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An Example Of Contrarian Marketing As It Relates To Real Estate

[With this post, Barry Cunningham will be taking his leave from BloodhoundBlog. Between Real Estate Radio USA and his burgeoning real estate business, Barry feels a need to regroup and redeploy his time. We’ll miss him here, but we’ll always be able to see him on the radio. –GSS]

Real Estate Radio USA | Contrarian Marketing

I wrote an article Sunday that some misunderstood and thought was only based upon shock and awe. A campaign of that nature is merely one of a myriad of ways to be contrarian. Simply put, implementing a marketing campaign of this sort would be defined as that which is contrary to conventional wisdom and normal business practices.

Subsequent to that article I received a ton of emails from real estate agents asking how such a campaign could be implemented and how it could be executed WITHOUT being shocking or offensive.

My reply is that what is shocking and offensive to one, may not be shocking and offensive to another. It all depends upon the niche you are marketing to.

I interviewed Mr. Internet, Michael Russer recently and he told us about a few Realtors that were really doing some neat things in their marketing and their focus.

Jackie Youngblood is a Realtor in Pasco County, Florida that markets to nudists. Yes, her market is people who want to walk around naked and be around others that want to be naked as well.

Obviously, Jackie markets to a specific clientele. Being a nudist is not for everyone.Is her marketing contrarian? I don’t recall seeing many other Realtors marketing their services while being nude in a hot tub with 5 or 6 other nude people. So I’d have to say yes, this is very much contrarian.

Is it shocking or offensive? That would wholly depend upon the person visiting her website, receiving her marketing materials or viewing the properties that she represents. If it is shocking and or offensive then you are most assuredly not the client she is seeking to reach.

Does it make it wrong? Absolutely not! She has found her market. She is a nudist herself, and she is selling homes. More power to her!

Linda Jefferson, is the broker-owner of Jefferson Bentley Real Estate in Lawton, Oklahoma. Jefferson wanted to expand her reach of potential consumers and decided to reach out to military families living near Fort Sill which is about 80 miles southwest of Oklahoma City.

Michael Russer wrote: “After her son was deployed for Iraq, she began volunteering for the Adopt a Soldier Now program. Jefferson ended up launching a local chapter of the organization, which provides care packages, letters, and other support to U.S. soldiers abroad.”

Ms. Jefferson was hooked, she wanted to specialize in military housing. As she became more and more passionate about it, she decided to gear her real estate business to the new found niche. “Before, I was trying to be everything to everyone,” she says. “I didn’t want to risk losing business by targeting a niche.”

Now Linda runs a real estate company that caters specifically to military personnel and their families. She also runs a number of other websites that also serve this niche market.

Is catering to a market of soldiers and military personnel that are fighting what some consider an unpopular war shocking and offensive? Based upon the level of protest in this Country and the liberal base who abhor war, guns and the military, I am sure it is.

Does it make it wrong that she is unabashedly pro military? Absolutely not, but much of what Jefferson does is quite contrarian to some.

So what are the components of a contrarian marketing program:

1. Specific Target Demographic: You need to understand that you will be targeting a well defined and very specific target audience.

2. Demographic Research: Know what your target demographic audience is interested in and what they are not interested in. You most assuredly want to focus on what their hot buttons are and avoid that which turns them off.

3. Deliver What Your Target Demo Wants: Once you have your research completed and your campaign designed. Deliver what your demo wants in the manner that they want it. Timing and execution is critical.

4.Collateral Material Design: Whether you are blogging, preparing post cards, utilizing television or radio…make sure all of your messages and imagery are properly designed to titillate and excite your demo. Make sure when the prospect knows that you know what they want. Marketing is about sizzle. Most real estate marketing is about selling the agent. The Contrarian sells the sizzle and the lifestyle. You only have seconds to make that impression on the niche demo. You had better make it count.

5. Utilize the Proper Medium Of Delivery: If you are trying to reach a Gen Y audience, advertising on the Golden Girls re-runs isn’t going to cut it. You have to determine from your research what is the best way to approach your intended audience. Whether it be by email, instant messaging, personal presentation..whatever the medium, know what your target demo wants.

5. Be The Niche: If you are not a nudist, it’s going to be hard selling to a nudist. Unless of course you are accepting of the lifestyle, comfortable speaking about it or have an associate that can run point for you. No specific niche wants to do business with someone who looks down their nose at them. Also…they will spot a phony a mile away. We market a lot to the gay community. Heck we’re in South Florida so you had better be open, acceptable and tolerant or you’ll be found out. While no one in my office is gay, we have a network of gay friends and associates who help us when we are launching a gay oriented campaign.

6. Avoid The Water Cooler: There may be those in your office who do not approve of what you are doing.Maybe even your broker. Avoid these people like the plague and concentrate on that which is going to satisfy your niche and earn you your commission. A niche once positively exploited (marketing term..relax) can be an ongoing profit center for years to come.

Additionally, there is a big difference between what some may say is a violation of the Fair Housing Laws and the execution of a marketing campaign of any kind. This is not the article to discuss Fair Housing laws but suffice it to say…contrarian marketing is NOT a violation of any such statute if executed correctly.

This article is just a brief example and outline as to how a contrarian marketing campaign can work to your benefit. Many will read this and still have negative comments. They will still say that it is shock and awe and offensive. If so, then Contrarian Marketing is not for them.

They get hung up on words that are marketing terms and do not understand how they apply to an overall campaign. Yesterday one gentleman devoted his blog to trying to critique that which he did not understand nor was intended for him.

He was well outside my targeted demographic audience. He was expected not to understand. If you want to go beyond conventional wisdom and seek to positively exploit (here’s that marketing term again) a defined niche, then contrarian marketing may be for you. I challenge you to defy conventional wisdom and see what the real estate world has in store for you. Business with a little spice is so much more fun!

Market to a different audience and march to a different drumbeat. Differentiate yourself from the norm and distance yourself from that which others may think is shocking and offensive.

They are not your audience anyway.

5 comments

How A Realtor Can Work With A Real Estate Investor

Real Estate Radio USA | Real Estate Investors

It’s no secret to most Realtors that the housing market is in the toilet right now, but there is still a group of aggressive buyers who are still quite active. The Real Estate Investor.

While the mere thought of working with investors causes some Realtors to cringe, it’s time for the vinegar and oil relationship to end.

Investors are willing to work with anyone that can bring them a deal. They use birddogs, postal workers, bankruptcy attorneys, court clerks and yes, they will use the services of a Realtor.

However, the breakdown in communication usually comes when the parameters of a real estate investor are not met. A real estate investor, if they are experienced, will have a very defined set of criteria that must be met if they are going to pull the trigger on a deal.

While condition and neighborhood often are irrelevant, the numbers have to absolutely make sense. Most investors that we work with will not look at any deal unless it either cash flows if it is held or provides for significant return if it is to be re-sold.

Cashflow means the property must provide for at minimum a zero balance after income and expenses are taken into account. That is to say that after the projected rental amount on the property, less expenses can not be a negative number.

Here is a calculator that you can use to determine cash flow BEFORE presenting a deal to an investor. You can obtain market rents very easily without the need of the MLS by simply going to Zilpy. The features on Zilpy are pretty accurate and we have used them to work the numbers on properties we own and properties we have purchased and it has proven to be quite accurate.

On a re-sale deal, the property has to be purchased at a price that is at minimum 60% or belowwhat is perceived to be current market value. Some more aggressive investors will take a deal at 70% below perceived current market value but the pool gets really thin at LTV levels above this number.

Where do you find properties like this to sell to investors? Everywhere! I wrote a post a couple of days ago referencing the productivity level of Realtors in this market. It became pretty clear that there are a lot of Realtors whose productivity level is below 5 or so sides for all of this year. I personally know some investors who are averaging 5-10 transactions…per month!

Many Realtors are reluctant to do what it takes to find the deals that investors are looking for. It is understandable if one chooses not to work with investors because as a group we can be very demanding. You’re not going to sell or convince an investor. You’re also not going to hide anything from them either.

Investors, experienced ones anyways, are trained to exploit any imperfection that they can in a property because that exploitation usually equates to higher profits. So when dealing with an investor, be prepared to disclose everything you know about a property and expect the investor to find even more issues and for the investor to put a dollar amount on those issues found.

In this market, you can find properties for investors by speaking to listing agents who are managing REO properties for lenders. Often times these properties need work and are not suitable for most “retail” end user buyers. These properties, if the numbers make sense, are the types of deals that most investors are looking for.

Here’s another caveat…don’t expect an investor to run all over town looking at deals. When we buy property we often do so sight unseen. Like I stated earlier, it’s all about the numbers. An experienced investor can perform all of his due diligence from the comfort of his office. He can run comparables, check out the neighborhood, obtain market rent analysis, find out about any liens or code violations, check out the status of the current owners and even have repairs estimated for him right from his office.

