BILL CHERRY'S GREATEST DALLAS PARK CITIES REAL ESTATE BLOG

NEW MORTGAGE LENDING RULES

2008-07-15T19:30:00Z

WASHINGTON (Associated Press) - The Federal Reserve has adopted a new plan intended to curb shady lending practices that sent home foreclosure rates to record highs.

The plan will:

prevent loans made without documentation of borrower's income;
require lenders to escrow money to pay taxes and insurance for risky borrowers;
limit - and, in some cases, ban - prepayment penalties;
prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value;
require mortgage advertising to contain information about rates, monthly payments and other features of the loan;
require that lenders credit a mortgage payment to a homeowner's account on the day it is received; and
forbid brokers and others from "coercing or encouraging" an appraiser to misrepresent the value of a home.

Most of the rules take effect Oct. 1. Escrow requirements will take effect April 1, 2010.

I began my business career as a real estate loan officer. It was 1962. This is essentially how we were required to underwrite loans back then. We also required the borrowers to have an equity position of their own -- not 0%, not 3%, not 5%, not 10%, but at least 20%!

I can't believe these people have finally admitted we knew what we were doing --- that our way was better than theirs. Will real equity be next?

SO YOU'VE BEEN "HAD" BY YOUR TEXAS COUNTY CENTRAL APPRAISAL DISTRICT?

2008-07-11T23:15:27Z

WHAT NOW?

Texas real property taxpayers appear to have little understanding of the logic behind our Central Appraisal District system. And I've concluded that at least some of the Chief Appraisers of CADs don't understand them either.

I wrote a voluminous piece on this some time back. Here it is for review.

That piece has brought any number of telephone calls and emails from taxpayers who went before the Appraisal Review Board at their Central Appraisal District to protest the new appraisal of their home. Each lost as a result of the smoke and mirrors presentation of the CAD's appraiser that he/she presented to the ARB.

The taxpayer didn't know how to argue against it, and the ARB members, interestingly, rabidly showed they had no understanding of how the Texas Central Appraisal system works.

In each case, the appraisal district's appraiser used as his/her evidence for raising the value of the protester's property, a handful of current sales in the neighborhood. Current sales are only evidence if every other like property's value was likewise raised equally.

More often than not, the district will try to use current sales to show why the protesting taxpayer's argument is invalid. Most of the time, this "evidence" isn't applicable because the neighbors' appraisals were not also raised. This is the smoke and mirror's presentation I mentioned.

NOTE THIS: The appraisal district has only one function, and it has two parts. Part one is to, through research, determine the fair value of every piece of property in the county, and then to assign them. Part two is to make sure that the value assigned to each taxpayer's property follows the logic of the values assigned to the property of his neighbors.

EXAMPLE: So if everyone on your block lives in a similar home, and those homes are all on the tax rolls at $100,000, then one of your neighbors sells his for $135,000, the Central Appraisal District cannot raise the value of yours to $135,000 without raising the value of the homes of everyone of your neighbors'.

And further, and interestingly, it is illegal for the CAD to immediately raise the value of the home that just sold for $135,000 to $135,000. That violation is known as "chasing the sale." Our state doesn't allow that.

So what should you do if you protest and the appraiser brings out current sales as his evidence? You point out that it is immaterial to the issue. Your protest is that your house has been assigned a value that cannot be justified when compared to those assigned your neighbors. Then you give your reasons.

If the ARB rules against you, and you have a great course of appeal. The state Comptroller's office has trained and appointed several hundred Arbitrators. You can find the list and their qualifications on the Comptroller's web site.

You can file for Arbitration. The fee cannot exceed $500. The arbitrator will hear your case and rule. The arbitrator's ruling is final and cannot be challenged. If you, the taxpayer, win, the CAD must pay the entire fee.

I am one of those originally appointed arbitrators. Prior to that, I served two terms on an ARB. That's why I have a pretty good knowledge of the ins and outs of appraisal district mechanics. But my purpose here is not to solicit arbitrations. My purpose is to give readers a dependable piece on how the CAD system works.

If you are going before one of the ARBs to protest your appraisal, print this out and hand it to the chairman before you begin your presentation. If there is disagreement to methodology, stay to complete your hearing, but be prepared to file for arbitration.

WILLIAM S. CHERRY, REALTORS

DALLAS

1 800-314-7110

I THINK IT STARTED WITH DONALD TRUMP'S "THE ART OF THE DEAL"

2008-07-07T20:00:05Z

I blame it on Donald Trump and his personal how-to books. Actually not him, but the public's interpretation of his how-to books.

And I do because it seemed to have started about six months after The Art of the Deal hit the bookstores and was a run-away success.

While most Gentiles probably intuitively know it, most don't know that proper business dealings follow a Jewish mitzvah which paraphrased means, "Make certain there is something on the table for everyone."

The idea is that even if you have the upper hand in a negotiation, it is your moral obligation to make sure that the terms are fair and fair to all concerned. When you don't, to Jews it is similar to having broken one of the Ten Commandments.

I think I must have been about fifty when The Art of the Deal made amateur negotiators into pseudo-Donald Trumps. I remember how appalled I was that one of my clients of many years started unfairly beating up --- making impossible demands --- on a poor fellow who was trying to sell his property to him for a fair price.

I stopped the meeting, and asked my client if I could speak with him in the hall. When we went out of earshot of the others, I all but yelled at him, "What in God's name are you doing?" He told me that he was doing what he had learned Donald Trump did.

Well, I told him, "That's not real, and even if it is, you're too honorable of a man to take those ideas into your bag of tricks." Then I said, "There is a Jewish mitzvah that says 'Make certain there is something on the table for everyone.' We're going to continue doing our business together that way, or you need a new Realtor." He knew I meant it, and we'd had too many successful dealings together for him to let me go on my way.

Then I learned he wasn't an anomaly. Lots of people began thinking they were Donald Trump. Even those guys on TV who push the books that tell you how to buy million dollar mansions with a buck and no risk to your credit.

