The NAR C&Ds RealtorGenius.com. Their timing is impeccable.
Technorati Tags: real estate, real estate marketing
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Radiohead is selling tracks from their upcoming album “In Rainbows” online. The price per track, according to the site, “is up to you”. Fans can choose how much they want to pay for the MP3 tracks, or not pay anything at all.
Was there ever a more confident display of “knowing your value to your clients”? Of course, many of Radiohead’s fans will pay an optional download fee.
To make this question relevant to us here at Bloodhound Blog, let’s see what our readers think:
Last week Peter Coy at BusinessWeek made a point of asking Redfin’s Glenn Kelman a real estate question. Kelman’s answer wasn’t awful, but it wasn’t great. (The negotiation advantage for unsold spec home occurs once a quarter, not just once a fiscal year.) But it was funny to me, because of this: Why would anyone expect Kelman to know about real estate in the trenches? He’s not like RE/Max’s Dave Liniger, an ex-grunt with a corner office. He’s a corporate guy, a veteran of securitized start-ups.
And that is a completely different world. Kelman provides a pretty candid peek into that world today at Guy Kawasaki’s weblog, a run-down on Redfin’s budgeting process and how things worked out in real life. There is a more corporate take on similar material at Redfin’s blog. Joel Burslem remarked briefly on these posts, and Sandy Kaduce provides a thoughtful analysis at the Seattle Post-Intelligencer‘s real estate weblog.
BloodhoundRealty.com runs out of a 300sf room in our home, and, especially, the passenger cabins of our cars. Glenn Kelman lives in a world I know nothing about. I find the idea of salaried agents interesting — by which I mean exotic — and I could see a benefit to a coordinated, centralized back-office operation, although this might introduce licensing problems across state lines (another good reason to do away with licensing). In any case, I am grateful to everyone who fingered these posts by email, but I don’t think I have anything to add to the discussion.
In comments here yesterday, Kelman said, “At Redfin, we would prefer it if both buyers’ agents and sellers’ agents each charged a fee.” That would be much easier to effect if the commissions were divorced, a topic I definitely am interested in taking up again — and again.
In the meantime, give a look to Kelman’s post at Guy Kawasaki’s blog. It’s a fascinating glimpse into a side of real estate most of us don’t have to think about.
Technorati Tags: blogging, real estate, real estate marketing, Redfin.com
I suppose I should care more than I do about the failed ransacking acquisition of Active Rain by Move.com. What’s less than zero? (Big-shot math geniuses should desist from an argument involving negative numbers).
From my overly-simplistic corner, this seems not so much like big news, but like more of the same. It is human nature. Carpetbagging capitalism is enjoying a feeding frenzy in the online real estate world right now. Meanwhile, forward thinking agents and their (reluctant) brokers are eagering jumping at every new opportunity to demonstrate their technical prowess in an attempt to stay relevant. We can’t give our stuff away fast enough. For zero.
Unless an Internet venture wants to do the real work, and this applies equally to the brave new start-up and to an established, money-making web giant like Move.com who has their taser set on world domination, they have three choices: Do nothing but charge less and characterize it as something; offer something for nothing which you can someday sell to someone for a fortune so that they can monetize it silly; or, wait for someone else to do the work and then swallow their platform and their intellectual property whole.
For the entrepreneurial, real estate-minded, all angles would have been killer had the Internet explosion not coincided with what is shaping up to be the worst real estate market in a more than a decade. Just how hard our landing will be in historical terms is yet to be seen. The fact remains; the timing sucks. Yet, those with strength and staying power will ultimately prevail.
Had one well-know rebate company made their big push seven years ago, their ranking on the Success-O-Meter might have been more impressive: More impressive than zero. Russell Shaw spoke to this brilliantly. Their target was (is) the consumer, and it seems that it is the consumer who is ultimately being courted by all of the online portals. Sure, the pay-to-play vendors geared toward the agent population, offering business tools, marketing platforms, lead generation and a paralyzing abundance of other opportunities to achieve untold riches (we are told), are out in force. But, their long-term success is dependent on generating consumer eyes, Read more
BloodhoundBlog is addressed to real estate professionals. We won’t reject anyone who wants to come and play, but we made a conscious decision very early on that we would be talking to Realtors, lenders, investors and other professionals, with a special emphasis on real estate webloggers. In that respect, we’re probably a pretty bad example for real estate webloggers to follow. We write about things that are of interest to you, but they aren’t likely to be interesting to ordinary people.
