Mr. Gross of Slate is at it. Mr. Cook: Your thoughts?
Category: Supplanting the NAR (page 8 of 10)
So someone, somewhere in the alphabet soup of Realtor associations is selling my email address — or perhaps just giving it away. Realtors all over Phoenix are watching an idiot’s spam-fest, as one clueless victim after another tries to escape the spam spiral started by an agent who seems not to know that we discover properties for sale in the MLS system — that this is what the MLS system is for.
This by itself is nothing. I get at least a thousand spam emails every day. Moreover, I know that a lot of people in my profession get painfully flustered when they sit down at a computer — so worried they’ll make a mistake that they cause a disaster instead.
But I am sick to death of being “led” by morons.
Witness:
- ZipForms does not work. It is crap software written by crap minds, with its bugs exceeded only by its omission of rational options. It was rammed down our throats by idiots at the AAR who obviously do not themselves use it. And yet, come the start of the year, we will have no choice but to use this piece of garbage — a fate which includes the vast legions of the flustered and the flummoxed.
- And because ZipForms has not been a big enough disaster, the AAR is now preparing to ram a piece of transaction-processing software down our throats — which will almost certainly also be a piece of buggy Windows-centric crap.
- The idiotic gateway software in our idiotic MLS system has never worked in Safari for the Macintosh. We’re getting rid of that crap vendor, thank god, but it is of a piece with the way the chefs of the alphabet soup have operated, that nothing they have promoted, until now, worked properly on the Macintosh.
- They spam me, and they sell or give my email address to spammers — and they charge me hundreds of dollars a year to deliver my inbox up to this rape.
I don’t care that other people don’t thrive at my wavelength. That’s understood. But I do care that they use power I never ceded to them to Read more
I’m behind on these, but this is a good time to catch up. This is my column from the Arizona Republic from last week.
Real estate representation has never been about information brokerage
As I write this, the National Association of Realtors is holding its annual convention at the Venetian Hotel and Conference Center in Las Vegas. This year marks the 100th anniversary of the founding of the trade group, a cause for celebration.
But the NAR is also embroiled in a years-long anti-trust suit brought by the United States Department of Justice and the Federal Trade Commission. Real estate buyers and sellers are steadily migrating to the world-wide web as their primary communications medium, even as the housing market is suffering through an extended downturn in many parts of the country.
Of the challenges facing the NAR, perhaps the greatest is finding a path to relevance in the internet age. The group’s own statistics demonstrate that a steadily increasing percentage of home buyers and sellers are conducting their search for real estate information and representation on the web.
This internet-focused client base can be significantly more tech-savvy than many Realtors, with agents constantly racing to catch up. At the same time, Realtors’ presumed traditional value proposition, access to MLS listings, has been obviated by on-line MLS systems and nascent Realty.bots — venture-capital-funded internet start-ups devoted to delivering real estate information.
In fact, truly valuable real estate representation has never been about information brokerage — a fact both the Realtors and the Realty.bots seem to be slowly discovering.
The value a Realtor brings to a home seller is not the MLS listing, which is at best an administrative function. A skilled listing agent should advise sellers on pricing, preparation and presentation — the factors that get skillfully-marketed homes sold when no other houses are selling.
The best advice a buyer’s agent can provide to his or her clients comes not in a stack of MLS listings but in specific tactics to deploy during negotiations, inspections and throughout the escrow process.
Whether the NAR can sustain relevance into the twenty-first century remains to be seen. But, even though consumers may find Read more
Clearly, this is a star-crossed enterprise. The audio worked fine tonight, so the video started capturing out of phase about 17 minutes in. The video is short, but the accompanying audio podcast contains our full discussion.
Ignore all that. I fixed it. The video shown below is complete, and it is also linked as the first video at BloodhoundBlog.TV. Dan Green’s audio is a little weak, mine is a little strong, Jay Thompson is a little out of focus, but we’ve gotten to a place we’ve never been before, a do-it-yourself multi-camera remote interview segment. Many more to come — with steadily increasing quality.
