BILL CHERRY'S GREATEST DALLAS PARK CITIES REAL ESTATE BLOG: January 2008

Dr. Ted Colson spent his entire teaching career at the University of North Texas in Denton.  At about 82, he is the last alive of those who taught me, and of course, you knowing me like you do, you know that he and I remain in regular contact.

I come early to the park each Sunday so that I can gather my thoughts in a peaceful countenance before you get here.  It's the lesson that Dr. Colson taught me so many years ago.  The idea was to pull in karma before class so that my mind was ready to accept what would be in store for me.  This morning I realized that I do this without premeditating as to why I do.  And I had to dig deep to remember where I had learned it.

Thanks for stopping by for our weekly Sunday visit in the park.  Have a seat here on the bench.  I've dried off the morning dew from the bench.

Coming Out.  Our sociology, acceptable personal behavior and tolerances of other Americans has certainly changed since, say the Korean Conflict.  Yesterday I was in our neighborhood Wal-Mart looking for a birthday card.  I saw a section of cards titled "Coming Out."  Apparently these are made for gay people to use when they decide it's time to tell their family and friends.

Lessons from Our Children.  Last week our friend Robert Lacquement sent me this.  "When someone loves you, the way they say your name is different. You just know that your name is safe in their mouth."  Billy.  Isn't it true and wonderful?

Edward R. Murrow.  Still today Mr. Murrow is considered to be the world's greatest and most ethical broadcast journalist ever, even though he's been dead since 1965.  The 2005  movie written and directed by George Clooney about Mr. Murrow's exposure of the famous McCarthy Hearings should be seen by all Americans.  It's titled "Good Night and Good Luck," the signature closing of every Murrow broadcast.

Those who remember seeing Mr. Murrow's news pieces will find David Stratharin's portrayal of him totally uncanny.  If you haven't seen "Good Night and Good Luck," rent the DVD.  We got ours from Netflix.  Eric Sevareid said at Mr. Murrow's funeral, "He was a shooting star; and we will live in his afterglow a very long time."

Bud Buschardt.  You've undoubtedly heard the voice of Bud Buschardt at sometime during his fifty year career if you've listened to any of the national radio music broadcasts over the years.  Bud, who recently retired from ABC, has a home in the Dallas' Park Cities.  While he's from Houston, he's lived here for next to ever.

For some reason, Bud's dad began collecting records - 78s, LPs and 45s - a very long time ago.  Bud inherited the collection and continued the practice, and his home contains what is arguably one of the largest catalogued collections in the U.S.

Tonight, Bud's famous 1974 tribute, "The Day the Music Died" will be re-broadcast on KMNY - 1360 AM between 6 and 9.  Streaming is at http://www.hificlub.net/.  A fascinating account and loaded with lots of memorable recordings.

This coming week Bud and I plan to have our irregular monthly lunch together.  We used to go to the Steak and Ale over by the huge ABC broadcasting complex on Monford, but I'll bet we'll find some place closer to North Dallas from now on.

Annuities.  About 1965 I knew I was deficient in my knowledge of life insurance.  Irrespective of what the business professors thought when they were lecturing on it, they hadn't left the class with enough practical information much less the technicalities of insurance products and underwriting.

So for my own benefit, I registered in the Chartered Life Underwriters (CLU) program in Houston, knowing that I couldn't actually attain the designation because I was not employed in the industry.  From its course study reputation, I knew I could learn there what I wanted to know.  I want to pass on to you what I think is the most important lesson I learned. 

There is nothing more misunderstood or is their an insurance product where there is the potential for more underwriting abuse than in annuities.  Nevertheless, with people living years past their retirement, there is no financial product that has more importance in the foundation of a person's wealth.  If you haven't already, you should study the many anuity products available, along with a trusted financial adviser, and pick the correct one for you and your situation.

The Real Definitions.

Arbitrator:  A cook that leaves Arby's to work at McDonalds.

Avoidable: What a bullfighter tried to do.

Bernadette: The act of torching a mortgage.

Burglarize:  What a crook sees with.

Counterfeiters: Workers who put together kitchen cabinets.

Eclipse: What an English barber does for a living. 

Eyedropper.  A clumsy ophthalmologist.

Heroes: What a guy in a boat does

Suedafed: Brought litigation against a government official.

Thanks for stopping by today for our Sunday after church visit.  Although it's cloudy and misty today, a bit chilly, the air has the smell of an early Easter.  See you next week, and remember...

GOD Blesses!

