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Category: Marketing (page 154 of 191)

December 17, 2006

See “The Pursuit of Happyness” — because there are worse fates than straight commission sales . . .

by

Suburban Phoenix Real Estate Broker

Author website

We see everything through the lens of real estate, including films and television programs. It’s baked in the cake. Houses, always, and rooms and neighborhoods, and god help us if there’s a real estate transaction in a movie or TV show. When we were leaving The Pursuit of Happyness last night, Cathy said, “That makes starting out in a split shop look easy.”

(For non-Realtors, a split shop is one where you have to split your commissions with your broker. New agents often have to give the broker 50% of their earnings, and they may have to pay a mandatory mentor 50% of the remainder. The attested quid pro quo is training, but most new licensees starve and quit before they see much training. They often leave a ton of money behind in other people’s pockets, though, so almost everyone is happy.)

Anyway, the travails Chris Gordon undergoes in “The Pursuit of Happyness” make everything associated with mere straight commission sales look downright easy. Yes, I know successful salespeople go through a lot to get to a place where money problems seem remote, but few of us take the path through Dante’s torments followed by Gordon.

Despite a dogged persistence he is dogged by persistent failure. His wife leaves him, and he voluntarily undertakes the burden of single parenthood. All of his capital is invested in portable medical devices that street people keep stealing. He is evicted from his apartment. His limited savings are confiscated by the IRS. He and his son end up homeless, vying and sometimes failing to get space in homeless shelters. Through all of this, he is working as hard as he can in an internship at a stock brokerage, competing against nineteen other applicants for the one available paying position.

This is a Hollywood movie based on the real-life Chris Gordon’s autobiography, so you know how it’s going to end. It’s the getting there that makes this film worth seeing. To say it is inspirational is a massive understatement.

I’d tell you to go see it, but I can’t imagine that anyone who cares about human achievement would not see this Read more

December 17, 2006

There’s no business like show business, like no business I know

by

Marketing Provocateur

Author website

You wouldn’t know it from its advertising, but Jordan’s is a furniture store local to Boston. And a rather successful one too. Always near or at the top of national lists for most sales per square foot in the retail furniture business. So profitable, it attracted the attention of the Sage of Omaha who bought Jordan’s with the expressed purpose of leaving a good thing alone. He wanted it to continue doing what it has always done: Act like anything but a furniture store while making money at a phenomenal rate.

If you didn’t know better, you might think Jordan’s was a movie theater. Or a theme park. Perhaps a restaurant. And when you got to know better, you would be right. That’s because Jordan’s realized early on that success in the furniture business first required success in the baby-sitting business. So they created stores that kids thought were way cool. A place where mom and dad would eagerly take them — and leave them alone! — for unadulterated fun. Mom and dad too thought this way cool. Because where else could they safely escape from the kids for an hour, and serenely spend their suddenly free time exploring an adult fantasy of their own? An Eden filled with rooms of perfectly arranged and accessorized furniture, all of which — when combined with a ready credit card and the relaxed sales resistance of couples floating in what feels like homes for their dreams — could be delivered whole the very next day?

Without jumping ahead, I know you already know what makes Jordan’s successful. And what you can learn from their example. The brothers Jordan asked “what business are we in?” And the right answer was show business. Entertainment for kids to be precise. A perfect, powerful synergy — because kids, most of all, drive the demand for furniture. You buy it when they’re born. You replace it as they grow. Again when they ruin it. And once more when they move away — free at last to repeat the same cycle.

Summon the gods and you’ll learn “What business are you in?” was Read more

December 15, 2006

How Much Is An Excellent Assistant Worth? Are You Kidding?

by

Real Estate Investments Broker

Author website

My company is a two horse operation. And one of the horses has just been cleared to take on riders. Although in the past I’ve had several assistants, I’ve found that when it’s all boiled down, my business is built on the foundation of — homework. In the past my assistants were trainees on their way to becoming full time investment agents. So as soon as they became really good at being an assistant, they were allowed access to the next level. And I’d be back at square one — again.

