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Archive for July, 2008

A real estate sign of the times: Our first custom yard sign printed in both English and Spanish

This is my column for this week from the Arizona Republic (permanent link).

 
A real estate sign of the times: Our first custom yard sign printed in both English and Spanish

We do things that other brokers in the Phoenix area don’t do. We’re not the busiest listing brokerage — not by miles — but we’re among the most aggressively innovative in our marketing practices.

Our yard signs have always been very big, to try to grab as much attention as we can get for our listed homes, but for the past two years we have been building custom signs for our listings.

Working with Signs By Tomorrow in Peoria, we have been able to build huge, custom, four-color signs for our listed homes — featuring giant photographs of the interior and exterior of the house and custom descriptive copy about the property.

Our signs stop traffic. I know because I will often sit in my car a block or two away and watch passing cars as they slow down and stop to take in the sign, look over the house and grab a flyer.

We have a home listed in Peoria right now, and we took things one step further for this property. We know that a significant number of people in the surrounding area speak Spanish as their first language, so both the flyer and the custom sign are printed with one side in English and one side in Spanish.

Working from the English version of the Flyer, Enrique Lopez of YourPrintSource.com prepared the Spanish translation. This copy was typeset for both the flyer and the sign. If you approach the home — 7813 West Beryl Avenue — from the East, you’ll see the sign and flyer in English. From the West, you’ll see the sign and flyer in Spanish.

Just because there’s no reason not to, the photos on each side of the sign are unique. Instead of four pictures, we were able to use eight.

We also added a Spanish version of the flyer to the MLS listing so that Spanish-speaking buyers can read about the features of the home.

Regardless of our endlessly-debated border policies, as a matter of pure demographics, Phoenix is becoming a bilingual city. Doing real estate promotional material in both English and Spanish just makes sense.

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What’s the obstacle to a paperless, iPhone-able real estate transaction? The sclerotic real estate industry itself

This is my column for last week from the Arizona Republic (permanent link).

 
What’s the obstacle to a paperless, iPhone-able real estate transaction? The sclerotic real estate industry itself

I carry my digital still camera and my Flip video camera with me wherever I go. I have belt-mounted camera cases, so they’re easy to carry, never in the way. I keep those two cameras with my car keys, along with everything else I take with me when I put my keys in my pocket: My wallet, my business cards, my watch, my phone, my Bluetooth headset and my MLS key.

All of these things are small and portable, either pocketable or belt-mounted, but I have almost all of the tools of my trade upon my person when I leave the house. I look like a cop — not always a bad thing — but I have my stuff with me so that I can work when I need to.

This is what I want for the iPhone or for some later iteration of the idea of a hand-held computer. A laptop or a notebook computer is luggable, not portable. Even rechargeable printers are luggable, not portable. I might have a laptop and printer in my trunk — absorbing damage from every bump in the road and cooking in the summer heat — but I don’t have that computing power on my person.

My dream is simple: Everything that I might do on a desktop or laptop computer, I want to be able to do from a hand-held computer. I’m perfectly happy to give up printed documents if I can shoot PDFs in all directions at will. This sounds almost implausible, but I think we might be down to the sclerotic real estate industry itself as the obstacle: Realtor associations, lenders, title companies, and all of the many branches of government.

It’s common, when discussing ideas like this, to throw up technical issues. The technical problems are truly trivial. The problem we face in real estate is the dinosaur mentality of our leadership. Properazzi.com has an iPhone interface, as do Zillow.com and Trulia.com. The National Association of Realtors doesn’t even have a clue, much less a plan, even though the importance of the iPhone has been undeniable since January 2007.

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Any BloodHounds looking for a lead in Ghana?

We have a feature called “Ask Our Agent” on our Listing Detail Pages where people can do just that, no registration required and anonymously if they so choose.

Today, for the first time, we got our first “African Diplomat” phisher, and it is such a relief. Up to now, almost all of the questions have been legitimate, and none the bogus ones were from African con men. I was insulted, to be honest, but now we have arrived! A Minister from Ghana wants to buy a $25m residence/hotel:

DEAR SIR,

I AM CONTACTIN YOU ON BEHAVE OF HONORABLE DR RICHARD ANANE MINISTER, FEDERAL REPUBLIC OF GHANA. I AM CONTACTING YOU IN RESPECT OF HOUSE PROPERTIES FOR PURCHASE AS CONTAINED IN YOUR PROFILE.
HE WANT A RESIDENTIAL HOUSE FOR HIS FAMILY IN YOUR COUNTRY. THE LOCATION MUST BE OUTSIDE THE CITY. AND IT MUST HAVE ALL HOUSE COMFORTS.AND THIS PROPERTIES ARE ESTIMATED $25 MILLION US DOLLAR BOTH THE RESIDENTIAL HOUSE AND THE HOTEL.