Saturday, I presented a clean and full-price contract to a listing agent. In the old days, the seller would have signed his name and been thrilled. Not this time. The contract was sent back to me countered with about twelve ridiculous Donald Trump Demands. And, in reality, they didn't mean a darned thing to the seller except he didn't want my client to have them. He wanted everything on the table for himself.

So what is my point? It is that real estate agents and attorneys have a professional obligation to all parties. They must do their very best to restrain their clients from being Donald Trump The Art of the Deal interpreters.

BILL CHERRY, REALTORS

DALLAS

1-800 314-7110

OUR 43RD YEAR SELLING TEXAS

Answering the Question

2008-07-06T08:42:31Z

All of us at one time or another are blind sided. Someone accuses us of something; they ask us to do something; we find ourselves in a trap. We'd rather not answer the question, but we do. For some reason, we believe "time is of the essence" is a required obeyance.

And we've been taught, I guess, or perhaps its intuitive, that we must provide a response. It's expected. It's good manners. And so we say something stupid, and we bury ourselves forever. We may even answer the question when 1) we don't have to and/or 2) it's none of the other party's business.

I frequently read the Question and Answers that are asked and provided within the Active Rain system. And often times the problem being laid out before us by the questioner is in essence, "How do I get out of this trap?"

And many of those times there should be more to the sentence. In fact it should read, "How do I get out of the this trap I've gotten myself in."

There are several answer statements everyone should learn:

"I don't know, I'll take it under advisement."

"Let me think about it and I'll get back to you with an answer."

"Before I answer, I want to get input from == my husband, my wife, my lawyer, my boss, my business partner, my daddy, my mother."

And then there's how you should construct the actual answer. Succinctly. With only a "yes" or a "no" when possible. Don't emblish your answer. Just answer the question, or don't answer it at all if you don't want to.

Finally, don't write letters and memos if there's any chance your disagreement may end up in court. Copies of what you write, email, fax, etc. can be asked for in the discovery process, and you must provide them. Now the other side has empirical data that can hurt you.

Phil Noah was a famous live insurance executive. He told everyone who would listen to never write a disagreement. Instead, call and disagree. It was the perfect advice.

GOVERNMENT FANS FORECLOSED HOME LOAN MISMANAGEMENT

2008-07-04T23:43:56Z

Lenders are foreclosing homes right and left, and the ownership of many of those pass to FHA or one of the other governmental secondary market lenders for them to dispose of.

That's because the loans were sold to them by the originating lender or mortgage broker.

As a result, an opportunist industry has developed. You see, rather than dole out the listings of these properties to licensed real estate brokers and agents on a lottery system, through some magic, only certain agents have gotten the majority of the listings.

This is yet another case where the National Association of Realtors didn't bother to step in and assist the governmental lenders and underwriters in developing an honorable, fair system.

There are any numbers of those specially treated agents in Dallas; the ones whose primary business is listing foreclosed homes.

I am familiar with three companies that have "teams" (a euphemism for a business within a business) composed of about six people, each whose major part of the real estate business is listing and managing foreclosed properties for the government.

One has so many of these listings that they don't bother to answer or return the phone calls of buyers. The signs in the front yards with the agent's rider and number at the bottom are of no value to obtaining and handling buyer inquiries.

The listing agent does not answer or return calls.

The agent expects the buyer to make inquiries and issue contracts on his listings through one of the other agents in the city. The problem is that the client has no way to know that's the rules he's expected to play by.

Just think, when some 14,000 agents in the Dallas and Ft. Worth area and where many are scratching to make a living, our government is consciously making a select few rich.

And there's no way to lose one of those listings because it will eventually sell at some price.

And if that isn't bad enough, it is obvious that the government has no audit procedure in place to see that these listings and sales are handled on the up and up. Many aren't.

I was involved as a co-op broker in one such listing. My client's contract was not accepted even though my client offered full price and immediate closing.

Why? It was obvious to me that before the listing hit the MLS, the listing agent had already cut a side deal as to whose contract would be accepted.

Real estate brokerage has had a propensity for dishonest dealings since the beginning of time. It's most certainly been going on since I entered the business forty-three years ago.

(Remind me to tell you about the time, representing a buyer, as trustee I bought a $3 million building for $711,000. It was because of the total incompetence of the government's selection of a real estate broker to represernt them in that sale.)

And as it has so many times in the past, the government is once again fanning the flames of deceit.

BILL CHERRY, REALTORS DALLAS

1 800 314-7110

www.billcherryrealtors.com

A CRAZY WAY TO APPROACH HOME SALES

2008-06-26T06:35:01Z

One part of Dallas where the more expensive homes are located, has developed the most arrogant approach to sales. I wonder where these people's heads are.

The MLS listing instructions more frequently than not read like this: Listing agent must accompany all showings. Appointments must be made 24 hours in advance. Owner's baby naps between 2 and 4 so no showings can be scheduled then. Please do not request showings on weekends or before 11 AM or after 4 PM.

I see these listings expire and renew over and over for months. No one seems willing to grasp that it could easily be because they are not accommodating the prospective buyer, and quite frankly, in sales, the one with the money to buy is the one who is supposed to trump.

So what useful purpose accrues by expecting the guy with the prospect to deal with the schedule of the listing agent as well as the unreasonable demands of the seller?

Exactly what does the listing agent accomplish by being at the showing other than 1) getting in the way 2) offering a subtle but obvious insult to the showing agent and the client that the listing agent is there to keep them from stealing or breaking something and 3) interfering with the rhythm of the showing agent's sales presentation?

So to reevaluate this scheme, let's do this. When Mr. Sewell initiates a similar plan in the sales departments at Sewell Lexus, Sewell Infinity, Sewell Cadillac and Sewell Hummer, go for it.

Until then, the way the million buck home should be presented and sold is no different than the way the Century 21 agent presents and sells the hundred thousand buck home.

