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January 21, 2008

The Odysseus Medal: “It’s not just about the lender, escrow officer, and agent doing their job; its about them doing their job as a team.”

by

Suburban Phoenix Real Estate Broker

Author website

The Odysseus Medal this week goes to Trevor Smith for Theology, Postmodernism, and a Different Kind of Buyer:

– Postmodernism places value on the journey. Many of my clients are very interested in learning about the process of real estate. They don’t want somebody to do it for them. They want to be part of the journey. They want to be an integral cog in the process, so that when they get the house they want, they can say “I took part, in buying this home.”  Contrast this to agent/client relationships of the past where the agent decided what homes to show their client, they drafted the paperwork and said “sign here,” and they moved their client through closing with directions rather than explanations.

– Postmodernism distrusts authority. At one time you may have been able to say, “This is a good value for this house,” and your buyer would simply trust your judgement. After all you are a professional. This is no longer the case. Now, multiple factors must go into making a decision: 1.) What does the data say? 2.) What does my agent say? 3.) What do my friends and spiritual advisor say? 4.) and lastly and most importantly, How do I feel about it?

– Truth is personal and it’s relative.There is market data, there are appraisals, there is the financial situation of the seller, and there are comparables; but none of this makes a bit of difference if the buyer doesn’t see the truth in them. Today’s buyer can’t be given the data and the data’s conclusion. They have to be given the data and make their own conclusion. To you the chicken farm next door might devalue the house by $10,000, but to the buyer it increases the value by $10,000. After all, they grew up on a chicken farm, and viewing one brings back fond memories.

– Postmodernism values community. It’s not just getting a good deal, but it’s meeting the seller of the house to learn about their kids and the experience they had in the home. It’s not just about advice from an agent, but its becoming friends with your agent. It’s not just about the lender, Read more

January 21, 2008

Active Rain gets $2.75 million in funding — from HouseValues.com

by

Suburban Phoenix Real Estate Broker

Author website

Jonathan Washburn:

ActiveRain has accepted a minority capital investment from HouseValues designed to help us grow and become more of what we had always hoped we could be.
 
A great deal of thought and consideration went into this decision. I’d like to share some of that with you.   
 
2007 taught us a few things. The biggest perhaps is how prudent we need to be about who we do business with. Despite the many hands held out to us over the past few months, the right one had to gain a firm grip on our trust. HouseValues did that – above all others.

Financial terms were important to us, but throughout the entire process we continually asked ourselves “who understands us and our culture the best?” and “Who will help us keep our commitments to the community? HouseValues, a local company with a wealth of experience in our industry, hit the mark.

I’m not even going to remark on this…

Thanks to Cheryl Johnson for dropping a dime.

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January 21, 2008

Descriptive text as benefit, not feature

by

Mapping Technology Entrepreneur

Author website

Over the course of developing Estately, Doug and I have looked at a lot of listings. We’ve seen humorous irregularities, things like the neighborhood called “Seattle” that has been carved out of adjacent cities or the neighborhoods of large cities that are promoted to city status by agents who apparently want no one to ever find their property on traditional, select-your-city-from-a-list real estate search sites.

After the awful photos, which are well documented by Athol, the most painful part of viewing listing after listing for me is the “descriptive text.” Of the dozens of boxes agents fill for every property, this is the one where a listing agent can sing the praises of the listings benefits and go beyond the laundry list of features.

Or at least it should be the box that is about benefits.

But all too often it is either meaningless filler or a relisting of selected features. It’s like real estate agents, people who are steeped in personal marketing strategies, who bandy about marketing words like conversions and leads, had never heard of benefits.

The following are a few of the regulars; the features buffed with flowery adjectives and sent off to the ether, and my amateurish reworking of them. I don’t market for a living, so I’m sure (positive!) we’ll see better reworkings in the comments.

