There’s always something to howl about.
Marlow Harris of 360Digest.com took these clips of Redfin’s Glenn Kelman as he spoke with us Thursday afternoon at Zillow.com headquarters in Seattle:
Technorati Tags: BloodhoundBlog Unchained, disintermediation, real estate, real estate marketing, Redfin.com
It’s been fun dealing with years-old academic studies of the real estate market insisting that For-Sale-By-Owner marketing is just as good as listing with a Realtor.
It might have been, during the boom, when any idiot could sell a house. But it’s been kind of sad to watch people in our current declining market trying to sell by themselves — or trying to sell with the Help-U-Fail style of discounters — or trying to sell with the usual crew of spelling-impaired white shoe Realtors.
For owner-occupants clinging to the last of their equity, there is no substitute in this market for actual real estate marketing. The white shoe boys will shine you on, and the rape-and-run guys will beat you up on price once a week, but to actually sell a premium-quality home at a premium price, somebody has to make a sales effort.
This is what FSBOs normally do worst, of course. Even the typically-clueless rain-dancing Realtor at least gets the basics right, when many by-owner sellers are busy finding unique and original ways to get in their own way.
But the market tells, doesn’t it? A short bit in Fortune hints that the fizz may be gone from the FSBO highball:
“I used to get a phone call a day from people interested in FSBO Web sites,” Zwiefelhofer says. “Now it’s maybe one call a week.”
So were FSBO sites just flashes in the pan? Murray says that with properties harder to sell these days, sellers are returning to brokers for professional marketing help, causing the unassisted slice of the market to slip to around 15%. But he expects the FSBO market to bounce back – eventually.
Not all by-owner sellers stink at the job. BloodhoundBlog Contributor Richard Riccelli is scary-good at marketing his own properties — witness 214Calhoun.com — and here in Phoenix, the people most likely to adopt our style of listing tactics are FSBOs — a sad commentary on the so-called “professionals.”
But in a market where even well-prepared, well-priced, well-promoted homes are taking a long time to sell, doing everything you can to make things hard on buyers is obviously a sub-optimal strategy. Read more
I had this news last night, under embargo, but I was tied up with geek stuff. The Cliff’s Notes: In areas where Redfin.com has MLS reach but does not have its own agents on the ground, starting today it will begin offering client referrals to agents it has screened and whose performance it will monitor and publicize on its website.
What follows is a piece of an email sent me by Redfin.com CEO (and BloodhoundBlog contributor) Glenn Kelman:
Maybe this seems like deck chairs on the Titanic because it doesn’t fix sub-agency – which I agree needs to be fixed — but it seems like a step forward to us. I mentioned it when we increased our prices and offered unlimited tours, that we had one more rabbit in the hat.
Starting tomorrow Redfin is going to start connecting folks in outlying areas to real estate agents who work for other brokerages. This has been done many, many times before, and it’s something Redfin could have done years ago, given all the traffic we have in outlying areas.
The Redfin twist – and the reason we waited so long — is that we wanted to do in a customer-centric way that also works for agents. Here’s what that means:
- Data: We suck in data about all the agents’ deals for the past year and we survey all their clients and then we publish *everything* — reviews, deals – on a continually updated web page. We survey every new deal too. The reviews we got are mostly good – too good right now – but that’s because response rates are low for long-past deals with only happy people replying. We do show every no-response, and every deal where the agent did not provide an email address for a past sale (they can’t do that going forward).
- Consumer in charge: The consumer is in charge, choosing the agent he wants to work with based on all this performance data (see attached screenshot) & he can fire the agent any time – no procuring-cause, no leads, no fees for leads, & the consumer always knows what he’s signing up for.
- Referral fee Read more
I just finished Malcolm Gladwell’s book, Outliers, The Story of Success. I found it a facinating read. If you have not yet read his book, or any of his others, I strongly suggest it. The premise of Outliers discusses the contributing factors, opportunities and cultural legacies that help shape the outcomes of individuals whom we recognized as highly successful.
One of the most enlightening discussions in the book provides perhaps a new perspective as to why people of Asian decent traditionally outperform people of Western cultures in math. We often believe that academic achievement is attributed to IQ and intellect, yet Gladwell’s explanation is more basic. It may very well relate to how Asians count and the character length of the actual numeric characters allowing them to retain more information in a smaller period of time. Again, I found the author’s insight facinating.
Success is not solely a factor of intellect. At a certain point, cultural influences/rules and situational circumstances contribute more to why an individual or individuals are successful. Even more at the core of real success are the long hours of dedicated hard work.
