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Category: Disintermediation (page 27 of 43)

May 25, 2007

MLS ‘ad’ crackdown a waste of time, expert says

by

Suburban Phoenix Real Estate Broker

Author website

This is me in today’s Arizona Republic (permanent link):

MLS ‘ad’ crackdown a waste of time, expert says

Here’s an interesting conundrum: MLS rules forbid one broker from advertising another’s listings without permission. The question is this: What is advertising?

At first blush, you might say that advertising is paid space or time in a publication or on a broadcasting outlet and that the rule is devised to prevent Broker Paul from advertising Broker Peter’s listings as if they were his own.

Surely it would be sleazy of Broker Paul to do that, but the rule itself is not without stain. Why wouldn’t Broker Peter want free advertising for his listings?

Because he wants to maximize his chances for representing both the seller and the buyer, taking commissions from both.

With the advent of the Internet, though, things are getting more complicated. Zillow.com, the Seattle-based real estate portal, will permit anyone, including Realtors, to announce that a particular home is for sale. Is this advertising another broker’s listings?

Seattle’s Redfin.com, a discount brokerage, built weblogs devoted to reviews of listed homes. The Northwest Multiple Listing Service has ordered the company to shut these sites down, assessing a $50,000 fine, claiming that the property reviews are advertising.

Two points to consider: First, nothing prevents ordinary people from saying whatever they choose, subject to libel laws, about a property. The only people to be restrained from speaking are MLS members, who presumably have the most information to share.

Secondly, these conversations will go on.

The Internet massively reduces the cost of sharing and acquiring information. The natural course of events for net-savvy consumers is to obtain as much information as possible before buying or selling anything.

Truly, resistance to this indefatigable quest for information is futile. So, smart vendors embrace it.

When you shop for a book on Amazon.com, at the bottom of the page you will find reviews by ordinary people, some positive, some negative — and the reviews themselves are rated by other users.

If Realtors, through the MLS, elect to exclude themselves from Net-based conversations about particular properties for sale, they will hurt no one but themselves.

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May 24, 2007

Trulia.com raises an additional $10 million

by

Suburban Phoenix Real Estate Broker

Author website

So says BlogForward in a strange little post. That puts the San Francisco-based Realty.bot’s total VC investment at $18 million, so far.

Further notice: TruliaBlog, TechCrunch, John Cook’s Venture Blog. The BlogForward post is actually a splog of this Venture Beat article, a tendentious mess of unquestioned, uncited misinformation (e.g., “Zillow and Trulia don’t divulge their traffic”).

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May 21, 2007

If lenders divorce the commissions, they’ll be divorced

by

Suburban Phoenix Real Estate Broker

Author website

Jim Duncan issues a battle cry for divorced commissions:

As a profession, we need to rid ourselves of Cooperative Compensation and the practice of the listing broker paying the Buyer’s Agent.

Cooperation between Brokers need not go away. In fact, without cooperative compensation, the practice of real estate representation will be enhanced, as the perceived collusion between Realtors will be mitigated significantly. What needs to disappear is the inherent conflict of interest that comes from the Listing Broker paying the Buyer’s Agent.

Jim argues for legislative changes, but my thinking is that lenders could effect this change overnight, without new laws.

How?

By refusing to honor the terms of the Listing Agreement.

If mortage underwriters disallow any commission over 3% or 3.5% from the seller, with all of that going to the Listing Broker, while simultaneously allowing a commission of up to 3% or 3.5% from the buyer, with all of that going to the Buyer’s Broker — what will happen? The brokers will immediately rewrite their employment agreements. We are always changing language to get it past the underwriter — and the smart ones among us write the language their way from then on.

The simple fact is, except for all-cash sales, we’re going to do what the lender tells us to do. No loan, no transaction. If lenders decide to divorce the commissions, they’re going to be divorced.

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May 21, 2007

I Still Want to Know Who Pays You, Bruce

by

Mega-Producing Realtor

Author website

I received the following via email and also as a comment to a post on BloodhoundBlog. It is from Bruce Hahn. Bruce claims to represent 75,000,000 people – and I think that at least 74,999,000 of those people have never even heard of him. He and his wife (along with some other unnamed person) are the American Homeowners Grassroots Alliance.

Bruce HahnBruce has a background as a lobbyist and has written several books. These days he seems to spend most of his time letting various government divisions (with loads of emphasis on the federal government) know “what is good for consumers”. He has a big heart, he just wants to help. He is quite secretive on who pays him. But he has come right out and said it is NOT Bank of America – so my guess on that is obviously wrong. I really don’t expect him to be forthcoming now – whoever does pay him doesn’t want anyone to know who they are.

