BILL CHERRY'S GREATEST DALLAS PARK CITIES REAL ESTATE BLOG

I recently wrote a piece for Active Rain for the purpose of letting those living in Dallas know that a famous American theologian and Duke University professor named Stanley Hauerwas would be giving several lectures at my church, The Episcopal Church of the Incarnation. (Click here to read it: Stanley Hauerwas.)

Last evening Patty and I invited our friends, John and Cindi Burnside, to join us for an early dinner and then a quick trip to Incarnation for the service and the performance of Dr. Hauerwas.

Dr. Hauerwas was ill-prepared, he rambled, he wouldn't look at his audience, he used vulgar and profane language in our church's sanctuary, and quite frankly he was a total bore.  I was embarrassed for those at the church who chose him and for him, himself for his bad behavior. 

The bottom line is this:  the man is a pacifist who opines about God's wishes without sighting Bible references to back up his opinions.  Thus, his arguments lack sufficient evidence.  I regret that the format wasn't a debate with a Bible scholar.  He would have been smashed like a helpless ant.

A lot has changed since I left college life for the last time in about 1967.  Dr. Hauerwas is a member of that large group of college and university instructors who have generated such outrage from parents and friends of their students.  It's time for change.

I apologize to anyone who attended any of Dr. Hauerwas' lectures on my recommendation.

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

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One of my friends, an old dude like me who's been involved in real esate for eons, called the other day.  Here's what he told me:

• Bank lobbyist are pushing for legislation which will prohibit a person who owns a home from selling it and taking back the mortgage.  The buyer will have to get his financing through a commercial, licensed lender.
• Soon it will be impossible for mortgage brokers to remain in business; all or the majority of the loans will be required to be made through a borrower's commercial banking relationship.
• The new rules requiring appraisers to be retained from a pool that is controlledby a third-party "appointment service" has a) raised the cost of the appraisals to the buyer and b) lowered the amount the appraiser nets.  For an example, Wells Fargo owns a company that is one of the newly required appraisal "booking agencies."  They charge upwards of $500 for an appraisal for which they pay the appraiser $200 to $300. It's projected Wells Fargo will net $500,000,000 the first year from this riskless venture.

Whether or not I have reported this precisely and totally accurately isn't the point.  That banks and their lobbyist continue to tinker with the real estate business is the point.  Taking free enterprises out of the components of loans is a bad idea.  Making the rules more complex and the time to close a transaction longer is not to the public's benefit, much less Realtors.'

There are an enormous number of people -- Realtors -- paying dues to local, state and national associations.  Do those groups not understand that their most important charge is to represent us as a group before lawmakers?

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

Last week I received a phone call from a man who had a partially finished $3.5 million home on his hands.  There were not any prospective buyers, and it would be completed in almost moments.

Frankly, it had been on the market for 195 days with an agent with one of the Dallas hotsy-totsy agencies.  (And that's not meant to be a disparaging remark directed to that real estate company.  They wisely learned to appeal to the market that buys and sells in the Dallas Park Cities area.)

They couldn't sell it, and from their cock-eyed, dirty sign in the yard, I suspect the agent hadn't been by in days.  In fact, their listing had been expired for more than a week, yet they apparently were unconcerned about their sign now being a violation.

The caller was responding to a letter I had written when his listing had expired, telling him it might be time to try a Realtor who uses a different marketing tactic, which I do. 

We were to meet this next morning at 11.  I was on time.  He wasn't,  In fact he didn't show up at all, and he didn't answer his phone when I called.  I even left him a voice mail message. 

While I was there waiting on him, I toured the home.  There was no on there supervising the workmen.  If anyone spoke English, I was unable to find him.

So here's what I saw: The architectural layout was weird...in fact, let me modify that a bit..it was crazy.  There were numerous mistakes in the quality of the workmanship, and in most instances the trim, cabinets and fixturing were substandard to a home expecting to justify a $3.5 million price tag.  The front steps were partially completed, that task having been abandoned for some reason.  It made walking up to the porch dangerous.

When I got back to my office, I googled the fellow's name to see who he was.  Apparently he's in the restaurant-bar business.  He's had his image problems if one is to believe the newspaper and magazine reports.

My purpose in writing this blog is as a muse that's prefaced by legitimate questions:  First, why would a lender loan someone with limited experience the money to build a $3.5 million spec home?  Why would someone who borrowed $3.5 million to build a spec home not use quality materials and workmen, and further, not have professional supervision to oversee the building process? 

Have you ever noticed how many think our business requires no experience or specific knowledge?

And finally, what's the deal with standing up a Realtor? In this market everyone with real estate inventory to sell needs all of the friends and support he can get.

Would I have taken the listing had he been on time?  No, not after what I saw.

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

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WIKIPEDIA BIOGRAPHY

DR. STANLEY HAUERWAS
"America's Best Theologian" - Time Magazine

I admit to being a serious student of many disciplines, overfed by an abundant curiosity that I inherited from my mother and father.  That was and remains compounded by the revelations of profound "stars of the universe" shown me by professors, clergy, relatives and friends.