I began thinking about how this all relates to the nature of real estate, both as a professional as well as the profession itself.
No doubt, we are currently experiencing a significant confluence of events both culturally and economically. The theory that real estate was a fairly sure bet, rarely if ever losing value has been more than proven wrong. Business models which leverage technology are not offering transformational change in how value is created in the real estate transaction.
Why did Rockerfeller become wealthy? Gladwell surmizes that he became wealthy due primarily to his time of birth, coupled with America’s dynamic economic transformation. Along with his hard work, his fate collided with enormous opportunity. It seems Bill Gates too collided with good timing – he came of age during the era of the birth of the personal computer.
It takes more than just smarts to make it to the top.
I sense we are again at a cross roads of transformational change, both culturally and economically today with even farther reaching Read more
I know someone who knows a guy who might know of a ‘pocket listing’ back in the old neighborhood. That’s how everybody refers to a certain kind of good fellow in one particular ‘Near West’ Chicago block of stoop and brick row homes—guys. They call them guys. Guys from the Neighborhood.
“He’s a guy.”
“Who?”
“Him.”
“Him?”
“Yeah, him.”
“He’s a guy?”
“Yeah, he’s a guy.”
“He ain’t a guy.”
“Sure he is.”
“No he ain’t”
“He ain’t?”
“Nah.”
“I thought he was.”
“Nah. You’re thinkin’ of his cousin.”
It’s the sort of community where adult children inherit the homes from their parents and never move away; the same homes their parents inherited from the grand parents. The housing stock is a block-by-block mixture of row homes, traditional city bungalows, wood framed Two and Three Flats circa 1900, and turn-of-the-century brick Multi-Unit tenements. The same Italian restaurants, corner bars, and beef joints have lined Grand Avenue from Ogden to Ashland for generations. Guys, both young and old, loaf in front of their social clubs three seasons a year blocking the side walks in both directions, their Caddys and Buicks double parked against the curbs. Nobody gets a ticket. Nobody seems to have a job.
“His cousin?”
“Yeah.”
“But not him?
“Nah. They got the same first name and hair.”
“I did not know that.”
“Yup.”
“I thought they was the same guy”
“Nah. Different guy. Same hair though.”
“I did not know that…”
And so on for hours. Or years. Generations. Anyway, I know someone who knows someone who has a place he might want to sell on the down low (that’s Not Listed on the MLS for all you traditional RE peeps). A real guy, apparently—and like I said, also someone from the old neighborhood. Of course, this guy my friend speaks of doesn’t live in his building anymore and hasn’t for almost a decade. He’s been…well…he’s been away. Away, serving his country and the great state of Illinois to the tune of concurrent life stretches which, I learn from my friend (who is my age and stills lives at home with his mother who is also seated at the table in a house coat this snowy morning) is much better than consecutive life Read more
Glenn Kelman’s recent Call to Arms brought to light for me the two paradigms that exist within the realm of transacting real estate – the traditional broker/agent-centric view and the evolving consumer-centric view. Ultimately both paradigms attempt to better serve the consumer, however, the perspectives are very different.
Glenn’s post queries why traditional brokers, i.e agent-centric business model, don’t embrace the consistent measure of customer satisfaction on an agent by agent basis after the completion of a transaction. The question is extremely valid – measuring customer satisfaction is a way to preserve the integrity of the broker and/or agents’ brand.
I question the validity of the metric – customer satisfaction – what is the criteria? In fact Glenn asked, “how do you measure customer satisfaction?” Defining the criteria is critical to measuring the ultimate value of the outcome – is 9 out of 10 a valid measure? What does 9 mean?
I’ve held the QSC – Quality Service Certified – Certification for almost 6 years. After each transaction, a third party administers a survey to measure how satisfied my clients were with the service level I provide. Interestingly, never once in 6 years have I had a potential client or prospect contact me because of my rating. In an agent-centric model, I measure customer sat by referral and repeat clients. I get measured on a scale from 1 to 5 and have been able to maintain a high level of satisfaction, but ultimately my clients have spoken more effectively about my skills and knowledge rather than my score.
While it may be important to know whether or not a particular consumer may recommend or even use the services of an agent and/or broker, I believe I need to know the “why?”.
The question has been asked many different times – what do consumers want? Again, Glenn asserts that consumers are seeking more metrics on agents. Depending upon whether or not a client is buying or selling, their wants have remained fairly consistent.
Buyers want assistance finding the the right home. They also want help negotiating the sales terms and price.