BILL CHERRY, REALTORS

DALLAS

Our 43rd Year Selling Texas

214 503-8563

On the Web

GALEN JETER ORCHESTRA PLAYS STAN KENTON -- SUNDAY, JUNE 29TH IN DALLAS

2008-06-23T11:59:02Z

THE GALEN JETER JAZZ ORCHESTRA

As the sun was going down Sunday, Patty and I met our friends (our minister and his wife) Clif and Gig Gardner and (famed radio man) Bud Buschardt at the Village Country Club on Southwestern near Skillman, for the barbeque buffet and three hours of music by the famous twenty piece Galen Jeter Orchestra.

Galen is a retired biology teacher from the Garland ISD, but he's had one big jazz orchestra or another for thirty-five years. And while he won't tell you this I will: He was with the famed Woody Herman Band along the way.

And he and his guys have played at the Village Country Club most Sunday nights for more than ten years.

Galen Jeter, 2nd from left

This is the real McCoy. It's a Kenton-style orchestra -- 5 saxes, 5 trumpets, 5 trombones and 5 rhythm pieces. And all of the members are highly trained and talented musicians, not the kid down the street who's just learning, or his dad who played in the high school marching band.

This coming Sunday night -- June 29th between 7 and 10 -- the Galen Jeter Orchestra will play original arrangements from the Stan Kenton book. If you like big bands, love Kenton, and long to hear a full orchestra play, here's your chance.

The tickets are 7 bucks a person. The buffet is 5 bucks. Drinks cost whatever drinks costs. (I spent $100 for the five of us, and that included admission, food, drinks and the tip.)

Get there no later than 6:30 so you'll have a good seat because the place fills up to SRO the closer it gets to 7 PM. We'll see you there.

BILL CHERRY, REALTORS

DALLAS

Our 43rd Year Selling Texas

214 503-8563

YOU CAN GO HOME TO THE NEXT HOT AREA OF DALLAS!

2008-06-23T11:14:06Z

2122 LEANDER DRIVE

$285,000

If you know me, you know my great passion for pianos. Maybe it's to me what hunting ducks is to my friend, Butch Kelso.

Nevertheless, I have performed for more than forty years, and I have tuned pianos in spare moments for what, maybe twenty of those years? Of course all the while devoting my full business time to real estate brokerage.

Well, since we've lived in Dallas until recently I hadn't had much reason to drive to Oak Cliff and explore. But about a month ago, an attorney friend called and asked me to tune his big Yamaha grand.

He lives in Oak Cliff, and in a most interesting million-dollar home that the contractor has just completed.

"What's the deal?" I asked him. "Successful attorneys are required to live in the Park Cities," I teased.

"Well, do you realize how easy it is to get from Oak Cliff to downtown Dallas? It's a handful of minutes even at the busiest time of the day," he said as of he were the discoverer of a heretofore secret biblical revelation.

"And look at the parks and golf courses and the big trees and the somewhat rolling terrain that are here in Oak Cliff," he went on.

"And how about the beautiful architecture that abounds," he said while waving his arms in broad strokes.

It was then that it hit me! Oak Cliff will be to Dallas what the Museum District and Montrose are to Houston and for the same reasons! And this gas problem isn't going to go away, and that can't help but bring more and more homebuyer interest to Oak Cliff. The attorney had found a secret revelation!

Well, my friend the well-known Park Cities builder, Mickey Smith, bought a tudor stone bungalow, and he and his men went in and made it wonderful, and stager Barie Pinnell brought in furniture and accessories to show it off.

Astounding results. He's ready to sell it.

2122 Leander Drive. 1941 square feet. 3 bedrooms, two big baths plus a fabulous Great Room. $285,000.

JUST LOOK AT THESE PHOTOS I TOOK

MLS Number 11006202. $285,000. Call us or your own real estate agent. Join what's sure to be a trend, and join it before HOT drives the prices up.

BILL CHERRY, REALTORS

DALLAS

Our 43rd Year Selling Texas

214 503-8563

On the Web

The Window Man and His Cold Calling Smile and Wizardry

2008-06-18T13:30:59Z

Lake Highlands in Dallas is really a wonderful place to live.

Because I have spent the majority of my life living in large Victorian homes, moving into a neighborhood that has houses that are primarily 25 to 30 years old is a new experience for me. But I'm growing to like it very much. Pretty much the late beginning of an Ozzie and Harriet life-style.

The other day the doorbell rang. I was here and getting ready to leave to meet a client at the title company. I went to the door, and there stood a small fellow -- a grown-up --- but an urchin of a man in a khaki uniform that was a bit on the too large side. He had a huge smile on his face. I mean huge and sincere. It makes me smile just thinking about it.

I answered the door, and he told me that he was Charles Dangprasert. He was cold calling our neighborhood for ACRI Factory to You Windows. He went on to tell me that almost all of the homes in our neighborhood could stand to have their windows replaced. I knew he was right...single pane windows in weather-pitted aluminum frames.

He gave me a flyer, and pointed me to the back page. It was a page full of references. "Call any of them," he said, "But don't call them until after you've called the Dallas Better Business Bureau. You'll find that not only are we members, but they don't have one black mark against us, and we've been in business here for years."

I told Charles that we weren't ready for new windows here at our house, but that we would be in a few months. And I told him we'd call him for a bid.

Real estate people know what it's like to cold call a neighborhood. Charles did it with such aplumb that I couldn't resist telling you about him and his company. If you're in Dallas and you need new windows, call Charles Dangprasert at ACR Factory to You Windows. You can reach him direct at 214 916-7870 or at his office at 214 550-0419.

Buy from the guy who's doing what you and I hate to do...cold calling a neighborhood.

BILL CHERRY, REALTORS

DALLAS

214 503-8563

WHEN CAN I SELL WITHOUT OWING MY AGENT A COMMISSION?

2008-06-18T09:50:39Z

For as long as I've been in the real estate bidniz, and that's now going on 44 years, I've had people ask me this question:

"How long after my listing contract expires must I wait before I am no longer contractually obligated to pay the agent for a sale to one of his clients that he brought by."

And I note that it is one of the most frequently asked questions at the Active Rain consumer Question and Answer site.

You see, for some reason, a lot of potential buyers like to go around their agent. They call the property owner without the agent's knowledge, and here's what they say: "What if I buy your house after the listing expires? You won't have to pay the commission, and we can split your savings."