As any offer submitted will be based upon a right of inspection, it’s not necessary to waste time running around looking at individual properties. Don’t worry a thorough inspection will most assuredly be completed but it will be done so after acceptance of the contract and the contract is subject to inspection anyway so what’s the reason to go running all over town.

A lot of Realtors used to selling to end users are often surprised by this. Often times we get asked by agents, “Don’t you even want to see the property before putting this offer in?” No, we don’t need to. We know the area, we have probably already seen the house at one time or another and we have people in the field and other associates who will or have gione by the house already and taken a look on our behalf.

That’s another great point to remember. An experienced professional investor can probably tell you about any neighborhood in his working area. He has been working that area for some time and already has information relative to the demographics and may have already bought and sold properties or may be holding properties in that very vicinity.

What a good agent is needed for is to professionally negotiate the offer with the REO agent. An agent who understands the needs of an investor and works diligently on behalf of an investor will have more business than they can handle.

How many Realtors reading this even know how to find investors? Word spreads quick when an agent is found to be investor friendly. Investors are often cash buyers and when they find the deal they want they move quickly. Some can close in as little as 24 hours from clear title. Just think, after you read this you could look up some properties on the MLS, run the numbers, and speak to some investors and have a closing by Friday! It can and does work like that.

So where do you find investors. You just have to look. There are investment clubs that meet regularly in most metropolitan areas. These clubs can be as few as 50 or so investors all the way up to some of the largest which may have as many as 5,000 active members. Additionally there are a number of large websites that specifically cater to investors. Here is a list of investment clubs from across the Country.

Working with investors is not for everyone. Investors can often be tough and brazen. Reason being is most don’t have the time to deal with the usual Realtor pitch or the unprepared Realtor.

Many Realtors think that some of the techniques that investors utilize are either unethical or illegal. While there are sure to be some con artists in the bunch, for the most part investors who have been around are very knowledgeable and are willing to listen if a deal makes sense.

When you approach an investor with a deal have your ducks in a row. Prepare thoroughly, expect to be challenged on your numbers, understand that you are dealing with a savvy and shred professional buyer who will do whatever it takes to maximize his or her profit.

Just because you may not understand a strategy or technique does not mean it’s illegal. An investor will buy a property today, if not from you, from somebody. If you want to approach the investor market as a way of increasing your income, understand that this market is viable but you need to have your ducks in a row.

In the next week or so I’ll be explaining some of the techniques an investor uses to maximize his profit and how a Realtor can also ethically and legally become an investor and earn more money investing than waiting for a commission.

Lastly, no…I am not advocating flipping or speculating haphazardly. There is a proper and conservative way that investors are making money right now. It is in these times that millionaires are made.

This is the best real estate market for experienced real estate investors. Those Realtors who are not actively and aggressively pursuing real estate investors are leaving a lot of money on the table.

10 comments

Sometimes Ticking People Off Is Exactly The Intent

Real Estate Radio USA | Contrarian Marketing

Established in 1965, Benetton is present in 120 countries around the world. It presently has global sales in excess of $2 Billion dollars annually. Yet many in the mainstream find their advertising and marketing strategies downright offensive.

The aim of United Colors of Benetton corporate communication is to create the image of a global enterprise that is modern and projects towards the future and uses distinct imagery and messaging to promote its principal and most important characteristic: uniqueness.

“If your brand is clearly defined enough to have the power to attract enemies, it also has the power to attract raving fans. And the raving fans of your brand are the ones who return again and again. They’re the ones who will tell their friends about you. They’re the ones who will wear your logo. They’re the ones that almost enjoy the annoyance of your brand-haters and will keep coming back for more.”

“So don’t fear the hate. Embrace it. Maybe in your next brainstorming meeting, don’t ask how you can appeal to X. Ask how you can annoy the hell out of Y.” …………………Rick Nobles president of Two West Inc

In marketing conventional wisdom is not always the chosen path. The delivery of a message and its ability to reach the intended audience need not be communicated the same way as your competitors. In fact sometimes it makes sense to completely differentiate yourself. If most of your competitors are turning left, then turn right. If those products or services you seek to overcome are painting there portrait in white, paint yours in black.

There are, as we have been told, two sides to every story and in marketing this could not be more true.

Are you afraid to offend someone with what you marketing materials? Do you shy away from making tough statements in your marketing messages on your collateral media pieces or on your blog or website? Have you received some angry comments or emails from people vehemently opposing or denouncing what you have said? Have you heard from some people that they will absolutely not buy from you or will not use your service or perhaps will not read your blog?

If so, then instead of being upset, you should be smiling like the proverbial cat that just ate the canary. Why? Because by having an audience that voices displeasure with you means that you are succeeding in branding your business and you are expertly applying the principles of Contrarian Marketing.

Real Estate Radio USA | Contrarian Marketing

Obviously one has to have a well thought out plan and commitment to execute a Contrarian Marketing Plan to fruition. It is definitely not for everyone and in real estate it seems to be even less likely to be implemented as a part of an overall campaign.

While all marketing and advertising is designed to evoke some measurable emotion or reaction from your target demo, most in real estate opt for what they erroneously view as the safe way out. Most real estate marketers rely and stake the success of their “businesses” on trying to deliver positive messages to a target they hope will like them and subsequently buy from them. Positive messaging surely works and is a marketing mainstay.

However, Contrarian Marketing also works very well. When you are building your brand you are declaring to the public, in any forum that you choose to use, that listen all this is who we are“, but as anyone in marketing will tell you, you are also as loudly proclaiming, “this is who we are not“.

What this is all about is positioning. In a competitive business environment, the shape and definition of your brand and its values informs the target audience what you believe in, and the message also clearly defines that which you do not.

In that regard, when someone is motivated to the point of taking time out of their day to let you know that they disagree or better yet exhibit anger about your message, don’t be upset…revel in the knowledge that your plan is succeeding and that the message that you wanted to deliver has most assuredly imparted a defined branding of your business.

Okay, I can hear it already. This guys has lost his ever-loving mind! How am I ever going to succeed and earn a profit if people despise my brand and won’t buy from me. [i.e. buying meaning the acceptance of your product or service].

If you feel this way, you are looking at the picture from the wrong angle. This “playa-hating” would not be occurring if you did not design a Contrarian Marketing campaign. So the end result is to be expected. But why would someone initiate such a campaign?

Simple answer. It works! Here’s the secret. If someone is driven to the point of anger to respond to your brand with such emotion then you have clearly determined that you have the ability and power to attract many enemies.

Sheer marketing logic then dictates that you have determined that you have the same ability or even greater ability to attract avid fans. And as you know, the avid fans are the ones who will buy and accept your message time and time again. That’s how your message can go viral. While the squeaky wheel complains openly, the fan may not. Yet they will tell their friends, they email you directly and they buy from you.

What’s more compelling is that the avid fan actually enjoys the displeasure of the complainers and they become the foundation of your brand and business.

Some of the biggest brands in business have major detractors. Yet they don’t care. They appeal to a segment of the population and audience that does not subscribe to what those who feel offended think. In fact the brand of choice actually becomes more clearly defined as positive, by the more the naysayers complain.

A brand needs to appeal to a way of life, an attitude, a system of beliefs and values. It can not, nor should not attempt to pander to all demographics of society. A brand (insert blog, house, service or product) attempting to woo everyone actually becomes a diluted commodity failing in its purpose to actually attract an avid fan base.

Instead it does just the opposite, it creates brand indifference. Want the fastest way to kill your business? Engage in a campaign that, in a sea of competition, breeds indifference to your brand. In that instance, you’re done.

Benetton has mastered Contrarian Marketing. Where most brands seek to avoid offending any segment of a demographic, Benetton’s contrarian approach, since followed by Abercrombie & Fitch and many others, Benetton seeks to set themselves apart from its competitors by delivering strong messages designed purposely to evoke an emotional response. Take a clothing campaign they ran using photos and stories about prisoners on death row. Can you imagine using murderers and rapists as pawns in your marketing campaign?

Benetton knows their audience. They know that while many will be appalled, many will applaud such a provocative marketing campaign with the backdrop of making social and political commentary.

Recently the Miley Cyrus photo shoot at Vanity Fair caused a tremendous uproar. Vanity Fair could not have paid for such publicity. While many condemned what occurred, the readership of Vanity Fair, what may be the silent majority, did not have a problem and I am sure in the boardroom their were a lot of high-fives going around. Try and price out the amount of brand mentions that Vanity Fair has received in the days since the Miley Cyrus photo shoot went public.

Advertising that makes you feel good inside is fine and most assuredly has its place, however companies that utilize a contrarian approach do so because they feel they can get a lot of mileage out of exploiting “hot-buttons” and moral outrage. Their target demographic distinctively accepts this.

Diversity of market share is often taken for granted amongst the established brands. In real estate, there has been an established norm. The belief is that there is a certain way to do business, and the masses who enter follow by being given the same instruction.

This does not mean, by any stretch of the imagination, that there are not consumers out there that want to and will accept a business that will throw caution to the wind and deviate..no kick to the curb, conventional wisdom.