This is Daniel Rothamel, Dan Green and Jay Thompson discussing their experiences at the NAR Convention, carrying forth from there to a broad discussion about how the benefits of Web 2.0-style marketing might be communicated to the 1.3 million members of the NAR.
Technorati Tags: blogging, disintermediation, real estate, real estate marketing, technology
There are 1.3 million members of the National Association of Realtors. Of those, 30,000 descended on Las Vegas for last week’s NAR Convention.
How many of those people, either the larger group or the smaller, know about our world, the world of Web 2.0, real estate weblogging, social networking — the world we think of as being “the conversation”?
Almost none.
BloodhoundBlog is big as real estate weblogs go, and we’re arguably the biggest of the blogs focused on real estate industry issues. We get around 1,200 unique visitors a day on weekdays, a steadily rising number. Many of those “hard clicks” are not Realtors, of course, but we have a large and growing population of RSS and email subscribers. I have no numbers for RSS subscriptions, but the email server demands kicked us from a shared-server account to a quarter-server to a full dual-core server in a little over a year. It would not seem unfair to me to estimate that we are talking to at least 1,200 dues-paying Realtors a day.
It pays to do that math, doesn’t it. We are well-known, highly regarded, deemed influential — and we are talking to fewer than one in 1,000 members of the NAR on any given day. Not everyone reads everything on any given day, but, on the other hand, things get passed around. We might be seen by as many as 50,000 Realtors a month, perhaps as many as a quarter-million in a year’s time.
But even then, for all but a few hundred Realtors, we are noise in the background. The others see what they see, with Debunking Zillow.com and What’s Wrong with zipRealty? being by far the two most popular hard clicks into the weblog.
There is a over-arching message here and in other places we frequent, a message about our world, the world of Web 2.0, real estate weblogging, social networking — the world we think of as being “the conversation.” But who among the attendees of the NAR Convention — much less the NAR membership as a whole — knows anything about it?
The quote comes from WorkHappy.net this morning. Yesterday — plane-bound, casino-bound, Twitter-bound — unable to post — I reflected upon why it’s all just so much waxed fruit — for now:
Rusting in irony. I really, really want to post and I have 140 chars to work with.
That’s Jeff Turner and a newly-shorn Dustin Luther checking out Jeff’s camera at last night’s BloggerCon event at the NAR Convention in Las Vegas. The event was a lot of fun for me, much more fun than I had anticipated, but we were just so much waxed fruit to the NAR, a minor constituency to be placated.
So be it. A year ago, there was nothing of our world at the NAR Convention. This year, amidst the pageantry for MS FrontPage and MS Publisher, Dustin Luther spoke on “Understanding Your Online Competition.” Seth Godin is speaking, too, although I think he might go over like The Great Gazoo.
And: So be it. What I was ruminating on, unable to post, was Jim Duncan’s optimistic take on working within the NAR. My thoughts run in the other direction — working without the NAR — and my honest belief is that the NAR is destined to go the way of the Typographer’s Union — marching stoutly and steadfastly into an unlamented irrelevance. Sic semper tyrannosauris — thus, ever, to dinosaurs.
Organizations don’t change because they should. They don’t change because the world has changed on them. The don’t change because glib ideologues like me persuade them to embrace their better angels. Organizations change — if they do — when they have to: When a sufficient power-bloc within the group forces a change or when a force from outside the group proves irresistible. Most dinosaurs change — to a state of perpetual demise — when they get hit by a meteor.
Are we — the RE.net, the Web 2.0 world — are we that outside force for the NAR? Are we that meteor? Don’t kid yourself. We’re waxed fruit for now, up from barely negligible a year ago. But a year from now…?