IF YOU ARE CAPABLE AND WILING TO SECURE THE ABOVE MENTIONED PROPERTIES AS QUICKLY AS POSSIBLE CONTACT ME TELL:00233-246-430-865.SO THAT I CAN TELL YOU WHAT TO DO ABOUT THIS PURCHASE.

THIS PURCHASE MUST BE VERY CONFIDENTIAL BECAUSE OF HIS POSITION IN THE GOVERNMENT.

EXPECTING YOUR SWIFT RESPONSE,MR.MICHAEL JOEL.

How awesome is that? Textbook! Here is the response I just emailed back, for your Saturday AM enjoyment:

Dear Sir:

I am contacting you on behalf of the former CEO of a mortgage originator here in the US. I got your email address from a Real Estate agent who, as I write this, is in the driveway trying to figure out how to program the GPS in her Lexus to locate $25 million residence/hotel properties for your minister. She is very excicted to help, and wants you to know that she is ready and willing to provide you with access to her bank accounts just in case you need help moving money around, no questions asked.

Your communication could not have been more timely. I can tell by your choice of an @yahoo.com email address like mine and your willingness to initiate multi-million dollar deals with people you have never met that you are a man who can be trusted.  My client is interested in leaving the US for a while, and bringing a large amount of cash with him. Ghana is his first choice. He hears that Cape Coast is nice spot.

First, my client will need a new Ghana passport and a hotel where he can lay low, so its a good thing your guy is a minister, right? Wink, wink, nudge, nudge, wink’s as good as a nod to a blind bat, eh, know what I mean?

My client is interested in buying a hotel there to use as a coastal residence. The first thing we will need you to do is find us a good local appraiser and we will go from there. Does Ghana have any bond rating agencies?

Once the hotel is secured, he will need a compound on high ground, with a local populace that he can first hire to act as lookouts and then, when the heat is off a bit, help him build a build a phone bank. Once that is done, he will train them to call people at dinner time and offer them loans, so you can tell the minister this is a job creation program.

Before we can do anyting, though, we need to get my client’s cash to an intermediate country with favorble banking laws. He can’t open the account because he is being watched, so we need you to open an account in Switzerland for us. You will need to deposit at least $10 million to open an account there, but that should not be problem considering that your minister has $25 million. Get that done and email me back and I will give you the information you need to make my client a co-signer on the account so that he can deposit his money. In exchange for this service, my guy will pay your guy $5 million and give him a stake in the new Ghana-based mortgage business.

This transaction must be kept very quiet for obvious reasons. I await your timely response,

Hal J Likiakik, esq.

7 comments

The Youth Myth: Why It’s Hip To Be Square in Real Estate Brokerage

You’re just back from Inman Connect?  Forget everything you heard there.  Chasing the hip, young 18-34 market is great if you’re selling sneakers but could be detrimental to the health of YOUR business for the next 7 years.  Here’s why:

Five reasons why you should avoid the 18-34 year old market for the next 7 years:

1- They ain’t got no money.

2- They don’t trust real estate as an investment.  This demographic believes that real estate is either perpetually overpriced or that it is dangerous.  Some eschewed the asset class, some leveraged it irresponsibly and lost.  It’s not that they don’t trust you because you’re a shady REALTOR, they don’t trust your product.

3- They view you as a functionary.  Your value hasn’t been established to them because they haven’t had good experiences with real estate.  They see you as an over-priced clerk because they watched you make “easy money’ while they chased the overpriced asset.

4- They need a lot of education…lots of it.  Since old is now new (in lending), the young are basically dinosaurs.

5- They really don’t have any “pain”.  They’ll be focusing on mitigating losses rather than maximizing wealth.  Their “pain” is best served by loss mitigation specialists and not wealth maximizers.

So…if that’s true, why the hell are you screwing around on Facebook and Twitter? Because the fastest growing user groups on those two social networks are the cheese, baby…the 45-65 age group.  If you want to sell or finance a lot of homes in the next 7-10 years, look for the baby boomers. Here’s why:

Five reasons the 45-65 market is the ticket to “real estate riches” until 2015:

1- They have the money and they’re getting a truckload more .  Baby boomers are in their peak earning years and are inheriting the largest transference of wealth, in history, as their WW2 generation parents pass away.

2- Boomers LOVE and trust real estate as an investment.  They’ve had great experiences with real estate as an asset class want to own 2 or 3 homes in retirement (this is a group that could buy twice as many properties as their children in the next 7 years).

3- They value you as a fiduciary, not a functionary.  They recognize, respect and want your expertise.  While they’re smart enough to figure it out on their own, they’re too busy going to concerts, visiting grandchildren, and staying in shape to pore over spreadsheets.

4- They’re already educated.  They understand the formula to real estate riches; buy, leverage responsibly, repeat.

5- They got pain…lots of it.  They think they’re going to live forever and don’t think they have enough money to do it.  They see real estate as an asset class to ease that pain.

