BloodhoundBlog

There’s always something to howl about.

Category: Marketing (page 146 of 191)

February 8, 2007

Glenn Kelman on Redfin.com’s move into Southern California: “I’ve never had to think so hard in an interview in my life”

by

Suburban Phoenix Real Estate Broker

Author website

Here’s the newspaper news, and we’ll come back to it in due course: Redfin.com today opens three new offices in Southern California: Los Angeles, Orange County and San Diego. The company has expanded its web site to include listings from nine Southern California MLS systems.

Here’s the real news, which emerges from a forty-five-minute podcast interview made by BloodhoundBlog contributor and San Diego-based Realtor Kris Berg with Redfin.com CEO Glenn Kelman: Redfin.com is not profitable at present and may never achieve a reliable state of profitability. Most notably, Kelman’s willingness to reverse himself on unpopular but cost-saving policies may ultimately doom the company, at least in its present configuration as a discount brokerage.

The immediate problem is simply the payroll. As Kelman says in the interview:

What investors worry about with Redfin is the margin in the model. So today we generate about a 50% margin out of real estate operations. So for every dollar we make, we have to pay fifty cents to one of our agents. And we have to pay our agents more than we initially thought, just because we wanted to to get good people.

Redfin’s agents are salaried employees, not the more typical independent contractor paid on some sort of commission sales plan.

A new Realtor in a traditional brokerage offering training would expect to earn from 50% to 90% of the total available commission offered for the sale of a the home — which might be 3% of the purchase price.

A more experienced Realtor working in a brokerage with no training could expect to keep 95% or more of earned commissions.

Redfin concedes two-thirds of the buyer’s agent’s commission to the buyer, with half of the remainder going to compensate its agents. By this we can see that Redfin agents are being paid substantially less than successful Realtors in other types of brokerages. Even so, Kelman concedes, “We’ve got it around fifty cents, and that’s not enough to pay our developers.”

Since launching as a brokerage, Redfin.com has met with considerable criticism for some of its more unorthodox business practices. At first, the company advised buyers to appeal directly to the listing Read more

February 7, 2007

Fortune on Zillow.com: They can gape, but they can’t Google . . .

by

Suburban Phoenix Real Estate Broker

Author website

It’s possible that I’ve written more about Zillow.com than any other real estate weblogger. More on why Automated Valuation Methods necessarily stink. More on why the National Community Reinvestment Coalition’s shake-down of Zillow.com stinks even worse. More on Zillow.com’s new features.

If I haven’t written more than anyone else, I’ve certainly written plenty. Want proof?

If you Google on Zillow.com, you have to drill all the way down to the third and fourth entries to find my posts. Most days, I beat their own frolickin’ weblog.

But let’s be conservative and simply say that, as a weblogging Realtor based in Phoenix, AZ, I’ve written quite a bit about Zillow.com. So when Fortune magazine writes a cover story about Zillow.com, who don’t they talk to?

They quoted a real estate weblogger — one I’ve never seen before — whose site has been dormant since last October.

And they talked to a Phoenix-based Realtor, Brett Barry, A Realty Executives agent working out of Scottsdale. (Brett emailed me about this article when he was interviewed a while ago.)

But apparently Fortune Senior Editor Jeffrey M. O’Brien didn’t run a simple Google search.

What he did do — almost but not quite — is talk a sweet pregnant lady into turning on her buyer’s agent and disintermediating the bee-hotch. I told David Gibbons last week that the Make Me Move feature puts Zillow.com in the business of brokerage, even thought they’re not taking commissions for it. I wrote about this in December, but, even so, he was taken aback. But in the article, O’Brien is actively marketing his home as a Make Me Move FSBO transaction.

It’s a fun article, but there’s really nothing new in it. It’s impressive, I suppose, that Zillow.com can make the cover of Fortune without even a hint of profitability on its horizons. And it’s certainly a matter of interest to me that I could wrestle my way to third and fourth position on the search for Zillow.com — a search for which BloodhoundBlog gets over a hundred unique hits a day — but not attract the attention of Fortune magazine. Who says real estate is going hi-tech…?

