American real estate flea market

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

Losing a race with progress

Feb 26th, 2009. The Rocky Mountain News closed its doors after 150 years of operation.

Rather than link to the story, I thought this 45-slide photo gallery of Rocky employees as they gathered to hear the news might serve as a dose of healthy reality to those within our industry who continue to resist change.

Yesterday, after speaking to a small group in Southern California, an agent rose and told the room about his dilemma in Pittsburgh, where MLS rules are preventing him from displaying IDX on his own site. I actually called the Pittsburgh MLS today to learn more.

Got voice mail.

Another agent spoke of her broker, in Chicago, who forbade her and her agent colleagues from having their own IDX display. She asked me what I thought she should do.

I suggested she leave and join the competition. 

Driving home I heard an interview with the rapper Fifty Cent. He spoke about selling his Connecticut mansion and how he had to fire his broker because he did not know how to market the property internationally -- where Fifty believes his buyer lies.

A gangsta who has a deeper understanding of property sales, marketing and merchandising than a so-called real estate professional. 

It's sickening just thinking about what will happen to those newspaper employees. These people did not resist change. They simply could not keep up, no matter how fast they ran.

In our business, too many are just standing still.

- Davison

Brokers, it's time to get out of the cockpit

Brian wrote this piece just about a year ago. The title became the basis for a live presentation we have given throughout this past year on a variety of topics including branding, marketing and communication, sales and creative thinking. 

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“Good morning, folks, my name is Brian Marsh and I’m your first officer on today’s flight out to Aruba [pauses amid chuckles].

How many people on this plane have never flown jetBlue before? Great, how about you stand up and tell us a little bit about yourselves?

Seriously, I’m grateful you’re on board with us this morning. We’ve got some tailwinds, so our flight time out to D.C. will be a quick four hours and thirty minutes. And all reports indicate a smooth ride.

Sit back and enjoy the jetBlue experience – and thanks again”

I was headed out to Washington from Oakland on a jetBlue flight last week.

The screen in front of me had already told me I “look good in leather” – the material covering my seat – and commended me for being a “good screen reader”. Now the first officer had come out of the cockpit to greet us, joke around a bit, and tell us what to expect.

The week before I had flown from Houston to Oakland on Continental. My seat smelled of body odor. The flight attendants were surly. My tray table restricted my breathing. I arrived home with a sore back and headed straight for the shower.

The guy flying the plane could have made me feel a little better about this, but he chose not too. He remained, as most pilots remain, a leaden voice coming through the squawk box, distant and unconcerned.

I hate Continental. I love JetBlue.

Brokers, it’s time for you to get out of the cockpit too. Times are tough. People are hurting. They’re angry, and unsure.

It’s been a long flight and the peanuts aren’t helping.

How often do you, your office mangers or your VPs, personally greet clients in your office? How often do you call buyers to congratulate them upon closing? Or send them a handwritten note?

Do you speak candidly and sympathetically to your customers about the challenges facing home buyers and sellers? Or do you remain ensconced in the soundproof cockpit of the executive suite and let your marketing department do the talking?

Have you lent humor to your interactions with sellers? Or are you still hoping to still the anxious minds in your market with postcards?

All this buzz about blogs? It’s not about technology: it’s about you, your voice, and a conversation you need to be having with your customers.

I know. There are reasons to stay put. You don’t want to edge in on agent relationships. You don’t want exposure to criticism. Let me tell you something: When you speak to your customers with a human voice you are forgiven for your mistakes. JetBlue botched hundreds of flights and stranded a hundred and fifty passengers on the tarmac at JFK for nine hours last winter in an operational meltdown. People gave them the flack they deserved and went on loving the company.

Get out there. Hold a town hall meeting. Spend 20k to hire a top shelf economist or personal finance expert to help your customers navigate a challenging economy. Give them the data they need, however ugly it may be.

Speak frankly. Be open. Push yourself to communicate in new ways. Take a look at this. I know -- it’s far from perfect. And the opening video is filled with cant. But he’s trying. He’s left the cockpit. He’s telling us what to expect and injecting his brand with a dose of humanity.

