BloodhoundBlog

There’s always something to howl about.

Category: Disintermediation (page 25 of 43)

July 17, 2007

Redfin cops another $12 million, raising investors’ stake in the discount realty.bot to $40,000 per closed transaction

by

Suburban Phoenix Real Estate Broker

Author website

The indefatigable John Cook:

Redfin has raised an additional $12 million in venture funding, money that the Seattle discount real estate broker will use to enhance its Web site and expand into new markets.

First up for Redfin are the Washington D.C and Baltimore areas, which are being unveiled today. Next on the agenda are Sacramento and Chicago, which the company hopes to open later this year. Redfin, which refunds two thirds of its commission to home buyers and offers a flat listing fee of $3,000 to sellers, already operates in Seattle, San Francisco, Boston, San Diego, Orange County and Los Angeles. Since its launch 17 months ago, more than 500 homes — valued at more than $350 million — have been bought and sold through Redfin.

To put things into perspective, Russell Shaw’s team of around ten people sold approximately 600 houses in the same span of time. With a head-count of 75 people — so far — and a capital investment of $40,000 cash-American per closed transaction, Redfin.com is somewhat less efficient.

But: Pay no attention to the man behind the curtain! Redfin will be profitable any day now. Scout’s honor!

Technorati Tags: , , ,

July 17, 2007

How not to divorce the real estate commissions: L.A. buyer figures out who pays the commissions but seems not to grasp the nature of the listing agreement

by

Suburban Phoenix Real Estate Broker

Author website

Via Freakonomics, the L.A. Land weblog at the Los Angeles Times has a shaggy-dog story about a buyer who came up with a brand new way to shoot herself in the foot: Pay all the commissions herself, regardless of the terms of the listing agreement and the HUD-1 procedures currently in place:

I thought it would be Super Smart to restructure the traditional home purchase offer. Traditionally, when you buy a house you just give the purchase money to the seller and the seller pays the 5% commission out of that. But when you think about it, you are agreeing to pay 5% more for the house, and that translates to a bigger down payment, a bigger mortgage and bigger property taxes every year. So I figured it would be brilliant to subtract the 5% off the purchase price and pay the agents’ commissions separately myself. Seems like no big deal, right? Wrong.

She actually worked it out to honest math, which is more than lenders and title companies can do. But of course the sellers couldn’t go along with this, even if they had wanted to, without being released from the listing agreement.

Per the purchase contract, the buyer would pay 5% of the full purchase price outside of escrow (a RESPA violation?), and the seller would pay an additional 5% at the closing table, per the terms of the listing contract. The agents might well have hated this idea — it is stoopid, after all — but not for financial reasons. Double-dips all around! Who could object?

Even so, just because the buyer made a thoughtless mistake — no doubt against the better advice of her agent — this doesn’t mean she’s wrong. Except in a short sale, the buyer pays for everything that gets paid for at the closing table. It would be a boon to consumers to make our processes reflect this fact.

Technorati Tags: , , ,

July 17, 2007

For pure home search, Terabitz puts all the cards on the table and all the icons on the map

by

Suburban Phoenix Real Estate Broker

Author website

When first I read about Terabitz this morning, I was prepared to make fun of it. It looks and “plays” like an on-line video game. Instead of a simple check-box-based user-interface on top of a map, you drag out icons for the types of searches you want to run, then build a mashed-up map like the one shown above from the results. My guess is that the intent is artificially to limit the number of things you search for at one time, but the overall effect is at least as fun as an on-line video game.

From VentureBeat:

Terabitz is launching a comprehensive site for home buyers wanting to organizing and map information about their prospective homes.

Think of it as a cross between a personal homepage (like iGoogle or Netvibes, for example) and a real estate information site (like Trulia or Zillow).

You can drag and drop housing information from menu bars into a central dashboard with a set of data displays. With one click, you can map this data using the site’s Google Maps mashup.

Besides for-sale listings, there’s information like average local mortgage rates, average rental fees and other real estate information.

You can also find out all sorts of good things about a place that are harder to quantify, like nearby restaurants, libraries, schools, coffee shops. Even the FBI’s crime — and specifically sex offender — database gets included.