Technorati Read more

February 7, 2007

Getting the “L” Out – A Stump Speech

by

Realtor, Associate Broker

Author website

Why is it that so many agents seem to see a “Sell” in “Selfless”? Don’t people see through the facade, or does this really have a positive marketing impact? I suppose it depends on your particular shtick, and perhaps the “love me” approach will play to some audiences. Call it naivete or an ignorant, misguided notion, but I somehow believe that the tone and quality of our personal marketing is a reflection of the type of people and professionals we are and the way we view and conduct our business. I could be wrong.

Love me! This is a common mantra among the dozens of agent ads I see in our little monthly community newsletter, circulation approximately 14,000. Dozens of “reprinted” testimonial letters, happy client gushings of adoration, and “We’re #1!” screams. The latter has gotten so ridiculous that we see statements like “#1 agent team for (name of company) in (name of community) in past (number of) years combined”. Now, I know that this means this team was out-produced by individual agents and agents for other companies and most everyone in other communities and during any single year. My question is, are consumers so gullible that they don’t get it?

Personally, I have always taken a high-road approach to my ad content, and this newsletter is no exception. No “sweetheart deals” in the February issue, no “new home in your stocking” in December. Bah-humbug. “Here are our listings, we sell bunches of them, call us if we can help you” has been our consistent message. My clients are not hiring me to run an ad filled with shamrocks and maypoles. They want their property exposed and sold. Of course, through marketing our inventory, we are de facto marketing ourselves, but in-your-face self-promotion has never struck me as the best method of gaining respect and trust for ones competence. As they say in Steve’s home state, “Show Me”. I am ever hopeful that our actions and our success speak for themselves.

I’m selfless! Let me tell you just how much so you will bring me business because of it! Another recurring theme I see Read more

February 6, 2007

Two thousand mugshots: A failure of leadership . . .

by

Suburban Phoenix Real Estate Broker

Author website

In retrospect, I should have said something. My own initial aversion to the 2000 bloggers incipient fiasco was purely personal, the Inner-Introvert whose skin crawls at the thought of too much social contact.

I was also operating from a rule of thumb I think of as Dustin’s Law: “If it sounds too much like high school, don’t do it.” I derived this by reading comments from Dustin Luther at Rain City Guide.

So why didn’t I say anything?

I didn’t want to rain on other webloggers’ parades. I didn’t actually realize that this game was wrecking Technorati’s utility until Thursday of last week, and, even then, I didn’t anticipate consequence at Google. I’m not aware of any of the usual SEO mavens sounding alarms, either.

But I did know from the very start that the 2000 bloggers project was trading in unearned links, morally suspect even if — at the time — seemingly inconsequential.

And by now we know that the game was not without consequences. On and off all day I’ve read people trying to excuse and rationalize what may turn out to be a huge disaster. Inasmuch as many, many RE.net webloggers were involved in this — bloggers who have great commercial hopes for their organic findability — this is not “only blogging.” It really does not matter what you are I or anyone thinks about this mess. What matters is what Google does about it.

Here’s my takeaway: If I have something to say, I’m going to say it. I don’t care if people call me a stick in the mud or whatever. This smelled wrong to me from the very beginning, and if I had said so at the time, a whole lot of people I like and respect might be sleeping better tonight. “Deliver us from evil,” is in some other guy’s job description, but I think you should be able to count on me to say so when I think something stinks, no matter whose toes I might be stepping on.

The truth is, I thought I was being nice, a good sport. But I’ve never been anybody’s “nice guy”, and I’ve Read more

February 6, 2007

Busted! Two thousand mug shots at Technorati.com . . .

by

Suburban Phoenix Real Estate Broker

Author website

Pinched. More beef. Technorati it going to take is all back.

To dissuade chain posts from submerging your voice in their dilutative effects, we’ve updated our indexing systems on an experimental basis to filter out links of this nature. We all love photo collages of faces; we’ve had them, albeit on a smaller scale, on the Technorati site since last summer. However, “join us and use these links” memes such as 2000 Bloggers is really a disservice to rank measurement systems and thus this decision to change our indexing policies in that regard.

What happens if Google decides it was scammed, too?