A contrarian position can only work if executed with full knowledge and care that you have ascertained that a market exists that is silent and wants a voice. While offending some, you must be statistically sure that there are numbers in your demo whose loyalty will grow as the assault on CV continues. Contrarian Marketing is a high risk, high reward strategy that is not for everyone.

While it’s doubtful that there could ever be a message as bold as Benetton’s in the real estate industry, contrarian marketing can and does work in this sector.

The next time you design a marketing campaign and it’s met with jeers and denigrating comments by those outside your intended demographic, don’t worry about it and definitely don’t fear it.

Instead understand that your goal was to evoke emotion and each response you obtain from someone who was offended indicates that your campaign is working, so embrace a negative response.

Then go back to the warroom, sit with your team and don’t engage in talk of how to appease those who are appalled, but rather figure out what you can do next to tick them off even more!

Trust me, it works! If you don’t believe me, ask Benetton, or Abercrombie & Fitch, or Apple, or Starbucks, or…

17 comments

Are There More Than 50 People Blogging In Real Estate?

Real Estate Radio USA

Yes, I know that there are blogs everywhere in this so called RE.net, Web 2.0 world, but lately it seems like I am walking down the halls of my high school. There’s the cool kids over by Mr. Hannah’s homeroom. Over there in the smoking lounge can be found the punks who always seem to just be hanging out. In the middle of the cafeteria is where the jocks can be found laughing it up.

By the theater lurking in the dark you’ll find the goths and the freaks, and over there, with the saddle shoes and pony tails next to the gummy floor are the gum-clacking gluehead Heathers all talking at the same time with nobody really saying anything.

Lately I have noticed that the cliques in the real estate blogosphere have become much more pronounced and apparently the Web 2.0 Realtor superdelegates seem to think they are speaking for the rest of the common folk. How sad!

Excuse me if I am wrong, but I thought that blogging in real estate was about buying and selling real estate. When did it become the muse of soda jerks who haven’t any real business and spend night and day writing and finger pointing about all that is not real estate?

Do I care, or for that matter, does anybody really care what this blogger is doing or what that blogger said about this guy or that guy…except if it is regarding a technique or strategy to help one another actually sell real estate?

Think about it for a second…the reason each of us took finger to keyboard to dive into this new world was because we thought it would enhance our business? I for one, call it selfish if you want, only intended to blog to attract eyeballs because eyeballs are important to advertisers and advertisers spend money.

Additionally, in learning how to efficiently blog and write, we created a radio show to help promote it. Now we have progressed to the point that we have taken what we have learned and are beginning our foray into a real estate blog to buy and sell houses.

Never did I decide to get into this because I cared an iota about “Sue” and her idea to change the world, or Fred’s ideas as to what he thinks Hillary should do. I certainly did not start my venture to obtain “great post comments” or have points bestowed.

I began blogging to make money! I want to be successful in buying and selling houses and selling advertising. All of the other smarmy BS is getting a bit old.

Lately it seems that the ‘conversation” on the blogosphere has turned trivial, boring and somewhat spiteful. I don’t wish any person in any endeavor misfortune and I hope that this forum is a way for us ALL to find ways to prosper but I am beginning to have my doubts.

Russell Shaw and I have had our words and I respect what he has to say even if he does not respect what I have to say. I respect the contributions of old schoolers like Jeff Brown even if he thinks that some of what I believe as to the opportunity that new business models hold is the future of real estate. No disrespect, no ill feelings…just dissenting viewpoints.

I recently watched a news show featuring Supreme Court Justice Anthony Scalia. Scalia is an ardent conservative. One of his best friends is Supreme Court Justice Ruth Bader Ginsburg, a staunch liberal by any definition. However, they are the best of friends and hold the utmost respect for each other.

They have battled and have had very heated discussions over many issues that they have been at different ends of the spectrum on in regards to perspective and ideology. Yet, they do not denigrate into mundane writings about the other. Maybe the Re blog world should take a lesson. It’s not about you, it’s about the business of real estate.

Recently we began somewhat of an investigative report that we were going to air. It involved looking up the sales activity of many of the so called noble class of the RE blog world.

After a week of looking into this and having our “moles’ review MLS sales records in various locations it became apparent that many in the blogosphere have had more time to write because they have not had any real sales activity. Many of the Gang of 50 have had less than 10 closed sales this year with a great many having less than 5.

You know who you are and you know the truth about your sales activity this year..or rather the lack thereof. Don’t worry, we’re not going to name any names but suffice it to say quite a few “prominent bloggers” need to concentrate on their real estate business instead of their blogging.

We were going to have a show about this but decided against it because it is now obvious. People are too busy blogging instead of actually selling. Maybe that’s why there are so many posts about everything EXCEPT the purchase and sale of real estate.

Maybe (OMG..I can’t believe I am saying this…) but maybe Russell Shaw is right. Maybe many in the business of real estate should be tending to more of the business of real estate and less in the blogging of opinions and obvious discontent with others.

Forget Redfin and what they are doing. Don’t worry about Bloodhound Unchained and whether or not Odysseus is going to succeed. Yes, Russell Shaw has a new home on agent genius…is any of that going to help you sell or buy a home today?

In this business of blogging I believe that the technology affords us the opportunity to explore new business models and propel the business to new heights. It’s okay if you don’t believe the same and it’s okay if you do agree. What’s more important is that we work together to improve each other’s businesses.

Tell me what kind of reaction your clients are having to the media doom and gloom, tell me what works with certain lenders and what doesn’t with others, fill me in on what certain asset managers are doing and how they are handling their REO inventory, what marketing is working for you and what isn’t….who cares if you found a new hand creme or widget that displays an animated character on your blog?

Help me sell! Help each other sell! Let’s work to improve each other’s business. Here’s another interesting tidbit. How about us all actually utilizing blogs to speak to consumers. There’s a novel concept. Speaking directly to the people who may want to buy or sell real estate.

Many of us have blogs with high traffic. Many of the blogs with somewhat high traffic have the same Gang of 50 or so commenting.

I turned off commenting on our real estate sales blog. Not interested in hearing comments from bloggers..I want contact with consumers and it’s working. If bloggers want to comment they can do so here. My real estate blog is for the consumer. I am in it to sell real estate not make friends with bloggers.

Maybe it’s Saturday and I need more sleep, but this blogging thing is becoming all too boring and uninteresting. I mean we are talking about real estate aren’t we. It’s not the sexiest business on the planet. Not like we’re running a race car around a track at 200 miles per hour or anything. We’re trying to buy and sell homes.

At least some of us are.

Anybody got any ideas as to how I can attract more qualified buyers to the South Florida area when mortgages are becoming harder and harder to obtain?

Now that’s a comment or blog post that would actually be interesting to read!

52 comments

The War Against The MLS Continues | The MLS Must Fall!

Department of Justice Sues the MLS | CMLS 

As the real estate industry awaits the long anticipated trial pitting the Department of Justice vs. The National Association of Realtors, another Multiple Listing Service has been targeted by the DOJ.

On May 2, 2008, the DOJ filed suit against the Consolidated Multiple Listing Service (CMLS) of Columbia, South Carolina. The suit challenges the manner in which the CMLS operates and governs its members.

The lawsuit states that CMLS rules unreasonably restricts competition among real estate brokers and has caused consumers in the Columbia area to pay more for the services of real estate agents and brokers.

The lawsuit alleges in part that the CMLS mandates that real estate agents and brokers perform a myriad of obligatory services, which provides for a reduced level of customer service and limits consumer choice.

The suit also states that these mandatory services provides for an exclusion of competitors who might offer innovative options that could provide better services to consumers in that area.

“Buying or selling a home is one of the most significant financial transactions in the lives of most Americans. The kinds of rules CMLS imposes stifle competition to the advantage of its members and the disadvantage of home buyers and sellers,” said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division.

“Today’s lawsuit seeks to remove unlawful impediments to competition for real estate brokerage services in the Columbia area, so that consumers will benefit from the additional options and reduced fees that competition can bring.”

The MLS in most areas allows for the free exchange of information by and between its members regarding available homes on the market. The efficiency of the CMLS, or any MLS for that matter, can be a benefit to the consumer.

The DOJ contends that certain practices by the CMLS negatively impacts how the real estate industry members can choose to operate their businesses and accordingly adversely influences competition.

Specifically cited are rules imposed by the CMLS wherein its members are not allowed to offer a home sellers the opportunity to avoid paying a broker’s commission if the seller locates a buyer on his or her own.

CMLS rules require brokers to be involved in certain aspects of the real estate transaction, even if the Seller does not want the service or can find a similar service less expensively in order to save money on the fees charged by the real estate agent or broker.

The DOJ’s lawsuit challenges CMLS rules that the Government feels unreasonably restrain trade and competition among real estate brokers and thereby lead to reduced consumer choice and higher fees paid by consumers.

