BloodhoundBlog

There’s always something to howl about.

Author: Greg Swann (page 206 of 209)

Suburban Phoenix Real Estate Broker

July 22, 2006

You buy something, you pay, m’kay?

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Suburban Phoenix Real Estate Broker

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Friday can be my dread day. I write a small real estate column for the West Valley sections of the Arizona Republic. That is not nearly as sexy as it sounds. They give me 350 words — might you have guessed that I can go on at greater length? — and then they frequently cut it down to 275 words or so. I like to make it very practical, first because I’m really not the potpourri and feng shui type of Realtor, and second because so much real estate coverage in the media is do daft, so wide of the mark.

But Friday can be a rough day if I’ve said anything even remotely controversial. I’ll get angry — but anonymous — phone calls from testy Realtors and brokers all day. Their being angry is fine. I just wish they wouldn’t waste my time venting their ire on the phone to me. Coming in anonymously — no name, no disclosure of license status, no brokerage affiliation, Caller ID blocked — is cowardly.

How much time do you think I should spend worrying about the opinions of people — supposed professionals! — who won’t stand behind their views publicly?

Yesterday’s column unearthed the mother-lode, of course. One caller, who sounded just like Mr. Mackey in South Park, told me that she had 22 years’ experience in real estate, m’kay? And she had never read anything as stupid as my column, m’kay? She hopes, sincerely, that I can amend my ignorant ways, m’kaaay?

For the record, I am an Accredited Buyer’s Representative, a Certified Buyer’s Representative, a Certified Residential Specialist, an E-Pro Internet Certified Realtor and a Graduate of the Realtor Institute. I hold a broker’s license, for goodness sakes! If I don’t know what I’m talking about by now, I never will.

Another caller spent two very obscene minutes in voicemail telling me what an idiot I am. The gist of it was that buyers should be down-on-their-knees grateful that the seller is giving them the opportunity to build equity. Then he said, “Of course the [frolicking] buyer pays for everything! You buy something, you pay!”

Oh. Yeah.

I Read more

July 21, 2006

Fast is the new slow…

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Suburban Phoenix Real Estate Broker

Author website

Last Friday Seth Godin offered galley copies of his new book, Small Is the New Bigto the first 30 people to send an email to his publisher. I was lucky enough to have the opportunity to be fast enough to respond — an apposite metaphor for internet marketing generally.

The book got here today, but it ain’t your father’s galley proofs. It’s a print-on-demand trade paperback, perfect bound with its own custom shell. It’s a book without a bar code. What it is is a superb marketing piece. Witness me writing about it without having read it!

I have two Open Houses Sunday, in the sleepy, sleepy summertime. Sadly, I should have plenty of time to read. I’ll let you know what I think of the book.

I’ve added a link in the Reading List in the sidebar to pre-order the book.

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July 21, 2006

If it’s a heat map, why does it look so cool?

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Suburban Phoenix Real Estate Broker

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All right, here’s the deal with Zillow.com:

I decide I’m going to buy you a pair of designer jeans, nothing but the best for you. I know that fit is important, so I go to three of your best friends to get their sizes. Not yours, theirs. I strike a happy medium amidst the diversity, reckoning that — what the heck! — you can’t be that different from your friends.

If the jeans I buy for you actually happen to fit, this will be a happy accident. More likely, the jeans will be a close but not perfect fit.

You understand why, of course. Epistemological error was built into my sizing algorithm. I chose a method that might have been convenient, but which cannot possibly produce objectively accurate results with any degree of confidence. Arguably, the more of your friends I measure, the smaller my margin of error. But I am still pursuing an inherently erroneous sizing methodology.

For Realtors, a perusal of the tax records, the equivalent of a Zillow Zestimate, is the first step in comping, the step known to be least accurate. The next step is comping the house one-for-one with recent past sales and currently-marketed (competitive) listings. The last step is working all those numbers against the subject property in its current state of upkeep and upgrades.

In the same way, if I don’t take a tape rule to your inseam, the chances of my getting jeans that fit your unique physique are very poor.

However: In email, my friend and client Richard Nikoley set me straight on the value of Zillow.com:

I still think it can be used as a valuable tool for getting an idea of the relative values between neighborhoods in places you’ve never been to. Of course, once you determine where you want to buy, based on a number of factors and Zillow being only one input, then you need to begin the real homework.

Plus which, it’s fun to play with. It would be even more fun in Safari.

The map to the right is a Zillow heat map for Greater Phoenix, reflecting not the ambient temperature (115!) but the (approximate!) Read more

July 21, 2006

Who pays whom for real estate? Follow the money . . .