Technorati Tags: , ,

February 5, 2007

Super Bowl? But there’s a Carnival of Real Estate going on . . . !

by

Suburban Phoenix Real Estate Broker

Author website

On second thought, maybe we are the nerdliest joint on the RE.net. I actually watched much of the Super Bowl yesterday, but it was only because it was coming between me and the judging for the Carnival of Real Estate. BloodhoundBlog is host to the 28th edition of the Carnival, and, geek that I am, that was far more interesting to me than watching the Colts stampede the Bears.

And, yes, we are geeks with pride. Snotty sardonic surly teenaged web-programmer god Cameron built us a little bot that would permit multiple judges to view and score each article “blind,” with no knowledge of either the author or weblog. And wise winsome willowy spreadsheet goddess Cathleen Collins built an Excel bot that combined all the results into a one-page report.

These were our judges, six out of the eleven of us: Kris Berg, Brian Brady, Cathleen Collins, Michael Cook, Greg Swann and Jeff Turner. Of the judges, only I saw the articles in their original form. Everyone else saw the versions that I had anonymized.

So: Who won?

Rank Has Its Privileges, and I’m asserting one here. The winner by a significant margin was David Gibbons from Zillow Blog with Attracting a Conversation: Blog Comment Tips. But — I hope without diluting David’s glory — I would like to craft mini-laurels for all of the authors of Zillow Blog’s series on real estate weblogging. Here are the other articles in the series:

And, yes, we’re weblogging about weblogging. But that’s beside the point. The Carnival of Real Estate should celebrate uncontested excellence in real estate weblogging, and David’s post — and the entire Zillow Blog series — are particularly good examples of how to handle this work wisely and well.

But now the pre-game show is over. Here are the top ten winners of the Carnival of Real Estate:

  1. David Gibbons outruns the Colts with Attracting a Conversation: Blog Comment Tips – Zillow Blog posted at Zillow Blog.
  2. REBlogGirl comes in second with Long tail, short tail and coat tail searches posted at Read more
February 4, 2007

BloodhoundBlog week in review: Nothing exceeds like INTx . . .

by

Suburban Phoenix Real Estate Broker

Author website

Surely BloodhoundBlog is not the nerdliest joint on the RE.net, but we’ve still got a lot of arrows in our quiver — er, pocket protector.

For a start, I pinned the tail on Redfin, arguing that nerdy INTx geeks are in fact their target market. (Sing along: “I’m fluent in JavaScript as well as Klingon.”) Kris Berg snagged an interview with Redfin CEO Glenn Kelman, himself a palpably INTx specimen. We have to sit on her podcast until Thursday, but Kelman’s confirmation that the brokerage target markets techno-geeks is not an embargoed tidbit.

Kris had a great Redfin post of her own as did husband Steve Berg at The San Diego Home Blog.

And: I did geek-seeking missile duty by awarding the first Cheez Whiz Prize to a dead-pool destined circle jerk called my-currency.com. What did the starving mathematicians say when they stumbled onto a can of beans? “First we will postulate a can-opener…”

But just to establish my own hopeless geek bona fides, this week I became the first hopeless geek to write a song about real estate weblogging. “Cathy’s Clown” indeed!

But, Dave, I’m just a wave. I ain’t the water. So here’s what else has been going on in the BloodhoundBlog pond:

Investor Michael Cook took us along on his trip to Greensboro, NC, advising us that Time Really is Money and asking What makes a good investment? He follows up by naming some Watchouts for New Market Investing and then invites us to consider Bank Relationships vs. Mortgage Brokers.

In Googling for Pizza Kris Berg takes us on a very straightforward roundabout route through the SEO benefits of real estate weblogging.

Also on the theme of weblogging, Jeff Brown argues against the practice of allowing anonymous comments in It’s Time To Take The Lead — Let’s Turn The Lights On Now. Anonymous commenters are still permitted at BloodhoundBlog, but we’ve had to put everyone on a very short leash to avoid flaming, obscenity, etc. It’s common for people to argue that policing comments is “censorship.” This is incorrect. Censorship is something that is done by governments. The issue here is the right of private property Read more

February 2, 2007

The First Honorary Cheez-Whiz Prize: my-currency.com, where play money is play wisdom

by

Suburban Phoenix Real Estate Broker

Author website

When I was a child, I used to love to play Monopoly with my kid sister, Pammy. She was sweet and passive and just wanted to play, where I’m the most competitive. I would routinely put her six figures in debt, then just keep lending her more and more money, so that I could put hotels on absolutely everything.

