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

 
Musical chairs: You can buy a home on leased land for a bargain price, but you must be prepared to sell before the music stops

We’re preparing to list a condominium that sits on leased land. Land leases aren’t common in the Phoenix area, but they do exist.

The most common way to own real property in the Valley is in fee simple: You own the land and all the structures on it, plus any mineral, water and air rights that haven’t been alienated by legislation or previous sale.

A very distant second way of owning property is the condominium plat: You own the airspace described by your interior walls, and you and all of your neighbors own the land and structures in common. Most often you will also own the air conditioner, and possibly also the roof. These are expensive to replace, so crafty developers and their HOAs socialize the risk to you.

We have a few co-ops in the Phoenix area, but very few. In a cooperative, you and all of your neighbors own the land and the structures in common, and you have a right to occupy your living space.

In a land lease, the structures can be owned in any one of these three ways — by individuals, by a condominium HOA or by a cooperative corporation. The important difference is that the land is owned by a landlord, and the landlord will be taking that land back someday.

What happens to the structures? They revert to the landlord’s ownership, and the former owners of those structures are left owning nothing.

In essence, it’s a game of musical chairs. The structures on the leasehold pass from owner to owner, but, when the music stops, no one then on that land has a place to sit. This tends to depress property values on leased land.

But land leases are written for very long terms, and a lot can happen in that time. If the landlord gets a huge offer for the land, the people who own the structures could get bought out early at a huge premium.

In the mean time, in exchange for taking the downstream risk of a depressed resale price, buyers can purchase a home for a bargain price.

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

 
You probably won’t sell your home for an above-market price, but even if you do, the home still has to appraise for that price

So your house is finally under contract. Congratulations. It took longer than you thought it would to sell, and you had to go through three price reductions before you got regular showings. But now you’re under contract and in escrow. You’ve made it through the inspections and you’ve taken care of all of the repairs. Nothing but smooth sailing from here, right?

Not quite.

Here comes some bad news you hadn’t anticipated: Your house didn’t appraise.

A lender will only lend on the appraised value or the purchase price — whichever is lower. If the appraisal comes in lower than the purchase price, something has to give.

If there’s an appraisal contingency in the contract — and there almost always is — the buyers can cancel the contract unilaterally.

More likely, they’re going to want you to lower your price instead.

If you don’t, you’re almost certainly killing that contract. The lender will not underwrite the loan, so the buyers will be forced to cancel using the financing contingency.

You could end up waiting quite a while longer for another buyer. And that buyer could offer you quite a bit less for your home. And even then, your house will still have to appraise for the purchase price. If home values continue to decline, you could live through this same nightmare a second time.

So does that mean you should cave on the appraisal no matter what? Not necessarily — depending on your objectives. If you need to move now, take your punishment and move on. But if you can afford to wait long enough for the market to recover, that might be the better option.

Appraisers and loan underwriters are skittish right now. Lenders are taking back homes and selling them for fifty cents on the dollar. Appraisers are being fastidious to make sure they are not overestimating values.

And all of this is just another reason to price your home to the market. You probably won’t find a buyer willing to pay an above-market price. But even if you do, the home still has to appraise for that price.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

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

 
Investors are coming back to the Phoenix rental home market — and with the right business plan they’ll make money

Rental home investors are coming back into the Phoenix real estate market, and this is a good thing.

The last time we had a substantial run on rental housing, results were not so sweet. Investors came to Phoenix with the idea that price appreciation would make up for any monthly losses they might take on their rental homes. It’s plausible they were right — in the long run. In the short run, negative cash flow and declining values, coupled with adjustable-rate or negative-amortization loans, drove many of these homes into foreclosure.

And this accounts for much of the inventory the new wave of investors is drawing upon. The difference is, the prices for these homes have declined enough that they can be — at least potentially — cash-flow positive.

Why only potentially cash-flow positive?

Because too many investors adopt the worst of the cartoonish characterizations of capitalism when they resolve to become landlords. They pick the cheapest properties in the worst locations and rent to the least-qualified tenants, living through one eviction and repair nightmare after another.

Here’s a strategy for making more money from a rental home — much more peacefully.

