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Category: Disintermediation (page 30 of 43)

February 27, 2007

Does Redfin.com have tougher agents or tougher clients? A challenge in Bloodhound red . . .

by

Suburban Phoenix Real Estate Broker

Author website

I represented the buyer in the sale of a home worth $450,000. Luxury home on the first tee of an exclusive golf course, right next to a million-dollar custom-home lot.

How much did we pay? $310,000.

Now the truth is, I had an ideally-situated buyer and we were working with an ideally-dys-situated seller. Fortune favors the well-prepared, but, in the end, we simply got lucky.

But if I wanted to, I could present that story in such a way that, by the time I finished warming your ears, you’d want to rename Wednesday after me. (Take that, Odin!)

And welcome to Redfinland. They’re determined to take a victory lap, and let ’em. As Kevin Boer said to me in email:

In all fairness to Redfin, if the numbers had come out the opposite, the re.net would have been all over it, showing it as “proof” that they suck.

Indeed. And as much as CEO Glenn Kelman resists the characterization of Redfin.com as a discount real estate brokerage, it remains that their marketing appeal is based on saving clients’ money. It’s hard to doubt that discount-seekers would be discount-finders.

But, as I discussed last night, Redfin’s results are not a slam-dunk validation of its agents skills, zeal, rigor, vigor or charm. The much more likely explanation for the results it reports is that its clients — unlike swimmingly-besotted house-lovers — are congenitally low-balling INTJs and INTPs who do not focus on anything that can’t be expressed numerically.

Tougher agents or tougher clients? There is a way to find out for sure. Last night I made this proposal to Kelman:

I’ll make you a deal. Send me PDF scans of the 170 files. I’ll make a server available for FTP, and y’all can redact for personal details. I can reconstruct a transaction from the file, so I can vet the quality of the work in full, not just as regards price. For example, I can see how complicated the deals are, and how much Redfin’s buyer’s agents are bringing to the transaction. I’ll report my findings in detail, and you can get your incredible PR machine to promote them far and wide. Read more

February 26, 2007

Thinking skeptically to rain on Redfin.com’s parade . . .

by

Suburban Phoenix Real Estate Broker

Author website

I’m not a Jesuit, but I play one on BloodhoundBlog. The real truth is, I’m a roll-your-own Jesuit, more auto-didact than anything. I didn’t have Brian Brady’s inestimable advantage of having had the gift of reason literally pounded into me. Instead, I had to stuff it between my own ears by hand. But one way or another, lay student or Brother, if you walk in the path of Ignatius Loyola, you learn to think skeptically. Any affirmative claim is far more likely to be false than true.

This morning, Redfin.com posted a claim that MLS results “prove” that Redfin agents are better negotiators than other agents in the Seattle area. If CEO Glenn Kelman had made a claim like this in Brother Paul’s class, he’d be up late tonight writing a paper, striving either to prove or disprove it.

The problem is not that the claim is necessarily false. The problem is that that there are so many ways that it might be false that, to call it true without eliminating each one of these canards and false paths is an inherently tendentious statement — suasion, not persuasion.

Before I begin work on my much shorter paper on why the claim is dubious, I want to raise three meta-issues. First, I do not have access to the underlying data. If I did, I might write a much longer and much more conclusive paper. Second, I would have much greater faith in the mainstream media if more reporters were tuned to a Jesuitical tenor of skepticism. And third, the tabbed browser window is an excellent tool for organizing the resources to be used in an exercise like this.

First, Redfin claims that its results rebut the claim that a salaried (and possibly inexperienced) agent will not negotiate as aggressively as a traditional real estate agent working on a straight commission compensation plan:

After a year in the market, we decided to put our theory to the test, by querying the Northwest Multiple Listing Service for data on every home or condominium sold via a brokerage from February 6, 2006 (the date of Redfin Direct’s launch) through February Read more

February 23, 2007

Redfin.com’s Glenn Kelman issues a non-apology apology: This is what it sounds like when pigs fly . . .

by

Suburban Phoenix Real Estate Broker

Author website

Oh, good grief…

If Redfin.com wants to make peace with the real estate industry, all it has to do is hold up its end. If it wants to be a cowbird bottom-feeding parasite — defaulting on its responsibilities and disbursing that default as “savings” — it has to live with the contempt fully earned and deserved by cowbird bottom-feeding parasites.

Glenn Kelman should take solace — or take a drink — or just take a nap — however. The contempt Redfin.com earns doesn’t originate in his inflammatory comments — even if these are really, truly, honestly, please-please-you-must-believe-me a real estate-specific form of Tourette Syndrome.