The CMLS in Columbia may not be the last MLS organization in the cross hairs of the DOJ. Justice Department spokeswoman Megan Gerking said the antitrust division has been monitoring multiple listing services in the past few years to ensure they are “competitively efficient.”

As we continue to see these lawsuits filed against MLS organizations and the DOJ’s obvious intent to bring down the MLS, why is it that so many real estate agents are not preparing for the inevitable?

I read stories and write stories about the ongoing assault that the DOJ is waging against the anti-trust laden operations of MLS orgs. These bastions of information, the gatekeepers of what is holy to a real estate agent are truly under attack.

it’s not like MLS operators are not being forewarned. Obviously reading about these lawsuits, MLS operators should be re-assessing how they are conducting business. In fact the CMLS was warned they would be sued on April 17, 2008 and despite meetings to amend some aspects of their operation, they still would not amend their operations to come into compliance.

Who runs these boards and what makes them think it’s okay to spend the members money fighting a lawsuit they have little chance of winning?

I keep reading on blogs in the RE Net from advocates supporting the NAR and its member organizations. I don’t understand how one can support such an obviously misguided and allegedly illegal run operation. It’s one thing to be a team player, it’s another to exist in a state of obfuscation which it seems that blind-following faithful must.

the MLS is not going to survive in it’s present state. Any reasonably thinking adult can clearly see this. The government has made the elimination of the MLS as a private members only discriminatory club a definite priority.

The consumer wants the walls torn down and with the assistance of the mighty hand of the DOJ can it be anything less than a certainty? The first it seems to fall or become insignificant will be the object of the aforementioned flagship lawsuit, the DOJ v. NAR.

Once the head of the snake is removed it will make it much harder, if not impossible, for subsequent MLS lawsuits to be won by the local boards seeking to defend them. Once a precedent is obtained in Federal Court regarding these MLS lawsuits, what will be the outcome?

It is doubtful the MLS will survive in its present form. The prudent agent would be preparing themselves as a mercenary. Ready to go either way.

The application of the Sherman Act has brought down quite a few companies and inflicted huge monetary damages against others. It’s sword is sharp and it’s blade will not dull.

Whether you like it or not, the revolution is truly under way.

For further information see this previous article.

19 comments

It’s The End Of The World As We Know It And I Feel Fine!

Case Shiller Reort | Real Estate Radio USA

That’s great, it starts with an earthquake, birds and
snakes, an aeroplane and Lenny Bruce is not afraid.
Eye of a hurricane, listen to yourself churn – world
serves its own needs, dummy serve your own needs.
Feed it off an aux speak, grunt, no, strength, Ladder
start to clatter with fear fight down height.
Wire in a fire, representing seven games, a government
for hire and a combat site.
Left of west and coming in
a hurry with the furies breathing down your neck.

Team by team reporters baffled, trumped, tethered cropped.
Look at that low playing! Fine, then.
Uh oh,
overflow, population, common food, but it’ll do.
Save yourself, serve yourself.
World serves its own needs,
listen to your heart bleed dummy with the rapture and
the revered and the right, right.

You vitriolic, patriotic, slam, fight, bright light, feeling pretty
psyched.

It’s the end of the world as we know it.
It’s the end of the world as we know it.
It’s the end of the world as we know it and I feel fine.

In 1987, Micheal Stipe and REM released a song that many have interpreted in many ways. When REM played the song live they were actually very surprised. In playing a song about the end of the world, the audience actually reacted with great enthusiasm. So much so that the fun vibe threw off the band. They thought the apocalyptic lyrics would create a more subdued response.

What does this have to do with real estate? Well yesterday the newest housing numbers came out and it’s sounding the end of the real estate world…yet I feel fine.

The S&P Case/Shiller Home Price Index, which tracks 20 of the largest housing markets, showed prices plummeting by 12.7% in the 12 months ending February. That’s the biggest fall since the index began tracking prices in 2000.

Of those same 20 markets, 17 of them posted their largest declines ever recorded and 50% of the metro areas posted double-digit declines.

“There is no sign of a bottom in the numbers,” S&P spokesman David M. Blitzer, said in a prepared statement. “Prices of single family homes continue to drop across the nation.”

“This is huge,” said Dean Baker, co-director of the Center for Economic and Policy Research. “Back a couple of years ago, people were saying, Housing prices are not like stocks; they change slowly,'” he said.

If this news wasn’t bad enough, the declines posted could be even more Revelational as you look further. It seems the decline is actually accelerating and economists are saying that an additional $6 trillion dollars (that’s trillion with a “T”) could be erased from home valuation across the USA.

While the message is not all doom and gloom, the good news is like being still alive after the comet hits. Charlotte, North Carolina actually saw their numbers increase.

Up in the Northwest, the decline was quite modest as Portland and Seattle only experienced drops of 2% and 2.7% respectively. Maybe Glenn Kelman was onto something by launching Redfin up there.

The “Big Apple” stays afloat as well with only a 6.6% decline. However, there seems to be a veritable race to for the title of “Ground Zero” of the housing debacle. Las Vegas (-22.8%), Miami (-21.7%), Phoenix (-20.8%),Los Angeles (-19.4%) and San Diego (-19.2%) seem to be the contenders vying for the ominous declaration of being the worst housing market in the Country.

Think you’re out of the woods if you are not in these markets? Think again. As these major markets continue to decline, they shape the consumer’s mindset and throw off an effect that could doom the rest of the markets.

Peter Schiff, the president of the investment firm Euro Pacific Capital said, “As housing price losses extend, the fall-off in demand for homes will deepen. Schiff expects to see a national price decline of 30% – and by as much as 50% in the worst hit markets.

“People wanted houses as vehicles to make money,” said Schiff. “Now that they can’t make money, they don’t want the houses anymore.”

From the “It Can’t Get Any Worse Department”, new data was also released today regarding foreclosures. Over the same period as the Case-Shiller report, foreclosures exploded 112% in the first quarter of 2008.

Anyone working in the real estate business realizes that the continuing flood of foreclosed homes onto the market is continuing to negatively affect home prices.

If you take into account just the vacant properties on the market, the numbers are staggering. Presently there are over 2.28 million vacant homes on the market. According to the U.S. Census Bureau, that’s the highest level in over 50 years! (report)

The number of vacant houses on the market is especially troubling, according to Pat Newport, a housing economist with Global Insight, a consulting firm. “I’m not surprised [by the record price declines], given the inventory numbers that came out yesterday,” he said. He called the vacancy statistic “the best measure of excess supply.” (source CNN Money)
(Yeah..I’d want to be a Listing agent in this market…good luck with that)

Many of these properties are owned by very motivated sellers, builders, banks and speculators who want to sell as quickly as possible in order to avoid having to pay to maintain them.

That’s going to make these owners willing to take substantial losses just to get the homes sold. “It means prices will have to drop a lot more,” Newport said. (source CNN Money)

So with all of this doom and gloom in the market and the apparent end of the real estate world upon us, why am I not lamenting and reciting a Novena?

Why? Because the other side of this information tells me and others like me that this is the time to buy and all of this information is fantastic data to use in obtaining the best deal I possibly can.

These are the types of numbers that become “chum in the water” for those bargain hunters looking to make a deal. Is www.firesale.com available? If you are a real estate agent and you are not looking aggressively for buyers in this market you have to wonder why you are in business.

This isn’t the market for the faint of heart or the easily insulted. The dread felt by most Realtors regarding the perceived “low-ball offer”, better be dealt with in a hurry!

Not only should you expect offers below list price. You may want to get used to seeing offers 25% – 35% or more below list price. Seriously..as banks dump current REO properties to be ready for the onslaught of the next round of foreclosures, the prices will continue to fall and the inventory will continue to rise.

We’ve had the supply and demand argument here before but suffice it to say, it’s time for Realtors to become realistic and earn the moniker of professionalism that many have sought to impose for so long. I believe that there are 5 steps that Realtors need to take right now to help stabilize the market:

1. Answer the phone! If you are not going to commit to the business, please get out of it. There are buyers out there ready to pull the trigger on deals and they can’t even get a hold of the agents listing the property. We hear this time and time again. We even hear it from other agents.

2. Terminate Unrealistic Listings! If the property you have on the market has no chance of selling and your seller is “seeing what they get”, then drop the listing. There is already enough inventory on the market. I know this is a tough one but why waste your time on a property like this when you know it’s not going to sell.

3. Wrap your arms around the data! Become a projection and data junkie. If you are a professional then you need to know the symptomatic ideology that is driving the market. It is your job to understand that which is driving prices and act accordingly. The Mary Kay style agent is done!

4. Immerse Yourself in regression analysis data! It’s nice and somewhat easy to pull a flowery, rose-colored CMA, but it is more professional to understand the maxims of regression analysis. Repeat after me..I’ve done the numbers and I understand there is no such thing as a low-ball offer! By even blogging about it, whining about it or lamenting publicly about it, you are negatively influencing your seller. It’s not a low-ball offer, it’s your ONLY offer.