There are dozens of costs associated with rental housing, and your business plan should take account of all of them. But your biggest potential losses are always going to be vacancy, tenant acquisition, repairs and resale value.

It makes much more sense to me to buy a property that can command premium rents and will sell at a premium price when you’re ready to move on. Location matters, as do the livability and lifestyle factors of the specific home. You want to pick a home that will stay rented.

I think it’s a good idea to charge something less than the market rent. This will give you a broader array of tenants to choose from, which will enable you to select tenants with good credit who will treat your property like their own.

With the right house and the right tenants, you should have very little vacancy, no evictions and no costly repairs between tenants.

Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate, real estate marketing

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

 
Price matters — but so does everything else: When buyers come to see your home, they’re looking for reasons to reject it, not to buy it

If price matters more than anything else in the sale of a home, why bother to clean, repair, stage and market the property for sale?

In a buyer’s market, if a home is priced above its market value, it probably will not show. If it doesn’t show, it can’t sell, and this by itself is all the argument anyone should need to price a home to the current market.

The corollary proposition is that, if your home is properly priced, it should get frequent showings.

So the battle is won, right? All you had to do was price your home to the current market, and you attracted the attention of buyers. Victory is at hand.

Not quite.

Your home is showing, and that’s good. But if it is dirty, if there are obvious repair issues, if the space is cluttered and confusing, if no one has worked to point out why it’s such a good buy — other houses will sell and yours will languish on the market.

As long as you’re priced right — and price can be a moving target in this market — you’ll get showings. But if your home is not a better value than the other houses your buyers are seeing, they’ll buy those homes instead.

That’s exactly what you would do in their place, isn’t it? When you’re picking through the melons at the grocery, you aren’t looking for the ones that are bruised and shopped over, unsightly and unappetizing. Why would you expect buyers to buy a property that you would pass on in a heartbeat, if you were in their shoes?

When buyers come to see your home, they aren’t looking for reasons to buy it. They’re looking for reasons to reject it, so they can move on to the next home. The one they buy will be the one that raises the fewest objections, for the money. If you want that money, you have to do everything you can to take away your buyers’ objections — before they think to raise them.

Not willing to do that? It’s not a problem. Just cut your price.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

We know a seller who doesn’t have the budget to spruce up her house to get it ready for market. Though it would be better for her to put a fresh coat of paint on the walls, there are still things she can do for free to help her house sell.

The first thing that every seller should do to help their lister sell the house is box things up. You’re going to have to box up everything once the house sells anyway, so start right now… before you put your house on the market. Go through your closets. What’s in there that you don’t plan to wear for the next three to six months? Pack it up and put it in storage. Take a critical look at the traffic flow in your house. Have you just become accustomed to swerving to avoid that overstuffed chair that sticks out a little too far? Time to downsize. If you can’t afford to rent an inexpensive storage unit until the house sells, store that chair and those boxes of clothes that you plan to fit back into by the holidays in the garage. If you’ve run out of room there, ask your friends and family to help. Maybe one of them would love to lay back in that chair to watch the tube until you need it back again — in your new house. Do you keep the leaf in your dining room table, so you don’t have to bother with it when you have company for dinner? Plan to not have company for dinner until you invite them over to see your new house. Take the leaf out of the table and pare down the number of chairs that are set up around the table to only three or four. If the kids bring home a friend for dinner, give them the TV trays.

Next — and probably most important — clean, clean, clean. Clean as though you were having Martha Stewart over for dinner. Is your bathroom floor so clean that you would sit down and play a game of jacks on it? It should be. Touch the walls of your shower. Are they smooth as glass? If not, here’s an investment you must make: Kaboom! Thirteen dollars for two bottles and add your elbow grease — this is a small enough investment to sell your home in this market. Everything that’s made of glass should shine: windows, mirrors, light fixtures, oven door windows (oh yes, clean that oven, too!), everything that’s glass. All your appliances need to shine. All of your countertops need to shine. You want a light, bright, shiny house. Dust the slats in your window blinds; dust the tops of your ceiling fans; dust every surface that you haven’t already just scrubbed. Make sure your air filter is fresh … and put a new one in every month till the house sells. You haven’t noticed it for years, but the prospective buyers will see the dark build-up that’s accumulated along the edges of the air vents and returns, so clean those, too. Scrub everything that hands have touched and over the years left their mark — light switches, door knobs, drawer pulls. Don’t neglect your floors. Clean them like Christmas is coming. And after you’re done with all this you’ll be able to notice the other areas that need your attention before the photographer comes.

