Working with the dregs

There's an old Frank Sinatra song that has a wonderful line "...from the brim to the dregs. It poured sweet and clear. It was a very good year...."

With great wine, tasting from the brim, or first portion, is a sweet affair. The flavors that arise aren't an accident. They arise because the wine maker's experience, education and love of the art and science of winemaking are at stake. In a word, the artisan's work is on display, and at first taste, it's either great or not so.

The dregs are what remain at the bottom of the barrel. Not much to taste from. Not much to brag about. In fact, in the Bible Jesus's first miracle is the changing of the water into wine. The miracle does not go unnoticed by the members of the party, and they remark that usually the host will serve good wine first, and then (after inebriation sets in) offer up wine of lesser quality later. Jesus actually serves the best wine later. But I digress.

I'm writing to you today because the business of real estate too often causes one to drink from the dregs, and not from the brim. This is so often the case because unlike the experience and education of the wine maker, real estate agents don't often seem to have or place the care for their own knowledge at a level as high as the wine maker. In short, poor preparation, poor education, and lack of experience make many real estate agents poor wine makers.

In the world of Equity Sharing, and more broadly in the world of real estate finance that stretches the comfort zone of many real estate agents and lenders, I'm coming quickly to see that the lack of education about Equity Sharing, and experience with Equity Sharing, is leaving clients poorly represented. After all, if you COULD buy the property, but your real estate agent only knows one of the many paths that open up that possibility, then you are severely at a disadvantage. Sure, every one talks fixed rates, adjustable loans, option ARMS, etc., but how many real estate agents know lease options, owner carry back, Equity Sharing, Tenant-in-Common, along with HOW and WHY these doors should be opened?

I asked a listing agent on behalf of my buyer if she would ask the seller to entertain a lease with an option to buy. I explained why my buyer needed this, and how I thought it could benefit both parties. On the other end of the phone, this response: "I don't know anything about lease options, and my client (the seller) wouldn't be interested."

Did you hear me put down the keyboard and scream? Assuming you've got a seller who wants to sell, a buyer who wants to buy, a listing agent that wants to sell, a selling agent that wants to buy, then this conversation just put all four parties deep down into the barrel of failure. It's working with the dregs, and these kind of experiences are leaving a bad taste in my mouth.

Perhaps with participation by professionals and Realtors who care about wine making. Perhaps with participation by thinking men and women who care about the clients they serve. Perhaps with the willingness to share some thoughts across the lines of the "box"; well, perhaps this blog and its ideas will age well and taste fine.

Righting the ship

In sailing, if overexhuberance takes hold of you one particularly fine, windswept day, and you haul in the sheets just so, the vessel that had been skimming you through the ocean at seemingly effortless speed will suddenly turn on you like a bad piece of fruit on a warm day. You have to pay attention, says every good sailor, to the vessel and conditions under which you are sailing. So it is with the real estate market. Oh, for some years we were swept away with exhuberance over rising prices, endless streams of buyers, and sunny horizons each and every day. Last year the sea began to push back a little, the swells increased, winds flailed the mainsail, and we seemed to be coming to the end of a great day of sailing.

Well, it's been about a year now, and I think it's about time to head up on deck, ease the sheets somewhat, and realize that the ship has righted itself once again. Funny thing about sailing. If you oversteer, overtrim, overdo almost any aspect of sailing, you'll slow the boat, piss off the crew, and ultimately ruin what otherwise would have been sheer pleasure. So now that the buyers have taken over the helm, trimmed in the seller's sheets so far that the vessel stalled out, and practically begged the ocean of naysayers to swamp the boat, we find that cooler deck hands have taken back the ship like Captain Morgan and his men.

Yup, the ship otherwise know as the real estate market, is righting itself once again. A sail boat will right itself time and time again, if only the crew will loose the sheets, take their hands off the wheel, and let the ballast, sails and design take over. Now, coming into the late winter, early fall of 2006, buyers have begun to let go of their overexhuberant demands, ease back into realistic offers, and the sea of sellers seem to be willing to calm their expectations enough to make the voyage once again safe and profitable for all.

So, take care all of you who want to steer the real estate market into ruin. It's a sailboat, stupid, not a power boat! Eventually, the wind, waves and design of great sailing ships always right themselves and bring home their crews safely.

Make ready the mooring lines. The market is back in port, crew and owners happy, ready to do business.