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Category: Disintermediation (page 33 of 43)

December 11, 2006

Thank You, Mr. Barton, May I Have Another?

by

Mega-Producing Realtor

Author website

Richard_Barton_newRich Barton asking: “Why do some people take an instant dislike to me?”

My answer: “To save time”.

I’ll give Rich Barton and Zillow full credit for listening to the PR firm they must have hired. Just last February this is what Rich was saying:

Zillow’s Barton was quoted as saying that inevitably real estate services and fees will change as online services take hold. “I’m not implying that we have some new commission model figured out, but it feels like . . . Realtor services are going to be unbundled a bit,” he told Inman Real Estate News.

Nice, huh? Right out of the gate and the most important thing he has to say to the press is how HE is going to help drive down real estate commissions. Here is more from our new best friend, Rich Barton:

“People want Realtors,” he said. “But is it rational to pay Realtors what they are paid?” He says he thinks they are overpaid because customers are doing more of the work themselves.

Zillow, for instance, has a number of other features that do the work of the agent. Someone wanting to compare properties can use pull-down menus to estimate the value of remodeling projects that are not reflected in the price. Because of the Internet, agents are spending less time with clients, Mr. Barton said. “Agents have to ask, What kind of value am I adding?”

Mr. Barton does not exclude the possibility that the role of the agent, and his site, may change.

Good News Everyone! Rich added: “it is not our intent to dislocate the agent.” free stupid

He wants us all to earn less but he is willing to let us keep our jobs. This is good news – especially in light of the way he is now (just 10 months later) being heralded as being on the verge of changing real estate for the better. It wouldn’t seem quite so wild except it is Realtors doing the horn blowing for him. What must have occurred in that boardroom in Seattle?

“Listen Rich, if we are ever going to take over the industry you are going to Read more

December 9, 2006

Zillow.com versus Realtor.com: Nothing grows in the shade of great tree . . .

by

Suburban Phoenix Real Estate Broker

Author website

I think part of the problem, in understanding the radical nature of what Zillow.com did this week, is that we are conflating unlike things. As an example, when I speak of a National MLS, I am not talking about local MLS systems.

For one thing, the sine qua non purpose of a local MLS system is to advertise the co-broke commission to other agents, keeping it secret from consumers. This objective is not even on the radar of home searchers, whether they are looking at local IDX listings or a national site like Realtor.com.

Kevin Boer posted an excellent analysis of why Zillow will not replace local MLS systems. I agree, for now, but that’s not really the issue. In the second place, if we were to split the buyer’s agent’s commission from the listing agent’s commission, the entire rationale for exclusive local MLS systems goes away.

But in the first place, home searchers are not going to any listings systems to find out about commissions. To the extent that a local MLS system corresponds to a market as Kevin sees it, to that extent a national home listings service is an entirely different type of market. If the one facilitates the essential activities of real estate brokerage, the other exists to introduce home searchers to the real estate market, to particular real estate products and to real estate vendors.

They are not the same market, so conflating the two is an error. If you want, we can call the idea of a National MLS system something else: National Property Listings Service — NeoPoLiS, “new town” in Greek.

The point is that harping that Zillow can’t do this and Zillow can’t do that is completely true and completely pointless: Zillow isn’t doing those things, nor could it, nor should it. What Zillow might be doing, and only time will tell if it can pull it off, is creating a national clearinghouse for listed homes — which will be brokered by off-site — and normally local — means.

In comments to one of my posts, Dustin Luther raises some plausible objections to my arguments. His counter is that Read more

December 8, 2006

In the trenches with Zillow.com: A working Realtor’s first-hand experience listing a home . . .

by

Realtor, Staging Consultant

Author website

Zillow has had Greg’s attention for a long time, going back to an Odysseus post from last February, when we were blogging for our own entertainment. Greg has debunked Zillow, he’s defended Zillow, but till this week I’ve been indifferent. Zillow has held as much relevance for me as Ragnarok Online. Both have inspired a lot of buzz among their audiences, but neither made my life better, easier, happier, so I’ve not wasted time on them.

But this past Monday, when David Gibbons told us about Zillow’s plans to add the For Sale and Make Me Move tools to their comprehensive database, he gave me a reason to care. When someone hires me to sell her house, one of my jobs is to let as many prospective buyers as possible know that this house is for sale. Zillow will help me find an audience that I might not already be getting through buyers’ brokers, drive-bys, Realtor.com, open houses… So now Zillow has made my life better, easier, happier, by giving me a tool to bring my client’s house to more potential buyers.

