All, Global Carbon Transfer

Global Carbon Transfer, and Evidence for Global Warming

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Global Carbon Transfer

I have said before that we should call this concept we are all familiar with Global Carbon Transfer. That is what it is and always has been.

Global Carbon Transfer is directly measurable.

The term “Global Carbon Transfer” is completely accurate to what we are actually doing. We know that we are transferring carbon.

The name “Global Carbon Transfer” allows for consideration of other unknown effects that we have yet to identify that nobody even talks about.

We are transferring a lot of carbon from the ground to the atmosphere. This is an indisputable fact.

Simple Man’s Evidence for Global Warming

I personally believe that global carbon transfer is causing significant man-made global warming. Here is a list of the evidence that shapes my concept of the world, my personal observations that lead to my belief:

  • I learned in Physics class in high school in ~2001 that carbon dioxide reflects infrared light / heat more than the other more highly-abundant components of the atmosphere. This makes sense to me. It would be difficult to fake this, easy to confirm or refute. I put this under the heading of scientific fact.
  • We learned what the greenhouse effect is, and I have personally been inside both a hot car in the sun, and an actual greenhouse. Fact.
  • I have personally seen an equilibrium exhibit a large change based on a small increase in a catalyst. For example:
    • Milk goes sour if you drink from the carton.
    • I saw chemicals abruptly change color in chemistry class after just drops of liquid entering.
    • If I had drunk two beers this morning instead of two cups of coffee, my blood would have changed by less than one percent, but I would absolutely not have written this post.
    • Small change can yield big change.
    • Catalysts exist.
  • I have seen man affect the environment, both for good and bad. Some of these I didn’t personally see of course, but they happened:
    • Water quality in Columbus, Ohio versus Rio de Janeiro.
    • Chemical disaster in Bhopal, India 1984.
    • Smog in LA.
    • Scale of the Piper Alpha explosion in 1988.
    • Personal accounts of the reduction in litter in the United States following anti-litter campaigns in the 1970s.
    • Chernobyl of course, but that’s nuclear not chemical, a whole ‘nother level.
    • Urban sewage management, cities now versus 200 years ago.
    • Forests versus fields.
  • I see carbon entering the atmosphere that used to be in the ground from sources that are less than a century old. Sound ridiculous? It’s everywhere. Everywhere. Try not seeing it! We could not transfer more carbon if we started a campaign to transfer more. Everything we do contributes to carbon transfer, and is mostly new!
  • The earth is really really old. There has been a lot of time for plants live, absorb carbon dioxide, respire oxygen, die, and be buried in the ground. Let me repeat, really really old, and a lot a lot a lot a lot of time. A lot. There has been so much time in fact that I no longer view the air I breath as coming from “the earth in general,” but as being the breathed out breath of plants. Call me a tree-hugger, but it is an accurate concept, much more accurate than the “general earth air” idea that comes easy. The atmosphere is and always has been a product of life and vice versa. It is a two-way street.
Some more carbon numbers, click here.
All, Global Carbon Transfer, Rage and Frenzy Politics

John Oliver, Archetype of the Cancer that is the Media

The News Story:

Bill Nye (of “The Science Guy” fame) recently sold out and went on John Oliver’s late night show:

Notes

Full bias disclosure: while I believe that John Oliver and for example, Donald Trump, are near equals in the damage that they do by being entertaining idiots / bullies in the media (both are both, if you can’t see that, then you are stuck firmly on one side), when they face off, I personally would enjoy watching Trump name-call John Oliver instead of the reverse. This is probably very simply because Oliver seems like a little weeny to me.

The subject of this post, whose name I am finished using so that you and I can successfully forget it as soon as possible, does not himself warrant a post. However, he so acutely represents a form of the cancer that is the mainstream media that his name gets to appear in my title here on Rage and Frenzy Politics, the most prestigious place it will probably ever be written.

I am going to use the stupid media term “global warming” here, rather than the more accurate and effective term, “global carbon transfer,” because we are talking about media bias, not the actual phenomenon.

The Perceived Problem

The perceived problem, judging by Bill Nye’s calling somebody “you f***ing idiots” (we don’t swear here at NathanRuffing.com, but in this case, it is a direct quote), is that global warming is caused, or at least allowed to continue, by some portion of the population who isn’t smart enough to understand global warming. I assume the idea is that this idiot portion of the population is voting for selfish policies that exacerbate the problem, and also probably spreading conspiracy theories that discredit the basic science behind global warming. I personally believe that these things have some truth to them, but what follows is the actual problem.

