There’s always something to howl about.
Suburban Phoenix Real Estate Broker
From sellsius° real estate blog, citing Forbes magazine, the top ten overpriced real estate markets:
1. Essex County, MA
2. San Francisco, CA
3. San Jose, CA
4. Honolulu, HA
5. Cambridge, MA
6. New York City, NY
7. Tucson, AZ
8. Oakland, CA
9. Boston, MA
10. Los Angeles, CA
I’m sure all of Phoenix is relieved to have missed out on this distinction. Interesting that seven of the ten are either in Massachusetts or California…
It’s deja vu all over again at the Arizona Republic. Magazine names Willo district one of top cottage communities it says in Wednesday’s paper:
They’re busting their buttons in the downtown Phoenix neighborhood of Willo.
Cottage Living magazine has named the historic district as one of the “Top 10 Cottage Communities in America.”
A profile of the neighborhood, generally bounded by Central and Seventh avenues and Thomas and McDowell roads, will appear in the July/August 2006 issue of the national publication.
Great news. Trouble is, it’s old news. The same article ran in the paper on June 30th.
Oh, what the heck. Even if it’s a twice-told tale, it’s still a great story:
“Places with charming architecture, where you can skip the car and stroll to locally owned shops and restaurants; places where neighbors know your name and are happy to have a cookout on Friday evening,” [Cottage Living Editor in Chief Eleanor Griffin] said. “Willo boasts crisply manicured lawns and small, doted-on houses of all types – it’s definitely a charming community of tight-knit residents.”
Joel Burslem The Future of Real Estate Marketing cites ShackYack.com, but I don’t think we’re seeing the same thing. What he sees is another manifestation of what he calls Real Estate 2.0. What I’m seeing is a particularly user-friendly interface to an IDX system. In other words, this is not the disintermediation of a brick ‘n’ mortar broker, this is a competitive advantage built by one broker to use against all the others. It’s not perfect, mind you. If the buyer has no idea where they want to live — a relocating family, for instance — this tool won’t be of much help. But still, it’s very cool.
But the other end of this is that I’m thinking maybe Joel sees this as a very complicated application, whereas it seems to me to be just an integration of an IDX-like database with the Google Maps API. The beauty of the tool is in the user interface, but that’s really just a Cascading Style Sheets job.
In other words, a young and money-hungry web programmer could probably reverse-engineer this in no time, if the price was right…
We’ve talked about seeing homes like this in Las Vegas. Even so, these will have more yard than homes being built there. From the Republic:
As residential land in Ahwatukee Foothills gets more scarce and expensive, one home builder has come up with a new concept for building homes: cottages.
The Cottages at Lakewood, which are expected to begin sales in the fall, will be a cluster of 15 normal-size, two-story, single-family homes packed into 2 acres at 3510 E. Lakewood Parkway West.
Legally, they will be classified as condominiums.
“It’s a different type of animal. I’m still trying to get my arms around it,” said Jason Kush, vice president of sales and project development at Scottsdale-based Montevina Estate Homes, the developer.
“We call it a cluster project. You see this all the time in Orange County.”
The cottages will have only side yards, measuring about 10 feet by 60 feet.
The homes will be 1,900-2,200 square feet each and come in three models: Santa Barbara, Spanish mission and ranch hacienda.
Prices will start in the mid-$400,000 range.
In The Fountainhead,
The shortest distance between two points is not a straight line — it’s a middleman.
Here’s Seth Godin on the same point:
Salespeople who sell properly sell stuff people wish they would have bought in the first place. It’s a huge service… I’m pretty sure we need more good salespeople, not less.
I actually don’t care too much for the kind of selling Godin’s talking about. It’s a thin line between helping people do something they should do and nudging them into doing something they should not do.
The salesmanship Rand is talking about is elemental in real estate, to be the source of and liaison with the many vendors involved in the sale of a home.
But the most important function for me, and the job I like the best, is addressed by neither: A good real estate salesperson helps people realize their dreams — and avoid potential nightmares. The first part is fairly easy. The second part requires real skill, especially with sellers. I don’t think these jobs can be done without.
Me, in today’s Arizona Republic:
Here’s a complicated question: How much money should you put down as an earnest deposit on the purchase of a home?
You’ll find a more permanent link on the BloodhoundRealty.com News and Views page.
