by Roberta Murphy

Luxury Home Digest is neutral politically and generally focuses on luxury homes and real estate issues.

But with a journalism background, there are several things I abhor–including mean-spirited personal attacks, hackers, shoddy reporting, and abuse of publishing power.

Not that we expect great things from grocery store rags like US Weekly, National Enquirer and Star Magazines, but I think we expect more from the glossy mags than the cheapie newsrags. 

It turns out that Jann Wenner, who also publishes Rolling Stone Magazine and has a decided political bent, approves of misleading headlines and the yellowest of journalism–as long as it targets those with whom he disagrees.

And US Weekly appears to be his latest yellow convertible.

Sure, Sarah Palin has a pregnant daughter–and had some issue with a former brother-in-law and his dismassal from Alaska law enforcement.–or some such thing.  

But lies and scandals?

After intense questioning, the editor of US Weekly acknowledged today that the “Lies” they had headlined dealt with the lies being spread by Sarah Palin’s political opponents–not prevarications being spread by Palin, McCain or anyone close to her.

Shame on US Weekly.

And shame Wenner and Rolling Stone Magazine–a former favorite.

Better to protray the truth, that twist your own lies and purposes into attention-grabbing headline$.

by Roberta Murphy

Last Thursday, I had the opportunity to sit across from Bob Dyson at his office in Del Mar and listen to this real estate legend discuss today’s real estate market. We were also fortunate to have Chris Dyson videotaping much of the discussion, which we have divided into four segments.

At the start of our interview, Bob Dyson said these are the worst conditions he has seen during his 40 years in the real estate business–citing symptoms such as lack of buyer confidence and the drastic deflation in certain real estate markets–including California, Nevada, Arizona and Florida.

The causes stem from irresponsible mortgage lending practices from 2003 to 2007 and the resultant and reactionary tightening of mortgage funds. Dyson simply calls it a “lending debacle.”

At the same time,he says, there is a large and growing backlog of buyers who want to buy–and are just waiting for reassurance that the real estate market has really bottomed, or is at least close to that point.

See below (and stay tuned for a radical solution):

by Roberta Murphy

I received an irate call from my father, Bob Michelson, this morning.

He, a calm and decorated veteran and pilot of three wars, was fit to be tied. In addition to following the stock market closely, he tracks world events with the eyes of a falcon.

“GM’s stock price is at an all-time low and Citibank is sitting at a 10-year low,” growled the Colonel. “Meanwhile the world scowls at us as we slurp up 25 percent of its oil supply and contribute to worldwide spikes in fuel prices–and yet refuse to drill for oil in our own backyard.”

And why can’t Congress get mobilizing legislation into gear? Because the legislation isn’t quite…perfect.

And so our elected leaders dismiss themselves for a patriotic holiday–as their fellow Americans and constituents drain their assets at the gas pumps this summer.

I join this veteran in his complaint–and wish we had reason to celebrate decisive action from our elected leaders this 4th of July.

by Roberta Murphy

Call this a geeky rant. Call it a blonde tirade. Call it what you want, but I just don’t know what to do about diverse databases.

I think I have them coming out the Wazoo.

If you came here seeking luxury news, you may want to click away and come back tomorrow. Right now, I am trying to sort out a database problem that honestly keeps me awake at night.

You see, I have been collecting names, addresses, email addresses and property preferences from people for centuries. And if there were a way my databases of information could talk to each other, I could be the supreme Yentl of real estate in Southern California–or the whole world.

My problem? SOAR Solutions, which for years reliably sent property information to hundreds of clients, was sold to HouseValues, who ostensibly does the same thing but charges a king’s ransom to do so. At the same time, clients who signed into SearchPoint with my ancient Realigent site, are listed there and are also receiving property updates from me.

Then there was Top Producer, which held all the contact information for existing clients–along with their birthdays and wine preferences. And now I have an account with 1ParkPlace, which also sends out listing information to clients and maintains another database.

The real problem?

None of these databases talk to one another–and I think it’s a deliberate conspiracy, HouseValues will release only the client’s name, address, telephone and email address. Forget about search parameters. They hold that information hostage and continue to charge me out the yingyang for the privilege of doing so. I would like to migrate this information to 1ParkPlace, but no can do.

Guess those tasks will have to be done one by one, keystroke by keystroke.

Then there’s the database sitting over at Realigent that is fully 8 years old. Many of these searchers have been with me since the last century. Those, too, will have to be migrated one by one, keystroke by keystroke.