I know a lot of smart brokers. People who’ve been through rough times before and have a genuine passion for helping people. Trouble is, they don’t have – or don’t think they have – the moves in them to pull something like this off. I think they underestimate themselves. The tools are there. It’s what Web 2.0 is all about.

Get out of the cockpit and face the crowd. It’ll make everyone feel better.

-- Brian Boero

I am a lead

As drab as the market feels, I just closed on my investment home in Portland.
Sold.
Check just came in the mail.

Granted, the sale price established though a CMA was obliterated by a Zestimate -- the tool the buyer chose to trust rather than the conventional real estate pricing formula performed by my agent. It missed the important things like upgrades and improvements, specific location, view, and the overall stability within my particular neighborhood.

But these days, many out there don't know who or what to believe. Some view the Zestimate as a mis-marked price tag. As the Blue Book for real estate. And when the cashier rings up a different price they argue on principle. Frankly, I don't blame them a bit. I would do the very same thing.

So it goes in the wacky world of real estate. And with things so unstable, I was happy to have a buyer willing to even make an offer.

I have to hand it to my agent - he worked hard to close this sale. Dealing with a difficult buyer during a difficult time was no easy feat considering how desperate I was to make the last three years of ownership account for something more than a $20,000 loss.

I'm not bitter at all. Given the market, I'm grateful for the small things, like how the buyer qualified for a loan. And how the bank had a few bucks left in the vault in make the loan. And I'm grateful for my agent, who is a good man and did a great job.

So what now? I received a check yesterday -- the deposit on the home. I'm basically back to where I started three years ago. Almost.

So anyway, I hear that now is great time to buy. That's what I heard three years ago and that didn't work out like we planned. But I'm willing to go at it again. After all, I've got some cash for a down payment, rates are low and if I can find something that flows positive with 10 or 20% down, in a market where prices have fallen and rentals are hot, and...

Well, not so fast, Davison.

Yes. I need more than a few superficial reasons to jump back into the pool.

Perhaps someone can explain to me exactly why now is a great time to buy. And where. And provide me with facts -- and an analysis of those facts -- to back that statement. Like many consumers out there, I'm a bit shaky and not ready to simply believe an ad campaign. But you could say I am motivated.

I suppose, when it comes right down to it, I am a lead.

- Davison

Some blue sky through a black cloud

So you go to Vegas with $500. You win $3000 playing craps. Then you blow $1000 on slots on the way out.

Good times or bad?

MSN MoneyCentral published this today. And for the first time in a while it feels as if there's still some blue sky peeking through the black cloud overhead.

In 2005, my home was valued by a Realtor to be worth $1,100,000. (I paid $245,000 in '97). Granted I put a few hundred grand of improvements into the home. But still, that return was significant.

Here we are in 2008. If things had continued going up, my home could have been worth several hundred thousand more. But the real estate slot machine ate some of the winnings.

But I, and millions of other American's like me, are still way, way ahead. And I think this relieves some of that doom and gloom hovering above.

Now, I realize some folks who bought homes in 2006 and 2007 are not as celebratory as I am right now. I feel that. But at least it's not everyone. And if we can all just hang on, things will correct themselves. They always have.

So I wouldn't call this report great news. Or for that matter, good news. But it's not horrible, roof caving in, CBS canceling Jericho for the second time, devastating news. If, after all this time, we are now at 2005 pricing, many of us are still way ahead with a ways to go before we're even at break even.

And sometimes, given the situation at hand, that's not the very worst thing in the world. The best we can do is say "nuts" and carry on!

- Davison

60 Minutes on real estate, act two

Last night, millions of Americans got to watch 60-minutes' latest installment on the real estate market.

The segment centered on Stockton, California - ground zero for the foreclosure epidemic, where 4,200 homes  either sit in default or foreclosure. That number was accentuated by ForeclosureRadar.com CEO Sean O'Toole, who illustrated the foreclosure landscape though a city map littered with red and blue dots. According to O'Toole, "The red dots indicate which homes are bank owned, the dark blue dots indicate which homes are being auctioned and the light blue indicate which homes are now in default". He expects many more red and blue dots to appear on his map over the coming months [Disclosure, ForeclosureRadar is a 1000watt client].