5. Fan the flames! Shout it from the rooftops, blog about it constantly, tell everyone who will listen, take out full page ads..let everyone in your market know that you are hosting a full blown fire sale! No reasonable offer refused..everything must go! Create a frenzy!

Right now there is a force to be reckoned with if only the force would come together. 1 Million Realtor voices would be really strong and really loud if it weren’t such a fractured voice.

I truly believe that collectively, we could turn this around. A lot of people ask me why I am so hard on Realtors. One of the reasons is because they don’t stand up for themselves. You’re an easy target, you can’t and for the most part won’t respond.

In another 30 days there will be another Case-Shiller report. I bet we can all pretty much predict what it will say. The media will pick it up and then there will be a slew of Realtors complaining about all the news being doom and gloom.

What’s the media’s alternative? Are you giving the media cause to seek other data? Has there been a turnaround, has there been an upward tick in sales nationally?

Create the news. Implement new sales techniques. Fight for your business, your profession. Begin aggressively searching and marketing for buyers. The buyers are out there, they’re just not responding to what you have to offer. Don’t list high and then step it down over time. Informed buyers see right through that lame attempt at getting a higher price.

In this information age, buyers are also reading about the techniques Realtors use to operate. You have to be smarter than that in this market.

Suffice it to say that you need to be relentless right now. I’m absolutely pumped. This kind of data means there is substantial profit to be made. Properties are nearing cash flow basis in many markets. The Internet has made the concept of virtual investing a reality. The Fed is lowering interest rates again. It’s a great time to be in real estate.

Call it what you want. Bottom feeding, vulture capitalism, bargain hunting, profiteering, opportunity seeking, call it whatever you want.

It’s The End Of The World As We Know It And I Feel Fine!

12 comments

Have You Seen Some Of The Answers On Trulia Voices?

Trulia Voices | Real Estate Radio USA

As I am constantly in search of constant promotion and link love, I recently ventured over to Trulia Voices.

I love the format. Consumers post questions about real estate and anyone who subscribes to a certain criteria that you choose, will receive the questions via email and then you have the opportunity to post your answer to the consumer…to the consumer!!

Great idea, great concept, and in its simplicity, a great way to interact with the consumer in a honest and open fashion. You are allowed to suggest an answer according to how you would handle a certain situation or dilemma that the consumer may have or be facing in the near future.

Of course, it is to be expected, that with a gazillion Realtors on the planet, that one answer may differ from another’s answer. We all have different life and vocational experiences that we can look to for our answers.

That’s what makes blogging so special. I may have one belief, you may have another and we can truly voice (no pun intended) our opinion as to what we feel is a suitable response to the consumer’s inquiry.

How wrong I was. Why did I ever go over to Trulia Voices? Yes, I probably received some of my sought after link love (no I didn’t check the “no-follow” tag), but I was not prepared for my other bonus.

Vilification as if one was an interloper! I began answering the questions that were being asked directly. I was giving the answers that I felt best solved the consumers problem or inquiry. I did not know that isn’t the way to respond.

Excuse me for speaking my mind and responding openly and honestly to an inquiry from the public. I didn’t see the response guidelines that said there was a specific manner in which to communicate with the consumer according to the amended Code of Realtor Mandated Responses on Trulia Voices. I now realize what I was supposed to do. Now I need a shower.

Most of those who choose to answer over at TV seem to be following some golden oldie real estate agent playbook. Most of the answers seem to be straight from the NAR manual for Standard Operating Procedures. There indeed must be such a book.

If I could find that book I am sure it would read as follows:

1. Never answer a question directly. Always make the consumer think you know more than you do by actually avoiding the question by telling the consumer to seek out a local professional.

2. Always, and I do mean always, tell the consumer that they need to seek out a local real estate professional for any question. (did I say this already…now you are getting the point of Trula Voices)

3. Never, ever, tell a consumer that any Realtor will EVER take a reduced commission.

4. Never say another Realtor was wrong (but secretly submarine him by clicking the thumbs down button)

5. Always tell the consumer that they received a lack of responses because they just don’t understand how the business works

6. Always be sure to tell the consumer how much a Realtor does to make sure the transaction goes smoothly and to reinforce the need to have a “local Realtor involved.” (regardless of the question the “local Professional will always have the answer..like the Ace Hardware man.)

7. At all costs, try not to DIRECTLY answer the question. That would be way too easy!

8. An issue previously discussed by Jay Thompson and Jonathan Dalton, Always answer as many questions as possible, even if you have no idea as to the answer or don’t live or work in the area. It does not matter. gotta get those points and improve those “rankings”. Seems I have hear about people commenting for the sake of points elsewhere…hmmm.

Actual Question courtesy of TV: “Looking for a Realtor willing to take a 2% commission on a new construction and give 1% back after closing.”
Written by an actual Buyer
looking to do a deal and not one response was an affirmative “I’ll do it!”.

An Actual Answer:The lack of responses to your question should tell you a great deal, but I’ll try to bring it down to laymen’s terms. Imagine your boss coming to you and asking you to work a full 40 hour week, plus another 10 hour’s overtime. But after he pays you and you receive your check, he wants you to give the overtime payment back to him.

If you did agree to that, might you be inclined not to work as hard or diligent? If you do find such a hungry and desperate
agent, look at the bigger picture – not just the monetary aspect.”

Wow..Thanks, Sparky..I bet the consumer who asked that question feels fulfilled. You certainly told him, albeit “in laymen’s terms“. If you were unwilling to do as asked..why did you bother answering? Oh yeah, must be that darn playbook!

Another Answer:An agent who is willing to take a 2% commission; share it with a selling agent; and give back 1% would actually lose money. You would need to find a real dumb agent to accept such a deal and I would not want him or her representing me.”

You would actually lose money?? I’m sorry…did he ask you to come out of pocket with any cash? Did he ask or state that this was the entire commission? C’mon, do these people even believe the words they are typing? I am not a mathematical genius but 1% of something is a lot more than 100% of nothing.

Rudy and the guys at Trulia came up with an amazing concept. A way for the consumer to interact with the consumer directly. An open line of communication wherein an agent could simply anwser a question and like writing a blog post, become an authority figure.

By answering a question with a clear and concise answer the agent could build credibility not just with the person asking the question but with other consumers reading the answers.

Instead, on TV we see question after question answered in party line talking points telling the consumer to “call me”, or ” work with a local Realtor” or “let me send you some information”.

This is a Web 2.0 world people! You can’t force old school marketing down the throat of today’s consumer. Everyone knows the stat, 84% of prospective homebuyers begin their search on the Internet. While we know that to be true, we can not be sure where that search actually begins.

It can be on your blog, on Realtor.com, on Remax.com or one of a million websites. It could even start on TV.

If it is starting on TV you are wasting a valuable resource and not working with a clear understanding of today’s instant information age.

Not to digress , but I love Twitter. I have just 140 characters to convey a message. That’s it, no more. Better make it clear and concise or the message is lost.

Today’s consumer doesn’t want to hear the mumbo jumbo that most Realtors are serving up on TV. If they wanted to consult a “local professional” they already would have!

They want an answer to a question. Answer it! Don’t use the space to advertise yourself or defend your profession or talk down another answer. Answer the question asked. Period!

Expose the others as professionally inept. Go ahead, this isn’t Romper Room…take the opportunity that the consumer is giving you to shine and DIFFRENTIATE yourself from the rest.

This is your moment on stage. You have direct communication from a consumer who is casting a line in the water looking for the most credible, authoritative person he or she can find. Don’t blow the opportunity with a talking point crafted response.

It might sound good to the other Realtors but it’s going to make you look just like what the consumer thinks you look like. We’ve all seen the studies, it’s obvious that now is the time to break from the pack and howl like the big dogs!

Trulia has given you the opportunity to be a purple cowand most agents just aren’t seizing the opportunity. You don’t get a second chance to impress. You have that one moment to answer the question and after you’ve answered..it’s over. You had better make it work.

I assume, even though I should not, that the reason people answer questions on TV is to make money. The eventuality of the Q&A is to lead to a consummated transaction. That being true, the opportunity is forever wasted if you do not give the customer that what they are looking for.

Trulia Voices is like a great restaurant, with great food and a wonderful ambiance. Unfortunately the wait staff doesn’t understand the menu and won’t serve up what the customer is looking for.

Like all restaurants in that predicament, the customer moves on un-satiated and quite unfulfilled. In doing so the wait staff goes home with sparse tips.

It’s not the restaurant (TV) that seems to be the problem here, it’s the quality of the service. In the end the customer relates the two as one.

While there are undoubtedly a number of agents who are using TV to their advantage (Ines from Miamism for one), there are far too many agents ruining the dining experience, if I may continue my metaphor.

I urge those Realtors who are willing to provide clear and concise answers and who have learned through their blogs what being an authority figure can mean to your business, to venture on over to Trulia Voices.

The consumer needs you.