To get to know this new tool, I claimed our own house on My Zillow. Here I got to experience first hand the problem with using Zillow for an accurate estimation of a house’s value. We live on a wonderfully eclectic street of ranch, bi-level and split-level 1960’s houses in the North Central Phoenix subdivision, Terry Terrace. Lots are all around 8000 square feet, but the houses range between 1400 to 2850 square feet. At 1993 square feet, ours is about average. The people who remodeled the house before we bought it did some wonderful things — enclosing the carport to make a 2-car garage and landscaping were minor compared to the the major improvement of raising the ceiling and removing the labyrinth of walls common in 1962, to open up the living area side of the house into two huge, very livable and very workable rooms. Then they added requisite granite, 18″ tile, designer cabinets and upgraded appliances. And, since we’ve moved in we’ve upgraded the bathrooms and all the Read more

December 8, 2006

You were saying . . . ?

by

Suburban Phoenix Real Estate Broker

Author website

Chickens? Eggs? How about poached eggs on toast…?

BloodhoundBlog’s team coverage of the Zillow.com upgrades:

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December 7, 2006

Early morning Zillow news round-up . . .

by

Suburban Phoenix Real Estate Broker

Author website

I have a walk-through this morning, so this is just a list of what I’ve seen out there this morning. I’m sure there’s stuff I’m missing, and the real news will come when people have had time to play with the new feature set. No particular order, no presumption of agreement or endorsement, just wall-to-wall coverage.

Drew Meyers’ list of links has been expanded.

Ardell has a list of her own going.

Much more: ZillowBlog, LA Times, Ardell’s other weblog, MSNBC, Seasttle Post-Intelligencer, HotPads, SocketSite, TransparentRE, Ubertor, Three Oceans Real Estate early and later, Sellsius, Galen Ward at RCG (cited last night, also), Real Central VA, Matrix, 360 Digest, BlueRoof.com.

BloodhoundBlog’s team coverage of the Zillow.com upgrades:

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November 21, 2006

A pre-Thanksgiving thought-feast: Blogtalk, techtalk, Zillowtalk — and the mysterious allure of ephemeral catastrophe . . .

by

Suburban Phoenix Real Estate Broker

Author website

Jeff Brown has come out from Behind the Curtain. His new weblog (blogrolled, of course) is BawldGuy Talking.

The Hamptons Real Estate Blog (blogrolled) has also moved to a new WordPress platform. One less Blogger weblog out there. The speed at which people can abandon software platforms should give every Google investor pause.

On that subject, The Phoenix Real Estate Guy has news about a new Point 2 Agent weblogging platform.

The Landlord Blog has started a Carnival of Real Estate Investing. I like the specialization. There are some very smart people in that corner of the RE.net.

Kevin Boer at Three Oceans Realty has maps! I am ambivalent about whether map searching actually does anything to sell houses, but it’s slicker than whale snot anyway. Kevin also has a real estate office in two boxes.

RSS Pieces has a great article on choosing the right domain name.

Rent or buy? Ask Todd Tarson at MOCO Real Estate News. I’m on the bubble on this question, and, not to bust any bubblehead bubbles, but I’m selling more houses than I expected to at this time of year.

Greg Tracy at BlueRoof.com Blog argues that Zillow is relevant, accuracy be damned. I agree from a different direction. Zillow is the elephant in the room right now. Its relevance is a given. As the BalwdGuy says, Zillow might be Pong, ultimately just a blip on technology’s radar. Okayfine. But: Pong was big news for its time.

Send a prayer out, if you can, for Jonathan Dalton’s father. Pneumonia, the worst of house guests — shows up unexpectedly and takes forever to clear out. Take good care of your own selves, too, as the weather cools. Pneumonia is what you get when you tell yourself you can ignore a chest cold.

Hey! Where is Kris Berg? I hope some San Diego newspaper is paying her big bucks for her sprightly sense of humor. If not that, I hope her absence is explained by a big stack of new contracts.

Finally, it might be nice if everyone would chip in to buy Keith at Housing Panic some lubricant. The poor sod has been Masturbating to Read more

November 21, 2006

The Zillow.com shake-down: Deconstructing the NCRC complaint . . .

by

Suburban Phoenix Real Estate Broker

Author website

The NCRC complaint against Zillow.com was filed 26 days ago. Today we have the first detailing in the public prints of the bogus nature of the charges (subscription required):

Absent specific instances of harm, the complaint looks more like a scheme to grab some of Zillow’s publicity than a legitimate beef. The fact that the coalition didn’t contact the company about its concerns before it filed the complaint also looks suspiciously like grandstanding or a fishing expedition.

