…on the trail of some Pennsylvania rats.
Technorati Tags: disintermediation, real estate, real estate marketing
Category: Real Estate (page 160 of 266)
This is my column for this week from the Arizona Republic (permanent link). I’m posting it now in the hopes that Realtors reading this will email it to all their sellers. I’m showing a lot lately — curse this slow market! — except I’m not because I can’t get into the houses:
Your house can’t be sold if it can’t be shown
Here’s a simple fact about the sale of your home:
If I can’t show it, I can’t sell it.
When I’m working with buyers, the ideal home is listed this way: Available, lockbox, vacant. The house is empty of occupants — although it would be great if it were staged — but there’s an MLS lockbox so I can get in with my party. I don’t want to have to call the lister, and I don’t want to talk to the seller. I just want to show the house.
The next easiest homes to show are not very easy to show: Alarm activated. Now I have to talk to the listing agent — who may be unavailable. I can’t go into the house until I hear back from the lister, which might be hours too late. This is not the worst form of seller self-sabotage, but it can be more than enough to sell another home instead.
What’s worse than an activated alarm? How about no lockbox? Now I not only have to make contact with the lister, we have to coordinate with each other. By-appointment-only listings might make sense at $3,000,000. At $300,000, you’re getting in your own way.
Buyers hate occupied homes. They feel they are invading your privacy at the same time you are invading theirs. Occupied homes are almost always stuffed with stuff, which makes it difficult for buyers to imagine their own stuff in its place. Still worse, half the time, the sellers will be hovering around. Even if they’re not trying to eavesdrop, buyers will feel that they are.
Pet advisory is another obstacle to be overcome. Now, even if the sellers have sense enough to be out of the house, I have to protect my party from the pets — Read more
You hear it here, you hear it there (there being here), and you know it in your heart. Real estate is so darn personal.
Ah, the personal touch! That is why I blog, and why I am very responsive to my emails and voicemail. That is why I love, and my clients love, the ability to electronically sign contracts and to view all contracts online from any Wi-Fi hotspot in the Delta Quadrant. Heck, what’s more personal than that daily auto-generated online update of home sales activity in your neighborhood… with MY PICTURE at bottom and YOUR NAME at the top?
I know what you are thinking – All that stuff is impersonal, but we are in a “people” business. Well, it depends on which “people” we are talking about. It’s a matter of communication, which we all know requires a sender and a receiver. When wearing the sender hat, I need to know in what form my client prefers to receive, which means I need to listen carefully to what my clients are telling me.
Times, they are a-changin’. That doesn’t mean that our business is becoming, can become, fully automated and physically detached. It simply means that our world is different now, and we are redefining “personal”. The ways in which we interact today are dramatically different than yesterday’s methods (smoke signals and dot-dot-dash). My children phone me from their bedrooms asking for the ETA of dinner, and they IM me from 100 feet removed to tell me that the Jonas Brothers are coming to town (to marry THEM!). I suspect they visit my home blog periodically to take a peak at the Trulia side bar widget of our active listings just to gauge the likelihood that I will be available to drive carpool to the movies on Friday.
As agents, we work with a wide cross-section of people and personalities. The key is to understand their definition of “personal”. My grandmother does not have a Meebo account, and you won’t find her on Facebook; she is the type of person who would prefer a phone call, a personal visit, and contracts in triplicate. My typical Qualcomm client, Read more
A combination of magic and the truth seems to be where it’s it. In regards to the selling of homes, in this current market, agents are willing to try anything; witchcraft, voodoo, incantations, an appeal to Jesus Christ, and aside from these, more orthodox approaches, including bribery, trickery, flattery, and simple marketing. Having tried some of these methods (of which my conscience would dictate), I have discovered that Russell and Greg are right. In this market, price matters most.
I had begun to view myself as one of those scantily clad women at boxing matches parading with a placard. Instead of “ROUND 2,” my placard read, “A STEAL AT ONLY $739,000!!” Generally speaking, these women are afforded a certain measure of respect, even if only for their outward attributes. I, on the other hand, was being pelted with rotten eggs and tomatoes. This was evident because my “steal” was in fact, not a steal, and at the worst of times, my glorious placard was entirely ignored.