11 comments

Gen X, Gen Y, And the End Of The Traditional Real Estate Business Model

 Real Estate Radio USA | Gen Y Homebuyers

With the median age of real estate agents being 52 years of age (source NAR), new Realtors hoping to make their mark in the real estate business are casting aside conventional wisdom.

New Real Estate Agents Seeking Gen X And Gen Y Buyers Break From The Mold

New real estate agents, cognizant of the fact that 84% of homebuyers start their home buying journey on the Internet and that the median age of first time home buyers is 32, now realize that what may have worked for the elder-statesmen of the industry is not what their clientele are looking for.

In a demographic wherein 50% of which use social networking websites,the axioms of traditional real estate sales is not viewed as being prudent.

Young agents are now finding that chaperoning prospective buyers from house to house and acting as the veritable liaison between the Buyer and Seller is not generating sales among the Gen X and Gen Y hip and technologically advanced home buyer.

“People, especially my peers, aren’t looking for a ride to the property or a go-between; they want to IM me to find out how big the basement is,” said Lisa Johnson, 33, who works for Coldwell Banker in Haverhill. “They often have more information on the properties than most realtors. They don’t want a new friend; they want answers fast and will make decisions quickly when you provide them. I know this because I’m the same way.” (As reported recently in the Boston Globe.)

It is becoming more and more apparent that a fresh, younger, breed of real estate agent is in great demand in an aging industry struggling to keep pace with a market populated with an emerging younger homebuyer. The dilemma? The real estate industry continues to get older while the industry’s consumer base begins to skew younger.

This widening gap poses a great conundrum for traditional real estate agents.Younger prospective home buyers seek to do their own research, on their own time, and in their own manner. They expect a real estate agent to “chill-out” and just be there when they are ready. They definitely do not want to be involved in any form of hard sell ethos.

The recent run-up in agents entering the business in the boom times of the last few years had little effect on closing the age gap between younger agent and older agent.

“The rapid rise in the number of agents in the early years of this century has done little to affect this median age, as the bulk of new entrants are late career transfers taking either early retirement or those made redundant by recession and technological change.” (Stefan Swanepoel from RE Trends)

The gap between the traditional real estate agent and the Gen X, Gen Y homebuyer is much larger than simply an age problem. It is an impediment of even greater proportions.

“Clearly these are two different generations with their own concepts of value, preferred channels of communications and preconceived views of how the world works. Often the sales methods most comfortable to the agent, which have worked for that agent for years, fall flat with younger buyers and sellers, who see the market and the sales process differently. ” (Stefan Swanepoel from RE Trends)

In an October 2007 study, Deloitte Research urged the real estate industry to attract new talent from the Gen Y demo (those born between 1982 and 1993), or the industry would not only not be in a position to service this market, but that the industry would begin to see a marked decrease in real estate professionals in the very near future. The Deloitte study states that nearly 60% of those in the real estate profession will be 65 years or older by 2010.

Swanepol says this might not be as bad as one may think. “Technological change has increased agent productivity so the number of agents necessary to service the market will be less. But demographic change is going to leave a large hole in the industry labor force.”

The Deloitte study mentions three salient admonitions to those running real estate businesses:

1. Generation Y is coming into the market with a set of values that differs from their predecessors’. This “value set,” which includes flexibility and work/life balance, are key career motivators for this generation.

2. To successfully recruit members of Generation Y, real estate companies must develop and communicate their vision and differentiate themselves from their competition. Based on Gen Y’s interests, companies should promote their sound values, technologically advanced workplaces and global scope.

3. Real estate companies need to adjust their talent management strategies to better suit the needs of the incoming workers, developing practices that add the most value to their employees — the “customers” of this process.

The National Association of Realtors, the industry’s trade organization must have missed all of this information. Just recently the NAR in an attempt to bring the traditional real estate office into the technological era, completely fell flat on their face with the introduction of Realtor Confidential.

This is clearly not going to help the traditional real estate company reach the Gen X or Gen Y buyer, nor the type of person who wants to be an agent who happens to be in that same demo.

How many brokers who will read this are actively recruiting young real estate agents who are well versed in IM, text-mesaging, social networking, Twitter, My Space, Facebook and similar new technologies?

Need proof of how this younger generation rolls out there? After working in the business for over three months utilizing traditional, somewhat obsolete methodology, Johnson decided to kick in what she and her associates regularly utilize to communicate.

“Instead of face-to-face or phone calls, I now stay connected to my customers the way they prefer, which tends to be through chat and text messages,” she said. “I even started working with some buyers and sellers through online news groups.”

It certainly worked. From toiling with no sales for months, Johnson has risen to Rockstar status. She has had so much success selling homes that she was named her office’s “Rookie of the Year”.

One of the reasons that younger agents like Johnson are needed is that they bring a fresh perspective and innate knowledge of the Gen X and Gen Y buyer or seller because they are well…in that demo.

While older, traditional agents have to rely on second hand information to understand what young single women are looking for, or possibly what the needs of a buppie may be, or possibly what appeals to a gay buyer or seller, the younger Gen Y agent already knows and more than likely has friends and many associates in those demos.

Accordingly, the Gen Y market also wants agents who are honest and open with them. The question they really want to know? Why are they paying so much commission?

I’ll leave that question for another time, but suffice it to say, this generation is viable. They know what they want and they want agents that can serve them in the manner they expect to be served.

Lisa Johnson and many like her understand this and they are breaking from the mold of conventional wisdom and are not looking back.

She recently sold another house on a street where many others remain on the market, sitting idle waiting for someone to market them. Her secret?

“The buyers saw a posting on my blog and came to our open house that weekend and then wrote their offer,” she said. “No blog post, no buyer. Technology sold this one.”

Amazing, is the wisdom out of the mouths of babes!

30 comments

The National Association Of Realtors Announces That The Typewriter Is State Of The Art Technology

 Real Estate Radio USA | National Association of Realtors Pat V. Combs

The NAR has launched a new website called Realtor Confidential. This site is “designed to educate our membership about technology-related topics and investigate how NAR can best use Web-based technology to communicate with members”.

In this, the first season of the Realtor Confidential series, the camera crew and production team have decided to follow 2007 NAR President Pat V. Combs, as she and her staff “implement new technologies”.

You know, people accuse us of Realtor bashing and it is just unfounded. We just bring to light the incredulity of what is fast becoming the laughing stock of trade organizations.

When you view the video below, you may think you’re watching a skit on Saturday Night Live, but unfortunately, you’re not.

From the “We can’t make this stuff up” department, comes a video featuring the 2007 NAR President Pat V. Combs wherein she describes the mainstays, the must haves in technological advancement.

Without further adieu, I give you the 2007 NAR President explaining to the world, that technology that is vital to the success of a Realtor.

There you have it. For all of us who did not know, it is the typewriter that no real estate agent can do without because you simply can not fill out forms in any other manner. Ummm…okay.

So, since this video was placed out there for the world to view, just what do you think the reviews will be like?

The former head of one of the world’s biggest trade organizations just allowed herself to be filmed telling the world that Realtors will be technologically advanced if they have a typewriter, a fax machine, a printer and a scanner…and let’s not forget about email.

My God what would she do if she heard about Twitter?

Is writing a story on this Realtor bashing? We didn’t make this video and put it on the Internet. This was supposed to “help” agents? Much to the contrary, this has got to be really, really embarrassing for a lot of Realtors.

Waiting with baited breath for the next informative episode! I am sure you are too.

78 comments

What Did Carol Hian Do Wrong?

Carol Hian | Kris Berg | Redfin

Okay, I have taken a full 24 hours to digest this blogosphere debacle before offering my 2 cents. In addition I have spoken to Glen Kelman, the CEO of Redfin as we interviewed him today on our show about this..this..thing of ours.

Glen, the consummate professional as always, denounced the now infamous blog post by Ms. Hian and terminated his relationship with her. It was obviously the right thing to do by a business owner responsible for protecting his brand and company’s image.

As the captain of the Redfin ship, it was an expected response and the swiftness of his actions is commendable and an attribute to his character. Glen Kelman is first class.

Now let’s get something else out of the way early here. It is obvious from reviewing the post that Kris Berg wrote, that it was an orchestrated shot at Redfin. It was most assuredly a well planned hit. This can not be denied. Anybody taking the time to read the post can clearly see the two to the back of the head that she fired at Redfin. Was this act supposed to go without anyone seeking some form of retribution?

So now comes Ms. Hian, feeling a little bit more than put off by Ms. Berg’s swipe at Redfin, and Hian, seeking to avenge the assault on her beloved Redfin unleashes a metaphorical torrent against Berg personally. Some thought there was an anti-semitic inference in the post but this has since been found not to be the case.

Personally, I found Hian’s post a bit non-sensical and basically blew it off as another blogger taking an opportunity to take down another. Problem was she made an unsanctioned hit at a “made member”. Kelman saw it coming, tried to quell the anger of the five families of the blogosphere, but the upheaval was too great.