Sellers make the same calls.

Listing contracts usually address those who are tempted to go that route, by saying, for an example, that any sale that results from a showing during the term of the contract will accrue the commission if the agreement is made within 90 days of the contract's expiration.

But why have we as a society let ourselves be led to believe that our legal obligations and moral obligations are one and the same?

I simply don't understand or accept that rational.

If your work results in a benefit for me, I need to pay you for it. It is corrupt logic for me to attempt to figure out how I can "legally" get out of doing it.

And I'll bet in your heart that you know that the same goes for you.

BILL CHERRY, REALTOR

DALLAS

214 503-8563

FOLLOWING YOUR REALTOR'S LEAD -- THE MAP TO SUCCESS

2008-06-14T10:15:08Z

There are some components of a real estate transaction that separate it from so many of the others:

A listing agent who knows what he's doing
A seller who rabidly does exactly what his listing broker instructs
A buyer's agent who knows what he's doing
A buyer who rabidly does exactly what his buyer's agent instructs

Yesterday, Dallas agent, 20-year Keller-Williams veteran Cindy Huitt and I completed our representation of our respective clients in what was an extremely complicated deal from beginning to end. Without going into the details, we sold and closed my listing to her clients for full price. Very few agents could have replicated our success, I'll promise you.

And that happened in a neighborhood of other for-sale homes that have remained unnoticed by potential buyers during the two months my client's home was listed until it sold and closed.

Ironically, for the heck of it I went to one of Craig Proctor's free real estate sales seminars last week. The leader of our group told us and then reinforced many times throughout the seminar, "It doesn't matter whether you like Craig's wording of this ad. We know the ad works. Why would you change it?" And so it goes with the mechanics of a real estate transaction.

And that's what came to my mind yesterday as my client, Miss Dorothy and I completed our visit to the title company. From the day she and I met for the first time, the day that I gave her my listing presentation, until yesterday when she got her check, she had done exactly what I had asked her to do. Exactly. Some complaining, I'll admit, but nevertheless, she let me win every time.

Yesterday the reward and how we got it was apparent. Miss Dorothy had let me do my job, and Cindy Huitt's clients had let her do her job. Neither interfered. Simple. A formula I always recommend to anyone planning to sell or buy a home.

"A Realtors's Secret Weapons" is an hour-long CD of a radio question and answer program I did with KAAM-AM's famed Money Doctor, W. Neil Gallagher. We send copies with our compliments to anyone in the U.S. and Canada. It tells you exactly what you should expect from your Realtor and how to work with him. Email or phone for your copy.

BILL CHERRY, REALTORS

Our 43^rd Year Selling Texas

Dallas

214 503-8563

THE IDEKER TWINS -- LOOKING FOR SUMMER JOBS IN LAKE HIGHLANDS

2008-06-11T21:46:36Z

J.P. and Hank Ideker are twins, and live in our neighborhood, in fact at the top of Rustleleaf Drive just off of Robin Hill. They are sophomores at Jesuit College Preparatory School. For those of you who aren't familiar with Jesuit, it's a great pedigree.

Today I was puttering around a bit before I went to a listing appointment, and I saw one of the boys and his dog walking up our front walkway. He had a hand full of paper, so I figured he and his dog-pal were going to leave one of them at our door.

Sure enough when I checked later in the day, there was the boys' flyer. They're looking for summer jobs around our neighborhood. Full lawn service, for an example. They'll water the plants and take care of your pets while you and your family are on vacation. They also have the supplies and the stencils to paint addresses on the curb.

So why pick them? "Customer satisfaction is our highest priority, and we have a flexible schedule. We do the job right with reasonable prices for each job."

Now J.P. and Hank have been providing all of these services for a long time, and they've collected "multiple references." They'll be glad to show them to you.

Here's their phone number: 214 340-7948. Hiring them will put your mind at ease. And P.S.: Realtors, these guys can take care of your vacant listings, too.

BILL CHERRY, REALTORS

DALLAS

214 503-8563

BLUEPRINT FOR SUCCESS - 14 POWERHOUSE PROFESSIONALS TALK

2008-06-11T17:33:50Z

Real estate training great, Petey Parker, has joined Stephen Covey, Ken Blanchard, Mark Leader, Joy Ohayia, Jim Gottfurcht, Wally Hauck and a handful of others to total 14.

The book, Blueprint for Success is a series of pointed interviews regarding what it takes to succeed in business in this new century.

Petey sent me a copy last week and I've just finished reading it. You'll want to, too.

Petey still has the poise of the airline hostess she was when she first entered the business world, but the business experiences that followed found her as a sought after trainer for major corporations.

You see, Petey was a major force as an executive with Ebby Halliday Realtors. She's got a lot to say, especially how to market to the new adults - the ones she calls the YLs...the "Young Lions.

The book is 19.95. In addition to bookstores and Amazon.com, you can order your copy from

Petey Parker

Parker & Associates

1717 Arts Plaza, Suite 1907

Dallas, Texas 75201

Petey is the perfect keynote speaker for state real estate conventions and a perfect trainer for real estate companies.

BILL CHERRY, REALTORS

Dallas

Our 43rd Year Selling Texas

214 503-8563

YAHWEH AND THE REAL ESTATE AGENT

2008-06-07T22:28:53Z

One of the major paradoxes of real estate brokerage is rarely, if ever, mentioned. Yet, it seems to haunt every agent and every real estate company. It especially bonds and hangs onto those who work the hardest; those who are the most creative in marketing themselves.

You see what most of us do is to take the conventional marketing wisdom - sending out cards and newsletters, cold calling neighborhoods, even putting expensive ads in magazines - and tinker with it. A splash of door hangers here, a mailing out of football schedules there, becoming very active in Rotary and the church and the PTA and the Junior League, and on and on. The things that are guaranteed to put you in the public's eye.

Lo and behold, one inch at a time our real estate prospects began to increase, our business seems to be on its way to gaining the momentum it needs to satisfy our goal. And darned if we don't soon get to the point where we are riding high. Some of us even fall into the trap of bragging to the public that we are at the top. No other agent is Up There with us.