So began the quest for Truth. Having searched diligently, I discovered what others before me had discovered: price will sell anything. An old Floyd Wickman adage goes something like this:
“I can’t sell this house. Nobody will look at it!”
“The price is too high.”
“No, it can’t be that. I comp’d the property every which way. It is priced right.”
“Are people going to see it?”
“Uh. . .no.”
“Then it is priced too high.”
“Nonsense. Maybe I need some new photos. Maybe some more advertising, or an open house.”
“Do you think you could sell it for $100,000?”
“Well, of course! That’d be like giving it away!”
“Then the price is too high.”
I determined to really get to know my market. I needed answers. I began to study and research the hard numbers. How many homes are selling? What is peculiar about these homes. Are they the nicest? Are they the cheapest? Are there agent bonuses? Are there buyer concessions? What I began to learn is that the ones that were selling were, in most cases, both the nicest and the cheapest. If I wanted to sell my homes, I needed to have the nicest Read more
The stakes are high, as Brian has pointed out. You yourself have been smart enough to build a Web 2.0 marketing strategy, but now you’re faced with the possibility that your broker, with or without the help of the brokers’ cartel, the National Association of Realtors, may try to take it all away. Here are some things you can do to pursue independence now:
- Get rid of the licensing laws. A minimum standard enshrined in law becomes the de facto maximum standard. Consumers have been deluded into thinking that the fog-a-mirror license denotes quality, so they don’t dig deeper for the added-value you bring to the marketplace. Even better, if there are no licenses, there are no brokers to tell you what you can and can’t do.
- But: That won’t happen, so work in your state to get rid of the broker level of licensing. This is already the law in a few states. Every agent can fly his or her own flag as an actual entrepreneur. Even if you should elect to affiliate with a Keller 21Max franchise, you’ll be at liberty to take flight whenever you want, since all your contracts will be your own.
- But even that is probably a long-term proposition. What will happen if your broker tries to shut down your weblog tomorrow? You need your broker’s license now — or as soon as you can get it — if your state still makes the distinction between salespeople and brokers. Even then your contracts aren’t your own, but you will have the ability to plan an orderly exit. And, having that mobility, you will have the power to negotiate with your broker as an equal.
- I mean no slight to our vendor friends, but take and keep control of your marketing technology. Of particular importance: If your broker controls your marketing, your broker controls your business.
- I despise laws, so I have complete contempt for “reforms.” The only reform that matters to me is repeal, which never, ever happens. Even so, a “reform” that would make a remarkable difference in the way the real estate brokerage business is conducted — even Read more
If you haven’t subscribed to TED Talks videos on YouTube, then you’re missing an advantage that some of the tech elite get months before we get a chance to see it online. So if you don’t view it on the internet (via YouTube or on the TED Talks website), then you don’t know what you’re missing. Chris Anderson, editor of WIRED Magazine, discusses the evolution of any viable technology and its four critical stages of evolution. I wanted to use this framework to discuss technology that has been introduced into the real estate industry and where it is in its evolution. As we’ve all heard “keep your friends close, but your enemies closer”. So where is the next real estate billionaire going to come from? Technology?
Stage One: Critical Price
The price of any new technology is stratospheric at first (the first DVD player was priced over $1,200 at first). Then, as the production increases and the acceptance from consumers takes hold, the price begins to decline to a “critical price” that opens the “flood gates” of demand. This critical price coincides with the efficiencies in production to meet the spike in demand for the product.
Stage Two: Critical Mass
The product was initially very costly to produce, but the increased demand has driven the production costs down to take advantage of economies of scale. The “critical mass” coincides with more efficient production avenues that help drive market share for the product.
Stage Three: Displacement
The product was originally conceived as an alternative to something else (something else that was too costly, too inefficient, too cumbersome, etc.) and that something else is losing market share to the new technology (product). The loss in market share will reach a point where the new product will “displace” the older, inefficient product in the minds (and hearts) of the consumer (i.e.: the DVD vs. the VHS).
