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Category: Marketing (page 181 of 191)

September 10, 2006

Caesar’s wife on the witness stand: The moral, the practical, the marketable and the defensible approach to forbidding dual agency . . .

by

Suburban Phoenix Real Estate Broker

Author website

I had a great letter today from Bob Hunter of the Muljat Group about our policy forbidding dual agency. I’ll quote the whole thing first:

Greg, my wife and I are agents in Bellingham, Wash and I have a question relating to your position on dual agency. Our brokerage is a 100% desk fee operation. The broker takes no cut from any commission. Why would a transaction between two agents from this office harm either of the parties? I have read your website (twice) and think I understand your philosophy (since your make it very prevalent marketing appears to be a pretty important motivator also). Still, in our situation I’m not sure how the clients are harmed.

We have tried different strategies, I represent one client, my wife the other, referring one client to another agent in our office, representing both clients. We have not yet referred to an agent out of our office. In all the years of doing this, we do more dual agency than the industry standard, I can think of only one instance where the buyer ‘felt’ his interests were not being represented fully. The transaction would have the same result with separate agents but any bad feelings are negative. In retrospect we should have contributed money to his cause which would have alleviated any feelings of misplaced loyalty.

If dual agency is outlawed and if the consumers rail against it, then it is a moot point, but I am still interested in your opinion of our office dynamics and why it is not equitable or ethical.

I read your blog regularly and hope to start my own.

thanks

Bob Hunter
The Muljat Group Realtors

Dual agency has a bad reputation for three reasons, only one of which is wholly deserved. That one is true double-dipping agents or brokers who are looking for the biggest payday regardless of who gets hurt. Second is the public’s perception of dual agency, which is colored to some degree by negative opinions about real estate agents generally. But third is the conviction, justified or not, on the part of buyers and sellers that dual agency resulted in unfair Read more

September 9, 2006

The FSBO and BUBBA variety hour: How to make the buyer’s agents dance . . .

by

Suburban Phoenix Real Estate Broker

Author website

Our friend, colleague and personal marketing god, Richard Riccelli is getting ready to FSBO his Boston townhouse. He’s spent a year planning this down to the last detail, including condo-izing his property into two apartments so that they can be sold separately — or together if someone wants a residence plus servant’s quarters.

Richard was all over the idea of being a risk-loving seller, offering “broker participation” in such a way that a buyer can choose what, if anything, to pay for representation. This is the language he’s using on his promotional materials:

Buyers or buyer-designated brokers receive 2.5% of sale price at closing.

Perfect! A 2.5% commission is normal in Boston, and agents are always looking for that “broker participation” rider on a FSBO sign before they’ll invest any effort. But if a buyer wants to come in as a BUBBA — a buyer unrepresented by a buyer’s agent — the money’s there for closing costs or whatever.

It’s not quite right out there that the buyer can decide how that money is to be divided, if the buyer hires an agent, but there is nothing to keep the buyer from figuring it out. Either way, Richard gets what he wants: Avid interest either from buyers or from their agents.

With three exceptions, the silence from the real estate community on the idea of paying the buyer to pay the agent, rather than paying the agent directly, has been deafening. But there is more to real estate than Realtors. Unrepresented and semi-unrepresented sellers aren’t going to be invited to the Association of Realtors golf tournaments anyway. Writing their “broker participation” language the way Richard did makes perfect sense for them.

And that’s why it makes sense for Realtors, too. Whether they are correct or not, many people believe they can buy a home by themselves. In states where one or more attorneys are going to be involved anyway, they just might be right. Even in Arizona, if you have identified the property, agreed with the seller on terms and have effected the due diligence amicably, a title company will do all the necessary paperwork in exchange Read more

September 9, 2006

Fanmail — or fanning the flames mail: “So maybe you should just sit back and keep your mouth shut . . . “

by

Suburban Phoenix Real Estate Broker

Author website

Here’s an email I got regarding this week’s Arizona Republic column, detailing how the buyer actually pays the “seller paid closing costs”:

Hello Greg,

I was incensed at your first article about the buyer paying for everything but I didn’t feel the need to waste my time writing to you.