"My hard work paid off. My tinkering with the formula of the conventional marketing wisdom has put me on top. I deserve it." That's what we smugly say to ourselves.

And then, although we are continuing to follow our hybrid of The Conventional Marketing Wisdom Formula, our number of sales and listings begin to diminish. Not only do they diminish, but we realize that another agent, another company has risen to take our place.

What happened and why?

In the Old Testament, God is referred to as YHWH. His name is thought to be representative of the sound of the wind. But since it can't be pronounced in English because it lacks vowels, the Masoretic bible spells it Yahweh.

And in the Old Testament, as Yahweh is trying out different ideas of how to get along with man, and how to teach man to get along with Him, often times an individual or group finds itself having spurts of Yahweh's favor followed by his disfavor.

So I've chalked my own bouts of real estate good favor and real estate bad favor to the will of Yahweh, not the result of my own doings. I think His purpose may be to help me keep my feet on the ground and understand the importance of being humble.

Because if I remain patient, soon I begin rising toward the top once again.

www.billcherrybroker.com

The Add a New Ride Rule - The Rule that Keeps Many Businesses from Going Broke

2008-06-06T04:56:28Z

For a rather brief period twenty years ago, I was a major investor in a marine park similar to the famous Sea Worlds. Our park was about to celebrate its twenty-fifth year in business when we purchased it from the original owners.

Since the marine park came with about thirty acres that were undeveloped, we had envisioned adding as many as four hotels plus some other entertainment attractions.

However, we quickly discovered something we hadn't expected and from that we learned a valuable business lesson. Our marine park was self-liquidating, and we hadn't realized it when we bought it.

While revenues at the park had increased most years since it opened, in reality the five or so years before we bought it, those increases had not been the result of more visits, but of raising ticket prices. In reality, the public was liquidating our investment for us because they weren't coming.

The reason was a simple one: Entertainment attractions have to rely, to a big part, on return visits, return visits year after year. The easiest example of this? The carnival has to add a new ride.

And the only way that number of return visitors can be quantified and kept is to offer new attractions and continually monitor the results. Who are your customers?

The prior owners of our marine park had chosen to not make any significant changes throughout their ownership. And we weren't knowledgeable enough at that point to know what to add. It was the perfect set-up for us to crash and burn.

So what's my point?

It's that lack of attention to the "Add a New Ride" rule is taking its toll on several businesses you know -- businesses that are not all appealing to entertainment. And the owners/corporate management obviously are or were not prepared to meet the challenge:

The Sharper Image
Six Flags
Linens 'n Things
Zales
Pier 1
Burger Chef
MCI
Montgomery Ward
Lionel Trains
F.W. Woolworth
E.F. Hutton
RCA Victor
Compaq
Any number of national theme-restaurants

Everyone who depends on a business to achieve good net income, whether it be as an owner, stockholder or employee, should be cognizant of the business' adherence to the Add a New Ride Rule.

BILL CHERRY, REALTORS

Dallas

214 503-8563

STUDY SHOWS WHAT LEADS TO HIGHER CLOSING COSTS

2008-06-02T06:11:46Z

Recently I wrote an Actice Rain blog in which I pointed out that the closing costs that end up on the HUD-1 Statement often times are over charges that go unnoticed. Frequently they are for excessive attorneys fees, excessive title escrow fees, plus the miscellaneous fees for messengers, copies, notary and the like that nickel and dime the client to death.

I went on to recommend that Realtors study those practices from title company to title company, and negotiate them either to an acceptable level, or move the file to a title company whose fees are more reasonable. I think we owe that to our clients. Click here to read the previous blog.

This following is an interesting copyrighted piece that the service has given permission to use.

RISMedia Real Estate News, Industry Trends, Marketing - Residential & Commercial

New Study Finds What Leads to Higher Closing Costs

RISMEDIA, June 2, 2008-Many American consumers overpay by thousands of dollars in total closing costs when they purchase their homes, according to a new nationwide report from the Urban Institute. The study found that there are significant and unsupported variations in loan charges, title fees and other closing costs charged to homebuyers, and that minority borrowers pay hundreds of dollars more in total loan origination fees than do non-minority home buyers.

In A Study of Closing Costs for FHA Mortgages, noted economist Dr. Susan Woodward analyzed more than 7,500 mortgages originated in May and June of 2001, a period of relative interest rate stability. The Urban Institute's study found significant disparities in closing costs even when it compared borrowers with identical credit scores, loan terms and mortgage amounts. In addition, variations appeared to be based on education level, geography, race and ethnicity. Even after accounting for these factors, there remain very substantial variations in what consumers pay at settlement.

"This report demonstrates once and for all that the process consumers endure when they buy their homes is entirely too confusing," said HUD Deputy Secretary Roy A. Bernardi. "Clearly, we need to open the window and allow consumers to understand the fine print and shop more effectively for the largest purchase of their lives."

HUD is currently proposing to improve disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. For the first time ever, HUD is proposing that all mortgage lenders and brokers provide consumers with a standard Good Faith Estimate. By more openly disclosing the key elements of the loan and by controlling "fee creep" at closing, the Department seeks to provide consumers with enough information to allow them to shop for the lowest cost loan. In addition, HUD's proposed Good Faith Estimate will promote comparison shopping and market competition by clearly articulating to borrowers their total estimated settlement charges. Ultimately, HUD's own economic analysis finds that by offering consumers clearer, more certain cost estimates, the average borrower will save approximately $700.

Key findings of the report include:

- Total loan fees can vary by thousands of dollars from borrower to borrower even for the same loan amount.
- Loan charges and title fees vary considerably from state to state even for similar loans. Even in the same state, disparities in title costs among identical borrowers can be more than $1,000.
- On average, borrowers see no reduction in out-of-pocket fees when they agree to higher interest rates. Ideally, consumers ought to receive a dollar-for-dollar credit for paying a so-called "yield spread premium" that results from agreeing to a higher interest rate loan. In fact, many borrowers see no reduction at all and even pay more in total loan fees.
- African-American families pay an average of $415 more in total loan origination fees than non-minorities.
- Hispanic borrowers pay an average of $365 more in total loan origination fees than non-minorities.
- Consumers obtaining loans for which comparison shopping is easiest, so called "no-cost loans," enjoyed an average cost savings of $1,200.

