Daydreaming deep

As young man, in my early 20's, my bedroom (in the attic of an old Victorian) had an alcove with a window that looked out over the entrance to a wooded area. The alcove was deep enough to house one chair. I would read here. Do homework. Or work out the music for the great lyrics my then band mate would pen. Those songs eventually won my group a record contract. Often, I would put my books down, lean my guitar against the wall and just stare out that window. And I would let my imagination go wherever it took me. The thing is, most of what I envisioned, one day became a reality. Befitting for the last days of 08, this piece hopefully serves to stir your imagination as you prepare for what will be a year that might very well depend on it. -Marc

Life has a way of bringing you just what you need when you need it.

The $20 dollar bill you find in a pants pocket you hadn't worn in ages when your wallet's empty.
The prayer that's just been answered.
The great new idea you just hatched.

You can bet that right now, somewhere inside a makeshift office, a few undernourished and overtired   innovators are using up various colors of erasable ink scribbling on a whiteboard. Their great new idea still in stealth mode, code name and all under lock and key.

Maybe it's a web application. Maybe it's a new commission model. Maybe it's a zany new design idea for a real estate office that includes a waterfall, tropical fauna, a few exotic birds and video of homes and neighborhoods broadcast onto a 60-inch plasma screen 24/7. All the furniture is oversized and comfortable, sitting on plush shag rugs and accented with art deco lamps, an oxygen bar and self-serve gelato.   

You can bet that right now, one your most ardent competitors are conjuring ways to steal your market share. To out advertise you. To recruit your best agents. To undercut your commission. To ramp up their site traffic

You can trust right now, all over America, the majority of real estate practices are blissfully unaware that anything I have just described is taking place. I say, let them. I'm sure dinosaurs where just as blissfully unaware of the great meteor and, if by chance, one caught wind of it, they probably wouldn't have known what it was or what to do about it.

And truthfully, life is much better without big dinosaurs running around.

What a day for a daydream

When I left college after my junior year to sign a recording contract with Polydor, I spent the ensuing months during recording, staring out the window of my apartment daydreaming. Hours would go by and then, after a time, lyrics began to make their way to the page. Then the music. It was astounding to me how minutes earlier that creation didn't exist. Its manifestation the result of a wandering mind. A few weeks later, the songs were performed on stage. In front of thousands. Two made their way to national radio.

I still daydream. Over the last few years, I have come up with a bunch of ideas for real estate. Some I've built, others never left a Power Point slide.

Some were over-the-top insane. But that's okay. Somewhere in between insanity and nothing is a place where the next, new, great ideas simmer. The Ideas that make their way to whiteboards. Then to the launch pad. The kind that go live and make you crazy wondering why you didn't think of them yourself. The kind that make you think you've been lazy. Or just arrogant enough to think that what isn't broke need not be fixed.

If it isn't broke... break it. 

Try it. Look around your office. Look at your revenue model. Your recruiting plan. Your advertising. Your presentations. Your website. Your hairstyle. The Feng Shui of your office. Your blog  design. Or the lack of having a blog. Or the time you spend blogging when you could be daydreaming. Your hesitation to go to the next conference. Your paper based operation and the time you spend standing in front of a copy machine.

If you think you have it all nailed down, rethink it. Break that mindset. Become an idea zealot. Get a whiteboard. Put it up on your wall. Let it be empty. The Mona Lisa was once a blank canvas. Find a window and stare out into the yonder. Find that one thing, one idea, one change to your current process that you can call your own. Put it on the white board. And then stare it a while.

Make this your contribution to you. The future you. The one that wants more money. More clients. More agents. More customers. More business. More time off. More recognition for being brilliant rather than just one of the crowd.      

Life has a way of bringing you just what you need when you need it.

It could be Andrew Jackson.
It could be the answered prayer.
And if you allow it, it could be your next great idea.