The RE.net and the blogging Babbits are buying into the biggest lie ever foisted upon us by tech vendors; worship at the fountain of youth.  Follow the money, not the crowd.  You might not become famous but you certainly will get rich.

NEXT:  I’ll be talking about effective ways to market to Boomers online.  Think Bawld Guy; while he appears to be hip, he’s really square..which makes him..successful.

PS:  I’m generalizing when I categorize the demographic groups.  There are a lot of successful and responsible 18-34 year-olds but your odds are better with their parents until 2015.  The cool part is that 80% of your competition will buy into the Youth Myth while you clean up on the Boomers.

PPS:  You don’t have to be a Boomer to serve them.  Cher and Demi don’t practice age discrimination.

66 comments

Mortgage Market Week in Review

Well, here we are on Friday again and I’m trying to figure out how to summarize all that’s been happening in the mortgage and financial worlds.   I could write a book about it, but I won’t (at least not today….)
So, here goes:
The week started out with Wachovia (the 4th largest bank in the country) announcing that they were getting out of wholesale lending.   That started a lot of people wondering how bad things were at Wachovia because Indymac announced that on a Monday and by Friday they were shut down.    On Tuesday, Wachovia announced that they lost a LOT of money ($8.9 billion to be exact) in the 2nd quarter.   But guess what, their CEO stood up and said, “I’m confident that we’re going to be fine,” and their stock went up.
Then we move on to our dear friends at Washington Mutual and they only announced a loss of $5.9 billion and announced that they were going to initiate cost cutting measures that will save them $1 billion.  Oh and their CEO stood up and said, “We aren’t going to need to raise any more money.”   And their stock went up.
In the interest of full disclosure, Fifth Third announced our earnings (losses) for the quarter.   Compared to these two, we did quite well, but we didn’t do as good as we’d like.   We came in down $202 million for the quarter.   But our CEO stood up and said, “We’ve made adjustments, we’ve raised additional money and we’ll be fine.”   Guess what our stock did?  Yep, it went up.
Existing Home Sales came in lower than expectations.   If you’ve been reading this for a while, you know my feelings on the year over year comparisons.   We’ve moved into a new market and comparing last year to this year is like comparing me to Tiger Woods.   There is no comparison because we aren’t even on the same playing field.
Weekly unemployment claims came in higher than expected.

National City came out and announced a huge loss for the 2nd quarter – $1.78 billion.   Their CEO stood up and said (Well, you get the picture……)
Washington Mutual had to make a second statement this week that said, “We really are okay!   Honest!   We’re healthy!  Everything’s fine!”   The market didn’t quite believe them and at the writing of this, their stock is down over 30% this week alone.
Durable good orders came out better than expected, but if you read the story behind the story at www.straighttalkaboutmortgages.com you’ll see that it’s not as good as it sounds.
New Home Sales came out down but not as bad as the market expected.
The House of Representatives passed the Fannie Freddie Bailout bill.   Now it’s off to the Senate.   Rumor has it that they’ll pass it but some of the people in the House are pushing Bush for a veto.
Oil prices have drifted down quite nicely this week.
Consumer Confidence came in surprisingly higher – do you think it was because the price of gas started
with a $3 rather than a $4?
Where does that leave us?   I’m going to quote John Augustine, a senior investment advisor at Fifth Third Investment Advisors because he summed it up quite nicely:

We now need better news in at least two of the below three areas to help support the recent Financial-led rebound in stocks –

  1. lower crude oil (…happening)
  2. better US housing market news (…not happening)
  3. calmer credit market (…not happening – credit spreads widening again with and continued concern about US loan losses).

I’ll leave you with a couple of thoughts:

1. If it sounds too good to be true, it probably is.   If it sounds too good to be true that bank stocks are going up in light of all of the losses, it probably is.

2. If someone says we’re at the bottom, good luck in believing that.   We’ve got a lot of inventory to work through and a lot of loan losses to sort out.

3. Something really interesting has happened – the spread between conforming and jumbo mortgages has all but disappeared.  Why?   Because of the problems that Fannie and Freddie are in and the pending bailout.

I’ll continue to keep in touch, let me know how I can be of help.

Thanks!

Tom Vanderwell
Quote of the week: When asked how to solve the housing crisis, Bill Gross, from PIMCO, replied: “One of the wisest men I know has this serious but admittedly impractical solution: have the government buy one million new/unoccupied homes, blow them up, and then start all over again. Absent that, he’s not quite sure what to do, nor am I.”
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Russell Shaw at StarPower: “Decide you’re going to do it.”

Here’s Russ yesterday. Sorry for the quality. We were at opposite ends of a packed room.

As a bonus, here’s a quick clip of the trade show floor:

Didn’t expect to have anything nice to say about the vendors, but Kristin Combs from Obeo is here. Worse news for cheap virtual tour vendors: They have new technology planned.