I think this proves that I am an incomparably talented real estate investor. Kirk Kerkorian owns three of the four corners of the intersection of Tropicana and Las Vegas Boulevards. But the only difference between us, as real estate investors, is that Kirk is playing with real money, where I was playing with play money.

That can’t be much of a difference. Can it?

If you’re thinking, “Who would bother to answer such a dumb question?” — there is an answer: my-currency.com, a brand new Zillow.com wannabe that is even stoopider than an AVM for pricing homes.

The site explains itself in a particularly soft-skulled newage style:

CrowdValue is where we process everyone’s idea of value for specific problems – such as “What is the value of a house for sale” or “what will be the value of a square foot in 6 months in my neighborhood”? So in that regard, CrowdValue is exactly like the stock exchange – it brings people together to coordinate all the different views of value and settle on an equilibrium price, at a point in time. CrowdValue is a trading engine and marketplace.

No, CrowdValue is a silly, masturbatory game. Stock prices are not equilibria, they are a consensus among buyers and sellers about real values. A play money stock market is as dumb as… a play money real estate market.

An AVM is at least rational enough to make guesses about what real traders might do. There is no value whatever in making guesses about what pretend traders will do with pretend money. Most especially since real buyers and real sellers are the only people who can establish the market value of real property, by negotiating to a meeting of the minds.

I’ll award the first Odysseus Medal next week, but this week Read more

February 2, 2007

Pump up the Carnivolume: RE.net blog carnivals proliferate

by

Suburban Phoenix Real Estate Broker

Author website

There was big news in last week’s Carnival of Real Estate, but we were delicate enough not to take notice.

A kinder, gentler BloodhoundBlog? Don’t hold your breath.

There is other RE.net blog carnival news, though:

We know about the Carnival of Real Estate Investing, of course, which was started by Real Estate Investing for Real. (BloodhoundBlog will be hosting this blog carnival on February 19th.)

Now comes news of the Consumer Focused Real Estate Blog Carnival, founded by Sadie’s Take on Delaware, Ohio. The idea is to reward locally-focused weblog posts.

From the other direction, David Gibbons of Zillow.com phoned this afternoon to talk about an idea he has proposed for the Carnival of Real Estate. The idea is to make a five- or ten-minute podcast with each week’s CoRE host, discussing the judging process, the decisive qualities of that week’s winning choice, and, also, offering the host a moment to discuss his or her local real estate market.

I like this idea, although I can never talk about anything for ten minutes. Our phone call to talk about a ten-minute podcast ran for 32 minutes. But I do like the thought that there will be some oversight over the hosts, if only to prevent — or at least draw ignominy to — the kind of news we delicately ignored this week.

I am also concerned about this proliferation of RE.net blog carnivals. I understand the impetus to create niche carnivals, but each new addition tends to dilute the impact of the others. I like the Carnival of Real Estate being “The Oscars,” as it were, of real estate weblogging carnivals. An idea I suggested to David is to split out CoRE awards by category: Best Investing Post, Best Local-Interest Post, Best Feature Post, Best News/Commentary Post, with one overall Best Post picked from among all the entries.

Another idea I have been toying with is to create a weekly Odysseus Medal to be awarded to what I think is the best RE.net weblog post of the week. Why me? Because I had the idea. Because I’m a presumptuous-enough insufferable bastard to trumpet my own opinions with a Read more

February 2, 2007

A line in the sand: Gaius Popillius Laenas and getting the real estate transaction closed against all opposition . . .

by

Suburban Phoenix Real Estate Broker

Author website

Someday soon I’ll write a full-blown Realty Reality post about this transaction. I’ve written about it several times already, but my client is quite right in telling me, “This should be Chapter 14 in your book!”

What am I talking about? It’s a home that finally closed this week — after much back and forth, feint and parry, sturm und drang, threat and counter-threat — all in a day’s work.