Sellers want to price their homes competively Read more
No. Upon final rewrite, make that Lichtenstein, a tiny cinematic metaphor freezing its alpine ass off smack in the middle of a much larger, tempestuous world money market. I’ll declare the Swiss Franc my new currency—diminutive, but not to the point as to be completely overlooked at the box office; still along the lines of cinema verite mind you, but hedging toward a safer ‘middle’ ground. For, to be artistically and financially agnostic, is to be, as Studs Terkel once put it, “merely a cowardly atheist.” It’s like trying to sift layman sense from a Steely Dan harangue sans the jazzy guitar rides….sober. ‘Careful what you carry…’
So I go to the movies to willingly suspend disbelief.
I walk past the marquee, daring only a brief, side-swiped glimpse at my own bankable image in the reflection. Until witnessing in person, The Curious Case of Benjamin Button, I never thought I could ever bear a resemblance to Brad Pitt. But Voila!….there I was, up on the silver shroud, lurking (the first hour only, to be sure) like the penny pinching AARPer I’m becoming. An old man on the surface, picking through the Big Board rubble for some common retirement ground, I search for my own safe spot in Pharmaceuticals or Technologies. But, alas, feeling the Fourth Quarter financial shiver in my brittle bones, I panic like every other old man on my ward at 4PM Eastern Time on Fridays and sell. Like the French, I retreat and quickly convert to cash. Where do people in the South of France run to at the end of the trading week, I wonder? If still around this summer, I’m taking the entire month of August off, I decide. If only I were bright and wealthy enough to meld into the European Intelligentsia (does it still exist?) for good, or romantic and brave enough to join the Foreign Legion for even a short stint. If only….
I’d drink stiff coffee, talk shit all day long with the expatriates, and take cover only when truly necessary. I’d jot caustic notes on the backs of napkins (and into my iPhone Read more
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RE BarCamp Seattle has a time and a date. From Todd Carpenter:
Rich Jacobson and Brad Andersohn from Active Rain, along with Drew Meyers from Zillow have established the basics. A date and venue. February 13 at Zillow Headquarters. This happens to follow a Bloodhound Unchained preview event held the day before, also at Zillow headquarters, and also free!
Greg and I are pretty stoked about heading to the Emerald City. Scott Cowan signed up for Bloodhound Unchained Phoenix ‘O8 but had to decline participation to tend to familial duties. Since then, Scott’s been lobbying us to head up to Seattle to out on our “Mini-Unchained Event” for Coffee Bean Town. Last month, I told him we’d gladly come if he could round up a venue and a group of eager people. Scott called the folks at Zillow and we arranged to be a prequel to Seattle RE BarCamp.
Our event will be from 1PM until 5:30 PM, on Thursday, February 12, 2008, at the Zillow Headquarters. We’ll be talking about Direct Marketing (online and offline), Social Media Marketing, and Blogging. David Gibbons and Rich Jacobson agreed to speak, as well. Marlow Harris raised her hand to attend but I’m hopeful to have her to speak.
Our concluding session will be a debate between Glenn Kelman of Redfin.com and Greg Swann. They’ll be discussing Glenn’s thoughts about whether size really matters. Glenn outlines the case for why the little guy might get squashed:
This is a change. Marketing, which used to be the large brokers’s primary advantage, is actually getting cheaper — if Bloodhound has proved anything, it’s that the web has made marketing a question of what you have to say not how much you have to spend.
But the cost of running a real estate search site is rising fast. Large brokers throw money (if not always expertise) at the problem, while small brokers struggle to compete. The small brokers ask MLSs to provide a common set of services, like listing alerts, but the large brokers sometimes block these efforts as being beyond the MLSs’ charter.
Greg Swann thinks the little guy has the advantage:
I want Read more
Instead of dozens of geniuses trying to program an AI in a university lab, there are billion people training the dim glimmers of intelligence arising between the quadrillion hyperlinks on the web. Long before the computing capacity of a plug-in computer overtakes the supposed computing capacity of a human brain, the web—encompassing all its connected computing chips—will dwarf the brain. In fact it already has.
Pascal kept a room full of “Rainmen” — idiot-savant math geeks — as human calculators. He could have done the problems he threw off to them himself, but they saved his time for the work they could not do.
While we will waste the web’s ai on trivial pursuits and random acts of entertainment, we’ll also use its new kind of intelligence for science. Most importantly, an embedded ai will change how we do science. Really intelligent instruments will speed and alter our measurements; really huge sets of constant real time data will speed and alter our model making; really smart documents will speed and alter our acceptance of when we “know” something. The scientific method is a way of knowing, but it has been based on how humans know. Once we add a new kind of intelligence into this method, it will have to know differently. At that point everything changes.