This non real estate data is what sets Terabitz, of Palo Alto, Calif. apart from sites like Zillow and Trulia, which also offer home profile pages that are limited mainly to real estate data.

You can customize your own page of data widgets about your prospective home. You can also make an image of your data collection and share it with other users or email to friends.

More from John Cook’s Venture Blog:

Yet another startup company is entering the online real estate category. Palo Alto, Calif.-based Terabitz — backed with $10 million in funding from Tudor Capital and originally conceived by 17-year-old Kamran Munshi — is attempting to create a site that will help home buyers or apartment hunters manage the process from beginning to end. Its Read more

July 16, 2007

The divorced real estate commission file: An organic compendium of arguments, pro and con, on divorcing commissions

by

Suburban Phoenix Real Estate Broker

Author website

I had the idea of building this last night, cataloging the BloodhoundBlog posts on the subject. Lani had a better idea, so I appropriated it. Attached below is a fairly comprehensive list of posts, both for and against, on the idea of divorced commissions.

I think this is the most important idea we’ve addressed, here and on the RE.net at large, so I wanted to build something that could grow with the debate.

Grow how? Two ways.

First, you can add your own or other people’s posts or articles to the catalog by filling out the form at this link. I want for this to be as comprehensive as possible, so do please let me know what I’ve missed.

Second, you can append this list to any future (or past) posts on the subject by using this PHP code:

<?PHP
include ("https://www.bloodhoundrealty.com/BloodhoundBlog/DCFile.php");
?>

In WordPress, you’ll need to use the runPHP plug-in.

How does it work? Watch and see:

< ?PHP include ("https://www.bloodhoundrealty.com/BloodhoundBlog/DCFile.php"); ?>

Technorati Tags: , , ,

July 14, 2007

The Imperative of Divorced Commissions, Part 2: The Inherent Value of Free

by

Realtor, Associate Broker

Author website

By far the most entertaining marketing presentation I’ve ever suffered was in the mid-eighties. I was representing a small shoe manufacturer in Worcester, MA. It was early in the comfort revolution, and the company owner had come up with a way to put a donut in the insole for the heel to rest. He’d asked a local ad agency — his brother-in-law, actually — to come up with a bottom to top marketing plan: name, packaging, hook, advertising.

Cleverly focusing in on the donut, thinking waaaaaaaaay outside the box, this is what was unveiled:

Manistee presents: ZER0&174;s!!
with
ZER0&174; Styling!
ZER0&174; Affordability!
and
ZER0&174; COMFORT!!

We never made it to the packaging.

=====

Here’s Kendra Hogue, editor for the real estate section of the Sunday Oregonian, a couple months ago:

For those of you who haven’t purchased a home before, “hiring” a Realtor to help locate a house costs you nothing.

Well.

No matter how we try to twist statutes or the code of ethics, no matter how much we argue among ourselves as to who actually pays the buyer’s agent, the fact is the debit remains on the seller’s HUD-1 and the perception is that buyers’ agents come free. And the value of ‘free’?

Zero.

No? How many Buyer Presentations have you been on in the last year? Why is it buyers are much more willing to work with the first person they meet — or with Aunt Rose’s pedicurist’s live in girlfriend’s little brother — than a seller might? Why do they often drift, as if one warm body is the equivalent of another?

No matter how much we plead that buyer’s agents are as important to buyers as listing agents are to sellers — and they are — the market price tells buyers a different story, and the argument falls largely unheard. And note importantly that the price isn’t set by the market — the customer — but artificially by the industry. Price-by-fiat is almost always disastrous [Google ‘Nixon price controls’].

The consequences are both obvious and counter intuitive. The fact that buyers don’t scrutinize their hires is a boon to the inexperienced and inept. That keeps the people Kris just Read more

July 12, 2007

What might make the idea of community work on Zillow.com? The individual autonomy we have learned to expect on the internet

by

Suburban Phoenix Real Estate Broker

Author website

We live and work right on the Arizona Canal in North Central Phoenix. North Central is a nebulous geographical region. Properly speaking, it runs from Seventh Street to Seventh Avenue, Missouri Street to the Canal. Within those boundaries, you will find some of the most prosperous and powerful people in the city — two categories from which we are more than amply excluded.