No one could have envisioned the absolute s*%tstorm that quickly ensued. It seems that almost every prominent blogger from the RE.net world was absolutely slamming Hian for what she had written about Berg. Fuhgettaboutit, she was done!

A ful fledged RE blogosphere whacking was in plain view. It culminated with Hian being taken for a ride and now in true Godfather form, she now sleep’s with fishes. Harsh sentence for writing a blog post but hey, ya gotta do what ya gotta do. Wow!

As I watched this unfold, it made me wonder. What did Hian do that was so wrong? Was she taken to task because she wrote for Redfin? Was she taken to task because she went after a beloved member of the RE blogosphere?

What was it that she did so wrong? I ask this because surely each and everyone of you reading this post has seen a blog war or inflammatory post by some blogger or the other. In fact many of you reading this have instigated or made incendiary personal “attacks” at many in the blogosphere.

So what was it Hian did so wrong? Is Berg beyond reproach? I have never met her and she is obviously well liked but since when did it become off limits to question someone and to hold them accountable for that which they write?

If you write a post that is designed to inflame and draw ire, are you not supposed to expect to receive some form of comeuppance? Isn’t that the reason some write controversial posts?

So what gives? To take a line from a Mel Brooks movie, “we all do it, you do it, she does it, he does it, we all do it”. Are you telling me, seriously telling me, that what Hian wrote deserved that kind of response? I am not referring to the punishment, I am referring to the response. As she wrote for Redfin, only Kelman can determine the appropriateness of sentencing and he has spoken in that regard quite clearly.

No what I am talking about is the angry, vehement response that was almost mob-like in fashion. I could almost hear Michael Corleone speaking as I read the collection of angry responses..”don’t ever take sides with anyone against the Family again. Ever”.Yeah…uddawise we’re gonna haveta whack ya..capisce?

Well, I think that while Glen at Redfin took care of what he had to take care of. In the wake of this episode, the question to me and many others remains.

What was so wrong with what Hian did? If the answer is as simple as Berg’s a friend to many and that she has many friends and she’s a made member…then fine, ok, that’s a good answer. However there has to be more here. Are you telling me that somebody got taken to task because of an inflammatory blog article? We all might as well call it a day if that’s the case!

I have read comments on many blogs and had captured many for this post, but decided this post would be much too long if I posted a list of comments from the many blog wars I have read about or participated in.

Many of the posts and comments I have seen on some blogs were far, far, more incendiary and there was nothing remotely close to the type of sanctioned assassination that was executed on Ms. Hian.

So, it just makes me and many others wonder as to the hypocrisy of the reaction by some who sought Ms. Hian’s head on a platter.

I am not condoning what either Ms. Berg or Ms. Hian wrote. If it weren’t for the fact that she wrote for Redfin we would probably not even be talking about this.

C’mon, let’s be real here. If Ms. Hian had her own blog this kind of blog war would have driven traffic to both of the combatants blogs and shot after shot would have been taken. Ms. Berg’s supporters would have been in her corner and Ms. Hian’s supporters would have had her back.

We’ve all been there and done that. The problem here is Ms. Hian left her rear flank open and was vulnerable. Her weakness was exploited and she was taken down hard and fast. She had Fredo guarding her and she got whacked. Mission accomplished. Hian miscalculated her strength and obviously underestimated her opponents strengths. Maybe she should have dressed up Enzo the Baker as a thug to scare off the hitmen that came calling after her.

However, it’s safe to assume, that if she had not been a contributor on Redfin’s blog, if this was a post on her own blog somewhere in WordPress land, she would still be around today. Although the uproar may have been as strong, it would not have ended up with her being rubbed out.

Obviously if she had an Active Rain blog, or if she wrote for us or if she wrote for Bloodhound or a number of other sites, do you think her execution would have been so swift, if at all?

Of course not! Hian screwed up, she did not know her place and she was felled by the support of an obviously better armed opponent..and worst of all she fought her battle on someone else’s turf. She was doomed before she finished typing.

Let’s not kid ourselves. We have all been offended by something someone wrote on a blog somewhere. We’re all adults. People regularly take personal attacks on the President, on many a politician, on sports figures, on actors, on Britney…you name it, personal attacks are a part of life if you place yourself in the public eye. Ever take a gander at some of the content on the Huffington Post or Daily Kos?

The expectation of a personal attack is magnified if you write something that is unpopular or deemed controversial. If not so, why write such a post? Answer: You want someone to read what you wrote..that’s why.

Ms. Berg took a shot, it provided tremendous exposure for her, drove a great deal of traffic to her blog and I applaud her for being the “Google pandering ho” that we all aspire to be. I mean that in quite the Tomlinsonian type of way.

RIP Ms. Hian, you drew snake eyes on this one. You went against the family and got a visit from Al Neri. Next time do a bit more research, pick your battle correctly and make sure your base is secure in case you need to retreat or have support if necessary.

48 comments

Sometimes Change Need Not Be Subtle

Real Estate Radio USA | Real Estate Changes

The old way is out and the new way is in. The manner in which you are presently engaged will cease to exist. You must change. You will have no choice!

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Is The Short Sale Dead?

Is the short sale?

The last time I checked, the short sale was on the gurney headed for the emergency room. I looked through the windows and saw the priest administering last rites so I am not sure if it’s going to survive. I can tell you though, it doesn’t look good.

What happened? Well, doing some investigative journalism, I crossed the police caution tape and started asking the witnesses what they saw. “Bank took to long to respond and my buyer walked”, remarked one distraught Realtor.

“My homeowner could not compile or would not compile all of the information the bank needed”, lamented another Realtor; while a third said she could not even find any pulse…the bank did not even respond. It was as if they simply gave up on life.

Yet, I could not understand why one Realtor, off in the distance taking pictures, seemed to be smiling, almost guffawing at the tragedy that other Realtors have endured.

I followed closely behind as he hurried away in his newly polished Mercedes. He did not seem to notice that I was following or if he did, he did not care. Either way, he drove for a while and showed up at a property. This property looked familiar.

It appeared similar to the property wherein the short sale was just shot down. The same weedy, tall grass, the same unkempt yard, even from my vantage point I could see the curtain-less windows that indicated that there was no one home. The property was vacant. Was this another short sale prospect ready to meet an untimely end? Was the Mercedes driver the Short Sale Killer?

I had to get a closer look. I moved up closer and closer until I was in view of the suspect. Just as he turned to see me, a bus drove up. From the bus emerged a bevy of other suspects who have been on the lam for some time. I recognized these perps.

They were BUYERS! They have been hiding for what seems like years! What were they doing here? Was the killing of a short sale some kind of gang initiation? Was it some crazy Mansonish cult that got their willies knocking off short sales?

And then it happened. I was spotted. The Cheshire cat smiling Mercedes driver headed over to see me. I froze, not knowing whether to pull my business card or my blackberry. Something had to give, this might get ugly ..what to do..closer..OMG..he’s reaching for something..it’s was going to be either him or me and I had to move on this.

I jumped out the car and shouted, “Hey bud, what’s going on here? I know what you’re doing. You’re not going to get away with killing another short sale”.

The man responded and what he pulled from his bag wasn’t a loaded blackberry at all. He was loaded with something much more powerful. He had a prospectus with everything you wanted to know about this property and asked me to join them.

I looked down somewhat bewildered at the document before me. It was page after page of pertinent information on the house that we were standing in front of. “What is this?” “What are all these Buyers doing here?” “This isn’t how to do a short sale?” “Why are you killing short sales?” These were some of the questions that I peppered the man with.

He laughed ..almost bellowing and said “Haven’t you heard…Short Sales are dead, REO deals are the way to go.”

With that light bulbs began going off in my head. That’s why the Buyers have returned. Of course, that’s it! Buying properties with clear title at prices of 35%-50% off of current market value were bringing the buyers out in droves.

Deals being cut and accepted in days instead of weeks and months. Properties that actually cash flowed from day 1. It was as if there had been some kind of real estate epiphany.

Looking around at the throngs of enthusiastic buyers I realized this man was not to be feared. He was to be revered. He wasn’t the real estate Lucifer, no he was the REO guy. The keeper of profit, The gatekeeper of capitalism. I like Mr. REO.

If you, like me, have been waiting for the ninth wave , the return of yesteryear…it is here and it’s yours for the taking. Good bye short sale!

Viva la REO!

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If 90% of the Buyers Go Away Will 90% Of Realtors Go Away As Well?

Supply and Demand | AP Aol Poll says real estate is in trouble 

Nearly 90% of consumers recently polled say they are not interested in buying a home any time soon.  A joint poll of the Associated Press and AOL indicated that the recovery of the housing sector will not be any time soon if the retail American consumer has anything to say about it.

60% of those polled stated that they were DEFINITELY not going to buy a home anytime soon while just 0ver 10% said they would be looking to purchase a new home in the near future.

You don’t have to be a mathematical genius to see that there is a tremendous amount of inventory available for a very slim and decreasing demand. If supply and demand ideology is true, then it is safe to say that there are going to be an overwhelmingly increasing number of unsold homes.