Feature: Beautiful view, huge picture window
Benefit: Watch the sunrise through the picture window from anywhere in the living room

Feature: only 15 minutes from downtown, hot tub
Benefit: relax in the hot tub after a short (less than 10 minute) commute from downtown

Feature (barely): You’ll love this floor plan!
Benefit: hallway-free floor plan maximizes living space OR open floor plan maximizes feng-shui

Things I wouldn’t put in a public description because they aren’t features or benefits:

  • all appliances stay+washer/dryer (that’s in the amenities)
  • close to all schools (really? every single school?)
  • Move in Now! (no!)
  • 2 cats and a lrg dog that live here (transparency is good, but that makes me think “pet odor!”)
January 21, 2008

Whatever you do, don’t dance: Pinal county restaurant fined $700 a day for encouraging its patrons to dance outdoors

by

Suburban Phoenix Real Estate Broker

Author website

We’re in Phoenix, which is a megalopolis. You can drive in a straight line in the Phoenix metropolitan area for two solid hours and never run out of metropolitan area.

But much of Arizona is not just rural but virtually devoid of people. Scrub desert, dry as dust, where a very few hard-scrabble folks try to scratch out a hard-scrabble living.

You can be on a lonely old road at night and not see a car in either direction. There are no street lights, since someone would have to build, pay for and maintain them. There are no lights at all, and you will never know what it feels like to be shipwrecked or stranded alone on the moon until you look in vain in every direction for any sign of the works of man.

And then, far off in the distance, there’s a light. Just a glint at first, but it seems to grow brighter as you draw nearer. You can drive toward a light like that for half an hour, so thick is the darkness. And then you’re upon it. And then, just like that, you’re past it.

What was it? An electric sign. For what? A lonely little cowboy roadhouse. And what did the sign say? “Dancing, Saturday Nights.”

That’s real life in the real desert.

Here’s a Reason.TV story about authorities in Pinal County trying to shut down a little desert road house — for the crime of allowing its patrons to dance outdoors.

There’s a bit of speculation in the video that calls to mind the Lincoln County War — but that’s a different desert in a different state…

Hat tip: Thomas Johnson.

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January 20, 2008

The Odysseus Medal competition — Voting for the People’s Choice Award is open

by

Suburban Phoenix Real Estate Broker

Author website

There are 15 entries on the short list this week, out of a long list of 82 posts. Vote for the People’s Choice Award here. You can use the voting interface to see each nominated post, so comparison is easy.

Ahem: Please don’t spam all your friends to come and vote for you. First, what we’re interested in is what is popular among people who would have been voting anyway. And second, I’ll eliminate you for cheating. Don’t say you weren’t warned.

Voting runs through to 12 Noon 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:

< ?PHP $AltEntries = array ( "Brian Brady -- Fishwrap Classifieds The Future of the Fishwrap Classifieds”,
“Connie Brzowski — Mortgage Crisis The Mortgage Crisis Has a Silver Lining (and other truths you won’t hear on cable news this week)“,
“Dan Green — Herd Mentality How Herd Mentality Determines The Direction Of Mortgage Rates“,
“Doug Quance — School Of Hard Knocks Tuition Is Expensive At The School Of Hard Knocks“,
“Drew Meyers — Neighborhood Boundary Files 7000+ Neighborhood Boundary Files in Shapefile Format“,
“Eric Blackwell — Network Solutions Network Solutions — I-CANN too hold your domain ideas hostage!“,
“Gary Elwood — Writing Why Writing Is the Most Important Thing You Can Learn“,
“Greg Tracy — Realtors are too Damn Old Realtors are Just too Damn Old“,
“Jim Cronin — Readers or Search Engines? Dichotomy of the Real Estate Blog – Do You Please the Readers or Search Engines?“,
“Kris Berg — Technology Hangover Technology Hangover – I’m a little fuzzy.“,
“Michael Wurzer — Seeking Clarity Seeking Clarity in Real Estate Data Standards“,
“Morgan Brown — A Fool’s Rally We’re looking at a fool’s rally – plain and simple.“,
“Chris Johnson — Economics of Wholesale Lending Some Economics of Wholesale Lending: Yet another Reason Why it’s a dead man walking.“,
“Stan Humphries — Zestimation What’s in a Number?“,
“Trevor Smith — Different Kind of Buyer Theology, Postmodernism, and a Different Kind of Buyer“,
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    Deadline for next week’s competition is Sunday at 12 Noon MST. You can nominate your own weblog entry or any post you admire here.