The problem could probably be solved if I were an enterprise level business doing gazillions of transactions per day. If that were the case, I would just call the database gurus at ANTs Software and they could use their cool plugin and make databases like Oracle, IBM, Sybase and Microsoft relate, talk and migrate to one or the other. The Ants Compatibility Server (ACS), fortunately and unfortunately, is whizbang technology for the big guys and ANTs will probably rule the world of databases some day, but are of little help to me now.

In the meantime, I think someone could make a modest royal ransom if they could solve the Realtor’s dilemma with databases and set us free from those vendors who hold us hostage. If software could be written that would encompass not only basic information, but also our real estate client’s search parameters and wine preferences, the world’s real estate crisis might be solved.

And just for grins, remember this classic Super Bowl 2000 Commercial?

by Roberta Murphy

The real estate predators are always there–in good times and in bad.

There are whispered stories in real estate circles of certain escrow and loan officers who, in the heady days of real estate, slipped deeds into the stacks of papers homeowners were signing as they refinanced their homes. The deed, of course, moved the property into the predator’s claws.

As the Discovery Channel shows, predators will always pick off the unsteady, the not-so-swift and the elderly because the catch is easy and the herd moves on. No different with these criminals.

But you know what’s scary?

The employers of these predators, when or if they discovered the crimes, fired the perps summarily–and kept their collective mouths shut. They didn’t want bad press, they didn’t want exposure, they didn’t want to field the possible litigation that sometimes come from predator attorneys.

It was a criminal catch and release program that spared corporations their reputations and the hassle of potential lawsuits.

As as result, it should surprise none of us that these same real estate criminals (and others who have caught onto their scams) are again preying on unsteady homeowners. This time they disguise themselves as the good guys of real estate, who are out to save stressed homeowners from foreclosure. Their lines and lead-ins go something like this:

I can save your home from foreclosure. I can save your credit. Just sign here.

Other wannabe-predators offer embarrassed and delinquent homeowners the chance to stay in their homes as renters, and then offer to buy them back when circumstances improve. Families can remain in their homes, the kids can stay in school, and neighbors will never know the difference.

The only problem is that the prices at which the homes will be eventually offered back to the former owners may be far above market value.

The true real estate predator will offer to make the foreclosure go away with a simple loan. All the distressed homeowner needs to do is sign on the marked lines (at the bottom of the promissory note and deed of trust)–which means that he and/or she have just signed over the deed to the house. These predators are really good at slipping these critical documents into big stacks of paper that need to be signed in any real estate transaction. If we recall, this is the same tactic these creeps used a few years ago and their targets remain the same: The distressed, the unsteady and the elderly–who also own homes with enough equity or opportunity to make it worth the hunt.

My advice to distressed homeowners? Immediately consult with a reputable real estate professional or attorney before signing anything offered by a real estate problem solver–and remember that the predators wouldn’t be after you if there wasn’t any meat on the target.

by Roberta Murphy

Opportunities for real estate fraud couldn’t have been more ripe than in 2005 and 2006, when real estate prices started to quietly soften–especially in fertile markets like San Diego, Phoenix, Las Vegas and Miami.

Home prices in these areas had rocketed to unsustainable levels, and some of the micro markets within these areas had already started to stall as early as 2005. By 2006, market time and “days on market” had begun to climb, to the discomfort of many sellers.

Many had listed their properties, hoping their homes could sell for at least as much as the recent neighborhood comparable sales or their own refinance appraisal–and perhaps even more. Some of these sellers were more motivated than others, and reduced their listing prices substantially to attract more buyers.

The stars were perfectly aligned for the real estate crooks:

• The housing market was declining, and there was general confusion in pricing;
• Mortgage money was easy, especially with stated income loans.
• Many of these shady real estate agents also wore the hats of loan brokers–and vice versa. This allowed better control of the transaction.

For example, we had an Imperial Beach home listed at close to $500,000, based on the owner’s 2005 refinance appraisal. Because the property needed so much work, the motivated absentee seller agreed to reduce the price to $399,000 and sell the home in as-is condition. Almost immediately, we had an offer for $500,000 (100 percent financing) with $120,000 to be credited back to the purchaser at close of escrow. The South Bay agent assured us the buyer was approved by their crooked in-house lending operation.

We presented the offer to the seller, and advised to him reject it outright. It was an obvious case of loan fraud.

A few months later, we had another fraudulent purchase attempt on a home we had listed in Carlsbad. It was a lovely listing in Rancho Carrillo that had also had a substantial reduction in price. We received a verbal offer from an out-of-area contractor who had never seen the property. His loan broker called from Northern California, and explained that their offer (100 percent financing again) required over $100,000 back because of all the work this contractor would have to do. They wanted me to write the offer, believing perhaps that if I “double-ended” the deal, I would be more cooperative.

