BloodhoundBlog

There’s always something to howl about.

Month: August 2008 (page 6 of 6)

August 4, 2008

A Realtor’s Life: Deeply Spiritual and Cheesier

by

Realtor, Rabble-Rouser

Author website

I admit my mind works a little differently than most – I like to write and talk about things that are current – so, in light of the past week’s recent events, I decided that I wanted to correlate last week’s LA earthquake, the current credit crunch and my recent trips to Costco into a meaningful discussion regarding real estate.  Surprisingly, there is a high correlation.

I have a habit of sharing my addictions as many of you well know – caffiene – and yes, Costco – sad to say, I often find myself “dining-out” with the combo pizza, occasionally the chicken caesar salad, 2 hotdogs (for my dogs) and let’s face it – the 2 drinks are essentially free.  Critical in today’s tough economic times.

You ask – how is this even remotely relevant?  Well – after hearing the news regarding the quake, and the follow-up public service announcements locally on the radio questioning what my emergency plan is in the event of an actual emergency – have I made the necessary arrangements for 72 hours of provisions – bottled water, food, batteries etc?

I immediately thought – I need to go to Costco.

Prior to my almost twice weekly adventure – mind you there are 2 of us plus 2 dogs – I checked to see what I needed – a quick scan of the pantry revealed 36 boxes of Mac & Cheese, 24 rolls for toilet paper, 72 bottles of water, two 128 fluid oz bottles of Neutrogena handwash – fridge check – 4 gallons of milk, 36 eggs, 128 oz of mayo and 48 slices of Timberlake muenster cheese.   Hmm – no batteries.

Off to Costco.

Being a Sagitarius, I am by nature an optimist, however, in light of my chosen profession, I am becoming intimately familiar with actual emergencies – the professional kind.  I’ve negotiated some tough deals, fended off irrate clients – but the emergencies I am speaking of are realtor’s-life threatening.  I Twittered briefly today with fellow “hound” Tom Vanderwell regarding Meredith Whitney’s interview on CNNMoney.com regarding the nature of the credit market.  She has a fairly solid track Read more

August 4, 2008

Another real estate model, a less-radical variation on a current theme that can work within the present regulatory context: A national franchise of real estate franchisors, each of whom is committed to sustaining the value of the brand

by

Suburban Phoenix Real Estate Broker

Author website

I read Rob Hahn’s ideas about brokerage-as-law-firm last week. I thought that much was kind of naive — a reflection of a lack of understanding the legal realities of real estate brokerage — but I didn’t jump in because I thought some of his other ideas were interesting.

Here’s the problem: A law firm is based on 1040 employment. The real estate brokerage safe harbor makes it extremely beneficial for brokers to have nothing but 1099 employees. There is no reason to expect that to change unless the IRS removes the safe harbor — three weeks after hell has frozen over.

The Team model works, but it’s inherently small-time.

Branding could work — but doesn’t — because the independent contractor status of agents dilutes the brand to homeopathic concentrations.

Hard-branding like Bloodhound does can only work with very strict control. Redfin has this — but it also has 1040 employees.

All that notwithstanding, present-day brokers are at risk of being wiped out at any minute by several liability — the designated broker is responsible for every idiot he puts out on the street.

Here’s a solution that makes sense to me:

The ideal case would be to get rid of licensing altogether, to get rid of the broker’s level of licensing or to get rid of the salesperson’s level of licensing and call everyone a broker, but none of that is necessary.

Instead, imagine an IntegratedRealty.com business entity that consists of a franchised brand for fly-you-own-flag brokers or brokerage entities. As the owner of IntegratedRealty.com, I franchise the brand and require certain standards and practices from the franchisees. I maintain offices, so, to all appearances to the public, we’re just like Realty Executives. Except that I am not anyone’s broker, and each individual franchised broker is the head of his or her own Team. They write and own their own contracts, and they’re free to sever their relationship with IntegratedRealty.com per the terms of our contract, with their representation contracts going along with them.

This could be rolled out city-by-city, like Realty Executives, or cross-competitively like RE/Max. Each new instance of IntegratedRealty.com could itself be a franchise, so you could Read more

August 4, 2008

Understanding How .250 Hitter Out Earns .325 Hitter

by

Real Estate Investments Broker

Author website

I’ll begin by encouraging brokers & agents to read and continue to follow Sean Purcell’s Super Team series. In my opinion it should prove prophetic and timeless. Why? ‘Cuz it’s about bank, and how to add 0’s and commas, the only thing that matters when the score is posted. The rest is like a bunch of artists arguing over being true to their spirit. 🙂

Alrighty then, how is it that there are players who strike out a lot, get 125 hits, and play just OK defense, yet make so much more than those rarely striking out, gettin’ close to 200 hits, and playin’ much better defense? The answer is simple, and it applies big time to real estate agents.

The answer can be found in the answer to another baseball question.