It’s about to happen for the last time as my son has finished two years of training. He’s been my right hand, assistant, TC, ‘road guy’, and general doer of those things we’d all rather avoid. And now I have to figure out how to replace the irreplaceable. The cost to train and retain long term, an employee as effective as Josh would literally be unaffordable. How do you find someone who can solve problems, keep clients happy, snap the whip, and million other things? And on top of all that care as much as I do about the results? You probably don’t.

Enter Becky Bethke. Calling her a diamond in the rough would be damning her with faint praise. We’ve done about 20 transactions in the general Boise region in the last two quarters this year. Not a tremendous number, but enough to test the local supporting cast. I’ve gone through two escrows, two title companies, three lenders, two property inspectors, and a partridge in a pear tree. And one Transaction Coordinator. Though calling her a TC is an undeserved compliment to TC’s everywhere.

I won’t bore you with the details, but outside of delivering pizza and beer when escrows close, Becky does everything else. She calls her company The Closing Source. She calls herself a Transaction Coordinator. Trust me, she’s not a TC, not even close. My mom was an executive secretary back when that’s what they called executive assistants. In her prime she wouldn’t be a better assistant than Becky.

Virtual Assistant

When we are successful in acquiring another Boise property Read more

December 15, 2006

Almost famous: BusinessWeek on excessive buyer’s agent’s commissions . . .

by

Suburban Phoenix Real Estate Broker

Author website

Eagle-eyed Kevin Boer of Three Oceans Real Estate was the first to catch it: BusinessWeek.com quoted me in an article on “supersized commissions”:

There’s nothing wrong with incentives, even sizable ones, if they’re disclosed and buyers fully understand what’s motivating the agents who are showing them around. But in many states disclosure is poor or inconsistent. In Arizona, for example, brokers who show houses are encouraged to sign agreements specifying how they’re compensated. But the agreements aren’t required.

THE SKY’S THE LIMIT

Also, they can be signed after someone has already fallen in love with a home and isn’t looking at the fine print. And the compensation can be explained as generally as, “3% and up,” meaning the sky’s the limit. Add it all up, and, “I don’t have to disclose to you how much I’m getting paid,” says Realtor Greg Swann, the designated broker of BloodhoundRealty.com in Phoenix, who says he voluntarily imposes stricter rules on his own agents. By offering extra-high commissions without informing customers, he says, “the builders are trying to bribe me to sell their houses.”

That whole section of the articles relies on BloodhoundBlog contributions: Contributor Doug Quance and frequent commenter Dave Barnes both kicked in examples that were used in the article, but, alas, they were not mentioned by name.

BusinessWeek Economics Editor Peter Coy first called me about last week’s Zillow.com news, and we talked in very broad terms about Realty.bots, disintermediation, the valued-added services a good Realtor brings to the table and commission structures in general. We’ve covered a lot of that here, so I sent him quite a few posts from our archives.

The implication of the article is that buyer’s agent’s incentives are the rule rather than the exception, but, even so, I don’t think it is a bad idea to caution buyers about the risks:

Advice to consumers: Start with the assumption that the nice person showing you around is not your ally. Ask up front how much the person would be compensated if you bought a place. If possible, sign a buyer-broker agreement before you start looking at houses. This guarantees that the agent is working Read more

December 15, 2006

Web sites offer exciting options

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link). Sadly, this is news. In other words, this is the first mention of the Zillow.com upgrades in the Republic.

Web sites offer exciting options

Depending on whom you talk to, the real estate industry is undergoing a revolutionary change – or is not.

The “Realty.bots” arrived in force in 2006, national Web sites offering free home evaluations or free for-sale listings for homeowners.

Some Realtors and consumers view these as harbingers of great change. Others yawn and dismiss them as gimmicks.