We shot back a quick rejection. This newer home, by the way, was already in pristine condition–and was sold shortly thereafter to very qualified buyers.

This time, though, I called the San Diego office for the FBI, and reported all the information I had regarding this attempted fraudulent purchase. I provided names, telephone numbers and email addresses–and never heard anything more.

Since then, we have seen countless cases where homes were sold at highly inflated prices in 2005 or 2006 with 100 percent financing. That can be an immediate red flag for either buyer and borrower misrepresentation–or possible loan fraud.

There is also the technique of hiding a kickback in inflated commission, because lenders aren’t privy to real estate commissions paid. Though not exactly illegal, it is a practice that should be examined. I am inclined to think commission kickbacks should be considered a lender disclosure issue.

The untallied costs of these real estate and lending crimes and schemes have contributed enormously to the current real estate crisis.

In the meantime, the US Department of Justice (DOJ) has wasted huge amounts of time and resources the past few years pursuing the National Association of Realtors (NAR) over ownership of MLS data and other obscurities. Their time, I believe, would have been far better spent pursuing organized and fraudulent real estate practitioners. Had they, the FBI and other law enforcement agencies been more aggressive in this arena, the real estate market might be in a different position today.

by Roberta Murphy

A year or so ago, real estate circles were abuzz with argument and discussion about the pros and cons of discount real estate services and commissions. Discounter Redfin had opened with one agent in San Diego, and their CEO Glenn Kelman promised that real estate discounters would turn the real estate brokerage business either upside down or inside out (I dont recall which).

Beating Kelman at his own venture was Iggys House, which would list ones home for free, and a corresponding sales arm that rebates even more than Redfin. In between the two were countless other ventures that vied against each other in real estate commissions and levels of service.

In the ensuing months, we began to see not a decrease in real estate commissions, but instead a rise in commission offerings. Builders and desperate sellers were offering 3, 4, 5, 6, 7 and even 8 percent sales commissions on their properties. (Of course, with inflated commissions we tend to suspect inflated pricing and share this with our clients.)

It is unimaginable to this writer that the U.S. Department of Justice could even think that the real estate industry is capable of controlling anything, let alone commissions. Brokers have long lamented that trying to control real estate agents is no easier that trying to herd cats. If they cant convince agents to attend weekly sales meetings, how could one think that they could possibly œset commissions that their independent contractors charge their clients?

So what is the commission and service situation in todays more challenged real estate market?

According to the National Association of Realtors, the latest survey of buyers and sellers showed that 83 percent used full-service agents last year, while 9 percent used limited-service agents and 8 percent needed only minimal service.

Of course, I cant resist adding my own simplistic opinions regarding the issue of full service versus discounted commission/service real estate brokers. These answers of mine came as a result of one questioners queries on Trulia regarding the advisability of using a discount real estate broker:

Pros: You may save on commission.
Cons: You may not.

Pros: You may gain valuable experience in selling real estate on your own.
Cons: You may never want to go there again.

Pros: It can be a workable strategy in a sellers market.
Cons: It could be disastrous in a buyers market.

(You seriously ask a very good question. I just cant resist simple answers and wish you well regardless of your listing strategy!)

We have been in an indisputable Sellers market in San Diego for some time. Now, more than ever, real estate buyers and sellers need expert guidance in the purchase and sale (or lease) of their San Diego property. Your ultimate success in the purchase or sale of real estate in the San Diego marketplace will depend not only on expert guidance, but timing and flexibility.

Commissions become somewhat irrelevant when 1 percent in value per month could easily be lost to a sliding market. This makes it more important than ever for sellers to employ the services of seasoned and knowledgeable real estate professionals and for buyers to do the same.

And as for luxury real estate representation in this real estate market, I can shamelessly suggest none other than Villa Sotheby’s International Realty at the Del Mar Plaza in Del Mar, just outside San Diego. Sotheby’s service is without parallel, while their commission rates remain quite ordinary.For additional reading abour these real estate issues:

Why You Always Need a Good Buyers Agent

New Real Estate Danger: Cancellation Fees

Real Estate Agent Liability?

Encinitas Bluffs, But Its No Joke

Palomar College Beefs Up as Agents Drop Out

by Roberta Murphy

The displaced people of San Diego County are beginning to return home. Most return to standing homes; 1600 or so others are greeted by their nightmares.

We are just beginning to hear and see stories of people returning to the burned heaps of rubble that were once their homes. They sift through some of the debris and find broken china, perhaps a metal bed frame, perhaps a spoon. They are somber, and many are tearful, as they survey the charred remains of former lives.

