American real estate flea market

Joel over at FOREM sent this to us. Happy Friday!

No, it's not okay

The late morning silence that typically pervades my home was broken by expletives emanating from my bedroom. From my study, I yelled, in a similarly frantic tone, if all was OK. My wife responded, "No, all is definitely not OK!"

What did I do?

Lori is a quiet, introspective lady. Those who know her can attest to her gentle demeanor. And she is quite my opposite in her reserve when it comes to four letter words. So I charged upstairs concerned about what was not OK. 

She was at her desk, facing her computer. As I approached, she swung around and pelted me with a verbal assault. "I'm so damn frustrated," she said. "This whole real estate thing sucks and it's not gotten any better over the years." "I know it's not your fault, but you can do something about this. You have too. People listen to you."

No, it's not okay

The bone of her frustration was clear. She was searching for homes with a sense of urgency. We are seriously considering moving. Next week she will be flying out to what could be our next destination for three days to visit schools, meet with an agent, and tour homes. She is madly surfing websites, saving searches and participating fully in the online real estate experience.

But all is not OK. Many homes lack a sufficient number of photos.  
Or contain bad photos that illustrate elements that have no bearing on the property.
Or contain no photos at all.

"Gavin is 7 (referring to our youngest son) and he's already filled the picture library in my cell phone with hundreds of photos of his Webkin," she ranted. "And they're all good photos! If he can do it why can't every agent take a lousy dozen photos of a home and post it? Why?"

I stood in silent agreement. I've been asking that question since 1998. 

"Maybe we can hire Gavin out to agents and put the income away for his college fund," she said. 

Lori pointed out homes with agent comments that sounded great. But descriptions of homes aren't enough. Not if you are serious about buying one.

According to my wife this presented her with two distinct problems:

1) She could not make an informed decision on which properties to tour with her agent

2) She would have to email said agent and ask her to go look at the homes, determine if they are right for us, take pictures and send them to us ASAP. 

In her mind...

Neither prospect is OK

Not for her and not for our agent, who is now burdened with the task of performing the job of the listing agent.  

As I stood accepting punishment for all that is wrong with real estate, Lori reminded me of a task I performed a while back for a broker who wanted to market a $3.5 million listing here on the Central Coast that wasn't moving. I drove over to the home, took a few pictures and used the Wifi inside the house to get online and upload the photos to an account I set up for her with Real Estate Shows. I spent a few minutes writing the subtitle copy and pressed submit.

In no time she had a compelling tour of the home ready to be syndicated all over the web.

A day later, I had one of the voice artists we work with at 1000watt record the audio of the script and sent the file to Jeff Turner (President of Real Estate Shows) and requested he customize the tour for me just a tad. After all, this was a $3.5 million home.

This is the result:

I know, no big deal. And that's my point. In less time than it takes an agent to explain to a seller why a listing is sitting on the market longer than it should, a simple show (minus the audio track) that effectively merchandises the listing was created.

Such an effort also creates a better experience for the prospective buyer (My wife, for example).

"Real estate is stressful enough," Lori said. "Agents should be doing what they can to reduce the stress, not add to it." 

Yup. 

Settling a great debate

Not long ago, Rob Hahn's post What Makes a Realtor Good launched a debate that tendered only a vague definition of what makes a Realtor good or bad. Well today, I can clarify that definition:

A bad Realtor is one whose marketing effort for a six figure listing pales in comparison to a seven-year old's playful regard for his $11.95 pet dinosaur.

A good agent is one who says "no problem, I'll take care of that" when asked to compensate for the bad agents job. 

- Davison
Twitter: 1000wattmarc

Buyers stretch the boundary of real estate blogging

Well, it's a blog -- technically. Newman's own is the newly launched diary of a young couple - Nora Krug and Michael Newman - who are proclaimed members of the "highly discriminated against minority - renters,"  and their pursuit of a home in the "post -Bush, pre-stimulus, late-bubble" Washington, DC area. 

Their diary is published through Slate, an online daily owned by the Washington Post (for which the couple work).

I found their first two entries to be well written, funny, insightful and a welcome divergence from the cacophony of inside real estate banter. It's not often we get to peak inside the consumer experience and view things through their lens. 