We’re leading into a discussion of last week’s ActiveRain fiasco, so here are two items that I think are very important to real estate webloggers — meaning webloggers who are not writing for the benefit of real estate professionals.
First, the MyBlogLog recent readers widget is not your friend. It visually convinces you that you are writing for the amusement of your real estate weblogging buddies, when in fact you should be writing for your target market, the people who can put money in your pocket.
Second, Search Engine Optimization (SEO) should not be your primary traffic-building strategy. Search engines will bring you unique visitors, which can be useful for advertising monetization business models. But search engine traffic comes with a truly gargantuan bounce rate: They land, they see that what they hit wasn’t what they wanted and they’re gone. Search engines can bring you visitors who will come and stay, some of whom might do business with you. But other traffic generating strategies — better targeted and much more viral — will make you a lot more money in the long run. I know I’m shouting down a well because everyone wants to believe SEO is a magic bullet, but facts are facts.
What does this have to do with ActiveRain? The sweet folks at ActiveRain have managed to convince themselves that talking about inside baseball to their good-time buddies will result in SEO traffic that will turn into money for them. This might actually be true, but it seems certain to me that, erg for erg, their energies could have been much better spent. ActiveRain argues that its search results prove it Read more
This was a great week. It wasn’t easy getting to a short list of twenty nominees, and I think it’s going to be particularly tough to pick an ultimate winner. I can’t imagine it will be any easier for you to vote for the People’s Choice Award.
What gets a weblog entry onto this list? Good writing, serious content — and especially both. There’s always room for something light-hearted if it’s very well written, but if you’re taking on a matter of true moment, I’m pretty forgiving about the niceties. My admitted bias is toward a deeper understanding of this thing we’re doing, real estate in the twenty-first century.
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:
< ?PHP
$entries = array (
"Dan Melson -- Sellers pays commissions Why the Real Estate Buyers Agent’s Commission is Paid by the Seller”,
“Brian Brady — Advertising to Ashley Advertising to Ashley“,
“Jonathan Dalton — Real estate 2.0 Real Estate 2.0 and the Phoenix Real Estate Consumer“,
“Dustin Luther — Make an impact 7 Ways to Make an Impact“,
“Jay Thompson — Aaron Anglin Tragedy Begets Triumph: Why I Love this Community“,
“Jay Thompson — Refrigerator service How to Save $94 on Refrigerator Service“,
“Joel Burslem — ActiveRain/Move Move.com Tried to Buy ActiveRain“,
“Michael Wurzer — Standards and monopolies Good Standards Break Monopolies, Not Make Them“,
“Daniel Rothamel — Facebook Why Your Answer to, “Are You on Facebook?” Will Determine the Fate of Your Business in 10 Years or Sooner“,
“Jim Watkins — Down market? Down Sales Market? Think Outside the Box“,
“Bill Leider — Opportunity costs Internet Marketing And Opportunity Cost – Connecting The Dots“,
“Steve Leung — Hidden factors Hidden Factors When Calculating a Home’s Value“,
“Jillayne Schlicke — Deceptive advertising Deceptive Radio Advertising in Mortgage Lending“,
“Patrick Kapowich — Realtor licensing Inside the Santa Clara County Association of Realtors’ Convention. Buyer beware? No. It’s Licensees Beware.“,
“Jeff Brown — Double-edged sword Double-Edged Sword — OR — Planning & Discipline — What Does Your Retirement Look Like?“,
“Dan Green — Data is granular Why Real Estate Data Is Read more
We had a lot of news this week, some tragic, some comical. All of it and then some is represented here. This is “the long list” — the total list of nominees that made the cut to be considered for the short list, the nominees available for voting for The People’s Choice Award.
What gets cut from this list? Posts that are too short, too stoopid, too much local or too much other people’s work. Even so, making this list of entries is an achievement, as you’ll see as you read them. There are some very serious minds out there, and it’s a delight to be able to showcase them.
For Aaron Anglin, may he rest in peace, the Ave Maria:
Ave Maria, gratia plena,
Dominus tecum,
benedicta tu in mulieribus,
et benedictus fructus ventris tui Iesus.