Pen and ink drawing of Bill in the Park by Galveston artist, Carlotta Barker

Copyright 2008 - William S. Cherry

All rights reserved

PREFACE

In 1975 I read in "The New Yorker" about and bought a new book with an intriguing title:  Ethnic America by Thomas Sowell.  Dr. Sowell is a black man who, at forty-five, decided he was going to get to the bottom of why black Americans had, in general, not progressed as much as many of the other ethnic American immigrants.

<<---Dr. Thomas Sowell

He meticulously took every major group that had immigrated to America, and traced them from Day 1 to see what they had accomplished and how they had gone about doing it.  Each group was a separate chapter in the book.  It was fascinating.

One of the things he said he learned through his research was this: "Blacks were not enslaved because they were black but because they were available. Slavery has existed in the world for thousands of years. Whites enslaved other whites in Europe for centuries before the first black was brought to the Western hemisphere. Asians enslaved Europeans. Asians enslaved other Asians. Africans enslaved other Africans, and indeed even today in North Africa, blacks continue to enslave blacks." 

Dr. Sowell became one of my heroes.  He has been a senior fellow at the Hoover Institute at Stanford University for years.  I have followed him as an author of more than twenty-five books, most on economics and culture, as well as regular columns he, in the past, contributed to Forbes Magazine.  He has made me do a great deal of thinking and, consequently, he has taught me more about the subjects I formally studied than I ever learned in the classroom.

Mr. Justice Clarence Thomas wrote that Dr. Sowell was one of his early heroes, too, and helped him mold his opinion that the Bill of Rights and Constitution sees no race. 

Two books of Thomas Sowell, both published last year, are worthy reads for those interested in economics:  Basic Economics: A Common Sense Guide to the Economy and Economic Facts and Fallacies.

MY THOMAS SOWELL STORY

About ten years ago, I decided I wanted to tell Dr. Sowell how much he had meant to me, and further, I childishly wanted his autograph.  I concocted the idea of tracking down his personal address and then writing him a nice note.  "Surely he'll be flattered and respond," I thought.  Then I'd not only have his autograph but a letter from him to me.

Patty told me it would never work.  She further admonished me for even considering the idea.

I wrote and sent the letter, anyway, and weeks and then a couple of months passed.  All was quiet on Dr. Sowell's end.  What was I going to do to get this off of dead center?  Patty was laughing.  "Heard from your new pal, Dr. Sowell lately?" she would chide.

I wrote him a follow-up, told him I had sent him this very complimentary letter and that since he hadn't responded, I knew it was an oversight, not because he was intentionally rude.

Within a few days, Dr. Sowell sent me back my original letter.  With a red pencil, he had corrected two punctuation marks, one typographical error, and at the top of the page he had given me a grade of B-Plus.

At the bottom, he had written, "I get so much mail from readers that I can't take the time to respond to them.  (Signed) Thomas Sowell."

If you don't know my friend, Tom Sowell, you should.  (I still don't think I'd better try calling him Tommy.)

Copyright 2008 - William S. Cherry

All rights reserved

I remember the first time I heard the word "fiduciary."  As any Latin student was taught to do, I mentally clicked through the Latin vocabulary in my mind, and I knew that "fiduciary" was from the Latin root "fiducia" and that means "trust"

Fiduciary is pitched around by bankers and stock brokers and real estate salespeople, even lawyers, and let's be sure we don't leave out administrators of estates, guardians of old folks and mentally incompetents, and business advisors. 

Fiduciary is pitched around by them as though it were the silver bullet they were shot with the day they got their license to practice their chosen profession. 

They infer that that silver bullet gives them an honesty above reproach, and further, that that acme of honesty doesn't exist for those who are not fiduciaries; the ones not shot with the silver bullet.

I have grown to hate the word primarily because when I hear someone tell me "I have a fiduciary responsibility," it's a red flag that he 1) either doesn't know what it means, 2) he's getting ready to try to violate it, or 3) he is inferring he has the knowledge to be a fiduciary in a particular subject when he doesn't. 

I sometimes think ministers and rabbis should be added to those who have fiduciary responsibilities.  For an example, many have near-phony credentials, yet they present themselves as "Dr. So-in-So."  That doesn't cut the mustard either.  Give them a list of a hundred Bible characters who did not play a part in the stories they had in Sunday school when they were kids, and they can't tell you who five of them were. 

You see, that a person is a fiduciary means he has greater knowledge and expertise about the business he is handling for someone else, and he has asked that they trust that he does and that he will exercise it on their behalf.

"A fiduciary must be held to a standard of conduct and trust above that of a stranger or of a casual business person," one jurist wrote.