Of particular interest to me was the back story regarding the home they almost bought before they started blogging:

"Why move to the suburbs just to live in a smallish house with a long, unlovely walk to the train and be able to send Joe to an underwhelming school? But you'll move before Joseph goes to high school, Denise, our gung-ho agent, assured us. But hey, Denise—the economy could get worse! In fact it almost certainly will. We may have to stay in this house till Joe goes to college."

Nora is right. And perhaps this calls attention to the struggles consumers face trying to buy into neighborhoods and homes they can't afford and the struggles agents face trying to assuage them with advice wrapped in a false sense of comfort. How often did buyers of the recent past hear things like "money's cheap, you can afford to bid $50,000 over list" or "don't worry, in two years when the ARM adjusts, you'll be making more money." 

Nora sends a signal to her agent -- who they apparently like -- that what's paramount to them is being guided by truth and realism in their quest for a home. These days, truth and realism might very well be an agent's most prized value proposition. 

Honestly, though the story is only two entries deep, I am already emotionally vested in Nora, Michael and Denise. The one person I really can relate with is 17-month old Joseph, whose need for more space is something my own six-member family is currently dealing with.

And, Joseph: Something tells me this search for a bigger home may mean Mom and Dad might give a brother or sister pretty soon! 

Good luck Newmans. 

And Denise too. 

- Davison

Twitter: 1000wattmarc

The end of real estate "search"

The forces that will kill real estate search as we know it have been set in motion. They are embryonic but growing rapidly. They will overtake their prey within a couple years.

Personally, I look forward to this. I'm tired of filling out form fields, yanking on drop downs and fiddling with sliders. In fact, "searching" for anything suggests, a.) that you've lost something, or b.) anxiety.

There are three reasons why I think we're in for a big change:

1. Everyone has a mobile phone
2. The Web experience on these devices is improving at breathtaking speed
3. Location awareness, either through GPS or cell tower triangulation, is being built into more and more of them
   

What does this mean? It means the Web will become something we experience with increasing ease. We'll do less searching and more finding. Our very presence will replace "search criteria" for location specific items like ATMs, coffee houses -- and homes.

This is part of what many have called the "ambient Web." The hardware is ready; the Web apps will follow soon.

A couple months ago, Yahoo! introduced its FireEagle platform, which allows users to securely share their location online and gives developers a suite of APIs for feeding them information based on where they are at any given moment. Google released a "My Location" feature to its maps late last year. Microsoft added location awareness to its Live Search in the UK and Japan just last week. The latest update to my iPhone made driving directions much easier by automatically finding my starting point, even when I am lost.

The FireEagle site's home page reads, in part:

"We're here to make the whole web respond to your location and help you to discover more about the world around you."

Location, location, location indeed. Here's how it could play out in real estate:

An IDX vendor or listings aggregator writes a FireEagle app, tying a feed to users who have location aware mobile devices. As a user moves about -- say, on a Sunday drive through a new neighborhood -- listings pop up on her screen much like road signs present themselves through the windshield. To take this still deeper, if the app ties together data points like the user's credit score and loan app, it will only display properties in her price range.

See, no more searching.

I know this sounds far-fetched right now. Most brokers are still limited by sclerotic IDX solutions and old school "Website vendors". And I realize that mobile, location aware online real estate apps won't be much use for relos and those unconvinced by assurances of privacy. However, as I have argued before, the customer has "left the building" -- accessing the real estate information they need on the go. 

As sure as I sit here typing on Gregory Street in Oakland, this is coming.

I can't wait!

-- Brian Boero

Eruption

He was a grown man on the brink of tears. A broker. Relating a story to a fellow speaker after a conference session a few weeks ago. 

I happened into the conversation by virtue of proximity. I became engaged by solidarity.   

The broker, a smart and eloquent man, was relating an event unfolding in his business, a family enterprise now on shaky ground.

It was 133 days into the unsuccessful representation of a listing when he was called by the seller to intervene. This seller, on the brink of foreclosure, could faintly hear the flushing gurgle of his family's hopes heading down the drain. 

The broker spoke with the listing agent to assess the marketing campaign and pricing.

At that show and tell moment, the broker came face to face with all the words he has read in the past, the speeches he has heard, the cautions and advice he had been given but chose to ignore.

"Only two photos," I heard him say.