Stanley Hauerwas is Professor of Theological Ethics at Duke University.  He has written more than thirty books, and he lectures to clergy, physicians, lawyers and the rest of us through speeches and seminars that are regularly held throughout the U.S.

Dr. Hauerwas, who is my age, has been invited to address the congregation of the Dallas Episcopal Church of the Incarnation throughout the weekend of March 6th and 7th. 

The free lecture, titled "Conversations with Stanley Hauerwas," will begin at 7 PM on Saturday evening and end by 8:30.  It will be given in the Main Church at 3966 McKinney.

On Sunday, March 7th, 3 PM to 4 PM, Dr. Hauerwas will lecture on "America's God."  It will be held in the church's Memorial Chapel.  There is a $10 admission fee.

And at the regular Sunday church services 9 AM and 11:15 AM, Dr, Hauerwas will sermonize "On Being a Christian and a Texan"

If you are interested in a preview of the kind of intellectual challenges and teachings that will be in store for the audiences, here is an interesting lecture about Abortion.

Set aside one of these times on Saturday or Sunday to experience your own mind receiving profound thoughts.

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

WIKIPEDIA BIOGRAPHY

My friend Patrick Dispense spent many years working in the banking business, first as a loan officer at Guaranty Federal Savings & Loan Association, and later as the president and manager of a large credit union.

I think this is a fine and accurate accounting of the various financial crisis that have occurred in recent years.

The other day I wrote a blog about banks and their mortgage loan practices regarding loans in trouble and foreclosures. 

Some of you took me to task, taking the side of the bank practices.  I still say they are full of weaselness.

Well, watch this video and you may understand why things are as they are and the market is not recovering.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1108552

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Since 1964

214 503-8563

WEB

Denton is a historic Texas city about forty miles from Dallas and a similar distance from Fort Worth. 

On January 20th, I wrote a letter to the mayor the Denton, Texas, which is the home of two major universities -- University of North Texas and Texas Women's University.  The mayor's public biography shows he is an attorney. The letter was not acknowledged. 

I believe that Denton residents and university officials should be writing and formally voicing similar opinions.  Here's the letter:

The Honorable Mark Burroughs
Mayor, City of Denton
(address redacted)
Denton, Texas 76205

Dear Mayor Burroughs:

My interest in Denton comes from having been a student at North Texas in the early 1960s and from meeting my wife, Patty, who graduated from there several years after I did.

In addition to good memories of those days, I have purposely kept in regular touch with many of my classmates and professors.  Sadly, only Leon Breeden and Ted Colson of the professors are still alive.

For the past five years, Patty and I have lived in Dallas.  I've been a real estate broker for forty-five years, and she is a retired school counselor.  Prior to moving to Dallas, we lived in Galveston where I owned a large brokerage firm and had other business interests.

My years as a resident of Denton mean as much to me as my time as a student at UNT.  I honestly loved that whole period, and I'll talk about it and tell stories about it at the drop of a hat.

Yesterday, I drove to Decatur to officiate as the arbitrator of a property appraisal dispute between a taxpayer and the CAD.  On the way back to Dallas, I thought I'd like to drive through the UNT campus.

Mayor Burroughs, frankly what in the world were the city council and citizens thinking when they allowed the property on the periphery of the UNT campus to go unbridled by architectural control?  That is the biggest mess I've ever seen in my travels throughout towns that have colleges and universities.

Allowing your city to take free-form shape, dictated by the whims of an insignificant number of property owners, I believe, has and is seriously hurting Denton's economic collateral.

I wish you and your council colleagues and friends would seriously study and address those issues, and do your best to reverse what has happened.  I'm not looking for a job, but I've had years of experience in inner-city redevelopment.  If I can help you any at all, let me know.

 Sincerely yours,

William S. Cherry

 BILL CHERRY, REALTORS

Dallas - Park Cities

Since 1964

214 503-8563

WEB

SOME BANKS DON'T PRACTICE THE IMAGE THEY TRY TO PORTRAY

A new lending wrinkle has worked its way into the policy books of a number of the Dallas banks that made real estate loans that have or will soon default. A like practice is probably permeating many other banks throughout the US.

Here's how it works. 

1) The lender offers a discounted mortgage loan interest rate to a potential borrower if he will purchase one of the properties collateralizing one of the bank's troubled loans or REO.

2) The bank will not make a mortgage loan on any basis to that same potential customer if he wishes to purchase a home that's on the free market.

Here's the problem.  This is a form of red lining, and red lining has been an illegal lending practice for almost fifty years.

In this case, the banks are using their depositors' money and the Fed funds that they have borrowed - again, public money - to the sole benefit of the bank.  In other words, you and I can both have like-homes for sale.  They can even be next door to each other.  The bank has a troubled lien against mine and is not the financing source for yours.

A third party turns in a contract to buy your home, and you accept it.  The buyer then makes application to a bank for a conforming loan to buy your house.  The bank turns that loan down, but then in the same breath tells your buyer that they will make a loan - even on better terms than market - to your buyer if he will buy mine instead.  You see, my loan with the bank -- the one the bank made a contractor to build a $5 million spec house that's like yours -- is in default.