Brian Montgomery, HUD Assistant Secretary for Housing and Federal Housing Commissioner, said, "The core problem is that too many Americans sign a mountain of documents they don't understand and pay thousands of dollars for services that they've probably never heard of. This report proves that the more informed you are, the less you pay. Our common goal should be to increase competition and transparency, and to help take the mystery out of buying a home."

Dr. Woodward examined data from a national sample of 7,560 FHA-insured, 30-year fixed-rate home purchase loans. Data were collected on how much borrowers paid for lender or broker services, title services and real estate agent services. The data were then linked to information on borrower and loan characteristics including loan amounts, interest rates, credit history, income, borrowers' race and ethnicity and the racial composition and educational attainment in the borrower's neighborhoods.

Woodward is an expert in financial economics and has held appointments in both academia and government. She has been on the faculties of the University of California at Los Angeles and at Santa Barbara and the University of Rochester's Simon School. She has also served as Chief Economist of the Securities and Exchange Commission (SEC), Chief Economist of HUD, and Senior Staff Economist for Financial Markets and Institutions at the Council of Economic Advisers. Dr. Woodward is currently the founder and chairman of Sand Hill Econometrics, Inc. in Palo Alto, California.

The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance problems facing the nation. The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.

For more information, visit www.hud.gov.

Reviving Shopping Centers, Rule 4

2008-05-31T15:03:46Z

Leasing agents and landlords alike frequently lust over the idea of having a cinema as a high-presence tenant in their center. After all, cinemas bring lots of people, and its therefore reasoned that those people will shop the stores before and after the movie.

But what is frequently not addressed by the leasing company and landlord is making certain that the cinema's lease terms and conditions give the landlord some authority on what films are shown and what hours they are shown.

Consequently, oft times those coming to partronize the theaters are not the traffic that is congruent with the type of clientele that the center's retail shops need to attract.

And on top of that, what movies are showing and when have a direct and tremendous influence on the center's security.

Dallas' premire center, NorthPark, added back a multi-screen cinema when it doubled the center's size about three years ago. On top of that, the landlord selected a plan that allowed entrance to the theaters only from inside the mall, and further, made containment of the movie patrons after the mall stores closed next to impossible.

Security infractions have increase by about three-fold, according to an article in the current issue of D Magazine. Recently, a mom was shot in the face by a random gunman while she was sitting in her truck waiting to pick up her child, who was there to see a movie.

So if a center must have a cinema to do well, the landlord must be able to have reasonable control over what movies are shown, the size of the theater where each feature will be shown, and all other demographic components necessary for safe and profitable crowd control.

*The spell check feature of AR has been inoperable off and on for many days. It is off today, so please forgive any errors.

BILL CHERRY, REALTORS

DALLAS

OUR 43RD YEAR SELLING TEXAS

214 503-8563

HOW TO PROTEST TEXAS PROPERTY TAX APPRAISALS -- Deadline May 31, 2008

2008-05-29T10:03:11Z

The property tax appraisal logic in Texas is this:

One entity will decide the appraised values of every taxable property in the county. These are called Central Appraisal Districts. There is a chief appraiser overseeing each district.
Using computer models and site visits, every piece of taxable property is given a value by the CAD. Those values are then published as public record.
A period of time is then allowed for taxpayers to compare the value that was assessed to their property with assessments of comparable properties.
If the taxpayer can show that the value assigned to his property is not in line with the comparable properties, he can file a formal written protest with the CAD. That protest must be filed by May 31 of the tax year.
An informal meeting is then scheduled between a CAD appraiser and the property owner. At that meeting the property owner shows his evidence of value to the appraiser and the appraiser shows his evidence of value to the property owner. A compromise is offered.
If the property owner is not satisfied with the offer made by the appraiser, he may request a hearing before the Appraisal Review Board.
The Appraisal Review Board is made of up of other taxpayers in the county; taxpayers who are not employees of the CAD, and whose determinations cannot be overturned by the CAD.
The ARB committee listens to the evidence presented it by the property owner and the evidence presented by the appraiser. The ARB members ask questions of both, then they determine what the value will be. The CAD must accept that value.
Home owners who remain unsatisfied with the assigned value have one more option outside of filing suit against the district. They can request binding arbitration. There are several hundred real estate professionals who have been certified by the Texas Comptroller to act as arbitrators. They can hear cases for homes worth less than $1 million. The cost of the arbitration cannot exceed $500, and the loser pays the fee.

The question you must ask is this: How does the CAD's appraised value of my home compare with their appraised values of other like homes?

It has nothing to do with what homes are selling for or have sold for, It has nothing to do with whether or not you think the value is too high or that you can't afford the amount of your taxes. And if you've lived in your home for a few years, it has nothing to do with what you paid for it when you bought it.

Again, the question is this: How does the CAD's appraised value of my home compare with their appraised values of other like homes? If yours is higher, then you protest. And let me again emphasize, this is the only question.

The CAD mentality is this: We'll do our best to appraise and assign accurate values. If the property owners do not file protest, then they must agree. If they agree, then we can conclude that our appraisal is correct.

All of this research information is available at the CAD office in your country and they are required to give it to you. It is also available at the web sites of each CAD. You can Google search by putting in the name of your country followed by CAD. For an example, "Dallas CAD."

If you have further questions, I am a former Appraisal Review Board member and committee chairman, and I am an state appointed arbitrator. Email me at cherrysells@aol.com.

BILL CHERRY, REAL ESTATE

DALLAS

OUR 43RD YEAR SELLING TEXAS

214 503-8563

What's It with You People....

2008-05-28T07:22:53Z

...who put your home on the market then turn the utilities off and move? And on top of that, you make no provisions to keep the yard mowed, landscaping fresh looking, and the interior regularly cleaned?

And what is it with you agents who let them get away with this totally idiotic behavior?