7 comments

The Epic Battle Ensues: Realtor vs. Realtwhore

Not sure if you’ve visited TruliaVoices lately – there is an active thread currently running, at last count, 1,599 responses. I believe that is the longest running thread in Trulia’s fledgling history. The poster has since updated the question with more information qualifying the question due to the overwhelming number of responses, however, the basic question is, “Why should someone buy in this market?”

When initially posted, the question was a legitimate query into an expert’s view as to why someone in the poster’s circumstances should buy in Chicago. Personally, I had a problem with the question – should the response be a multiple choice response?

a. buy low, sell high
b. interest rates are at historically low levels
c. Jill is half as tall as Bill and 3/4 tall as Sally
d. Vicodine
e. There is insufficent data to answer to this question

I like “e” – and for the first time in almost 30 years, I can now fully appreciate the significance of that answer on the SATs. For those of you who found Vicodine to be the logical choice, may I suggest an intervention?

Ok – so I’ve been following the thread from time to time, watching it morph from being a useful discussion to – lately – a discussion regarding the existence of nuclear weapons in Israel. Almost like a game of telephone gone bad. More disturbing to me however is how the question has evolved into a rhetorical question “WHY THE HELL would someone buy in this market? What are you, an idiot?”

If you’re familiar with the TruliaVoices rating scheme, you understand that comments are rated by either a thumbs up or thumbs down. Honestly, I think there’s a conspiracy brewing. As you read the responses of the many realtors who answered the question, “There is no better time to buy!”, many of those responses were met with a burrage of thrumbs down. You can almost hear the resounding “BOO!”, “LOSER!” – you know, while you’re at, why don’t you just poke me and call me fat.

On the flipside, the number of written responses as insults were flying back and forth, discrediting realtors who provided insightful responses to a fairly ambiguous question. Again – thumbs up to the responder who really stuck it to the realtor – thunderous applause – BRAVO!

I think the collective mindset – or groupthink has become, any agent who tells a consumer to buy in this market is nothing but a realtwhore. Of course you want to tell people to buy, otherwise you won’t make your ridiculous commissions.

Well, I don’t think NAR’s national campaign blanket statement, “There’s no better time to buy! Consult your local realtor” has gained us points in the credibility deparment. A good majority of consumers aren’t convinced. Honestly, I did whince at a few responses (some with big hair) – shiney, happy people providing generic responses to a very generic question. Interest rates are low, inventory is high, it’s a buyers market! Buy! Buy! Buy! Sorry – they do kinda sound like realtwhores.

It’s a tough crowd in there, many of whom are well armed – spouting out data statistics from Standard and Poors, the Case Shiller Index, weighted averages etc. Even Fortune magazine wrote an article about the state of the market. Astonishing that Fortune’s article had higher credibility that a broker of greater than 20 years experience who has shared her thoughtful, specific responses throughout the thread. Hmmm – I thought Fortune sold magazines, not real estate? Why is the Case Shiller Index the defacto standard instead of NAR’s market stats? … because NAR’s nothing but a bunch of realtwhores.

I will say I did find a great deal of humor by reading the responses. I’ve been following the thread and have noticed a good number of real estate professionals’ responses. Many continue to dent their armor, they stood their ground – they took a few for the team, but then again, they do this for a living.

I couldn’t help but be struck by one agent’s response who up until then had been fighting the good fight, but then sheepishly admitted, oh I don’t actually use this site as a prospecting tool, I just come here from time to time and “check-in”.

Excuse me?

Let me get this straight – you fill out a profile in detail, providing all of your contact information, designate yourself as a real estate professional, actively participate in discussions, follow a thread that has grown to almost 1,600 responses, share your knowledge and expertise, but you don’t want consumers to think you’re a realtwhore – is that was you mean?

Who are you kidding? After I read that – the groupthink just took a survey: *DING*DING*DING, survey says *REALTWHORE* Suffice it to say – when a potential client now calls said agent, it is their duty to say – oh, I’m sorry, while I appreciate the fact that you enjoyed my knowledge and experience, I was not seeking any potential business – I’m afraid I can’t help you – I’m a realtor, not a realtwhore.

Some how realtors who admit they use social networking sites as prospecting tools are looked upon as less credible. How far from the truth can that be? When you establish a web presence, you’re prospecting. Consumers are using these sites in exponentially increasing numbers. While some consumers enjoy the game of discrediting the experts and the realtwhores, a greater majority are seeking sage advice. They need expertise and knowledge and they are seeking out the experts. Groupthink tells that buying and selling is a do-it-yourself job. For some that very well may be the case – some are not seeking to be converted and you know, that’s ok. Where better to draw the distinction between a realtor and a realtwhore?

Regarding my own TruliaVoices involvement, in my own professional way, I would like to address the few of you who gave me thumbs down on my incredibly insightful responses. No – for you who choose to discredit me – I will not pick up my toys and leave the sandbox. Nope – instead I want you to follow these simple directions:

Apply lips firmly to my right buttock. Pucker and release. Repeat.