Did any one of us make it through middle school without understanding demagoguery? If so, here are the review notes:

The skinny kid spewing half-witted insults is a coward who is terrified of two things: That his posturing is ludicrous, and that you know it…

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February 20, 2007

So what’s changed at Zillow.com?

by

Suburban Phoenix Real Estate Broker

Author website

Last look before going to bed, I saw this image at Drew Meyers’ very insightful Insights weblog:

I bumped it up in FireFox and got the same image. Then I hit refresh and got a normal Zillow.com home page.

What had changed?

I know this won’t last, but I love it that I can bug people who work for multi-million dollar corporations in the dead of the night and have them answer me. I emailed Drew, and he replied in half an instant:

[W]e changed our wiki landing page, added page counters, and fixed some bugs.

The page counters are the primary feature that we added — which I think is a VERY cool feature (that numerous users requested). For instance, check this random house I just pulled up in Phoenix and scroll to the bottom of the page – http://www.zillow.com/HomeDetails.htm?zprop=7786893

This is the counter from that page, clipped to fit:

A small enough change, I suppose, but most big things are accretions of little things. And we didn’t have to wait to find out what had changed…

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February 16, 2007

‘Fizzbos’ fizzle because of 3 key marketing issues

by

Suburban Phoenix Real Estate Broker

Author website

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

 
‘Fizzbos’ fizzle because of 3 key marketing issues

I have a friend in another state who is selling his home “by owner,” which Realtors affectionately refer to as a “fizzbo.” It’s interesting for me to watch, because he’s done a very professional job.

We should note at the outset that most “for sale by owner” (hence, fizzbo) efforts fail. Of the three P’s of real estate marketing — price, preparation and presentation — many fizzbos will fail on two or even all three.

First, if a home isn’t priced to the market, the home will not sell. This is why so much inventory, even Realtor-represented inventory, has lingered on the market so long over the past 15 months.

Second, the home has to be in turnkey condition: in excellent repair and staged to perfection. If it isn’t, it should be priced accordingly. Even then, most buyers in this market won’t give it a second glance.

And finally, the home must be appropriately marketed.

A fizzbo is at a huge disadvantage over a represented sale. At an absolute minimum, a Realtor-represented home is advertised through the MLS system to every other Realtor in the market.

By contrast, the by-owner home is promoted only to people who happen to drive by and see the sign or who happen upon a newspaper or online ad.

An aggressive Realtor will do even more to market your home, targeting promotions to the people most likely to buy.

And that’s what’s interesting about my friend’s efforts. He is a marketing professional, so he had presentation more than covered. He has excellent taste, and he keeps his home in pristine condition, so his preparation was perfect. And he consulted with Realtors and, ultimately, an appraiser to make sure his home was priced right.

You could call this a semi-professional for-sale-by-owner sale, and my advice would still be: “Don’t try this at home.”

But note this: He “launched” his home to the marketplace on Dec. 23, which no professional would have done. The result? Showings all through Christmas weekend, when people had time available to look at houses.

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February 13, 2007

Hillary Clinton and Rotarian Socialism: What’s wrong with the NAR?

by

Suburban Phoenix Real Estate Broker

Author website

Business Week’s Hot Property wrote yesterday about the NAR’s having gotten into bed with Hillary Clinton — who is “sponsoring a bill that bars commercial banks from hiring real estate brokers/agents” — but that’s just the tip of the iceberg. The National Association of Realtor is routinely, habitually, congenitally anti-free market.

I’m doing the prep work to defend the traditional practice of real estate, but this is my radical yelp: The original and on-going purpose of the NAR is anti-capitalist. The organization was formed to limit entry into the residential real estate business — to push Chester the Barber and others out of the business. The NAR wrote the original state real estate laws to achieve this goal — however poorly. This on-going legislative campaign against banks competing for real estate transactions is just more of the same: “Protecting” mediocrities from fair competition.

It seems never to end. If you’re a member of the NAR, you get hit with spam about once a month about some vitally important piece of anti-free market legislation: Coerced health insurance for real estate brokerages, keep WalMart out of banking, keep banks out of real estate. The NAR is hardly alone in making appeals for legislation, so it is perhaps easy to forget that legislation is imposed by force of arms. What the NAR is doing is taking control of the massive firepower of the Federal government and deploying it to hijack potential competitors.

It’s a protection racket — vicious, awful, evil crime — dressed up in Brooks Brothers suits.