People living as far east as 16th Street and as far west as 19th Avenue might claim to live in North Central, and it would be considered churlish to contradict them. But this courtesy would not be extended to anyone living north of the Arizona Canal. North of the Canal is Sunnyslope, one of the worst neighborhoods in Phoenix.

What’s the difference? About $150,000 right now. In other words, the house you could buy just north of the Canal for $250,000 would cost you at least $400,000 if you were to buy it just south of the Canal. Location, location, location.

Now suppose you have joyfully paid that price premium to own, use, enjoy and profit from a home in North Central. If you went to your neighborhood page on Zillow.com, what might you not want to see?

I added the highlighting, just to put a finer point on the slur. In fact, this is just the kind of ham-handed stupidity you would expect from a robo-bartender, which, if you think about it, is one of the bogus roles a social network can take on.

Full disclosure: I am a social networking skeptic. The youthful fetish clubs are immensely popular with people who are determined to stay forever young. The commerce-oriented sites are full of self-promoters, every bit as interesting as the Friday morning business card exchange at the Denny’s over by the freeway. It could be there is something else I’m missing, but I’m not predisposed to care.

The truth is, I’m an introvert, as are many smart, technically-oriented people. My skin doesn’t actually crawl when I’m around other people, but my social interactions are always project-focused, and I’ve never been to a party that I didn’t want to leave before I got Read more

July 11, 2007

Zillow.com to launch Realtor rating system

by

Suburban Phoenix Real Estate Broker

Author website

From John Cook’s Venture Blog:

As an investor and board member at Avvo, I asked [Zillow.com’s Rich Barton] when Zillow might roll out an online rating system for real estate agents. That idea is in the works, with Barton saying that the company also is trying to develop ways for consumers to search for agents based on specific criteria. Stay tuned…

First we’ll milk ’em for free content as the only persistent members of our “community.” Then we’ll sell ’em astoundingly low-yield advertising. Then we’ll get anonymous misanthropes to write poison-pen letters about them. That sounds like a plan…

Am I missing something, or is this evidence of an unbounded cluelessness?

Technorati Tags: , , ,

July 10, 2007

Zillow.com’s latest release me-too’s Trulia.com’s recent me-too release: Can either make the leap from ghost-town to community?

by

Suburban Phoenix Real Estate Broker

Author website

With its Z6 software release, which goes live tonight, Zillow.com adds a neighborhood level of user conversations, similar to Trulia.com’s Trulia Voices feature released in May of this year.

From Zillow’s press release:

Real estate Web site Zillow.com today added a number of new community features, opening up the site even further to user contributions. Chief among these additions are individual neighborhood pages in more than 130 U.S. cities (more than 6,500 neighborhoods in all). The pages are seeded with rich local demographic and real estate information, but are built for communities and neighbors to make their own. Anyone within a community has the ability to add photos, events, local news, engage in discussions and ask or answer questions about neighborhood real estate.

“Adding the ability for neighbors to meet, share information and learn about their local neighborhood is a natural next step for Zillow. We started with individual Web pages and Home Q&A for more than 70 million homes, and today we’re bringing the conversation out to the neighborhood level,” said Lloyd Frink, Zillow president. “In the offline world, conversations happen all the time around homes, neighborhoods and communities. With these additions, we’re adding the data, tools and a platform for these conversations to thrive online — and help people become smarter about real estate, for free, in the process.”

Neighborhoods are accessed from any of the 70 million Home Details pages within Zillow, or via the “local real estate” link at the bottom of every Zillow page.

There’s more, but we’ll come back to it.

First: Is this a surprise to anyone? The new features were accidentally pre-announced last week in an inadvertently transmitted email. I understood the portent of that email, as I’m sure did everyone else in the RE.net who got it: Responding to Trulia was Zillow’s obvious next move, and they’re fairly steady at doing major upgrades once a quarter. The only real surprise was that the hermetically-sealed start-up actually leaked something.