"After 133 days, all my agent did was take two photos of the home. Put it on the MLS. That's it. This is a home worth millions that is about to go into foreclosure." he  said. "And it's all my fault."

Pain has a profile. It pushed hard against this man's brow. He looked at both of us, his eyes continuing the conversation his voice couldn't. A lesser man might have looked down. Or said nothing. He continued.

"I could be sued," he said.
"I should be sued," he echoed.
"If I were the seller, I would sue me. We have done less than nothing to help him."

No longer was I a passerby.

"Nothing yet." Was his reply to my question: "So what have you done about that agent?"

I peeked over at my colleague. Waited a few cautionary seconds before speaking. Hoping he, being far wiser than I, would intercept the moment and say something sage.

Seconds.

"What you should have done is handed that agent back their license," I said. "Right then. On the spot. Send a message to every other sub-par agent in the company looking to do as little as possible and make the most. Then I would have called every broker in the city and made sure this individual never works in this profession again. I would fire my GM, take over the reigns and send a message out to every agent that at this moment, everything in the company changes."

The broker looked me square in the face. "I never should have hired him to begin with," he said.
"Forget that," I said. "What's done is done. Fire his ass and anyone else who has an issue with it. And either close the doors to your brokerage or use this as an opportunity to rebuild."

I expected him to tell me where to shove it. I would have deserved it. Or give me fifteen reasons why such drastic moves were impossible.

Neither occurred. The next day I saw him in the hall. As he put it, he was "erupting with new ideas."

Way to go.

- Davison

Pocket full of Kryptonite

Faster than a speeding bullet
More powerful than a locomotive.
Look up in the sky, it's a bird, it's a plane, no … it's just a simple twist on an old idea.

The Golden Age of Superman

During the Golden Age, the supermen and superwomen of real estate performed feats of marvel. Super strength protected consumers from bad deals. Leaping ability allowed them to comb through piles of paperwork in a single bound. Super speed enabled them to handle issues the second they arose. Super vision allowed them to funnel through thousands of listings to locate the perfect home. Super stamina enabled them to work into the wee hours while we, the customer, slept soundly, protected from the devilish details.

And all the while, durability prevented slings and arrows from piercing their value.

Kryptonite

Ten years ago, it found its way into real estate's pocket. It took the form of an online listing. Soon, it shape-shifted into hundreds of new online applications and features -- a protean force that made Superman weak in the knees.

Kryptonite IDX stole his listings mojo. Kryptonite Web portals with data mashups drained her superhuman feats of market knowledge of value. E-mail updates sapped super vision of its power. A phalanx of Kryptonite templates overran his brand magic.

Many tools and systems sold to real estate people over the past decade bound them to cumbersome work-flow processes. And they produced no more business, despite the earnest promises of the Kryptonite peddlers who spoke of the moon but delivered craters.

Kryptonite ultimately is a product of the limitations we place on ourselves: age-old habits, tired traditions that worked in the past, and a belief that they will therefore work forever.

It's time to inoculate Superman.

Smallville

It's what real state used to be. Many still live here despite the massive consumer migration to Metropolis driven by a sense of empowerment in the flattened, global, information-ready, instantaneous world.

In Metropolis, consumers are in charge. They want to be involved in the process. They see their homes sitting on the market for months and want to know why. They are frustrated. They are no longer interested in being blissfully unaware. They think they know how to price, how to market.

They look to their agents to be their Superman and all they see is Clark Kent fumbling about in his everyman's disguise, doing the same things he's always done, the same things every other Clark Kent does.

Superman needs new powers.
Ones that build on the old.
And creates anew.

How Superman gets his groove back

Here's one idea:

It used to be that home buyers and sellers were kept apart during the transaction. The emotional currents flowing through a deal were often thought of as deadly. Does that thinking apply today?

Suppose buyers and sellers were brought together on a blog allowing them to interact in the new social environment that offers a fine balance of intimacy and distance. Imagine merging your website with your blog. 1 product. A site that contains your IDX but void of all the boiler plate, carbon copied, real estate 101 refuse that litters the road.

Using any one of several powerful blog tools, and there are more and more coming out all the time, an agent can upload pictures galore, video and post endless content about the things they know - their listings, the neighborhood, the market, local amenities... just about anything you think about and talk about everyday.