The Actual Problem

The actual problem is that we – and I do mean we human beings, all of us, especially those of us living in industrialized nations – are logistically supported by the energy that comes largely from transferring carbon from the ground into the atmosphere. Keep in mind, I did not say that we are the problem, I am saying that our source of energy can cause problems that we did not foresee when we started using it.

The current population of the world is 7 billion +. That is seven times the population of just 200 years ago, and ~25x the population of about 1,000 years ago. That is a significant increase. On top of that, we use a lot more energy per person now than we did 1,000 years ago. This is great, and I am happy to be a beneficiary of this energy wealth, but we should recognize that we should conserve the resources that produce it.

The Mainstream Media

What does the mainstream media say?

One side of the media says that global warming is not happening at all. This side actually will go so far as to say that it is impossible to the point of ridiculous to even suggest that mankind could affect the entire atmosphere and the climate. The main evidence that I have heard cited for this idea is that some scientists faked data, and that there are large global climate cycles. Both are almost certainly true, neither is evidence one way or the other.

The other side says that global warming is definitely happening, and does things like have a “Science Guy” put safety glasses on, string swear words together, and take a torch to a globe while a laugh-track rolls. Very constructive, subject of this post, you little weeny. I agree with your science, but you are the ring leader of a half-political laugh-track circus whose carbon footprint is the size of most third-world countries. Your team of writers puts its energy toward corrupting Bill Nye The Science Guy into insulting half the country because it is more entertaining to call somebody stupid than to say something smart. Are you even the leader? I find it hard to believe. Who writes your teleprompter? Who tells that person what to write and not to write? Who pays that person?

My Opinion

I think I editorialized this post enough that you know my opinion.

The Solution

The solution is for us to identify things that we do that use a lot of energy, especially energy that transfers carbon into the atmosphere, and stop doing those things. The first thing that comes to my mind is the military-industrial complex. If you don’t know what the military industrial complex is, you should. Click the link for the Wikipedia article.

The military industrial complex is not a new concept. One of the greatest warfighters in our history recognized the military industrial complex and preached about it in 1935. Click for the PDF: War is a Racket, by Major General Smedley Butler, USMC

Stopping doing many things that transfer carbon into the atmosphere will be difficult. For example, if we fight fewer wars, trade routes will close, and prices may go up. This may include the price we pay for gas at the pump. This would be difficult. We would have to coordinate with each other and carpool to work for example. We might even have to live closer to work and bike there.

All

Venture Capital Criteria

After three years of experience in this type of investment, I made a list of criteria to use. Venture capital is must be flexible by nature, so the criteria are broad, but there are some components that must be present:

  1. Simplicity: Straightforward, valuable product.
  2. Consistent Action: People are doing hard work necessary to make the product with consistency and discipline.
  3. Frugality: Money is utilized exclusively toward value creation.
  4. Moral: Does overall good for the world. Not morally opposed to the product / company.
  5. Communication and Reporting = teamwork, team building. A business is its systems and people working together effectively. Communication is critical to developing a business.
  6. Common stock only. One and only one type of stock means everybody is on the same team. Companies are complex enough without having multiple types of equity. One type of stock streamlines the decision-making process. If “preferred shares” are introduced, there should be a good reason and the terms need to be understood by all stockholders.
  7. Investor must use money he can afford to lose.
  8. As investor, should meet the other investors, and at least one of them should be a successful institutional investor that has significant clout.
  9. What is the end-game? How are you going to get paid one day?
All, Ventures Quarterly

Ventures Update April 2019, The “Stop Doing List”

695 Riverview Drive

Still renovating, landlording, and taking notes about it for an operating manual. My favorite part is actually selecting the items to install and doing the work.

Here are the pictures from the most recent renovation, apartment B2:

https://www.nathanruffing.com/riverview/march-2019-b2/ 

I’m about to finish another renovation, apartment B4, within the next few days and I expect it to rent quickly. It is pretty much standard.

The next apartment, apartment A2, is more exciting. It will be the “Skunk Works” apartment with several major top-secret design overhauls that take some of my materials selection strategies to the extreme. It is unique, and minimalist but functional with high-quality materials. Should be done by the close of April. Stand by for photos next quarter.

Landlord’s Operating Manual

This is a double-down on the apartments. The manual describes my system in detail. I am looking to make it available to other landlords and aspiring investors.

PI Time
Piano

Kineomen

I remain the Secretary at Kineomen and record a monthly summary for the company.

Kineomen is trimming down to its winning parts.

Simple Kneads Gluten-Free Bread

Great product, great people.

www.simplekneads.com

These are the only money-making ventures that make the cut. I am trimming everything else out.