    Technorati Tags: , Read more

    • January 20, 2008

    Ahem: Your goal is not weblog traffic, your goal is converted sales

    by

    Suburban Phoenix Real Estate Broker

    Author website

    It might seem like I’m shouting up the drain pipe, but I’m not talking to Dustin — I’m talking to you.

    If you were selling a viral product like Skype, where for every 10,000 people with a casual interest in your product, one will turn into a paying customer — with the cost per conversion approaching zero dollars — what Dustin is saying would make sense.

    But selling real estate is a direct marketing problem. If 10,000 people exhibit a casual interest in your product, you will have earned nothing, whereas if one person actually buys, you will have earned a huge pay-check.

    There’s more: If you are spending some significant fraction of your time servicing inquiries from people who will not be buying your product, you will have less time — possibly no time — to work with the small number of people who will buy your product — from someone else if not from you.

    Your goal is not weblog traffic. Your goal is converted sales. This is not news. This is me, from last March:

    “Traffic is not about traffic. Traffic is about conversions.”

    If you get 3,000 unique hits every day and convert one a month, you are an emaciated wretch with huge bragging rights. If you get three unique hits a day and convert one a week, you are constantly trying and failing to make time between appointments to get your Lexus detailed. Your goal is not traffic. Your goal is not even community, although this is a vitally-important secondary objective. Your goal is not forms filled out or leads captured or phone calls returned or listings emailed or showings scheduled. Your goal is conversions, as represented by a fat check from a title company. It does not matter how many shots you take at the basket. What matters is how many times — and how often and how regularly — you get the ball through the cylinder.

    I pointed out that the False Dichotomy of schmoozing with the homies versus counting flowers on the wall is a logical fallacy. Your objective is not to be tripped-upon by accident by any one of Read more

    January 19, 2008

    Net-borne buyers create new burdens for listing agents

    by

    Suburban Phoenix Real Estate Broker

    Author website

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

     
    Net-borne buyers create new burdens for listing agents

    “Eighty percent of buyers start their home search on the internet.”

    You don’t have to dig too deeply in the real estate world to unearth that statistic. There are two problems that I can see with the claim.

    First, it’s based on an outrageously unreliable mail survey of recent home-buyers. Fewer than five percent of recipients returned the survey. How did the other 95% manage their home search? We don’t know.

    Moreover, while the long-term trend, surely, is that more people are using the internet to shop for homes, what matters is not how they started their search, but, rather, how did they finish?

    There’s more to think about, though, because it seems reasonable to me that people who are starting their home search without professional representation — without a Realtor — are continuing their search unrepresented as well.

    What’s the implication? Like it or not, the listing Realtor’s responsibilities are increasing.

    Realtors like to say — to each other — “If you list, you last.” What that means is that a listing, at least in a normal market, is a pretty secure paycheck, where working with buyers can be a lot riskier. This is the reason that the buyer’s Realtor often gets 60% or even 75% of the gross commission. The listing Realtor presumes that the buyer’s Realtor is going to be doing most of the heavy lifting.

    But this is not as much the case in the age of the internet. If an unrepresented buyer clicks through to the listing Realtor from an on-line Realty.bot — or if that buyer simply makes a sign call — the listing Realtor is obliged to show the home, even if the original intent was to have buyer’s Realtors doing all the work. Moreover, the open house, long derided by Realtors, is suddenly much more important.

