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Unfortunately, I think I jinxed the US Senate's recent attempt to add an amendment to the stimulus bill that would have increased the homebuyer tax credit to $15,000 (read my previous post).  The final version that made it through both houses ended up with a first time homebuyer credit of $8,000.  While not what the Senate had hoped for, it is still a very meaningful credit and, unlike the current incentive in place, it does not have to be repaid.

It looks like Washington is finally going to do something significant to support the housing market. Last night the Senate passed an amendment to be included in the economic stimulus bill that would give all homebuyers over the next year a $15,000 tax credit. This is a vast improvement from the current credit, which gives first-time homebuyers a credit of $7500 that must be repaid over a 15 year period, effectively making it an interest free loan. The new amendment, sponsored by Senator Johnny Isakson (R-Ga.), has a few minor caveats – e.g. primary residences only – but by and large it’s as good as it appears. Uncle Sam is truly paying you to buy a home. The effect on the housing market could be substantial, as the new tax credit gives prospective homebuyers a reason to jump off the fence and get into a home.

Being out at Inman Connect last week, I had far more time than usual to think about the big picture—what are we doing? How is it different? What’s wrong with the current system? Several themes emerged from this thinking, and I don’t have time for all of them right now. So I will start with one...

Online real estate directs consumers toward less-good agents.

Think of the pool of local real estate agents as a pyramid, with the best agents at the top. They are experienced, knowledgeable, professional, and businesslike; they are an active part of a local community of other top agents. If you were the ultimate real estate insider, these are the agents with whom you would work.

They actually do help you sell homes for more, buy better homes for less and solve problems when they inevitably arise. In short, they really do all the things NAR says every Realtor does.

At the bottom are the opposite kind of agents: newbies, part-timers, outdated old-timers, low-volume, slow-volume, no-volume. Basically, they’ve got a license. Over 2.77 million people in the U.S. do—what are the chances that any particular one of them is really good at their job?

In between is everyone else—OK, average, and pretty-good agents who do their job and move buyers, sellers and homes through the system.

So there’s your pyramid, probably similar to that of any other field or occupation. Take doctors or architects or IT guys and the breakdown works the same way (though the ease of entry to real estate caused the bottom of our pyramid to swell between 2002 and 2006). In all cases, it’s pretty obvious who you want to work with, right? The question is just how you identify and find them.

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I spent the last four days in San Francisco at Inman Connect 2008, the leading real estate-meets-technology conference of the year. For a down year for the real estate industry, it certainly seemed crowded to me (through it was my first time, so I don't have a benchmark). While the sample might be somewhat skewed, it sounded like many brokers and agents were using this downturn to redirect traditional advertising dollars online. So maybe that helps explain the turnout.

There was a lot said about blogging, both by agents for consumers and among those in the real estate and technology industries. This obviously served as a reminder that I my blogging has been woefully infrequent of late. So I'm going to try harder.

Another discussion of one of my personal shortcomings came from Merlin Mann, the keynote speaker, proprietor of 43folders.com, and proponent of Inbox Zero. In short, he tries to give people (like me, and probably you) who can be overwhelmed by email a way out. He has a fairly simple and specific system to accomplish this, but it only works with a parallel attitude adjustment about what email is and is not. Worth a look.

I attended many sessions; as expected, some were more interesting or useful than others. One packed session was titled "Brokers & MLS vs. Listings Aggregators." Basically, it was a discussion of the merits of listing aggregators like Trulia and Zillow, and whether they were friend or foe of real estate brokers and their MLSs. It could have been really interesting, but while Trulia and some brokers and MLSs who supply them listings data were on the panel, there was really no one on the other side of the issue.

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What's a "short sale"?  In brief, it's when a homeowner sells their home for less than what they owe on their mortgage(s).  Obviously, in order for this to happen their lender needs to agree to the deal and get less than they are owed.  This is why you will often see the words "Third Party Approval Required" on a listing.  That's code for "The seller's lender needs to sign off on any deal."

There is a perception in the market that because there are so many "short sale" listings then lenders must be signing off on these deals.  Unfortunately, the reality  is a bit different.  Lenders are agreeing to some short sales, but the majority of offers are rejected after a laborious and time consuming process.  Check out this article in The Wall Street Journal.

Bottom line: approach "short sale" listings with the idea that there are likely many obstacles to overcome in order to make a deal.  They are worth checking out, but manage your expectations.

As housing prices (and commissions) leapt up over the last few years, the number of real estate agents skyrocketed. Today, there are over 2.77 million of them—one in every 79 adults is a licensed real estate agent! (In fact, it’s much higher than that in areas with higher home prices.)

But as the number of agents has grown, the experience of the average agent has plummeted. The vast majority of these agents haven’t been in the business that long, operate part-time, and don’t do that many deals each year.

Increasingly, real estate brokers have focused their attention (and marketing) on bringing in as many of these low-volume agents as possible. They pay them significantly lower commission splits than top agents and are more likely to get business for their high-profit mortgage and title companies. (Top agents and teams often shy away from the in-house lender and ABA settlement company.)

The idea is that these new agents will sign up their friends and family when they’re ready to buy or sell. And guess what…it works. But that doesn’t mean it’s a good system.

These brokers want you to make a subjective, personal decision in picking your agent—more like deciding who to invite to your party. Who do you already know? Who will be offended if you don’t pick them? Who do your friends like best?

Sawbuck is trying to do things differently. We want to help buyers find an agent for better reasons. Who has the most experience in this neighborhood? Who can provide unique insight into the homes you like? Who has the best chance to know that a house you’ll love will hit the market next week?