference is $2,322.17.
This would be allowed to continue until my original mortgage balance of $375,000 reaches $562,500! I estimate this would take 80 months (or just shy of 7 years). Although the rate is fixed for 10 years, the loan will recast into a fully amortized mortgage when it reaches the 150% cap.
If we assume that my house is worth $550,000 today and has a mortgage balance of $375,000. In 7 years, we know that if I did this refinance with Slick, my mortgage balance would be $562,500. We really have no guarantees on what my $550,000 home will be worth in 7 years. Not to mention what would happen to my credit scores having a mortgage balance that was increasing over the original loan balance.
Last but not least…we’ve finally uncovered the “vacation mortgage” mystery! With this program, they also offer to give you 12 months off of your mortgage payment as a “credit”. It’s very easy for this type of lender to do. At $79 a month, 12 months of mortgage payments would be $948. It’s simply priced into the loan by rebate, margins or the prepayment penalty.
Pretty slick….huh?
Sphere: Related ContentSellsius Launches their Real Estate Classified Site!!
Sellsius° has Launched!
The Blog that bore a Business…Sellsius
Good Luck Joe and Rudy!!
I’ve been waiting since September of 2005
to announce that Sellsius has launched!
Check it out at: Sellsius Real Estate
Congrats to both Rudy and Joe!
The (legal) importance of a home inspection
(This post is not legal advice. For legal advice, consult a lawyer about your particular situation.)
First, my apologies to the RCG community. I recently took a lengthy vacation and have been quite busy since my return. Moreover, I now need to hire additional staff and thus move to a larger office space. So, please forgive my less-than-frequent contributions until things return to “normal.”
Recently, Russ authored a post discussing the recent Supreme Court case of Alejandre v. Bull (beating me to the punch, in the process). This is indeed an important case for several reasons, one of which Russ and the subsequent comments touch upon: the importance of a thorough home inspection.
Initially, the home inspection (if performed competently) provides the buyer with information regarding the condition of the house. Obviously, the buyer is best served having full knowledge of any existing defects and able to make an informed decision about whether to complete the purchase.
In light of the Bull case, however, the inspection also has legal significance. In that case, the Court (in paragraphs 32 and 33) noted that a buyer of real property may still have a claim of fraudulent concealment and/or fraud where the seller fails to disclose a known defect (notwithstanding the fact that the buyer does not have a claim for negligent misrepresentation due to the economic loss rule, as discussed by Russ). To prevail on a claim of fraudulent concealment, the buyer must show that the defect at issue “would not be disclosed by a careful, reasonable inspection by the purchaser.” To prevail on a fraud claim, the buyer must show that he had a right to rely on the alleged misrepresentation of the defect at issue. This “right to rely” is “intrinsically linked” (using the Court’s words) to a buyer’s duty to exercise diligence with regard to the representations at issue.
Accordingly, an inspection is critical to retaining the ability to make a claim of fraud or fraudulent concealment against a seller. If a buyer skips the inspection, the buyer will have great difficulty showing that the defect would not have been revealed by an inspection. The reverse is true as well: by getting an inspection that fails to uncover the defect, the buyer will have a very good argument that the defect would not be (and indeed was not) revealed by an inspection. Similarly, absent an inspection, the buyer will almost certainly have failed to exercise the necessary diligence to identify the defect, regardless of seller’s representation.
An inspection has an immediate, practical benefit. However, it also has a legal benefit. If you forego the inspection, you essentially waive any claim against the seller for failing to disclose a known defect.
Sphere: Related ContentHow Loan Officers Harvest Seller Paid Contributions: An escrow perspective for buyers and sellers. April 25, 2007
Preface: Last week Rhonda Porter brought up the topic of “Are you leaving too much on the table.” The latter part of her post suggests that the Loan Officer harvested the amount of seller contributions that were left on the table. Within the commentary that followed, the question was asked if escrow sees this occur,and if so, how often? It raises many questions beginning with agents having a thorough understanding of what is in the best interest of their clients. Further, it casts a bright light on the issue of how agents should approach drafting purchase and sale addenda that are clear (no vagueness) and meet the intention of their clients. Lastly, questions of ethics are raised. The harvesting of seller contributions by loan officers is much more frequent than agents probably know, partly due to the fact that some agents may know very little how the system can work against them and their clients.