Still, the common response of all has been a profound gratitude for life. The fires may have stolen lifestyles and mementos, but they have also gifted people with a new appreciation for living.

A few days ago, I spoke with some who thought people would be leaving San Diego by the thousands.

At that time I thought not–and still do.

A family whose home was destroyed in Ramona was asked by a reporter if they were going to pull up stakes and move. The owner replied that his burned house is just a house, but Ramona is home. They will rebuild and remain in their home: Ramona. That is their community, where friends pull together and share a common history. Fires cannot destroy that bond.

I have spoken with several people whose La Costa area homes were destroyed 12 years ago in the Harmony Grove Fire. Most rebuilt and remained in the community–because it is the community that is home.

No one means to minimize the horrible trauma of losing one’s home. There is the shock of the initial loss, the months of haggling with insurance companies and contractors, the problems of displacement and finding temporary shelter, the process of rebuilding a lifestyle.

But the process of rebuilding a lifestyle allows for changes in living that might not have occurred otherwise. The rebuilt home may be configured differently, may better reflect your identity, may better serve your needs. And the rebuilding will be a process shared by the community, which will further tighten the bonds between neighbors and friends.

San Diego will survive and thrive.

If grass can grow through concrete, life can arise from the ashes.

by Roberta Murphy

Become a victim of identity theft, and you could be in for the nightmare of a lifetime.

We have known several identity theft victims. One family lost its home because of it and another even fears for his safety. It is a vicious crime that can take years to to resolve and the damages can last far longer than that.

Almost 10 million Americans are victimized by identity theft each year, and it is one of the fastest growing financial crimes.

The best solution is prevention and freezing your credit may be one of the simplest steps you can take to help stop this crime. A security freeze will prevent thieves from obtaining credit in your name by locking, freezing and blocking access to your credit report and credit score.

The cost to do this is fairly minimal ($10 in California), and is a solution available to residents of:

Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

What happens if you want to obtain new credit? The consumer is given a PIN to grant access to the credit file. Again, a nominal fee may be charged to do so.

How does the credit freeze work? Simple. If a business or lender cannot obtain credit information, new credit will not be issued to the thief.

For additional reading about this subject, click here.

Click for instructions on freezing credit in California
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by Roberta Murphy

I believe we have a new issue to negotiate on behalf of our clients:

CANCELLATION FEES

A couple of weeks ago we had a buyer cancel a transaction within the timeframes agreed upon by the buyer and seller. Notice of cancellation was sent out shortly after the physical inspection on the $400,000 downtown San Diego condo.

It should have been a simple matter, but that was not to be the case.

The Prudential listing agent had stipulated that Prudential California-owned Pickford Escrow handle the transaction. All proceeded smoothly until the point of cancellation, when Pickford assessed a $1115 cancellation fee against the buyer, and refused to back down from that claim, despite our requests to do so.

Never in our real estate experience had we encountered an escrow cancellation fee of this enormity, and I cannot recall any escrow cancellation fee that had been assessed against any of our transactions in the last few years.

In the rare cases when we have had an escrow that cancelled, the escrow and title companies bore their losses along with the agents involved in the transaction. Even though œreasonable cancellation fees are generally allowed for in the escrow instructions, it is something that is rarely levied against the real estate client.

Curious as to whether this is to become a revenue-generating trend of some sort in a sagging real estate economy, I called the Pickford Escrow manager involved in this transaction and asked if cancellation fees were part of a new policy. He said it wasnt a policy, but was something that was allowed for in the escrow instructions and could be charged on a discretionary basis.

Hmmm..

I called Steve Torneo, San Diego attorney for First American Title and Escrow, and asked what First Americans stance would be regarding escrow cancellation fees. He, too, said it was a discretionary call, but that they would not levy that fee against a cancelling client who felt it was unfair in any way or who felt that First American had failed to earn what was charged.

He also agreed that $1115 seemed excessive.

A call to Alonzo Castro, a Carlsbad service rep with First American Title, further confirmed the rarity of cancellation fees and he could not recall First American assessing them against any clients.

To round out this informal survey, I asked senior escrow officer Deanna Lynch with Southland Title Escrow in Carlsbad, CA what their policy was regarding escrow cancellation fees. She said, œWe just dont charge cancellation fees.

A final call to Gena Riede, a seasoned Sacramento real estate broker, confirmed that she had not seen any fees assessed against any of her cancelled escrows either. I mentioned that an authorization for this fee appears in the small print of escrow instructions, and that in the future we will be inserting language in our offers that prohibits the assessment of escrow cancellation fees against any of our clients.

Gena will be doing the same.

It is the least we can do to help protect our clients.