Remember high school? Remember when the photographer scheduled a day to come take pictures of all the underclassmen? The seniors had each already payed a handsome sum for private studio sessions to make sure that would great senior pictures for posterity. But the underclassmen had one chance and a prayer of getting a decent photograph in that year’s yearbook. If you were like me, you paid extra attention to your skin during the weeks leading up to the shots, to make sure your complexion was clear. The night before the photography, you picked out your nicest looking outfit. And the morning of the pictures, if you were a girl anyway, you got up early to make sure your makeup and hair were perfect. Well now — with your house — we’re talking about a six-figure asset. So the morning that the photographer is scheduled to arrive do whatever you can to make your house picture perfect.

Put away the Sunday paper.

Wipe the dishes and put them away — don’t leave them out draining. Clear the reminders from your refrigerator. And — for goodness sakes — don’t leave your prescription bottle sitting out on the counter.

Take your dirty clothes off the bed and make it! This includes putting a cover on the bed that’s at least long enough that the bed skirt’s slip isn’t showing. (Do I need to mention picking the garbage and more dirty clothes up off the floor?)

And please put the toilet seat down!

But there’s more you can do. Set the table as though you were expecting guests. Make up the bed so it looks like a display in the Neiman Marcus Bed & Bath Department. Put out a vase or two of cut flowers. Fill a glass bowl with fresh fruit.

I recently staged a home for sale, which had previously been listed but not staged. Pictures from the earlier listings were well taken… but just look at what a big difference little touches can make.

One final tip. Look at the photos your agent uses when the listing goes into the MLS. Be very particular.

This photo was used on MLS with the caption, “Master Bedroom.” Is this the image you want prospective buyers to have of your master bedroom? If this is the image that’s being presented, then expect yours to be one of the tens of thousands of houses on the market today that are not selling.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

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

 
Has the Phoenix real estate market turned the corner? It’s too early to tell, but May’s results suggest we may be nearing the bottom

Are you in the mood for some good real estate news for a change? How about some news that’s not all bad? Here’s what news there is, in any case:

May was a very strong month for clearing bread-and-butter inventory in the Phoenix real estate market. BloodhoundRealty.com tracks sales of newer suburban tract homes — three bedroom, two bath, single-story homes with tile roofs and two-car garages — the middle of the housing-supply bell curve.

We have records going back to January of 2004, so we have tracked both the boom and the bust in our recent real estate history. May 2008 was the strongest month for the homes we track since May of 2007, with the best month before then being November of 2006. A total of 170 of these homes sold in May, up from 114 in April.

Prices were down, month over month, and not by just a little bit, so May’s results no doubt reflect the sale of a lot of lender-owned properties. But inventories of the homes we track are down by 7% from April and by over 14% from March.

The implied absorption rate from May’s results is 5.2 months, down from 8.4 months for April. Absorption rate is the amount of time it would take to absorb all currently-available inventory at the current rate of sales.

The absorption rate calculation is less than reliable, since it uses backward-looking numbers to make a forward-looking projection. But substantially greater sales taken together with substantially lower inventories is a very good sign.

As a matter of anecdotal evidence, earlier this week I phoned the listing agent of a very market-weary short sale. After months of no activity, three offers came in over the weekend. The seller issued multiple counter-offers, with the high-bid being $17,000 over the list price.

So has the Phoenix real estate market finally turned the corner? We won’t know for sure for two or three months after the fact, but May or June could be the bottom of the market in Phoenix.

Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate, real estate marketing

The prices on lender-owned homes in the Phoenix area are getting to be incredibly low. It’s true that many of these homes will require some serious work to bring them back to turn-key condition. But others require little more than a cosmetic effort to return them to rent-ready condition.