Worse yet, the Center for Responsible Appraisals and Valuations, an offshoot of the coalition, reportedly has hired a third party to offer an automated valuation model and site-visited appraisal services through one of the coalition’s own Web sites. That makes Zillow a competitor of the coalition.

The complaint also fails to explain why Zillow would be at fault if its inaccurate estimates were used to mislead low-income or minority buyers as the coalition contends. That’s important because it isn’t bad data, but rather, bad actors who should be held responsible for harm to the public. And thus it’s not Zillow, but rather, unethical realty and mortgage brokers who should be prosecuted when fraud or other crimes occur. And that’s true regardless of whether or not the victim happens to be of a low-income or minority group.

Moreover, where is the evidence that any other estimates of home values are more accurate than Zillow’s? After all, homes are sold every day for substantially more or less than the asking price due to multiple offers, price reductions and negotiation between buyers and sellers after homes are put on the market. Are sellers’ asking prices harmful to the public because they don’t necessarily present an accurate representation of a home’s value? Any estimate of value is by definition an opinion.

In the best of all possible worlds, inaccurate data wouldn’t exist or be tolerated. And yes, Zillow would be a better service if its estimates were more reliable. Yet, no one is obligated to use Zillow for any purpose whatsoever, and if the service offers little or no real benefit, so what? Until the coalition comes forward with specific instances of actual Read more

November 20, 2006

Dual Agency Smack-Down – Russell Answers Up

by

Mega-Producing Realtor

Author website

Trevor Smith writes:

First, I want to say that you are incredibly articulate and a great writer. You know what you believe, you’ve researched it, and you stand by it. So, as far as that goes I respect you.

Second, I am with John L Scott, where I charge 4% commission for a full service listing package. I love John L Scott, and my Broker has been very supportive of my business model.Third, I recently interviewed with Redfin. This is not because I don’t like John L Scott, but becasue I believe in Redfin’s model. I believe that the REALTORs who will succeed in the next 30 years will likely adapt to a model similar to Redfin’s (ie lower commissions)

I would point out that since John L. Scott is a proven company and Redfin isn’t – your odds of success are far greater at your present home. If your present company – I believe it is the largest and most successful real estate brokerage firm in the entire northwest – is willing to support you in your desired business model, wouldn’t it make more sense to stay there? Check around and find out what the most successful John L. Scott agents earn and compare that to what the most successful Redfin agents earn.

If Redfin were not a public company (one supported by raising cash from investors) they wouldn’t even have their doors open now. It isn’t a sustainable business model. You are free to ignore my comments and to believe that I am “biased” against them because they are a discounter, but you would be wrong in that assumption. Many companies are “discounters” and do quite well and I have no quarrel with them either.

Fourth, by interviewing at Redfin, I learned EXACTLY how Redfin operates their business, and so when you say that Redfin is not procuring cause… respectfully you’re the monkey… because you’re wrong. Redfin, does show houses to their buyers, does do the paperwork, and does take it to closing. That is procuring cause.

There may be circumstances and transactions where they aren’t guilty of violating procuring cause, nevertheless, that business model Read more

November 19, 2006

Reagor-mortis? On-the-spot real estate news coverage only a few weeks late . . .

by

Suburban Phoenix Real Estate Broker

Author website

October 26th: NCRC files specious complaint against Zillow.com.

November 19th: Crack Arizona Republic real estate reporter Catherine Reagor yawns, burps, goes back to sleep:

The popular Web site zillow.com gets a lot of hits as people frequently check the values of their homes and their neighbors’ in the fast-changing housing market.

But not everyone agrees with Zillow’s figures. I have received several calls and e-mails from people questioning its data. The National Community Reinvestment Coalition agrees. The Washington, D.C.-based non-profit has filed a complaint with the Federal Trade Commission saying Zillow’s home-valuation tool is inaccurate.

Further deponent sayeth not.

Reagor was in love with Zillow when it was brand new, but this was because she hadn’t bothered to test it. The idea of reporters actually checking things seems to have died with Hildy Johnson…

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November 19, 2006

Redfin Again

by

Mega-Producing Realtor

Author website

Trevor Smith writes (and I respond):

Your comment about Redfin is not only ignorant it is probably borderline libel.

Please feel free to pass my comments and my contact information along to them.