I live in a very long-term world, but I live Read more
There are two premises to this post:
1. We accept that the National Association of Realtors is going to exist for the foreseeable future.
2. They have an existing infrastructure, including its 1.4 million members, that could potentially be leveraged to do great things.
First, we need much more than a “massive media campaign,” as stated by Dale Stinton, CEO of NAR. Not once does he mention improving the product (the Realtors) – all the technology in the world will not improve the competence of the professional.
Greg and I disagree on this – rather than supplant the various associations, I argue that working from within, in tandem with efforts from outside (read: the RE.net), may prove to be an even more effective strategy. Many in the RE.net recognize the opportunity to effect change; there may be great value in working, not necessarily with, but on parallel paths with, some components of the NAR. I mentioned in the inaugural Bloodhound.TV effort that the NAR clearly does recognize the impact and influence that the RE.net has on the industry – by choosing to assist in the BloggerCon, the NAR is reaching out to the bloggers. From my experience, the leadership of the NAR and the local and state associations, wants to be led, but often don’t know where to begin.
To lead, sometimes you just need to ask – or be asked.
With some prodding by some people whom I respect greatly, I am going to put my money/time where my mouth is and try to gain a seat on the Professional Standards committee (requires login) within the NAR, which may be tasked with evaluating blogging. This is the committee’s charge:
To advise and make recommendations to the Board of Directors on matters relating to the Code of Ethics; upon request, the Committee advises member boards on interpretations on the Code; upon receiving notice of lack of enforcement thereof by member boards, the Committee inquires into the situation, seeks remedial action and, if necessary, brings to the attention of the Board of Directors or the proper official of the Association in case of failure or refusal to enforce the Read more
Part V: Why arguments for the current method of compensating real estate agents and against divorcing the real estate commissions must fail
As I write this, the National Association of Realtors is preparing for its annual convention, to be held this year in America’s playground, Las Vegas, Nevada. This year marks the 100th anniversary of the founding of the NAR, so that milestone will be part of this year’s festivities. Can you guess what won’t be on the program?
You guessed it. Not one session or event will be devoted to an earnest discussion of divorcing the real estate commissions, reconfiguring the way we account for funds at Close of Escrow so that sellers pay only their own agents and buyers pay for their own representation. I think it would be accurate to say that the NAR likes things the way they are, but it would probably be still more accurate to say that divorcing the commissions is not even on the NAR’s radar.
Why not? That’s for you to decide, but the most common “yeah, but” objection you will hear to divorcing the commissions, among real estate professionals, is, “Yeah, but buyers don’t even care who pays the commission.”
I wrote this series of essays so you would know why it is important for the real estate commissions to be divorced. But assuming I have failed in this objective, let me endeavor now to help you understand why this matters:
In our current buyer’s market, some sellers are offering 4%, 5%, even 6% buyer’s agent’s commissions. Some new home builders are offering 8%, 12%, 16%. The highest buyer’s agent’s commission I have heard so far is 20%.
You as the buyer bring or borrow every dollar that gets paid to anyone in a normal real estate transaction, so it is possible that you could end up writing a mortgage check every month with twenty cents of every dollar going to cover what you unwittingly paid for “your” agent. That’s twenty cents of every dollar of principal payment, but also twenty cents of every dollar of interest — and taxes, and insurance and private mortgage insurance.
If buyer Read more
Via TechCrunch, here’s College Humor’s take on the TV show 24 — as it might have aired in 1994.
The video is really funny, until you see this, from the program of events for next week’s NAR convention:
Web Site WOW with FrontPage & Utilities
It’s 1994 forever for the NAR…
Technorati Tags: real estate, real estate marketing, technology
Part IV: Divorcing the real estate commissions will result in benefits not just for buyers but also for their agents and for the real estate market as a whole
The National Association of Realtors is embroiled right now in a protracted anti-trust suit brought by the United States Department of Justice and the Federal Trade Commission. The case in a nutshell: The NAR has been attempting to use MLS rules to stifle lower-priced competition.