Here’s the best news: Because the prices are so low, because interest rates are still very aggressive, and because rents are holding their own through the rough real estate market, it’s relatively easy to make a newer suburban home throw off positive cash flow. It could be that we’ve already found the bottom in the Phoenix real estate market. But, even if we have not, a well-chosen rental home will self-amortize. You can buy now, while the selection is great, as you wait for the market to fully recover.

A great example of a near-turn-key lender-owned home is 14912 West Watson Circle in Ashton Ranch in Surprise, Arizona. The home will need some cosmetic work, especially paint and landscaping, but it is in very good condition for a foreclosure. The cost to make it rent-ready might only be around $5,000, and, as this cash-flow analysis shows, the $115,000 list price should yield a positive cash flow even using relatively pessimistic assumptions.

Here’s the bad news: As I write this, I may have already sold this home.

Here’s the good news: There are dozens more like this, well-priced lender-owned homes in decent shape that can make very nice, cash-flow-positive rental homes.

These homes are not flip candidates. There’s not enough upside in the short run to justify the risk. But as buy-and-hold rentals, they could end up paying for a lot of feathers for your retirement nest.

 
Further notice: I ended up writing a contract on this house, but here are 26 more newer suburban homes priced at $115,000 or less. Some are in better condition than others, but all of these homes are in areas that can command premium rents and should appreciate well over time. Each one requires on-the-ground inspection, but I’m very choosy about what makes a good rental. If we pick the right home, it should stay rented consistently for the entire time you own it.

Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate

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

 
Looking for the bottom? Real estate speculators are establishing the bottom-dollar price for lender-owned homes in Phoenix

If you’re looking for the bottom of the real estate market in Phoenix, chances are it’s right up the block. It’s that house with the jungle of overgrown weeds in front.

It used to be for sale. Then it was a short sale. By now it’s lender-owned. A year ago it might have been listed for $250,000. Now the price has been slashed to $120,000 — maybe less.

That’s a sad story, particularly if you knew the owners. And now, as you watch the parade of investors checking it out, you might feel a certain anger toward them.

If so, your anger is misdirected. Between syrupy books and movies and high-strung high-school-teachers, we have been indoctrinated to despise speculators. But the truth is, speculators are the garbage collectors of capitalism. They come in and clean up messes they did not create, returning productive value to underperforming assets.

It you’re looking for a villain in these stories, look to the borrower, to the lender or just to the vicissitudes of life. But it is the speculators who are going to bring the real estate market back to a viable state.

How? By establishing the bottom-dollar price.

What is your home really worth right now? It’s worth as much as the lowest-price lender-owned comparable plus the cost of returning that home to turn-key condition plus a small convenience premium. In other words, if the lender-owned house sells for $120,000, and if it will take $10,000 to make it as nice as your home, then your home is worth $135,000 — $140,000 at most.

And if you’re not willing to sell you home for that price? Get it off the market right now. It will not sell for more, but the surplus of over-priced inventory is a false signal to buyers that the market has not found its bottom.

If you must sell into this market, you’ll sell at the market price. If you can afford to wait, you will almost certainly do better after the market has turned.

Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate, real estate marketing

“We feel that you and Bloodhound Realty did an excellent job and we are extremely happy that you selected us as one of your clients. Your diligence and hard work were both refreshing and somewhat unexpected given our previous experience with ‘traditional’ real estate marketing.” –Ken Green, formerly of 1322 East Vermont Avene, Phoenix, AZ 85014


This is a detailing of the things we do to list a home for sale. We don’t do every one of these things on every home. For example, we know that if we list in a newer tract-home subdivision, much of the noise we try to make will fall on deaf ears. If I am listing a tenant-occupied investor-owned home, we won’t do much beyond the normal MLS, lockbox and sign kind of listing. But this is what we do when we pull out all the stops for those homes that are likely to excite the most attention among buyers.