Now see? It’s all in the delivery.

21 comments

Open sourcing and spiking the punchbowl with anarchism. REBarCamp is birthed as a user generated unconference and it absolutely rocks!

There’s no question that I felt a lot of anxiety in having possibly two hundred people show up for a BarCamp event without a “well structured agenda”. Nearly the entire event was created by using a variety of social media tools, our fearless unorganizer, Andy Kaufman led the charge into creating an unprecedented event for Real Estate professionals.   The black pearl from REBarCamp is letting go of control and operating without hierarchy can work to generate progressive brainstorming.   The many volunteers and attendees should be real proud of themselves for putting on what was probably the most unique event Real Estate Technology has ever seen.  I wished I had more time to parse some of the data I know that’s being posted to the web right now, but I’m working on transacting 3 of the most challenging deals I’ve had in two years.

The videos below give a post wrap up perspective by a few of the Campers.

Mike price of ML Broadcast chimes in for substance and structure.

Mike Price video

Daniel Rothamel who’s “not big on circles” say’s we hit a home run.

Daniel Rothamel video

Todd Carpenter and BarCamp mastermind Andy Kaufman managed to even get some value despite all the cat herding.

Todd and Andy video

David Gibbons of Zillow, which sponsored Beer for Bloggers downstairs after the event, shares what a vet of social media learned and I think my Greg Swann” sneaks out as I give the Cafe Du Nord a mention. This of course, was recorded after my first celebratory pint of Racer Ale.

David Gibbons video

Many thanks to all of the amazing sponsors, volunteers, and participants for making this happen. I’m looking forward to gathering some more feedback as it comes in.

18 comments

Black Pearl from StarPower: Buy gas

No kidding. Buy gas.

Here’s the Black Pearl: When you put a buyer in your car, make your first stop the gas station to top off the tank.

The marketing objective? To communicate to your buyer that showing cost real money.

24 comments

The Top 7 Things Every Home Buyer Should Know…..

Okay, yesterday, I dealt with the theoretical and philosphical in our discussion of moral hazard.   Almost more of a topic for a college class than a blog about the mortgage world, don’t you think?

Well, today we’re going to get more into the every day nitty gritty with the Top 7 things (in random order) that I think everyone who is looking to buy or sell in today’s market needs to know:

1. 6 months ago is ancient history. What your neighbor sold his house for 6 months ago doesn’t matter.   What the seller was asking for the house 6 months ago doesn’t matter.   What matters is what the market will support today.

2. Don’t worry so much about what you paid for your house. Instead, look at the difference between what you can expect to sell your house for and what it’s going to cost you to buy the new one that you want.   I expect you’ll find that those are much more important numbers (unless you end up without any equity in which case you don’t sell).

3. Now is not the time for do-it-yourselfers. When the inventory levels are, depending on property type and area, any where from twice as much as is healthy (single family homes near my hometown) to 750% as much inventory as there should be (condos in Florida from what I’ve heard), you need to find a professional to help you navigate the markets and get your house noticed.   I’m not, frankly, just talking about calling the Realtor who sold the house up the street.  I’m talking about calling a high caliber professional who knows what it takes and can really give your house the attention that it needs.   People like Greg and Teri and Jeff are examples of the types of Realtors who have the knowledge and talent to help you navigate through this market and make wise decisions.

4. Any interest rate that starts with a 6 is a good number. Check out the attached chart.   From 1971 to 1998, we did not see any mortgage rates that started with a 6.   Frankly, we’ve gotten spoiled in an era of cheap credit and we need to keep things in perspective.

5. There is a Tangible Difference in working with a true mortgage professional.  I’m not talking about the difference between a mortgage broker (like Brian Brady) or a mortgage lender at a bank (like yours truly).   I’m talking about the difference between someone who can help you navigate the changing environment that we’re in.   Read The Tangible Difference and you’ll see what I mean.

6. Don’t buy a house today if you aren’t going to stay there at least 7 years. That’s right, a mortgage lender is telling you that if you don’t have at least a 7 year time frame in mind, you shouldn’t buy a house right now.   Why?  It’s all about the math.   If the market drops another 5% over the next year and then stays the same for two years, it’s going to take 7 years for you to recoup the 5% loss and then build up enough to pay the 6% Realtor’s fees when you sell and make a little profit too.   Long term, the value of real estate investments is very solid, but this market has spread things out a bit longer.

7. It really is a good time to buy a house. No, I’m not turning into a National Association of Realtors choir boy.   If you go into the transaction with the right mindset (long term investment), with a talented group of professionals (Realtor, lender, inspector and accountant) backing you up, and you remain analytical about the financials and keep the emotions from forcing decisions, I firmly believe that you’ll find yourself very glad that you made the move you made.   Is it the right time for everyone to buy and sell?   Nope, but I have the feeling that there are a lot of people sitting on the sidelines because they are scared of what the mainstream media has done to the portrayal of the markets and are missing out on some great opportunities to move forward and upward.

