Here’s a press release from the “Lending Tree of Real Estate Agents.”

LessThan6Percent Revolutionizes How Home Sellers and Real Estate Agents Connect

Press Release: LessThan6Percent – Mon, Apr 29, 2013 6:39 PM EDT

SAN FRANCISCO, April 29, 2013 /PRNewswire/ — LessThan6Percent (http://www.lessthan6percent.com), the online marketplace where home sellers can compare commissions and marketing plans from local real estate agents, is exiting its beta launch in the San Francisco Bay Area and expanding into Southern California. Founded in late 2012 by serial entrepreneur Simon Ru, LessThan6Percent provides home sellers a convenient platform to streamline the process of finding the best agents to represent their home.

"The problem home sellers face is that there are thousands of agents in any given market," says Ru. "It is difficult for home sellers to compare agents to find the best match. They don’t know what questions to ask, what to look for in a marketing proposal, or how to start the awkward conversation of negotiating services & commissions." This is where LessThan6Percent steps in.

LessThan6Percent differs from traditional agent-matching service such as Trulia (http://www.trulia.com/) and Zillow (http://www.zillow.com) by matching sellers to proposals submitted by agents rather than agents’ profiles. Instead of directing sellers to call agents’ numbers on a directory, LessThan6Percent transforms the matching process by having agents compete for sellers’ business. With a click of a button, home sellers would know exactly what services they are going to receive and how much they would cost. This level of transparency is unparalleled in the real estate industry.  

You may have noticed that LessThan6Percent is one of our newest advertisers, featuring that oversized entry form on the right. We’re certainly in accord with their business model. Some home sales are pretty routine, and there’s no reason why the six percent commission rate has been enshrined as unchanging. Personally, we’d like to see home sales done as flat fees, because that would mean the buyers’ agent wouldn’t have a financial incentive to advise you to bid more than a home is worth.

Then again, we are in Bay Area Bubble 4.0, every house is worth more than it’s listed for, and you couldn’t possibly pay too much for a place in the Real Bay Area. That means your agent was right to tell you to overbid by 85%.

Meanwhile, LessThan6Percent says you can specify what you want in an agent and look over the proposals you get in response.

And if their algorithm predicts you may be likely to sell, watch for their ads appearing wherever you surf.  This reminds us of that creepy datamining prediction that Target became infamous for: figuring out you were expecting before the rest of your family knew.

But LessThan6Percent also expects to reel in many leads through an algorithm that the company has created to identify people who are likely to sell. Ru said the algorithm scours a wide array of information sources, including social media, and then turns up likely sellers, like people who it’s discovered are having children soon.

The company then uses printed materials, cookies and keyword advertising to invite those people to use the site, Ru said.

- See more at: http://www.inman.com/2013/04/08/new-website-lets-sellers-see-proposals-from-listing-agents

According to Ru, the comments on this article were “getting heated” once a NAR official showed up. It appears Inman removed them by moving the article to a new location and conveniently neglecting to bring any comments along… or even allow them to be made.

LessThan6Percent envisions having agents slug it out for the right to sell your house. Why not have a good fight in comments on what you think of this idea? 

Today is Sunday, and that means… no A-Z Blog Challenge today. The schedule’s been set that we do a new letter every Monday through Saturday, and on Sunday you can go to church or look at Open Houses.  Or in the case of this story, courtesy of Burbed reader nomadic, you can combine both.

Judge Rules Against Bay Area Church Leaders In Real Estate Case

VALLEJO (KPIX 5) – A California state judge has ruled against two leaders of a prominent Bay Area church accused of bilking parishioners in an alleged investment scheme.

The judge ruled that General Assembly Church leaders Lacy Hawkins and Michael Parker operated a real estate investment company without a license, in violation of securities law.

KPIX 5 has been investigating Lacy Hawkins and Michael Parker’s involvement in the business deal, that church members said cost them millions of dollars. General Assembly Church has locations in Union City and Vallejo.

Hundreds of parishioners mortgaged their homes and drained retirement accounts on the promise of investment returns as high as 30 percent. Some said they were even promised salvation.

Yes, it’s not enough to have a religious leader in a fraud case, it has to have a realty component. And this one’s actually pretty interesting. Seems this was one of those We’re Here To Run Your Life For You kinds of churches, where you can’t even wipe your nose without permission.

And the Supreme Leader pretty much was ordering parishioners to buy into their real estate trusts or tout them to each other.  The investment vehicles weren’t exactly transparent about the real estate in them.  Unless you count the Woodlands of Ascension project they bought in Louisiana. Which was, mo konmprann, swamp.  Leadership blamed lack of progress on Katrina, but the Army Corps of Engineers said the land was always swamp.

The victims are claiming they were brainwashed into investing with the church’s leaders. We’re imagining just what kind of techniques were used. Maybe “Buy now or you’ll be priced out forever and that, my friends, is the definition of HELL.” 

Also the church leadership quickly realized that paying the real estate agent (who was part of the church) regular commissions for flipping properties was a loser… for them. The agent went from $20,000 a month to $1600 biweekly, as straight salary.  Meanwhile, the church reported to the IRS that they had paid him the commissions, so he owes more than a million in taxes.

The investment’s books were not open to the membership, either, so they didn’t realize that the vehicles were classic Ponzi schemes.