I first wrote about this in an Ask the Broker post about a divorcing seller who was reluctant to move.

I talked about my own buyer briefly in a post about the realities of what we suppose to be tech-infused real estate brokerage.

Two weeks ago, I wrote what I thought was the last chapter in the story for the Arizona Republic (permanent link):

Sellers who aren’t motivated can create headaches

When Realtors speak of unmotivated sellers, what they normally mean are sellers who are unwilling to do what’s necessary to make their home appealing to buyers — price to the market, attend to repairs or keep the home show-ready.

I have a home in escrow right now where the seller doesn’t seem to be motivated to do anything.

I represent the buyer. When first we saw the house, it was graced by a great deal of debris. Not trash, necessarily, but not treasure, either, and none of it put away. When we were back in the home for inspections, nothing had changed.

And, to my knowledge, nothing has changed since then.

I have been driving by the home every other day or so, looking for external evidence of changes. Nothing discernible.

We were there on Friday for the final walk-through and we discovered one important change: The key in the listing agent’s lockbox no longer works. The seller had changed the locks.

What does this mean? The home is about to close and, to all evidence, the seller seems unmotivated to move out. There is every reason to suppose that every bit of debris we saw in the house a month ago is still there.

What happens next? We close the transaction, withholding funds in escrow to pay to have the seller’s personal Read more

February 1, 2007

A Different Perspective on the Value of Realtors

by

Real Estate Investor

Author website

Has anyone ever wondered why the price of real estate agents has been 5-7% for what seems like an eternity? I know I run a serious risk of stepping on a lot of people’s toes out there since this is a site run by realtors, but I really have been thinking about this a lot lately (particularly this morning after I read Greg’s articles). Additionally, several other articles got my attention (CNN Money, Business News, and The Wall Street Journal). If you stop to really think about this, you will realize that real estate agents have created one of the longest standing monopolies out there. Let me dust off my economics text book and delve a bit deeper into this subject. [Please note this is intended to spark discussion and not personally attack anyone’s profession. As I said before, I love a GOOD real estate agent].

What is a monopoly? Let’s simply define a monopoly as providing a good or service with very little competition. While this may be debated, humor me when I say that real estate agents have been providing their service with very little competition. This is evident in the fact that the price has stayed fixed for so long. One could argue that by using a percentage method, agents are simply hedging themselves against inflation. While that would partially explain this pricing phenomenon, the fact that the percentage has stayed the same despite significant changes in information control speaks of something else. In other arenas, when a significant technological advancement hits the market, prices typically drop accordingly or the level of service increase dramatically. Look at cars for example. As technology has improved cars have become much cheaper (in real dollars) than 70 or even 30 years ago. Additionally, an owner now gets many more standard services.

So do Realtors do more now than say 30 years ago? Of course they do. With the advent of new technologies, they provide marketing over the Internet, in newspapers, and perhaps even their own website. The more important question, however, is does the consumer get a higher value for the services they Read more

February 1, 2007

Whatever it takes: A determined Realtor is a bargain . . .

by

Suburban Phoenix Real Estate Broker

Author website

Jeff Turner wrote this in a comment, but I think my answer to him justifies a post of its own:

Greg, what percentage of transactions fall into the category of “requires great skill,” as a result of the kind of title issues you speak of in this post, and what percentage fall into the “no problems” category?

Four out of five, at least, seem very routine to me, but that’s misleading. There is no transaction we are involved in to which we don’t bring a great deal of non-obvious value. Frankly, if I just talk with you, or visit you at home, I’m going to shed a lot of information gleaned from experience. I’ve seen thousands of houses. I’ve worked with hundreds of buyers and sellers. I’ve been directly involved in dozens of escrows from start to finish. You might be a lot smarter man than me, but I have seen everything, big and small, that can go wrong in the sale of a home. I’m not just there for the paperwork, which any title company can do in Arizona, and I’m not just taking your order, sink or swim. My job is to make sure you get everything you want — as, when and in the amount you want. So even on transactions that seem routine to me, I will be doing many, many things for you that you would not know to do for yourself. It’s not razzle-dazzle salesmanship, and it’s not some vast brilliance. More than anything else, it’s the knowledge that comes from having done it so many times before.