Like a stockbroker, a real estate agent must consider the best investment for the client and not taint his advice on the basis of what will bring him the highest commission.  And this is the trap that those who the court defines as fiduciaries frequently break or are caught with little or no documentation to shore up the business decisions they made in their agency capacity.

While a fiduciary and the beneficiary may join together in, say, a joint venture investment in a piece of property, the best interest of the person who is not the fiduciary must be primary and further, all thoughts, recommendations, advice and actions of the fiduciary must be made with absolute candor to his joint venture partner.  When something goes wrong, that that candor was prevalent while the business was being conducted is usually hard to prove.

Frankly, I'm a real estate adviser when I am paid a fee for my services.  That's when I will agree that I am a fiduciary.  However, when I'm working for a commission, I don't throw that "fiduciary" word around.  I prefer it be inferred.  I don't want anyone to ever testify that I instructed them that I was their fiduciary.  I do my very best, but when the plaintiff's attorney asks, "Where you paid a commission for your advice and work?" and you have to answer, "Yes," in my opinion you have just let yourself be impeached in the eyes of the jury.

Copyright 2008 - William S. Cherry

All rights reserved

An interesting article showed up today.  "Feeling Misled on Home Price, Buyers Sue Agent," by David Streitfeld of the New York Times.

In Carlsbad, California, Mrs. Marty Ummel has filed suit claiming that she was misled by the real estate agent who was representing her.  She says the agent knew similar homes in the neighborhood were selling for less, but he didn't tell her because he felt she may back out of the deal.  If she did, Mrs. Ummel went on to say in her petition, he would loose about $30,000 in commissions.

Many real estate agents, including me, as well as any number of litigators feel confident that Ms. Ummel's claim will be the first of many.  In fact, we've been expecting it.

And how many may well be determined by what success, if any, she has when a decision is reached in her North County Superior Court trial.  It begins this Monday.

Those who want to point a finger at the cause can stick it in the eye of our own industry that, somehow, decided that when we are being paid a percentage of the sales price, we can be representing either the seller or the buyer.  Now we have seller's agents, buyer's agents and a new thing called "dual-agency."

Since I brokered the Garden of Eden to Adam and Eve for Yahweh thousands of years ago, real estate brokers, by definition, always represented the seller.  One had to jump through logic hoops to conclude otherwise.  And any argument to the contrary is and always will be weak, as long as the agent is being paid from the proceeds of the sale.

Nevertheless, real estate people got steamrollered, rolled over and played dead, and consequently finally accepted that there is dual agency.

Mr. Streitfeld believes this, too.  He says, "Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller."

Mike Little, the agent who is the defendant, also worked as a mortgage broker, and he arranged their financing.  And while he was at it, he's the one who offered to hire the appraiser whose job it was to evaluate the proposed purchase price.

And to add fuel to the fire of the $1.2 million purchase, the owner of the home that Mr. and Mrs. Ummel bought is also a licensed real estate agent.

The new way is not always the best way.  In my view, real estate brokers and agents should have only one piece of the puzzle: representing the seller as agent or sub-agent in the sale of his property.  That does not include appraising, brokering loans, acting as the notary, selling the homeowners policy and on and on. 

What do you think?  If you are an agent, do you think you now have some exposure similar to Mr. Little's?

Copyright 2008 - William S. Cherry

All rights reserved

                                             BILL CHERRY REALTORS

214 503-8563

Our 43rd Year Serving Texans 

DALLAS AREA RESIDENTIAL SALES DATA

JANUARY 1, 2007 THROUGH DECEMBER 31, 2007    

The information provided above was compiled from files of the Metrotex Association of Realtors Multiple Listing Service.  Neither they nor I warrant the accuracy, although we believe it to be correct from the data on file.

 SUNDAY IN THE PARK WITH BILL CHERRY, 14th Edition

If it's going to warm-up today in Dallas, it had better get busy doing it.  Although the day is clear and crisp, it's a bit brisk on the bench here in the park.  Thanks, though, for stopping by for our weekly Sunday after church visit.

THIS PAST WEEK one of my blog subjects dealt with those whose marketing is primarily devoted to stating that they are Number 1, the Top Realtor, the Best OB-GYN doc, sell the most fried chicken, or whatever.

Several hundred have read the piece thus far, and about eighty or so have taken the position that they feel those ads are usually deceitful and objectionable.  I think if they stretch the truth or are blatant lies, they are totally unethical.  And that they are used without audit shows that professional organizations that claim to monitor their members have serious flaws.

Here are the thoughts and things that we might want to ponder today.