Do you even know exactly what services Redfin does or does not provide?

No. What I do know is that they are attempting to build a business model based on the buyer finding the house themselves (in many cases seeing it via the listing agent) and then going to Redfin to have them write the contract.

Redfin is not doing much less than your typical traditional agent, and they are providing their customers thousands in refunds… hmmm sounds like a great business model to me.

In most states there is a little issue called procuring cause. Here is how Redfin handles it – per their website.

If you are referring to the fact that they do not show their buyers prospective properties, this is no longer true either. So, as far as I am concerned, praise God for Redfin and other discounters who are awakening America to the fact that REALTORS are overpaid.

Your email address would seem to indicate that you ARE an agent with John L. Scott (known to be a highly successful and very reputable full service company) so truthfully, I do find it a bit odd that you choose to praise God for Redfin.

The part that would not align with your own long term survival is your belief that Realtors are overpaid – if in fact, you are one. The FTC monkeys (I believe I originally referred to them as “Howler Monkeys”) share your belief – so you aren’t alone on this point. Additionally, you state that Redfin isn’t doing much less than the typical traditional agent. Yes they are – they are not really performing the vital functions of any traditional buyer agent: taking the customer from the initial contact all the way through to the closing. They are asking the buyer to go and find the house and then “give us a call and we will write it up for you”.

I have no quarrel with any agent Read more

November 16, 2006

I’m all in

by

Mega-Producing Realtor

Author website

I’m all in.

Meeting Greg and Cathleen was good for me too. I really enjoyed the time we spent together. As all of the regular readers here already know they are very cordial and intelligent people. And isn’t that the whole idea for the individuals who congregate here – find people with those qualities to help and be helped by?

I need to wrap up some loose ends – respond to several posts that have been left hanging.

Benjamin wrote:

Hey Russell

I’m with a fairly new (just one year young) Keller Williams office in South Western Ontario, and we currently have the highest average commission out of offices in the area, averaging over 5%. The ‘normal’ commission out here is 5%, and increasingly we’re seeing 4.5 and 4 become normal for listing residential; many realtors in my office still are signing people up at 6% because we do offer more value and service than other firms. Does KW have the perception in the US of being a ‘discounter’?

No, they don’t. KW – from the top down – does not want to be perceived that way. There are KW agents here promoting 4% total commission listings (as there are agents with Re/Max and the company I am with, John Hall & Associates). But those agents are in the minority – advertising a low commission. I personally think that advertising a low commission is stupid and the agents who do it (thinking it will bring them more business) are doing a poor job in the area of strategic planning. They are not thinking very far into the future. 3% is what would be considered a “competitive co-broke” percentage in my market. In a market like Greater Los Angles that number is probably more like 2.5% – based on their much higher sales price. If the listing agent is only getting 1% they have set themselves up for failure.

Listing agents who work that cheap are doomed to failure. Why? Because a successful operation will actually spend more than the failure agent grosses on PROMOTION OF THEIR LISTINGS. It costs money to sell a lot of houses – a Read more

November 13, 2006

Avid AVM aversion extends only to Zillow.com: NCRC off-shoot starts competing on-line valuation service . . .

by

Suburban Phoenix Real Estate Broker

Author website

Curiouser and curiouser. Could it be that NCRC’s motive is not to shake-down Zillow.com but to sully its reputation, in advance of going into competition against it? From InmanNews (fingered by Jim Duncan of Real Central VA):

Zillow officials say their valuations should also be seen as a starting point for consumers who want to learn more about the value of their homes.

But the National Community Reinvestment Coalition, a Washington, D.C., nonprofit, has filed a complaint with the Federal Trade Commission alleging that Zillow does not adequately disclose the degree to which its free automated home valuations can over- or underestimate a property’s value. The site is “likely to cause substantial injury to consumers who rely on the inaccurate representations made by the company,” the complaint alleged.

Zillow officials called the allegations groundless, saying they make every effort to explain the site’s role as a starting point for research, and display accuracy rates for every area covered by the site.

In a confusing twist, a nonprofit group formed by NCRC to promote best practices in the appraisal industry has hired another company, Eppraisal LLC, to provide a service similar to Saris Technologies’ eppraisal.com.

The NCRC offshoot, the Center for Responsible Appraisals and Valuations, is contracting with Eppraisal LLC to operate its www.BuySmartProgram.com Web site, which offers consumers appraisals using an automated valuation model in conjunction with the services of an appraiser.