    All of this creates new opportunities for dual agency, whereby the listing Realtor gets paid more — and incurs huge risks — while giving the buyer almost nothing in the way of representation. It’s hard to Read more

    January 18, 2008

    So I’m The Bad Guy, Huh?

    by

    Realtor, Audio Engineer

    Author website

    This particular scenario has been played out four times in the last few months, and I’m tired of the liberal application of chap-stick to my ass. It goes something like this:

     I take my overly qualified clients out on the town to look at homes. We find one they really like. It has everything they want: acre lot, built in 1969 but completely remodeled, close to town, great pool, a guest house out back for aging parents, the works.  So far, so good.

    Once my clients find this fabulous house, my real work begins: protect my client’s interests. You know, do a little research on market conditions, comparable properties, the recoupable costs of remodeling, all while keeping an eye on where the market is headed. Now, it would be easy for me to seriously lowball my offer in order to protect my client from market depreciation, but I don’t actually think that’s a fair thing to do. There is inherent risk in any real estate transaction, and it needs to be spread fairly evenly in order to work. My job is to carefully balance the risk so that my clients have as little as possible. The balancing act is in shifting more risk to the seller’s plate than they might have been prepared to eat. But, if I slide over a heaping helping of steaming risk onto the seller, I have doomed and relagated the negotiation to the realm of “principle.” Arguing on principle is not an effective strategy, ever.

    Consider this recent example. A certain home had been purchased in 2005 at a price of $450,000. It was in various states of disrepair and an overall delapidated condition, so the sellers decided to put $100,000 worth of (very nice) upgrades into the home.  It appears that the slab and walls are 1969, everything else (and I truly do mean everything) was 2006.  Once the home was completed in mid-2006, it was placed on the market for $669,000. By the time my clients became interested in the home, is was priced at $515,000. The sellers had been steadily dropping the price over the period of Read more

    January 18, 2008

    Tuition Is Expensive At The School Of Hard Knocks

    by

    Associate Broker

    Author website

    Another Episode Of “It Doesn’t Pay To Be A Cheap Bastard”

    In times like these, real estate investors often search for the corners to be cut. While many of the corners should be cut – others should not.

    Such is the case of adequate insurance.

    Many sellers are having to resort to leasing out their properties. Some of these properties are leased out under a lease-purchase agreement… while others are simply rented out. Their goal is to simply stop the red ink.

    When I list a vacant property for sale, one of my areas of discussion with the seller is adequate insurance coverage. And let me tell you – it ain’t cheap. Vacant homes are not only more susceptible to vandalism, but when something like a pipe breaks or some bad wiring starts a fire – the damage is usually far greater than a home which is occupied.

    This increase in premium can triple your insurance costs… or more.

    But a vacant property is not the only concern. If you rent or lease your property, you would be well-advised to report this to your insurance company so that they can ensure your policy will maintain its coverage under that particular scenario.

    Case in point is a recent tale of woe told to me by a lender who was about to fund a new investment property for one of her clients. This client had a property in Florida that he had lease-purchased to a tenant who had been paying their rent in a timely manner. But shortly before closing on his new property – the neighbors of his lease-purchase tenants called him up to inform him that the tenants left in the middle of the night.

    At first blush, this only seemed to be a big nuisance to her client, as the tenants had posted a $10K non-refundable deposit… so he went down to Florida to check it out.

    And this is where the other shoe drops.

    The tenants had torn the place up. With a vengeance. Stole all the fixtures… even the cabinets in the kitchen. The damage was so extensive – it made that $10K deposit pale in comparison.

    My Read more

    January 18, 2008

    Real Estate Weblogging 101: Wringing actual commerce out of your commercial weblog

    by

    Suburban Phoenix Real Estate Broker

    Author website

    I’m engaged in a debate with Dustin Luther at his place, but the issues are important enough that I want to highlight some of my remarks here. The meta-issue: Is linking back and forth among real estate weblogs an effective marketing strategy for a consumer-focused, client-seeking real estate weblog, or do other marketing techniques offer greater promise of financial rewards?