Stage Four: Deflationary abundance
The product has displaced an older, inefficient product and its appeal has become ubiquitous throughout the market. The final stage of this “new” technology (product) is its mass appeal and the availability of cheap, mass production. The availability of the product will Read more
If you don’t comment on others’ blogs, you are missing a core element of blogging. Bulk up on your blog muscles before NAR Big Brother bans blogging.
by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
Broker-controlled blogging was a hot topic this weekend. I tried to raise some eyebrows (and awareness) with my speculation about the internet land grab the employing brokers and banks might try.
I think a few things might have gotten lost in the translation. While I said that the brokers and banks will claim that it is a compliance issue, I believe that the REAL reason will be that they want to control the marketing channel to the consumer. Here’s what I said, over on Active Rain:
That will put pressure on the large companies to provide higher compensation to the more effective sales agents. That, will be the problem. Large real estate brokers and banks will severely curb the weblogging efforts of the individual sales agents in the name of “compliance”. In short, the behemoths will say that they can not adequately protect the consumer from the unsupervised local messages being offered by its sales agents. That, will be bunk.
The end-game play, the brokerage firms and banks will make, will always be about the money. Control of the customer has always been a competitive advantage for a large broker or bank. If that competitive advantage is lost, the value proposition of a large firm is lost. They won’t tolerate that loss.
What I’m saying is “The Compliance Argument is Crap- They Just Want Your Money“. I’m telling you this so that you are prepared when the NAR comes at you with the “Internet Compliance Memorandum” from their convention next month. I have no inside information, it’s pure conjecture on my part. This is, as Greg Swann would say, “evil dressed up in a Brooks Brothers suit”. My opinion isn’t biased against big brokerage firms, it will be even worse for the mortgage originators. Our evil is dressed up in custom made suits with Italian loafers- there is no way the big bank Presidents will allow their “salespeople” to live better than they do.
Look at the follow up articles on Active Rain:
Why is housing so much more expensive in Los Angeles than it is in Dallas? Higher demand? No so much. The reason is that building new housing in Dallas is easy, while building anything at all in California is a nightmare of absurd regulations. Virgina Postrel explores a study that shows the marginal cost, in land prices, of pushing innocent people around by force with land-use restrictions. (HT Dan Melson.)
Some of the higher price of L.A. real estate does reflect the intrinsic pleasure of living there, as I’m reminded every time I walk out my door into the perfect weather. Some of the price reflects the productivity advantages of being near others doing similar work (try selling a screenplay from Arlington, Texas). All of these benefits—and the negatives of traffic and smog—are reflected in the price of land.
But what exactly is that price? Consider two ways of computing the price of a quarter acre of land. You can compare the value of a house on a quarter acre with that of a similar house on a half acre. Or you can take the price of a house on a quarter acre and subtract the cost of the house itself—the price of construction. Either way, you get the value of an empty quarter acre. The two numbers should be roughly the same. But they aren’t. The second one is always bigger, because it includes not just the property but the right to build. Expanding your quarter-acre lot to a half acre doesn’t give you per- mission to add a second house.
In a 2003 article, Glaeser and Gyourko calculated the two different land values for 26 cities (using data from 1999). They found wide disparities. In Los Angeles, an extra quarter acre cost about $28,000—the pure price of land. But the cost of empty land isn’t the whole story, or even most of it. A quarter- acre lot minus the cost of the house came out to about $331,000—nearly 12 times as much as the extra quarter acre. The difference between the first and second prices, around $303,000, was what L.A. home buyers Read more
What is your broker doing when he’s not milking you for overpriced business cards and overpriced letterhead with overpriced envelopes? He’s milking your buyers for overpriced loans, overpriced title services, overprices inspections, home warranties and hazard insurance policies. For some brokerages, there is never enough money to be squeezed out of a transaction. This is white shoe corruption — technically lawfully but oozing sleaze. Someday there will be a successful class action suit and it will all go away just like that.