However, now you seem to just be digging yourself a deeper hole. You have now enraged BOTH the buyers and sellers. Good for you!

Obviously, if you had such a response to your article by agents and brokers, I would think that you would take time to pause to realize just what you did to our industry. But now you insist on pounding your ridiculous theory yet another week. You’re only making a fool of yourself. And buyers and sellers will realize this too.

It’s sad to see someone like you in the industry. Your article about dual agency was also way off base. Remember, we’re all in this together. So maybe you should just sit back and keep your mouth shut.

Regards,
Cindy Kingery

Cindy Kingery, Associate Broker, e-Pro
Windermere Real Estate/Surprise

Just as a matter of reference, the calls I get from ordinary people, not Realtors or brokers, are overwhelmingly supportive. But also as a matter of reference, the calls I get from Realtors and brokers are almost always line-blocked, and rarely do I get so much as a first name out of those callers. Cindy is to be commended for putting her name behind her words.

That said, I disagree that “we’re all in this together”. I think that attitude perfectly encapsulates what is wrong with real estate brokerage as it is currently practiced. I work for — and only for — my clients. If other Realtors make money as the result of my efforts, that’s a secondary consequence. My entire loyalty is owed to my clients. After that, I owe a duty of honesty to everyone. The buyer pays for everything in a real estate transaction. That’s the truth. To say anything else, or to “keep [my] mouth shut”, would be dishonest.

I have better surprises for you, Cindy. This week I plan to disclose how Read more

September 8, 2006

Overall August real estate market results for MLS listed homes in the Phoenix area

by

Suburban Phoenix Real Estate Broker

Author website

In the Arizona Regional Multiple Listings Service at large, 6,170 homes sold in August against an inventory of 46,830, an implied absorption rate of 7.6 months. There are 6,185 properties listed as “Sale Pending.” All of these numbers are largely unchanged from July.

The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis — which we can expect from the Arizona Republic a week or more from now — is misleading.

Number of Homes Sold (with Days on Market)

March 2003   6471    67
          2004   8678    60
          2005   9959    36
          2006   7469    58

April    2003   7429    67
          2004   8889    61
          2005   9567    32
          2006   6725    60

May   2003   7428    67
          2004   8932    56
          2005   9853    27
          2006   7582    63

June   2003     7409    67
          2004    9969    55
          2005   10225    26
          2006    7209    67

July   2003     7643    64
          2004    8974    51
          2005    9326    25
          2006    6101    70

August 2003     7648    63
          2004    8968    47
          2005    9996    25
          2006    6170    76

Prices are virtually unchanged as well. The average sales price for a closed MLS transaction in July was $332,426. For the month of August, the average was $331,266, a net loss of about 0.35%.

Note that this may not accurately reflect the Phoenix-area real estate market as a whole. All private sales and most new-home builder sales are excluded from MLS statistics. However, for MLS-represented resale homes, the month of August was virtually a repeat of July — a few more transactions taking a few more days to sell for marginally less money. If the pending sales are any indication, September may be more of the same.

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September 8, 2006

Incremental movement toward a blanket Zillow.com disclaimer?

by

Suburban Phoenix Real Estate Broker

Author website

Today brings a game effort by David Gibbons of Zillow Blog to address Zillow.com’s disclosure/disclaimer issue. The problem for me is that the material he cites is at least one click deeper than where he puts is and two clicks deeper than where it should be. Even worse, the page he cites makes even more extravagant indefensible claims than does the Zillow.com home page.

This much, snipped together from David’s text

A Zestimate is really a starting point in figuring out the true value of a house. A Zestimate is not an appraisal.

would be perfectly adequate — if it were placed prominently on the Zillow.com home page and any page from which a Zestimate can be run. Of course, the extravagant claims would need a pruning, too…

But: This is incremental progress, movement in the right direction. Good on ya’, David!

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September 8, 2006

Move.com looks for viral buzz with sneak peeks of new commercials . . .

by

Suburban Phoenix Real Estate Broker

Author website

They’re looking for comments, they say. That’s because the spots are in the can and the media’s already bought:

As someone who regularly blogs about real estate, we thought you would like a sneak peek at the new Move.com; television ads before they air. We’d love to hear your comments.