Sure, you can do this to some extend with a Web site, but what a listing blog offers is the possiblity that your readers might leave comments, ask questions and create a dialogue that will further extract your super powers.

When you can invite the client into the experience -- the experience of your technology, communication and process, answering questions, dialoguing with buyers, checking traffic stats, reading feedback -- you will slay many of the villains that plague upon your Lois Lane consumers. The antipathy. The frustration. The sense that you are not doing your job.

This is your chance to land on her roof, pick her up in your arms and fly her through your world.

Supermen and Superwoman do the unexpected.
They leap tall buildings in a single bound.
A blog is not a tall building, but just one simple story
Take that leap.

And … long live Superman.

Sawbuck offers an "alternative" alternative brokerage model

Cut your commission, offer buyer rebates, rock the website, get that consumer religion ... and, after a few hard-bitten years, fade away.

Such has been the trajectory of nearly all discount or "alternative" brokerage shops for the past decade.

Today, however, I spoke with Guy Wolcott, Co-founder of Sawbuck Realty, a new brokerage company in the DC market unveiling an "alternative" alternative model.

Without getting into the captious snarl of the "discounter" debate, I'll offer a few quick observations gleaned from my conversation with Guy and a test drive of the site:

1. They have turned the conventional wisdom on the alternative brokerage model on its head -- shunning buyer rebates. Instead, they buy down the mortgage rate from their banking partner and negotiate rock bottom settlement pricing from a national provider. This, it's worth noting, also goes against the recent trend among traditional companies who often look at the brokerage deal as a loss leader for the higher margins an in-house mortgage or settlement operation can offer.
2. From a consumer standpoint, the immediate settlement savings coupled with the long-term savings associated with a below market mortgage rate seems more appealing than a rebate check.
3. The company makes money by handing off buyers to hand picked agents (mostly teams) who the company claims are top performing experts in the buyer's target neighborhood.
   
4. They have really nailed the home search. It's as if they took all the great user experience queues from Estately and then stripped out all the noise. As someone in the "less is more" design camp, I think this offers a fine model for any brokerage company looking to retool its search.
5. They claim that the business model pencils, of course. Though I remain skeptical, I give them points for trying a different angle. They still have to pay programmers and phone "agents", but the amount they are paying to buy down the mortgage rate is likely less than a lump sum rebate, while offering more value to the consumer long term.

It's going to be interesting to see how this one plays out.

-- Brian Boero

Buyer sues agent: Anomaly or tip of the iceberg?

From the New York Times this morning: "Feeling mislead on home price, buyer sues agent".

This story, alas, is the "most emailed" on the entire site at the moment.

What do you think -- are we going to see more of this?

-- Brian Boero

96 hours later - Innovation

The saga continues:

Captain's log star date: 1-18-2008

It's been 96 hours since my first distress signal. Still no response. There appears to be no sign of life on planet Realtor. I am a lead. Lost in cyberspace. My mission was to seek out information on a home with a stairway fresco and a bathtub. It must be a very special tub.  I boldly went where I have never been before.

These are the voyages of the Starship Consumer.

1988. Four years into my marriage. I was cycling in Rockland County (20 miles north of Manhattan). I rounded a corner and screeched to a stop. In front of me was a home for sale. I was not in the market for a home. With no pen, no paper, no cell phone, I rode up onto the circular driveway and knocked on the door. 120 McNamara Rd.

Mr. Ralph answered. He was several days into retirement. We spoke. 60 days later, I was a homeowner.

2008. I suppose I could call the agent listed on this site. But the home hadn't yet spoken to me. Not like Mr. Ralph’s did. I needed to see more pictures. Many more. Like I can on Zappos when I buy a $50 pair of shoes.

Maybe the agent sensed I'm not really a buyer. Maybe she determined through experience that lead inquires such as the one I made are a waste of time. What else could it be? Email has been around for a long time now.

2007: Friends of mine made an offer on a home. It was declined by the agent. Too low. This couple recently moved back from Spain and couldn't up their offer. Months later, while combing cragislist, they spotted that same home listed for rent. The owner, it turns out, was forced to rent because he received no offers. The couple were shocked. Turns out the listing agent never presented the offer to the seller.

There are too many examples of buyers and sellers getting beamed up into a real estate vortex where it’s all about the agent and not at all about the consumer. That is what all the lead generation this and lead incubation that is all about. None of it has any bearing on or sensitivity to the people who hire agents to represent their needs.

