Volume 47, Issue 2 - March 2008
A dealer’s perspective
by R. Mark Reasbeck, owner of Coyote Springs Window and Door of Las Vegas. Mr. Reasbeck’s comments are solely his own and do not necessarily reflect those of this magazine.
If I’m Elected President
I Promise …
By the time this is published, I will have attended the Nevada Presidential Caucus. At this point, I can’t say it was a great experience, so I’ll wait to tell you that once it’s actually true.
This magazine does not take a political stand and I understand why. But I would just like to use this forum to encourage everyone to pay attention, find out where candidates stand and get involved.
This is a critical election and we have such a diverse group of candidates who will do most anything to snag your vote. With our industry in the toilet (in my opinion), we need to search out the best candidates who understand we don’t just need change, but we need someone who will preserve our way of life. With that in mind, if I had it in my power to make wholesale changes, this is what I would do to turn our industry around:
There Are Two “I’s” in Sacrifice
No one escapes sacrifice. To turn this around, it’s better to get pinched than hit with a knockout punch. In order to build new homes, the glut of repossessed homes needs to go away. But how do we do this?
From what everyone tells me, banks do not want to be in the real estate business. But, when an upside-down homeowner walks away, the bank gets the keys. Why not sit down with the homeowner, find out where his “cap” payment is, reverse-amortize the mortgage so that the payment doesn’t adjust and extend the payoff with an adjusted fixed-rate mortgage? Maybe a 30-year adjustable rate mortgage (ARM) becomes a 40-year fixed rate mortgage. Then the homeowner gets to stay in his home and property values remain intact, because there are no foreclosure sales in existing neighborhoods. The overall inventory decreases, creating a demand for new housing. Will you look at that? I should run for president.
Your turn RE-Century-Garden-Keller-Max realtors.
Half a dozen years ago, the median house price in Las Vegas was $145,000. With a 6-percent real estate commission, it cost the homeowner $8,700 to sell his property using an agent. Depending on the market, that house could now be valued at an upwards of $500,000. With the same 6-percent commission, it now costs the homeowner $30,000 to use an agent. Let’s get real here. What extra value is the seller getting for three and a half times the previous commission amount?
With higher property values, many people are upside down just because of the realtor fees. My proposal would be to set a standard fee for listing your home in the realtor multiple listing service (MLS). There could be several ways to decide fees, but maybe the fairest across the board would be having different increments according to square footage. You can’t convince me that selling a 2,500-square-foot house deserves a $30,000 total commission. I believe this would help move existing inventory and stabilize a more logical value-gap. I also believe it would help create a marked distinction between purchasing an existing home and buying a new one, helping move-up buyers to re-emerge in the market place. As a result, homes would spend less time on the market and you realtors wouldn’t send me hate mail. You would sell more homes, at a reasonable commission, instead of making a killing on one house, twice a year.
OK, I probably lost the realtor voting-block for president here. Remember, sacrifice escapes no one.
First Ma-Bell Now Ma-Home
Years ago, the phone company was just that—one phone company, nationwide. With the break-up of Ma-Bell came the upstart of regional telephone companies, yet all using the same phone lines. According to one of my window reps whose territory includes seven Midwest and Southwest states, the markets that were not hit as hard with a downturn all have one thing in common: the absence of national builders. I agree. The “Wall Street Builders” have hurt the boom markets. Bully tactics on acquisitions, land hoarding and subcontractor abuse have taken their toll. I know dozens of business owners who will tell you, in private, that they wish the top-ten builders would leave town, because there are no loyalties and low-bid is high-king.
Case in point, a national builder called me and told me that, due to a slowdown in business, “my part” was now going to be supplying free glass replacements—regardless of whether the damage was due to vandalism, construction or unknown reasons. I was now supplying free glass and labor. I asked, “What if I can’t afford to participate?” I was told it would go out to bid. My response to that was, “So, if I have a contract in place that excludes this free glass, yet I don’t comply, you will terminate my contract?” I was told yes. “Isn’t that a form of extortion?” I asked. She apologized and said it came from the top, and I could take it or leave it.
Thousands of contractors would love to see the break-up of Ma-Home. No doubt I jeopardized a few votes and probably some contracts here—see, sacrifice doesn’t exclude me.
Mark’s Blueprint to Get Blueprints
Another area of concern includes the way we build houses. Instead of looking at “green,” how about looking at “lean?” Lean in the area of energy consumption, that is. Let’s trade that natural-gas-burning, ambience-providing fireplace for a small wind generator. How about solar panels designated specifically for HVAC operation? Along with that, how about a real rebate program for builders, so these things eventually become standards? It would be no different than when they changed building code requirements for SEER ratings on AC units.
A year from now, we may look back at 2008 and call it: “The Year of Thinning the Herd.” Take a deep breath, and welcome to the world’s longest roller coaster ride.
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