April 2008

Sorry, I haven’t been here much lately but Todd, my man, you gave me a sales and marketing tool that is just going nuts and I love it.

Our community is discovering Ligonier Living for the positive community forum it’s designed to be and a place to stay on top of local happenings.  I haven’t decided whether to launch a separate Ligonier Housing sister blog or simply incorporate housing in Living.  I’m leaning towards incorporating it into the one platform because this is becoming like a newspaper of sorts.

I’m having so much fun with the project and like a garden it’s taking root.  Thanks, Todd.  I highly recommend that others in the business of real estate - whether you’re in sales, title, or mortgage, consider the hyper-localized blog as a platform for local marketing.

If there was ever a model for how to build your reputation as an expert on mortgage origination through the power of blogging, one only needs to take a look at Dan Green’s The Mortgage’s Report.

Jay Thompson, a real estate broker blogger on Phoenix AZ wrote two great posts today concerning a lesson I had to learn the hard way.

Jay comments on his own blog about an attack piece written by Redfin Blogger Carol Hian. Then follows up with a great article over at Agent Genius about how such an attack can so easily backfire.

It’s funny because I was reminded of this just the other day while re-reading “How to win friends and influence people”. In it, Dale Carnegie quotes Benjamin Franklin on the secret of his success.

“I will speak ill of no man… and speak all the good I know of everybody”

Great advice. Carnegie’s first chapter titled, “If you want to gather honey, don’t kick over the beehive” centers on the premise that scolding others is no way to win an argument. People tend to refuse to believe they’re wrong. All you end up doing is making them your enemy.

I love to argue. I love to win an argument. I doubt I’ll ever share my secret identity here, but I enjoy getting under the skin of the crazies on Daily Kos, just for the sport of it. I argue online about sports cars, sailing, the best beers, and even cigars.

Sometimes I let the desire to win an argument at any cost spill into my business life. It’s my greatest failing. Certainly, I’ve never acted as badly as Ms Hian (at least I hope not), but I only need to think back to a post I wrote last February to see the results of such actions. I wrote a well reasoned post, with a very inflammatory title right here on Lenderama. It generated a lot of comments, and quite a bit of private support, but those who disagreed with the article did so based on the title, not the article itself.

The title was received as far more insulting than I intended. It was perceived by some as a personal attack on someone I actually like and respect very much. I eventually deleted the post, the only post ever deleted on lenderama because it was obvious I had done exactly what Dale Carnegie had advised me not to do, every time I read his book.

Principal 1 - Don’t criticize, condemn or complain

Ms Hain has probably blogged her last post for Redfin. I have to live with the fact that a former friend is unfortunately just that “former”. And for what? To win a silly argument? This is easily my most regrettable moment in lenderama’s history.

The mortgage industry is full of conflict. How you resolve those conflicts should be largely focused on finding a solution where everyone wins. Choose your battles. Don’t argue over who left who a message, or who said what. Concentrate on getting the deal closed in a way that everyone is happy. Don’t take it personal when you know someone is lying, or wrong. You can always choose not to work with them in the future, but you don’t want them to consider that same choice.

*The title of this post is a quote from Hans Selye

There was a lot of talk a while back about how the 2005 American personal savings rate fell into negative territory for the first time since the Great Depression. Journalists cried, “We’re spending more than we make!” To make matters worse, the 2006 personal savings rate was also negative.

What is the “personal savings rate,” anyway? It’s basically personal income minus expenditures — what you make minus what you spend. If you make $50,000 and spend $49,000, your personal savings rate is 2%. The graph below says it all. 2005 starts a trend of negative personal savings for Americans, with the blue bars pointing downward, quarter after quarter.

Images provided by Losing Money To Inflation

Then a miracle happened. Someone at the U.S. Bureau of Economic Analysis must have said, “Gosh, that graph looks really ugly with all those blue thingies pointing downward. Let’s make a new graph.” And that’s exactly what they did. They released the following updated graph:

Good news. Now all the bars are in positive territory except for one quarter. Ahhh, that looks much better. Americans have been saving money after all! What happened? I have no idea. The revised graph does not offer any explanation, nor does it state that it’s revised. It’s just there. Perhaps the statisticians found a flaw in their previous model. Perhaps they just faked the numbers. It does, however, make one ever more distrustful of financial data released by the government.

One thing that is for sure about the U.S. personal savings rate is that it is a bit misleading, even if the revised numbers presented are accurate. It excludes 401k contributions. If a guy spends everything that he makes but still socks away 20% of his income in his 401k account, his personal savings rate is still zero. Home appreciation isn’t considered either.

Maybe the government could revise the home value graphs for 2007 and 2008. I think that might make me feel better.