Zillow.com, one of the biggest of the Realty.bots, just upped the stakes with an upgrade that will add the following new functionality:

  • Owners or listing agents for any of the 67 million homes in Zillow’s database will be able to list those homes for sale at no cost.
  • Owners will be able to post a “Make Me Move” price on their homes, the price at which all objections to selling will have been overcome.
  • Zillow is creating a real estate “wiki” to serve as a sort of Wikipedia.org-like encyclopedia of real estate.

The wiki — a user-built and maintained encyclopedia — is a nice idea that may grow into something great in time.

The Make Me Move feature seems like a gimmick right now, although it may turn into a vibrant clearinghouse for homes.

But the big news is that owners and Realtors will be able to list their homes on a site that already draws around 3.2 million visitors a month.

On the one hand, that number is huge. It rivals Realtor.com, the 900-pound gorilla of real estate Web sites.

On the other hand, it could be a big yawn: Millions upon millions of homeowners and buyers are not going to Zillow.com or to any real estate sites.

Surely this will change over the long run, and Zillow is positioning itself to be the one-stop-shopping national real estate Web site. This bodes ill for Realtor.com and all of the other Realty.bots.

Real estate is local, not national, and a real estate transaction involves hundreds of intricate details for which expert advice is essential.

So what does all this mean for consumers and Realtors? Time will Read more

December 14, 2006

Everybody loves Ramen . . .

by

Suburban Phoenix Real Estate Broker

Author website

Here’s a true fact of life for almost everyone with a real estate license: This job pays really badly.

Here’s a true fact of life for a favored few people with real estate licenses: This job pays really well.

I don’t know if we can safely count ourselves among the favored few just yet, but being Realtors is throwing off a lot of cash for us, and that cash is throwing off a lot of opportunities to make more cash.

Last year was phenomenal, of course, and this year hasn’t been awful for us, considering how awful it was for other Realtors in Phoenix. We got a lot choosier about listings, which helped keep our money in our pockets, and we’ve both done more than we ever have before with new builds.

But: Do Realtors “deserve” all the money they make? I’ve had transactions — two closing later this month — where my total involvement was around five hours. I’ve had others that have run to hundreds of hours over the course of years. But looking at my added-value by hours or tasks or ergs of energy expended is a mistake. The value I bring to the transaction comes from knowing what to do, how, when — and why. Our clients do a lot better because of our involvement, and they are gracious enough to say so.

For now, our earning goal is $1,000 a day, each, call it $700,000 a year, gross. Obviously our expenses are huge, as are our taxes (grr!). Worse yet, we’re not hitting that goal yet. And to put things in perspective, Russell Shaw’s annual broadcast advertising spend approaches our total earning goal.

In the near term, I think we can double our numbers to something like $1.5 million a year, before taxes and expenses. From there, with a couple of assistants each, we might be able to push things to that amount, gross, each. In other words, without growing our head-count very much, we might be able to knock down $3 million a year in gross commission income. The net from that might not be all that great, considering, but it Read more

December 13, 2006

David versus Goliath: Rolling out a brand-new map-based search portal when everyone is looking the other way . . .

by

Suburban Phoenix Real Estate Broker

Author website

The universe of map-based listings portals was upended last week with the announcement that Zillow.com was coming into the game, along with 58 million of its little green friends. Whatever long-term effects this might have, the short-term consequence has been a deafening silence from all directions. We haven’t even heard the blustering ‘guy talk’ one might expect in these circumstances (“Two legs?! Only losers need two legs!”).

But there is in fact a place even harder than the hard place the Realty.bots found themselves in last week: Imagine being on the verge of rolling out your brand new map-based listings portal when Zillow made its announcement.

This is the predicament Galen Ward and Doug Cole found themselves in last week as they prepared to go live with ShackPrices.com, a brand new listings portal based in and (for now) devoted to Washington state.