Since unsold homes equates to unearned commissions, what are the majority of real estate agents going to do? Earlier this year, we wrote what was viewed as an inflammatory article announcing the NAR Going Out Of Business Sale. Doesn’t sound too far fetched anymore does it?

Don’t Believe It’s A Going Out Of Business Sale…Then Somebody’s Lying To You!

While this news of prospective buyers not wanting to purchase any homes is somewhat disconcerting, it’s not the main reason to be alarmed. It’s merely a by product of a continued misunderstanding of the simple economic precept of supply and demand.

Many current home sellers do not understand it, and many listing agents do not understand it. It is my opinion that if this theory was more understood and accepted, then it is possible that the housing market would not be in the state that it is.

The Laws of Supply and Demand represent the cornerstone of economics and these laws are the basis for a free market economy. DEMAND is based upon how many buyers are interested in acquiring a certain product or service AND how much of that service or product they are interested in consuming. The latter part of that statement is often overlooked.

When planning to bring a product or service to market it is prudent to have a good understanding on not only the consumer’s desire for a product, but also knowing how much of that product the consumer is willing to…well consume.

When you go to a movie, you come to the theater and take a seat and wait for the film to begin. As you sit with your popcorn and soda, you see the room begin to fill up. The theater owner knows there is a certain part of the neighborhood that will be interested in a certain film, what is harder to forecast is how many of those in the neighborhood are actually willing to purchase a ticket at that particular time and in the near future to see THAT particular film.

In real estate, with a tremendous amount of inventory, there are less and less buyers willing to even purchase a home and the Realtor working in that particular market can not determine which home any prospective buyer will purchase at any particular price at any given time. The irrefutable laws of supply and demand are working negatively on the pricing of inventory in the real estate industry.

While certainly there are SOME buyers out there looking for homes in any given market, and that is a given, what has now been determined by the latest AP/AOL poll is that the market of available buyers willing to consume at the present time and foreseeable future has dwindled considerably.

The “law of demand” is important for those in the real estate industry to understand. This basis of enterprise states that the higher the retail or asking price of a good, the less consumers will DEMAND that product or service. In black and white this is an undeniable fact, point blank…the higher the price, the lower the quantity of the demand. Add in to the mix a perceived decline in value and you have a recipe for economic disaster.

In the present real estate market, there exists a declining consumer base willing to purchase any home, at any price at any time in the foreseeable future, while you have an incredible, growing supply of product flooding the market and FURTHER influencing prices downwards.

In is incomprehensible how any seller or any agent can be utilizing the obsolete CMA or comparable system of pricing homes on the market right now. Real estate seems to be one of the only businesses wherein price is not determined by an accurate and intelligent assessment of supply and demand. Why?

Real estate professionals are either not understanding the proven laws of supply and demand or are seeking to ignore them. The former is remedied by an actual study of economics and business, the latter spells certain supplantation for those unlearned.

Maybe the NAR should have saved the $40 Million it spent on the “Great Time To Buy Campaign” which was DOA when it was unveiled. While I agree it is indeed a great time to buy, the message was futile and lost. It should have been the “Great Time To Buy At A Price People Are Willing To Pay – No Such Thing As A Low Ball Offer – No Offer Refused Campaign”, maybe that campaign would have had some legs.

I am sure there are some top producing agents out there that will indeed weather this storm, but if approximately 90% of the consumers WILL NOT be buying a home in the foreseeable future, is the Great Realtor Famine upon us?

Other Posts you may find Interesting…

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It’s 10:00AM; Do You Know Where Your Realtor Is?

Real Estate News } Real Estate Radio USA

Do you know that the Realtor who you have your house listed with is actually still earning their living as a Realtor? That was the concern recently voiced and posed to us by a concerned agent in Poinciana, Florida.

“In Central Florida, for example, over 50% of real estate agents are not actively working their listings. (That’s an approximation based on the number of agents who never return my calls and/or are know to now have full-time jobs doing something else.) Seems to me that there is something inherently unethical about REALTORS who don’t disclose to their customers that they aren’t working full-time to sell their properties.”

While I understand that this agent is probably a bit frustrated with her Central Florida colleagues and may be embellishing a bit, this comment gave me reason to ponder the implications of her statement.

A real estate agent approaches a homeowner and seeks to obtain a listing, prepares a listing presentation, and obtains a listing, all the while knowing that they will only be working part-time to sell the homeowner’s property. The homeowner, of course thinking they are hiring a professional, would probably not think to ask this “professional” if they are only in the game on a part-time basis.

Obviously this is not something the part-time “professional” is going to offer or disclose willingly, so therein lies the dilemma. Is there an inherent misrepresentation if an agent does not inform the homeowner that they are not earning enough of a living as a real estate agent and is not a full-time agent?

Does the homeowner have the right to know in order to make a fully informed and properly represented hiring decision that could possibly involve the signing of a binding contract?

In reviewing the National Association of Realtors Code of Ethics there seems to be some evidence to support the notion that an agent should indeed inform a homeowner of their status as a part-time agent.

Article 12
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

In a real estate market that provides its own challenges, should a homeowner not be entitled to know whether or not a real estate agent is truly making his or hers best efforts to sell and market their home?

Is this why so many calls to agents go unanswered? Is this why so many offers go without a response? I wonder with so many agents leaving the business, how many have stayed, only to be working in a part-time status?

How many have taken listings and already have moved on to their “day job” never informing the homeowner of their career change?

In this litigious climate wherein lawyers are lining up to take shots at Realtors, should agents be giving homeowners more lawsuit fodder?

As I am not an agent, and in light of recent articles I have written that have been seen as inflammatory, I am going to step back and just ask the questions this time. My opinion does not matter in this regard, I don’t have a listing with an agent and I am not a Realtor. I am however very interested to hear from other real estate professionals as to what they think about this. I’ll reserve comment for a follow-up article.

I would also like to hear comments from consumers as to what they think about this. When you hire an agent, do you think you are hiring a full-time professional? What would you think if you found out that the Realtor you had hired had another day job?

We won’t even ask the question as to whether a “part-time” agent should be entitled to 3%-4% commission on a second job gig…not yet anyways.

What say you all on this?

Other Posts you may find Interesting…

32 comments

What Would You Do?

Real Estate Radio USA | What Would A Real Estate Agent Do to Help A Homeowner In A Foreclosure Mess?

Here’s the scenario. A consumer calls you based upon a blog post that you have recently made. He is in dire NEED of the services of a competent and professional real estate agent.

He must sell his house quickly. He is in foreclosure and he does not want his credit damaged. He already has had a short sale denied by his bank because he has too many other assets. His only alternative is to sell the home.

Here are the vital signs:

1. The home is worth approximately $300,000.00 as determined by comparable analysis
2. He owes $208,000.00 on his first and second mortgage combined
3. He has a Federal Tax Lien in the amount of $22,500.00
4. He has a municipal lien for not maintaining his pool (it’s a green slimy mess) and it has been running since October 2007 at the rate of $1,000.00 per day
5. He has not paid the County Property taxes in 2 years and he owes the County $12,500.00
6. He has not listed the property because he thinks he can not afford to pay commission and he’s not willing to sign a listing agreement that he can not terminate at will
7. His wife is on title with him but she’s now in Chicago living with her parents and wants $5,000 from the sale of the house
8. He needs at least $5,000.00 himself to be able to move on with his life
9. He will also need to stay in the house for 30 days AFTER the closing because it will take him that long to move because he can’t move until he gets the money from the closing
10. The house has pretty good bones but will need:
a.  basic cosmetic work
b.  new landscaping
c.  the pool drained, cleaned and refilled as well as a new pump
d. the roof needs to be replaced (estimate from local roofer is $8,500.00)
e. the garage door needs to be replaced

Other than what has been stated above, the home is located in an upper middle class neighborhood with good schools and is in close proximity to great amenities like a major mall, fine restaurants and exciting nightlife activities. It is also located within an area of stable employment.

This house goes to auction on May 31, 2008. What would you do? Seriously, often times we are accused of “realtor bashing”…not true it’s the sub-par ones that irk us. However we know there are some consummate professionals, many of whom have taken offense to some of my posts.

Well, I have decided to make a concerted effort to engage much more civilly with real estate agents and to network with fellow real estate professionals so that we may all further our endeavors through the camaraderie of being brothers and sisters at arms…if you will.

So in that regard, I want to be more of a resource facilitator so that we can all benefit from our mutual experiences. That being said, I wanted to poll members of Active Rain and the readers of Bloodhound Blog to get their valued input as to how they would handle this transaction.

I am sure with the tens of thousands of readers of these collective sites, as well as our own, that we can come up with a plan to successfully help Mr. “Smith”  sell this home and move on with his life.

So please, let’s work together not only to help Mr. Smith but to help each other should any agent anywhere be faced with this kind of challenge in the future.

What would you do?

Other Posts From Real Estate Radio USA that you may find Interesting…

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