If my client won't budge, I just have it done myself and dial it into my marketing budget for that property. It's either do that or watch it not sell.

In the Texas heat, neither agents nor clients go into un-airconditioned homes. And on the chance that they do, that interior weather condition is so much in the forefront of their minds that actually considering buying that home never enters their minds.

I went in a home the other day that had been on the market for a year. "What's my problem?" the owner asked.

"How much do I love thee? Let me count the ways...."

The utilities weren't on so not only was it stuffy and hot, a prospect couldn't see if they worked.
Someone had used one of the bathrooms, obviously not knowing that the water was off
The counters were dusty; the hardwood floors had blobs of mud on them from the time the house was shown when it was raining
The porches were dirty
The yard was unmowed-unedged. The only thing missing was a big piece of Texas tumbleweed...and the only reason it was was because it doesn't grow near Dallas, and a piece hadn't blown in here from West Texas

I told the guy, "I'll send you a punch list. Call me when you've got it complete, and we'll get the house sold." Then I winked.

THE LISTING'S MARKETING APPROACH WAS BANKRUPT

2008-05-25T07:33:16Z

One of the things I do each morning is search the Multiple Listing Service to find and study each home that's listing has expired. What happened to cause disappointment?

With just the bare bones information that's given on the listing sheet, I try to figure out why the listing agent was unsuccessful in his quest to find a buyer. Sometimes it is obvious right off the bat. The home was seriously over-priced; in the photos that were given us it doesn't show well; the front of the home and the landscaping are bland; things like that.

But more often than not, it looks like the home should have brought at least one successful contract, especially when we are talking about listing periods with the same agent that have run for four, six, nine months; frequently a year or more.

There is only one primary question in any argument. "Is there a need for a change?" Every other thought and discussion is a sub-set of "Is there a need for a change?"

A debater would attempt to show that during the listing period other comparable homes were sold and closed. Then he would try to establish evidence that the reason this listing didn't sell was because it had been presented to the market in an unlike manner - that was the reason for its failure.

So I often wonder what is going on in an agent's mind when after, say, sixty days into the listing period at least one serious offer hasn't materialized, yet he continues down the same road.

Why would he think that continuing the status quo was going to bring success when it hasn't in the months prior? Why wouldn't he study how those that did sell were marketed? Could any of that be applicable and applied here?

And I often wonder what is going on in the seller's mind when 1) he gives a listing to an agent for more than four months and 2) renews it once, twice, three times thereafter. And even worse, they agree to renew it without making any significant changes.

If a home hasn't gotten sufficient activity and at least one serious offer within, say, three months, the agent's marketing program for that listing is and was bankrupt from the beginning. It's time for the listing agent and the client to part ways.

And on those occasions when it has happened to me, I have encouraged my client to find an agent with new ideas. We shake hands, agree we are great friends, and bid each other adieu.

BILL CHERRY, REALTOR

DALLAS

214 503-8563

Title Company Over-Charges

2008-05-21T23:01:52Z

I want to speak with you today about the selection of title insurance underwriters. For years the tradition has been for one or both of the Realtors involved in a sale to agree on a specific title company, office and escrow officer. The clients usually don't voice an opinion.

So while the title company wants to lay claim to the seller on whose behalf they are insuring to the buyer that the seller has indisputable ownership of the property he is selling, their real clients are the Realtors. And that's where their loyalty belongs.

In Texas, and probably throughout all or most all of America, the title insurance rates are regulated by the state. If you buy a $200,000 home in Texas, the title premium is the same at all Texas licensed title companies.

But what isn't regulated is what the title company passes off as additional charges for their services, frequently labeled as escrow fees, messenger service, document preparation, copies, wire transfers and on and on. And they are rarely the same among companies.

In fact, they are negotiable, yet I'll venture to say that most Realtors don't dial this into the equation when they are selecting the company where their sale/purchase will take place. (For the record, I always do.)

But how can it not be the Realtor's obligation to make certain that the client is not going to pay unnecessary fees so that your favorite closer can have their business? It can't be. It is the Realtor's obligation.

I keep a watchful eye on what title companies want to charge my clients, and I frequently call around to see what a sample of the companies are charging for the components of their services. If the charges to my clients are out of line, the title company either has to reconcile the matter or I threaten to move the file. I've only had to do this once, but I'll promise you I'll do it in a heart beat if the company that's opened escrow for my client is padding the bill.

BILL CHERRY, REALTORS

DALLAS

214 503-8563

Our 43rd Year Selling Texas

What Would My Clients Write About Me If There Were A Realtors' Day?

2008-05-15T22:52:07Z

Ever since W.L. Moody, Jr., gave me his worn copy of Dale Carnegie's How to Win Friends and Influence People when I was about 12-years old, I've had this thing about making sure I'm around people who motivate me to both understand as well as improve myself.

It all started when I asked Mr. Moody how I could be rich like him someday, and he told me two things: "First, to attain wealth you have to have money working for you, people working for you, but preferably both. Second, read Dale Carnegie's book at least once a year for the rest of your life."

And that was when he gave me his copy of the Carnegie book. It's on my desk right now because I have just finished reading it for about the 55th time.

What I get out of all of this is not necessarily lessons in life, but a better understanding of myself...what I think about the components of life, and why I think as I do. Often times, I find I've had a lifetime of faulty reasoning that brought me to a lousy opinion that I need to change.

One of my favorite radio talk programs is hosted by Dennis Prager, a modern day Jewish scholar-philosopher. The subjects of his programs are always about life, faith, who we are and why we are. Sometimes I don't agree with him, but to listen just to his thoughts and reasoning, I have to reconcile them with my own belief system. I admire Mr. Prager and I thank him for what he has given me.

And there's author John Maxwell. His biographical blurb says he's "an internationally recognized leadership expert, speaker and author." Of his many books, I think I have gotten more out of The 21 Irrefutable Laws of Leadership. You can pick up a new one for $25 or a used one for less than $10.