1. We know from hard experience that if a home is priced wrong, nothing else we do will make a difference, so the very first thing we do for our listings is price them properly. We will work hard from the MLS system, looking at each comparable home physically to see how it really compares. If we have any doubts about the price we arrive at, we acquire a full appraisal at our expense. We want to make sure we get every dollar that we can actually get for the home. By pricing to the current real estate market, we can get the maximum price in the minimum time.
2. Setting the stage for staging. Cathleen Collins will go though the house with a fine-tooth comb, often taking many photos. She will make lists of repairs, touch-ups and redecorating she wants to do, and she will plan her staging strategy.
3. Home-warranty pre-inspection. We put a home warranty on our listings covering the listing period and the buyer’s first year in the home. We use American Home Guardian, and they do a fairly rigorous pre-inspection so that any pre-existing conditions can be addressed.
4. Repairs, painting and cleaning. This can take anywhere from a few days to more than a week. Everything’s a trade-off, and we can’t always do everything we might wish for, but we want for our homes to be as clean, as homey, as livable and as turn-key as we can possibly make them.
5. Staging. This is Cathleen, and she is a master at it. We own about three houses worth of furniture, and she is always trawling Craigslist to find more — period, modern, eclectic. She has tons of art and decorator items as well, and her modus vivendi is to take everything she thinks she might need to the house, then move back what she doesn’t use.
6. Professional photography. We have just switched to Obeo for our virtual tours. They send in a local professional photographer to do hi-resolution and panoramic photos. In addition to forming the basis of the virtual tour, the hi-rez photos are also used for Obeo’s Style Designer, virtual remodeling of selected spaces.
7. Floorplan measurement. We put an interactive floorplan on the web site for every listing. Buyers can interactively place their furniture, plus there is a printable PDF version that they can pass along to movers or decorators. We use Floor Plans First, but this is a service that Obeo offers, as well.
8. Amateur photography. That would be by us. We like to have dozens of photographs of everything, including photos of the interior and exterior of the home in all the different colors of light of the day. We can end up taking photos of the home over the course of days, just for the sake of a static kind of verisimilitude. For what it’s worth, I think it is incumbent upon Realtors to do the bulk of their own photography. Use a pro for the print stuff, if you lack confidence, but acquire a camera appropriate for real estate work and learn how to take good real estate photos. You should get in the habit of having a good-enough real estate camera with you every time you leave the office. The language of real estate is photography, after all.
9. Neighborhood photography. We like to have a fairly comprehensive selection of photos of other homes in the neighborhood. We know that buyers want to know for sure that they’re moving into a neighborhood that fits the home we are selling. We show them many of the nearby homes so they can get a feel for the neighborhood.
10. Videography. We don’t do this for every listing. We only do it when we have a story to tell, because video without a story is anti-marketing — worse than doing nothing. If the sellers or the neighbors have an interesting story to tell, that can work. Often, just using the neighborhood photos with a voiceover can make an interesting film.
11. Building business-card-sized Open House invitations. I do this, printing them with OvernightPrints.com. We print these in the thousands.
12. Building custom yard signs and directionals. This is me again. We print these locally, with a company called Signs By Tomorrow. Why do we put a paragraph of small text on our yard signs? To stop traffic. The purpose of the sign is to sell the house, so we do what we can to make sure people stop and take a look. We also add a “rider” to the sign showing the price of the home in six-inch high numerals. It’s the first question anyone is going to have about the home, so why not answer it in no uncertain terms?