Yesterday was the theoretical, today is the practical.  If you have questions about it or want to discuss it further, let me know.

Tom Vanderwell

13 comments

What’s better than a hokey faux-video photo-based virtual tour? How about a FREE hokey faux-video photo-based virtual tour?

One of the factors that unites the vendors who annoy me is that they tend to do things that are fast, cheap and obvious, then market them like manna from the heavens. Still worse is doing something fast, cheap and obvious as a hosted solution, charging start-up fees, per use fees and monthly hosting fees — which can turn into a boatload of money real fast.

The back side of doing things that are fast, cheap and obvious is that the product category quickly becomes a commodity, with the corresponding free fall in prices. The dipshit thing may not be worth having, but at least it doesn’t cost much.

Today the economy of abundance comes to Ken-Burns-style virtual tours. Documentarian Ken Burns and others perfected a style of cinematography that lends motion to still photos by panning across and zooming in on the images. This turns out to be a fast, cheap and obvious way to build cheesy little faux-video virtual tours.

The good news: These kinds of tours have always been pretty cheap.

The bad news: They’re video, even if there is no actual live motion, so they occupy huge amounts of disk space and consume big bunches of bandwidth.

The worse news: They suck. As with true video, they only work as virtual tours as the secondary tour, the back-up or the teaser. All virtual tour solutions suck, but the faux-video photo-based virtual tour sucks big time.

The purpose of a virtual tour is to get the viewer to commit to the home, and the only way to do that is by way of the commitment of time. Any real estate promotion that excuses the buyer after a minute or two — as all video solutions do — is sub-optimal. The ideal virtual tour will offer the buyer more and more tools to play with, more and more ways to “try on” the home.

All virtual tours suck to one degree or another, but the best of the breed right now is Obeo.com. You get the panoramas and the pro-photographer photos, the neighborhood information, all that stuff. But what you get with Obeo and no one else is virtual remodeling, a chance for your buyers to make your not-quite-right listing their own. This is a category-killer. For now, Obeo has no competitors in the virtual tour category.

On the other hand, the vendors of faux-video photo-based virtual tours may well have wet the bed last night. Why? Because the price of their product dropped to zero dollars and zero cents:

PropertyPreviews.com today announced the launch of its new Web site, which provides real estate professionals, photographers and home sellers with free and easy-to-use technology to instantly create engaging real estate video tours. In addition, the site is a one-click stop for distributing videos and property information to real estate and video sites including YouTube, Trulia, Zillow, Oodle, Google and others. PropertyPreviews.com users never need to install software, sign contracts or incur video or subscription fees to use the free video creation service.

“Research shows that 84 percent of home buyers begin their home searches online,” said Jeff Harris, General Manager for PropertyPreviews.com. “Giving these prospective buyers an interactive, visual experience viewable from computers and iPhones enables real estate professionals and sellers to effectively market their properties. It’s like having an Open House, 24-hours a day.”

Photos uploaded to PropertyPreviews.com are automatically converted into a Controlled Motion Video (CMV). CMV gives visual movement to static property images to create videos without the typical pixelization and loss of quality of videotaped tours. While the video creation is automated, users can personalize tours with editing tools and a variety of background music selections. PropertyPreviews.com creates the video tour and displays the property details, tour and photos in an ePostcard that can be distributed to an agent’s Web site or other real estate listing services.

PropertyPreviews.com distributes the property information to a variety of Web sites, including Zillow, Trulia, Oodle, Google and YouTube — with one click of a button, and at no cost. The site also provides the ability to buy such marketing materials as DVDs, 5×7 photo books and to distribute the video tour to Realtor.com.

I think the words “Realtor.com” may be the actual monetization strategy, but I don’t have to care. Faux-video photo-based virtual tours might be hokey, and they might be pretty poor marketing tools, but — what the heck? — they’re FREE! My day is officially made.

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There aren’t enough advertising dollars for Zillow.com to go IPO, but adding Google Street View makes the site a little more useful

So far, in 30 months since Zillow.com launched, precisely one client has shown me a Zestimate. I mention the site all the time, just as a matter of casual conversation, but only the INTx types know what the hell I’m talking about. Last night on the the phone with Brian Brady, I equated the Realty.bots with model trains: We fool around with these model train layouts because they’re interesting and fun — and then we get up and go back to our real jobs on the railroad.

That’s not completely fair. I’ve been using Zillow more and more in my own real estate practice, as one of my pre-listing tools. Because our current MLS system sucks so bad — it’s gone on July 28th — often I will go to Zillow first.

One thing I’ve wanted and missed at the site is Google’s Street View.

Guess what we’re getting today? That link is dead for now, but I’m not under any embargo, so here’s the news:

Even though it uses Microsoft’s satellite imagery, Zillow will also be adding Google’s Street View technology for exterior elevations of homes and views of the streets and surrounding areas.