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Suburban Phoenix Real Estate Broker

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The second in my series of articles devised to tick off real estate brokers appeared in the Arizona Republic today. (Here is a more permanent link to a longer version of the article.) Torquing the brokers is not really my intent, just a secondary consequence. Next week we get to Ardell DellaLoggia’s issues, which may just spark a riot at the Arizona Association of Realtors.

Here’s today’s article in full:

The conventional wisdom in real estate is that the seller pays the sales commission to both the listing agent and the buyer’s agent. Is that really the way things work? To find out, follow the money.

Imagine a closing conference. Normally, we don’t have these in Arizona. Buyers sign their documents at one time, sellers at another. Neither party need ever set foot in Arizona, for that matter.

But for the sake of discussion, picture a settlement conference. Let’s invite everyone who has a seat at the table, so to speak, so we can see who pays whom.

At the head of the table is the escrow officer, who will be getting paid escrow fees and title insurance premiums.

Next comes the County Recorder, who will receive a recordation fee. At the next seat is the County Assessor, who will receive property tax payments. Then comes the insurance underwriter, who will get the hazard insurance premium.

The seller will get a big pile of money, some of which will be passed along to the seller’s mortgage lender.

The two Realtors will both get paid, of course.

The buyer’s lender arrived at the table with a big satchel of cash, but the lender will be taking some of it back in the form of loan origination fees and pre-paid interest. Moreover, the money the lender brought is really the buyer’s money. It was lent on the surety of the home and the buyer’s income and credit.

In fact, everyone seated at that closing table is going to be pocketing money — with one exception.

That one exception is the buyer, who pays for everything else, either out of pocket or on credit. The seller doesn’t pay the Realtor commissions — or anything else. Read more

July 21, 2006

21 reasons to bank on the Phoenix real estate market . . .

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Suburban Phoenix Real Estate Broker

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HousingPanic, a particularly vitriolic BubbleBlog — which is saying something — asks:

Realistically, how overvalued are Phoenix home prices?

Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites — and not just HousingPanic — are infested with a cult-like fever to inflict suffering — at second hand, to be sure — on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.

That’s all one. I don’t care. The whole of the last century was dominated by the bad behavior of viciously angry wretches, but look where it got them. The BubbleBloggers will someday bawl balefully in private, but they will never, ever admit that they have been very publicly very foolish. You will know and I will know and in the secret chambers of their hearts they will know they were wrong all along. But as long as you don’t hold your breath waiting for that contrite admission of error, you should be fine.

Here’s where I do start to care. Whenever the subject of Phoenix comes up in a BubbleBlog, the assembled Brown Shirts pile on, for whatever reason. This is their perfect right — even though I think they’re wrong. I love this place. I came here for three months in 1988, and I could not wait to get back. The first time I set foot here, on March 13, 1988, I knew I was home. We moved here for good on April 1, 1991, and I cannot imagine living happily anywhere else. Our relocation page is my extended love letter to the Phoenix area, warts and all. I’ve been writing lovingly about this place since the day I got here, and I’ll keep it up at least until the day before I die here.

Which brings me back to HousingPanic’s question. We keep Read more

July 20, 2006

7 (or more) creative ways to market your property in a cold housing market…

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Suburban Phoenix Real Estate Broker

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The Real Estate Investing For Real Blog cites 7 Creative Ways to Market Your Property in a Cold Housing Market:

Properties are not getting multiple offers and selling within hours of listing anymore. Things have calmed down a bit across most of the country, and properties are now sitting on the market. The traditional method of listing your property with a real estate agent and waiting for people to buy isn’t going to cut it anymore, unless you price very aggressively.

What can you do? The market has gotten a bit cold – showing a definite slowdown. If you insist on holding out for top dollar, you may get a bit creative…

Some of the ideas suggested are better than others. Here’s my deal: For every one I don’t like, I’ll post a replacement suggestion. At the end, we’ll have seven for seven, just not necessarily the same seven.

  1. Auctions.
    I don’t love this. If you come in without a minimum bid, you risk giving up the house for peanuts. If you do have a minimum, you risk getting no bids. Auctions work well where demand is high or price is low. My alternative idea: Auction the house (with a reserved minimum bid) on EBay.com. Reveal this fact to every starry-eyed reporter in town. The buzz could sell the house if the auction doesn’t.
  2. Use all the mania in social networking to create buzz.
    Among whom? And assuming there’s a whom, why would they be buzzed about a house for sale? Try this instead: Put a great ad on CraigsList.com every other day. REIFRBlog continues:
    Create a simple website for your property, then post creative titles on the social sites like del.icio.us or reddit.
    Okay, but better yet, create a nice, clean weblog for the property, with an extensive web site as ancillary support — with dozens of photos — then promote it as a part of every other bit of marketing you do. This REIFRBlog list suggest many types of internet social marketing among distant strangers, but, in fact, your marketing should be targeted to people who really are likely to buy your home — for example, people currently Read more
July 20, 2006

When is the best time to buy? When everyone else is selling…

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Suburban Phoenix Real Estate Broker

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I think this is exceptionally good advice from Craig King at RealBlogging.com:

No matter what you’re selling, conventional wisdom is that the FUD Factor (fear, uncertainty and doubt) tends to freeze buyers in their tracks. Purchases get delayed. Decisions take longer. Buyers follow the maxim, “When in doubt, don’t.”