Sancta Maria mater Dei,
ora pro nobis peccatoribus, nunc, et in hora mortis nostrae.
Amen
And for all the ActiveRainers who may yet find themselves left out in the cold, here is a link to Roger Miller singing The Ballad of Waterhole #3 (The Code of the West).
With that, the long list:
< ?PHP
$AltEntries = array (
"Dan Melson -- Sellers pays commissions Why the Real Estate Buyers Agent’s Commission is Paid by the Seller”,
“Brian Brady — Debunking Guttentag Debunking Guttentag“,
“Dan Green — Fed Funds Rate How Setting The Fed Funds Rate Is Like Shooting Free Throws With Your Eyes Closed“,
“Kelly Roark — Agent 2.0 Agent 2.0: not-so-clever play on ‘Web 2.0’ or the future of real estate marketing?“,
“Brian Wilson — Redfin [Redfin] “I coulda been a contender…”“,
“Erik Hersman — RealUmbrella Creating the Ultimate Real Estate Disintermediator“,
“Jillayne Schlicke — Deceptive advertising Deceptive Radio Advertising in Mortgage Lending“,
“Ron Ares — Rent vs buy Addressing the Rent vs. Buy Conundrum“,
“Patrick Kapowich — Realtor licensing Inside the Santa Clara County Association of Realtors’ Convention. Buyer beware? No. It’s Licensees Beware.“,
“Jeff Brown — Double-edged sword Double-Edged Sword — OR — Planning & Discipline — What Does Your Retirement Look Like?“,
“Dan Green — Visa credit scoring How Visa USA Tried To Scare Us All Into Using Its Credit Scoring Web Site“,
“Morgan Brown — Housing glut Housing Glut, Lennar Revenue off 44%, Other Goodies“,
“Dustin Luther — Make an Read more
Jay Thompson fingered this comment from someone named Brandon writing at TechCrunch:
If “the good guys” succeed in “fixing the most screwed up industry in America”, their business model will collapse. Redfin’s success depends SOLELY on the real estate industry STAYING the most screwed up industry in America.
Without a co-broker fee of 2-3% to the buyer broker, Redfin will not have anything to refund to their buyers. Using the example on the Redfin home page, if the home is for sale by owner or listed with Redfin for $3000-$4000 flat fee, they have no way to refund the buyer the $10,000 they’re using in their “typical” example.
Go lookup Bloodhound Blog if you want really insightful info on the real estate industry (including how screwed up parts of it really are) and how Redfin’s model falls down. An no, I am not affiliated with Bloodhound in any way – just a loyal reader.
Ah, well, we have a lot of interesting ideas for changes in the real estate industry, but I can’t imagine that any of them will be implemented in the next couple of days. Even so, get your Odysseus Medal nominations in now. Deadline 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 — and before the entire universe is upended.
Technorati Tags: blogging, real estate, real estate marketing
Some of the “we do nothing for less crowd” got very good at marketing themselves to the broad public. They did this at a time when the average busboy or cab driver could have easily listed and sold a house. A few short years ago it was uncertain if the market disruption “full service at a much lower price” companies (yes really, service that is just beyond belief) had gotten a meaningful toehold and were here to stay.
That question is being answered again and again on a daily basis. Foxtons announcement that they were filing bankruptcy is one of my favorites. I don’t like them and I am quite delighted they have failed utterly. It isn’t often that I take delight in any company failing but for them (and anyone like them) I make an exception. They did everything they could to ruin the lives of others.
I want to be very clear on this, I am NOT “against discounters”. I was giving a talk the other day to a group of Realtors and mentioned Foxtons having already closed one office completely and now it looked like they were going to be gone for good. One member of the audience immediately said something about ZIP Realty. Totally different situation. Just totally different. Yes, I inadvertently started a fire (that may never go out) when I wrote this post, but I have nothing against ZIP, and neither does the public. Further, any competing agents who have lost business to them lost it fair and square. ZIP has a website that the public LOVES. Really. We’ve had several potential clients mention to us how much they liked the ZIP Realty site. We have had numerous cross sales with ZIP agents and have had nothing but completely professional people on the other side of any transaction we have ever had with them.