J.M.W. TURNER.  19th Century English artist, J.M.W. Turner gained his fame as a landscape artist working in oil and watercolor.  The Dallas Museum of Art will show 140 of his works, the most comprehensive retrospective of his career ever held in the U.S.  The show will be hung from February 10th through May 18th. For more information: 214 992-1247.

CHUCK WILLIAMS.  This is the guy who took what he learned about repairing cars in his dad's repair shop, and became an airplane mechanic for Lockheed in India and Africa during World War II.

<<--Chuck Williams, circa 1947

After the war, he moved to Sonoma and for a number of years was a successful builder.  Then seven years or so later, he bought a hardware store and began adding French cookware to its inventory.  But it was when he was the first one to import the Cuisinart food processor that his store hit real pay dirt and transformed itself into America's most famous cooking supply store. Williams-Sonoma.

Although he sold the company years ago, approaching 93-years old, Williams still contributes recipes to the company's cookbooks and catalogs.  The company also owns Pottery Barn and Holds Everything.

WILLIAMS-SONOMA FEBRUARY CATALOG.  Among the culinary hardware and gifts are many pages dedicated to "preserving the culinary traditions of New Orleans."  Peppered throughout are authentic Crescent City recipes for gumbo, Brennan's chef Lazone Randolph's famous bananas Foster, Chef Leah Chase's red beans and rice, Central Grocery's muffuletta sandwiches, and my favorite, Antoine's eggs Sardou.

You can order the homemade olive salad that is the garnish for the famous muffuletta directly from Central Grocery, 923 Decatur St., New Orleans, LA 70116 (504) 523-1620.  Patty and I call 'em up and buy four jars at a time, twice a year.

NEW ORLEANS.  After spending a couple of years living in New Orleans as a college student and as a radio host for American Airlines' famous "Music ‘til Dawn" program, I admit that I have always fantasized about going back as a permanent resident.  At 67 and with a wife who loves Dallas, I'm resigned to the fact that won't happen.  Patty's infinitely more important to me than New Orleans.  But nothing can keep me from loving it with all of my heart.

WORLD WAR II.  In the spring just before the war was over, I was playing with my friend Butch, when a military officer rang the doorbell of his mother's home.  The soldier was there to tell her that her husband, Lieutenant Walter A. Kelso, Jr., had died as a captured prisoner of the Japanese aboard the merchant vessel Oryoku Maru on December 13, 1944.  I can vividly remember what Mrs. Kelso, Butch and I were each wearing, where we were standing in the living room and I remember trying to understand why his daddy would not be coming home.  Sixty-three years later, I still don't fully understand.

Lt. Walter A. Kelso, Jr., circa 1942 -->

A couple of years ago, Butch's son Mark, who I proudly call my surrogate nephew, began and completed an enormous research project to find out once and for all the history of the American soldiers who had been aboard the Oryoku Maru, but especially his grandfather.

Mark, a computer wizard, a Galveston Realtor and an Active Rain member, launched a web site that you must visit.  Oryoku Maru.  You will see the callousness of our enemy in a way that is quite different than you have probably heard before.   It seems that most of those accounts were seriously deluted.

There are many photos as well as the story itself.  Interestingly, Mark discovered that entertainers Tom and Dick Smothers' father was also a prisoner on the Oryoku Maru.

HILLARY CLINTON.  A friend of mine emailed this photo.  I pass it on to you just for the heck of it, not as a political statement one way or the other. 

I will say, though, that I'm not sure I can endure another nine months of this campaign   

And further, there is a very interesting article in this week's (1-21-08) The New Yorker by Ryan Lizza titled "Minority Reports."  (To the right is the accompanying editorial cartoon)  If you have the opportunity, be sure to read Mr. Lizza's piece.

McShan Florist.  When we were teenagers, three of us chipped in to help our friend J.E. Tramonte who worked in a local flower shop after school.  The Cagnolas who owned Elbert's Flower Shop were fabulous designers, and they taught us well.  I can still do it, and I can still make the plush bows. 

So I've remained very picky about who I buy flowers from because of that experience.  In Houston, there were none better than Harry Rice's and Leonard Thorpe's shops.  Only a shop called The Empty Vase came close. 

Here in Dallas, it's Bruce McShan's floral designers.  Bruce's family has been serving Dallas since 1948.  Here's their phone number.  800 627-4267.  Tell them how much you want to spend and turn them loose to make your gift enormously memorable. 