Here are some links I found telling you more about this endlessly polite and highly articulate and prolific man who seems to have dedicated his life to making sure consumers aren’t taken advantage of by Realtors (or anyone else).

http://www.inmanwiki.com/Real-Estate/Bruce_Hahn

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4047

http://www.theamericanconsumer.org/Bruce.htm

http://realtytimes.com/rtapages/20070221_grassroots.htm

http://justice.gov/atr/public/workshops/rewcom/212268.htm

http://realtytimes.com/rtapages/20041001_agencyerosion.htm

http://www.washingtontechnology.com/print/12_21/13695-1.html

http://www.usdoj.gov/atr/public/workshops/rewcom/212268a.htm

_____

Russell

Thanks for the link to our website!

If you would have read some of our recent congressional testimony on subprime lending (which is on our web site and is very critical of the banking sector), you would understand why we are not getting any funding from Bank of America or other banks. And if you had gone back in our history to see some of our past Congressional testimony against the banking sector for its legislative efforts to hamstring Freddie and Fannie, you would have no doubts at all. We are opposed to “Rotarian Socialism”, as Gregg Swann so aptly described it in his outstanding February 13 Bloodhound post. In it he wisely noted that NAR’s “on-going legislative campaign against banks competing for real estate transactions is just more of the same: “Protecting” mediocrities from fair competition.” Our aforementioned testimony opposing banking practices in the mortgage lending sector simply reflects our opposition to Read more

May 16, 2007

Not to be missed: Marlow (The Hammer) Harris on the Redfin hustle

by

Suburban Phoenix Real Estate Broker

Author website

Eminently worth waiting for:

I’d love to be a fly on the wall at those meetings with the investors and venture capitalists. Pie charts, graphs, facts, figures. Lots of talk about disintermediation and volume of scale and that sort of thing.

When Redfin fails, they won’t blame themselves, the business model, lack of planning, poor management skills or bad judgement. They will blame the NAR, the “real estate industrial complex”, and the “real estate monopoly”.

VC’s out there reading this, please, use your head. At this rate, you will never see a dime returned on your money. It will just go down the same hole where the other $8M already went, subsidizing the 150 or so buyers who got their 2% refund from Redfin. That was YOUR money!

Redfin believes real estate agents are overpaid. They want to reduce commissions. If they succeed, THERE WILL BE NOTHING TO REFUND. Their whole M.O., their raison d’etre, their entire business model disintegrates.

Priceless. Read the whole thing.

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May 15, 2007

FTC to NCRC regarding Zillow.com: What price justice?

by

Suburban Phoenix Real Estate Broker

Author website

The attempted shakedown of Zillow.com that began last October — when The National Community Reinvestment Coalition (NCRC) sent a letter to the Federal Trade Commission (FTC) complaining that the nascent Seattle-based Automated Valuation Model (AVM) was misleading minority homeowners about the value of their homes — has come to stunningly banal conclusion.

In a letter dated May 4, 2007, the FTC elects to take “no further Commission action,” citing Zillow.com’s fortified disclaimers about the accuracy of AVM results and the need for site visitors to investiagte other sources of real estate evaluation.

The NCRC has since discovered the sub-prime mortgage melt-down as a more profitable mine to be quarried, since lenders can be faulted simultaneously for the foolish loans they made to minority borrowers in the past and for forbearing to be equally foolish in the present.

You can read the FTC’s letter here.

I wrote a great deal about this issue last fall, all of which is linked below. As with the State of Arizona’s persecution of Zillow.com, I see the NCRC shake-down as old-school criminality attempting to impose itself on the internet — trying to leverage off of Zillow’s fame or perhaps viewing AVMs as the weakest member of the new-economy herd in PR terms. In any case, this moral victory with the FTC will rob innuendo-wending reporters of a minor weapon to inveigh against the web start-up in stories about the on-going Arizona controversy.

These are my posts about the attempted NCRC shake-down of Zillow.com:

More at John’s Cook’s Venture Blog at Read more

May 14, 2007

Are traditional Realtors being undercut? There’s always room at the top

by

Suburban Phoenix Real Estate Broker

Author website

This is me from last July. Real Estate Wives has a post on Redfin and WalMart today, so I thought I’d bring this back to the top of the queue.

Are traditional Realtors being undercut? There’s always room at the top

Let’s see… Our customers are leaving us in a steady march. They’ve found an alternative that is easier to use, more convenient, overall just a better fit to their lives — and to top it all off, it’s much cheaper than our product.

What should we do?

Here’s an idea. Our customers are telling us in no uncertain terms what they want: More! Newer! Better! Faster! Cheaper! So let’s do the same things we’ve been doing all along, only less!

From Reuters.com:

The New York Times Co. plans to narrow the size of its flagship newspaper and close a printing plant, resulting in the loss of 250 jobs, the company said in a story posted on its Web site late on Monday.