What then is the difference I am protesting here? Why would I have nothing against Help-U-Sell, Assist 2 Sell , ZIP Realty and find Foxtons to be so despicable that I am delighted they are shutting their doors in the United States? Simple, Foxtons Read more
by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
In an effort to placate angry users, Active Rain announces that the content is owned by the author; not the network. This isolates the membership roster as the only valuable asset in the failed sales to Move.com
The platform is not proprietary, the content was never owned (and couldn’t legally be “sold”), and the points scheme is not unique; Gather.com and Yahoo!Answers use similar systems. So…The membership roster seems to be the $33 million asset.
Six hundred bucks a name. Wow! So it was just a membership play, huh? I’m not buying that. I think the content clarification announcement is kind of like closing the barn door after the horse ran away. I think Active Rain fully intended to profit off of my words but I don’t care.
Today, Jon Washburn defines the future after he got caught with his hand in the cookie jar. His pandering to the members neglects to recognize the members’ need for the network. He should have said, “Hey! I did it for the money!” Could Move.com have profited off the 50,000 users? Certainly, most of the content would have stayed. Here’s why: The members’ motives for blogging on Active Rain were in line with the owners of the network’s motivation- Money.
Now, as a raving fan of the network, I’m prone to blurt the childish socialist mantra, “It’s MY community!” like any other happy Active Rainer. However, deep in the bowels of my conscience, the truth persists like a nagging mother.
You and I used Active Rain. We did it for the money. We did it for the allure of our names on the top of the search engines, for the leads that were sent our way, for the networking opportunities that materialized, and for the warm happy, fuzzy feeling that we got when we engaged in an activity that felt like marketing. You used Active Rain and I used Active Rain and that is perfectly fine.
What isn’t fine, is that Active Rainers are pissed that the boys wanted to set up their Read more
The PDF files of ActiveRain’s complaint against Move, Inc., and Move’s response, both attested to be linked from ActiveRain, are no longer there. (See comment below from Jonathan Washburn; the disappearance was apparently inadvertent.)
I am fairly reliably paranoid about crap like this, so I took copies of the two files while they were still available.
Here is ActiveRain’s petition of complaint.
And here is Move, Inc.’s response to that petition.
As someone pointed out the other day, these documents are public records in the State of California, available for inspection by anyone in the jurisdiction where they were filed.
On the other hand, these particular scanned PDF representations of those documents are presumably the work product of ActiveRain.
Whether the added labor of scanning the documents and rendering them as PDF files grants ActiveRain (or anyone) copyright protection is a colorable argument.
However: I will happily remove them upon receipt of a Cease and Desist Order from either party’s attorneys, replacing the documents with a scanned copy of that Cease and Desist Order.
Welcome to the wide-open world of weblogging…
< ?PHP include("ActiveRainMoveSaga.php"); ?>
Technorati Tags: blogging, real estate, real estate marketing
I’ve read ActiveRain’s lawsuit against Move, Inc., twice now. I had thought that I might parse the document, to show its fundamental weaknesses, but this isn’t necessary. It’s so weak that we can knock the whole thing down in a few paragraphs.
The gist of the document is an extended sob story of how ActiveRain wuz done wrong. This might seem meaningful in a newspaper story or a dinner party anecdote, but it don’t mean squat to a judge. In a courtroom, every story is a sob story. Everyone, it turns out, is ‘left in a maimed and disadvantaged position’ — doomed to a grubby, grungy, loveless life in a wheelchair, begging for quarters down at the bus station.
Here’s a summary of the thing. People so much want to judge issues of fact by their emotions, but this is a fair — if comical — run down of the actual facts, take them for what you will.
Notable omissions
AR petitioned for a jury trial, but their best possible outcome would be either a bench ruling or a directed verdict. Legal pleadings are written for judges, not casual readers, newspaper reporters or dinner party conversants. In fact, many lawsuit petitions take this form, just enough to get to court with the case to come later. But if AR really had a slam dunk case against Move, I would expect to see some evidence of it. The attorneys do, however, try to hold Move accountable for violations of a Washington State statute in paragraphs 67 through 74. I think the actual purpose of this is well-poisoning, to make a number of smarmy assertions about the behavior of past Move, Inc., executives.*
The complaint itself
This is the essence of the complaint:
- Upon verbal overtures from Move, ActiveRain agreed to sell all its assets to Move
- Move and ActiveRain executed a Non-Disclosure Agreement, in consideration for which AR revealed confidential business information so that Move could do its due diligence on the acquisition
- Subsequently, Move provided AR with a Letter of Intent to purchase the company, specifying the price and detailing other terms and conditions
- The NDA and the Letter of Intent Read more
by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
Caleb Mardini was one of the founders of Active Rain. He played a significant role in the expansion of the network, offering weblogging tips and serving as one of the “community cops”. I’ve always been a Caleb fan because he was a sales guy; he sold real estate and originated loans before his tenure with Active Rain. He was the pivotal link between the tekkie-type owners and sales-type users.