- Davison
Twitter: 1000wattmarc

What a brokerage must become tomorrow

The media center for local real estate
The repository of real estate facts and truths
The provider of valued benefits to the community
The trusted source
The one-stop provider for everything real estate
Virtual                                                                                                                                                            Profitable     

What was

In the 1999 release, Homesurfing.net, The insiders guide to buying and selling your home, writer Blanche Evans documented the eight main services brokerages offer for sellers and buyers. They were:

Sellers

1. Fix-up advice prior to showing
2. Calculating the listing price
3. Listing the property in the MLS and on the Internet
4. Assistance with marketing, including signs, brochures, tours, open house parties, and other advertising
5. Providing potential buyers with information on various financing alternatives
6. Negotiating the offer
7. Arranging the closing
8. Troubleshooting the gap between offer and closing

Buyers

1. Pre-qualifying the buyer
2. Matching the buyer's needs and wants against his/her ability to pay
3. Help with search
4. Showing the property
5. Help with the offer
6. Assistance with inspections
7. Help with financing
8. Help with the closing

This was ten years ago.

What is

A quick scan of the Web reveals how obsolete many of these services have become due in part to information and/or services now provided by either people and/or technologies that have made these services and specialties ubiquitous.

From the flurry of decision support content that now reside everywhere to establishing affordability now offered by new entrants like http://www.icanbuy.com, what you did as a broker ten years ago, is no longer special, highly regarded or arguably, valued.

Given what’s transpired in the past few years, the decimation of trust in the marketplace alongside the emergence of new participants that are slicing and dicing real estate, brokers are looking at a grim future questioning both their services and value. And for good reason.

What you can do

Think this through with me.  

Consumers search, find and educate themselves via the web. They can even create marketing material on their home, craft a listing and syndicate it directly to CraigsList. Buyers can search, save, estimate, calculate and through services like N-Play, begin the negotiation on their own.

Granted there are reports that are needed and the coordination of activities that involve the offer that, in time, will be managed by some third party vendor.

Am I predicting doom for a brokerage? On the contrary, I am documenting a clear path towards what kind of website and online service a virtual brokerage must offer going forward. As I see it, if what I just documented is the precise behavior of millions of Americans, why not give them one place to do all of it.

Take Zenbe, a Web 2.0 platform provider that took a similar path. It understood that creating a single destination that organizes all of our email accounts alongside all of our social network accounts would allow us, much like AOL did 2 decades ago and Yahoo did a decade ago, a new 1-stop destination to manage the many things that are important to us all within one framework. 

Knowledge management

Knowledge Management is a practice used to identify, create, represent, distribute and enable adoption of insights and experiences. Practitioners of KM treat inherent knowledge as a component of their business activities as an explicit concern leveraging the organizations explicit and tacit intellectual assets to create positive business results.

Apply this to your brokerage. Whether you have 8 agents or 800 agents, you are a warehouse of intellectual assets that are right now currently fragmented in that many areas. The result is a fragmented brand and confusing value proposition that sits like a rotting outer layer covering what could be a very sweet core.

My guess is most brokers don't even know what they have, where it might be located and, if you could even find it, might not know how to expose it, market it, drive users to it and earn revenue from it.

My guess is you might be too deeply wed to that service legacy that doesn't work anymore and can't see your way out.

Nagual

You could take a trip to the Sonoran desert, eat some peyote and tap the realm of the unknown. Sometimes, I think that's not a totally bad idea. Carlos Castaneda would regard that as the teaching of Mesoamerican shamanism. Joseph Schumpeter would regard that as simple creative destruction.

I call it survival. The most obvious next step for a brokerage. 

And that's my point folks. Pick your poison but right now, you need to find a way to dynamite the deeper recesses of your brokerage mine and find that vein that leads to the diamonds. I know it's lying there under the sediment, under the politics, under what your agents think they want, need and force you to be doing.

Brush it off.
Hold it to the light.
We are talking your future here. 

- 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

Life during wartime

Part one of a two-part series.

A hubbub of technological euphoria swirls in real estate. It's been here since the early days of agent domain squatters and will likely last well past Real Estate Connect 2008, where talking heads, brokers, innovators, technologists and bloggers sipped from the Pixie Sticks of cool and trendy.

Web 2.0. It's now a bona fide addiction. Connect proved that. The merry band of bloggers and Twitterers mingled, typed and grooved to the orange and green.