At the moment, you’d think the “FUD Factor” would be a big cloud over the real estate market. Israel and Hezbollah have broken out into open warfare, and the conflict could broaden throughout the Middle East. Oil prices are skyrocketing, and supply is all but certain. Iran and North Korea are rattling nuclear sabers. And back home, we’re enduring a drought and bracing for a new hurricane season.

In short, I think it’s a great time to be buying — and selling — real estate. Real property has always been an investment haven in troubled times, and I believe it will play that role in the months ahead. Interest rates are still extremely low by any sane historical standard, and the Fed appears to be through with its tightening for a while. Volatility of stock prices has a lot of investors worn down and impatient with mediocre or negative returns. It may not happen overnight, but in times like this, people “return to the land.”

If we do a good job of telling our story, I think prospects will realize it’s a time to buy, not a time to stall.

There’s more to this, though. I spent 16 months racing around with investors while they bought everything that didn’t move, all the while wondering why they couldn’t find any bargains. Duh! Everyone else was buying at the same time, and no one was selling. Now the situation is reversed, a lot of sellers but buyers are thin on the ground. It’s counter-contrarianism, a carefully thought-out strategy of running with the herd.

Take a look at the cost break-downs on our investments page for Phoenix-area rental homes. Those are rigorous numbers, no blue-sky fantasies, but they still hold. It’s easy to get a 1,200sf home that will perform that well, and — for now at least — Read more

July 20, 2006

How much does The Long Tail weigh? Here’s a better question: In The Long Tail, how long does it take to Google from last to first?

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Suburban Phoenix Real Estate Broker

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Joseph Ferrara at sellsius&176; blog asks once and then again and then a third time here: How much does The Long Tailweigh?

Chris Anderson, the author of the book, has some answers, but they vary from industry to industry. But from my own point of view in real estate, The Long Tail is a very promising source of choice opportunities. If you can conceive of an under-served niche market where the product is avidly sought, even if only by a small minority of the buyer population, you have a business. This much is not news. We’ve had luxury home and vacation home and historic home specialists forever. The difference is Google, which is surely The Lord Of The Long Tail.

Consider this as an example:

I wrote my web page on No Dual Agency on June 28, 2006. I linked to it internally within our own site, but the page had no in-bound links, nor did I pursue any. On July 7, I ran this search, jut to make sure I hadn’t overlooked anything. My page had Googled up from nowhere to first place in nine days on the strength of content alone, with zero in-bound links.

But wait. There’s more. I first mentioned our No Dual Agency policy in BloodhoundBlog on June 29, but the first time I weblogged it as its own topic was on July 14 — Bastille Day.

On July 17, Jim Duncan of Real Central VA wrote a post called Dual Agency — Who benefits?, linking back to me. I saw the trackback and commented on his weblog.

Guess what happened?

Take another look at that Google search. Jim’s post is in second place. In three days — two days, really; I saw it yesterday.

This is truly a Long Tail keyword. In quotes, “no dual agency” yields 290 hits total. And it is probably vain to expect home buyers or sellers to sit down at the computer and type “no dual agency” into the Google box. But the basic point stands: First and second place are held — for now — by two web sites that weren’t even in the game on June Read more

July 20, 2006

How do you grow from 8,000 people to a million in 25 years? Do it the Buckeye way…

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Suburban Phoenix Real Estate Broker

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If you don’t live in Arizona, or even if you do, it may help to put a little background on the Town of Buckeye, until lately a proud if tiny outpost in the midst of the wide Sonoran Desert west of Phoenix. Buckeye was the point in the car trip when thoughtful and experienced fathers would shout out, “Heads up, kids. This is your last chance to use the potty before we get to California.” This was not literally true, but Buckeye was at the frontier of a land where public facilities of any kind could be hours apart.

That’s all changing, of course. They discovered a huge aquifer under Buckeye, and now it’s on track to be the fourth, third, or even second most-populous city in Arizona — and possibly the largest in land area. From the Arizona Republic:

Buckeye is a place where the best breakfast in town is right on Main Street, where a man still feels comfortable leaving his car running as he jets inside a corner store.

It’s a place where you tell someone to meet you at “the Sonic” because there’s only one.