With my real estate broker hat on, I recently saw a bank turn down the loan application for a home listed in MLS for in excess of $1 million, and then offer to make a loan to that person if they would buy a million-buck spec home out of foreclosure that the bank was going to taking back. 

The loan terms offered?  How about these:  Four percent guaranteed for 10 years, fixed rate at market thereafter, and with a thirty year amortization.  Oh, and let me add, the loan would be made with only 5% being required as the down payment.

(To put that in prospective, in today's market, sources for jumbo loans (say over $850,000) are sparce, but even when offered usually require at least a 30% down payment and a rate that is significantly above the current FHA rate.

The bank has no compunction about telling their bank customer - the guy who is also the person whose house the buyer wanted to buy - that they are trumping his deal by

1) Refusing to make his buyer a loan on his house, but
2) Offering a below market loan to the applicant if he'll buy one of the bank's REO instead.

This is a form of red lining because "red lining" are those lending parctices that interfers with the free market.

Banks should be prohibited by law from this practice, especially when their depositors are comprised of the "public" and that are regulated and insured by the FDIC.

Copyright 2010 - William S. Cherry

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

Wikipedia

The idea of not selling ones current home for the purpose of moving to another of equal or greater value because of today's market conditions is a bankrupt one.

Realtors continue to hear their friends and clients say, "I can't move now.  If I were to sell my home in this market, I'd lose a fortune."  And I suppose most Realtors believe the same thing, or are unable to prove to their friends and clients that the statement is not empirically true.

You see, for it to be true, the seller would have to be selling a home in a depressed market area in order to buy one in an area that is not depressed.  We'll call that a reverse arbitrage.

There is an investment procedure that is called arbitrage.  The idea is that the investor takes advantage of a specific but temporary oddity in the market.  For an example, let's say an owner of 100 shares of Widget stock would sell you his shares for $1.00 each.  And let's say that you knew someone who wanted to buy 100 shares of Widget in Canada and would pay $2.00 each.  Buying the 100 shares for $1.00 and immediately selling them for $2.00 would be an arbitrage transaction.

There are actually professional investors who specialize in arbitrage, and they are called arbitrageurs.

So in my home sale example, reverse arbitrage would be selling your home in a specifically depressed market area to buy one in a non-depressed market area.  You would sustain a loss.

But that's not typically what will happen in today's economy.  If home prices have decreased by 15% in Dallas, selling yours at a price that's 15% lower than it would have brought two years ago, and then buying another of equal or greater value in that same marketplace would probably mean that it had experienced a similar decrease in value.  Consequently, there is no arbitrage.  This is trading apples for apples.

By using a watchful eye and adding to it the solving of a simple math problem to your desire to change homes, there is no reason for someone who wants to sell their existing home and buy one of equal or greater value to postpone the transaction.

If you're in the Dallas market and need help with this analysis, call me.  If you are elsewhere, your Realtor will help you determine whether or not your buy-sell would result in a reverse arbitrage.

Copyright 2010 - William S. Cherry
All Rights Reserved

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

Biography

If you know anything about Galveston's past, you surely know that it's always been the town's hobby to cover up one body of water while opening up another. 

For an example, 25^th Street used to be a canal.  For some reason it was filled in, then named Bath Street. Never mind the water was gone.

And then there's what's known as English Bayou.  It's the big pond that's on the east side of 61^st Street.  It's manmade.  The dirt and sand and stuff that were there were dug up and used to raise the area to its east.  From that came streets like Bayou Shore and Borden.

My lifelong friend, Bob McCulley, passed away a few days ago by the hand of a very aggressive cancer.  Bob was a great storyteller.  This is one that he told me.

<<==Jody and Bob McCulley

Ellis Badgett was the father of the famous Galveston quadruplets, Joan, Joyce, Jeanette, and Jeraldine.  But he and his friend James R. McCulley, who was Bob's dad, also owned a small heavy equipment company.

They dug, dredged and filled-in holes all over Galveston Island.  Built an entire company around this Island obsession with finding water in one place, hiding it in another.

One time they were digging a big hole in the sand just after the west end of the Seawall.  The sand was being used to fill parts of the undeveloped area around Harve Lafitte. 

And like you'd suspect, they'd hit the water table and the water was rising around Sis, the old tractor.  The hole had grown in its perimeter to a gargantuan size.

McCulley was operating Sis; Badgett was driving the dump truck.

Sis, began belching smoke and coughing even more than usual. 

And then wouldn't you know, one morning just before noon, Sis coughed, wheezed, bounced up and down a few times, and then died. 

McCulley and the tractor were now sitting in this huge water hole, and neither of them was moving.

"Ellis, what do we do now? McCulley yelled at Badgett.

"Aren't you about ready to retire?" Badgett responded to McCulley.

"Yep," McCulley said back.

"Wade on over here. I'll take you home in the truck." 

Badgett and McCulley and their loyal friend Sis retired on the same day. 

Sis, left all alone, stayed behind, knee deep in the muck of that big hole filled with water, for many years thereafter.

Copyright 2010 - William S. Cherry

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

Our 45th Year

214 503-8563

WEB

 Biography