For some,  it has become a lifestyle. But this stuff can also be a van loaded with  weapons, packed and ready to go.

Or it can  be a gravesite out by the highway -- a place nobody knows.

And gunfire off in the distance

By the close of Connect, dozens sat in airports Twittering about sitting in the airport. Others madly signed up "friends" on social networks. Bloggers blogged to other bloggers about all the blogging taking place at the conference.

I spent the  weekend sifting though e-mails, accepting and denying invites from people I do  not know.

I wondered  how any of this helps build business.

Of course I get Web 2.0. But with a calm reserve. Enthusiasts might note that my year-old consulting firm has benefitted greatly from our blog, but that would then detract from the years of experience my business partner and I have inside this industry.

And herein lies a balance I feel is often overlooked by the preachers, teachers and believers. The promiscuous social necking and compost heap of useless tweets that steam atop the real estate "conversation" often, for me anyway, have no correlation to terrestrial real estate excellence.

Real estate is in the market equivalent of wartime.

The battle is fought between what's trendy and what's real. Between anecdotal and fact. Between hype and truth. Between profit and loss. With so many Web 2.0 tools and applications now being deployed onto real estate it feels as if practitioners are armed with only a fuse. Bullets of random advice are pinging off your helmets daily. Your efforts ricocheting out of control.

The  explosive power of deeper thinking and real application of these revolutionary  tools is left unharnessed and lost.

Three passports and a couple of  visas

Video, mapping, blogs, vertical social networks -- these Web 2.0 tools are sound. But I wonder how are you applying them? How are you not applying them? Are you caught up in a facile enthusiasm, spending days and nights Twittering about what the most menial things you're doing instead of participating in truly meaningful discussion about the consequential benefit of that activity to your clients?

Are you starting to wonder whether this Web 2.0 stuff, or at least how it's being presented to real estate is
noting short of a way to distract you in the wake of such a slow market?  Are you scratching your head wondering what the heck the bottom line is on all this stuff? Or if there is some sound application to all this that has not yet revealed itself?

If you are you are not alone.

And she was

Real estate had it right all along. Buying a home is different than buying a used car. Or airline tickets. Or shoes. Online, or for that matter, off. While there are things we can and must borrow from those experiences it is its own experience that needs to be polished not molded to become MySpace.

As for the tools and applications and the spirit of Web 2.0,  it is, at this juncture a complement, not a replacement, for the old-fashioned tenets of real estate services that are born out of providing a deep sense of intellectual guidance, service and benefit to the consumer.

As for transparency, well... I think that when it comes to stripping that final coat of cheesy camouflage off of real estate and revealing it's many secrets and truths, that's more about survival than it is about Web 2.0. 

"This ain't no party, this ain't no disco, This ain't no fooling around, No time for dancing, or lovey dovey," or you  ain't got time for that now!"

- Davison

This is part one of a two-part series. Next: A deep, balanced dive into the new tools, what they mean and how to get the most out of them.

Sirius XM

The long-awaited merger of satellite radio's two players has finally been approved by the FCC. As an early subscriber to XM who converted to Sirius, I am pleased that, soon, I will be able to reap the benefits of their combined programing. 

Here in real estate, the merger should serve as a breadcrumb left on the path of logic and forward thinking.

Why the merger makes sense

Other than slight differences in individual programs (comedy, music, talk, etc.,) both XM and Sirius are seemingly duplicate models performing duplicate functions vying for the same consumer.

Each company employs staff performing similar functions. Since both entities are not yet profitable, merging will dramatically reduce these redundancies, which would, if allowed to fester, bring about their ruin.

The merger creates one incredibly strong entity from two struggling companies with less than 5% market share fighting each other to the death.

What this means for real estate

This is almost too obvious. M&A activity has dropped off the table in real estate, but does that make sense? Is not a down market the best time to combined staff, mingle offerings, and shore up financials?

I think there's a valid argument here. I've spoken at association meetings and wondered out loud why one association with no technology but a core education competency isn't partnering with a neighboring association with great technology but vulnerabilities in administration or education.