Signs, though, hint things soon will be sharply different for a town that could someday be as large as Phoenix. The acres of empty land are filling up with plats for homes that will make up more than 30 master-planned communities like Verrado. Town Council meetings provide standing room only and are filled with developers holding poster boards with more plans for Buckeye’s future. The numbers say the town could have 1 million people by 2025, up from about 25,000 now.

And most of those 25,000 people are new arrivals. The town’s population was 8,000 in 2000. Folks in other parts of the country have no way of getting their minds around that much growth, that fast. This is one of the signal triumphs of the Phoenix metropolitan area, sixty years of expertise at managing — and surviving — extreme growth.

At 230 square miles now, Buckeye already is larger than Tucson, Mesa and Seattle. Even one of the town’s planned communities, Douglas Ranch, is 55 square miles, larger than Tempe.

The proposed annexation would put Buckeye closer to its planning area of 600-plus square miles and further away from its past as a sleepy, rural community.

“Most people don’t have any idea how big Buckeye is,” said Bob Bushfield, its community development director. “If we continue to annex all the property around, we will be every bit as big as Phoenix.”

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July 19, 2006

“What does it feel like? Home.”

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Suburban Phoenix Real Estate Broker

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Dave Winer, the man who invented the incalculable wealth that is weblogging, talks about a home buyer’s sense of peace and joy when he knows he is finally home:

I bought a house in Berkeley this morning. It’s a real beauty, an 80 year-old stucco, built on a hillside, with a view of downtown SF and the Golden Gate Bridge. I spent six months looking, it was by far the best house I saw. As with my first house in Woodside, there was a moment when I knew I’d own it. In this case, it happened as I walked in the front door. The place has a magic feel to it. What does it feel like? Home.

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July 19, 2006

“Arizona first among states in terms of economic momentum”

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Suburban Phoenix Real Estate Broker

Author website

From the Business Journal of Phoenix:

Arizona ranks well in terms of economic growth and potential, according to a study released Tuesday.

A new report by a research group called Federal Funds Information for States ranks Arizona first among states in terms of economic momentum.

The FFIS study found Arizona with strong growth in terms of jobs, personal income and population. Nevada ranked second, Louisiana last.

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July 19, 2006

Strike the Big Top!: BloodhoundBlog to host Carnival of Real Estate October 9th

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Suburban Phoenix Real Estate Broker

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We’ll post reminders as the date draws nigh, but be sure to hoard all your really good blog ideas for the week of October 2. That way, we’ll be able to feature them when we host the Carnival of Real Estate on October 9th. This week’s Carnival is at Zillow Blog. Next week, the big show moves to Searchlight Crusade, and from there to The Future of Real Estate Marketing, one of our favorite weblogs. It will be a while before the carny caravan pulls into Phoenix — but that just means you’ll have plenty of time to think up really good posts!

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July 19, 2006

Location, location, location: Refusing Dual Agency puts Realtors above reproach . . .

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Suburban Phoenix Real Estate Broker

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I may have stirred up a hornet’s nest on the subject of No Dual Agency. Jim Duncan at Real Central VA posted his thoughts, and the sellsius° real estate blog posted a round-up, asking Are Buyers Customers or Clients? From Arizona, taking a trip Back East is also taking a trip back in time: Agency as it is understood in New York has been absent from this remote cultural backwater for at least 15 years.

That’s as may be. I work in Arizona. Plus which, if seller sub-agency is not already in the past in your state, buyer agency is definitely in your future. There’s a new sheriff in town.

This is all to the good, by me. The slim justification for our licenses is consumer protection, and it seem obvious to me that exclusive representation is the only way to achieve truly transparent protection for both of the parties to a real estate transaction.

Ardell DellaLoggia, in comments posted here, seems to disagree:

Due to the internet access of homes for sale, the trend is UP and not DOWN with regard to buyers calling listing agents direct vs. seeking separate and distinct representation. When the Buyer Consumer chooses to call the listing agent, if you outlaw Dual Agency, you leave them with NO representation at all.

It sounds good to say “outlaw Dual Agency”, but it leaves the Buyer Consumer back where they started, if and when they call the listing agent direct, with NO representation whatsoever.

I see that as a false dichotomy. In that circumstance, the listing agent can either refer the buyer to one of several trusted buyer’s agents (we do this) or simply advise the buyer to seek separate representation. The Buyer’s Broker’s commission is already built in to the MLS listing. There is no reason for the buyer not to seek representation.

Prove my point, Greg. Buyer calls you on your listing and only wants to deal with you personally when making an offer on your listing. Where do you go with that scenario if Dual Agency is “outlawed”, without leaving the buyer high and dry with regard to representation in the Read more

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