We are apt to think of Communism as being Capitalism’s natural enemy, but there is another, perhaps more insidious foe to unfettered laissez faire. I call it Rotarian Socialism, just to give it a name. Rotarian Socialism is legislation written by and for the membership of a politically-powerful elite. Most of the criticisms you hear about Capitalism are in fact criticisms of Rotarian Socialism.

Truly free markets require freedom, not laws. I have argued before for getting rid of the real estate licensing laws — or, at a minimum, eliminating the broker level of licensing — and for eliminating the real Read more

February 12, 2007

Podcast: Dustin Luther’s Real Estate Weblogging Seminar Part III

by

Suburban Phoenix Real Estate Broker

Author website

This is the third of three podcasts of Dustin Luther’s Real Estate Weblogging Seminar.

The recordings for these podcasts were made by Rudy Bachraty of the Sellsius Real Estate Weblog.

Dustin is best known as the founder of Rain City Guide. Dustin works as a technology evangelist for Move, Inc. As evidence to his commitment to weblogging, he has a weblog devoted to internet real estate marketing, and this particular series of seminars are sponsored by Top Producer.

Rudy’s initial recordings suffered from some quality issues, most notably his distance from Dustin and some random electronic interference. BloodhoundBlog’s intrepid audio engineer Allen Butler (himself a top-producing Realtor) was able to scrub the audio to bring Dustin’s voice forward. The recordings still suffer from some defects, but 99%+ of the intellectual content has been preserved.

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February 11, 2007

BloodhoundBlog week in review: Podcasting a wider net . . .

by

Suburban Phoenix Real Estate Broker

Author website

Years ago, long before I met Cathleen the Leggy Blonde and came to be so joyously entwined if not actually entombed in matrimonial and connubial bliss, I wrote an essay about personal ads at the dawn of the age of five-hundred-channel television. But now, in the blink of a decade, we are on the verge of five-hundred-thousand-channel television, a net.wise video niche for every conceivable itch.

That goes for BloodhoundBlog, too, by inches and hours, in fits and starts. By tomorrow, we will have published ten audio and video podcasts in the few scant weeks since the start of the year. And there are many, many more to come. On top of everything else we might do, mega-producing Realtor Russell Shaw has committed to doing a complete step-by-step mega-production course in podcast form. You’ll be able to download his hard-won advice and review it until Russell’s expertise becomes your own.

Our podcasting prowess made news twice this week. First, Kris Berg posted a forty-five minute podcast with Redfin.com CEO Glenn Kelman, asking him the kinds of tough questions only a seasoned real estate professional would know to ask.

Our Redfin coverage was robust and then some. I wrote a companion piece to Kris’ interview, and her husband, San Diego Realtor Steve Berg posted a great list of follow-up questions for Kelman. The next day, I wondered What if Redfin gave a PR offensive and nobody came? And Redfin.com ended up winning this week’s Cheez Whiz Prize: Redfin.com’s CEO Glenn Kelman: “What if the parasites had to eat the parasites?”

Our second bit of podcasting news came from recordings of Dustin Luther’s Real Estate Weblogging Seminar. The original recordings for these podcasts were made by Rudy Bachraty of the Sellsius Real Estate Weblog. Dustin is best known as the founder of Rain City Guide, although he works as a technology evangelist for Move, Inc. Rudy’s initial recordings suffered from some quality issues, but BloodhoundBlog’s intrepid audio engineer Allen Butler (himself a top-producing Realtor) was able to scrub the audio to bring Dustin’s voice forward.

So far, Part I and Part II of Dustin’s seminar have been posted. Read more

February 11, 2007

Podcast: Dustin Luther’s Real Estate Weblogging Seminar Part II

by

Suburban Phoenix Real Estate Broker

Author website

This is the second of three podcasts of Dustin Luther’s Real Estate Weblogging Seminar.

The recordings for these podcasts were made by Rudy Bachraty of the Sellsius Real Estate Weblog.

Dustin is best known as the founder of Rain City Guide. Dustin works as a technology evangelist for Move, Inc. As evidence to his commitment to weblogging, he has a weblog devoted to internet real estate marketing, and this particular series of seminars are sponsored by Top Producer.

Rudy’s initial recordings suffered from some quality issues, most notably his distance from Dustin and some random electronic interference. BloodhoundBlog’s intrepid audio engineer Allen Butler (himself a top-producing Realtor) was able to scrub the audio to bring Dustin’s voice forward. The recordings still suffer from some defects, but 99%+ of the intellectual content has been preserved.

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February 10, 2007

Podcast: Dustin Luther’s Real Estate Weblogging Seminar Part I

by

Suburban Phoenix Real Estate Broker

Author website

This is the first of three podcasts of Dustin Luther’s Real Estate Weblogging Seminar.