We looked at a house yesterday in Las Vegas. We’re loosely motivated buyers, so we didn’t waste an agent’s time. But we have this idea that we might buy a distinctive home in a choice location, trick it out in every possible way, then own it as a getaway vacation rental that we will rent ourselves from time to time, when we’re in town. We were looking yesterday in the allegedly ‘historic’ neighborhood of Downtown Las Vegas, which makes the historic neighborhoods of Phoenix look positively ancient.
Anyway, here’s what’s important in the present context: The lister of the home happened to be there as we drove by, and she offered to show it to us. She was eager and energetic, well-informed and enthusiastic, everything you might want in a Realtor, either as a broker or a seller. Except that in the course of about ten minutes, she committed at least two Federal Fair Housing law violations – religion and family status.
We can give the lady a break, I suppose. We weren’t offended, and I can’t image that even members of the two protected classes would have been offended. She was trying to be inclusive, even if unlawfully, not exclusive. All she really wanted to do was get the house sold, so she gave us information she thought we would want, even though doing so was in violation of the law, even though we had disclosed to her our status as Realtors from out of state, even though she should have known we would hear every violation of the law.
As it happens, we are very, very careful about this stuff. Not because we believe all people are individuals, equal in every metaphysical respect. Not because we find prejudice and exclusion abhorrent, repulsive, nauseating. Not because we want to spread the social, emotional and financial benefits of homeownership as far and as wide as possible. We uphold every one of those noble ideals. But here is the reason we are so serious about Fair Housing laws: Because the fines at the Federal level are $11,000 – per violation. Add to that state, county Read more
At 360 Digest, an exceptionally fine real estate weblog, Marlow Harris weighs in with this idea about an incipient on-line real estate start-up:
Blue Roof, like Redfin and Zip Realty, misrepresents their status as “Realtor” and claims to be a member of the National Association of Realtors and adhere to its strict Code of Ethics, while actually NOT being a Realtor subject to their rules, regulations and ethical code.
I don’t know if this is true or not, with respect to any of the vendors named, but, if it is, it seems to invite considerable exposure to litigation. No, not a trademark infringement suit from the NAR. A judge might reasonably hold the RealtyBot sites to the claims they are making, even if those claims are untrue. A mere real estate licensee is answerable only to the statute law of the licensing jurisdiction. Realtors are held to much higher standards, both because of the NAR Code of Ethics and because of the presumption that the aspiration to professional status implies greater education and more rigorous care and diligence. Real estate brokers, whether or not they are Realtors, are held to the highest standards. Ignorance of the law is not only not an excuse, it is not even a mitigating factor.
For all its virtues, the internet has always been driven by an ‘aw shucks, we’re just having some fun’ attitude. Witness a major, multi-national communications conglomerate named ‘Yahoo’. But real estate is not an ‘aw shucks’ business. A real estate practitioner – licensee or not, Realtor or not – has the power to ruin his clients’ financial lives forever. We’re not talking about impersonating a Realtor, a funny idea. We’re talking about depersonalizing, deprofessionalizing – ultimately deligimating – the fiduciary relationship. If the agency law hammer ever drops on these practices, whether or not they are buttressed by lies, the damage awards are going to be collossal.
Before we hopped our Southwest flight to Sin City, I had time to read but not comment upon this bit by Catherine Reagor of the Arizona Republic. The truth is, it gets hard to care after a while. Whether the Republic‘s real estate reporting is completely tendentious, completely uninformed or completely random, it is almost always completely wrong. Ms. Reagor, in particular, never once saw a cliff that she didn’t immediately jump off of, whether it’s the wonder and beauty of ‘affordable’ housing expropriated at gunpoint or the dream of a desert paradise master-planned in every particular by Locutus of Borg. If the Republic is singing the praises of an on-line real estate start-up, it might be wise to park your wealth anywhere else.
Even so, and harkening back to the idea of lawsuits against RealtyBots, I seized upon the opportunity to play my favorite game as a real estate broker: Name that violation. I summarized the article to Cathy, emphasizing this:
Some real estate Web sites make money on advertising.
Others, such as myfuturenet, try to make money on the back end by getting buyers and seller to close deals online using their mortgage and title firms.
In possession of that little bit of information, a mere 36 words, the challenge for you is to name that violation.
