There’s always something to howl about.

Month: September 2007 (page 1 of 6)

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

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

The Odysseus Medal competition — The long list

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:

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“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

Get your Odysseus Medal nominations in now for change is nigh

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.

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Foxtons Almost Gone – About to Become a Footnote in Real Estate History

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

Activerain.com v. Move.com: The Duplicity at Activerain.com

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

You can view or download mirrored copies of ActiveRain’s complaint and Move, Inc.’s response at BloodhoundBlog

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…
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The voices of bitter experience: ActiveRain’s petition against Move, Inc., is a heart-breaking sob story with no legal merit

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

ActiveRain.com v. Move.com: Where’s Caleb?

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

If you don’t want to get trampled . . .

…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.

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Looking for a bargain-priced home? If you don’t Flinch!, the seller will

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

An open letter to the owners of ActiveRain: Show us the contracts

Messrs. Heaton and Washburn, owners of ActiveRain,

My take on your having released your lawsuit against Move, Inc., and their response is that you know with a high degree of confidence that you cannot prevail in court. I read your original lawsuit as an attempt to extract something from Move, Inc., even though there is no chance they will proceed with the planned acquisition of ActiveRain. When that initial foray failed, my thinking is that you released your petition and their response because you hope to pressure Move, Inc., in the court of public opinion.

All that’s as may be. Those two documents don’t interest me nearly as much as whatever acquisition agreements were executed between ActiveRain and Move, Inc. Those documents will detail specifically what information you had agreed to disclose, and what Move, Inc., had pledged to do — and not do — in its turn.

Attorney’s briefs are full of bluster and bravado, but, in fact, it is these acquisition agreements that will be dispositive in any formal hearing of your allegations.

Ergo, I ask that you release those documents for public scrutiny. When we have had an opportunity to determine what was actually agreed to, in writing, we can better judge the validity of your complaints.

I know that your knee jerk response will be to insist that those documents are too vital to your court case to be disclosed. But, if that were true, the corollary proposition would be that the documents you have made public — your initial petition and Move, Inc.’s response — are not vital to your court case — are not actually of any importance at all. This I am completely prepared to believe.

In fact, it’s one or the other. Keeping one’s private business to oneself is everyone’s right, but partial transparency is necessarily deception. If your goal is to proclaim to the world that you have been badly used, you must show us the violated terms of the contracts by which you were so cruelly violated.

If you will not do this, I will regard your having released your petition and Move, Inc.’s response as nothing but Read more

ActiveRain.com v. Move.com: The Nagging Question

I can’t seem to get this out of my head. Call it the Dustin effect.

If Dustin was hired by Move.com as the Director of Interactive Marketing, and was teaching Realtors how to blog way back in early 2007, why are the Active Rain boys surprised that Move.com was developing a blog platform? What made them think that Move.com wouldn’t proceed with that product if they didn’t purchase Active Rain?

and yet…

Dustin was openly critical of Active Rain when he first joined (December, 2006) . Why would Move.com make an offer for Active Rain when its Director of Interactive Marketing had little good to say about the platform?
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Active Rain Wuz Robbed

There are so many ways to play the puns here.  Who Moved my Rain?  Move before you get Rained Upon.  It’s Rainin’ Moves.  All pretty goofy.

In the interest of full disclosure, I’m biased but so is Greg Swann.  Greg calls Active Rain stoopid technology, I call it useful,  Again, my interest in Active Rain’s success is financial; I write to and market to the Realtor channel.

Move’s shuck and jive play for Active Rain is indefensible.  If Move were a home buyer, they would be entitled to material information in the interest of full disclosure.  Real estate agents call this the inspection or contingency period.  In the corporate finance/M&A world, it is referred to as the due diligence period.  Move had every right to reverse it’s offer to purchase Active Rain if it discovered something during the due diligence period.