The other bit of Zillow news this week was the announcement by Zillow.com CFO Spencer Rascoff that the start-up will not be going IPO in 2008.

The problem? All of Zillow’s services are built on an advertising-based revenue model, and it is struggling to sell enough ads.
 
“There’s an online advertising recession right now, and we are not immune,” said Rascoff. He did not show any signs of departing from the company’s advertising-based business model, or its eventual plans for an IPO.

Street View doesn’t seem to be turned on yet, as I write this. The IPO spigot may be turned off for quite a while.

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Dan Kennedy InfusionSoft Tour: Four Cities in Four Days

If you’re unfamiliar with Dan Kennedy, he’s often referred to as “The Millionaire Maker“.  He cut his teeth as a direct marketing copywriting guru in the 80s, attracted a lot of readers in the 90s, and has built an army of students, this decade, through his Glazer-Kennedy Insider Circle.  His “superconference” had Gene Simmons and Nido Qubein as headline speakers.

InfusionSoft is a CRM on steroids and is used by many of Dan Kennedy’s successful students (among others).  Infusion Software is sponsoring a FREE  “Day with Dan” tour:

Infusionsoft, the leading, fast-growing provider of unique, integrated online/offline marketing, follow-up marketing and customer/prospect relationship management — the only software system ever endorsed by Dan Kennedy, and the one running the Glazer-Kennedy Insider’s Circle business — is sponsoring this 4-city seminar tour as an appreciation gift to our users and, with limited seating*, to other invited guests for three simple reasons: (a) as a meaningful contribution to the community of entrepreneurs in a challenging and uncertain economy; (b) as publicity tour for Mr. Kennedy’s newest books; and (c) as a means of introducing you and other business owners to Infusionsoft. There will be a brief “introduction to the power of Infusionsoft to transform your business into an automated, efficient marketing machine” at the Seminar, however you are under no obligation to participate or accept the offers made. For more information about Infusionsoft in advance of the Seminar, you can visit www.infusionsoft.com. *While the Seminars are open to the public, advance registration is required and no at-the-door admissions without tickets can be permitted. Seating is limited and strictly controlled. Hotel locations will be provided only to confirmed registrants.

Anaheim/LA, CA – 8/5

Chicago, IL – 8/6

New York, NY – 8/7

Orlando, FL – 8/8

If you’re trying to learn some cool marketing ideas, you’ll enjoy one of these seminars.  Sean Purcell and I will be in Anaheim.  If you can’t make one of the seminars, you might view this free e-book called:

The Edge of Success: 9 Building Blocks to Double Your Sales.”

PS:  I have no dog in this hunt other than to hope a few of you enjoy the seminar.  If you attend ANY GKIC event, you’ll be surrounded by off-beat, crazy, brave, successful entrepreneurs.  I promise you that you’ll go home rejuvenated and ready to take on the world.

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What’s the difference between BloodhoundBlog Unchained and a trade show like Inman Connect? Nothing but the chains…

In a comment to my Parliament of Whores post, Erion Shehaj asks:

I’m having a hard time differentiating between an event such as Connect and BHB Unchained[….] Is there any real difference between them charging for a conference and you doing the same?

Now that’s an excellent question.

Have you been to events like Inman Connect, StarPower or the NAR Convention? Are they charging you for a conference? You bet.

Is that their sole or even their primary objective? To the contrary.

A trade show exists to deliver you to its sponsors. The conference curriculum will consist of sponsored presentations, with the sponsors attempting to sell you their products. Are these the best tools for your business? No. The sponsors you hear from will be the highest bidders, and the hosting organization — Inman or StarPower or the NAR — will actively prevent anyone from pointing out that the sponsor’s products are inferior to others available. In other words, a trade show like Inman Connect, StarPower or the NAR Convention is nothing but a shillfest, a carnival for bilking dupes, who come there to be bilked on their own nickel.

I know you haven’t been to the one Unchained event we have had so far, but what we do is nothing like that. We had one sponsor, Zillow.com, which bought nothing but naming rights — practically speaking as a much-needed subsidy. No other sponsors, no sponsored presentations at all, no trade-show booths. The bulk of the program was Brian Brady and I teaching the theory and practice of Social Media Marketing. We interviewed a few vendors as a means of pinning them down and putting the screws to them. Everything about Unchained is contained in that one word: Achieving the greatest possible independence for the grunts on the ground.

You highlighted this text:

rather than strive to find new ways of milking Realtors and lenders of their income

Everything that Brian and I do is aimed at helping working Realtors and lenders hang on to every cent they earn. If you come to see us live, you’re going to pay. Electrons are almost free but atoms cost money to move around. But everything we talk about is always available right here for free.