Friends’ Venture of the Quarter

Check out Travis and Marcus’ Paveway.

https://paveway.io/

They are five years out of the military, and this project has several years of momentum now. Paveway is about business development, and they just put up the website complete with a few blog posts. Read, comment, interact!

Below this point did not make the cut!

“Stop Doing List”

and lessons learned from four years of trying to do everything.

Real Estate Agent

(Maintaining the license!)

I am supporting my current clients, and maintaining the license, but not taking any new clients. I really appreciate all those who took a chance on me as a new agent and I feel fortunate that my clients are happy with their transactions. Real estate really is a lot of work, but it is fun too. Thanks everybody!

This was the most difficult to say ‘no’ to because I was just starting to gain some momentum and the money is great.

Don’t worry, I’m a part-timer for life! Any questions, let me know. Free advice, free guy with MLS access!

Meet Cbus TV

I would love to make this happen, but I simply do not have time. This is not a side-job. This would be full-time. Producing videos is time-consuming. Once you are reasonably good at it, figure an hour per minute of video, and that is if you already know what the content will be.

Clean video requires an hour per minute, PLUS thinking up and planning the content.

Nate TV

I still have the structure, the video equipment, and the editing software. I still have many videos that I really want to make! Down, but never out!

Park City Holdings

This ended some time ago, but I wanted to list it because I learned so much looking into the note business. It really helped me understand lenders’ motivations and value quality lenders as a real estate agent.

Columbus Area Technology Club

I love talking about tech.

Real Estate Agent by Location

This arose from my desire to do real estate close to home, and I hoped to help other agents do so as well, around the country! However, making money by referring is really hard to do. You are like the broker to the middleman and it is too many steps removed from the value creation.

Nate the Columbus Commuter Biker

Maybe with all these projects off my plate I can actually ride my bike again sometimes!

Art Gallery

I’ve dabbled in the idea of transporting art from Brazil for sale in friends’ establishments here in Columbus, but it’s another thing that just takes time time time. I will still write about it!

Uber Driver

People, my car is just too old and I’m not buying a car just to make $12 / hour!

The Stock Market

Every time I hear somebody talk about the stock market, whether up or down, I am so glad that I have reclaimed the time and energy by not paying attention to that pie in the sky to which I’m always an outsider.

Vino de Coco

I still plan to visit the Philippines. Still.

All, Comfort and Convenience Plagues

Industrial Everyday Consumer Relationships

What is a credit card?

A credit card is a card with a number on it that you can use to buy stuff.

Yes. Yes it is.

They also represent the systemization of all consumer relationships.

Credit cards have only existed since the 1950’s or so. That is not very long ago. So how new are they? Do they represent a completely new concept? As with many things that appear new, credit cards are really a transformation of something very old. In the case of credit cards, they transformed personal consumer relationships with vendors. The relationship is still there, but it has taken a different form, and different people and institutions handle it and profit from it.

Let’s consider 2 consumers: Consumer A, and Consumer B. We will consider how each did business in 1819, then we will consider how they do business now.

Consumer A: The Person and Habits

Consumer A is very responsible. He spends only what he makes. He is polite when he enters the store, makes his purchases and usually has cash on hand to pay for the merchandise. He likes a good deal, but pays the listed price. He considers debt to be a burden on his life and immediately pays it to keep his life clear. As the store owner, you happen to know several other people in Consumer A’s family who also shop in the store. Consumer A buys mostly bread and horse food, but enjoys the occasional beer with friends on the weekend.

In short, Consumer A is a responsible consumer who is a pleasure to do business with.

Consumer B: The Person and Habits

Consumer B is not responsible. He spends money when he sees things in front of him that he impulse buys. He is polite, but always seems like his politeness has an ulterior motive — hence when it comes time to pay, he is usually short some cash and asks for a “quick loan.” He likes a good deal — so he is always taking what he can get. Consumer B racks up little debt constantly and if you forget about it then so did he. As the store owner, you never really know Consumer B very well. Consumer B buys the necessities, but also a whole bunch of other stuff that nobody needs, drinks during the week and drinks too much on the weekends.

In short, Consumer B is worth doing business with, but only because barring him from the store would be more of a hassle than it’s worth.

Consumer A in 1819

Consumer A spends decades racking up goodwill with store owners, and store owners pay him in kind. When there is excess inventory of horse food one year that will go bad if they don’t give it away, the store owner takes Consumer A to the back of the store and gives him the horse food for free. When the store expands and gets rid of quality office furniture, it goes to Consumer A. When the store owner sees Consumer A at the bar on the weekends, he picks up Consumer A’s drink tab.