The changes, set to take place in April 2008, include the closure of a printing plant in Edison, New Jersey. The company will sublet the plant and consolidate its regional printing facilities at a plant in Queens, the paper said.

The newspaper will be narrower by 1 1/2 inches. The redesign will result in the loss of 250 production jobs, the company said.

The New York Times said it expected the changes to result in savings of $42 million.

The narrower format, offset by some additional pages, will reduce the space the paper has for news by 5 percent, Executive Editor Bill Keller said in the article.

The Times will join a list of several other papers from The Washington Post to the Los Angeles Times that have reduced their size as they cut newsprint and other production costs and try to stem a loss of readers and advertising to the Internet and other media.

It might be fun to chortle about someone else’s troubles — and who doesn’t love seeing the New York Times get it good and hard?

But what they are doing is what the real estate industry, in general, is doing. In both cases, the consequences Read more

May 13, 2007

60 Minutes’ Redfin.com story delivers 400 hits in 60 minutes flat . . .

by

Suburban Phoenix Real Estate Broker

Author website

Who says the old media is dead? In the hour just ended, Redfin.com’s Real Estate Consumer’s Bill of Rights: A wolf in sheepskin clothing had over 400 hits from organic search. Just think what might happen if the NAR made reasoned arguments instead of trying to club reality into shape with legislation…

(This search is why we’re getting the traffic. As with Zillow.com, we are the highest-ranking discouraging words on the topic. It’s up to you to determine where the intellectual leadership of the real estate industry resides…)

More: real estate 2.x emerges from its Howard Hughes-like seclusion to comment.

Further notice: Well. That was pretty lame. You can see the video here. Wouldn’t it be cool if a reporter could ask an intelligent question? Wouldn’t it be cool if both sides of a story were actually presented? Even so, the bottom line is: Big deal.

Still more: I commented on the TechCrunch.com post, not that anyone other than insiders cares about accuracy on these issues.

My initial comment:

[Quoting Michael Arrington]> Redfin is doing their best to completely remove real estate agents and brokers from at least half of a home sale.

This is incorrect. Redfin’s cost “savings” consists of pushing the cost of buyer representation off to the listing agent and the buyer. It “saves” money by not doing the work the buyer’s agent’s commission is intended to compensate. The net consequence, if no other changes are made in the real estate industry, is that sellers and listing agents are likely to change the way they provide for the buyer’s agent’s compensation. Redfin.com has never turned a profit, and, if its business model actually gets traction, the money it “rebates” will no longer be available to it.

This was Arrington’s response:

Greg – the fact is that the real estate market is seriously screwed up and needs to be disrupted. Agents are overpaid and often do little more than underprice a house to ensure a quick sale. The model needs to change, and Redfin is changing it. Good for them.

That rejoinder is devoid of any actual response to what I had said, but people are rarely Read more

May 11, 2007

Trulia.com versus Zillow.com revisited: Are your end-users temporary or permanent?

by

Suburban Phoenix Real Estate Broker

Author website

This is me last month, at the time of the Zillow.com’s most-recent software release:

In the world of Trulia.com — and other listings.bots focused on evanescent listings — users come and go. On the idealized Planet Zillow, users come and stay.

Home buying is at most an 18-month effort undertaken every seven to ten years, on average. Home ownership is continuous. Zillow attracts a lot of sellers, and it seems certain that it hopes to attract a countervailing cadre of buyers. But what Zillow is really doing, I think, is aiming at the 100 million-plus Americans who own their own homes. Some may come every day — to see new listings, to see new home photos, to ask or answer questions. Some may come only once in a while, when they have a particular need.

But its databases are permanent and accretive, constantly improving. I think Zillow’s goal is not to compete with Trulia or Google Base for home shoppers in the short run. I think its goal is to suck every bit of oxygen out of the residential real estate space as a vertical market. I’m not implying malice. But where others see this opportunity or that opportunity, I think Zillow.com sees the information marketplace for homeowners as a single unified whole, and I think the company’s goal is to dominate the whole thing in its entirety.

Today’s changes have the potential to make Trulia.com a stickier experience. But will it retain end-users after their homes have closed?

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May 11, 2007

Is Trulia.com the UnZillow? Realty.bot emerges from beta with a new Q&A feature and robust, system-wide automated alerts

by

Suburban Phoenix Real Estate Broker

Author website

Come with me to the newly-reconfigured Trulia.com, freshly emerged from beta status. Let’s search for an ideal house. The criteria we can use are limited — location, type of structure, price range, bedrooms, bathrooms, square footage — but we can still scare up some results. Plus which, if you really know what you want — for instance, by winnowing the location down to a particular zip code — you won’t have a huge number of listings to sort through.