Sirius XM

This is the name of the new entity. To me, it's genius.  Both names own market share. Both names are well known to satellite users. XM is a channel on Ford radios and Sirius is branded on Mercedes. Why create a new name and make customers feel expired?

I think real estate could take a chapter out of this book. What do you think?

- Davison

You're going to Real Estate Connect, aren't you?

Do not miss Inman's Real Estate Connect event next week. The crowd is big and the program rocks. Whether you're an agent, broker, vendor, media company exec. or pretty much anyone interested in the future of the industry, you need to make the trip out to San Francisco.

Yes, this is a blatant plug for the conference. And it's heartfelt. In a past life I was president of Inman News. I was there for the first show in July of '97 and helped produce every conference through 2004.

The event has become even better since I left. And my appreciation for its value has increased as an attendee. The breadth of content ensures you'll leave with new insights. You'll make more contacts in three days than you would in three months at the office.

That's not hype. It's a reality I've experienced firsthand.

Marc and I will be there and hope to see you. I am moderating two great sessions -- a deep dive into real estate search with some of the category's leaders, and a discussion on social media's promise in real estate. Marc is leading two sessions focused on helping brokers get their arms around marketing and the Web 2.0 phenomenon.

And if you're looking for the best places to eat old-school Italian in North Beach (i.e., burgundy by the carafe, 7-course family style goodness, heavenly chicken parm) just ping us. We've got that category covered.

A House Divided

Curtain call and lights  grow dim
Tragedy, love all lie  within
Each player takes his  chance to play
And lives to fight  another day
    --The Damned, 1977

Our industry had its heyday. Business boomed. Organization memberships ascended. Buyers flocked. Sellers scored. The economy rocked. Good times rolled.

But that's  over. And the haze of 10 years of real estate's sex, drugs and rock and roll  has lifted.

The hotel room is trashed.
Many of you are burnt out.
Some will never be the same.

And what's left is …

A house divided

Let's not beat around the bush. There are deep issues festering in real estate. I've addressed some of them: The disconnect between the industry and the consumer. The barricades thrown up against discounters and alternative models. The 100-year war for control.

But brewing deep in the pit, at the bottom of it all, is a "War of the Roses" between real estate agents and brokers. A house divided. Michael Douglas on one side. Kathleen Turner on the other.

I've been inside the house. I've worked closely with brokers. I have at times worked even closer with the agents. The indignation is pervasive.

The Cause

l think you should hear  the story, though. lt might matter to you.
    -- Gavin D'Amato, "War  of the Roses"

Here's  how it all looks to me, a guest in the living room:

Brokers:

• The day you agreed to cave on splits you might have made your agents happy financially, but you lost their respect. Your concessions spoke volumes about your inability to provide equal value. From that day on they began to question your existence.
• As technology emerged, you failed to pounce. You outsourced it to vendors. They stepped in. Rubbed your agents' feet and gave them their happy endings.
• Those hunting licenses you awarded through your affiliate programs were often not awarded to the best or the brightest. But your agents didn't know that. And after all that money they spent on things that didn't work, well … they feel you sold them out.
• You've recruited anyone with a pulse. Hence you became big rather than great. You damaged your brand. And shortchanged your best agents. You forced them to build their own brand. Or leave yours to start their own.
• You lost location where it now matters most: online.  Others -- the ones you now buy leads from -- are the local destination of  choice.

There are  more issues. Feel free to continue the list.

Agents:

• Your independence is a termite. It eats away at your broker's legacy. And destroys whatever meaning they attempt to place on their brand -- your brand.
  
  
• You're addicted to things that no longer make sense. Office space. Paper. Newspaper spreads with vanity ads. These cost your broker a fortune -- money they no longer have.
• You lag educationally. This is not about intellect. This is about knowing your industry and buying into the notion that real estate today is as much about technology, branding, marketing and service as it is about sales. And using it.

Brokers,  you have voiced more concerns. Feel free to add them to the list.