Cathy got it instantly, of course, as every skilled practitioner would. The law this business model is most likely to violate is RESPA, the Real Estate Settlement Procedures Act. Every vendor used in a real estate transaction should be chosen by the buyer. If a real estate licensee refers a vendor, he must disclose any ‘referral fees’ or other kickbacks received from that vendor. Our policy, of course, is no kickbacks of any kind, ever, since there should never be a doubt in our clients’ minds about our absolute fidelity to their interests. But a business model that binds buyers to certain third-party vendors seems to have a RESPA suit, an agency suit – or both – baked in the cake.
Is there light at the end of the tunnel? Home values were up slightly, by 0.33%, in the June 2006 BloodhoundRealty.com Market-Basket of Homes. Average sales prices were up $851, from 257,148 in May to 257,999 in June. Nevertheless, values are down $11,876 from the December 2005 high of $269,875. Market-Basket homes spent an average of 69 days on market, one day less than in May.
As has been the case in recent months, most Market-Basket homes are selling at or above list price. A few deeply-discounted properties pulled down the average, and average discounting netted out to 1.75%, up from 1.31% in May.
A total of 176 Market-Basket homes were sold in June, down from 211 in May. Inventories of available homes continue to climb. There are now 1,525 homes available for sale in the Market-Basket, which would imply an absorption rate of over eight months. A six-month absorption rate is considered normal.
Based on the idea of the Consumer Price Index market-basket of goods and services, the Market-Basket of Homes uses average sales prices for a small subset of all Valley home sales to get a clearer idea of what is happening in the middle of the bell curve. The alternative method, striking a median among all closed transactions, introduces too many extraneous factors to provide a reliable indicator of what is happening to prices for those homes that are most avidly desired by the greatest number of people. To that end, the Market-Basket of Homes looks at sales prices for MLS-listed suburban homes from 1300sf to 1900sf built in 1998 or later, the homes that drive the resale market.
The BloodhoundRealty.com Market-Basket of Homes is updated monthly and is always available at http://www.BloodhoundRealty.com/MarketBasket.pdf
We’re living la vida Vegas for our anniversary, but before we take off, here is the brand new Bloodhound newsletter.
In a comment below, Jon offers this:
What are you talking about? Lawsuits against emongoo, zillow and refin? None of them are doing anything wrong…sorry to say. I looked at emongoo, zillow and redfins sites and I don’t see anywhere where they say they give legal advice.
First, I only cited legal advice with respect to emongoo.com – and we’ll come back to that. We should exclude zillow.com from this discussion, because, for now at least, they are doing nothing but running a look-up service with no legal consequences that I know of.
But redfin.com has considerable legal exposure, as does buysiderealty.com and anyone emulating the general redfin.com business model. The first and most obvious problem is the legal doctrine known as procuring cause. These sites are a procuring cause lawsuit – or perhaps a procuring cause class action suit – waiting to happen. They go out of their way to flout the rights of cooperating brokers, openly advising buyers to see homes at open houses or by contacting the listing broker directly. The NAR Code of Ethics forbids brokers from letting a procuring cause dispute impede a transaction, but there is nothing to prevent the aggrieved broker from pursuing damages after the fact. I’m not saying this will happen, but their noses are wide open.
(As a side note, the way I read buysiderealty.com’s web site, their real business is loan origination. My guess is that the real estate brokerage side of the business will be one or more separate operating entities, with the broker being hung out to dry in the event of a lawsuit.)
The entire discount sector of the real estate industry – on-line and brick ‘n’ mortar – faces huge risks on the subject of agency law. It is difficult to argue that you did everything possible to advance your client’s interests when you did everything possible to avoid knowing what your client’s interests actually are. From the outside, you might want to shout caveat emptor! But the law of agency in real estate is by now much closer to caveat venditor.
There is actually added risk for the discounters, as Read more
The map above is a tiny slice of my week. My clients are buying the home that sits on lot 387 of that plat map. Their insurance underwriter deemed it vital that they know where the fire hydrants are with respect to that house. This is a job that can be delegated, but it is not a job that can be easily disintermediated. In anticipation of sputtering expostulations: I made another trip to that house to measure the exact dimensions of the cavities of space into which the appliances will be installed. These are but two of the dozens of little things that go into delivering the whole product…