My search turned up four houses. Not a big number, but all of them are reasonably well-suited to my needs. But: None of them is a perfect fit. Here’s the cool part: I can instruct Trulia to send me email updates or an RSS feed of changed data in that particular search. When a new home matching my criteria is listed at Trulia.com, I’ll learn about it right away. Or, if I like a particular house, but I don’t like the asking price, I can subscribe to get an email notification of future changes made to that one listing.

I can set up any number of tightly focused searches, each with its own email alert or RSS feed. That much is not news to Realtors. We do this every day, with much more robust search tools. But we do it for clients. The clients themselves don’t have direct access to the MLS system. Some added-cost IDX systems permit saved searches with email updates, but then the search is not terribly more robust than Trulia’s.

But wait. There’s more. The new improved Trulia.com, will alert me when the house of my dreams becomes available. This is essentially the complementary counterpart to Zillow.com’s “Make Me Move” feature. Using a database of tax records, you can select a particular residence and ask Trulia to inform you by email or RSS feed when that home comes on the market.

Neither of these features is without problems. For example, where Trulia turns up four homes that match my criteria, either Realtor-listed or For Sale By Owner, the Arizona Regional MLS system unearths 146 active listings for the same search. And, at Read more

May 11, 2007

Podcast interview with Trulia.com’s Heather Fernandez: “Real estate professionals are going to be able connect directly with consumers”

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Linked below is a podcast interview I conducted with Heather Mirjahangir Fernandez, Trulia.com’s Director of Marketing. Heather takes us through all of Trulia’s new functionality. At the end of the recording, I raise the idea that Heather might be getting a lot of email about the upgrade, so it seems appropriate to share her email address: heather@trulia.com. Let her know what you thnk of the new Trulia.com.

May 10, 2007

The NAR’s Operation Tip-Off: How to make yourself look guilty by protesting your innocence

by

Suburban Phoenix Real Estate Broker

Author website

Matthew Hardy of Real Estate Success Tools sends along a copy of the NAR’s press release on this Sunday’s 60 Minutes Redfin PR puff piece.

We are led by buffoons, avidly drawing attention to the stuff they want everyone to ignore. Two words is too many in reply to this crap: So what? Discount Realtors are nature’s perfect revenge on people who crave real estate discounts. The intelligent response is not to shout, like Redfin, “We’ll do nothing for even less!” but to offer a quality product at a fair price — and then actually deliver it.

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May 10, 2007

Hey, can I hop a train to that shack? ShackPrices.com introduces proximity to mass transit as a search criterion

by

Suburban Phoenix Real Estate Broker

Author website

Correct me if I’m wrong, but I think the most innovative of the map-based real estate search portals is ShackPrices.com. A house is a house and a neighborhood is a neighborhood, but a home is a lifestyle, and ShackPrices is doing more than anyone else to integrate lifestyle data in its databases.

The latest innovation is showing proximity to present or future mass transit services in its search results:

Beginning today, home buyers can search from thousands of homes for sale near bus stops along one or more King County Metro Bus lines or near Sound Transit Rail stops. Home buyers can combine their search for homes near mass transit lines with a variety of other factors including price, size, and keywords using ShackPrices’ intuitive map search.

“By letting home buyers search for properties near current and future transit stops, we are giving the public a valuable tool to find homes that fit an environmentally friendly lifestyle,” said ShackPrices.com co-founder Galen Ward, “Most importantly, we’re giving home buyers the opportunity to find a home that should substantially increase in value when transit lines are complete. Homes within 500 feet of rail lines are worth as much as $40,000 more than similar homes just a little farther away.”

I, personally, don’t like taxpayer-subsidized mass transportation, but “people like pie.” In the urbanosphere, proximity to mass transit is a very common question. Answering this question visually and automatically would seem to be painfully obvious — except no one else is doing it.

My frank assessment: ShackPrices.com should post a “Make Me Move” price to see if anyone in Seattle has brains enough to write an eight-figure check.

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May 1, 2007

“Here’s a better idea: How about abolishing the state Board of Appraisal?”

by

Suburban Phoenix Real Estate Broker

Author website

This is from the Tucson Daily Citizen:

Zillow.com offers online estimates of home values. There is now plenty of public data available for computers to crunch to make the estimates pretty good.

According to Zillow’s Web site, in the Phoenix metro area its estimates are within 6 percent of the actual selling price 50 percent of the time, and 72 percent of the time they are within 10 percent.

Although Zillow states on its Web site that its estimates aren’t appraisals, the state Board of Appraisal has ordered it to stop offering them in Arizona.

Here’s a better idea: How about abolishing the state Board of Appraisal? Any property is actually worth whatever a willing buyer is willing to pay to a willing seller.

Lenders might want appraisers in whom they have confidence to ensure that the property will cover their principal in the event of default. However, lenders are big boys. They can set up their own certification process to obtain the expertise they want. There’s no need for government to do it for them.

I find this logic unassailable. But it does make me yearn to live in a town with a newspaper…
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