Homes are now being auctioned like cattle as homeowners, unable or unwilling to deal with the problem, are  abandoning their homes as if they were bad marriages.

It's hard to watch this unfold and not find yourself feeling weary trying to figure out if this could have been averted. Homeowners, at least the few that were interviewed, just seemed downright ignorant and irresponsible. They appeared unaware, perhaps willfully, of what an ARM is and unaware of how buying a half-million dollar home with no money down on middle class wages could ever pencil --- unless, of  course, home prices just continued to soar at 22% a year ... forever.   

The good news for Realtors is there were no fingers pointed towards real estate agents, nor did the segment attempt to cast them as party to the debacle. But it did manage to cast an eye on one local agent who leads  a twice daily Merry Prankster-like bus tour of foreclosed properties. I admire his creativity, but he came off looking like a vulture picking at the scraps of the housing carcass. More subtle and professional methods to handle this are in order.

If this segment did anything, it highlighted the critical, desperate, dire need for honorable, trustworthy, professionals to step up and really start representing.

- Davison

When AdAge starts asking questions, will real estate start listening?

From Advertising Age:

Pay head to what Realtors don't say in their latest pitch

It's one thing for me to constantly harp on the NAR and others for their loose grasp on reality when it comes to advertising, messaging and designing campaigns based on trust and transparency. But when AdAge takes it to task, maybe it's time our industry take the blinders off and grab a second look at what they push out into the marketplace. 

I've never liked the NAR's ethics campaign. It never resonated with me, or maybe anyone for that matter. Honestly, how could it when the spokespeople for ethics are themselves under investigation by the DOJ? But beyond that, can you really sell "ethics" today? Is there a single American who believes anything is ethical because a commercial tells them so? I doubt it. Ethics has been sold down the river in a boat steered by Jeffery Skilling, Dennis Kozlowski, Bernie Ebbers and so many others.

In the words of AdAge:

The campaign, in other words, is a perfect miniature of the inherent conflict of interest Realtors wallow in, like pigs in the sty, all the time. They have no incentive to perform due diligence for buyers. They don't even have incentive to protect their clients, the sellers. Their only interest is in closing the sale. Seven percent of $500,000 is $35,000, no matter who else takes a bath.

I'm not going to go through each paragraph of the article and point out where the writer is off base or over the top in his disdain for the industry. And there's no good reason to anyone to get defensive about his statements. Instead, what we should all focus on is the level of bias the writer possess, which I maintain is shared by many. Far more than I think our industry wants to recognize.

Never is there a more important time than right this second to look at everything you do that is public facing. Check it for bullshit. Check it for hyperbole. Check it for self-aggrandizement. If you blog, talk about this article. Expose it. Write about it. Create a position that removes you from the general stereotype.

If you do not blog, think of ways you reach your constituency, your sphere and help them deal with their issues that right now, they might be dealing with alone. Without you.

NAR could hire the best ad agency on the planet. It won't matter if they can't get the message straight

I'm guessing some of you can.

- Davison

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

I need to save $0.49 on my shampoo ... wait, maybe I'll buy a home too

The Arizona Republic recently reported that Metro North Realty, a Phoenix based brokerage, opened an office inside the Peoria, Arizona Wal-Mart.

I like to think of myself as open minded. I like pushing the limits. But this one has me confused.

I wonder how any real estate company, poised on the edge of a bad market, tipping on the tightrope of trust, and trying to get top value for their sellers, could think that selling something -- a home -- priced in the hundreds of thousands of dollars inside a retail operation known for slashing vendors' pricing models is a sound, prudent, idea.

According to Daniel McCarthy, Metro North's Peoria office manager, he "expects the mega-retailer's heavy foot traffic to translate into increased sales, giving the company an edge over other real-estate companies using traditional sales methods."

He "expects." No study. No numbers. No nothing. Just a hunch.

Given today's market climate, shouldn't real estate companies be doing more than grasping at straws such as this? Consider Wal-Mart's rap in the minds of consumers. From blogs to documentaries. there is a world of negative energy around the company.