Right now a seller sits in a beautiful home, with a little yellow fire hydrant in the front yard and a special bathtub in a bathroom, blind to his agent’s failure. Blind to the opportunity passing them by.

And these days, the longer that homes sits on the market, the less valuable it's going to become. There has to be a better way.

Introducing N-play. A simple little app imbedded into any listing that allows buyers and or buyers agents to make offers online that alert both the seller and their agent. The offer ends up on a live grid viewable by the buyer and seller as well as anyone interested in buying the home.

Bad idea? Why? Are sellers not allowed to see, or even handle, inquiries? Mr. Ralph certainly had no problem doing so back in 1988 and his agent received a double commission as a result.

Would this be a cool selling point to acquire listings?
Would this be a great way to involve sellers?
Would this serve to enhance an agent's value proposition?
Would this serve to enhance the buyer’s experience?

A little innovation powered by love could lead to a brilliant sale and make a $100,000 commission check feel good to write. That’s what this is all about. That’s what real estate has got to be about.

I am no longer a lead. I am disgusted, frustrated and disappointed. Well done real estate.

This is Captain Davison of the Starship Consumer, signing off.

part 1
part 2
part 3

72 hours later... I am abandoned

The saga continues

Part 1
Part 2
Part 4

It's Thursday. 5:17

72 hours ago I became a lead. Today, I feel ignored. Unimportant. I feel that maybe I failed to clearly express my needs to the agent on whose website I was captured. Maybe I wrote something that rubbed her the wrong way. Maybe she's sick. Or lying in the hospital victim to a crime. Or illness. If that were the case, I would feel horrible for even thinking that maybe she doesn't care. Or worse, can't do her job.

I want to believe that real estate agents are good people who wake up every morning hell bent on doing right by their customer. I know they want to sell their listings. I know they want to get their buyers into new homes. I know they want to build their new client base. I know they want to build deep seeded loyalties with past clients. I know they want to make as much money as they possibly can and live wonderful lives.

Then why aren't they?
I think they have no idea how.
And I wonder... who's to blame?

I believe we are all responsible for our own actions.
I believe that our success or failure rests upon our own shoulders.
I believe that if you take your life in your own hands, you can't blame anyone for your failures.

Yet I cannot bring myself to blame this agent.

A few months back Brian and I were in a cab in NYC and saw a huge ad posted on the side of building. It was a call to action for would be agents. He blogged about it the following week and it's worth reading. It pertains to this.

Is real estate a career for just anyone?
Has it performed a disservice by importing people into it as easily as songs into iTunes?
What happens when an agent graduates and is awarded their license?
Are they ready?

Did they learn bedside manner? Marketing? Technology?
Have then been taught how to analyze cycles? How to analyze data? How to cope with bubbles or even what bubbles are?

Have they written a thesis or given projects to work on to help broaden their awareness or skill set?

Are they briefed on many online communities, forums and destinations that can help them grow, aspire and connect?

Do they know how to discern between the hundreds of vendors that will promise the earth and deliver them soil?

Are they taught how to properly price homes?
Are they taught how to negotiate through the home inspection?
Are they taught how to respond to an email inquiry?

I don't know how long it takes for an agent to master their craft but however long that is, today in 2008, given everything from huge commissions to complex market trends, is it fair that agents are allowed to woodshed these critical skills on the consumer?

I don't have all the answers. But I know this -- the system is corroded if what I've been experiencing this week happens more than once in a blue moon. And if it is... the industry must consider its responsibility. Its stake in changing it. I refuse to believe there is an epidemic of agents in that don't care about the consumer. And if that is the case, all the more reason to mend it.

But I actually believe most agents care.
I believe they love their job.
I am convinced they just don't know how to represent.

The industry as a whole owes something to the agents it recruits. It owes them a more comprehensive education at the onset. Better training and internship once hired. And stricter standards along the way.

The industry owes something to sellers like the owner of the home I inquired about and never heard back on. The industry owes something to buyers -- the ones who get sucked up into the vortex.

And the industry owes something to the professional agents who who kill for their clients but get lumped under the big tent of stereotype.

And the industry owes it to itself to live up to its self portrait.

...to be continued

- Davison