The recordings for these podcasts were made by Rudy Bachraty of the Sellsius Real Estate Weblog.

Dustin is best known as the founder of Rain City Guide. Dustin works as a technology evangelist for Move, Inc. As evidence to his commitment to weblogging, he has a weblog devoted to internet real estate marketing, and this particular series of seminars are sponsored by Top Producer.

Rudy’s initial recordings suffered from some quality issues, most notably his distance from Dustin and some random electronic interference. BloodhoundBlog’s intrepid audio engineer Allen Butler (himself a top-producing Realtor) was able to scrub the audio to bring Dustin’s voice forward. The recordings still suffer from some defects, but 99%+ of the intellectual content has been preserved.

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February 9, 2007

Travel through time as you learn to take your Zestimate with 1.027631 grains of salt . . .

by

Suburban Phoenix Real Estate Broker

Author website

The Sunday New York Times will have a feature on hi-tech real estate, but you can see it today through the miracle of Google.

Not hugely interesting, more a catalog of press releases. Kristal Kraft gets a chance to strut, which is fun.

And: Zillow.com says you have to take their Zestimates with a grain of salt, which must be why none of them ends with three zeros.

The gist of the article is that information is more valuable to home buyers than pumpkins (who knew?), but, taking account of that, there is a huge omission: ShackPrices.com, the leader of the pack in deep info. Zillow should just buy them so they can get the kind of press attention they deserve…

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February 9, 2007

What if Redfin gave a PR offensive and nobody came?

by

Suburban Phoenix Real Estate Broker

Author website

We pulled out all the stops for Redfin.com’s announcement yesterday because we thought it was important news. Such insiders we are, like Obscure Sports Quarterly subscribers glued to ESPN-8 for the Women’s Curling Semi-Finals. On and off all morning, I combed Google and Technorati for news, linking to what I found. Bottom line: Big yawn.

Redfin employee Matt Goyer provides a similar rundown, catching a few that I missed. Goyer also does the kind of stupid Realty.bot math trick that we have learned to expect from fawning news coverage of stupid Realty.bots: In adding three agents, Redfin.com grew by 340%. No, the number of MLS listings on its stupid Realty.bot grew by 340%. Redfin grew its head-count and its burn rate.

The only truly amazingly stupid math I saw, though, was at The Real Estate Economy, which cannot tell an apple from an orange, but which knows they must be equal if there are a million of them:

When Redfin gets up to six cities, it should carry a total of about a million listings on any given day, roughly the same that rival Trulia currently stocks.

It would take an hour to sort out every idiocy in that one sentence, and that may be the actual problem: The Realty.bot revolution is being fomented by geeks who can’t do the math and is being heralded by dinks who can’t think at all.

Marlow Harris, by pointed contrast, shows us what can be done with a fully-functioning mind and an insider’s insight:

One of the problems I have with Redfin is their continual commoditization of the bad-boy stance, their claim of being the outsider, the renegade ready to fight against The Man, ready to defend their clients against the Real Estate Industrial Complex, when in reality the business is made up of hundreds of thousands of individuals. There’s no cartel. There are thousands of little real estate offices all across the U.S., with 100’s of MLS’s, each with their own rules. Redfin has co-opted the power of dissent by appropriating the language and symbolism of non-conformist youth and tech/geek culture. By inserting themselves into the real estate equation, Read more

February 8, 2007

Podcast with Redfin.com CEO Glenn Kelman: “We’re looking for nerds living in nice houses”

by

Realtor, Associate Broker

Author website

Last week I had the pleasure of meeting with Redfin CEO Glenn Kelman and his Senior Communications Director, Cynthia Pang. Let me begin by saying that I waltzed into my local Starbucks anticipating a date with the devil. While I exited no more enamored with their business model, I have to admit that both Glenn and Cynthia were a delight. No horns, no forked tails and no speaking in tongues (well, not exactly).

My impression of Glenn was one of a passionate entrepreneur who genuinely believes in his work. He struck me as honest and sincere, and I thoroughly enjoyed our brief time together. Having said that, I don’t get the impression that he entirely understands the depth of our business or of our duties as agents and fiduciaries. Some of his core premises strike me as fundamentally flawed from the standpoint of end game success or, worse, as ingredients in a recipe for future liability claims and outright failure.

I could be wrong. Divergent opinions and perspectives are what make our world go round. So, I would like to thank Glenn and Cynthia for their time. It may surprise some to know that I honestly wish them much success, as I believe their success will only be found (if it is truly realized at all) in a niche market sense.