Until then, heed the advice of attorney Joshua Marks, who wins this week’s Odysseus Medal with Buyer Beware: You Don’t Have to Use the Mortgage and Title Companies Affiliated with your Real Estate Broker. Make Sure You Shop Around!:
A recent class-action lawsuit filed in the state of Minnesota is bringing to light a long-standing issue that affects buyers of residential real estate throughout the country—alleged steering of home buyers to affiliated title, settlement and mortgage companies by large realty brokers. This widely utilized practice often leads to consumers incurring a considerable amount of extra fees and costs when compared with fees and services offered by non-affiliated competitors.
Many real estate brokerages rely on the income generated by clients using mortgage and title companies that are affiliated with them. Brokerages often attempt to maximize their “capture rates” – the percentage of all home-sale transactions that use the affiliates’ services. A consumer typically ends up paying more fees than if he/she selected a non-affiliated competitor. The brokerages justify the additional expense to consumers by claiming that even if the affiliates’ fees or mortgage rates are not the lowest available, the quality and dependability of the affiliates’ services more than compensate for any price differences.
Over the past several years, many cases involving financial relationships between brokerages and their affiliates have withstood legal challenges. So long as the financial arrangement was properly structured to comply with federal anti-steering and anti-kickback rules, the Courts have been reluctant to intervene in these arrangements.
In the Minnesota lawsuit, two buyers filed claims against Coldwell Banker Burnet Realty Inc., one of the largest realty firms in the state. The Plaintiffs Read more
I had been doing a short list of 20 nominees, but I had the idea that that was an overwhelming number. (It was for me.) This week I cut the short list to 12, and it’s not only more manageable, it seemed to be easier to distinguish the exemplary posts from the many notable entries that had been nominated.
Vote for the People’s Choice Award here. You can use the voting interface to see each nominated post, so comparison is easy.
Voting runs through to 12 Noon PDT/MST Monday. I’ll announce the winners of this week’s awards soon thereafter.
Here is this week’s short-list of Odysseus Medal nominees:
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$AltEntries = array (
"Daniel Rothamel -- Social media How your business can benefit from social media right now”,
“Sean Broderick — Google Basewide Google Basewide? One Step Away in California“,
“Brian Boero — On-line real estate Online real estate: It’s anybody’s ballgame“,
“Jim Cronin — Pay-per-click Kick the Pay Per Click Habit: 7 Reasons Why Real Estate Blogging Is Better For Your Business“,
“Joshua Marks — Broker affiliations Buyer Beware: You Don’t Have to Use the Mortgage and Title Companies Affiliated with your Real Estate Broker. Make Sure You Shop Around!“,
“John Cook — Pete Flint A Q&A with Trulia CEO Pete Flint“,
“Jay Thompson — Zolve Zolve – One Agent’s Perspective“,
“Eric Blackwell — Realtor.com How to Stop getting hosed by REALTOR.com…“,
“Michael Price — Secret sauce Mmmmm…..Secret Sauce“,
“Teri Lussier — Viral marketing Web 2.0: Catching a virus at the local dance“,
“Cathleen Collins — Columbus Christopher Columbus… a top producer for the ages!“,
“Brian Brady — Professionalization Trim The Fat…No, Throw Away the Meat and Get a New Cow”
);
shuffle($AltEntries);
$radioGroup = “”;
$num = count($AltEntries);
for ($i=0; $i< $num; $i++)
{
$pieces = explode("\t", $AltEntries[$i]);
$radioGroup .= "
$radioGroup .= “$pieces[0], “;
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}
echo (“
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Deadline for next week’s competition is Sunday at 12 Noon PDT/MST. You can nominate your own weblog entry or any post you admire here.
Technorati Tags: blogging, real estate, real estate marketing
…but you still have time. Cut-off is today at 12 Noon PDT/MST. If you know of something worthy of recognition, your own work or someone else’s, nominate it now while it’s on your mind.
Technorati Tags: blogging, real estate, real estate marketing
Recently, we discussed Google blocking ads against MoveOn.org which has led to much negative talk in the blogosphere about Google.
As if their PR department wasn’t working overtime already, ProBlogger alleges Google’s AdSense is committing what appears to be conversion fraud.
I’ll say it again- Google is invincible today, but if the entire world decides that their shady methods won’t fly, they may be moving to a lower rent building for their headquarters.