Do not under any circumstance ask for one of the wire service designs.  Those things, in the main, are miserable and they use the fan configuration that hasn't been in style since Dorothy Lamour, Bob Hope and Bing Crosby made the first Road picture ("A Road to Singapore" 1940).

Thanks for stopping by for the visit.  I really do look forward to seeing you each Sunday when we can get away from talking about real estate

It's fun to explore with you the things I've thought about and learned since our last visit.  So, I hope to see you next Sunday after church, and remember that...

GOD Blesses!

Pen and ink drawing of Bill in the park by Galveston artist Carlotta Barker

Copyright 2008 - William S. Cherry

All rights reserved

Bill's Town Hall Column  Bill's Texas Escapes Magazine Column

Dallas Homes  Highland Park Homes  Park Cities Homes  Lake Highlands Homes Galveston Historic Homes

Business Week is reporting interesting statistics this week.  Their cover story shows the Twenty Top Housing Markets in the US, contrasted with the Twenty Worse Housing Markets in the U.S.

            Texas had four of those Top markets and none of the Worse Markets:

7         Austin    1.5 million         Median Price $188,000

8         Beaumont  379,640         Median Price $128,000

15        San Antonio  1.9 million   Median Price $154,700

18        El Paso    746,310           Median Price $135,800

<==BILL CHERRY REALTORS WORLD HEADQUARTERS*

            Interestingly, as so frequently seems to happen, there are so many cities in California and Florida that over-built, that the two states share the award for the most cities with bad markets.

            California has nine of them; Florida has eight of them; and Michigan, the only other state with a mention in the list of bad markets, has three of them.

            Overall, Texas remains in a rather enviable position.

*Wishful thinking.

Bill Cherry, Dallas Broker

Our 43rd Year Serving Texas

214 503 8563

Copyright 2008 - William S. Cherry

All Rights Reserved

Dear Active Rainers:

A friend of mine, John in Oregon, read my recent blog on Soverign Fund investment activity in the U.S., and sent his take on the matter.  All of the following is a direct quote without any additions or admissions from me to the editorial content.

Bill Cherry

----------------------------------------------------------------------------------------------------------------------

The capital markets are a never ending sources of fascination. They work differently in different places.

In Europe - the great banks were the center of capital- with weak capital markets, representing private wealth. Europe is still only now coming into its own after recovery from the great wars of the last century. The common market is breaking up some of these national concentration of capital. We are seeing London going back to a status as a premier source of world capital. The human capital necessary to sustain capital markets does not exist in much of Europe.

In Asia, groups of major corporations also had a bank at the center -- In japan and Korea. These industrial groups took risks that private markets were unable to fund or handle. The elite groups went to the same schools and intermarried. The result are ties that in this country would be illegal. The government itself has sponsored these groups and promoted types of preferred industrial activity - cars and electronics in Japan.

In Japan private savings are still held largely in the postal banks rather than invested in the stock market. 10 years of a down market will do that.

The sovereign funds are hardly new. But they are being used in a new way. China without a recent capitalist tradition could have been predicted to adopt the Japanese model of development-- but there were no large banks, no great corporations to work with. The same in Singapore and most of the mideast. Instead you have state owned businesses, small capital markets, little private savings. And you had western investors wanting government guarantees on their investment.

What is unique though is what these sovereign funds are investing in. The Japanese were happy to buy trophy buildings. golf courses and Hawaii and West Coast real estate of all sorts. They went bust.

The new sovereign funds may have learned from the Japanese. Buy real stuff. Buy strategic assets. Buy stuff on a risk adverse basis.

As to the model for the sovereign funds. The State of California pension fund has well over 150 billion dollars. My own state Oregon has more than 40 billion in pension funds. The total in the State pension funds is in the trillions. The social security fund has trillions as well in its accounts.

Social Security can't be considered as an active investor- but the state pension funds. California leads in investor activism. Oregon has been a major source of funds for KKR and other hedge funds.

Going beyond the states - look at our leading educational institutions, Harvard has an endowment of near $40 billion. Texas is not far behind. The top 50 educational institutions hold over a trillion in investable funds.

The great pools of capital all act alike. Economics may be a dismal science but when the directors of these pools of capital receive the same training and want the same objective-- the results are predictable.

I must admit to sharing some of your concerns. The last time we have seen concentrations of wealth on this scale, we had the Protestant reformation. Henry the VII seized church properties to pay off government debt. The English church concentrated more than half of England's wealth in one institution. That simply represented too great a threat to the central government.

And I would assume that some point in the future these great pools of capital will be confiscated by governments... or otherwise dispersed. Governments tend to be jealous of competing power centers.