What team wins any baseball game?

A. The team with the most hits.
B. The team making the most spectacular defensive plays.
C. The team with the most runs.
D. The team with the most at bats during the game.

Yeah, we all know the answer. Then why do so many not understand how some .250 hitters could buy and sell .300+ hitters before breakfast is over? Stick with me here, ‘cuz this is hugely important when applied to those working in commission real estate.

Adam Dunn plays for the Reds and makes a staggering $13 Million a year. Incredibly, the guy could figure a way to strike out in a brothel. The season’s barely 2/3 over and he’s already K’d 110 times! That means when the season’s over he’ll have walked back to the dugout in shame over 150 times. $13 Million a year. By the way, since 2004 Mr. Dunn has averaged over 100 runs batted in, yearly. Apparently in baseball runs = bank. Go figure.

He hits .240 — your Aunt Fannie could strike him out on any given day — his defense is, uh, well at least he wears a glove. Yet he makes $13 Million a year. He gets over 500 ‘at bats’ each season. Sometimes over 550.

Let’s look at this through a real estate agent’s eyes. Uh Read more

August 4, 2008

The New Real Estate Model – Part 3.2: Patrick, Dunne & Purcell, A Real Estate Firm

by

Real Estate Renaissance Man

Author website

A Real Estate Firm based on the legal model could have many looks, as do actual law firms.  But for a starting point I am going to lay out an achievable structure that will accommodate the greatest majority of agents.  The firm would consist of three distinct levels as well as an administrative staff.

  1. In the top level are the named agents: let’s say Ms. Patrick, Mr. Dunne and Mr. Purcell. These are the founders of the firm and generally speaking they are all three tremendous rain makers. They have a large and active client base from which they receive a tremendous amount of referral business.  It is also quite likely that one or more of them has a strong presence in a niche area.  They are not only the face of the firm, but it is their style and personality that colors the firm’s corporate vision.
  2. Under the named agents are the partner agents.  It is within this level that we see so much of the communal benefit that Mike Farmer has written about.  Similar to the named agents, partner agents bring in a lot of transactions.  They also may have areas (geographic, industrial, network, etc.) of specialty.  These agents have reached a level reminiscent of tenure.  They share ownership of the firm as well as decision making duties and have a say in its direction.
  3. The associate level is where the greatest number of agents are found.  From fresh beginners to agents with years of experience.  The associate level is also the workhorse of the firm.  Associate agents are not only working hard to take care of clients assigned by the partners, but are at the same time trying to impress the partners with business they generate themselves.  The presumed goal of an associate agent is to be made partner.
  4. Finally, there is an administrative staff which grows as the firm’s growth dictates.  It could be as simple as one administrator or as complex as a multiple level staff covering everything from answering the phones to creating the marketing to processing the transactions and more.  Staffing might be the one place where someone Read more
August 4, 2008

The New Real Estate Model – Part 3.1: The Solution

by

Real Estate Renaissance Man

Author website

This final post (Part 3) grew rather lengthy.  Considering the fact this has already stretched into a three-part series, I chose to extend the series to five rather than attempt a conclusion of  somnolent proportions.  If brevity is the soul of wit, creating a new model for real estate is witless.  So grab a cup of coffee or your favorite bagel and settle in.  Fairly warned be thee, says I…

The Preamble
In Part 1: Disbrokeration, I looked at the problems that exist within the current, brokerage-based real estate model.  The shift to a 2.0 world is making the traditional position of broker obsolete.  The tax advantaged laws that helped create this model now create a drain on the industry and the level of professionalism is widely perceived to be at an all time low.  This is a topic of some concern, as the most popular response to the current state of affairs is more legislation, more licensing and more efforts to validate capability through pernicious membership rather than actual results.  As Big Al said: “We cannot solve our problems with the same thinking we used when we created them.”

In Part 2: Super Teams, I looked at a natural progression that is already occurring in our industry: Real Estate Teams.  I took that notion further and looked at how a Super Team might be constructed.  There was also a link to some great writing on the concept by Mike Farmer.  There are some problems with the Super Teams though.  They do not go far enough in dealing with issues of independent contractor status, education, professionalism and image.  Their success depends upon either a self-less communal work effort or a strong, unique figurehead to hold all the pieces together.  The former is not realistic across an entire industry and the latter is too uncommon.

The Outline
It is time to outline a new model for the real estate industry.  I believe the following to be a reasonable list of minimum expectations:

  • The new model should account for the natural desire in many people to achieve.  It might even embrace the concept that a great many people enter Read more
August 2, 2008

New FlexMLS system is a bold stride into the twenty-first century for Phoenix-area Multiple Listings Service

by

Suburban Phoenix Real Estate Broker

Author website

This is my column for this week from the Arizona Republic (permanent link).