    Notably:

    [S]earch engines are suboptimal as a source of traffic for niche-based, consumer-focused weblogs. They’re going to get their long-tail searches anyway, but search-engine borne visitors are loosely-motivated and rapidly-bouncing. The objective should be to build relationships with future clients and to forge alliances that will result in even more of those relationships. Done right, the weblog doesn’t need search engine traffic — and the practitioner is immune to competition.

    Professionals learning from experts is a great idea, which is why BloodhoundBlog is what it is. Professionals chatting with each other, as with Active Rain, is more than anything a pleasant diversion, a plausibly harmless waste of time. Professionals sending their prospects off to BloodhoundBlog or 4realz is a poor marketing strategy.

    I’m sorry, Dustin. You’re simply wrong about this. It is to my benefit that so many locally-focused and hyperlocal weblogs blogroll BloodhoundBlog. But it almost certainly is not to their interest, nor is the conversation among such weblogs, nor is the incestuous cronyism among the webloggers — at least not on those weblogs. Flying fish don’t actually fly, and there is no rational convergence between fish and fowl.

    Inadvertently, this becomes a commercial for BloodhoundBlog Unchained. We won’t teach you how to have fun publicly noodging other weblogs from what should be your office on the internet, but we will show you how to run a commercial weblog as a business.

    More:

    The larger topic is interesting to me, though, so maybe I’ll write about it. There is an extent to which the RCG model does a disservice to the idea of real estate weblogging. I make a point of telling our readers that what BloodhoundBlog does is not what they should do. Many of the major RE.net weblogs are modeled on RCG to greater and Read more

    January 17, 2008

    Five Times More Effective Than E-mail ?

    by

    Commercial Real Estate Finance Expert
    Structured Debt and Equity
    Licensed Real Estate Broker in AL, CA, and FL

    Author website

    I explained how important it is to “bridge the digital divide“:

    The phone call separates the wheat from the chaff, the signal from the noise, the serious from the frivolous. When attacked, on my home weblog, I offered a three-way call, to explain my math. The drive-by commenter scurried away, too important to deal with the likes of me. His attitude was that he wanted to win a blog comment war, not educate nor be educated.

    Tim Sanders, a likeable expert, offers more credibility to my theory:

    As I mentioned before in a previous post, research indicates that tone of voice is five times more effective at conveying your intentions than words on paper (or in an email). When you pick up the phone, you increase your effectiveness at resolving customer service issues.

    The alternative is hiding behind email and hoping for the best.

    Pick up the damned phone!  Enough said.

    January 17, 2008

    Yesterday Twitter was a village; today it’s an exclusive gated community

    by

    Rust Belt Realtor

    Author website

    “Hyper-local micro-blogging”. Ya heard it here first.

    Let’s gather the pieces:

    –Twitter might be a village, but real estate is local.
    -To create an insanely great hyper-local weblog, “Be the community”.
    -In order for Twitter to be useful, you have to tweet something useful.

    Let’s put it all together:

    -What if you created your own Twitter village?
    -What if you created your own unique hyper-local community content?
    -What if all the tweets were for the benefit of your readers, and they all pointed back to your blog, your website, or if you were a broker they could point to the brokerage website and your agent’s blogs?

    What if?

    January 17, 2008

    Active Rain can’t catch a break…

    by

    Suburban Phoenix Real Estate Broker

    Author website

    T.S. Eliot:

    Should I, after tea and cakes and ices,
    Have the strength to force the moment to its crisis?
    But though I have wept and fasted, wept and prayed,
    Though I have seen my head [grown slightly bald]
        brought in upon a platter,
    I am no prophet—and here’s no great matter;
    I have seen the moment of my greatness flicker,
    And I have seen the eternal Footman hold my coat, and snicker.