What do they really want? Buzz, of course, word-of-mouth pre-conditioning of the audience. To me they’re just commercials — the email, bathroom and microwave popcorn time courteously inserted into broadcast TV. Your mileage may vary.

Here are the spots, shown with Move.com’s titles:

Atlas:

Paper:

Search:

Time:

Tires:

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September 8, 2006

August 2006 Market-Basket of Homes: Values up .25% on stronger sales . . .

by

Suburban Phoenix Real Estate Broker

Author website

Is the Metropolitan Phoenix real estate market starting to recover? Too soon to say, but prices edged up slightly on sales that were stronger — even if they are still slow — in the August edition of the BloodhoundRealty.com Market-Basket of Homes.

Average prices for Market Basket homes in August were up 0.25%, compared to July. Don’t break out the champagne, though. Year-over-year, prices are still down 1.72%, and down a little less than 6% from the December 2005 high.

A total of 199 sales were recorded, up substantially from July’s total of 151. August is the second-strongest month for 2006, so far, trailing May’s high of 211 transactions. Market-Basket homes spent an average of 78 days on market, four days more than in July. For comparison purposes, 200 Market Basket homes were sold in August of 2003, the last relatively normal year, in an average of 56 days.

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 1.43%, down from 1.61% in July.

Inventories of available Market Basket homes continue their decline. There are now 1,406 homes available for sale in the Market-Basket, where there were 1,506 in July. With sales of 199 homes, the implied absorption rate is a littlle over 7 months, down significantly from almost 10 months in July. A six-month absorption rate is considered normal. The number of homes listed as "Sale Pending" is 179, no change from July.

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 Read more

September 8, 2006

Who pays when “seller pays closing costs”? The buyer . . .

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link):

Who pays when “seller pays closing costs”? The buyer…

Not all of the phone calls I get in response to these columns are from angry Realtors.

I like the calls I get from real people, rather than Realtors or brokers. Even so, a brief telephone call is not the always the best way for a person to wrap his or her mind around a new idea.

As an example, I had a very nice call in response to the article I wrote arguing that the buyer pays for everything in a real estate transaction. The caller was a very sweet man, but he insisted I must be wrong, because the seller of his home had paid his closing costs.

I explained to him that I write deals that way all the time, that I prefer to do things that way no matter what the buyer’s financial circumstances, because, for now at least, retaining your own cash is usually more profitable than the interest-cost of the additional borrowed funds.

But – emphasize that “but” – it doesn’t matter. You’re paying your own closing costs either way. If you pay them in cash, you can watch the money come out of your checking account. If “the seller pays the closing costs,” all you’re doing is exchanging one price discount for another. Your money stays in your checking account because you are paying more for the home and financing the closing costs.

“But, but, but,” the caller sputtered.

“I know,” I continued. “This is hard. If the seller hadn’t paid your closing costs, would the purchase price have been the same?”

“Heck, no!”

“So you took a three percent discount in closing costs instead of shaving three percent off the price?” I asked.

“That sounds about right.”

“So you borrowed three percent more from your lender than you would have done if you had paid the closing costs out of pocket.”

Silence – the threshold of rhetorical surrender.

“So who paid the closing costs?” I asked.

“When you put it that way…”

“Who paid for everything?”

“I’ll be danged if you haven’t got me convinced.”

If only my Realtor and broker callers were Read more

September 7, 2006

Bed-time real estate blog-bytes: “A hammer’s a great tool until you have to paint a wall, right?”

by

Suburban Phoenix Real Estate Broker

Author website

Rey Estate: Make things simple!

In The Trenches: There’s gold in them thar data!

The Property Monger: Scuse me while I Zillow the sky…

Hamptons Real Estate Blog: Home prices are stable, but the Zestimates are surging.

Rubbing elbows with Nubricks gets Real Central VA, The Real Estate Tomato and BloodhoundBlog in The London Times Online. And you thought my English was hard to read!

Sellsius° counters: Write it so they can read it…

True Gotham: Give buyers real control.

True Gotham again (blogrolled): “It’s a mistake to set up any system that denies there is expertise in real estate.”