This is an Open Thread. Are you attending religious services this weekend, Open Houses, both, or neither?  And we’ll be back with the next letter in the Challenge tomorrow, G for God. Or Grab. Or both.

Here’s some news from the exciting and ever-fragrant community of Milpitas!

State suspends license of contractor in fatal trench collapse

By Joe Rodriguez, Posted: 02/03/2012 08:34:27 PM PST
Photos by ABC7 News

State officials Friday suspended the license of the contractor building a home in Milpitas where an immigrant carpenter was buried alive over the weekend when a trench collapsed over him.

The Contractors State License Board said it suspended U.S.-Sino Investment, based in Fremont, after discovering the builder claimed to have no employees when it filed paperwork in 2008. Agency spokesman Rick Lopes said the employee list was necessary to meet state requirements for workers’ compensation insurance.

The owner of the company, Richard Liu, is believed to be in China and could not be reached Friday for comment.

We have to go back to some earlier articles to find out a little more about the home in question.  It turns out that you need a state permit, not just a mere city Mother-May-I, to dig trenches deeper than five feet. 

Furthermore city inspectors had issued a stop-work order three days before the tragic accident, because the trench was not shored. The recent rains made it even more unstable, plus the construction work by the contractor was also considered poor quality.

Why do you think a 5800 sf house foundation needs a 12 foot trench?  Were they building their own wine caverns?  Given that it was in Milpitas, shouldn’t it have been corn syrup caverns instead?

Anyway, here is the property in question:

Notice anything interesting about this 2010 sale?  Not only did the agent provide both ends of the deal, but that name ought to sound a tad familiar.  If it doesn’t, go back and read the third paragraph of the Merc’s article above.

Criminal charges are being considered against the contractor, but then again, building a 5800 sf “small mansion” seems to require additional karma loss.

Last week we covered the sad tale of Nick Martin, who lost ten million dollars on real estate and high-style living.  This story is very different.

San Diego House Is Burned Down, for Safety’s Sake

Published: December 9, 2010, New York Times

The authorities in San Diego County burned down a house filled with explosives on Thursday after determining that removal of the volatile clutter of chemicals, detonators and grenades would be too dangerous.

Officials discovered the hazardous house in Escondido last month after a gardener stepped on a homemade bomb in the yard. When county sheriffs and F.B.I. agents tried to enter, they found so many explosive materials lying about, in containers and loose piles, that they abandoned their search.

Later, a bomb squad collected samples including PETN, which was used in 2001 when a man on an airplane tried to ignite a bomb in his shoe, and HMBT, which can explode when stepped on.

The house was rented by George D. Jakubec, 54, an unemployed software consultant. He has pleaded not guilty to federal charges of making explosives and robbing three banks with firearms. Prosecutors have declined to say why they think Mr. Jakubec assembled the jumbled arsenal, saying on Thursday that “the investigation is ongoing.”

Photos by Sandy Huffaker

But the most important quote above wasn’t in the early part of the story.  It was the caption under the photo at left:

Officials did not plan to compensate the owner of the house for the loss.

That’s amazing, isn’t it?  You save up your money to buy an investment property, you rent it out to some unemployed software consultant who turns the place into a terrorist bomb factory, then the Feds decide it’s too dangerous to clean the explosives out so the local Sheriff sets fire to the place.

This article goes into all the ways Jakubec’s landlady is seriously screwed.  While governments have to compensate owners when their property is seized via eminent domain, police action is a different issue.  And forget about homeowner insurance (unemployed software consultant bomb factory riders notwithstanding); governmental action isn’t covered.

The county’s declaration gives officials authority to destroy private property in the interest of public health and safety —- without compensating the owner, [county spokesman Michael] Workman said.

Did you remember to buy unemployed software consultant bomb factory insurance on your rental property?  I suggest you take care of that because there are a lot of unemployed software consultants in the Real Bay Area.  Some of them might have lost their own homes. While most will rob a few banks to get even, a few may not feel too kindly towards blood-sucking landlords and will blow up the gardener as proof of concept.

Here’s the house.  It was bought five and a half years ago for $479K, with a $383,200 first mortgage and a $85,800 second mortgage, both variable.  98% financing, sounds about right for Southern California.  The following year the house was refinanced for a $436,000 fixed first and a $54,500 fixed second, which means another $20,000 borrowed.

Now the owner is going to find out that a zero down purchase means infinite loss.

The owner also has the house as her address of record for property taxes, despite currently residing in Oakland.  And she isn’t talking to the press.  The Los Angeles Times reports that Jakubec has lived at the house for three years.  This is great, not only will she lose the house while still owing on two mortgages, she’s going to lose her $7,000 homeowners exemption.

Zillow seems to have some trouble with their home estimate algorithm; look at the wild swings between three and five hundred thousand over the last two years.  If we can believe that the house’s value is up again, it’s not worth much more ($496,000) than the owner “paid” for it in 2005.  However, nearby recent sales show values in the $300,000 range; exurban San Diego prices were hit hard when the real estate bubble collapsed.  Looks like this underwater property will be done in by fire.

Now, the value is all in the 3/4 acre of land.  And while Jakubec wants to apologize to all the neighbors for the difficulties, there’s no word what he has to say to the person who owned the house.  Since he is under arrest in lieu of $5 million bail, and currently charged with 28 felonies, including possession and manufacturing of destructive devices as well as bank robbery, it may be a while before he has to disclose this incident to a future landlord.