Here’s the company’s official press announcement:

ShackPrices.com is a snappy Google maps-based real estate search site that makes finding a home better by augmenting each real estate listing with data about what is nearby, including the distances to nearby landmarks, nearby schools and nearby bus stops. ShackPrices also helps home buyers learn about cities and neighborhoods through links to reviews, statistics and photos.

We cover all of Washington State right now and we plan to expand to other states in the coming year. As part of our mission to make finding and buying real estate easier and better, we will be introducing a service to help home buyers find the best local real estate agents in the coming year.

Readers here will know Galen Ward from his contributions to Rain City Guide. And the site is everything we would expect from Galen, fast and robust, esthetically beautiful and rich in practical details. The fit and finish is beyond excellent, in stark contrast to Zillow’s offering, and the extra features — neighborhood details, nearby amenities, etc. — are the best I’ve ever seen.

The site draws upon MLS listings, so the inventory is very large from day one. The browser window is tab-based for maximum information density with a minimum of confusion. The underlying AJAX programming makes Read more

December 13, 2006

Making Predictions, Cowards & Lies

by

Mega-Producing Realtor

Author website

“Mike” writes:

A lot of the current level of vilification is because of people like David Lereah, ostensibly the public voice of all realtors in the US, who is now perceived by many as somewhere between a buffoon and a baldfaced liar.


The man simply cannot tell the truth and every monthly and quarterly revision the NAR issues highlights that problem.

You are correct about one thing: David Lereah is often wrong in some of his predictions. I don’t think he is the only economist who makes non-stop predictions (that are published and posted on the internet) who is wrong on some of his pronouncements. In fact, he has a lot of company. To my knowledge almost every economist who makes predictions about the direction of “the market” is often wrong – it just goes with the territory. In all of history there is NO person who consistently always accurately predicted the future of any financial market (real estate, bonds, stocks, art, etc).

This is also true for people who – on a daily basis – predict the weather. They are often wrong. But most people don’t tend to characterize the meteorologist who said, “No rain this weekend” as a baldfaced liar. Most people seem to understand that anybody who makes predictions all the time will not be right all the time. Unlike you (and the other gleeful I-hate-everything-about-NAR-and-all-Realtors), David Lereah actually uses his real name when he makes a prediction – and his past predictions are readily available for anyone to compare with the actual statistics that did occur. Based on the fact that Mr. Lereah uses his own name – just this one point – makes anything he might have to say FAR more credible than anything you (or any of the other nameless and spineless cowards who anonymously snipe) might have to say. I have NO respect for the opinion of someone who is too spineless to even use a real email address.

How about YOU bother to do some real research yourself before you call someone a liar? How about posting specific statements made by Lereah and the specifics Read more

December 12, 2006

Who needs Realtors . . . ?

by

Suburban Phoenix Real Estate Broker

Author website

I was talking with a reporter yesterday about the idea of disintermediation in real estate. I brought up the question of what is the ideal closing date, just as a quick and dirty illustration of why buyers and sellers need professional advice, even if they think they don’t. This morning’s Ask the Broker question provides more examples.

Here’s another one:

Cathy has a house closing on Friday. She’s the lister (sold in 21 days!) and the buyer came in without a contingency on the sale of another home (yay!). But: They live out of state right now and they have an out-of-state lender (boo!).

The sellers are buying their next nome in Boise, and that transaction is contingent on the sale of their home in Arizona.

Without discussing this with either Cathy or with their buyer’s agent in Boise, the sellers scheduled their closing in Boise for — guess when? — Friday.

They scheduled their movers to deliver their stuff to their new home in Boise on — guess what day? — Friday.

Now god loves the uninitiated in real estate transactions, and he graces them with the unshakable faith that things always work perfectly, as and when planned.

Especially with out of state buyers.

Especially with out of state lenders.

Especially with contingent sales.

Most especially with simultaneous closings — in two different states.