Setting the stage
As a simple and general example, the 100% financed borrower finds a home and the seller and buyer come to a sales agreement with the seller paying, say, $10,000 towards the buyer’s allowable closing costs. Never mind that sellers commonly increase the sales price to offset their contributions without knowing or factoring that it also increases other costs (typically the fog of getting an offer (s) may mask bottom line factoring).
For this conversation, let’s just stick to the contribution factor of $10,000. The borrower received a Good Faith Estimate (GFE) from their loan officer early in sales process. This GFE displays many of the most common fees in conjunction with buying a home. Once a home is sold-pending and under contract the loan officer working with the buyers knows that the seller is paying for the buyer’s closing costs, which, in this case, is written into the contract at $10,000. Going forward the loan officer knows that closing costs may or may not meet the $10,000 allocation the parties intended. In this example, the borrowers closing costs end up being less than the $10,000. It is $3500.00 shy. Dang, that’s a lot of chips on the table that need to be used up. Meanwhile, the buyers “believe” that the $10,000 is theirs to use up and it will be spoken for. There’s $3500.00 on the table!
Where does it go?
The quick and general answer is the Loan Officer increases fees prior to the parties realizing what has happened, usually at the very last minute.
How is this accomplished? What is the primary enabler or scenario in which this occurs?
- For one (this happened just recently), the loan processor may call escrow and say, “Hey, we’re short on using seller contributions. Do you want to jack up your escrow fees?” Of course, our answer is no (laundry list of violations including RESPA), and we don’t care to find out how good we look in white and black striped Pajamas.
- Sometimes, to pre-empt and reduce the probability of a borrower becoming upset that the funds allocated to them were not used up, the loan officer increases the loan origination fees. When this happens, the borrower is largely unaware that they just financed the difference as part of their loan fees.
- The primary vehicle/enabler: When escrow firms receive loan documents (frustratingly, usually 1 or 2 days prior to actual closing) and prepare the estimated settlement statement, it is at this point where the excess unused seller contributions show up. It is generally too late at this stage of the transaction to use allocated money for discount points, or any other consideration, unless the loan is re-drawn at the lower interest rate WHICH WILL result in delaying closing. Here lies the primary opportunity for the excess funds to be used up by the loan officer. A good portion of the time, many agents don’t realize that this has occurred to their borrower. If they do know it happened and didn’t tell their client….well, that is another topic altogether.
Why can’t the funds be used to reduce the purchase price?
Many agents do not understand that unused excess seller contribution funds CANNOT be used to reduce the purchase price without the loan going back to underwriting (because the borrower qualified under specific guidelines, ratios & LTV which would be thrown off) which is impractical when you are two days or sooner from closing.
So how often does escrow see this happen?
Speaking only for our company, Legacy Escrow Service, Inc., there are NEVER excess funds from seller contributions. The loan officer will take it. We rarely see the Good Faith Estimates, so we have no way of knowing if the broker’s fees at closing match what was originally disclosed at the time of application. We only know that EVERY time we prepare a HUD-1 settlement statement in which there are unused seller concessions, we ALWAYS receive revised instructions from the broker changing (increasing) their fees.
What can agents do to prevent seller contributions from landing in the loan officer’s wallet?
1. Write very specific addenda regarding seller-paid contributions.
2. As Rhonda suggests, compare the initial GFE with the estimated fees stated on the Settlement Statement (HUD -1 Form). If the fees are off in a meaningful way, start asking questions.
3. Tell the loan officer that you referred to your clients that this practice will not be tolerated.
4. Refer to #1 again.
Sphere: Related Contentolder posts »