Everyone knows that Herb Kelleher and Lamar Muse founded Southwest Airlines. Mr. Muse resigned after a few years, so it was left up to Mr. Kelleher to promote and attain the airline company dream that he and Mr. Muse had. John Maxwell reminded me in his The 21 Irrefutable Laws of Leadership that Mr. Kelleher's employees bought a full page ad on Boss's Day, 1994, in "USA Today." Here's what it said.

Thanks, Herb

For remembering every one our our names

For supporting the Ronald McDonald House

For helping load baggage on Thanksgiving

For giving everyone a kiss (and we mean everyone)

For listening

For running the only profitable major airline

For singing at our holiday party

For singing only once a year

For letting us wear shorts and sneakers to work

For golfing at The LUV Classic with only one club

For out-talking Sam Donaldson

For riding your Harley Davidson into Southwest Headquarters

For being a friend, not just a boss

Happy Boss's Day from Each One of Your 16,000 Employees

So what did I get out of this? Other than reinforcement of my deep respect for Mr. Kelleher and his 16,000 employees, I got this:

What would my prior clients write about me if there were a Realtors' Day? I'd better do some evaluating and make some major adjustments. What about you? How would you fair?

BILL CHERRY, REALTORS

DALLAS

214 503-8563

OUR 43RD YEAR SELLING TEXAS!

Reviving Shopping Centers - Rule 4

2008-05-14T22:44:35Z

So I suppose this is logical: Because major big-box tenants attract a lot of shopping traffic, landlords usually give them cheap rents and big build-out allowances.

And small tenants have their rent rates burdened by their prorata part of those discounts. After all, without the big box traffic and marketing, most of the smaller shops in the center could not survive.

However on the other side, if the small shops had a good representative negotiating their leases, they made sure that they could terminate their lease at anytime one of the big boxes closed up and left the center.

There are two very important considerations when setting up a tenanting plan. The first and primary one is picking the right tenant mix and the second is where each store is placed in the mall, i.e., who are its neighbors? This requires serious talent in order to make a good footprint.

And there is a third one, one that is often either overlooked or not enforced by the management company. All shops must have the same business hours and the same days for holidays. And that even applies to not closing or opening five minutes late.

I often use Dallas' North Park for examples. There are four high-end jewelry stores in the mall and they are grouped together. None of them respects the mall's posted business hours. In fact, one of them isn't even open one day each week. Others close helter-skelter...totally unpredictable. I guess if the manager's son has a socker game, that's reason enough to close early. I often wonder if the store's home office approves these closings.

Shoppers frequently stop and go back when they reach 1) a blank store space 2) a closed store. So this behavior by the tenants not only affects the business revenues of their neighbors, but it also affects the percentage of their sales that is a part of their rent.

To line of the stars for the best oppotrunity to revitalize an older mall or strip center, you'll surely want to keep these important concepts in mind.

*The spell check feature is not working as I post this. Please forgive errors.

BANG -- ANOTHER WAL-MART CLOSES

2008-05-11T07:42:27Z

One day recently, Wal-Mart decided to close one of its "supercenters" in the Dallas suburb of Garland. One day the 250,000 square feet building that hovered over a big parking lot on Garland Road, just a few blocks from the LBJ Freeway, was there, the next day the only hint it had been a Wal-Mart was they had not painted over the Wal-Mart blue on the façade.

To the naked eye, the store looked viable and profitable. It had been well-stocked and seemed to have many shoppers through the day. Today a newly-painted For Sale Sign spawns rumors that looks were deceiving.

Apparently store closures like this usually come with no advance notice to the public, not even to the employees. And there's rarely a definitive explanation.

I did find this statement in one of the company's recent annual reports.

"The decision (to close stores) is related to Wal-Mart's recently announced plans to moderate growth of U.S. supercenters as part of leveraging capital resources through a strategy designed to improve returns and sales within U.S. stores."

This, even though in this same report, future expansion for the company showed they had budgeted for a net gain of about 265 of the huge stores that year.

Nevertheless, almost immediately they did just the opposite - the slowed down building new stores as well as began closing a number of those already on the ground.

Stockholders and analysts shared shock while the New York Times said the company had reached a turning point.

No longer satisfied with its own definition of what a Wal-Mart store is, company officials are beginning the same journey that Sears-Roebuck started down years ago - investing in businesses and ideas that do not fit its model.

Today Sears is drowning in debt as the result of its prior and current management's idiocy. It'll be interesting to see if the same thing happens to Wal-Mart over time.

Reviving Shopping Centers - Rule 3

2008-05-09T23:52:20Z

There's been an expression around for a few years that dictates, "Think outside of the box." While it's overused, tired and annoying to hear these days, it still has a life. Here's a place where it does.

Throughout America are weird outdoor strip centers and worn out malls that are begging for an enthusiastic second life. Most go unnoticed year after year. The remaining tenants weren't there on opening day. A tattoo parlor, a fake nail parlor, a dry cleaner's substation, a flea market, and one of the forms of "everything is a dollar."

Some of them had important anchors like Sears, J.C. Penny, Dillard's, Montgomery Wards. But they haven't been in the neighborhood for years.

To the landlords, property taxes and insurance continue to accrue, deterioriation chips away at the asset, and the huge cardboard For Lease signs now hang on by one piece of tape in a cockeyed fashion. The leasing agent hasn't been by to check the property in months, but the landlord lets him hang on.

Ironically, a good portion of these centers and malls can be revitalized and retenanted. They can be a profitable asset again. It's happening in pockets here there and everywhere all over America. And it is a perfect niche for Realtors who are struggling to make a living in the home market and are looking for a new income stream.

The secret is quite simple. American and foreign investment trusts are flush with money and looking for stable American real estate investments. These centers present three ways for them to invest: as a joint venture partner with the current owner, as the sole owner, as a lender with an equity/income participation.

The Realtor's part in this is to put together the team that will modernize and redevelop the property, and will solicit and tenant it.

If you need us, my team of experts can provide the foundation and back-office expertise for putting together these plans and bringing them to a succsssful conclusion. We have solid credentials and we've worked together for years. We'll augment you and your team!

BILL CHERRY, REALTORS

DALLAS

214 503-8563