Technorati Tags: disintermediation, technology
Can a man save his face, his ass, and his house at the same time? The moral and Big Board gods claim naught. But still, rooting through the year end financial rubble atop my desk—the economic equivalent of the Gaza Strip, I consider the question (pondering Realtor that I am).
I tally my Christmas card total while I search the mail pile for fellow holiday survivors. I uncover just three scant acknowledgements this dim Season; one from my parents with a modest check enclosed (made out to my wife, of course); one from my daughter with a nice handwritten note; and one from our missing housekeeper. The latter is a nativity scene, written in Polish, and sent to our house via Air Mail. I’m assuming it either says ‘Merry Christmas!’ or ‘I Quit!’ We haven’t seen her in weeks. Perhaps she moved back to her motherland where she can actually make ends meet scrubbing floors. I suppose she just resigned before we had to let her go anyway. (I mean really, who can’t keep their own house clean?)
I turn back to the task at hand and continue sifting through the pulp, avoiding paper cuts, and careful to sidestep 2nd Notices from lesser, non FICO reporting insurgents; my dentist, the Chicago Tribune Classified Section, the lawn service guy who never picked up my leaves this year. I hear a mutter beneath the wrack before electronically mine-sweeping my Schwab account to stave off the more formidable creditors for yet another 40 days and nights (with Grace Period); Bank of America Mortgage, BMW Financial Services, my genius accountant.
I look again at the three lone Seasons Greetings and reflect. I haven’t physically written, licked, stamped or sent out an actual Christmas card in years—not to family, not to friends, not to clients. I’m surprised I receive anything in the mail at all, to be honest. Between Twitter, Facebook, and Harry and David, all I seem to do anymore is Text and order online. Like an iPhone crackwhore, I find myself scrolling the cyber alleys for expired listings and below market abandominiums. It has to Read more
We are drowning in information but starved for knowledge.” quoted by John Naisbitt.
As RE Web 2.0 has evolved, there has been so much emphasis on the data, yet as we sit and evaluate the present solutions, consumers are still unclear how to interpret the information.
“Information is not knowledge.” quoted by Albert Einstein.
Buying and selling real estate isn’t all about the data – it’s about knowledge and expertise.
If knowledge is not information, what is knowledge?
According to Merriam-Webster online, knowledge is defined as the following:
I’d like to introduce you to some really nice folks. Take a look:
The couple on the left are the Anybodys, Jeff and Janice. Jeff is a middle-manager for GE. Unless he owns a Pizza Hut. Unless he’s a Civil Engineer for the county health department. Janice is a schoolteacher — or a stay-at-home mom — or the assistant manager of the parts department at the Saturn dealership.
On the right is their real estate agent — real live real estate agent Allie Howard.
This is good real estate marketing, profoundly effective in all kinds of ways. Virtually anybody can see themselves as the Anybodys. They are exceptional examples of everything that is unexceptional in American middle-class life. And Allie is just geeky enough, just semi-hip enough, just po-mo enough and just down-to-business enough to connect with the Anybodys in the intense but decisively temporary marriage that is a home search.
Everything in this photo is perfect. The clothing is casual but expensive — in just the right colors. That hand-written type face is an homage to the “Hello!” of the original Macintosh. Everything about this image is devised to make you feel comfortable about proceeding with a real estate transaction with Allie.
So who is responsible for this inspired piece of marketing?
Redfin.com, that’s who.
That’s right, the home of the geeks is working very hard to become the just-geeky-enough place for Janice — not Jeff — to shop for a home.
Just two weeks ago, Redfin CEO Glenn Kelman was wondering among the Bloodhounds if hi-tech companies like his would crush all the Mom and Pop brokerages. But here we see that self-same Kelman working very hard to compete with Mom and Pop on their own turf.
Let me make two interstitial points, if I might.
First, do not underestimate Glenn Kelman. We’ve beat up on a lot of people in the last 30 months, but, as far as I can tell, Glenn Kelman is the only one among them who is actively trying to figure out what he’s getting wrong. That doesn’t mean we have been right, necessarily. But Kelman is going to keep testing and revising his Read more
I edited 1,407 files in 1,407 folders on Friday. Not by hand, mind you. That would have been a tedious and error-prone path to an inevitable suicide for someone like me. No, I built a spider to do the job, and it took a surprisingly long time to run — almost four minutes.
But I wanted to put the Phoenix Area Headlines Scenius scene into every engenu web page we’ve built so far, and that entailed editing 1,407 files in 1,407 folders — dispersed among thousands of folders in dozens of domains all over our file server.