Consumer A normally has plenty of savings, but one time spends his savings to buy lumber to build a new house. The first day of construction, the load falls from the cart and breaks his arm. He can’t work for three months and is potentially mildly crippled permanently! The townspeople line up to help him out. The store owner drops off bread to his wife who is taking care of Consumer A. The horses eat for free. Consumer A recovers and manages to pay back the debt that he had his wife keep track of. The store owner and townspeople accept some repayment, but in the end Consumer A is hardly able to pay back what he actually received. There was certainly no interest added to his debt.

In short, Consumer A gets a bunch of extra little stuff that adds up over time, and in hard times gets even more because of the goodwill he had built up with others.

Consumer B in 1819

Consumer B spends decades making everybody a little angry and uncomfortable. He has several enemies who hate him and will take everything they can get from him. When he accidentally leaves his cash clip on the counter, it disappears. No free horse food. When the office furniture was given away, he was the last to know and found out too late. When he passes out at the bar one weekend, he wakes up with nothing. The wallet thief gives some of the take to the store owner because he knows Consumer B owes the store owner money — but the store owner won’t take it because he doesn’t want the dirty money.

One day, Consumer B wakes up with a broken wrist and he doesn’t know where it came from. He spends his recovery time of four months alone begging for crumbs, and loses weight almost to the point of death, but eventually recovers angrier than ever and antagonizing everybody even more.

In short, Consumer B fights hard for tiny little deals constantly and loses every penny that isn’t physically attached to him. In hard times, he loses everything and barely survives.

The Store Owner in 1819

The store owner wants to sell stuff, get paid for it, and go home to his family at the end of the day.

The store owner deals with Consumer A and Consumer B because they both pay for the merchandise, although in the case of Consumer B only after three times as much energy was expended hounding him.

Consumer A in 2019

Consumer A has a credit score of 770 that was determined by algorithms that used Consumer A’s habit data collected and stored by financial institutions.

Consumer A buys everything on the same rewards credit card that constantly gives him 1% – 1.5% cash back on everything he buys, and up to 5% on some merchandise. He pays his credit card statement balance every month.

Consumer A constantly receives offers for 0% financing. Normally he doesn’t use this financing, but the one time when his new house was under construction and he breaks his arm, he charges everything to a 0% credit card and pays no interest for the three months that he couldn’t make his payments.

In short, Consumer A gets a bunch of little extra stuff — well, exactly 1% — that adds up over time to a nice vacation each year.

Consumer B in 2019

Consumer B has a credit score of 550 that was determined by algorithms that used Consumer B’s habit data collected and stored by financial institutions.

Consumer B buys everything on credit from whomever will lend him money. The best credit card he can get charges him the maximum interest rate allowed by law. He pays the minimum balance every month and pays one credit card with another if possible.

Consumer B constantly receives offers for loans to buy a variety of optional expensive items like furniture, electronics, new cars, fancy liquor, anything sellers can put in front of him to impulse buy. He takes the bait often enough that he is in debt to many creditors who hound him all the time.

In short, Consumer B has nothing because every penny to his name is already spoken for by a creditor.

The Store Owner in 2019

The store owner wants to sell stuff, get paid for it, and go home to his family at the end of the day. (Notice this has not changed at all).

The store owner deals with Consumer A and Consumer B because they both pay for merchandise with credit cards. He goes home at the end of the day with 97% of what Consumer A and Consumer B spent without even knowing who the consumers are as people. Where did the 3% go that would make 100%? He paid 3% of his sales to …

…

The Credit Card Company in 2019

The credit card company did not exist in 1819. However, what the credit card company does is far from new. In fact, ironically, people in 1819 were much more familiar with what credit card companies actually do than we are today in 2019. The credit card companies deal with the store owners, and they deal with Consumer A and Consumer B. They manage that relationship and make it transparent to all parties.

The credit card company goes to the store owner and says,

“I will make sure you get paid 97% of all that you sell. You don’t have to know the customers at all. As long as they pay with this card, you will receive 97% of the value of what they purchased. You will receive it from our bank, in one big monthly payment — guaranteed.”

The store owner says,

“I don’t have to deal with Consumer B at all, and I don’t even have to lend to Consumer A when he breaks his arm? Just 3%?!?! Guaranteed payment?? Done. Where do I sign?”