13. Building the custom web site for the home. Generally, we will acquire the domain for the home before we even go on the listing appointment. Using engenu, I can set up the gross anatomy of the single-property web site, then Cathleen or I can go in and finesse it page-by-page. In addition to many, many folders full of photos, which engenu will render as slide shows, we supplement our web sites with all the additional information we can find or create. For example, if we can lay our hands on historic photos of the home or neighborhood, we will scan them in order to provide that background information. The same goes for historic documents or newspaper articles. We will research the builder, the architectural styles or the construction methods and document those. Lately we’ve been building custom maps in Google Maps to help buyers discover local amenities. We try to have all these ancillary items done before the listing hits the MLS, but that’s not always possible. But we live by the idea that, if it looks done, it is done, so we don’t tell people about features that are still to come. That way, the web site always looks and feels finished, even if we don’t yet have the link for the finished virtual tour, for instance. Our sites are built to permit the easy addition of new or changed content, so we keep working on the site before and after the MLS listing goes live.
14. Starting now, we are building coffee-table books for distinctive homes. We always have dozens of striking photos of the home, so a coffee table book is just one more way we have of getting those images in front of buyers.
15. Listing the home in the MLS. By now we will have written a ton of text about this home. We use it all and then some in the MLS. We get 680 characters in the remarks and six photos with 250 characters each for captions. If we miss out on using three of the characters available to us, that’s a lot. We can have an unlimited number of “virtual tours,” which are essentially off-site URLs. We use as many of these as we have content for. One of our working precepts is that the listing may be our only chance to make our case for the home to the buyer, so we try to leave nothing to chance. If we can feed the buyer’s agent a good closing argument, we’ll do that, too.
16. Compose the flyer. We build a full-color flyer using our best photos and our most rhapsodic text, printing it on heavy coated stock. We use flyer boxes that will hold the flyers but also have a pocket at the top for business cards. We put the Open House invitation cards in there, just in case someone doesn’t want to take a full flyer. We normally put flyer boxes facing in both directions on the post, and we will store extra flyers and Open House cards inside the home.
17. Set the post, hang the signs and flyer boxes, mount the lockbox. For now we use a normal six-foot 4×4″ white post. When we can afford to have it done, we’re going to switch to a custom-made sign structure, framing off the big sign and the riders and attaching everything will small bungee cords to keep things from flapping around in the wind. We’re always looking for better sign-lighting solutions, too.
18. Promote the listing with online listing bots. We’re using PostLets for the broadcast distribution, but we do Craigslist our way, by hand, and we will go in and hand-finesse other online listings.
19. Write a weblog entry promoting the listing and linking back to the single-property web site. This has all kinds of benefits, as we’ve discussed, but here’s one we haven’t talked about: Linking to your single-property web site from a trusted weblog can break you out of the Google sandbox.
20. Distribute the Open House invitation cards. We will do this with nearby employers and in two sorts of neighborhoods: Move-up areas for our listings, and neighborhoods where BloodhoundRealty.com has a lot of fans. We know that people who like us will try to send us buyers, so we always want to let them know when we have a new house for sale.
21. We hold Open Houses every week until the home is sold. Why? Because there are an awful lot of un- or under-represented buyers out there, and we want for them to be able to see our home. We avoid dual agency, but we have no problem showing the home to buyers who accidentally left their buyer’s agents at home. If a listing is near the commuter traffic flow — and most of ours are — we like to hold after-work Open Houses, too, just to see if we can snag people sick of driving. We hold Open Houses to sell the house — everything we’re talking about here is about selling the house — but we have met a lot of very interesting people at Open House. Sellers come to check us out, of course, and we meet a few buyers. But we also get to become acquainted with fascinating people who love our houses and know a ton about them. I can’t count how many times we have gained access to historic photos of our listings because someone wanted to see what had become of their old home.
22. We service our listings. For vacant homes, we want to be in the house every other day, at the outside, ideally every day. For one thing, a home needs regular maintenance, and we can’t see to it if we aren’t seeing the home first hand. But very often we will end up taking new photos of the home, which we then incorporate into the web site.