Here’s where Move screwed up; they started a competing business while fleecing the boys of their member roster and competitive points system plan.  That is referred to in the lawsuit as the “confidential information”.  They placed contingencies upon the purchase:  Active Rain was instructed to cease all merger and acquisition opportunities, revenue opportunities, and financing plans.  Those very actions, combined with a simultaneous push to present a competing product, suggest that Move perceived  Active Rain as a competitive threat.  It used the carrot of its deep pockets as a tool to paralyze the industry leader while developing a competing product.

Are the boys at Active Rain insane to think that the platform is worth $33 million?  I think so but I’m no investment banker (and I clearly have no experience in valuations of tech start-ups).  The figure, however, was set by the perpetrator of this scheme.  Move played the old Nigerian e-mail scam on Active Rain.  Naivete doesn’t make the victim any less injured nor does it make the scam artist any less culpable.  That means you can’t say “What are they stupid to think we’d pay them that much? ” as your defense.

A jury trial will be a nightmare for Move, especially if that jury is in California.  Twelve reasonably hard-working men and Read more

ActiveRain discovers that the Code of Web 2.0 is the Code of the West: Do unto others before them others do it unto you

The Code of the West ain’t some words on a page
You just naturally know it when you come of age
You eat when you’re hungry, you drink when you’re dry
You look every man in the eye

In the nineteenth century, rogue investors like Jay Gould and Big Jim Fisk would buy up parcels of land parallel to a successful railroad. They would lay some track and invite reporters in, regaling them with tales of the new railroad they planned to build in direct competition with the going concern. The owners of the competing railroad would panic, racing to put together a buy-out package that would get the rogues to sell out — at many multiples of their initial outlay. Did they ever intend to build anything? No one ever put them to the test.

It’s the Code of the West when the boys talk of women
The Code of the West what you know you don’t tell
The Code of the West a man soaps his own saddle
Brands his own cattle and some of his neighbor’s as well

A century later on Wall Street, greenmailers like T. Boone Pickens would put together minor stakes in bloated corporations, then announce with great fanfare their intention to incite a proxy battle, thus to sell the company off piecemeal. The bloated boards of directors of the bloated corporations would race off to find a white knight investor, who would buy out the rogue investors at a handsome profit.

If you’re buildin’ fences then I ain’t for hire
You get me for nothin’ and I’ll bring the wire
You patch up my windows, I’ll plumb up your doors
If you scratch my back I’ll scratch yours

In the world of Web 2.0, we have a similar scam, only by now the entrenched interest has the game figured out.

Let’s say you and two college buddies have built a Web 2.0 “platform” — which is to say something stoopid, goofy and — at least temporarily — viral and sticky.

Why did you do this? To build a business? To set an example? To leave a legacy in the world of hi-tech commerce?

No.

You built it to sell it to Google Read more

Updated information on the Anglin children

Jay Thompson has an update on the state of the Anglin children, along with a link to Aaron Anglin’s obituary in the Austin American-Statesman. Jay has set up a guest book so that you can express your condolences to the family.

The obituary includes this important information:

A trust fund has been set up for the children:
Guaranty Bank, Acct# 3805908914
Checks payable to James Johnson (grandfather)
ITF Eleanor & Mackenzie Anglin

We each of us are doing what we can, and I expect we’ve gone a long way toward covering Aaron’s burial expenses and the children’s hospital costs. But: That’s a band-aid. The real costs of raising children are huge and ever-accelerating.

I know there are big-money vendors reading this site. Your tax advisors can instruct you on what you need to do to expense a donation to a trust fund — or an annuity — as good will or whatever.

If we can put the arm on a few hundred people for a few hundred dollars each, that’s a good thing. But if someone can step up to put a few hundred dollars a month in the kitty for the next 18 or 20 years, that would be quite a bit better.

The fact is, these children are going to grow up without a father. I wish that were a rare circumstance, but it’s not. But here is a case we know about of children losing their patrimony, and a particularly brutal loss of patrimony at that.

We’re all doing what we can, but if you can do more than the rest of us, that would be a wonderful thing.

 
PS: Don’t be shy about emailing this post or a letter of your own to vendors with whom you have a working relationship. The secret to getting money is to ask for it.