The credit card company (which is essentially banks) collect all the data from all the consumers no matter where they shop, and they collect all payment data on all consumers. They use that data to determine who is Consumer A and who is Consumer B. They then take 3% of all sales, plus the interest – charged mostly to Consumer B – as their revenue. From their revenue, they subtract the rewards given to Consumer A as incentive for being zero hassle to them. The credit card companies then use the remaining money to pay the wallet thieves and hustlers to take everything they can from Consumer B through consumer data sales to impulse goods salesmen, interest charges, general hounding, and repossession. What remains is the credit card companies’ profit.

In short, the credit card companies make a lot of money by charging 3% on all sales to deal with the few Consumer B’s out there.

All, Industrial Change Surfing, Rage and Frenzy Politics

Technopolitics

Geopolitics, from Wikipedia:

At the level of international relations, geopolitics is a method of studying foreign policy to understand, explain and predict international political behavior through geographical variables. These include area studies, climate, topography, demography, natural resources, and applied science of the region being evaluated.

If the geographical landscape affects politics, doesn’t the technological landscape affect politics also? Shouldn’t there be people studying how technology affects our politics?

Technopolitics, from my Rage and Frenzy Politics category:

At the level of national policy-making and international relations, technopolitics is a method of studying policy and foreign policy to understand, explain and predict political behavior through technological variables, especially as those variables change over time. These include technology market penetration studies, cultural attitudes, demography, information flow, and communication norms of the region and time period being evaluated.

Technopolitics, Historical Context

I remember my high school history teachers drilling into our heads the importance of the Gutenberg Press while I went through high school. They said it was easily the most important invention in the last 2,000 years. I remember because it seemed so dull at the time – but it finally clicked. We should all know about the Gutenberg Press and the Reformation, and the technopolitics of the world at that time. This should not be obscure history, this should be daily discussion. Who were the first political leaders in the wake of the press in the 15th century? Who issued the first political proclamation to be copied to a newly-reading populace? These are the right questions to be asking right now in the twenty-eighth year of the internet, very possibly the height of technopolitics for the 3rd millennium. I discuss it here on Rage and Frenzy Politics.

Modern Applicability of Technopolitics

Being the case that technology, especially communication, has fundamentally changed over the last century, technopolitics should be a focus of academia today. The internet went public 25 years ago. Information exchange changed fundamentally, and it increased exponentially. Many attribute the election of the current president of the United States to his use of modern communication technology in Twitter. This is such a simple truth to us that we are instantly bored with it, but it is also such a fundamental driver within our world that we must understand it more deeply.

Solution

Vote, … and participate in the multi-directional free exchange of thought on the open frontier that is the internet. But do it responsibly! Contribute your ideas to Rage and Frenzy Politics. Thank you!

All, Real Estate

Shades of “Cash” Offers

There are two main aspects to every offer. The first aspect is the offer amount (=money from buyer). The second aspect is the “strength” of the offer.

Offer Amount

This is very straightforward. No matter how the buyer comes up with the money, the title company will receive the agreed upon purchase price from the buyer / lender / salty loan shark, and distribute the money to all the people to whom the seller owes money in relation to the property and transaction, then the remaining money to the seller. For the amount, it does not matter where the money comes from, it is all the same money to the seller at closing: dollars $$$.

The amount that reaches the seller depends on the seller’s situation, and can be estimated with a Net to Seller, example here. It does not depend on the source of the buyer’s money nor what the money is labeled within the offer.

The only way that an offer of the same purchase price can yield less or more to the seller is if there is another specific amount written on the contract that obligates the seller or buyer to pay something at closing. The most common example of this is, for example:

“Seller to contribute $2000 toward buyer’s closing costs and related fees.”

Let’s compare two offers.

Offer A: $150,000 / $2,000 in closing costs.

Offer B: $148,000 / $0 in closing costs.

Offers A and B are equal in amount because in offer A – though higher than offer B – the title company will distribute $2,000 from the seller’s funds to the buyer at closing. Offer A might be slightly more attractive to the buyer because the buyer brings less cash at closing because of the money being “kicked back” by the seller. To the seller, these offers are essentially the exact same.

Other common examples are when the seller pays for a warranty on the house, usually $500-$600 to a warranty company, or perhaps the seller agrees during the remedy period to pay for some defect that was found on the inspection.

Offer Strength, The Cash Continuum

“Cash is king,” so cash can get you good deals! … This is true, but there are many factors that influence a seller’s decision of whether to accept an offer or not, or which offer to accept if there are multiple. From strongest to weakest, here are the types of offers that a seller can receive, why they are strong / not as strong, and also which types of sellers consider which aspects of offers. Imagine you are the seller in this case and you are receiving multiple offers of the same amount, but with different strength factors:

Strongest

Cash, “As-Is,” No Inspection

This means that the buyer accepts the house in its current condition. The seller need not so much as set foot on the property again, only give the buyer agreed amount of time to arrange his funds (1-3 weeks usually), schedule a closing, then sign the deed to the buyer and receive the money.