Consider the disclosure chain: The out of state lender to the Arizona buyer’s agent to Cathy to the Boise buyer’s agent to the Boise seller’s agent, with Cathy also keeping the lender on the Boise property (our favorite lender, Logan Hall of SallieMae Home Loans) in the loop, and with each Realtor and each lender keeping their respective clients up to date. Every new development has to traverse this chain. Everyone is on good terms, and they’re all pulling in the same direction against the forces of inertia and Murphy’s Immutable Laws.

So: Who needs a freakin’ Realtor, anyway? The MLS wants to be free! Once that happens, we can push the middlemen (count them in the previous paragraph) off to the side, and real estate will change hands just as easily as securities, airline tickets and cheesy Read more

December 12, 2006

Ask the Broker: Can I call the listing agent on the carpet . . . ?

by

Suburban Phoenix Real Estate Broker

Author website

I made an offer for a listing that stated the place has “brand new carpets” (not newer or new, clearly “brand new”). I found out after asking many times and when it didn’t make any difference money-wise that the carpet was installed when the seller moved in which is 1.5 years ago. Am I crazy to be totally upset by it? The seller has a dog and the carpet doesn’t look great. Can I file a complaint somewhere for her false advertising?

Okay, first, this is an excellent argument for working with a buyer’s agent. I would have walked into that house the first time and said to you, “This carpet is not new.” Brand new carpet smells like formaldehyde, for one thing, but it also has a sheen on it that wears away in just a few weeks of normal use. There is no way an experienced Realtor could mistake new for newer or used carpet. There are too many tell-tales that tell the tale on carpet that has been lived on.

So can you file a complaint for false advertising? My guess would be no. At the bottom of the real estate listing, it will have said, “Buyer to verify all pertinent details” — or language to the same effect. We have more buyer protections now than pure caveat emptor, but not many more. The inspection period provided for in your purchase contract is your opportunity to discover whether the horse you are proposing to buy really does have a leg at all four corners. If it doesn’t, and if the deficit is material — meaning it matters to you — then you should cancel the contract or seek redress.

This again is another good reason to have professional advice. If you’re paying a market price for a home that is not delivering market value, you should either cancel or renegotiate. If you are paying well under the market price, you might resolve to grin and bear it.

The seller’s agent also pulled a convenient offer out of her hat every time she needed to pressure us, but I don’t have any proof Read more

December 11, 2006

Dear Abby

by

Mega-Producing Realtor

Author website

Dear Abby:

I have two brothers and
two sisters; one brother
is a Realtor, the other was
just sentenced to death
for murder. My mother
died from insanity when
I was young. My two
sisters are prostitutes and
my father sells narcotics
to feed the family. Recently
I met a girl who was released
from a reformatory, where she
served time for smothering
her illegitimate child, and I want
very much to marry her.
My problem is this: If I marry
this girl, should I tell her about my
brother who is a Realtor?

December 11, 2006

When It Clicks

by

Realtor, Associate Broker

Author website

We rely so heavily today on the internet to market our properties, but with so much information available to the would-be home buyer, our on-line ads had better pack a punch. This audience will forever be just one click away from the next property listing, and our “special” home will be all but forgotten. Galen Ward talked about the peekaboo law of home photography, and Ardell had a great footnote on the subject. Of course, Greg Swann had his own 3000-words-or-less thoughts on the topic.

Steve and I have an escrow closing today on a home that is the poster child for taking thoughtful photos to effectively market a property. This is what the home looks like from the street:

Not very inspiring, I’m afraid. It just looks like any one of another 120 or so homes on the market in this zip code today.

Here is the photo I used in the MLS and on the web as the primary photo:

This accomplished several things. It followed the peekaboo law by showing just enough to get the audience’s attention, plus it was a cleansing process which eliminated those that were water sport-averse. And, as Ardell recommends, it told a story – The story of a home with a beautiful pool. In this case, that was the story. Nowhere is it written that the primary photo must be of the driveway, and yet I would venture a guess that 99% of the agents out there succumb to this trap. If the front of the home is inspiring, then by all means use it, but if there is something better waiting for you once you cross the threshold, why not make it known?