    Trulia.com is going into the Realtors-talking-to-each-other business…

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    January 17, 2008

    What do you do about a $3 billion dollar foreclosure? You can take it in stride — or you can squish it like a bug

    by

    Suburban Phoenix Real Estate Broker

    Author website

    Foreclosure is normally not a topic for amusement, but the Las Vegas real estate scene is like a brand new Hasbro game show, Monopoly.TV.

    The news:

    The developer of the $3 billion Cosmopolitan Resort & Casino says its lender, Deutsche Bank, filed a notice of foreclosure on the property for a construction loan of $760 million that just matured.

    Developer and owner Ian Bruce Eichner says in a statement that his company is working with Deutsche Bank and Merrill Lynch to find new investors.

    Eichner tells The Associated Press in the statement that, “This action by our lender comes as no surprise.”

    He blames challenges in the real estate and capital markets for difficulty in raising capital for the project, which is now under construction.

    The project: The Cosmopolitan is being built to wrap around the old Jockey Club time-share on the strip. The owners were able to make the deal by revitalizing the Jockey Club towers and connecting them with a new parking garage. It’s an interesting plan, because the only artifact of humankind likely to outlast the cockroaches is fractional-ownership real estate.

    The prologue from the past:

    The Cosmopolitan isn’t the first local hotel-casino project to run into problems because of the current economic climate.

    “We have seen selected projects fail to move forward that had previously announced plans with the current credit crunch and the tightened lending requirements,” Las Vegas-based Applied Analysis principal Brian Gordon said. “Certainly, that has impacted many projects throughout the Las Vegas Valley, including resort and nonresort projects.”

    Tight credit markets have been cited as the reason for postponing planned resort developments at the Tropicana, the Silverton and Southern Highlands Resort.

    However, unlike the Cosmopolitan, which broke ground in October 2005, none of those projects had begun construction.

    The most famous example of a stalled Strip project was the Stratosphere, which was conceived by casino operator Bob Stupak in the early 1990s.

    Grand Casinos stepped in and finished the 1,149-foot tower hotel-casino project after Stupak ran into financial trouble that had stopped construction. Construction work was halted again in the mid-1990s, this time on a hotel room section, when the company went bankrupt. The development was eventually Read more

    January 16, 2008

    While Rates Are Low, Schedule Your Purchase Closing At Least 45 Days Out

    by

    Mortgage Planner

    Author website

    Because of negative sentiment about the economy, we’re in the middle of the first remortgage boom of 2008. There may be others, or this one may last a while.

    It’s been a few years since mortgage rates fell so far, so fast. It’s like a Sid Fernandez curveball.

    If your loan officer hasn’t called you about taking a lower rate yet, get pro-active and call him (or her, Rhonda). It’s your money, after all.

    That said, there are a few key differences from the last time we had a remortgage boom like this.

    1. During the last remortgage boom, lenders were growing their staff to handle extra capacity. This year, mortgage lenders are working with smaller staffs after major layoffs in 2007.
    2. During the last remortgage boom, lenders were sprouting like weeds to chase mortgage money. This year, there are far fewer mortgage lenders after the bloodletting in 2006 and 2007.

    Complicating matters: mortgage guidelines are very different this year from the recent past. Underwriters don’t know the new standards frontwards and backwards like they did, plus they’re being more careful.

    All of this combines to mean that fewer underwriters are processing more applications that each require additional scrutiny. It would be prudent for all of us to expect underwriting delays.

    As an example, the “24-hour turntime” notices I used from my investors now read:

    “Please allow one week for underwriting”.

    Now, at times like this, some loan officers will say to clients and real estate agents that because they can underwrite home loans in their offices, their files are immune to delays when rates fall. There’s some truth in that (and I know because we do it at Mobium), but that doesn’t mean we’re not feeling the pressure of time, too.

    Every mortgage broker|banker|lender in the country is experiencing very high volume right now and we are all coping with the same issues about time and resources.

    30-day closings are still possible, but it may be better to play it safe at 45. If rates keep falling, we may bump that to 60.

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    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.

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