Sellers who care: this matters most to a seller who is selling a house for which most banks won’t issue a loan. For example, when floors are not installed (sub-floor exposed), banks often will not lend even if the house would clearly be very valuable with just $2,000 worth of carpet installed. Complete rehabs want cash buyers because they don’t want to wait for the buyer to convince a construction lender’s slow bureaucracy to finance his project.

Sellers who don’t really care: cash is always strong, but for example when a seller is selling a house that is almost brand new, built by a reputable builder in a neighborhood where 3 similar houses have sold recently after passing inspections for near the offered price, the seller doesn’t really care where the money comes from. A cash buyer might be able to close faster, but it is only a difference of a few weeks at most.

Strong

Conventional Financing

This means that the buyer has been pre-approved for a standard loan. Most banks can close within 30 days, and require an appraisal. The appraisal is the primary risk to the seller, and the seller might also care about time to close. Sellers usually prefer banks that specialize in mortgages as opposed to “big banks,” but on a normal deal, either bank will close within 45 days at the most, and usually within 30 days.

“The Cash Continuum”

As we progress down this list, the buyer is bringing less and less of his own cash to the table. More cash is a stronger offer, so sellers are more likely to accept, and also as a general rule, the more cash you bring, the better deal you get from the lender. Most people know about the cut-off at 20% down, where the lender does not require the buyer to purchase Private Mortgage Insurance (PMI), but 20% down is just one of several levels. 10% down gets a slightly better deal than 5% down. “No money down!” loans exist, but they are expensive like credit card loans. There are deals above 20% as well. Banks will often give slightly lower rates to buyers who can bring 30% or 40% down. Most people don’t even consider purchasing with cash only, but still the more of your own cash you bring, the less risk the lender is taking, and the better deal you get.

Not as Strong

FHA Financing

This means that the buyer is getting a loan with help from the Federal Housing Administration. The FHA is a government entity and has inspection requirements and bureaucratic paperwork to complete. These often take more than 30 days, carry risk to the seller, and require more work from both parties to complete. FHA loans are therefore less attractive to sellers and considered weaker offers.

Contingent on the Sale of …

This means that the buyer can only complete the contract and purchase the house if the buyer sells his house first. Agents often advise sellers to turn down these offers (while encouraging the prospective buyer’s interest as much as possible), and remain on the market. However, sometimes sellers will take the chance and accept such an offer for an attractive price (this means it costs the buyer money).

Another option for the seller is to include an “Escape Clause” in the contract that says the seller still has the option to escape from a contract and accept another offer if a second buyer comes along while the first buyer tries to close the sale of his house. Click here for an explanation of the types of contract contingencies / MLS status.

Click here for all real estate posts on this site.

All, Real Estate

Shades of “In Contract”

1 Comment

This is the continuum of how “in contract” a house it.

Imagine you are a buyer looking at houses and you want to know how available a house is based on its “MLS status.” In order from most available to least available, here they are:

Most Available

Active
  • The seller advertises that he will sell for the listed price. Make an offer!
Back on the Market
  • Same status as active, but the house was previously in a contract that fell through for some reason.
Active* …

*But Listed Very Low

  • When the list price is clearly below market value, it has only been on the market a few days, and it is a hot sellers’ market, there could very well be multiple offers arriving to the seller, and the house will go to the highest strong offer. These usually close for near market value rather than the advertised lower price, or “over list price.”
Contingent Escape
  • This means that the seller has a buyer who intends to purchase, but the seller demanded that the contract include an “escape clause” that he can “escape” from the contract if he chooses, i.e. something better came along.
  • The most common reason for a Contingent Escape status is that the seller received an offer from “buyer 1” that was contingent on the sale of another house. Rather than deny the offer, the seller gives buyer 1 a chance to perform, motivating buyer 1. However, knowing that such an offer can take a long time and be very fickle, the seller wants to have the option to take a stronger offer if buyer 2 comes along to swoop the house up.
  • When I want to search for just houses that are truly available, I do include Contingent Escape. These are not common, and it is better to be buyer 1, but they are likely to be available if you really want them.
  • When Contingent Escape, you are buyer 2, and you have to contend with buyer 1, but the seller is not obligated to sell to buyer 1. The seller can choose your offer if he decides that it is better.