NCRC vice president David Berenbaum said there is no contradiction in NCRC’s complaint against Zillow and CRAV’s use of an AVM on the www.BuySmartProgram.com Web site.

“The product being offered is an appraisal involving a site visit. It is not limited to an AVM,” Berenbaum said. “We do not have a problem with accurate AVMs, especially if they are combined with (the services of) an appraiser.”

Berenbaum said Eppraisal LLC is a subcontractor with no influence over policy decisions at NCRC or CRAV.

Based in Mayfield Heights, Ohio, Eppraisal LLC offers access to a network of 10,000 appraisers through its Web site, www.uappraiseit.com.

Scott said the term eppraisal has not been trademarked, and that Saris and its www.eppraisal.com service have no ties to Eppraisal LLC.

Another unrelated company with a Read more

November 8, 2006

What’s the big idea? The good, the true and the beautiful in real estate weblogging . . .

by

Suburban Phoenix Real Estate Broker

Author website

I really, really like ideas, and I sometimes feel like I should talk about them in a larger, more comprehensive way. Events intrude, always. Plus which, I think extended rumination is what god made retirement for. For now, we gallop on horseback through the museum of my mind, since this is what I have time for.

I love having Russell Shaw with us, because he is serious, rigorous and thorough-going. But he sees the world from where he stands, and very few of us command similar heights. Russell says, in essence, “I charge more because I’m worth more.” This argument has unassailable particular merit, as do the similar arguments made by Our Lady Ardell and the avuncular Jeff Brown.

But the argument does not invert, as many wish it could: “I’m worth more because I charge more” is the fallacy non sequitur. How much commission should a Realtor charge? In fact — in actual, demonstrable, undeniable fact — some large fraction of the NAR membership is earning nothing.

Surplus capacity argues either for lower prices, for liquidation of some of that capacity, or both. Ardell argues with some cogency that nothing will be done from the inside about prices — although she might be surprised at what can be done from the outside. Even so, the quantity of real estate transactions will not go up with a marginal reduction in transaction costs. We still sleep one pillow per capita. In any case, the problem of excess capacity can easily be solved by eliminating the real estate broker’s safe harbor from tax withholding laws.

Brokers really don’t even have much reason to oppose this, if we presume that the quantity of real estate transactions is inelastic. In other words, if a broker can anticipate 1,000 transactions a year whether he has 1,000 agents or 100 agents, then the only real difference to his business is the marginal cost of tax-withholding itself — which that broker will surely find a way to socialize to the agents anyway.

Privately, our own billionaire brain trust — god help us if they ever dun us! — has been reflecting on the Read more

November 8, 2006

Run faster: There’s a new minimum wage in Arizona . . .

by

Suburban Phoenix Real Estate Broker

Author website

The voters of Arizona passed a number of those pernicious ballot initiatives Cameron argued against Monday night.

Probably the most consequential is a coercive increase in the minimum wage. Warm-hearted people like to think of poor people making more money, but the net consequence of minimum wage laws is to get marginal employees — such as teenagers, the handicapped and people recovering from really bad decisions — fired, while lowering the marginal costs of alternatives to local human labor.

In other words, when you raise the marginal cost of employing goofy neighborhood kids, you essentially lower the marginal cost of adding labor-saving equipment or sending that labor off-shore. This is pure Bastiat, the seen and the unseen. What is seen are the shiny, happy people working at Taco Bell — already a capital-intensive response to high labor costs — for much more money. What is not seen are the many more people who had been working there, but who were fired because they were unprofitable at the coerced higher wage.

The good news is, if you own, say, a real estate brokerage, the cost of independent-contractor labor just went down, and the quality of the labor pool soared.

Remember, avoiding slavery is easy. Just keep running faster and faster…

Here’s are some faster-paced idea to speed the race:

Google Blogoscoped and TechCrunch both have news on like.com, a visual search engine. Like images.google.com or whatever, you can do keyword searches for images. But the cooler feature set is to use an image to search for other, similar images. Picture yourself standing outside a house, looking at all the junk mounted around the electrical panel, and the client says, “What’s that?” Wouldn’t it be sweet to whip out your digital camera and reply, “Let’s find out.”

The XBroker nails a manifesto to the door of the Treasury.

Christine Forgione at NY Houses 4 Sale has a stout defense of why you need a Realtor. (Am I the only person who sees this site as one giant link? Real Estate Snippets look like this to me, too, like everything is encapsulated within one giant link.)

Kris Berg from The San Diego Home Read more

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