Recall that the NAR is a conspiracy against consumers. Its purpose is artificially to limit access to real estate representation, so that consumers will have to pay more than they might otherwise for real estate advice. The cause of action in the DOJ/FTC suit is a move by old-line brokers against young-turk brokers within the NAR. The trade organization stands accused of deliberately frustrating the objectives of its own members.
What is the essential data field in an MLS system — do you remember? It’s the co-broke. Everything else is just details. Every true MLS system exists so that real estate brokers can communicate — in presumptive secrecy — how much they will pay when a co-operating broker procures a buyer for a particular listing.
Can you think of one simple thing the NAR could do to make the DOJ/FTC anti-trust suit go away in an instant?
How about… divorcing the real estate commissions…?
Do you think that might work?
Remember that the MLS system is a vestigial engine of sub-agency, designed from the outset to advance the home seller’s interests — at the expense of the home buyer’s interests.
If we were to divorce the real estate commissions, the co-broke field would go away and with it the entire edifice of the top-secret MLS system.
Does this mean homes would no longer be listed? Of course not. But home listing would become a free-market business — with no anti-consumer rules on what material facts can and cannot be disclosed to buyers.
Without doubt there will be a shake-out period, with conflicts among vendors, errors of judgement, etc. — just as in any competitive marketplace. This will occasion much lamentation — before, during and after — starting Read more
Part III: The who-pays-whom of real estate is not as simple as you might have thought…
All right, let’s go buy a house. I want to talk about the flow of money in a real estate transaction, and there is no better way of understanding that flow than wading right out into the middle of it all.
So let’s buy a house for $100,000. Where I live, in Phoenix, a hundred grand will get you a grungy dump. Where I grew up, in downstate Illinois, a hundred-thousand dollar house will put you among the diamond-crusted elite. Either way, it doesn’t matter. We’re not buying this house to live in it, but just so we can see who gets paid and how.
I want for us to buy this house with 100% financing — nothing down! — even though that kind of loan isn’t as easy to get as it used to be. Even better, I want you to take 3% of the purchase price as a concession from the seller to defray your closing costs. You’re going to have to put down an earnest deposit to show that you’re serious, but I like $500 for a house this cheap. Not only that, but, since there is going to be money left over from the closing costs concession, you’re actually going to get your $500 back at Close of Escrow.
Isn’t that cool? You just took possession of a $100,000 asset for not one red cent out-of-pocket. You bought a house for nothing. This is not a fantasy. I’ve done this for dozens of clients. But before you get on the phone to all your friends, telling them about your amazing financial skills, stop and think for a minute.
Did you just buy a house for nothing, or did you buy it by promising to make monthly payments for up to thirty — or forty — or fifty — years for principle, interest, taxes, insurance, HOA fees and private mortgage insurance?
Your lender pushed $100,000 onto the closing table, but he did it on the strength of your promise to pay all that money back and then some. Read more
Part II: How buyers can finally take a seat at the grown-up’s table
When a potential home-seller calls me to set up a listing appointment, very often the first question I will hear is, “How much do you charge?” A motivated seller is done with the house, and now all that matters is money. Sellers — usually — are practical, phlegmatic and open — if not at first then eventually — to logical persuasion.
Buyers, on the other hand, are giddy and emotional and mercurial and fun. They are on a safari to capture something big and exciting, and mere matters of finance are the farthest thing from their minds. This applies even to move-up buyers, people who are also selling their current home to buy the next one. On Friday evening, meeting about the house they are selling, they are coldly rational. On Saturday morning, shopping for the new house, they are swept away by their emotions.
Why do sellers pay the buyer’s agent’s commission, with or without sub-agency? Because it works. Buyers get to look at houses “for free.” The agent will set up searches “for free,” driving the buyers from house to house “for free.” And when it comes time to write a contract, the more the buyers pay for the home, the more the buyer’s agent will get paid. The seller is paying a percentage of the sales price, so the buyer’s agent’s pecuniary interest is aligned with that of the seller, not the buyers, his nominal clients. But — what the heck? — it’s all being done “for free.”