But could it be that Zillow and Trulia are stuck in a tennis volley of answering each other’s features? Truila Voices was the loud claim from the Read more

June 30, 2007

Moscow on the Delaware: Who, precisely, are the thugs wielding the guns in the New Jersey rebate debate?

by

Suburban Phoenix Real Estate Broker

Author website

Independence Day is upon us, and Cathy Jager reminds us what it is we seek independence from. The little question: Can a sleazy anti-rebate law be repealed? The big question: Is the NAR arming the opposition?

A happier note: Linked below is a clip from Moscow on the Hudson. There are better films about Communism, but perhaps no better film about the idea of Independence Day. You have time to pick it up over the weekend so you can spin it up Wednesday night after the kids have gone to bed (things were different in the 80s).

Technorati Tags: , , ,

June 28, 2007

ShackPrices.com a tear-down? Innovative map-search portal reconstructed as Estately.com

by

Suburban Phoenix Real Estate Broker

Author website

The most-innovative little map-search in Seattle, ShackPrices.com, today relaunches as Estately.com, a name perhaps more fitting for a town where you can still get a decent fixer for less than a million dollars.

The site is also launching its monetization model with this release: A fee-based referral system for users who ask to be introduced to an agent, paid by the agent. From company co-founder Galen Ward:

Agent Match lets consumers get personalized recommendations for the best real estate agents in their area, hear personal introductions from the recommended agents, and see feedback from previous clients. Where most brokerages assign potential clients in a haphazard fashion, Estately recommends three prescreened, high quality agents from local brokerages to consumers.[…] [W]e already have a few happy beta-testers and a “rock-star” team of agents from a bunch of local brokerages.

We’re selective and we’re keeping the referral fee low enough (12%) that we have been able to recruit great agents who do most of their business from referrals.

Under the name ShackPrices.com, the company pioneered a number of great ideas in map-search technology, including showing nearby parks, schools, restaurants, access to public transportation, etc. The AgentMatch idea is also an innovation, sort of an eHarmony for Realtors:

Estately’s Agent Match algorithm uses consumer answers from a brief questionnaire to match them with highly qualified, individually recruited agents who meet their needs. Consumers and agents are matched geographically, based on consumer’s needs and based on agent feedback from past clients. Consumers are shown all the feedback for each agent recommended to them. Home buyers and sellers can choose to remain anonymous until they are ready to work with an agent.

This is smart enough to be truly scary.

More coverage: The Real Estate Bloggers, John Cook’s Venture Blog.

Technorati Tags: , ,

June 25, 2007

And one other “thing” – Information vs. Knowledge (or Internet vs. Agent)

by

Realtor, Associate Broker

Author website

This past week our company had its annual sales rally, for lack of a better term. It consisted of the requisite motivational speaker who was charged with inspiring us to achieve greatness, greatness which apparently can only be realized after purchasing $600 worth of inspirational tapes, a State of the State address by our CEO, and a State of the Union address by our parent company’s CEO.

Anyone who knows me well knows that I generally abhor these things. My mortgage bill, my ongoing desire to eat a periodic meal, and the constant pressure to keep feeding the offspring those iTunes credits are motivation enough for me.

When I do find myself, through happenstance, momentary lack of good judgment, or as a result of being hog-tied and stuffed in a colleague’s trunk, at one of these pep rallies, I always apply the “one thing” rule. If I can leave having gleaned “one thing” that can be of value to me and my business, I feel it was worth the price (rope burns and the imprint of a spare tire on my forehead).

This time, I gleaned two things. Today, I’m Rocky Balboa at the steps of the Philadelphia Museum of Art.

Live and Breathe Your Goal – Check!

Our motivational speaker spent much time reminding us that successful people are the ones that have a goal, are unequivocally committed to that goal, and never, ever stop thinking about how to achieve that goal. Yep, that’s me.