Probably not Available

“Contingent on Finance and Inspection”
  • “Contingent on Finance,” and “Contingent on Inspection” do not exist separately as options on the MLS when the listing real estate agent enters status data. Therefore, when you see “Contingent on Finance and Inspection,” the seller has accepted an offer from a buyer, but the contract is still contingent on both or just one of these, finance or inspection. You do not know which without calling to ask. The agent / seller are not obligated to disclose the details of the contract.
  • The seller must sell if the buyer performs.
Contingent on Inspection
  • This means that the seller has a buyer, but the buyer has not yet completed the inspection portion of the due diligence. The inspection is probably the most common reason that a house returns to the market, but still is fairly rare. Either the inspector finds something unexpected that is wrong with the house, or finds something that that particular buyer will not accept.
  • When this falls through: the house is in contract, and the buyer orders the inspection. The inspector lifts up insulation that covered the basement wall and sees large cracks in the concrete blocks, indicating that the foundation is shifting. The buyer is now looking at a house with a major problem that affects the sale value and the buyer’s overall interest. The seller will now probably have to go back on the market, and now officially knows about the cracks and is legally obligated to disclose the cracks to all future buyers.
  • The seller must sell if the buyer performs.
Contingent on Finance
  • This means that the seller has a buyer, but the buyer needs a loan and does not yet have a loan commitment. The deal is very likely to close, but there is a chance that the appraisal will be low, or the bank may do an inspection and decline to lend on the house.
  • When this falls through: if the appraisal comes back below the contract price, often the buyer asks the seller to drop the price. The seller can then decline and go back on the market, accept the lower price, or demand that the buyer bring cash to cover the difference over the appraisal. The buyer is not required to brign cash unless that was written into the contract. These usually close, but in hot markets where buyers go over market value to get a house into contract, these deals fall through sometimes.
  • The seller must sell if the buyer performs.

Pretty Much Sold

Pending
  • This most often means that the seller has accepted a cash offer, no inspection, and is only waiting for the scheduled date at the title company or lawyer’s office to close the deal.
  • When a bank / loan is involved, once a contract has progressed through the inspection and remedy period, the appraisal is complete and sufficient, and the bank has issued a loan commitment (commitment is much more than a “pre-approval”) the status becomes pending. In the most common transactions involving banks and loans, the loan commitment is not issued until just a few days before closing, so the listing agent never changes the status to pending just for a few days. These go directly from “Contingent on Finance and Inspection” to “Closed.”
  • The seller must sell if the buyer performs, and the buyer is finished with due diligence. Pending houses are pretty much sold.
Not for Sale
  • What it means: You can make an offer on a house that’s not for sale, but of course you have to offer enough to make the owner want to move unexpectedly.
  • What you have to do to buy it: you approach the owner personally or through an agent and make an offer. The owner has to accept the offer.
  • Cool story: I heard of a couple in Washington DC who lived in a townhouse worth ~$800,000. They lived in the townhouse because they had sold their house in a nearby neighborhood that was worth ~$1.5 million. It was not for sale, but sold like this. They were eating dinner one evening and they heard a knock at the door. There was a Chinese couple at the door who asked to look around the house they’d like to buy it. The owners said, “Uh, OK, why don’t you come back tomorrow at x time.” The Chinese couple returned the next day, looked around and said, “We would like to buy it ‘as-is,’ with the paintings on the wall, furniture, everything, all included, how much?” The owners consulted with a real estate agent and a lawyer, and asked for $2.5 million. The Chinese couple agreed. Sold! for an extra $ 1 million. The Chinese couple’s daughter was attending a nearby university and they wanted a place to stay while they visited.
  • There are also companies that make offers on houses not for sale from distressed owners. “Cash for your house!”

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All, Comfort and Convenience Plagues

One Channel Versus Many

“TV is bad.” “TV saps your motivation and rots your brain.” “I don’t watch much TV (therefore I’m better than you).” “TV wastes time.” “Cable wastes money.” “There’s nothing on but trash.”

You’ve heard all that. I’m not going to beat those dead horses.

Cable TV

There is a milestone in the development of television that I believe often goes unnoticed and its societal impact under-estimated. That is cable TV and how cable is different from regular old antenna TV.

I lived in Rio de Janeiro Brazil for six months. Brazil has multiple channels, but for the most part, there is one channel to watch, Globo. The feel there was very different and it felt like lack of cable TV was largely responsible. I say “lack of cable TV” as an American born in 1983, but to them no cable TV – one channel – was normal, nothing to notice.