The Cure

Brokerages are not going away. They will consolidate. Agents are not going away either. Especially the really good ones. So in everyone's best interest here are some ideas for a truer collaboration:

Brokers:

√ Redo your corporate Web site. From scratch. Ditch the stock photos and confusing user interface. Get mapping. Get data. Rethink search. Focus on find. Make your site the  destination for your marketplace. Build something that adds value to your agents. Something that's an advantage to them,  not an embarrassment.

√ Get out of the cockpit and into your company's cabin. Start partnering with your agents. Form advisory councils amongst those with category savvy and allow them to participate in critical decisions that affect them such as vendor selection, listing partners, etc.

√ Rethink how you charge your agents. They feel ultra-squeezed having to support archaic processes such as cubicle workspace and 10,000-square-foot facilities that sit empty on Main Street.

√ Do something bold. Buy out a competitor. Strike while the iron is cold. Build an internal social network that connect agents with each other where they can communicate about listings, share information and tap into the collective.

Agents:

√ Co-brand with your broker. Especially if you're part of a still-strong brand. It simply makes no sense to be part of a company and not combine your brand with theirs unless the firm you're with is trash. Which then begs the question: Why are you with them?

√ Stop demanding useless things from your broker -- like that office space we talk about above. And buy your own pencils. Free your broker's profit and loss for new line items that matter. Wean yourself off things that no longer work -- that your broker pays for to appease you.

√ Attendance. Your broker needs you to show up at office meetings. Conventions. Award ceremonies. Even vendor presentations. From their top producers down to the newbie agents. This is your opportunity to show some solidarity. Lend your voice. Share your thoughts and help craft a culture -- the rebar of a brand.

A house aligned

Many of these things above are intertwined, and change will not occur unless these issues are exposed and placed on the discussion table.

Ask  yourself how young firms like @properties with a born-on date of 2000 rose to become the number four brokerage in Chicago with five-year, quadruple-digit revenue growth. The company is but one of several incredible examples of what happens when an operation runs with a house aligned.

It can be  done. It must be done.

- Davison

Redfin sets sail: Are you following?

Redfin broke a big taboo this week by "co-mingling" FSBO's and foreclosures with MLS listings.

Under every circumstance it's the right thing to do. It delivers exactly what the customer wants: All the listings, in one place.

But there's something more here. Look beyond the mashup. How do you think the Redfin brand is being strengthened by offering every housing opportunity, politics be damned?

I'll suggest the following:

• It makes the company and its agents appear distinctly more expert.
• It makes the company seem more consumer focused and more trustworthy than other brands.
• It makes the company appear more sensitive to the needs of the community by providing representation to people with alternative needs.

I don't believe the first question most consumers ask when they hit a site is if it has all the listings. I believe they don't know to ask. Trulia's fabulous traffic proves that. If anything, the consumer has been slipped that false notion mickey about coverage for a long time.

But that's certainly about to end. And it's about time.

So what's next? Well, it wouldn't hurt to follow suit. The data feeds are out there. Along with a herd of new company sunrising across real estate's horizon with new ideas, tools, apps and possibilities. And it certainly wouldn't hurt to leap frog either. One up them as they say.

Or not. You certainly have options. You can use this opportunity to vilify Redfin. Or allow your local MLS to ban you from co-mingling.

I think that continuing to moor your boat to old taboos is a bad idea -- especially when your competitors have set sail into the future. 

- Davison

Where’s mom when you need her?

Once upon a time, you “walked in” for real estate services. A pleasant face greeted you. You had questions; helpful people had answers.

It was a simple.
Friendly.
It worked.

You called, someone answered. You were handled. Not routed through some invisible air traffic system waiting for a faceless controller to pick you up a day later with a response.    

The Realtor was once a servant. Performing the heavy lifting and attending to the smallest details. Making sense of things.

The client was afforded the luxury of being serviced. They were unencumbered by the minutia of the process.

When I was young we spent time huddled around the kitchen table. Eating. Talking. Dreaming.

Back then, the only box we all stared into was the Ebinger’s cake box. Pale green with brown crosshatching. We craved its contents - sweet and addictive.   

In these happy golden days of yore, the customer was king -- even though they weren’t “empowered”.