We never stop thinking of new ways to promote the home. Our future success at selling homes is directly related to our present success at selling homes, but that’s a secondary consideration. The primary goal is simply to sell the home. We are always thinking and talking abut new ways to draw attention to our homes, new ways to make them more appealing to buyers, new ways to get the best results we can attain for our sellers. We’re not shy about talking about the things we do. We’re always delighted when someone picks up on our ideas, but that’s the rare case. But, regardless of what anyone else does, we are always going to be working at getting better at listing and selling homes.

Technorati Tags: real estate, real estate marketing, real estate photography, real estate training, technology

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

 
Phoenix real estate conference teaches Realtors and lenders the brave new world of internet social media marketing

What happens when you bring the brightest Realtors and lenders from all over the country to Phoenix for a social media marketing conference? Great ideas are cross-pollinated, germinated, planted, take root and flower.

We run a national real estate industry-focused weblog called BloodhoundBlog.com. There are 24 contributors — Realtors, lenders and investors from all around the country — and hundreds of daily visitors. We’ve been doing this for nearly two years, and, in that time, we have avidly pushed for excellence among real estate practitioners, especially in the burgeoning internet side of the business.

This past week we hosted the inaugural BloodhoundBlog Unchained event at the Heard Museum in Phoenix. People came from all over — a third from Greater Phoenix, a third from the rest of the Southwest, a third from places where it rains and snows. Together for three days we explored the world of social media marketing in real estate.

What’s that? Social media marketing is the commercial arm of the participatory internet. As more and more people make the internet their primary means of interacting with the world, real estate professionals are learning how to move their own practices online.

The important question: What’s in it for you? The internet is a brave new world of commerce. No one likes sleazy sales people, but sleazy sales tricks cannot work on the internet, where every suspicious claim can be checked in an instant. Transparency rules, and the practitioners who succeed with net-empowered consumers are the ones who are prepared to back up everything they say.

The bonus for people willing to work this way is that consumers will have a much higher degree of trust in their Realtor or lender. Rather than picking a name out of a phone book or off of a yard sign, they will have gotten to know that person — passively and anonymously — online.

BloodhoundBlog Unchained was put on by me and my partner, Brian Brady of MortgageRatesReport.com. If you’d like to sneak a peek at the world of real estate as the professionals see it, feel free to join us at BloodhoundBlog.com.

Technorati Tags: blogging, BloodhoundBlog Unchained, disintermediation, real estate, real estate marketing, technology

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

 
The Flip digital video camera makes illustrating real estate ideas fast, convenient and fun

I’m becoming a fan of digital video for marketing real estate.

I’ve always hated the video home tour: “This. Is. The. Living. Room. This. Is. The. Dining. Room. The. Family. Dines. In. This. Room.” The images will be small, dark and grainy. The motion will be either jerky, swooping or both. And the tour itself will do nothing that could not be done better with digital photos.

But just lately I got a Flip video camera, and I can’t seem to stop thinking of real estate uses for it.

The Flip uses solid state memory rather than tapes to store its video. It’s a tiny little thing, about the size of a digital still camera, and you can operate it with one hand. It’s really only good for certain kinds of work. It would be useless at a wedding or a basketball game. But for capturing interviews, it is the prefect video camera.

Even better, it comes with a built-in USB connection and software for emailing videos or pumping them directly into YouTube or MySpace. Shooting, storing, editing and sharing videos are all painlessly convenient.

The first real estate application I thought of for the Flip was to collect testimonials from clients. That’s kind of self-serving, but the next idea was all about selling houses. In the past we have done video interviews with sellers or neighbors, but the editing process for normal video is onerous. But with the Flip we can just shoot the interview, upload it to YouTube and then link it from the web site for that property.

If I want to make a quick video to show weather conditions or traffic around a house, it’s easily done. I had a home inspector deliver a short video summary of the repair issues on a home for out-of-town buyers.

The breakthrough for me was thinking of video in the same way I think of still photography, as another way of illustrating real estate ideas. Because it’s so small and easy to use, the Flip now rides on my hip with my digital still camera.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing, real estate photography, technology

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

 
Are you an investor looking for a Phoenix-area rental home that will stay rented? Buy a home that’s worth living in

I represented tenants for my first two years as a real estate licensee. Working with tenants didn’t pay very well, but it was a good way to get a lot of real estate experience very fast. Gradually I started working with home buyers, and then with home sellers. By now, I only work with tenants as a courtesy. It still doesn’t pay very well.

But in those two years, I saw an awful lot of rental homes. Or, more precisely, a lot of awful rental homes. Again and again, I would find myself wondering why anyone would think a particular house would be appealing to tenants. Not just the condition of the property, often atrocious, but simply the location itself. It’s astounding to me how many vacant rentals are situated nowhere near where tenants might want to live.

In the years since then, I’ve represented a huge number of investors. Market conditions haven’t been kind to them lately, but Phoenix is once again a market ripe for landlords. Prices are low and cash flows are positive. If landlords buy the right properties to use as rentals, the homes should rent quickly and stay rented.