By the way, the buyer of this home found it listed on Realtor.com and wasn’t even aware that this neighborhood existed. She wanted first and foremost (drum roll) a pool. At the initial showing, she had mentally purchased her pool, and the rest of the home was just icing that happened to convey. Had this not been the first photo she saw, she likely would have clicked on by.

December 11, 2006

Thank You, Mr. Barton, May I Have Another?

by

Mega-Producing Realtor

Author website

Richard_Barton_newRich Barton asking: “Why do some people take an instant dislike to me?”

My answer: “To save time”.

I’ll give Rich Barton and Zillow full credit for listening to the PR firm they must have hired. Just last February this is what Rich was saying:

Zillow’s Barton was quoted as saying that inevitably real estate services and fees will change as online services take hold. “I’m not implying that we have some new commission model figured out, but it feels like . . . Realtor services are going to be unbundled a bit,” he told Inman Real Estate News.

Nice, huh? Right out of the gate and the most important thing he has to say to the press is how HE is going to help drive down real estate commissions. Here is more from our new best friend, Rich Barton:

“People want Realtors,” he said. “But is it rational to pay Realtors what they are paid?” He says he thinks they are overpaid because customers are doing more of the work themselves.

Zillow, for instance, has a number of other features that do the work of the agent. Someone wanting to compare properties can use pull-down menus to estimate the value of remodeling projects that are not reflected in the price. Because of the Internet, agents are spending less time with clients, Mr. Barton said. “Agents have to ask, What kind of value am I adding?”

Mr. Barton does not exclude the possibility that the role of the agent, and his site, may change.

Good News Everyone! Rich added: “it is not our intent to dislocate the agent.” free stupid

He wants us all to earn less but he is willing to let us keep our jobs. This is good news – especially in light of the way he is now (just 10 months later) being heralded as being on the verge of changing real estate for the better. It wouldn’t seem quite so wild except it is Realtors doing the horn blowing for him. What must have occurred in that boardroom in Seattle?

“Listen Rich, if we are ever going to take over the industry you are going to Read more

December 9, 2006

Zillow.com versus Realtor.com: Nothing grows in the shade of great tree . . .

by

Suburban Phoenix Real Estate Broker

Author website

I think part of the problem, in understanding the radical nature of what Zillow.com did this week, is that we are conflating unlike things. As an example, when I speak of a National MLS, I am not talking about local MLS systems.

For one thing, the sine qua non purpose of a local MLS system is to advertise the co-broke commission to other agents, keeping it secret from consumers. This objective is not even on the radar of home searchers, whether they are looking at local IDX listings or a national site like Realtor.com.

Kevin Boer posted an excellent analysis of why Zillow will not replace local MLS systems. I agree, for now, but that’s not really the issue. In the second place, if we were to split the buyer’s agent’s commission from the listing agent’s commission, the entire rationale for exclusive local MLS systems goes away.

But in the first place, home searchers are not going to any listings systems to find out about commissions. To the extent that a local MLS system corresponds to a market as Kevin sees it, to that extent a national home listings service is an entirely different type of market. If the one facilitates the essential activities of real estate brokerage, the other exists to introduce home searchers to the real estate market, to particular real estate products and to real estate vendors.

They are not the same market, so conflating the two is an error. If you want, we can call the idea of a National MLS system something else: National Property Listings Service — NeoPoLiS, “new town” in Greek.

The point is that harping that Zillow can’t do this and Zillow can’t do that is completely true and completely pointless: Zillow isn’t doing those things, nor could it, nor should it. What Zillow might be doing, and only time will tell if it can pull it off, is creating a national clearinghouse for listed homes — which will be brokered by off-site — and normally local — means.

In comments to one of my posts, Dustin Luther raises some plausible objections to my arguments. His counter is that Read more

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Inventing Real Estate 2.0

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