I didn’t really edit them, of course. Software doesn’t work that way. I sucked the files to be altered into memory, concatenated my new code on at the end, killed the original file and then wrote down my new version under the same name. I built the engenu file architecture anticipating that I might want to do things like this.
And that kind of thing makes me a hard sell on the idea of Attitude with a capital A. I definitely believe in working from a positive frame of mind toward positive goals — all based firmly in reason and logic. But it doesn’t matter how many times you say, “I can do it!” — if you don’t actually know how to edit 1,407 files in four minutes. Attitude is nothing without Aptitude.
But Aptitude is nothing without Application. We are all of us buried up to our necks in work we could be doing, and our success at digging ourselves out is entirely a function of how we apply ourselves.
Aristotle said, “We are what we repeatedly do.” For most of my life, I’ve regarded that as being the essence of human character. But there is an interesting question about those 1,407 engenu pages: Where did they come from?
Each one of those engenu folders represents a web page, and many of them are grouped together into web sites. A single-property web site might consist of 20 or more engenu folders. An extensive home search could run to 60 or more folders — 60 or more web pages linked Read more
In a prior life, before becoming a licensed real estate professional, I was responsible for implementing supply chain technology in the discrete manufacturing arena – more specifically – the auto industry.
Over a 7 month period, between 1998 and 1999, I made a temporary home in Sterling Heights, Michigan – 16 mile and Mound Road to be exact – home to Ford Motor Company’s largest real axle and transmission manufacturing and assembly facility – one million square feet of real estate, generating roughly $1.7B of product. The plant was as vertical an operation as I have seen, short of a foundry. From raw forged metal, UAW workers machined gears and assembled rear wheel drive transmissions for Ford’s cars and trucks – the Mustang, Lincoln Town Car, Explorer and the Ranger pickup – at the time, some of Ford’s hottest products – the Explorer was selling like crazy.
Before setting foot in Sterling Heights, I was tasked with creating a new sales methodology, tools and implementation plan that calculated the ROI of our supply chain technology solution once implemented. The sales methodology walked a senior executive through the hard dollar, tangible savings and return to bottom-line profit contribution our technology solution would deliver.
Process created – tools developed – mission accomplished.
Or so I thought. Now go prove that it actually works.
My first – and my team’s feat was to sell our solution to the VP of Operations. We walked through the process and learned from our discussions that the VP of Operations was given the directive to reduce Work In Process inventory – WIP had grown disproportionately to end-unit assembled transmissions. This particular problem was a no-brainer – our sweet spot. Our solution optimized the flow of WIP and synchronized the flow of raw material to end-unit assembled transmissions via planning and scheduling algorithms. Cake.
Unique to our solution was our commitment to reduce WIP over a 12 month period. Our proposition – Ford would pay our travel expenses and small overhead expenses for our 12 month assignment – nothing more UNLESS we delivered results over and above the $20M goal. Any additional savings above and Read more
About once a week, someone asks Redfin who built our real estate search site (sometimes they don’t ask, they just take). Since we built our site on our own, we can’t recommend a development partner, but we can offer advice to other brokers building MLS-powered sites.
And our first suggestion would be to bring your wallet. If you include all the employee salaries, benefits, hardware, online services, data costs and hosting costs, Redfin will probably spend $4+ million on research and development in 2009.
Is Technology Tilting the Playing Field Toward Large Brokers?
That may sound like an imposing number but we have costs you can avoid. We spend at least $1 million on commerce tools for tracking offers and listings, so we can give customers the same 24-hour web support you expect from a bank, limiting the administrative burdens on our agents. A traditional brokerage doesn’t have to invest in this area.
We probably spend another $1 million making mistakes you could easily duck by following us at a safe distance of, say, six months. We try to avoid mistakes, but a mistake is often just a good decision outpaced by circumstances.
For example, when we had no money — scratch that, (thanks David Selinger) when no mapping technology existed that supported user-controlled panning and satellite imagery — it made sense to build our own map. Later, Virtual Earth was the best choice because Google was slow to draw hundreds of property outlines on its map. Now the best choice for us is Google Maps because we figured out how to outline all the properties at once. We just switched to GMaps today, and now it’s on the front page of TechMeme.
I think we’re the only folks in real estate who have used Virtual Earth, Google Maps and a proprietary map, so if you have questions on the relative merits of each service, please just drop us a line.
That leaves the cost at around a few million dollars per year to build a real estate search site with national scale, which is still too expensive. While hardware costs decrease every year, Read more