In the feast of residential real estate, buyers sit at the kiddie table and they don’t even know it. If a buyer even thinks to ask who is paying for all these free gifts of information, transportation and advice, the buyer’s agent will blow him off by saying, “Oh, the seller pays me.” We like to think we are smart shoppers, suspicious if not outright cynical, but no one ever thinks to ask, “The seller pays you for what?”
There’s more. Since the advent of buyer brokerage, the claim has been that Read more
Part I: How we got into this mess in the first place
Can we be straight with each other? I’m not a soft and subtle kind of guy, and my working assumption is that you are sick to death of being hustled — handled — lied to. We yammer all day about transparency, but if transparency is something other than old wine in a new bottle, it’s time we told the truth, don’t you think?
So let’s start here: The National Association of Realtors, which celebrates its 100th birthday this year, is a vast and largely successful conspiracy against consumers by real estate brokers. By brokers, mind you, not agents, although agents are not without sin. The purpose of the National Association of Realtors is to limit — artificially, by fiat of law — the number of people to whom you might turn for help in effecting a real estate transaction. Before the NAR got real estate licensing laws passed, you could have worked with anyone: A friend, a relative, the local beautician or insurance agent. But because of real estate licensing laws, your choices are limited either to real estate brokers and their agents or attorneys. No one else can represent you in a real estate transaction, accepting compensation for their efforts, without breaking the law.
Why did the NAR do this? So that it might artificially raise the price you are obliged to pay for real estate representation. This is the conspiracy against the consumer, and it has been largely successful for the real estate brokers. The real estate licensing laws are written in such a way that the secondary victims of the NAR conspiracy are real estate agents — who fail in massive numbers — but they’re on their own today. What we are talking about, in the broadest possible terms, is how the residential real estate industry can be reformed so that it is not a conspiracy against the consumer.
I would warn you against rebuttals that take the form of, “Yeah, but.” The “yeah” concedes the point, and the “but” seeks to muddy the waters. So brokers will read this Read more
The strike poses an interesting challenge for television at a time where internet usage has surpassed TV viewing time in most homes. Users are already choosing online entertainment over TV, how many more will switch off their televisions when their favorite shows stop going to air? These eyeballs present a real opportunity for online content creators at all levels; from the VC funded video startups through to the DIY part timers. The trends in viewer numbers have all been headed online to this point, this strike could well accelerate this trend, particularly if it lasts over the long term.
I was thinking about this yesterday, and, of course, this was the subject of the very first post I wrote on BloodhoundBlog:
In a subsistence culture, the work of the mind is precious and literally unsupportable. We are by now so rich that millions of people can create intellectual resources that they give away, in turn to be remarketed by others…. If almost-as-good is free or nearly free, what is the market value of slightly-better?
As an irony supplement, some of the free content that will be created during this strike will have been created by the strikers.
Amendment: Like this:
There are natural barriers to wealth, such as scarcity and inaccessibility. There are man-made barriers to wealth, like walls and laws. And there are barriers to wealth that are co-factors of relative wealth and poverty.
In a condition of vast abundance, trying to build walls around popular media content is an effort doomed to failure. What the Writers Guild actually needs to advance its agenda is not a strike but a campaign to forbid the creation of cheesy entertainment without a license.
And now you understand the National Association of Realtors…
Technorati Tags: disintermediation, real estate, real estate marketing
Don’t blame me for this, pin the blame on Matthew Hardy.
Note that if you happen to be the constantly-besieged president of a beleaguered trade association, I will be in Las Vegas on Monday, November 12th. I can show you how to get out in front of all these ethics complaints.
Technorati Tags: disintermediation, real estate, real estate marketing