What do sellers think? Would they, you, want your half million dollar home on sale inside a low end brand box store, especially one that tends to cause disharmony in every community they open up in? Shouldn't their long-standing history of disrupting local businesses and merchants be something a local real estate company considers before deciding to affiliate with?       

So where do we go from here? How far are some in this business prepared to go to dilute their brand for the sake of The Next Deal? Will we start seeing real estate banner ads on cyberporn sites? Or how about licensing toll booth takers? They can take change and hand out business cards at the same time. Think of the traffic.

You know why ambulance chasers don't affect the reverence people have for high priced, Park Ave attorneys? It's because people understand the difference between them. Unfortunately, this is too often not the case in real estate. It's getting harder and harder for the consumer to know, off the bat, the differences between a seasoned pro and the agent in aisle 5.

And I think that is a problem. For everyone. Including the consumer.

If it were me, I'd be polishing up my new facility at Neiman Marcus. Guess I'll just have to see where this one goes.

-  Davison

Newspapers: Not dead yet

Editorial policies aside.
The cost aside.
Are newspapers really a dead medium?

If you think that print media -- and in particular newspaper advertising -- is a waste of money, think again. Considering all the honest-to-goodness garbage found in most papers, a well placed, well written, neatly conceptualized ad could do wonders for your brand, your business, your properties and your customers.

I know the Web is cheap. I know it’s easy. But let’s get down to the heart of the matter of real estate’s mass exodus from newspapers. I’m trying to weed through all the crying to mama about the media and the woe-is-me thinking to try and figure out why papers have fallen so out of fashion with real estate.

I think the conventional wisdom here is lacking, so I will offer my own: The newspaper format is waning, and the ROI on newspaper advertising is being questioned, in large part because most in the industry has never figured out how to master it.

Think that’s off base? Take a stroll through your local paper’s real estate section in the shoes of your prospective customer. Does the advertising compel you to action? Does it elevate your consciousness? Does it inspire you to curiosity? Look at what you see in other sections of the paper. Chances are there are some ads that affect you in some manner. How come you never see such things in the real estate section?

If you are willing to acknowledge this, you are on your way toward an opportunity to seize upon the down market to do something different, something smarter, something that seizes the imagination of a jaded public.

And, really, you won’t be wasting money While the numbers are down, a quick glance at newspaper circulation reveals a considerable opportunity to reach deep inside the average American household.

Advertising on internet, while cheap and relatively easy, has another side to it that makes any one advertisement seem like a tiny meteor floating around the vast expanse of space. Newspapers, on the other hand, are simple, sectional and delivered to the potential customer’s doorstep, a tangible element of information at the beginning of day filled with ephemera (there is still no widget or feed that can do that). Everyone who gets a paper at least scans it before placing it in their recycle pile.

For my money, that sort of connection with my customer still holds magnificent potential … unless, of course, I had no idea how to leverage it. This, I believe, is real estate’s bigger problem with newspapers.

As I travel the USA speaking, I make it point, in every city I visit, to pick up the local paper and bring it with me for use as a prop during my speech. Sadly, I know what’s inside the paper before I land. I can count on this material more dependably that I can my flight arrival time. And that’s because every section is a carbon copy of every other in America – twelve or so pages of mediocre, poorly written, poorly designed copycat ads. Image after image of tired, soft focused, unsettled, and inescapably consumed with themselves people saying and offering the reader little that is truly compelling.

Top Producers, Area Specialists, several Agents of the Month – they all clamor for the attention of people looking for something fresh, real, and useful. Claims of honesty, trustworthiness, sophistication and market expertise arise from agents posing with their kids or zipping along on a motorcycle with their monkey Bobo riding shotgun in the sidecar.

Leafing through these pages, I find myself thinking, “No wonder this medium doesn’t work. No one knows how to use it!”

So how do you break out? Start by doing the exact opposite of what everyone else is doing. Take your face out of your ads. You don’t matter anymore (it’s nothing personal). Your services do. Your technology does. You insight does. Your call to action does. Your properties, especially if they aren’t reduced to tiny thumbnails, matter most of all.

Draft a brand message that is unique. Write something profound. Describe services that are honestly distinctive.

Think smart.
Fresh.
Big.

- Davison