So, Redfin, welcome to San Diego!

More: Kris Berg’s husband, Steve, has a very thorough Redfin post at The San Diego Home Blog. Los Angeles Times. Redfin.com’s weblog. (Ahem. Gertrude Stein’s ungrateful whine about Oakland was “There is no there there.”) Kevin Boer at The San Francisco Bay Area Real Estate Blog illustrates the demographics of Redfin’s move. The Future of Real Estate Marketing. More from Kevin Boer.

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February 8, 2007

Glenn Kelman on Redfin.com’s move into Southern California: “I’ve never had to think so hard in an interview in my life”

by

Suburban Phoenix Real Estate Broker

Author website

Here’s the newspaper news, and we’ll come back to it in due course: Redfin.com today opens three new offices in Southern California: Los Angeles, Orange County and San Diego. The company has expanded its web site to include listings from nine Southern California MLS systems.

Here’s the real news, which emerges from a forty-five-minute podcast interview made by BloodhoundBlog contributor and San Diego-based Realtor Kris Berg with Redfin.com CEO Glenn Kelman: Redfin.com is not profitable at present and may never achieve a reliable state of profitability. Most notably, Kelman’s willingness to reverse himself on unpopular but cost-saving policies may ultimately doom the company, at least in its present configuration as a discount brokerage.

The immediate problem is simply the payroll. As Kelman says in the interview:

What investors worry about with Redfin is the margin in the model. So today we generate about a 50% margin out of real estate operations. So for every dollar we make, we have to pay fifty cents to one of our agents. And we have to pay our agents more than we initially thought, just because we wanted to to get good people.

Redfin’s agents are salaried employees, not the more typical independent contractor paid on some sort of commission sales plan.

A new Realtor in a traditional brokerage offering training would expect to earn from 50% to 90% of the total available commission offered for the sale of a the home — which might be 3% of the purchase price.

A more experienced Realtor working in a brokerage with no training could expect to keep 95% or more of earned commissions.

Redfin concedes two-thirds of the buyer’s agent’s commission to the buyer, with half of the remainder going to compensate its agents. By this we can see that Redfin agents are being paid substantially less than successful Realtors in other types of brokerages. Even so, Kelman concedes, “We’ve got it around fifty cents, and that’s not enough to pay our developers.”

Since launching as a brokerage, Redfin.com has met with considerable criticism for some of its more unorthodox business practices. At first, the company advised buyers to appeal directly to the listing Read more

February 7, 2007

Fortune on Zillow.com: They can gape, but they can’t Google . . .

by

Suburban Phoenix Real Estate Broker

Author website

It’s possible that I’ve written more about Zillow.com than any other real estate weblogger. More on why Automated Valuation Methods necessarily stink. More on why the National Community Reinvestment Coalition’s shake-down of Zillow.com stinks even worse. More on Zillow.com’s new features.

If I haven’t written more than anyone else, I’ve certainly written plenty. Want proof?

If you Google on Zillow.com, you have to drill all the way down to the third and fourth entries to find my posts. Most days, I beat their own frolickin’ weblog.

But let’s be conservative and simply say that, as a weblogging Realtor based in Phoenix, AZ, I’ve written quite a bit about Zillow.com. So when Fortune magazine writes a cover story about Zillow.com, who don’t they talk to?

They quoted a real estate weblogger — one I’ve never seen before — whose site has been dormant since last October.

And they talked to a Phoenix-based Realtor, Brett Barry, A Realty Executives agent working out of Scottsdale. (Brett emailed me about this article when he was interviewed a while ago.)

But apparently Fortune Senior Editor Jeffrey M. O’Brien didn’t run a simple Google search.

What he did do — almost but not quite — is talk a sweet pregnant lady into turning on her buyer’s agent and disintermediating the bee-hotch. I told David Gibbons last week that the Make Me Move feature puts Zillow.com in the business of brokerage, even thought they’re not taking commissions for it. I wrote about this in December, but, even so, he was taken aback. But in the article, O’Brien is actively marketing his home as a Make Me Move FSBO transaction.

It’s a fun article, but there’s really nothing new in it. It’s impressive, I suppose, that Zillow.com can make the cover of Fortune without even a hint of profitability on its horizons. And it’s certainly a matter of interest to me that I could wrestle my way to third and fourth position on the search for Zillow.com — a search for which BloodhoundBlog gets over a hundred unique hits a day — but not attract the attention of Fortune magazine. Who says real estate is going hi-tech…?

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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.

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