So which homes will work best as rentals?

I’m looking for a home in a built-out suburb. Buckeye is a bargain for owner-occupants, but why would tenants move to a town with no employment base? What I want are jobs, schools, shopping and entertainment, all nearby, with decent freeway and bus access. I want a north-facing home; tenants read their power bills, too.

Am I looking for the cheapest house? No. Price matters, but what matters more is livability. Parents worry about the kids taking a header down the stairs, so I want a single-story home. There has to be at least a little grass in the back yard so toddlers can romp.

Here’s the magic bullet: If you buy a house that will resell well, and you maintain it in a way that communicates that you like and respect your tenants, it should rent well the whole time you own it.

Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate, real estate marketing

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

 
Do you want to make sure your home will sell? Little things matter

I tend to do a lot of previewing. I will go into houses alone to take photographs. My buyers and I then use those photos to draft a short-list of homes to view when they’re ready to see for themselves.

Because of this, I get to spend a lot of time alone in homes, looking at absolutely everything, with no distractions.

Here’s what I’ve learned from looking at thousands of homes for sale: Little things matter.

Is the home picked up, or are there clothes, toys and magazines scattered everywhere? Are there dirty breakfast dishes on the kitchen table? Dried up orange juice splotches? Toast crumbs? Are last night’s dirty dishes piled up in the sink?

Is the house clean? Does it look and smell like the cleaning crew just left? If I look for dirt, I can find it. But can I find it easily without having to look?

Is every room of the house packed to the walls with furniture? Are there pictures of every member of the family for three generations tacked all over the walls? Do the kids like dark blue, dark purple, dark black paint?

I can probably guess your religion by the stuff you own and the other stuff you don’t own, but my buyers should never, ever see symbols of your religion in the house. Why? Because it can be subtly off-putting to them without their even knowing why at a conscious level.

Likewise, if they can smell your cat — or the fish you fried for dinner last week — you’ve probably already alienated potential buyers before they have even given your house half a chance. Odors kill sales, so kill those odors now.

Fix any obvious defects. Only a specialist can say for sure if the air conditioner is working properly, but no one has to be told when it’s completely broken.

It only takes a few small things to drive buyers on to the next house on their list. If you want for yours to be the one that sells, it simply must be better than others. Little things matter.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing, real estate photography

This is my column for this week from the Arizona Republic (permanent link). The lender in the story? Brian Brady, America’s #1 Mortgage Broker.

 
The challenge for Realtors and lenders in the future: How do you sell to consumers who don’t want to be sold?

We represented a cute couple in the purchase of their first home late last year. That much is not news: First time home-buyers are the bread and butter of the real estate business. What was interesting to me was how internet-focused they were.

The husband, Michael, is an internet adept, but his wife, Danielle, is a true wizard. Her primary interface to the commercial world is the world wide web.

They found me on the internet, of course, and I referred them to a lender that I know through the nets.

Consider this: There are 30,000 Realtors in Phoenix, and at least that many lenders. All of them are advertising at a furious pace — newspapers, real estate magazines, supermarket shopping carts, bus benches, billboards, radio, TV — plus balloons, free pens and scratch pads and coffee mugs, refrigerator magnets, flower seeds, recipe cards and Halloween pumpkins.

Real estate professionals spent millions of dollars trying to get Michael and Danielle’s attention, and all of that money was wasted. They are not paying attention to advertising.

To the contrary, if Danielle cannot completely research a product or service on-line, she won’t have anything to do with it. They never once went into the home they were buying without a digital camera. I watched Danielle crane around in impossible contortions so she could read and write down the model and serial numbers from the washer and dryer so she could research them on-line.

Looking forward, nothing changes as fast as we expect it to. But looking backward, the world seems always to be changing like dreams. Danielle is immune to advertising. She recycles her junk mail unread. She doesn’t want to be pitched, she doesn’t want to be sold, she doesn’t want to be wheedled or needled or cajoled. She doesn’t want to be closed on.

All those old school gimmicks still work — on some people — and they will continue to work — for a while. But Danielle is the future of real estate marketing. Realtors and lenders are going to have to learn to sell to consumers like her.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing