Wednesday, November 21, 2012

Anywhere But Here: Or, House Hunting 701

I'm trying to come to terms with myself as someone who's never quite content, who aways thinks there's something better than where, and what, I am, and what I have.

As of January 30, 2013, my wife and I will have been married 42 years. In that time, we've lived in seventeen homes, some owned, some rented. The latest one enjoyed our occupancy for about six years--the longest we've ever lived anywhere.

When people learn this about us, they think we're nuts. Moving, after all, is incredibly disruptive in so many ways--moving sucks, it dislocates the kids from their schools, and so on. We not only know them all, we've lived them, plus some no one ever talks about  And some we don't even think we know because we've done them so many times, they don't occur to us.

Why did we do that? Though I was born in a farming town on the Feather River, in central California, I consider Reno, Nevada, to be my hometown. My family moved there in 1951. My education and professional life happened there, I was married there, and my children were born there. I had a life, there.

And we changed houses every two years or so. In 1987, we moved to San Francisco, moving about every two years, and left for Eugene, OR, in 1994, where we lived in six homes until we left for Portland (Hillsboro, actually) in 2005, commuting from an apartment in Eugene (which technically makes it six homes) and moving into Orenco Station until November 2012, when we left for Denver, CO.

Why did we move so much? Hell if I know. We usually told ourselves it was for moving up. That we were fixing the places up and selling them for a small profit. In fact, our "profit" was roughly equal to the rate of inflation, and on a couple, we actually lost money.

We bought our first home for around $30,000 as I recall. A kitchen fire and insurance claim got us a new kitchen, which turned out to be kind of fun. We also added a little family room and ultimately sold the place for around $75k or so.

At which point we moved to a horse property. We got our bellies full of that and moved back into town and fixed up a home, where we got robbed and sold the house because of bad karma, and bought another place to remodel.

Always a reason, real or manufactured.

Truth be told, I'm pretty much of a next-bend-in-the-river kind of person. Wallace Stegner would have hated me. For those unfamiliar with Stegner, the underlying current of his novels was the destruction of the American West by people looking for something better than from whence they had come, turning the new place into something more akin to where they'd left, even trashing it,  and moving on. The West always had someplace else to move to, except that it didn't.  An American myth that persists, really.

All of which pretty much plays into my me-ness and is a both a symptom and result of my failures as a person, which is, namely, wanting something I can't have. Which, my psychiatrist (if I had one) would say, so what? A dream, wanting something you don't have or maybe can't have is what propels you forward.

Which, of course, totally misses the point. It's okay to dream the impossible dream, to want something or someone that's unattainable, because if you're satisfied with the status quo, then really, you're existing more than you are living. There's nothing wrong with existing, mind you. Cows and prairie dogs do it all the time, so if that's your schtick, okay.

What's not okay is to always second-guess what you have, which I do with every aspect of my life. I hate planning a vacation, for example, because I know that if I commit and prepay for Hawaii, I'll instantly wonder if I should have gone to the Virgin Islands instead and will keep the thought all through Hawaii. If I order Mu Shu pork for dinner, I'll fall asleep thinking I should have had Mongolian beef.

It gets back to absences, I guess, which was the subject of a previous post.  Anyway.

But pick someone successful at anything--Van Gogh, Jobs, Baldwin (James), Einstein, Bonds (Barry), Brown (Tina), whoever, and you'll find someone with a clear definition of purpose and focus on getting there. It's a trait I simply do not have.

If I were to start college tomorrow and had to choose a major, I'd still check "undecided," just as I did as an undergrad forty-six years ago. And of you're undecided on where you want to end up, how can you focus on a path that will get you there?

Can you imagine Donald Trump changing majors a half dozen times? Or Hope Solo changing sports?

When we first moved to Eugene, I saw, for the first time, the bumper sticker that said, "All who wander are not lost." Know what? They are too. If these people--my people--want to make a point, they need to make a case for being lost. Or for wandering. Whatever. But don't equate indecision with life success.

But back to the house thing. Okay, in the interests of full disclosure, let's stipulate that we're both sort of house junkies (except I loathe everything on HGTV, save "Holmes on Homes"). If we were to land in, say, Vienna tomorrow morning, we'd be perusing the local real estate section on the metro by that afternoon. Send us to Martha's Vineyard, and we wouldn't be looking for anyone famous, stressing over cafes or looking at the ocean. We'd be touring Open Houses.

And if I made an accepted offer on one, I'd be discouraged within days. This is not the typical buyer's remorse. It's the reflexive, if not congenital, discontent with any decision I make. 

We made an offer on a short sale home in Denver, and within days, started talking about how we could flip it. Nothing wrong with the home. It was the neighborhood we really wanted. The home was a bit more than we wanted to pay, but hey--for-sale inventory was/is really, really low. It was new, extremely contemporary and very, very nice.

We abandoned that offer and ended up buying a lovable cosmetic fixer with a setting on a lake, and with a mountain view--to die for. But I already know what I'll be thinking in the months to come: We should have waited; we should have bought the short sale home; we should have stayed in Portland; we should have moved to Istanbul. 

Where am I going with all this?

Honestly, I don't know. And I wish I did.

Sunday, November 18, 2012

Boomers: Take One for the Team

Fiscal cliff? Deficits? 

I have a solution.

The question is, what's the problem? Fair enough, since we're exiting an election season where the real truth of that particular issue got short shrift. But my take:

  1. The country's infrastructure is breaking. Cracking. Dissembling. Too many bridges are not earthquake proof and more need to be built. Too many highways are in crappy shape. Too many airports need serious upgrades. Too many power grids fail, internet access is spotty, the Post Office is going broke, teacher and public employee unions suck in more than their corresponding states or cities or counties can pay, and so on.
  2. Medicare is tap city. Social Security, in the not-too-far-future, might be more underwater than a depth-charged World War II submarine.
  3. All in all, the U.S. government's debt exceed its Gross Domestic Product.
That's enough for starters. The solution? Easy. Less spending and more revenue. Which has the same resonance as Save the Brazilian Rainforest. The call sounds reasonable, but no one who can do anything seems to hear anything.

We've heard all that. As for spending, it's "Don't gore my ox, man." Don't take my pension benefits. Don't take my benefit." Not enough money to build a useful Jersey Tunnel. Can't afford the expansion of bottlenecked roads. Seismic upgrades for Northwest Coast cities? Fuhgeddaboudit. Whatever. And as for revenue? It's Huey Long's "Don't tax me, don't tax thee, tax that fellow under the tree."

Know what? I don't want to leave my kids and grandkids with cracking bridges and stuff that could have been fixed but now, can't, because there's no money. Money that was diverted to, well, see above. My solutions?

  1. Dump the payroll tax limit for the Social Security tax. Currently, it stops at $110,000. That's silly. This change alone would bail the whole program out.
  2. Means test for Medicare, Social Security and tax preferences. I mean, seriously: Do well-off people, whom I begrudge nothing and honestly applaud (except for trust fund liberals, coupon-clipping conservatives, & C.) need to pay the same for their benefits as retired pipe fitters and homeless veterans? Mmm, not, say I.
  3. If need be, cities, counties and states need to file BK and tell public employee unions the money just isn't there anymore. We'll pony up as best as we can and schedule out the cuts to mitigate the pain, but hey. It's not politics, it's not personal, it's not ideological. It's arithmetic.
  4. This is the most important: Boomers need to die sooner. No seppuku or harakiri here, just realize when it's time to buy the farm.
The first two items, I'm thinking, will probably come to pass in some way. I mean, seriously. Should the country give folks with homes on four coasts and two inland lakes the same mortgage tax deduction as a family where the wife is an urban planner and the husband a surveyor?  And is anything wrong with changing the Medicare insurance deductible to, say, $20,000 for people whose Mastercard limit is several times that amount? Yes, said no one...ever.

However, definitions of when to pull the plug on oneself depends on the person, his or her eschatological definitions and so on. Some people think the lights go out when God has determined that they should. I'll leave it for another argument on whether or not God, in these situations, ought to cough up if He controls the electricity, especially if it's for an obese, alcoholic diabetic who smokes two packs a day.

Too many of society's resources are wasted in keeping people alive past the point of the joy, utility, discovery and redemption of being alive. Twenty years ago, my father, at 89, had a stroke on Monday and died on Friday, staying on life support in an ICU. The Medicare bill was about $20,000. He was not among the super-rich by any means, but he could have easily afforded the bill. Instead, the taxpayers took care of it.

Maybe that worked in 1992. It doesn't, now.

For me, the time to cash out is that moment when Assisted Living is my only option.

Now, I have seen some perfectly capable people in Assisted Living carrying on, taking care of their mates, making a contribution and generally adding to the richness of their friends and family. An 80-year-old good friend in another city moved to Assisted Living when his wife's Parkinson's Disease advanced and he couldn't care for her, even as he was still working on the Mars Lander as a Professor Emeritus. So it goes.

But honestly, these folks are in the minority. I've moved a parent, a cousin, and a brother into Assisted Living. Thank fortune I didn't have to suggest it to my father, who'd have seriously studied up on his Second Amendment rights at the suggestion.

I've made many, many rounds through Assisted Living places, and I do not want to live there when my health and well-being makes doing so my only option. They kind of smell like poop. The staff, reasonably, treats the residents like children. Most residents have that deer-in-the-headlight look. Some sit slack-jawed all day in their wheelchairs, only showing signs of life when the dinner bell rings. Others ask the same question several dozen times, every day.

Drive down most any suburban street in America, and you'll see more Assisted Living projects than Carter has pills, as my father would have said (I never got the allusion). And that doesn't count the thousands of private homes, nor the many-more uncountable places where the kids and grandkids take care of the degenerating old. 

Getting old sucks, but for me, I want to live, not just exist. When my existence is nothing more than, well, existing, I want to sing, "So Long, It's Been Good to Know Ya," and nip the hemlock with my vodka. And I encourage my fellow Baby Boomers to consider same.

Each of us Boomers has a definition, however abstract and vague, of what our individual end of life should be. I have to say, too, that my generation has consumed an inordinate amount of natural, economic and social resources, like an anteater on steroids. We need, each of us, consider things, and then make a choice on how much we want to leave behind.

Boomers are creaking up the works on their children's and grandchildren's credit cards, and you know what? In getting old, we have a chance to demonstrate our authenticity and lay down a final offering to the mythical ethic of The Sixties.

It's time for us to take one for the team.

Friday, November 16, 2012

The Six Percent Solution

Alisha Braatz ruined my day. And the day was almost over.

What I wanted to do was write something about the Colorado sky. The sunrises and sunsets strike at your very existence in their awesomeness. But then, I read a post in Inman News, perhaps the premier real estate trade journal, by one Alisha Alway Braatz, and decided the heavens will have to wait.

Ms. Braatz recounted her early days as a real estate broker, in which she cold-called every builder in the Eugene, OR phone book, promising to sell their unwanted property within 90 days at an acceptable price. Of course, she failed.

In her sadder but wiser screed, she went on to say how honesty in listing presentations is really the way to go, how it's made her more successful and how it's filled her Gucci briefcase with whatever. Well, fuck all anyway. Being honest didn't occur to her in the first place?

The whole thing gets to my main beef with the way residential real estate sales are conducted in this country, namely, on the commission-based compensation system. Hear this, home buyers and sellers: As long as the broker who helps buy or sell your home isn't paid until--and unless--the transaction closes, that broker is representing her interests ahead of yours.

Hey there, buyer or seller. What do you do? Are you a teacher, administrative assistant, Starbucks barista, project manager, tinker, tailor, soldier, spy? Tell me: Would you work for free? 

Yes, said no one, ever. 

So, do you really expect a real estate broker works for free? Conducting endless home searches, driving all over Hell's Half Acre looking at houses, preparing pricing analyses, and so on and so on, for free? Come on.

They work for the six percent commission. The redoubtable Ms. Braatz had no problem whatsoever bullshitting builders that she could magically sell their properties in ninety days. Why did she say this? It's because, as Freakonmics has said, a commission at the close of a sale is so lucrative.

But the real morons in Braatz' situation are less her than the builders who bought her line. And so it is with the America public. All too many buyers and sellers buy into the commission-based compensation system, for whatever reason.

Maybe people think their real estate broker will work harder if he/she doesn't get paid until the house is sold. Oh, okay. But if the broker encourages the seller to "take this deal," is it because the broker wants to get paid, or because it's a good deal? If the broker wants the seller to lower the price, is it because the broker's light bill is due or his American express is late, or because of market conditions?

Fact is, Mr. Seller, you don't know. And you don't deserve to, because you got no skin in the game. You've bought into the Party Line of paying brokers when and if the sale closes, deluding yourself that it costs nothing.

Until you look at the HUD statement at closing.

Oh, and Ms. Buyer? I'll bet your broker told you that you don't have to pay him anything, that the seller takes care of the compensation. I know, because I've heard literally dozens of brokers say just that, both in private conversation and in public forums. And the public buys it.

Well, Jeez. Tell me, Sweetheart. Would that no-cost home purchase of yours close escrow if you didn't (a) agree to buy the place, and (b) take down a huge mortgage to do it? And doesn't the sales price include a commission?

Cost you nothing? Seriously. If you bought a $250,000 home, your loan paid both brokers twelve or fifteen thousand dollars. Think about that as you make your payment every month.

The best part about Alisha Alway Braatz is that she lives in Eugene, OR, a town which--as with the Galapagos--has taken its own evolutionary track. The worst part is that they might as well be manufacturing the real estate Kool Aid there for national distribution.

Wednesday, November 14, 2012

Should You Get Your Real Estate License?

More to the point, should I?

When I worked as a real estate investor and developer, my brother and I would classify real estate brokers. "This guy's a Groopoo," one of us would say about someone claiming to represent a Group Who was fabulously wealthy and would make you realize your fondest hopes and dreams resulting in gazillions of dollars, only if you worked with that broker, who's Groupoo identity was elusive.

The common term for what these people offer is bullshit. Bullshit is described here by Princeton Professor Emeritus in Philosophy, Harry G. Frankfurt. Bullshit is really a much fuller term than its common usage suggests. We hear something unpleasing, and we think or say, "That's bullshit." 

Bullshit, though, is far more nefarious than lying, since bullshitters convey, or try to convey, an impression of themselves with no regard whatsoever to truth. Liars, at least, acknowledge truth. Bullshitters ignore its existence.

[Editor's note: You're getting far afield, here. Consider getting back to the original point, whatever it was].

OK, Ed., got it. Real estate brokers and bullshit is fodder for several blogs, and this one is only about pursuit of a license.

Real estate brokers don't get paid unless the transaction closes. And it doesn't matter whether or not they represent the buyer or seller: No close, no dough.

Does it matter? Absolutely. What happens when a buyer's broker and a listing agent meet, for example, to discuss a buyer's repair list? A list that might include something unreasonable, such as installation of an inline GFC when an inline GFC wasn't code? Is the buyer's agent likely to say, "We need to get this done," and possibly killing the deal, or might he/she say, "I'll talk my people out of it" in order to get the deal closed, when both agents meet in private?

I can tell you first hand that situations like this happen in many transactions. I like to think I always advocated for my buyer-clients' requests, reasonable or not. It's their money, after all. And I know many brokers who would similarly behave (and all but one works in the Hillsboro-Remax office; well two, I guess).

But I've experienced more situations where the close of escrow--and therefore a broker's paycheck--dictates the application of advocacy. In one instance, a client wanted repairs I thought were unreasonable, but I pushed for them anyway, only to have the listing broker say, "Hey, get in the game. Do you want this thing to close, or not?" This is almost verbatim.

What makes it all worse is that the clients never, ever know this backstory, since their broker can blame it on the other side, and the client will never, ever know the truth. Bullshit at work.

In searching for my own home in Denver Metro, I'd gone through several real estate brokers. My plan was that as a licensed broker in Oregon, I could contact the listing broker directly with the intent of not paying for the selling agent side of the transaction and saving myself a few bucks.

And I can tell you from the point of view of a home buyer who is also a licensed broker, getting you to make an offer is about the broker's interests, not the client's. I had listing brokers reveal their client's dire circumstances, misrepresent pricing history, not disclose uncomfortable facts about the property that would never come up in a due diligence search, misrepresent their own expertise, and so on, Colorado law notwithstanding.

Granted, they represented the other side. But should the approach to getting an offer be analogous to throwing mud on the wall and hoping part of it sticks? Or, as I have always felt, is it better to get everything on the table at the outset and not waste anyone's time?

As my father said, the measure of a man's character is what he'd do if he knew no one would ever find out.

The final straw was a short sale property we liked. The listing agent told me both the first and second loan were with Chase. Neither was a Fannie Mae or Freddie Mac loan (kind of inside baseball, here: Fannie and Freddie loans have different short sale protocols than others). He had expertise in short sales. The short sale package had been assembled.

I was not familiar with Chase, so I investigated as best as I could (I also know one of Chase's national director of services I could call on to cut through the bureaucracy). With all documentation properly done, Chase could close a short sale in thirty days.

This was September 18. We needed to move in November 1--tight, difficult, but possibly doable if everything clicked. However, the agent emailed me two weeks later to say he'd just assembled the short sale package and tendered it, and oh, by the way, it was missing a few items, such as pay stubs, the hardship, and so on.

Which is the same as saying there is no hardship package. It also turned out that the property only had a first mortgage, and that it was a Fannie Mae loan. So much for critical path timing. His language totally ignored the existence of our previous conversations and his representations.

And so much for having a home to move into.

In my experience, this kind of thing is the rule rather than the exception. Most brokers will say anything they need to say to get a transaction going. They know that once a buyer and seller get emotionally invested, they will do most anything--even behave against their own self-interest--to keep a deal together and close.

In fairness, this is not universally true. Some real estate brokers view their practice as a business, and employ business-like best practices. But they are a minority.

Groucho Marx famously said that he would never join a country club that would have him as a member. My question for myself is, should I join a club whose members have a jabberwocky definition of reality?

Would you?