For what it’s worth, the house that closed yesterday didn’t require great skill, just bulldozer persistence. A dozen phone calls a day for weeks, not letting up. Yesterday, I spent half the day in my car moving documents myself to avoid courier delays. This is dumb work, perhaps demeaning to some. My attitude: Whatever it takes. Last Friday I looked at a hopeless situation and bet everything I had that we could get the job done by the end of the month. At two-thirty yesterday afternoon, the movers were waiting Read more

January 31, 2007

Overcharging? A dedicated Realtor is a bargain . . .

by

Suburban Phoenix Real Estate Broker

Author website

Attorney Craig Blackmon issues a testy remark in a comment today, but the truth is, I could not be happier to discuss the underlying issue.

Sez Craig:

Well, it appears that even the “full service” agents are overcharging just a wee bit. It turns out that a successful agent must rebate nearly $69,000 a year to clients in order to charge a “fair” fee for the service. With this sort of transparency, I’m not sure Redfin has such a poor business model — at least they overcharge less.

I rebated more than half that amount in Q4 ’06 alone, so the number is not impressive to me.

Here is a number that has a very high priority for me today: Three.

That is the number of attorneys in two different states who tried with all their might — and failed — to kill one of my transactions.

They weren’t really trying to kill the deal — they were just being lawyers: Clumsy, stupid, ham-handed and — most particularly — slow. It took more than two weeks for the three of them to work out how to remove a bogus lis pendens that should never have been a cloud on the title in the first place.

I’m pretty sure each one of them made more on the house than I did.

But the important thing is, we closed the deal. A real estate attorney would have either killed the deal or bled the buyer white — for months. Lazy-for-less Redfin would have killed the deal. We closed today and my buyer moved in because I refused to let the transaction die.

I get paid for results, not ergs of energy expended nor drops of sweat spilled nor towering piles of paperwork. Results — not my time, not information, not obsequious service. I only get paid when I actually do the job I was hired to do.

Erg for erg, hour for hour, I lost my ass on this deal. But I don’t measure my life that way. I don’t have a job. I don’t get to eat one sesame seed every time I press the big red button. I work for days Read more

January 30, 2007

Redfin and the antics of the INTx crowd . . .

by

Suburban Phoenix Real Estate Broker

Author website

By my lights, one of the most interesting bits of news to come out of Inman Connect was Redfin’s announcement that they plan to swim into Boston Harbor. Washington State has reasonably normal wild-West real estate laws, as does California. The natural leap, in terms of maintaining a decent level of sanity over legal compliance, would be to migrate to nearby states — Nevada and Arizona leap to mind.

There is a problem with this idea, though. The median home price in Phoenix is around $260,000. In Las Vegas, the median is around $300,000. If Redfin proposes to give back two-thirds of a $9,000 commission, there is a word for what’s left: Doodly.

Unlike a true bottom-feeder, Redfin has encysted itself with a boatload of dead-heading barnacles. This is why it keeps trying to grow into luxury markets: The company needs one third of a bigger commission bite even to make a pretense at covering its inflated payroll.

Kris Berg points out today that this is a less than brilliant strategy, inasmuch as buyers and sellers of luxury homes are busy people who have the money to pay for the kind of roll-out-the-red-carpet service they have come to expect. “We do nothing for less” is not a winning value proposition, generally speaking, among prosperous people.

There is an exception to this rule, however. Kris hints at it by suggesting that younger people might be attracted to Redfin. They might, but few of them are buying or selling at the $500,000 level and above. Redfin actually sends a stronger hint by announcing their plans to jump to Boston.

A couple of months ago, I was on the phone with Galen Ward. He suggested to me that, while Redfin’s approach to the marketplace was only popular with hi-tech Seattlites for now, eventually they would be seen as early-adopters and the business model would meet broad acceptance in the marketplace. This is a colorable proposition, I suppose.

Just after Inman, I mentioned on Rain City Guide that I thought Move, Inc’s. Alan Dalton had mopped up Redfin’s Glenn Kelman in their debate. The example I offered was this: If you Read more

« Older posts Newer posts »

Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

Media Contacts