Everything associated with the NAR and the Inmanosphere exists to enslave you in one way or another, to tie you up with one set of golden handcuffs after another, so that, in order to retain as much as half of your income, you have to piss the other half away on brokers, memberships, leads, hosted software solutions and other useless crap. Everything associated with BloodhoundBlog Unchained is aimed in exactly the opposite direction, cutting one bond after another, so that you control as much of your own destiny — and retain as much of your own income — as you possibly can.

You can come see BloodhoundBlog Unchained in Orlando for $99 — at least for now; Brian still hasn’t bumped the price, and I like it where it is. But you can come and reap everything we have to teach right here for free. We want nothing to do with milking you of your income. We want you to make so much money that, if you should pay to come and see us, it’s because you want to make even more.

You don’t have to take my word for it. There were almost a hundred people with us for our first time out. Ask them what’s the difference between BloodhoundBlog Unchained and a shillfest like Inman Connect or StarPower or the NAR Convention.

In the mean time, please do not doubt my gratitude to you for having asked this question. It’s those lingering objections that don’t quite get addressed that cause problems in any persuasive endeavor.

To close, and to summarize, here’s the one clip I made with BrokerIPTV.com at BloodhoundBlog Unchained in May:


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Moral Hazard….

Barry Ritholz at The Big Picture had these two comics that brought to the forefront again the issue of moral hazard. Check out the comics and then we’ll talk “on the other side.”

This is going to get expensive.....

Carry the World on our Shoulders

Okay, now some thoughts about moral hazard:

The definition of moral hazard (as taken from that scholarly journal, Wikipedia):

Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions.

Let’s break that down and look at it a little more closely in light of the current market environment:

a party insulated from risk may behave differently…. What that means is that, frankly, the people on Wall Street and the bankers on Main St. (including yours truly) might very well have done things differently over the last few years if we had been more fully exposed to the risk. Will Fannie or Freddie buy it? That’s all that most mortgage lenders really cared about when structuring a loan. On Wall Street, the guys (I’m using that term in a gender neutral sense, okay?) who packaged these loans up and sold them as securities didn’t really care how they performed, all they cared about was the great big fat commissions that they made. The rating agencies didn’t care about whether they really told the truth about these mortgage backed securities, all they cared about was getting the big fat commission checks.

And so what do we have now? We have, between Wachovia and Washington Mutual, $10.1 billion in loan loss provisions in the last 12 hours. That’s for a period of 90 days folks. I was going to figure out the cost per day but my calculator doesn’t crunch numbers that big!

Moral hazard arises because an individual or institution does not bear the full consequences of its actions.

But how can we prevent a total meltdown of the housing and mortgage market (what would happen if Fannie and Freddie actually went under) without absolving some of the participants (for this particular discussion, we’ll limit it to Wall St., the Ratings Agencies, the Mortgage Companies, and the Banks who wrote the loans oh, and the mortgage lenders themselves if they did anything criminal or fraudlent) of at least some of their consequences?

Let me offer a few suggestions to start the discussion:

1. If the US Government has to step in to bail out any more financial institutions (aka Bear Stearns Take 2), the shareholders should get virtually no value for their existing shares. Years ago, I bought stock in AutoDie (a local die manufacturing company). It went bankrupt, I lost all $1000 that I put into it. (I know, big time investment). I know what you’re thinking – what about the FDIC and banks that fail? I’m not proposing a change in the way of FDIC, that’s going to continue to work the way it works and I’m all for that. I’m talking about the Bear Stearns, Lehman Brothers, Goldman Sachs type of investment banks.

2. If the US Government has to step in to bail out Fannie and Freddie, I think the only way that should be done would be for a couple of things to happen: 1) Existing shares should be turned into some sort of subordinated debt where the only way the shareholders would get any of their investment back is once Fannie and Freddie are paid back and they are turning a profit and then they would get back a nominal “dividend” until 5 years of profitability has happened. 2) The existing management along with their exorbitant compensation structure need to be shown the door (I could ruin Freddie Mac for a lot less than $20 million per year!) 3. There needs to be a 10 year plan put in place to eventually move Fannie and Freddie from GSE’s (Government sponsored entities) to totally private enterprises. It needs to be done but the market is too fragile to handle it now. That’s why I’m proposing a 10 year plan.

I know that there are companies who indeed are too big to fail, the economic devastation that would be caused by them failing would be significantly worse than stepping in to save them. But I’m getting the very uneasy feeling that the rally in the financial stocks that we’ve seen going on in the last week is being caused/encouraged/related to some sort of an “It’s going to be okay, because Uncle Sam is going to bail out Fannie and Freddie and that will save us from all of our bad investments and the world will be okay.

The world is not without risk, a lot of risk, but when there isn’t the consequences as well as the rewards for the risk, something has gone wrong. According to reports that I’ve read, this bailout could cost all of us $25 billion. We better make sure we do it right or we’ll all be paying for it for it for a long time and we better make sure things are set up so that the same risk without consequence issue doesn’t come back to haunt us again.

What do you think we should do?

Tom Vanderwell

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