When I am not worried about something, I tend to worry about why I don’t have something to worry about. When I am not thinking about real estate, I am dreaming about it. I had a college English teacher who once said that people who are creative during the day don’t dream. Hogwash!. Last night, for instance, after a rich and full day of Sunday fun which included showing property, sitting an open house, drafting a marketing piece, writing an offer on another house for a client, a half-dozen phone calls made and another dozen or so taken, I worked (“created”) all night. In my sleep, I sold two more homes, Read more

June 22, 2007

The Imperative of Divorced Commissions, Part 1: Fundamentals of Narcissism.

by

Realtor, Associate Broker

Author website

3bac.jpgI was running in a local park a few days ago. The road into the park is about a half mile long and barely wide enough for two cars to pass in opposite directions, thus there are “NO PARKING AT ANY TIME” signs on both sides the entire length. As I drove in two mini-vans were parked next to a field, and I waited as two other cars coming the other direction passed. Three women were in the field chatting and setting up cones, perhaps for a relay.

As I ran out ten minutes later, the vans were still there, but now there were five cars stopped in one direction while three others drove by in the other. The women were oblivious, corpulent Paris Hiltons. When I suggested they move their vans to a parking area fifty feet away, one said “Oh, get real. It’s not as if this is a major thoroughfare.” Solipsism at its summary best. Rules are fine unless they’re inconvenient.

…

696.810 Real estate licensee as buyer’s agent; obligations….
 (3) A buyer’s agent owes the buyer involved in a real estate transaction the following affirmative duties: …
 (c) To be loyal to the buyer by not taking action that is adverse or detrimental to the buyer’s interest in a transaction;
 (d) To disclose in a timely manner to the buyer any conflict of interest, existing or contemplated;

Whenever the charge of venality is brought against the real estate profession, out comes the Code of Ethics, here codified into Oregon statute. It’s our Wizard’s Curtain; while most agents I work with — and I suspect most people here — take it very seriously, too many don’t.

The reason high BACs and agent bonuses are used so often as marketing ploys is because they work. I was told recently by one agent who incorporates both in many of his older listings that not only does he immediately get more showings, once under contract the buyer’s agent is much more eager to cooperate to get Read more

June 22, 2007

Zillow.com off the hook in Arizona?: “State rethinks crackdown on online home appraisals”

by

Suburban Phoenix Real Estate Broker

Author website

This is me in the Arizona Republic (permanent link).

State rethinks crackdown on online home appraisals

The move by the Arizona Board of Appraisal and Attorney General Terry Goddard to prosecute Zillow.com, and potentially other Internet-based home valuation services, may be at an end.

Last June and November, the board ordered Zillow to cease and desist offering its free “Zestimates” in Arizona. The Attorney General’s Office followed up with a letter of its own, threatening prosecution. No other Automated Valuation Model was targeted.

Arizona Senate Bill 1291 was drafted earlier this year to fortify the board’s argument, redefining “appraisal” to mean any opinion of value, not just a paid evaluation contracted from a professional appraiser.

Rep. Michelle Reagan initiated the process of amending the legislation to permit AVMs to operate in Arizona. Her amended version passed the House and was subsequently further amended in a joint House-Senate conference committee.

The Senate voted Monday night to approve the amended version of SB 1291. Among the amendments was an exemption for free Web-based AVMs from regulation under the state’s appraiser licensing laws. The House approved the amended language Tuesday.

As the Web site LittlePinkHouses.com notes, the amendments also undid other changes that had been sought in the bill. The composition of the Board of Appraisal will not be changed to include a majority of professional appraisers and the legal definition of an appraisal will conform to a common-sense understanding of the term.

As originally drafted, the bill would have outlawed virtually any estimation of value, possibly even including the casual conversations of neighbors. This is the amended definition of an appraisal:

“A person who produces a statement that is provided to any other person concerning the estimated value of real property through an Internet Website, automated valuation or other software program or other means of comparative market analysis and who discloses that the estimate is not an appraisal.”

This language absolves not just Zillow but also real estate licensees producing Broker Price Opinions for lenders and, presumably, other methods of evaluating homes.

The amended bill awaits only the signature of Gov. Janet Napalitano to become law.
< ?PHP include("Zapraisails.php"); ?>

Technorati Tags: , Read more

« Older posts Newer posts »

Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

Media Contacts