The RE.net has been itchingly acrawl with creepy stories about creative mortgages and imminent doom. I have no idea how many of those loans have already been refinanced, but, whether or not they have, there are a hell of a lot more happy mortgage stories than sad ones. Behind the Curtain (blogrolled for sheer effrontery) on negative-amortization loans: “A hammer’s a great tool until you have to paint a wall, right?”

Ardell says buyers and agents need to feel each other out before committing to each other. I don’t hate this idea, provided that buyers remember to nail down the terms of their representation before they run out and fall in love with a house.

Bubbleboys: This is what you’re looking for: The Lord of the Bubbleflies: Lean-looked prophet whispers fearful change, cultivating the worst impulses in otherwise decent people…

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September 7, 2006

Shadowing Zillow, filleting Redfin, and a “Just Plane Smart” approach to change in the real estate business . . .

by

Suburban Phoenix Real Estate Broker

Author website

Dustin at Rain City Guide is giving stat-dancing lessons today. I am neither as talented nor as interested as he is, but I do have an interesting statistic to reveal: Debunking Zillow.com is averaging well over 100 unique hits a day. All of my extended Zillow rants do very well, and Debunking Zillow.com comes in third if you Google on “zillow.com” — which many visitors to BloodhoundBlog are doing every day. It pays to keep things in perspective: Our Zillow traffic can’t hold a candle to that which is landing directly on Zillow.com. But for anyone looking for a second-opinion, and apparently many people are, it’s right there on the shelf next to the branded product.

There are two memes I hear all the time in the disintermediation debate that I think are incorrect. The first is the implication that anyone who expresses a skeptical or negative view of one or more of the dot.com RealtyBots is either an actual luddite or is in some way frightened by technology, disintermediation or simply change in any form. The second is the idea that disintermediation in the real estate industry will — or will not — take the course followed by travel agencies and stock brokerages.

For the first meme, I can discern no evidence whatever. It’s a caricature composed of characterizations rather than quotations with supporting links. Surely I would qualify as a technophile of at least the second rank, and my objections to Zillow.com and Redfin.com have nothing to do with technology, fear or even the idea of disintermediation as such. Zillow.com is deceptive in its portrayal of what it can and cannot do, and Redfin.com is a cowbird that incubates its buyer representation commissions in the listing agent’s nest. I am one of the most pro-innovation Realtors on the planet — and, in case you didn’t notice, yesterday I proposed an innovation that will, as a secondary consequence, obviate Redfin.com’s current business model. What I am opposed to — and what every honest person should be opposed to — is unethical behavior.

For the second meme, I think both the “will” and “will Read more

September 7, 2006

Back story: How we evolved our policy forbidding dual agency . . .

by

Realtor, Staging Consultant

Author website

Someone commented on Greg’s recent post regarding dual agency. I thought I’d give you the “back story” so you can understand how we came to this position.

Just this past May three events converged to make it crystal clear that dual agency was, in general, good for no one except the real estate agent — who doesn’t want to shake loose those extra dollars he can get from both of his clients by serving neither of them well:

One of the classes I attended to earn my GRI (Graduate of Realtors Institute) was taught by Cec Daniels and Don Martin, past president of Arizona Association of Realtors. For two days we learned from Cec all about how practicing dual agency was unfair to our clients, and Don was all over the idea of the liability dual agency creates for the brokers. During this lecture, one of the instructors wore a baseball cap embossed with a capital B (ostensibly for Buyer) and the other a cap embossed with a capital S (Seller). When they stood together in alphabetical order their caps spelled out another term for dual agency. 😉

At about the same time, Greg was representing a dear family friend in the sale of her house. He got a sign call from someone who didn’t think he needed buyer representation… he was shopping on his own and making sign calls. (He told us that the primary reason he was interested in our friend’s home more than any other was that Greg was the only agent who had returned his sign call!) By this time we were already convinced that it’s practically impossible to avoid dual agency when representing a client if the customer (a party in a real estate transaction who is not my client) is unrepresented. The party without representation is sure to rely on us for advice — even though we cannot advise a customer without creating an undisclosed dual agency. Thus, since we would be the only professional representation when half of the parties weren’t represented, we had made it policy to sign limited dual agency agreements with each party. Read more

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