Here’s Caleb swelling with pride about the sales profession:
Sales people should be celebrated. There are bad sales people I know. But they don’t represent what I did when selling. They shouldn’t be able to ruin the profession for me, or any other honest hard working professional out there. There are a whole lot of sales people who are making a difference in this world. They are doing a lot to assist people making important and life impacting decisions. In my recent past I took great pride in telling people I was a sales person. Sales is terrific and it makes the world go around. I have to say that as a sales person I took great pride telling people that I was in sales
How does a founding partner quit, in the midst of an obvious windfall, a mere week after he represented the Network in Louisiana?
Is Jon pulling a Michael Corleone ? Did Caleb throw in the towel because he recognized a no win situation?
If the former supposition is true, that a pretty crappy thing to do. If it’s the latter, then this trial is over before it got started.
Greg Swann raised the stakes by pointing out that Active Rain has thrown this lawsuit into the court of public opinion. Elevating its membership to advocates is risky. Public support and misplaced outrage has divided the community. Members are questioning whether the commitment they’ve made to the network was really worth it.
I’ve pointed out that Dustin’s existence at Move.com compromises its claim of innocence; Caleb’s sudden departure from Active Rain equally undermines the court of public opinion’s confidence in the veracity of the Network’s claim.
One thing Read more
…do not come between the NAR and Hillary Clinton’s scheme to give every newborn child a $5,000 savings account:
Democratic presidential candidate Hillary Rodham Clinton said Friday that every child born in the United States should get a $5,000 “baby bond” from the government to help pay for future costs of college or buying a home.
Clinton, her party’s front-runner in the 2008 race, made the suggestion during a forum hosted by the Congressional Black Caucus.
“I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that downpayment on their first home,” she said.
The magic words are “downpayment on their first home.” There is no liberty the NAR won’t trample to juice the housing market. The obvious fact that the people taxed to provide these “baby bonds” will buy fewer and smaller homes — and will have substantially smaller portfolios to invest in commercial real estate — will not dawn on the dolts.
Technorati Tags: investment, real estate, real estate marketing
This is my column this week from the Arizona Republic (permanent link):
Looking for a bargain-priced home? If you don’t Flinch!, the seller will
Let’s talk a little bit about buying strategies. Last week’s rate adjustments by the Federal Reserve Bank may have scared up a few buyers. I’m taking a lot of calls from Canada, and investors seem to be trying to time the bottom of the market.
Here’s a simple idea: If you were to buy a newer three bedroom, two bath stucco-and-tile suburban tract home for $160,000, putting 20% down, it would be cash-flow positive at $850 a month rent. That includes everything, mortgage, HOA, taxes, maintenance, vacancy — everything. The positive cash-flow would net out to about $5 a month after taxes, but the point is that the Phoenix real estate market is back to the point where a rental home is self-amortizing. If home values go up in the future, so much the better, but the home will pay for itself either way.
Here’s a better idea, one that has been making me crazy for more than a year. The name of this game is Flinch!
Normally, when buyers are looking for a home, they’re looking for that one unrepeatable masterpiece, the only home they could even consider buying.
What if, instead of looking for one ideal home, they resolved to look for three — or five — that might fill the bill? Now they’ve got bargaining power.
The game works like this: Make multiple low-ball offers on all the houses that might work for you, with all of those offers being subject to your final approval. Make it plain to all of your sellers that the first one to salute goes under contract, and the others go home empty handed.
This is exactly what sellers were doing to buyers two years ago, with multiple counter offers. By now there are at least eleven homes for sale for every qualified buyer. It’s time buyers exercised their incredible negotiating power.
What happens if it doesn’t work? Try again in a different neighborhood. Or try same neighborhood six weeks from now. Here’s the trick to winning at Read more