This is a bit of a rosy picture, but allow me some dramatization. It felt like one big family in Brazil with respect to the TV because everybody saw the same stuff. In Brazil, whether you love the TV darling Flamengo soccer team or not, they are the televised team and everybody watched. Love the current novela or not, everybody watches it at least a little, even in the bars. The news was limited to an hour because otherwise that’s all there would be.

The Good About One Channel

  • Everybody is on the same TV schedule, so it doesn’t get in the way of plans.
  • The news doesn’t have to sensationalize the news to compete with the others, so it is much less emotional and dramatic.
  • Less TV in general, that’s always good.
  • TV was kind of boring, so you didn’t pay much attention to it.
  • I enjoyed the two novelas that ran while I was there, “A Regra do Jogo” and “Velho Chico,” even though I struggled to understand. I was able to get lots of help though because everybody knew what was happening!

The Bad

  • Without competition, one outlet has a monopoly on politics and opinion. Many Brazilians felt like Globo was owned by specific parties and unfairly biased the news.
  • TV was kind of boring. Boring is bad I guess.

The Feeling

I have to admit these differences sound small, but the overall feeling and my perception that it was connected to cable television was really very strong. There was an overall ambiance that the collective attention was outside instead of inside, on others instead of self-focused. Even while actually watching TV, you knew that a good number of homes around were watching the same channel. If you could see in a neighbor’s window, you would see the same channel. If you go outside and run into somebody on the street, you would have just seen the same show. If you go to a bar, the only difference on the TV from your house is that 10 minutes had passed so it is likely later in the same show.

“Winter Storm Harper,” January 2019

I don’t know who started naming winter storms. It was kind of fun having everybody talking about the same thing, but it’s the weather, not the TV. However, instead of the weather – which was underwhelming – we were talking about the TV’s dramatization of the weather. Ridiculous. I heard the grocery stores ran out of food! Hilarious.

So by the way, when did we start naming winter storms?

“When ‘men’ started naming their penises.”

That’s the best answer I heard.

All, Rage and Frenzy Politics

Bigger Than Trump

Big News: Trump. Still Bigger: The Internet

Like him or not, Trump is the most powerful man in the world. He gets more attention globally than any other single person. His media coverage may be mostly negative, but they’re covering him, and more importantly, his coverage of the media is just as negative, and it matters. So what is bigger than Trump? The technopolitics that enabled him to turn the tables on the media and rise to the presidency are bigger than Trump.

The internet went public in August of 1991. The barrier to information dissemination dropped to zero. This is the defining event of our lives. This invention in the last decade of the 2nd millennium will be the defining event of the 3rd millennium. It seems old now after 25 years. It is not old. It is still brand new and its shock wave is still emanating.

The Only Thing Bigger: The Gutenberg Press

You will see a theme on this blog that the best historical analog to the internet is the Gutenberg Press. The movable type press was invented 500 years ago, which is a long time past, but like the internet does today, the press represented an exponential increase in the spread of information. Information spreading has far-reaching impacts. The details of the impacts are unpredictable, but the overall effect has direct historical precedence if you know what to look for and you look for general trends.

The Gutenberg Press, the first movable-type printing press that enabled documents to be copied by machine. Look at the changes that occurred within two centuries of the invention. The press fueled the Reformation that occurred from 1517 (Martin Luther’s 95 theses) to 1648 (end of the bloody Thirty Years’ War). The Reformation was a revolution of literacy and upended the monopoly on religion that the Catholic Church had held in Europe for more than a millennium.

Fake News, A Modern Inevitability

“Fake news” is one small example of the impact that information dissemination has. It is an example of the general trend of exposing corruption and eliminating information asymmetries that leads to tearing down of institutions. We could not have known that Donald Trump specifically would be elected, but we absolutely should have known that ideas would shatter powerful institutions like the established media, and the Republican and Democratic parties. “Fake news” is shattering the established media. The media reports Twitter. They have to. They have to report what Trump says on Twitter because 50 million people will hear what he says anyway, and is therefore by default, “news.”

What It Means

I don’t know exactly. I do know that the fall of institutions and the shift of power is not complete. The internet is still new and we need to pay attention to the technopolitics of what is happening to understand our modern world.

Solution

Get on Twitter. Participate on the internet. Don’t leave it to the power-hungry, narcisistic few YouTubers and Instagrammers. Hard to imagine, but I bet anything there were hold-outs when the Bible was first available to read in 1500. I bet there were many who refused to read Martin Luther’s 95 Theses in 1520. They missed out. We shouldn’t. Help me understand what is happening. Contribute your thoughts here at RageandFrenzy.com

Produce. Persist. Own. Succeed. Fail. Care. Do. Learn. Win.