If you think consumers are truly empowered today, you are clinging to fantasy

You enter the local yogurt shop. Pick your Styrofoam cup. Pour your own yogurt. Choose and apply your own toppings. The only visible and meaningful exchange between you and the service person is experienced at the cash register.

Fast food. Self service. 

Today you enter real estate the same way. Pick your Styrofoam website. Pour your own flavor of search. Apply your own data, sign-up, log-in, drag, drop, join, calculate and map out your real estate treat. The only visible and meaningful exchange between you and the service person is experienced at the real estate cash register.

Fast food real estate. Self service.

All this technology. Amazing feats of invention. But if you think leaving it in the hands of the consumer is empowering, you are clinging to fantasy. 

The power I see

Technology can be empowering. But what happens when those who license and present it to the consumer are incapable of adding to it the nuance of expertise, the touch of service?

What happens when they have no aptitude for integrating it into a cohesive experience?

What happens when the professional skims the surface of technology, takes the cheap route and makes technology an Achilles Heel when it should be a strength?

I’ll tell you what happens. You lose control of your business. You end up with a wary consumer that doesn’t know what to do or who to trust. You end up having your entire value proposition eviscerated by outsiders, your carcass picked apart by squawking crows on the trash strewn shoulder of your industry.

How empowering is that?

Technology is amazing. If used right. But if not, if misguided, you end up selling your brand down a dry river bed littered with crappy websites, crappy search and a workforce of spoiled agents that don’t want to work -- or even know what work to do.

Empowerment is not conning oneself itself into believing the consumer wants to do everything themselves. Empowerment sunk when real estate began believing the consumer would have no issue paying top dollar for the privilege of serving themselves.

Where’s mom when you need her?

Today, we all gather round the same dining table. We still dream, eat, talk and wonder about our next home. The box we all stare into is equally alluring as the old Ebinger’s. Its contents just as sweet and addictive. Filled with empowerment and promise.

What would be incredibly empowering is if real estate started leveraging its contents better. Serve it up like mom used to. She knew exactly when and how. And was always there when you needed her.

That’s what real estate needs now more than ever. 

- Davison

The pot of gold at the end of real estate's rainbow coalition

In my world, we are all the same.
United by our commonalities, bonded still further by ardent disagreement.
Through tension, debate and collaboration, we rise and evolve.

Chris Brogan, well known in tech/social media circles, has this to offer real estate professionals. He begins with the disclaimer:

I’m not in the real estate biz, so I’ll write this from the perspective of what I’ve observed and what might be useful.

Real estate practitioners have often discounted the opinions of outsiders. But that seems to be changing.

The year 2000. Homegain launches amid considerable controversy that lasts for years. Today, they are woven deep into the fabric of real estate, connecting thousand of practitioners with nearly six million consumers who visit the site each month. They have a flourishing business and provide real opportunities to their members, including the agent who received my business. He would tell you the cost to acquire my transaction was worth it.

The year was 2006. Zillow emerged. While many enjoy the sport of skeet shooting Zillow's product line, many more have woven Zillow's cotton lining inside their linen business coats and wear better as a result.

A rainbow collation

One could argue that in the 90's, the first wave of Internet invaders were made up of dot-com rustlers  looking to wrangle consumers away from the traditional real estate coral. By 2002 - high noon - most if not all them were gunned down or run out of town.

Today the landscape sparkles, augmented by a beautiful rainbow forming over yonder. It's comprised of a pantone chart of vendors, bloggers, thinkers and innovators with new perspectives, deep intelligence and wonderfully fresh offerings. You know some of them -- Joel, Dustin , Seth -- who join with many others like Jessie, Chuck and other new entrants with cool, new, engaging ideas. 

Real estate today. It's a rainbow coalition of outsiders, insiders, consumers, MBAs, college students, Americans and friends abroad all participating in the construction of a new real estate experience. Not only for themselves, but for everyone.   

Join in.
Add your color to the spectrum.
When the bad market storm passes, be part of the rainbow. 

My sense is, there's a pot of gold waiting at the end of it.

- Davison