 
New FlexMLS system is a bold stride into the twenty-first century for Phoenix-area Multiple Listings Service

Metropolitan Phoenix got a brand new MLS system this week. MLS is the Multiple Listings Service, the system by which Realtors share their listings with one another. Until this week, the Arizona Regional Multiple Listings Service had been using a computing system called Tempo to share listings. As of this Monday just past, we have switched to the FlexMLS system.

Had you guessed that something had changed? If your Realtor has been sending you listings from a saved search, or if you had been receiving updates to a Tempo Gateway, all that stopped on Monday morning. Chances are your agent has spent much of this week rewriting searches and reestablishing gateways. The FlexMLS system is more robust than anything we’ve had before, but it’s also quite a bit more complicated. It may take a while before things get back to normal.

So why make the switch? For one very good reason, to tap into that much more robust technology. Tempo permitted a crude kind of map-based search, but FlexMLS allows you to select houses from within multiple non-contiguous irregular polygons. So, as an example, I can search for homes that are either within walking distance of Apollo High School or within walking distance of Valley Metro bus lines servicing Apollo High School.

There’s more: The FlexMLS pricing software is comparable to the tools appraisers use. Realtors will have to stretch themselves to learn how to tap this power, but our Comparative Market Analyses are going to be painstakingly accurate.

But not without some growing pains. ARMLS is by far the largest MLS system FlexMLS has taken on so far. This first week has been a trial for the North Dakota company — a strain on their servers, and, no doubt, a strain on their tech support staff as well.

And workaday Realtors are sharing the pain. No doubt many are grumbling, “If it ain’t broke, don’t fix it.” But FlexMLS is a bold stride into the twenty-first century for Read more

August 1, 2008

Mortgage Market Week in Review

by

Mortgage Officer

Author website

Is it just me, or do Fridays keep coming around faster and faster? Maybe it’s because I’m so young!

Any way, it’s time for our “Mortgage Market Week in Review.” We’re going to focus on a couple of main topics for today:

Jobs – the ADP report came out on Wednesday and had some relatively positive news. That brought a lot of people in the markets thinking that the jobs report that came out this morning would be a lot more positive than the markets had been expecting. Well, we got to this morning and it came out “moderate.” The market had expected 70,000 losses and we only got 51000 losses. We had expected 5.6% unemployment and we got 5.7%. So, not too bad, but not too good either. However, I’ve read some technical analysis that said that due to some accounting regulations (known as the birth death of businesses adjustments) these numbers are probably overstating things to the positive. That means that next month, these numbers will probably get revised downward.

Losses – talk about missing a target here, wow. General Motors announced that they lost $15 billion this quarter. Think about it, that’s a lot of money. Even if you take out the “one time” expenses, that is still a LOT of money (like maybe $6 billion, I think the number was.) I read today that GM has now “eaten up” all of their profits that they have made since 1985. That means that a profit and loss statement for the last 23 years for General Motors would end up with a big fat $0. In addition to them, Deutsche Bank announce a 64% drop in profits and Merrill Lynch announced some staggeringly negative numbers too.

House prices made a lot of news this week. Alan Greenspan was talking about them and several others also made a lot of noise about what’s happening with house prices. Check out the chart here to give you a good flavor of the regionality of housing prices and how not all areas are seeing the same numbers.

The Housing Bill – Read more

August 1, 2008

Are You Making Music?

by

Real Estate Renaissance Man

Author website

I recently attended a birthday party with my two beautiful boys (yes they are the most beautiful boys in the world and no, I am not biased).  The birthday guest of honor received a great many gifts and it was lots of fun.  Save for one interesting observation… an odd note that just might reflect a growing problem many agents face in real estate.  But I am ahead of myself.

In particular, the boys all gathered around a video game (I think it is called Guitar Hero) that comes with drums and a guitar.  You put the DVD in and the TV provides music and a video while the boys watch a visual cue telling them when to strum a chord or bang a drum.  Anyway, they all jumped in and so did I.  (Little kid at heart still…)

Now here is the interesting part.  I did well at that game. I did well because of my athleticism.  I still have very good eye-hand coordination and I pick things up pretty quickly.  In hindsight, maybe that is not so interesting.  But let me add this: I am completely tone deaf and possess no rhythm whatsoever.  My ex-wife used to laugh at me when I clapped my hands or tapped my foot along to some song.  Apparently I was never on the beat.  I tried to tell her I was keeping with the “back beat”… but she wasn’t buying.  In any case, I was the source for a good deal of amusement.  Now imagine: a guy with no beat excelling at a game involving music.

(Stay with me because I am going to tie this all together in a moment.)  A day or two later, I catch an episode of Gene Simmons’ Family Jewels on cable.  If you have not seen this you are missing out on insights from one of the greatest marketers of our time.  In this particular episode Gene’s son, along with some friends, challenge Gene to this very same video game… and kick his rock & roll butt.  Gene decides this is not right.  So he calls his buddies Tommy Read more

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